The importance of marketing

Financial Success often depends on marketing ability.

CEOs acknowledge the importance of marketing.
Making the right decision about change is not an easy task.
The Scope of Marketing
To become a marketer one need to understand the followings:
What is marketing ?
- Marketing is about identifying and meeting human and social
needs.
- Marketing is not just an art of selling but it is much more than
that.
What is Marketed ?
- In Marketing Goods, Services, Events, Experience, Persons,
Places, Properties, Organization, Information and Ideas are
marketed.
- Who Markets?
- Marketers who seeks a response or attention.
- A Prospects from whom response or attention is expected.
Core Marketing Concepts
Needs, Wants and Demands
- Needs are basic human requirements.
- Needs become wants when they are specified.
- Demands are specific wants with an ability to pay.
Co should find out people with willingness to buy though
they have capacity to buy.
- Under standing consumer needs and demand is not always
easy. The Marketer must probe it.
- Co. must help customer learn what they want.
- Five types of needs are: Stated needs, Real needs,
Unstated needs, Delight needs, Secret needs.
Target Markets Positioning, and Segmentation.

It is not possible to satisfy everyone in the market.

Markets can be divided into markets segments on the basis
of demographic, psychographic demands of the buyers.
After identifying the market segment, the co. should
decide which segment will provide with greater
opportunities. It is its Target Market.
Offerings and Brands.
Companies tries to satisfy needs by giving value
proposition.
Proposition is a set of benefit offered to customers.
Intangible value is made physical by an offering. A brand is
an offering from a known source.
Companies strives to built a strong favorable and unique
brand image.
Value and Satisfaction
The Offering will be successful if it delivers value and
satisfaction to the target buyers.
Value reflects the sum of the perceived tangible and
intangible benefits and costs to customers.
Value increases with quality and service and decreases
with price, although other factors can also plays an
important role in our perceptions of value.
Value is a central marketing concept. We can think of
marketing as the identification, creation, communication,
delivery, and monitoring of customers value.
If the performance falls short of expectations, the
customers is dissatisfied and disappointed.
If it matches expectations , the customers is satisfied.
If it exceeds them, the customers is delighted.
 Marketing Channels
To reach its target market the co. uses marketing channels.
Three kinds of marketing channels are.
Communication Channels.
Distribution Channels
Service Channels
Communication Channels delivers and receive messages from target
buyers and include newspapers, magazines, radio, television, mail,
telephone, billboards, posters, fliers, CDs, audiotapes, and the
Internet.
Distribution Channels- The marketer uses distribution channels to
display, sell, or, deliver the physical product or services (s) to the
buyers or user. They include distributors, wholesalers, retailers, and
agents.
 Service Channels
Service channels include warehouses, transportations
companies, banks, and insurance companies that
facilitate transactions.
Marketers clearly face a design challenge in choosing the
best mix of communication, distribution, and service
channels for their offerings.
Supply Chain
The supply chain is a longer channel stretching from
raw materials to components to final products that are
carried to final buyers.
 Each companies captures only a certain percentage of the
total value generated by the supply chains value delivery
system.
Competition
Competition includes all the actual and potential rival
offerings and substitutes a buyer might consider.
Tata steel would be thing narrowly of competition if it
thought only of the other integrated steel companies.
In fact, in the long run steel companies are more likely to
be hurt by substitute products than by other steel
companies.
 Marketing Environment
The marketing environment consists of the task
environment and the broad environment .
The task environment includes the actors engaged in
producing, distributing and promoting the offerings.
These are the company, suppliers, distributors, dealers,
and the target customers.
In the supplier group are material suppliers and service
suppliers, such as marketing research agencies, advertising
agencies, banking and insurance companies,
transportation companies and Telecommunications
companies.
 Distributors and dealers include agents, brokers,
manufacturer representatives, and others who facilitated
findings and selling to customers.
The broad environment consists of six components :
demographic environment, economic environment,
