Slides of my session at ITM, Mumbai. Introduction to Marketing. Session 1. Includes: What is Marketing  Marketing Defined  Core Concepts  Marketing Process  Marketing Philosophies  Towards new marketing assumptions  Functions of Marketing  The Four 4 Ps The Marketing Variables Market Segmenting  Identify sub-markets within market  Decide which one(s) to pursue (target)  Design marketing mix(es) to be attractive to targeted segment's  Demographics - age, race, sex, income, education  Geographic - country, state, urban/rural, climate  Psychographics -attitudes, values, beliefs, personality traits  Behavioral - benefits, usage.  Market consists of people with both the desire and ability to buy

1. Introduction to Marketing
NANDA KISHORE SETHURAMAN
ITM SEPTEMBER 2012

2. Agenda
 What is Marketing
 Marketing Defined
 Core Concepts
 Marketing Process
 Marketing Philosophies
 Towards new marketing assumptions
 Functions of Marketing
 The Four 4 Ps The
Marketing Variables
 Market Segmenting
 Identify sub-markets within market
 Decide which one(s) to pursue (target)
 Design marketing mix(es) to be attractive to targeted segment's
 Demographics - age, race, sex, income, education
 Geographic - country, state, urban/rural, climate
 Psychographics -attitudes, values, beliefs, personality traits
 Behavioral - benefits, usage.
 Market consists of people with both the desire and ability to buy

3. Marketing… Defined?!?!?!?!

4. What is Marketing?
Social definition – A societal process by which
individuals and groups obtain what they need and
want through creating, offering and freely
exchanging products and services of value with
others
Management definition – It is the process of
planning and executing the conception,
pricing, promotion and distribution of ideas,
goods and services to create exchanges that
satisfy individual and organizational goals.
Marketing is an art and science

5. Function of Marketing
Marketing is meeting the needs of both the marketer
and the customer Profitably.
The aim of marketing is to know and understand the
customer so well that the product or service fits him
and sells itself

6. Core Concepts & Marketing
Philosophies

7. Core Concepts
Needs
Wants
Demand
Exchange
Transaction

8. Needs and Wants
Needs are basic human requirements.
 Real needs
 Stated needs
 Unstated needs (assumptions)
 Delight needs
 Secret needs
Wants are needs directed to specific objects/services
that might satisfy the need.

9. Hierarchy of Needs

10. Demand
Want for a specific product backed by an ability to
pay.
Marketers should try to shape the wants. Many
customers don't know what they want when the
product, concept or service is new.
So companies help the customers to learn what they
want.

11. Exchange
Get something (product /service) by offering
something in return.
 Eg. kind (barter) or money (value )
Exchange is a value creating process because it
leaves both parties better off
 (win – win situation)

12. Transaction
A transaction is an exchange between two things of
value on agreed conditions and a time and place of
agreement.
To make successful transaction a marketer should
understand what each party expects from
transaction.

13. What all gets Marketed today?
 Goods
 Services
 Events
 Experiences
 Persons
 Places
 Properties
 Organizations
 Information
 Ideas

14. Concepts
Production concept
Product Concept
Selling Concept
Marketing Concept
Holistic Marketing Concept
Societal marketing Concept

15. Production concept
Consumers will prefer products that are widely
available and inexpensive.
Managers of production oriented businesses
concentrate on achieving high production efficiency,
low costs, mass distribution.

16. Selling Concept
It stems from the belief that consumers if left alone,
will ordinarily not buy enough of the organization’s
products. The organization must therefore,
undertake and aggressive selling and promotion
effort.
The aim is to sell what companies make rather that
what the market wants.

17. Marketing Concept
Everything is from the customer’s end.
Customer-centered, sense and response
philosophy.
The job is to find right products for your
customers.
The key to achieve organizational goals consists of
the company being more effective than competitors
in creating, delivering and communicating superior
customer value to its chosen target markers.

18. Holistic Marketing Concept
Based on development, design and
implementation of marketing programs, processes
and activities
 Relationship Marketing - Building long term mutually
satisfying relations with customers, suppliers,
distributors in order to retain their long term preference
and business.
 Integrated Marketing - The tools that an organization
employs to pursue its marketing objectives in the target
market
 Product, Price, Place, Promotion
 4 C’s – Customer solution, Cost, Convenience,
Communication

19. Holistic Marketing Concept
 Internal Marketing
 Marketing Department
 Senior Management
 Other departments
 Socially Responsible Marketing
 Cause and effect if marketing clearly extend beyond the company
and the customers.
 Ethics
 Environment
 Legal
 Community

20. Societal marketing Concept
Organization’s tasks is to determine the needs, wants
and interests of target markets and to deliver the
desired satisfactions more effectively and efficiently
than competitors in a way that preserves or enhances
the consumer’s and the society’s well being.

