Principles of Marketing

Introduction

• Name
• Education
• Work Experience
What is Marketing ?
 Marketing Perspectives

Focus: Sell what it’s easy

Production Orientation
to produce
 Marketing Perspectives

Focus: Sell what it’s easy

Production Orientation
to produce

Focus: Push products to

Sales Orientation
beat competition
 Marketing Perspectives

Production Orientation Focus: Sell what it’s easy

to produce

Focus: Push products to

Sales Orientation
beat competition

Marketing Department Focus : Coordinate all

Orientation customer contacts
 Marketing Perspectives

Focus: Sell what it’s easy

Production-orientation
to produce

Focus: Push products to

Sales-orientation
beat competition

Marketing Department Focus : Coordinate all

Orientation customer contacts

Marketing Company Focus : Long-run customer

Orientation satisfaction
 How Should a Business be Defined?
Company Product-Oriented Market-Oriented
Answer Answer
Kodak We make cameras We help preserve
and films beautiful memories
 Evolution – Trade to Marketing

Export Raw Material Export Raw Jute , Cotton

( India early 1900)

Massive Industrialization during 1960’s

Export Products Jute Products , cotton garments

etc

Distribution channels , product development, pricing

Demand for Indian products like

Created market for various products Textiles Electronics Tea coffee
etc
Launch a Product
 Why is Marketing Important?

• To let people know you exist

• To let them be inform about your product
or service
• To make goods and services available
when it is needed and where it is need and
in the right quantity
• To satisfy customers by delivering on what
you promised in your marketing messages
 Q: What are the factors
impacting marketing decisions
today?
- Cars

- Consumer Durables

- Smart Phones

- FMCG ( Tooth Paste )

- Online / Offline Markets`

• New Technologies and platforms- Websites, Internet,
intranet, social media, phones etc. can provide
companies with powerful new information and sales
channel

• Online software can facilitate purchase, training,

recruiting

• Companies can collect scientific information about

markets, customers, prospects and competitors from a
variety of sources and be in a position to make
comparisons and decisions
 Marketing Overview
• Marketing is part of all of our lives and
touches us in some way every day. To be
successful each company that deals with
customers on a daily basis must not only be
customer-driven, but customer-obsessed.

• The best way to achieve this objective is

to develop a sound marketing function
within the organization.
 Purpose of Marketing
• To build awareness, credibility and trust with your
preferred prospect or customer

• To be ‘out there’, networking, writing articles that

educate your preferred prospects, being active in
social media circles, getting recommendations,
testimonials and referrals, delivering what you
promised, going above and beyond for your
clients.
• – To facilitate the decision-making process of
your preferred prospect or customer;
• The process is accomplished by
providing valuable educational
content so that your prospects have
all the information they require to
make a good decision when buying the
service or product you sell.
• Is to lower the risk for your preferred
prospect or customer to purchase from
your competitor

• Is to make the purchasing decision easy

through: availability, trial, specials,
brand identification and quality service
• Aside from the most important decisions of
a company which are: Vision, mission and
objectives , the first marketing strategy question
a company needs to ask is, “What consumers
will we serve?” This is market segmentation
and targeting.

• The second marketing strategy question is,

“How can we best serve targeted customers?”
This is differentiation, branding and
positioning.
• With its marketing strategy decided, the company
now constructs a marketing Program-consisting
of the four marketing mix elements, the 4 Ps.

• Perhaps the most important step in the marketing

process involves building value-laden,
profitable relationships with target customers.
 The Marketing Concept

Customer Total Company

Satisfaction Effort

The
Marketing
Concept

Profit
 In short, (College)
“Marketing is so basic that it cannot be
considered a separate function. It is the
whole business seen from the point of view
of its final results, that is, from the
CUSTOMER’S point of view”- Peter Drucker

MARKETING CONCEPT
Customer
Customer satisfaction
Orientation +
Coordinated
+ marketing
activities
Organisation’s + Organisational
Performance objectives success
Marketing: Creating
and Capturing
Customer Value
 Topic Outline