Physical enviroment, technological environment, political
legal enviroment and social- cultural enviroment.
Marketers must pay close attention to the trends and
developments in these environments and make timely
adjustments to their marketing strategies.
 Marketing Tasks
Introduction:
We can identify a specific set of tasks that make up
successful marketing management and marketing
leadership.
 Developing Marketing Strategies and Plans
The first task facing is to identify its potential long run
opportunities, given its market experience and core
competencies.
E.g. Decision about the product to be produced
Diversification
Whichever direction it chooses, it must develops
concrete marketing plans that specify the marketing
strategy and tactics going forward.
Capturing Marketing Insights
Co. needs a reliable marketing information system to
closely monitor its marketing enviroment.
Micro Enviroment consists of suppliers, marketing
intermediaries, customers, and competitors affects
production and sales.
Its macro environments includes demographic,
economic, physical, technological, political- legal, and
social- cultural forces that affects sales and profits.
Its also needs a dependable marketing research
system. To transform marketing strategy into
marketing programmes. Marketing managers job.
Connecting With Customers
Co. must consider how to best create value for its
chosen target markets and develop strong, profitable,
long term relationships with customers.
E.g. TOI group, radio Mirchi
To do so, it needs to understand consumer markets.
Who buys and why do they buy? What are they
looking for in the way of features and prices and where
do they shop?
Building Strong Brands
Co. must pay close attention to competitors,
anticipating its competitors moves and knowing how
to react quickly and decisively.
Activa and Access
Co. should also understand the strength and
weaknesses.
Shaping the market offerings
At the heart of the marketing program is the product
the firms tangible offering to the market, which
includes the product quality, design, features, and
packaging.
To gain a competitive advantage.
A critical marketing decision relates to price and its
related policies.
Price should match with value.
Delivering Value
Co must also determine how to properly deliver to the
target market the value embodied in its products and
services.
Divya Bhasker
It must identify, recruit, and link various marketing
facilitators to supply its products and services
efficiently to the target market.
E.g. Amuls distribution system
Communicating Value
Co. must also adequately communicate to the target
market the value embodied by its product and
services.
It will need an integrated marketing communication
program that maximizes the individual and collective
contribution of all communication activities.
Creating Long Term Growth
Based on its product positing co. must initiate new
product development, testing, and launching as part
of its long- term view.
The Strategy take into account changing global
opportunities and challenges.
E.g. Navgujarat times by TOI group,
Company Orientation towards the Marketplace
Or
Evolution of Marketing
It took many years for companies to realize that
satisfying customers is the key for making sales and
profits in the long run. Over the years business have
gone through different stages of marketing like
production,product,sales and marketing. Here we
shall take the review of evolution of marketing ideas.
The Production Concepts
The oldest business concept continued from starting of
Industrial revolution to the late 1920s.
Supply creates its own demand.
Consumer will prefer widely available & inexpensive
product.
Managers concentrate on high production efficiency, low
production cost and mass distribution at low prices. e.g.
China where Lenovo and Haier take advantage of chinas
labor pool.
Product features are not given any importance.
This concept can also be used when production is to be
expand. Concept make sense in developing countries.
The Product Concept
Consumer favor products that offer the most quality ,
performances or innovative features.
E.g. Havmor
Managers focus on superior products and improving
them over time. E.g. Samsung
Better Mousetrap
A new or improved product will be successful only if it
is priced, distributed, advertised and sold properly.
e.g. Go Cool Ice cream, Hyundai Getz car
The Selling Concept
The concept holds that consumer and business wont
by enough products therefore companies must
undertake an aggressive selling and promotion effort
e.g. Insurance, Encyclopedia
Companies realized that they could used information
on the likes and dislikes of consumers in developing
advertisement to increased demand. e.g. Cadbury
Most companies also practice this concept when they
have over capacity. Their aim is to sell what they make
