Marketing, as a subject, encompasses the strategies and processes businesses use to promote, sell, and distribute their products or services, ultimately aiming to build relationships with customers and drive sales
- 1. MARKETING Text books: INDUSTRIAL ENGINEERING & MANAGEMENT – O P KHANNA INDUSTRIAL ORGANISATION & ENGINEERING ECONOMICS – BANGA & SHARMA
- 2. Markets The set of all actual and potential buyers of a product or service Industry (a collection of sellers) Market (a collection of buyers) Communication Products / Services Money Information A simple marketing system
- 3. Marketing It is a technique by which the needs of the customer are satisfied through market Marketing may be defined as activities aimed at satisfying needs & wants through exchange process. Eg:- food, water, clothing, education Marketing tries to know & understand the customer as well as product that fits him and sells itself Human needs & wants create a state of discomfort and they tend to get objects those satisfy these needs & wants
- 4. The Goal of Marketing is: To attract new customer by promising superior value, and to keep current customers by delivering satisfaction Marketing, more than any other business function, deals with customers Creating customer value and satisfaction are at the very heart of modern marketing thinking and practice Some people believe that only large business organizations operating in highly developed economies use marketing, but sound marketing is critical to the success of every organization – whether large or small, for profit or non – profit, domestic or global
- 6. Functions of Marketing To give direction & purpose to the marketing division as a whole as well as to its various departments To place present activities in perspective To discipline various future activities To place tactical plans correctly in the strategic selling To establish the organisation & the methods which will be required
- 7. What is marketed…??? Goods Services Events Experiences Persons Places Properties Organizations Information Ideas
- 8. Structure of flows in a modern exchange economy
- 9. Key customer markets Consumer markets – companies selling mass consumer goods & services such as juices, cosmetics Non profit & Governmental markets – companies selling to non profit organizations with limited purchasing power such as churches, temples, universities..
- 10. Business markets – companies selling business goods & services Global markets – companies in the global market must decide which countries to enter, how to enter each, how to adapt product & service features to each country, how to price products in different countries
- 11. Market places, Market spaces & Metamarkets Market places:- it is physical, such as a store you shop in Market space:- it is digital, as when you shop on the internet Metamarket:- it is a cluster of complementary products & services closely related in the minds of consumers, but spread across a diverse set of industries
- 12. Marketing concept To explain marketing definition, we examine the following important terms : Needs, wants, and demands Products and services Value, satisfaction and quality Exchange, transactions, and relationships Markets
- 14. Core Marketing Concepts Needs: The most basic concept underlying marketing is that of human needs Human needs are states of felt deprivation Human have many complex needs: Physical needs for food, clothing and safety Social needs or belonging and affection Individual needs for knowledge and self – expression
- 15. Core Marketing Concepts Wants: Want are the form taken by human needs as they are shaped by culture and individual personality People have almost unlimited wants but limited resources They want to choose products that provide the most value and satisfaction for their money Demands: Demand means the willingness and capacity to pay When wants backed by buying power, wants become demands Consumers view products as bundles of benefits and choose products that give them the best bundle for their money
- 16. Core Marketing Concepts Product: Anything that can be offered to a market to satisfy a need or want The concept of product is not limited to physical objects – anything capable of satisfying a need can be called a product. Eg:- softwares, informations Services: In addition to tangible goods, products also include services, which are activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything
- 17. Core Marketing Concepts Values: Customer value is the difference between the values the customer gains from owning & using a product and the costs of obtaining the products Customers often do not judge product value and costs accurately or objectively. They act on perceived value
- 18. Core Marketing Concepts Satisfaction: Customer satisfaction depends on a product’s perceived performance in delivering value relative to a buyer’s expectation If the product’s performance falls short of the customer’s expectations, the buyer is dissatisfied
- 19. Core Marketing Concepts Quality: Customer satisfaction is closely linked to quality Quality has a direct impact on product performance Quality can be defined as “freedom from defects” TQM programs designed to constantly improve the quality of products, services, and marketing processes
- 20. Core Marketing Concepts Exchange : The act of obtaining a desired object from someone by offering something in return Transaction : A trade between two parties that involves at least two things of value, agreed – upon conditions a time of agreement, and a place of agreement Relationship marketing : The process of creating, maintaining, and enhancing strong, value – laden relationships with customers and other stakeholders
- 21. Marketing concept vs Selling concept Marketing focuses on the needs of the buyer. The idea behind marketing is to satisfy the needs of the customer by means of the product or services Selling focuses on the needs of seller. Seller need to convert his product in to cash
- 22. Marketing concept vs Selling concept Marketing concept starts with the company’s target customer. Company integrates & coordinates all its activities to meet the customer satisfaction Selling concept start with the company’s existing products by adopting heavy selling & promoting activities
