![40
The Marketing Mix
The conventional view of the marketing mix consisted of
four components (4 Ps): Product, Price, Place/
distribution and Promotion.
Generally acknowledged that this is too narrow today;
now includes , Processes, Productivity [technology ]
People [employees], Physical evidence
Marketers today are focused on virtually all aspects of
the firm’s operations that have the potential to affect
the relationship with customers.](https://image.slidesharecdn.com/marketinganditsfundamentals-160507135645/85/Marketing-and-its-fundamentals-39-320.jpg)
Marketing and its fundamentals
- 1. 1 What is Marketing…?? Selling? Advertising? Promotions? Making products available in stores? Maintaining inventories? All of the above, plus much more!
- 2. 2 Marketing = ? Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals American Marketing Association
- 3. 3 Marketing = ? Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
- 4. 4 Simple Marketing System Industry (a collection of sellers) Market (a collection of Buyers) Goods/services Money Communication Information
- 5. 5 Marketing = ? Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over. Marketing is all about managing the four P’s – product price place promotion
- 6. 6 The 4 Ps & 4Cs Marketing Mix Product Price Promotion Place Customer Solution Customer Cost Communication Convenience
- 7. 7 Difference Between - Sales & Marketing ? Sales trying to get the customer to want what the company produces Marketing trying to get the company produce what the customer wants
- 8. 8 Scope – What do we market Goods Services Events Experiences Personalities Place Organizations Properties Information Ideas and concepts
- 9. 9 Core Concepts of Marketing Based on : Needs, Wants, Desires / demand Products, Utility, Value & Satisfaction Exchange, Transactions & Relationships Markets, Marketing & Marketers.
- 10. 10 Needs, wants demands Markets Marketing & Marketers Utility, Value & Satisfaction Xchange, Transaction Relationships Products Core Concepts of Marketing
- 11. 11 In order to understand Marketing let us begin with the Marketing Triangle Customers CompetitionCompany
- 12. 12 Who is a Customer ?? Anyone who is in the market looking at a product / service for attention, acquisition, use or consumption that satisfies a want or a need CUSTOMER IS . . . . .
- 13. 13 Customer – CUSTOMER has needs, wants, demands and desires Understanding these needs is starting point of the entire marketing These needs, wants …… arise within a framework or an ecosystem Understanding both the needs and the ecosystem is the starting point of a long term relationship
- 14. 14 How Do Consumers Choose Among Products & Services? Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product. Satisfaction - Based on a comparison of performance and expectations. Performance > Expectations => Satisfaction Performance < Expectations => Dissatisfaction
- 15. 15 Customers - Problem Solution As a priority , we must bring to our customers “WHAT THEY NEED” We must be in a position to UNDERSTAND their problems Or in a new situation to give them a chance to AVOID the problems
- 16. 16 Customer looks for Value Value = Benefit / Cost Benefit = Functional Benefit + Emotional Benefit Cost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost
- 17. 18 Strategic Marketing Strategic marketing management is concerned with how we will create value for the customer Asks two main questions What is the organization’s main activity at a particular time? – Customer Value What are its primary goals and how will these be achieved? – how will this value be delivered
- 18. 19 Strategic Planning Strategic Planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities. Also called Strategic Management Process All organizations have this Can be Formal or Informal
- 19. 20 The Strategic-Planning, Implementation, and Control Process
- 20. 21 Business Strategic-Planning Process External environment (Opportunity & Threat analysis) Internal Environment (Strength/ Weakness analysis) Goal FormulationBusiness Mission
- 21. 22 Strategy Formulation Environmental Analysis Internal AnalysisCompetitor Customer Supplier Regulatory Social/ Political Technology Know-How Manufacturing Know-How Marketing Know-How Distribution Know-How Logistics Strength & Weaknesses Identity Core Competencies Opportunities & Threats Identify opportunity Fit internal Competencies with external opportunities Firm Strategies
- 22. 23 The Marketing Plan A written document that acts as a guidebook of marketing activities for the marketing manager
- 23. 24 CONTENTS of MARKETING PLAN Business Mission Statement Objectives Situation Analysis Marketing Strategy Target Market Strategy Marketing Mix Positioning Product Promotion Price Place – Distribution People Process Implementation, Evaluation and Control
- 24. 25 The Marketing Process Business Mission Statemen t Objective s Situation Analysis Implementation Evaluation, Control Target Market Strategy Marketing Strategy Product Promotion Place/Distribution Price Marketing Mix
- 25. 26 Why a product like radio declined and now once again emerging as an entertainment medium ?
- 26. 27 What Were the Drivers of This Change ? Technology ? Government policy ? Other media substitutes ?
- 28. 29 DemographicsDemographics Social Change Social Change Economic Conditions Economic Conditions Political & Legal Factors Political & Legal Factors TechnologyTechnology CompetitionCompetition Environmental Scanning Target Market Product Distribution Promotion Price Product Distribution Promotion Price External Environment is not controllable Ever-Changing Marketplace External Marketing Environment Physical / Natural
- 29. 30 The macro-environment is the assessment of the external forces that act upon the firm and its customers, that create threats & opportunities
- 30. 31 P r o d u c tP r o d u c t
- 31. 32 Anything that is offered to the market for attention, acquisition, use or consumption that satisfies a want or a need Product is . . . . .