rather than the market wants. e.g. Coca cola
The marketing Concept
Emerged in the mid 1950s
Companies focus on satisfying customers needs and
wants rather than manufacturing .
Not to find right customer but find right product
It aims at matching the companies offering with
customers needs to achieve the desired level of
customer satisfaction. e.g. Dell Computer
Three important features of marketing concept.
1.Consumer orientation
2.Long term profitability Reactive and Proactive
3.Functional integration
The Holistic Concept
This concept is based on the development, design and
implementation of marketing programmes, process
and activities that recognized their breathe and
independencies .
This concept recognize that . everything matters in
marketing integrated perspective is often necessary
It attempts to recognized and reconciled the scope and
complexities of marketing activities.
Only those companies are successful which keep pace
with changing marketplace and market space.
Company and Marketing Responses and Adjustments
Or
Marketing Dynamics
Due to technological advancement products and markets
are constantly changing.
Intense competition has been created.
More and more companies are using same technology that
reduces both competitive advantages and demand for the
product.
Consumer s have become knowledgeable due to easy
access to useful and better information about the product
and its competing product.
This has become the reason for decrease in profit margin.
Marketers are trying cope up with this situation using
different strategies.
Company Responses and adjustments
Reengineering
This is the process of redesigning the organization
structure, business processes and associated systems to
achieve a desired performance in following situations.
- Poor financial terms
- Intense competition or erosion of market share
- Discover emerging market opportunity
 Outsourcing
Outsources are done with the following intention:
Company can focus on the activities where it is
strong.
- Reduce cost and improve organizational performance
- Leads to better utilization of organizational resources
e.g. Car Dealer, Contracts by Govt.
E-commerce
- Selling and delivering products using Internet.
- Customers can gather more information and can
critically analyze product or services of different
sellers before ordering, buying or making payment.
 Benchmarking
- Earlier companies use to set their own benchmark and
measures performance against it.
- But in todays competitive world, the market leaders
performance usually becomes the benchmark for the
other companies of the industry.
Suppliers
- Buying material or components from small no of
suppliers helps the company to maintain relationship
with them
- This will reduce the problems like storage, lead time,
EOQ etc.
 Global and Local Markets
The advent of globalization and advances in technology
have made the global market local one.
Companies cater their services world wide
Decentralization
- Earlier companies had vertical structure with powers
in the hands of top management. Now a days
decentralization of power encourage s the employees.
 Marketers Responses and Adjustments
Customization
- Marketers are providing better Form utility by
creating customized or tailor made products suitable
to individuals.
Building a good relationship with customers
-It is difficult and costly to attract new customers compared
to existing customers.
- Existing customers mouth publicity shows the importance
of building Long term relationship with customers.
 Target Marketing
- Identifying target market and promoting product
there helps to increase profit.
- Advanced technology has made it possible for seller.
Customer Database:
- About their preference , buying habit , taste, need and
wants etc.
- Integrated Marketing Communication
- Marketers use different means to reach target markets.
- Marketers be assure that there is no conflict between
- Communication message from different media.
 Marketing Process
The Marketing Process of a company involves :
- Identifying the viable and potential marketing
opportunities
-Developing strategies
-Evolving suitable strategies
-Supervising the efforts
Traditionally, marketing has been done on the basis of
production concept.
The company must therefore concentrate on formulating
strategies to attract customers based on their value
perception.
Value Delivery Sequence
There are two types of value delivery sequences they are:
- Focusing on the product
The traditional value delivery activity.
- Focusing on the customer
This sequence focuses on the marketing process,
where value is created and delivered to the customer.
The process stats with strategic marketing process :
- Segmentation, Targeting and Positioning
- Development of product with service
- Pricing, Distribution, Sales Promotion and Advertising
Steps in the Planning Process

