Marketing Management (B.
com)
Module I (Marketing management)
Core marketing concepts (Basic terms)
Customer
Customer is the person who makes the decision to purchase a product
and who pays for it.
Needs
Needs are the basic requirements of human being such as food, cloth,
shelter, education etc.
Wants
Wants are things that satisfy our needs. Wants are the needs directed to
specific product or service.
Product
A product is anything that can be offered to satisfy a need or want.
Products includes goods, services and ideas.
Exchange
Exchange is a process of obtaining a desired offered by sacrificing
something in return.
Value
Value means utility per unit of price. It reflects the relationship of benefits
to cost, or what we get or what we go.
Satisfaction
Satisfaction expressed in terms of the products perceived performance in
relation to customers’ expectations.
Market
It is a place where buyers and sellers gather to exchange goods and
services.
Marketing
Marketing means creation and exchange of goods and services for the
satisfaction of human needs and wants.
Difference between selling and marketing
Selling Marketing
Emphasis is on the product Emphasis is on customer want
Emphasis on sellers need Emphasis on buyers need
It is profit oriented It is customer oriented
Aims profit maximization Aims customer satisfaction
It begins after production It begins before production
Planning is short run oriented Planning is long run oriented
Narrow scope Wider scope
It create only possession utility It create time, place and
possession utility
The value of marketing
The value of marketing is created by meeting customer needs. Marketing
is the delivery of value to customers at a profit.
Types of value
1. Functional value
This is the functional performance utility received from the products
attributes.
2. Social value
This is the perceived utility acquired because of the association between
one or more specific social groups.
3. Emotional value
This is the capacity of a product to stimulate the consumer’s emotions or
feelings.
4. Epistemic value
This comes from the products ability to foster curiosity, provide novelty
and desire for knowledge.
5. Conditional value
This comes from the some particular situation or circumstances facing the
customers.
Marketing philosophies (Marketing concepts)
Marketing concept or philosophies is an attitude or a way of business
thinking. It is also referred to as marketing philosophies.
Production concept
According to this concept marketing success depends on offering
products at low price. This concepts emphasis low cost of production
through mass production and distribution.
Product concept
According to this concept, the marketer can easily sell the product if it is
of high quality. This concept emphasis on product quality.
Selling concept
According to this concept low cost or high quality alone is sufficient to
sell the products. This concept emphasis selling efforts.
Marketing concept
According to this concept products are developed and produced to
satisfy the needs of the customer. This concept emphasis on customer
satisfaction.
Social marketing concept
According to this concept marketing activities should aims at the welfare
of the society. This concept emphasis on customer satisfaction.
Holistic marketing concept
It is a new marketing philosophy developed to meet challenges of
modern marketing. It comprise the following
a) Relationship marketing
It is an attempt to create customer loyalty and discouraging customers
from defecting to other sellers.
b) Integrated marketing
It refers to an approach where marketing function is integrated with
other functions, to achieve the organizational objectives.
c) Internal marketing
Internal marketing refers to harmony among various marketing activities
within the firm.
d) Performance marketing
It refers to evaluation of the performance of marketing activities and
programs.
Strategies adopted by companies for creating long term loyalty
relationship with customers
Financial incentives
Social as well as financial benefits
Club marketing programs
Research about the customers
Total customer satisfaction
Monitoring satisfaction
Visualize future success
Customer centric
Value differentiation
Growth of sales
Expand the relationship
The new marketing realities (Modern marketing features)
Technology
Globalization
Social responsibility
Competition
Privatization
Retail revolution
Direct marketing
Consumer movement
E-marketing
Social networking sites
Consumer participation
Deregulation
Consumer buying power
Importance of marketing
Importance to society
Provides employment
Raises standard of living
Create utilities
Reduces costs
Enriches society
Make life easier
Solve social problems
Importance to companies
Helps in income generation
Helps in planning and decision making
Helps in exchanging information
Expands global presence
Helps to adapt changing environment
Helps in distribution
Importance to consumers
Provide quality products
Consumer satisfaction
Helps in selection
Provides variety of products
Improving knowledge of consumers
Importance to economy
Increases in national income
Economic growth
Ploughing back of resources
Saves the economy from depression
Importance of marketing in Indian economy
Increase in employment opportunities
Balanced growth of economy
Increase in per capita income
Increase in profits
Increase in exports
Increase in national income
Improves standard of living
Marketing management
Marketing management is the art and science of choosing target markets
and building profitable relationships with them.