•What Is Marketing?
•Understand the Marketplace and Customer Needs
•Designing a Customer-Driven Marketing Strategy
•Preparing an Integrated Marketing Plan and Program
•Building Customer Relationships
•Capturing Value from Customers
•The Changing Marketing Landscape
Marketing is a process by which companies
create value for customers and build strong
customer relationships to capture value from
customers in return

Marketing is about managing profitable customer

relationships
– Attracting new customers
– Retaining and growing current customers
What Is Marketing?
Customer Value - Advertisement
What Is Marketing?
The Marketing Process
 Understanding the Marketplace
and Customer Needs
Core Concepts involved

You must understand:

• Customer needs, wants, and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets
 Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands

• States of deprivation
• Physical—food, clothing, warmth, safety
Needs • Social—belonging and affection
• Individual—knowledge and self-expression

Wants • Form that needs take as they are shaped by culture

and individual personality

Demands • Wants backed by buying power

 Understanding the Marketplace
and Customer Needs

• Market offerings are

some combination of
products, services,
information, or
experiences offered to a
market to satisfy a need
or want
• Marketing myopia is
focusing only on existing
wants and losing sight of
underlying consumer
needs
Market Offerings (1).mp4

Market Offerings (2).mp4

Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction
Expectations

Customers
•Value and
satisfaction

Marketers
•Set the right
level of
expectations
•Not too high
or low
Value and Satisfaction ( Value Pricing vs Cost )

• Perceived Value - Perceived

Value.mp4
– The customers’ evaluation of the
difference between benefits and costs.
– Customers often do not judge values and
costs accurately or objectively.
• Customer Satisfaction
– Product’s perceived performance relative
to customers’ expectations.
Understanding the Marketplace
and Customer Needs
Exchange is the act of obtaining a
desired object from someone by
offering something in return
Understanding the Marketplace and Customer
Needs ( Launch a Smart TV)

Markets are the set of actual

and potential buyers of a
product
 Designing a Customer-Driven
Marketing Strategy

Marketing management is the art and

science of choosing target markets and
building profitable relationships with
them
– What customers will we serve?
– How can we best serve these customers?
Selecting Customers and Creating
Value
• What customers will we serve?
– Marketers select customers that can be served
profitably- target market ( Marker market in
Pune – All Colleges/ corporates & tutions)
• How can we serve these customers
best?
– By defining a value proposition - The BMW -
Value Prepaposition.mp4
– Includes the set of benefits or values a
company promises to deliver to consumers in
order to satisfy their needs
Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve

Market segmentation refers to

dividing the markets into
segments of customers

Target marketing refers to

which segments to go after
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production Product Selling Marketing Societal

concept concept concept concept concept
Designing a Customer-Driven
Marketing Strategy
Marketing Management
Orientations

Production concept is the idea

that consumers will favor
products that are available or
highly affordable
Management should focus on
improving production and
distribution efficiency
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Product concept is the idea that
consumers will favor products
that offer the most quality,
performance, and features.
Organization should therefore
devote its energy to making
continuous product
improvements.
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Selling concept is the idea that

consumers will not buy enough of
the firm’s products unless it
undertakes a large scale selling
and promotion effort
This concept is typically practiced
with unsought goods-those that
buyers do not normally think of
buying, such as insurance.
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Marketing concept is the idea

that achieving organizational
goals depends on knowing the
needs and wants of the target
markets and delivering the desired
satisfactions better than

competitors do
Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Societal marketing concept is the idea
that a company should make good
marketing decisions by considering
consumers’ wants, the company’s
requirements, consumers’ long-term
interests, and society’s long- run
interests (Bottled Water – Good or Bad)
Designing a Customer-Driven
Marketing Strategy
Preparing an Integrated Marketing
Plan and Program
The marketing mix is the set of tools
(four Ps) the firm uses to implement its
marketing strategy. It includes product,
price, promotion, and place.
Integrated marketing program is a
comprehensive plan that communicates
and delivers the intended value to
chosen customers.
Building Customer Relationships
Customer Relationship Management (CRM)
•The overall process of building and
maintaining profitable customer relationships
by delivering superior customer value and
satisfaction
•It the most important concept of modern
marketing
•It deals with acquiring, growing and
keeping customers.
Building Customer Relationships
Relationship Building Blocks: Customer Value
and Satisfaction