The steps in the marketing planning process are

1. Analyzing the Marketing Opportunities
2.Developing Marketing Strategies
3.Planning Marketing Programs
4. Managing the Marketing Effort
Analyzing the Marketing Opportunities
-Ever y company has to analyze its marketing
opportunities based on its area of significance, position
and sales in the market.
-Market Research has to be conducted
-The company has to focus on : Features, Customers
expectation and Advertising and Promotion strategy.
-With the help of this data product may be developed
using advanced technology.
-Identify and develop marketing opportunities before
competitors and transform them into successful
product.
- Virtual Marketing Organizations ( VMOs)
Developing Marketing Strategies
- After analysis of Marketing Opportunities and Product
Development specific strategy suitable to target market
have to be developed.
- Strategy for different stages of Product Life Cycle
- Competitive advantage should be always sustained
Planning Marketing Programs
Marketing Programs have to planned so that
- Strategies formulated are properly implemented
- Organizational goals are achieved

While planning marketing programs company should

consider Marketing Mix Variables with their factor.
Marketing Mix: Product, Price, Place and Promotion
Managing the Marketing Effort
-It is a crucial task
-After marketing plan necessary steps have to be taken
to Control the activities and put them on track
- The budget allocation should be properly utilized
- The manager should efficiently control the deviations
if any
- Any fault during the process will affect sales badly
therefore due care should be taken
 MARKETING PLAN
-Marketing Plan involves the development of logical
process to establish marketing goals and plans to
achieve these goals.
- It may be informal in small organizations
- The management should take necessary steps to
overcome the barriers to marketing planning and
implementation.
- The marketing plan involves functions like Chart,
Analysis, Action program, Projected P & L A/c and
control measures
Executive Summary
- It is a brief description of the entire report
- Includes information about the expenditure that will
be incurred for plan.
- Only brief overview
Opportunity and Issue Analysis
- Manager analysis the opportunity available to the
company and threat to the company
- In issue analysis the manager determines the issues
related with Strengths and weakness of company
- Highlights the area to be focus upon
Marketing Strategy
- Manager formulates a strategy to achieve the
objectives of the plan.
- The strategies set may be for Marketing mix,
promotions, advertising and distribution, R & D etc.
Action Programs
-The action programs specify the details of the strategies
adopted to achieve the objectives
- It should answer:
1. Cost of performing activity?
2. Actions for specific activity?
3. What is going to be done?
4 . Who is going to do it?
Projected Profit and Loss Statement
-Shows the details regarding allocated budge
- The difference between revenue and expenses is
profit or loss
- Top management approves it
Controls
-It is the final stage of plan
- It is the process of controlling the activities deviating
from the planned track.
- The top management time to time review the activities
- Necessary steps are taken if they are going off track
 CUSTOMER VALUE
CUSTOMER PERCEIVED VALUE
Consumer are more educated and informed than ever,
and they have the tools to verify companies claims and
seek out superior alternatives.
Customer perceived value is the difference between
the prospective customers evaluation of Total
customer benefit and Total customer cost.
CPV is thus based on the difference between what the
customer gets and what he or she gives for different
possible choices.
The marketer can increase value or decrease cost.
 The steps in Customer Value Analysis
Identify the major attributes and benefits that
customers value.
Assess the quantitative importance of the different
attributes and benefits.
Assess the companies and competitors performance
on the different customer values against their
importance.
Examine how customers in a specific segment rate the
companies performance against a specific major
competitor or an individual attribute or benefit basis.
Monitor customer value over time.
 Choices and Implications
Some possibilities are as under
The buyer may be under compulsion to buy the
product.
The buyer will retire before the company realizes.
The buyer enjoys a long term friendship with
companies employees.
Delivering High Customer Value
Customers have varying degrees of loyalty to specific
brands, stores and companies.
The value proposition consists of the whole of
benefits the company promises to deliver.
The value delivery system includes all the experiences
the customer will have using the offerings.
 Customer Satisfaction
In general, Satisfaction is a persons feeling of pleasure
or disappointment that results from comparing a
products perceived performance to their expectations.
Customers assessment of product performance depends
on many factors, especially the type of loyalty
relationship the customer has with the brand.
Companies effort to increase customer satisfaction by
lowering price or increasing service may decrease profit
and stakeholder s available fund.
Buyers expectations results from past buying
experience, friends advice, competitors information
and promises.
 Monitoring Satisfaction
Many companies systematically measure how well they
treat their customers, Identify the factors shaping
satisfaction, make changes in their operations and
marketing.
Measurement Techniques
A number of method exist Periodic survey, contact
switched customers, hire mystery shoppers, phone
own company
Influence of Customer satisfaction
Company need to be especially concerned with their
customer satisfaction level to avoid negative image.
Customer Complains
 Product and Service Quality
Satisfaction will also depends on product and service
quality.
Quality is the totality of features and characteristics of
a product or service that bear on its ability to satisfy its
stated or implied needs.
Impact of Quality Higher level of quality results in
higher level of customer satisfaction. Quality is a key
to value creation and customer satisfaction.
 Attracting and Retaining Customers
Companies seeking to expand their profits and sales
must spend its considerable time and resources for
searching for new customers
Only try for adding is like adding water to a leaking
bucket.
- Reducing defection Define and measure retention
rate, Identify causes of attrition.
- Retention Dynamics Satisfied customer, Attracting
new customer is more costly.
 Building Loyalty
Interacting with customers
Developing loyalty programmes
Personalizing Marketing
Creating institutional ties