21. Marketing Concept versus Selling Concept
Starting Point Focus Means Ends
The Marketing Concept
Customer Integrated Profits from
Market
needs marketing satisfied customers
The Selling Concept
Sell and Profits through
Factory Product
Promote it sales volume

22.  “A customer is the most
important visitor on our
premises. He is not
dependent on us. We are
dependent on him. He is
not an interruption in our
work. He is the purpose of
it. He is not an outsider in
our business. He is part of
it. We are not doing him a
favor by serving him. He is
doing us a favor by giving
us an opportunity to do so.”

23. Marketing Defined
Marketing is the activity, set of instructions, and
processes for creating, communicating, delivering,
and exchanging offerings that have value for
customers, clients, partners, and society at large.
OLD view of NEW view of
marketing: marketing:
Making a sale Satisfying
—“telling and customer needs
selling”

24. Why is Marketing Important?
Shifting Business Paradigm
Buyers’
markets
Sellers’
markets

25. Marketing Process

26. Marketing and Customer Value
Value and Satisfaction
 Value = Benefits/Costs
 Benefits = Functional Benefits + Emotional benefits
 Costs = Monetary costs + Time + Energy + Psychic costs

27. Value Creation and Delivery sequence
Before actually coming out with the product, the
marketer must do:
 Customer segmentation
 Market selection focus
 Value positioning

28. How is it done?
Providing the value
 Product development
 Service development
 Pricing
 Distribution
Communicating the value
 Sales force
 Sales promotion
 Advertising

29. Value Chain
Understanding the value chain helps in creating
better customer value
The primary activities
 Procurement of raw materials (inbound logistics)
 Converting them into final products (operations)
 Shipping out final products (outbound logistics)
 Marketing them (marketing and sales)
 Provide services

30. Value Chain (Contd)
Support activities
 Procurement
 Technology development
 Human resource management
 Firm infrastructure
Value exploration
 How can a company identify new value opportunities?
Value creation
 How can a company differently create more promising new value
offerings?
Value delivery
 How can a company use its capabilities and infrastructure to deliver
the new value offerings more efficiently?

31. Strategic Planning
A game plan for achieving company’s long term
objectives.
 Key areas
 Managing company’s business as an investment portfolio
 Assessing each business that market.
 Establishing a strategy.

32. Planning, Implementation and Control
Planning Implementing
 Corporate planning  Organizing
 Division planning  Implementing
 Business planning Control
 Product planning  Measuring results
 Diagnosing results
 Taking corrective actions

33. Marketing Plan
It summarizes what the marketer has learnt about
the marketplace and indicates how the firm plans to
reach its marketing objectives.
It contains guidelines for marketing programs and
financial allocations over the planning period.

34. Marketing Plan
A marketing plan is the central instrument for
direction and coordination the marketing efforts.
The strategic marketing plan lays out the target
markets and the value proposition that will be
offered based on an analysis of the best market
opportunities.
The tactical marketing plan specifies the
marketing tactics including product features,
promotion, merchandising ,pricing ,sales channels
and service.

35. Objectives of the marketing plan
Acts as a roadmap
Assist in management control and monitoring the
implementation strategy
Informs new participants in the plan of their role
and function
To obtain resources for implementation
To stimulate thinking and make better use of
resources.

36. Contents of a Marketing Plan
Summary of main goals
Situation analysis
Marketing strategy
Financial projections
 Sales forecast an expense forecast and break even analysis.
Implementation controls
 Review of each period’s results, steps to be taken in response to
specific environmental developments such as price wars.

37. Implications of Marketing
Who are our existing/potential customers?
What are their current/future needs?
How can we satisfy these needs/
Can we offer a product/service that the customer
would value?
Can we communicate with our customers?
Can we deliver a competitive product or service?
Why should customers buy from us?

38. Marketing Variables
(Marketing Mix)

41. The Marketing Mix

42. The Marketing Mix
The tools available to a business to gain the reaction
it is seeking from its target market in relation to its
marketing objectives
7Ps – Price, Product, Promotion, Place, People,
Process, Physical Environment
Traditional 4Ps extended to encompass growth of
service industry

43. Product

44. Product
 Methods used to
improve/differentiate
the product and increase
sales or target sales more
effectively to gain
a competitive advantage
e.g.
 Extension strategies
 Specialised versions
 New editions
 Improvements – real or
otherwise!
 Changed packaging
 Technology, etc.