Customer- Customer
perceived value satisfaction
• The difference • The extent to
between total which a product’s
customer value perceived
and total performance
customer cost matches a
buyer’s
expectations
Building Customer Relationships
Customer Relationship Levels and Tools

Basic
Relationships

Full
Partnerships
Building Customer Relationships
The Changing Nature of Customer
Relationships
•Relating with more carefully
selected customers uses selective
relationship management to target
fewer, more profitable customers
•Relating more deeply and
interactively by incorporating more
interactive two way relationships
through blogs, Websites, online
communities and social networks
 Building Customer Relationships

Partner relationship management

involves working closely with
partners in other company
departments and outside the
company to jointly bring greater value
to customers
Building Customer Relationships
Partner Relationship Management
•Partners inside the company is
every function area interacting
with customers
– Electronically
– Cross-functional teams
•Partners outside the company is
how marketers connect with their
suppliers, channel partners, and
competitors by developing
partnerships
Building Customer Relationships
Partner Relationship Management
•Supply chain is a channel that
stretches from raw materials to
components to final products to
final buyers
•Supply management
•Strategic partners
•Strategic alliances
Capturing Value from Customers
Creating Customer Loyalty and
Retention
•Customer lifetime value is the value
of the entire stream of purchases
that the customer would
make over a lifetime of patronage
Capturing Value from Customers
Growing Share of Customer

Share of customer is the

portion of the
customer’s purchasing that a
company gets in its product
categories
 Capturing Value from
Customers
Customer equity
is the total
combined
customer lifetime
values of all of
the company’s
customers
Capturing Value from Customers
Building Customer Equity
•Building the right
relationships with the right
customers involves treating
customers as assets that
need to be managed and
maximized
•Different types of customers require
different relationship management
strategies
– Build the right relationship with the
right customers
 The Changing Marketing
Landscape

Major Developments

Rapid
Digital age
globalization

Ethics and
Not-for-profit
social
marketing
responsibility
So, What Is Marketing?
Pulling It All Together
Marketing is .
1. the same as advertising and sales
2. not used by small corporations
3. about satisfying customer needs
4. making a profit
 Answer!

• 3. about satisfying customerneeds

Marketing is .
1. part of manufacturing
2. part of the financedepartment
3. managing customer relationships
4. sales promotion
 Answer!

• 3.managing customer relationships

The most basic concept underlying marketing
is that of .
satisfying
1.profits
2.products
3.human needs
4. services
3. HUMAN NEEDS
REVISION
 Market Analysis

1. Analyze Markets
Current & potential size of the alternative markets.
Level of competition ( Telecom in India- Handset Launch )
Legal & political Environments ( Volatility – Syria, Egypt)
Socio cultural environment- Check acceptibility ( Mc-donalds)

Market Potential ( Rate it !! )

Population of the country
GDP ( Is high GDP enough ? )
Per capita income (High Involvement goods – High GDP)
Purchasing power ( Latest Data on PPP )
Level Of Competition (Honda)
No & size of existing firms in the market(Telecom,HLL)
Relative strengths & weakness of the firm(Apple)
Product price & distribution strategies of the companies(FMCG-Bristol
Menthol)).
Actual market condition(Insurance Sector collapse. Research vs Actual)

Legal & political environment

Trade policies(France Subsidy) -Toyota
Legal – Tariffs(GM, Ford, Audi in Brazil)
Political

Socio-cultural influence ( Apple Success In US)

Risks:

Exchange rate fluctuations(South East Asia Case)

Operating complexity
Direct financial losses due to mis-assesment of market
potential(Daewoo)
Govt. seizure of property(Zimbabwe + Syria + Iraq….).
 Marketing Environment

• External
• Internal
Social and Cultural Environment
Social & cultural factors in various countries of the globe affect the
international business.

These factors include :

1. People to work
2. Attitude to wealth
3. Family
4. Marriage
5. Religion
6. Education
7. Ethics
8. Human Relations
9. Social Responsibilities
 Cultural Environment
Culture is “ the thought and behavior pattern that member of a society
learn through language and other forms of symbolic interaction.