Nature/ Characteristics of marketing management
Managerial function
Goal oriented
Determining appropriate marketing mix
Specialized function
Marketing concept in action
Universal function
Marketing management tasks
It is the specific set of tasks that helps to bring up successful marketing
management and marketing leadership.
Important marketing management tasks
Developing marketing strategies and plans
Capturing marketing insights
Connecting with customers
Building strong brands
Creating value
Communicating value
Delivering value
Creating successful long term growth
Basic marketing management tasks
Conversional marketing
Developmental marketing
Remarketing
Maintained marketing
Consumer markets
It refers to the markets where people purchase product for consumption
and are not meant for further sales.
Characteristics/ features of consumer markets
1. Market focus
2. Consumption purpose
3. Branding
4. Packaging
5. Demand
6. Emotion
Consumer behaviour
According to Engel, Blackwell and Mansard “Consumer behavior is the
action and decision process of people who purchase goods and services
for personal consumption.”
Factors affecting/ influencing consumer behaviour (Determinants)
Psychological Cultural Social factors Personal Economic factors
factors factors factors
Motives Culture Family Age Personal income
Perception Sub culture Role and status Gender Family income
Learning Social class Reference group Occupation Savings
Beliefs Life style Liquidity position
Attitudes Personality Consumer credits
Consumer buying process/ Consumer decision making process
1. Recognition of an unsatisfied need
2. Identification of alternatives
3. Evaluation of alternatives
4. Purchase decision
5. Post purchase behavior
Market segmentation
The process of dividing whole market in to different sub-market is called
market segmentation.
Steps/ Stages/ Process/ Phases in market segmentation
1. Establish overall strategy or objective.
2. Decide the bases for segmenting the market.
3. Select segmentation variables.
4. Profile the segments.
5. Evaluate segment attractiveness.
6. Select segments or target markets.
Criteria for successful segmentation
1. Homogeneity
2. Measurability
3. Substantiality
4. Accessibility
5. Profitability
6. Responsiveness
7. Growth potential
Need for market segmentation
1. Different people prefer different products. Their needs and wants
are different.
2. It is necessary to develop pricing strategy.
3. It is required to develop different promotional programs.
4. It is necessary to arrange physical distribution.
5. It is needed for packing a product.
6. It is necessary to develop an appropriate packaging.
Importance/ Advantages/ Benefits of market segmentation
Advantages to firms
Increases sales volume
Helps to prepare effective marketing plan
Helps to understand the needs of consumers
Helps to win competition
Makes best use of resources
Enables to take decisions
Achieves marketing goals
Expand markets
Specialized marketing
Creates innovations
Higher market shares
Advantages to consumers
Customer oriented
Quality products at reasonable rates
Innovative products
Levels of market segmentation
1. Segment marketing
In segment marketing, market is divided into two or more segments. For
each segment separate marketing mix is designed.
2. Niche marketing
A niche is a segment within a segment. This segment is a very small
section of the whole market which has not yet been identified and
served by competitors.
3. Local marketing
Here the market program is tailored to the needs and wants of local
customer groups.
4. Individual marketing
This is the ultimate level of segmentation. This is also called customized
marketing.
Market coverage strategies (Strategies of market targeting)
Undifferentiated marketing
Under this strategy, a firm goes to the whole market with one product
type. It means one marketing mix is used for entire market.
Differentiated marketing
Under this strategy different marketing mix is used for each of the
segments.
