MARKETING ENVIRONMENT INTRODUCTION

1. Introduction to Marketing
Environment
Module 1
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2. Introduction
• Main objective of any business
organization is to satisfy the needs and
wants of the society
• Production or purchase is of no meaning if
a firm is unable to market its goods and
services
• Marketing is the focal point of all business
activities
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3. Introduction
• Marketing is an ancient art & is everywhere.
• Formally or informally, people &
organizations engage in a vast numbers of
activities that could be called marketing.
• Good marketing has become an increasingly
vital ingredient for business success.
• It is embedded in everything we do- from the
clothes we wear, to the web sites we click on,
to the ads we see.
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4. • The term Marketing has been derived
from the word Market
• Market is a place or geographical area
where buyers and sellers meet and enter
into transactions involving transfer of
ownership of goods and services
Marketing Defined
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5. • Traditional View
Performance of business activities that
direct the flow of goods and services from
producers to consumers or users
• Modern View
A business process through which
products are matched with the markets
and through which transfer of ownerships
are effected
Marketing Defined
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6. Marketing Defined
• The American Marketing Association has
defined marketing as “an organizational
function & a set of processes for creating,
communicating & delivering value to the
customers & for managing customer
relationships so as to benefit the
organization & the stake holders.
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7. • “The process by which companies create value
for customers and build strong customer
relationships in order to capture value from
customers in return.”
• According to Philip Kotler, “Marketing is a
social process by which individuals and groups
obtain what they need and want through
creating, offering, freely exchanging products
and services of value with others”
Marketing Defined
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9. What are Consumers’ Needs,
Wants, and Demands?
Needs- stateof felt
deprivationincluding
physical,social, and
individualneedsi.ehunger
Wants- formthatahuman
needtakesasshapedby
cultureandindividual
personalityi.e. bread
Demands- humanwants
backedbybuyingpower
i.e. money
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10. NATURE OF MARKETING
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Exchange is the essence of marketing.
Marketing is customer/ consumer oriented.
Marketing starts and ends with customers/ consumers.
Modern marketing precedes and succeeds production.
Marketing is goal oriented and the goal being profit maximization
through satisfaction of human needs.
Marketing is a science as well as an art.
Marketing is the guiding element of business (It tells what, when,
how to produce; Marketing is capable of guiding and controlling
business.
Marketing is a system .
Marketing is a process, i.e., series of interrelated functions.
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11. Marketing has a very wide scope it covers all the activities from conception of
ideas to realization of profits. Some of them as discussed as below:
• Study of Consumer Wants and Needs: Goods are produced to satisfy
consumer wants. Therefore study is done to identify consumer needs and
wants. These needs and wants motivates consumer to purchase.
• Study of Consumer behaviour: Marketers performs study of consumer
behaviour. Analysis of buyer behaviour helps marketer in market
segmentation and targeting.
• Product Planning and development : It includes the activities of product
research, marketing research, market segmentation, product development,
determination of the attributes, quantity and quality of the products.
• Branding: Branding of products is adopted by many reputed enterprises to
make their products popular among their customer and for many other
benefits. Marketing manager has to take decision regarding the branding
policy, procedures and implementation programs.
• Packaging: Packaging is to provide a container or wrapper to the product for
safety, attraction and ease of use and transportation of the product.
Scope of Marketing
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12. Scope of Marketing
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Channels of Distribution: Decision regarding selection of most appropriate
channel of distribution like wholesaling, distribution and retailing is taken by the
marketing manager and sales manager.
• Pricing Policies: Marketer has to determine pricing policies for their products.
Pricing policies differs form product to product. It depends on the level of
competition, product life cycle, marketing goals and objectives, etc.
Sales Management: Selling is a part of marketing. Marketing is concerned about
all the selling activities like customer identification, finding customer needs,
persuading customer to buy products, customer service, etc.
Promotion: Promotion includes personal selling, sales promotion, and advertising.
Right promotion mix is crucial in accomplishment of marketing goals.
Finance: Marketing is also concerned about the finance, as for every marketing
activity be it packaging, advertising, sales force budget is fixed and all the activities
have to be completed with in the limit of that budget.
After Sales services: Marketing covers after sales services given to customers,
maintaining good relationships with customers, attending their queries and solving
their problems.
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13. Customer
Experience
(1998 -
Present)
Customers
Evolution of Marketing
The
Firm/
Company
Product
(to 1950s)
Production
(to 1960s)
Selling
(1950 - 1960s)
Marketing
(1970 -
Present)
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14.  1970s till 1980s
 Focus was the product and the effectiveness
 The development and research was at the forth front because of changed needs it
was important to produce the right things and to be innovative
 that means that the best product wins, which means getting the most sales

Product concepts seeks to achieve result via product excellence. And emphasis on
quality assurance
 Myopia when organization love product its leads to marketing myopia because the
focus is on product rather the customers needs
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15.  Prevailed from the time of the industrial revolution until the early 1950's
 The idea that a firm should focus on those products that it could produce most
efficiently and that the creation of a supply of low-cost products would in and of
itself create the demand for the products.