Culture is :

• Derived mostly from the climate conditions of the geographic region

and economic conditions of the country ( Dressing Style – Tie).
• Set of traditional beliefs and values which are transmitted and shared
in a given society ( Respect Elders).
• Total way of life and thinking patterns that are passed from generation
to generation (North India – Live king size Vs South India – Save
Money).
• Norms , customs , art , values etc.
 Cultural Environment
Characteristics of culture are :

Prescriptive

The kind of behavior acceptable to the society

( Drinking Alcohol is prohibited in Saudi Arabia.)
Degree of Prohibition – At public places, Against Law in US & UK,
legal in Belgium & Germany )
UB Group cannot expand its liquor arm in Saudi !!

Socially Shared
Out of necessity , the social interaction & creation (Sikhs with Kirpan).

Learned
Acquired through learning but not inherited genetically .
Subjective
People of different cultures have different ideas about the same object (
American HR Culture – Hire n Fire, Japan – Lifetime Employment -83%
firms follow the same culture. It is because industrial revolution in
1920’s).

Cumulative
Accumulated circumstances over the years.
(Uncertainty of Rains created a culture of saving for the next year)

Dynamic
Culture is changing. (Pizza in India, Deo by HLL)
 Cultural Attitudes
• Dressing habits
(Burka)

• Living styles

• Eating Habits
( Mc-Donalds – Beef Burger)
Choosing names like Mc-Aloo , Maharaja etc)
Its very difficult of get a Veg Burger in China)
Guidelines for the businessman when they launch business in foreign
countries
(Give real time examples….)

1. Resist the tendency to conduct business immediately on landing , and

at all times (Mc-D, KFC….)
2. Offer favors as the business tools to generate allies ( PCMC – 2 lakhs
employment in the form of labors, suppliers etc).
3. Contact, Cultivate & conduct field work among at least one sample
clientele to serve as an initial testing centre for the firms product.
4. Introduce the product line into the sample group by local firms of
cause related marketing
5. Extend product acceptance beyond the sample clientele into related
market segment.
Cross cultural communication process &
negotiations

High Context Cultures

• Verbal vs Non Verbal Communication

• E.g : Western vs India

According to Hall,

• Cultures vary on the basis on the manner of information processing.

• Cultures which handle information in a direct, Linear fashion are
called “ monochromic” (USA – Only one thing at a time)
• People working on several forms simultaneously instead of a single
task are called as polychromic. ( Japan & India)
 Cultural Universe

• Irrespective of religion , race, region cast all of us have more or less

the same needs. These common needs are referred to as “ Cultural
Universals”.
• The cultural universals enables the businessmen to market the
products in
many foreign countries.
Eg. Computer Games, Cars ( Maruti, Tata- Jaguar, BMW) etc – Don’t need
much modification

Communication through Languages

• There are more than 5000 spoken languages in the world.

• The same words in the same language may mean different things in
the different regions in the country.
Safe rules in international communication are:

• Over punctuate, when you are in doubt.

• Keep ideas separate, making only one point at a time.
• Confirm discussion in writing
• Write down all figures using the style of the person you are talking to.
• Use visual aid whenever possible.
• Avoid technical, sports and business jargon.
 Non Verbal Communication

• Sitting at a table around a corner signals cooperation and active

listening.
• Sitting straight across from one another signals confrontation.
• Sitting side by side makes conversation awkward.
• Standing in presence of the elders and superiors signals respecting
them in india.

• Time & Culture

USA- Punctual , Indonesia – Not so
• Space & Culture ( Comfortable Distance – Hotel)
• Culture & Agreement (US & Germany – Legality Vs India)
• Culture of Friendship ( North India vs South India )
• Culture of Negotiations ( France/ Italy – Meetings over lunch/dinner) Beer
Lunch concept at DHL.
• Culture of Superstition ( Films, Real Estate , Gold Business )
• Culture & Gifts.
 Social Environment

Social environment consists of religious aspects, language , customs ,

beliefs , tastes & preferences , social institutes , living habits , dressing
habits etc.