Concentrated marketing
Concentrated marketing is concerned with the concentration of all
marketing efforts on one selected segments within the total market.
Customized marketing
It is also called one-to one marketing, individual marketing or
personalized marketing. In this case each customer as a separate segment
and customize marketing programme.
Bases of market segmentation/ Methods of segmentation
Demographic Geographic Behavioral Psychological
Segmentation Segmentation segmentation segmentation
Age Area Attitude Life style
Sex Climate Occasions Personality
Family size Population Product Social class
density segmentation
Occupation
Education
Market targeting
A target market is a group of customers at whom the entire marketing
efforts are directed.
Advantages/ Benefits of target marketing
Firm can expand market share.
It build up company image.
It enable a firm to tap marketing opportunities better.
It is suitable in case of services.
It develop new loyal customers
Steps in market targeting
1. Market segmentation
2. Segment evaluation
3. Designing market mix
4. Product positioning
Service
Service is an intangible product that provides benefits to consumers and
involves human or mechanical efforts.
Characteristics/ Elements of service
Intangibility
Lack of ownership
Inseparability
Perishability
Variability
Simultaneity
Difference between good and services
Goods Services
It is an object, device or thing. It is a deed, performance or effort
It is tangible or physical It is intangible or non-physical.
It can be carried and stored. It cannot be carried or stored.
It is generally non- perishable. It is perishable.
It can be standardized. It is difficult to standardize.
It cannot be replaced. It can be replaced.
Service marketing
It is a process for identifying or creating, communicating, and delivering
value to customers and for managing customer relationship.
Difference between product and service marketing
Product marketing Service marketing
Markets tangible things Markets intangible things
Customer evaluate product Difficult to evaluate service
Effective advertisement is Cannot be advertised effectively
possible
Pricing is not complex Pricing is complex
Standardization is possible Standardization is not possible
Classification/ Types of services
Production services: Repair, maintenance, transportation.
Business services: Banking, insurance, accounting, creditcard
Consumer services: Travel, education, consultancy, leisure.
Government services: Defense, police, medical, broadcasting
Special problems of service marketing
1. Promotion is very difficult
2. Mass production for mass distribution not possible
3. Not a universally accepted formula for price determination
4. It cannot be protected through patents.
5. It cannot be returned or resolved.
Rural market
Rural market simply refers to market in rural areas. Rural market consist
of small farmers, primary producers and village people.
Types of rural markets
Regular periodic market
Seasonal markets
Daily markets
4 As of rural marketing
1. Affordability
2. Awareness
3. Availability
4. Acceptability
Salient features of rural marketing in India
Consumer
Cultural diversity
Income levels
Vast scattered markets
Market structure
Seasonal demand
Infrastructure facilities
Traditional life
Buying decisions
Spread of cable TV
Potential of rural marketing in India/Growing importance of rural
marketing
1. Growing population
2. Increasing literacy rate
3. Rising prosperity
4. Growth in consumption
5. Changing life style
6. Higher market growth
7. Less expensive
8. Lesser dependence on agriculture and monsoons
9. Increasing demand for brand products
10. Favorable government policies
Challenges/ problems of rural marketing
1. Lack of infrastructure facilities
2. Lack of communication facilities
3. Dispersed markets
4. Distribution problems
5. Inadequate banking or credit facilities
6. Low per capita income
7. Small quantity of purchase
8. Many languages and dialects
9. Low level of literacy
10. Problem in segmentation
Rural marketing strategies
Segmentation
Marketing research
Marketing agencies
Cooperative promotion
Penetration pricing strategy
Difference between rural and urban marketing
Rural marketing Urban marketing
Market segmentation not easy Market segmentation easy
Positioning is difficult Positioning is easy
Limited product availability Product availability is low
Price sensitive consumers Less price sensitive consumers
Income level of consumers is low Income level of consumers is high
Sales promotion is not effective Sales promotion is effective
Goods are sold in small packets Goods are sold in large packets