45. Price

46. Price
Pricing Strategy
Importance of:
 knowing the market
elasticity
 keeping an eye on rivals

47. Place

48. Place
The means by which products and services get from
producer to consumer and where they can be
accessed by the consumer
 The more places to buy the product and the easier it is made to
buy it, the better for the business (and the consumer?)

49. Promotion

50. Promotion
Strategies
to make the consumer
aware of the existence of
a product
or service
NOT just advertising

51. People

52. People
People represent the business
 The image they present can be important
 First contact often human – what is the lasting image they
provide to the customer?
 Extent of training and knowledge
of the product/service concerned
 Mission statement – how relevant?
 Do staff represent the desired culture
of the business?

53. Process

54. Process
How do people consume services?
What processes do they have to go through to
acquire the services?
Where do they find the availability
of the service?
 Contact
 Reminders
 Registration
 Subscription
 Form filling
 Degree of technology

55. Physical Environment

56. Physical Environment
The ambience, mood or physical presentation of the
environment
 Smart/shabby?
 Trendy/retro/modern/old fashioned?
 Light/dark/bright/subdued?
 Romantic/chic/loud?
 Clean/dirty/unkempt/neat?
 Music?
 Smell?

57. The Marketing Mix
Blend of the mix depends upon:
Marketing objectives
Type of product
Target market
Market structure
Rivals’ behaviour
Global issues – culture/religion, etc.
Marketing position
Product portfolio
 Product lifecycle
 Boston Matrix

58. The Marketing Mix
 Blend of the mix depends upon:
 Marketing objectives
 Type of product
 Target market
 Market structure
 Rivals’ behaviour
 Global issues – culture/religion, etc.
 Marketing position
 Product portfolio
 Product lifecycle
 Boston Matrix

59. Factors Influencing Company Marketing
Strategy

60. Market Segmenting

62. Segmentation, Targeting, Positioning
62

63. Learning Goals
1. Learn the three steps of target marketing, market
segmentation, target marketing, and market positioning
2. Understand the major bases for segmenting consumer
and business marketing strategy
3. Know how companies identify attractive market segments
and choose target marketing strategy
4. Realize how companies position their products for
maximum competitive advantage in the marketplace
7 - 63

64. Case Study - Procter & Gamble
• Sells multiple brands • Has also identified
within the same product different niches within
category for a variety of certain segments
products • Product modifications
are useful: Tide offers
• Brands feature a
seven different product
different mix of benefits formulations to serve
and appeal to different different niches’ needs
segments
7 - 64

65. Steps in market segmentation, targeting and
positioning
Market Segmentation
Identify bases for segmenting the market

 Develop segment profiles
Target Marketing
Develop measure of segment attractiveness

 Select target segments
Market Positioning
 Develop positioning for target segments
 Develop a marketing mix for each segment
7 - 65

66. Segmentation
66

67. In other words…
A market segment is a subgroup
of people or organizations sharing
one or more characteristics that
cause them to have similar product
needs.
 it is distinct from other segments
(heterogeneity across segments)
 it is homogeneous within the segment
(exhibits common attributes)
 it responds similarly to a market
stimuli
 it can be reached by a market
intervention

68. Purpose
Increase marketing
efficiency by focusing
marketing efforts to a
particular group
Maximize scarce
marketing resources
Find a market with
limited competition
Select the most
profitable segment

69. 69

70. Linking Market Need to a Marketing Program
70

71. Segmentation Bases
71

72. Geographic Segmentation
72

73. Blank
73

74. Demographic Segmentation
74

75. Demographics - Marketing across Generations
Mature Baby Generation Generation
Market Boomers X Y
1945 1965 1976 1994

77. Mature Market

78. Generation X

79. Generation Y

80. Behavioral Segmentation
80

81. Psychographic Segmentation
81

82. 82

83. Segmenting International Markets
83

84. Dell, across the globe
84

85. Requirements for Effective Segmentation
Measurable
Measurable • Size, purchasing power, profiles
of segments can be measured.
Accessible
Accessible • Segments must be effectively
reached and served.
Substantial
Substantial • Segments must be large or
profitable enough to serve.
Differential
Differential • Segments must respond
differently to different marketing
mix elements & actions.
Actionable
Actionable • Must be able to attract and serve
the segments.

86. Market Segmentation Process
1. Determine the characteristics of segments in the
target market & separate these segments in the
market based on these characteristics.
2. Verify the market segments size if adequate
enough to support the organization's product.
3. Develop a marketing strategy to target this
market.

87. End of Day 1