Various aspects of Social Environment:

1. Religion ( Protestant vs Catholic vs Hinduism )

2. Family System ( Nuclear vs Joint families )

3. Behavioral Factors affecting Business

• Cultural factors influence human behavior. Cultural difference in

various
Countries results in variation in human behavior.
Culture affects behavior and behavior affects business
4. Behavior based on group membership
5. Motivation & achievement ( Non Materialistic Hinduism vs Work is God
for Protestant)
6. Power distance ( relationship between boss and subordinate, Leaders
vs Boss)
7. Individualism vs. Collectivism
8. Risk taking behavior
9. Masculinity
 Strategies for dealing with cultural differences

Business should identify the cultural variations in foreign countries and

evaluate their on human resources management, marketing, stakeholders
relations etc.

1. Making Adjustments whenever necessary

2. Communication
3. Competitive advantage
4. Cultural & Business Ethics
- Respect the core human values & human rights
- Respect for local tradition
- Situational factors to be considered
5. - Impact of culture on Consumer behavior
6. - Religions & Economic Implications
 Economic Environment

The economic environment of various countries directly influence

international business.

The major changes which affected the economic environment;

(Please Explain)
1. Capital flow rather than trade or product flow across the globe.
2. Establishment of production facilities in various countries
3. Technological revolution delinked the relation between the size of
production & level of employment.
4. Primary products are delinked from the industrial economies.
5. The macroeconomic factors of individual nations independently do
not
6. significantly control the global economic outcome.
7. The contest between capitalism & communism is over.
• Consider Yourself as a CEO of an
Insurance firm.
• You are given a responsibility to launch
your company in India,

What political factors would you consider

before launching the company/product?
 Political Factors
The political arena has a huge influence upon the regulation of businesses, and the

spending power of consumers and other businesses.

You must consider issues such as:

1.How stable is the political environment?

2.Will government policy influence laws that regulate or tax your business?

3.What is the government's position on marketing ethics?

4. What is the government's policy on the economy?

5. Does the government have a view on culture and religion?

6. Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or

others?
• ecological/environmental issues

• current legislation home market

• future legislation

• European/international legislation

• regulatory bodies and processes

• government policies

• government term and change

• trading policies

• funding, grants and initiatives

• home market lobbying/pressure groups

• international pressure groups

• Consider Yourself as a CEO of Citibank.

You are given a responsibility to launch “Preferred

account” (with a minimum quarterly deposit of 2
lakhs) in India.

What Economic factors would you consider

before launching the company/product?
Marketers need to consider the state of a trading economy in the short and

long-terms. This is especially true when planning for international marketing.

You need to look at:

1. Interest rates

2. The level of inflation Employment level per capita

3. Long-term prospects for the economy Gross Domestic Product (GDP) per
capita, and so on
• home economy situation

• home economy trends

• overseas economies and trends

• general taxation issues

• taxation specific to product/services

• seasonality/weather issues

• market and trade cycles

• specific industry factors

• market routes and distribution trends

• customer/end-user drivers

• interest and exchange rates

 Technology Factors

• Consider Yourself as a CEO of Versace.

You are given a responsibility to launch your

company in India,

What Technological factors would you

Consider
before launching the company/product?
 Technological Factors
• Technology is vital for competitive advantage, and is a major driver of globalization.
Consider the following points:

1. Does technology allow for products and services to be made more cheaply and to a
better standard of quality?

2. Do the technologies offer consumers and businesses more innovative products and
services such as Internet banking, new generation mobile telephones, etc?

3. How is distribution changed by new technologies e.g. books via the Internet, flight
tickets, auctions, etc?

4. Does technology offer companies a new way to communicate with consumers e.g.
banners, Customer Relationship Management (CRM), etc?
PEST CASE STUDY: PEPSI COLA
Changes in laws and regulations, including changes in accounting standards,
Taxation requirements, (including tax rate changes, new tax laws and revised
tax law interpretations) and environmental laws in domestic or foreign
jurisdictions.