- 23. Marketing goals Maximize consumption. This will lead to create maximum production, wealth & employment Maximize consumer satisfaction Improve the quality of product life by improving the quality, quantity, range & accessibility
- 24. Duties of marketing managers Selling Buying Transportation Storage Risk bearing Standardization & grading Financing Market information
- 25. Market strategy Marketing managers should develop a marketing strategy to move goods or products from where they are manufactured to the final consumer A marketing strategy consists of two parts 1. Market segment 2. Marketing mix
- 26. Market Segmentation Market Segmentation is a method of “dividing a market (Large) into smaller groupings of consumers or organizations in which each segment has a common characteristic such as needs or behavior” Market segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs
- 27. SEGMENT MARKETING Each segment consists of a group of customers who share a similar set of needs and wants Identifiable Group with in a Market with Similar • Wants • Purchasing Power • Geographical Location • Buying Attitudes
- 28. Steps in the Segmentation Process Determine Market Boundaries Decide which Segmentation Bases to Use Analyze (Consider) Segmentation Data Develop a Profile of Each Segment Target the Segments to be Served Design a Marketing Plan
- 29. Market Segmentation Segmenting Consumer Markets • Geographic • Demographic • Psychographic • Behavioral
- 30. Market Segmentation Segmenting Consumer Markets Geographic segmentation divides the market into different geographical units such as nations, regions, states, countries, or cities Demographic segmentation divides the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, generation, and nationality
- 31. Market Segmentation Demographic segmentation is the most popular segmentation method because consumer needs, wants, and usage often vary, closely with demographic variables and are easier to measure than other types of variables
- 32. Market Segmentation Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product • Occasion • Benefits sought • User status • Usage rate • Loyalty status
- 33. Behavioral segmentation Occasion segmentation divides buyers into groups according to occasions when they get the idea to buy, actually make purchases, or respond to a product Benefit segmentation requires finding the major benefits people look for in the product class, the kinds of people who look for each benefit, and the major brands that deliver each benefit
- 34. Behavioral segmentation User status divides buyers into ex-users, potential users, first time users, and regular users of a product Usage rate divides buyers into light, medium, and heavy product users Loyalty status divides buyers into groups according to their degree of loyalty
- 35. THE 4 P’S OF MARKETING
- 36. The 4 P’s of Marketing or The Marketing Mix • Marketing Mix – All four are essential to the success of a marketing plan for either a product or a service • 4 P’s stand for – Product – Price – Place – Promotion • A mix of the four is necessary to sell a product
- 37. The Marketing Mix Think of a Cake All cakes need 4 things – flour, egg, sugar, milk However, you can play with the flavour of your cake by changing the ingredients slightly Example: Sweeter cake – add more sugar
- 38. The Marketing Mix The same thing is true with the marketing mix You can vary the type of message you are sending out about your product/service by mixing different elements of each of the P’s Example: Want to be seen as a luxury item – make the price high, have limited selection
- 39. PRODUCT - Variety - Quality - Design - Brand name - Sizes - Warranties PRICE - List price - Discounts - Allowances - Payment period - Credit terms PROMOTION -Sales promotion - Advertising -Sales force -Public relations -Direct marketing PLACE (DISTRIBUTION) -Channels - Locations - Transport - Assortments MARKETING MIX
- 40. Product • Refers to the benefits of buying a product – What need does the service/product fulfill – Quality • What will the quality of your service/product be? • Some people really want quality (Ferrarri) vs others that don’t really matter (Maruthi 800) – Features • How will your product/service differ from the competition • What will you do differently? – Design • How is it going to look? • Consumers often will purchase because “it looks cool”
- 41. Product Packaging – if you are selling a product what image will the packaging communicate? If a service – how will the appearance of your operation communicate an image about your business Range of Products – what complimentary products may you offer If service: Will you offer other products with your service Example: Moose Winooski’s – you can buy T-Shirts and Hats Example: Think of the range of products that apple has
- 42. Price • Marketing is responsible for establishing the price of their service/product • Must consider the costs of all the inputs (materials, labour, etc) • Mark-up Price – How much profit do you want to make on every product/customer • Example: Selling Cupcakes – Every cupcake uses 5 rupees of materials and labour roughly costs 2 rupees to make one muffin – You must charge at least 7 rupees to break-even
- 43. Price The price of your product or service tells the customer a lot about your product Rs.1000 Rs.1500
- 44. Price Different Pricing Strategies Competition – basing your prices on those of the competition Penetration – making your price low while new just to get some business Bundle – putting the product/service with another item and bundling the prices Psychological – making the price say something about the quality of your product
- 45. Place (Distribution) • Simply refers to how & where you are going to sell the product to the consumer • Direct Distribution – selling your product directly to the consumer • Indirect Distribution – sold through a 3rd party – What retailers are the best for reaching your Target Market? – Example: Selling protein powder – where do I sell? Notice how car dealerships are always on the outskirts of town or close to a highway?
- 46. Promotion A successful product or service means nothing unless the benefit of that product/service can be communicated to the Target Market o Sales promotion o Advertising o Sales force o Public relations o Direct marketing
- 47. Public Relations Advertising Sales Buzz