- 33. 34 Product Items, Lines, and Mixes Product ItemProduct Item Product LineProduct Line Product MixProduct Mix A specific version of a product that can be designated as a distinct offering among an organization’s products. A specific version of a product that can be designated as a distinct offering among an organization’s products. A group of closely-related product items. A group of closely-related product items. All products that an organization sells. All products that an organization sells.
- 34. 35 Product Mix Width – how many product lines a company has Length – how many products are there in a product line Depth – how many variants of each product exist within a product line Consistency – how closely related the product lines are in end use
- 35. 36 What is a Service? Defining the Essence An act or performance offered by one party to another (performances are intangible, but may involve use of physical products) An economic activity that does not result in ownership A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets
- 36. 37 Some Industries - Service Sector Banking, stock broking Lodging Restaurants, bars, catering Insurance News and entertainment Transportation (freight and passenger) Health care Education Wholesaling and retailing Laundries, dry-cleaning Repair and maintenance Professional (e.g., law, architecture, consulting)
- 37. 38 Classification of Services Pure Tangible Product Materials / Components Computers Major Product with Minor Services Product = Service Major Service with Minor Product Business Hotels Good Transportation Banking Pure Intangible Service
- 38. 39 Intangibility – Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase. Inseparability - Services are produced and consumed simultaneously. Variability or Heterogeneity – Services are highly variable Perishability – Services cannot be stored. Non Ownership - Services are rendered but there is no transfer of title Major Characteristic of Services
- 39. 40 The Marketing Mix The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion. Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ] People [employees], Physical evidence Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.
- 40. 41 The “8Ps” of Integrated Service Management vs. the Traditional “4Ps” ► Product elements ► Place and time ► Process ► Productivity and quality ► People ► Promotion and education ► Physical evidence ► Price and other user outlays
- 41. 42 The Give and Get of Marketing
- 42. 43 Great Words on Marketing 1. “The purpose of a company is ‘to create a customer…The only profit center is the customer.’” 2. “A business has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.” 3. “The aim of marketing is to make selling unnecessary.” 4. “While great devices are invented in the Laboratory, great products are invented in the Marketing department.” 5. “Marketing is too important to be left to the marketing department.”
- 43. 44 Drivers of Customer Satisfaction Many aspects of the firm’s value proposition contribute to customer satisfaction: The core product or service offered Support services and systems The technical performance of the firm Interaction with the firm and it employees The emotional connection with customers Ability to add value and to differentiate as a firm focuses more on the top levels
- 44. 45 Marketers and Markets Marketers are focused on stimulating exchanges with customers who make up markets – B2C or B2B. The market is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers. It is absolutely essential that marketers have a detailed understanding of consumers, their needs and wants. Much happens before and after the sale to affect customer satisfaction
- 45. 46 Stages of Customer Interaction
- 46. 47 What Changed in Marketing… • Organize by product units • Focus on profitable transactions • Look primarily at financial scorecard • Focus on shareholders • Marketing does the marketing • Build brands through advertising • Focus on customer acquisition • No customer satisfaction measurement • Over-promise, under-deliver • Organize by customer segments • Focus on customer lifetime value • Look also at marketing scorecard • Focus on stakeholders • Everyone does the marketing • Build brands through performance • Focus on customer retention • Measure customer satisfaction and retention rate • Under-promise, over-deliver Old Economy New Economy
- 47. 48 Myth 1 – The larger the range of products, the more customer-centric I am. Mythbuster – The range of products hasMythbuster – The range of products has emerged from beingemerged from being competition-centric.competition-centric.
- 48. 49 Myth 2 – Better technology leads to better customer service. Mythbuster – TechnologyMythbuster – Technology alone does not deliver,alone does not deliver, helps people do.helps people do.
- 49. 50 Myth 3 – Launch a product and the customer will start using instantly. - Give a customer a card and he will learn how to play with it immediately Mythbuster – Customers needMythbuster – Customers need To be educated too…To be educated too…
- 50. 51 Mythbuster – CustomersMythbuster – Customers are not only presentare not only present where competition is.where competition is. Myth 4 – The only way to get a customer is from competition.
- 51. 52 Myth 5 – Just advertise and - You will sell. Mythbuster – Advertising will only sell,Mythbuster – Advertising will only sell, Not retain customers.Not retain customers.
- 52. 53 Myth 6 – No difference between marketing & selling Mythbuster –Mythbuster – “Selling focuses on the needs of the“Selling focuses on the needs of the seller; marketing on the needs of the buyer.seller; marketing on the needs of the buyer.
- 53. 54 Myth 7 – In the absence of relationships ‘trust’ builds financial brands Mythbuster – TMythbuster – Trust is not a differentiator at all…rust is not a differentiator at all… it is the very minimum that the customer expects!!it is the very minimum that the customer expects!!
- 54. 55 So what will the differentiators be :So what will the differentiators be : • Technology ? • Brand ?
- 55. 56 The real differentiator ofThe real differentiator of customer – centricity in acustomer – centricity in a commoditised world of financialcommoditised world of financial products -products - Customer Service !Customer Service !
Editor's Notes
- #44: Drucker, Yogi Berra, A Chinese Proverb, William Davidow, David Packard