Many U.S. citizens are practicing healthier lifestyles. This has affected the non-
alcoholic beverage industry in that many are switching to bottled water and diet
colas instead of beer and other alcoholic beverages. Also, time management
has increased and is at approximately 43% of all households. (http://www.cdf-
mn.org). The need for bottled water and other more convenient and healthy
products are in important in the average day-to-day life.
The effectiveness of company's advertising, marketing and promotional
programs. The internet and television which use special effects for advertising
through media. They make some products look attractive. This helps in selling
of the products. This advertising makes the product attractive. This technology
is being used in media to sell their products.

Consumers from the ages of 37 to 55 are also increasingly concerned with

nutrition. There is a large population of the age range known as the baby
boomers. Since many are reaching an older age in life they are becoming more
concerned with increasing their longevity. This will continue to affect the non-
alcoholic beverage industry by increasing the demand overall and in the
healthier beverages.
Due to introduction of machineries the production of the Coca-Cola company
has increased tremendously then it was few years ago

Changes in the non-alcoholic business environment. These include, without

limitation, competitive product and pricing pressures and their ability to gain or
maintain share of sales in the global market as a result of action by
competitors.

Last year the U.S. economy was strong and nearly every part of it was growing
and doing well. However, things changed. Most economists loosely define a
recession as two consecutive quarters of contraction, or negative GDP growth.
On Monday 26, the government officially declared that the U.S. has been in
recession since March. (CBS Market Watch." U.S. Officially in a recession."
Rex Nutting. [nov 26,2001]. www.cbsmarketwatch.com)
However, because of aggressive action by the Federal Reserve and Congress
it will be short and mild. The economy will return to sustained, positive growth
in the first half of 2002.

Introduction of cans and plastic bottles have increased sales for Coca-Cola as
these are easier to carry and you can bin them once they are used.

The Federal Reserve is doing all that it can help the economy recover. They
have cut the interest rate ten times this year. The rate now lies at a 40-year low
of 2%. Lowering the interest rates will ultimately excite consumer demand in
the economy. Companies will expand and increase use of debt as a result of
the low borrowing rates. Coca-Cola can borrow money for investing in other
products as the interest rates are low. It can use the borrowing on research of
new products or technology. As researching for new products would cost less
the Coca-Cola Company will sell its products for less and the people will spend
as they would get cheap products from Coca-cola.
The non-alcoholic beverage industry has high sales in countries outside the
U.S. According to the Standard and Poor's Industry surveys, "For major soft
drink companies, there has been economic improvement in many major
international markets, such as Japan, Brazil, and Germany." These markets will
continue to play a major role in the success and stable growth for a majority of
the non-alcoholic beverage industry.

CCE has six factories in Britain which use the most stat-of the-art drinks
technology to ensure top product quality and speedy delivery. Europe's largest
soft drinks factory was opened by CCE in Wakefield, Yorkshire in 1990. The
Wakefield factory has the technology to produce cans of Coca-Cola faster than
bullets from a machine gun.
Before the attacks on September 11, 2001, the United States was starting tot
see the economy recover slightly and it is only just recently that they achieved
the economic levels. Consumers are now resuming their normal habits, going
to the malls, car shopping, and eating out at restaurants. However, many are
still handling their money cautiously. They believe that with lower inflation still to
come, consumers will recover their confidence over the next year.
 Marketing Environment

Macro Environment Micro Environment

• It consists of the • It consists of the

larger societal forces actors close to the
that affect the company that affect
microenvironment. its ability to serve its
customers.
 Micro Environment
• If you are hired as a Marketing Manager of Park
Avenue (Raymond).
You are given an assignment to launch a product (shirt ) in
Pune.
• Launched in 1986, Park Avenue provides stylish and innovative
wardrobe solutions to well-dressed gentlemen. As India's premium
lifestyle brand, its designs embody the latest in international fabric,
styling, colour and fashion trends. We cater to customer needs with
formal clothing for varied occasions; be it for a day at office, high-
powered corporate meetings, social gatherings or celebrations.
• Park Avenue evolved into an innovation brand offering leading new
styles to the corporate world and won the 'Most Admired Men’s
Formalwear Brand ' at the Images Fashion Awards 2011.
Please decide on;
Product
Place ( Target Market )
Price