 The key questions that a firm would ask before producing a product were:
 Can we produce the product?
 Can we produce enough of it?
 At the time, the production concept worked fairly well because the goods that were
produced were largely those of basic necessity and there was a relatively high level
of unfulfilled demand.
 The production concept prevailed into the late 1920's.
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17.  Around this time (Mass Production), firms began to practice the sales concept (or
selling concept), under which companies not only would produce the products, but
also would try to convince customers to buy them through advertising and personal
selling. Before producing a product, the key questions were:
 Can we sell the product?
 Can we charge enough for it?
 The sales concept paid little attention to whether the product actually was
needed; the goal simply was to beat the competition to the sale with little regard to
customer satisfaction.
 Marketing was a function that was performed after the product was developed and
produced, and many people came to associate marketing with hard selling. Even
today, many people use the word "marketing" when they really mean sales.
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18.  It starts with consumer want and ends with satisfaction of those wants
 It is rest on four pillars and they are target market, costumer need, integrated marketing and
profitability
 Profit through consumer satisfaction
 What do customers want? Can we develop it while they still want it? How can we keep
our customers satisfied?
 In response to these discerning customers, firms began to adopt the marketing concept, which
involves:
 Focusing on customer needs before developing the product
 Aligning all functions of the company to focus on those needs
 Realizing a profit by successfully satisfying customer needs over the long-term
 When firms first began to adopt the marketing concept, they typically set up separate
marketing departments whose objective it was to satisfy customer needs.
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19.  Marketing Promotes Product Awareness to the Public
 Marketing Helps Boost Product Sales
 Marketing Builds Company Reputation
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20. Core Concepts/ Philosophies of Marketing/
Evolution of Marketing/ Marketing
Orientation
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21. • Exchange Concept holds that the exchange of a
product between seller & buyer is the central idea
of marketing. Exchange is an important part of
marketing, but marketing is a much wider concept.
• Production Concept is one of the oldest
concepts in business. It holds that consumers will
prefer products that are widely available &
inexpensive. Manager of production oriented
business concentrate on achieving high
production efficiency low cost & mass distribution.
Core Concepts/ Philosophies of
Marketing
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22. • Product Concept holds that consumers
will prefer those products that are high in
quality, performance or innovative
features. Managers in these organization
focus on making superior products &
improving them over time.
Core Concepts/ Philosophies of
Marketing
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23. • Selling Concept holds that consumers, if
left alone, will ordinarily not buy enough of
the organizations product and thus the
organization must undertake an
aggressive selling promotion effort for
pushing its products.
• It implies selling what is made, rather than
making what can sell.
Core Concepts/ Philosophies of
Marketing
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24. •
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The Marketing concept emerged in the mid 1950’s.The
business generally shifted from a product – centered, make &
sell philosophy, to a customer centered, sense & respond
philosophy.
The job is not to find the right customers for your product, but to
find right products for your customers.
The marketing concept holds that the key to achieving
organizational goals consists in determining the needs and wants
of target markets and delivering the desired satisfaction more
effectively and efficiently than competitors.
Every department & every worker should think customer & act
customer.
Core Concepts/ Philosophies of
Marketing
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26. • Social or Societal Marketing Concept holds
that the organizations task is to determine the
needs, wants and interests of target markets and
to deliver the desired satisfaction more
effectively and efficiently than competitors in a
way that preserves or enhances the customers'
and the society's well being.
Core Concepts/ Philosophies of
Marketing
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27. •
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• http://www.projectguru.in/publications/concept-of-holistic-mar
Core Concepts/ Philosophies of
Marketing
• The Holistic Marketing Concept is based on the
development, design and implementation of marketing
programs, processes and activities that recognizes their
breadth and inter-dependencies.
Holistic marketing is a marketing philosophy that
believes ‘everything matters’ and that a business
cannot exist and excel in vaccum.
This is an approach which proposes that marketing
should be looked from a broad and integrated
perspective and not as an isolated management
function.
For more details, please visit:
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28. Components Characterizing
Holistic Marketing
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29. Difference between
Marketing and Selling
MARKETING
Focuses on customer’s needs
Customer Enjoys Supreme importance
Product Planning and development to
match products with markets
Converts customer’s needs into products
Profits through customer satisfaction
Consumers determine the price; price
determines costs
SALES
Focuses on Seller’s needs
Product enjoys supreme importance
High pressure selling to sell goods
already produced
Converts products into cash
Profits through sales volume
Cost determines the price
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30. Marketing Environment
• Businesses do not operate in isolation in the
market place.
• There are various factors/ forces, that directly or
indirectly influence the organizations business
activities.
• All these forces/ factors form the Marketing
Environment of an organization.
• The company operates in a complex marketing
environment, consisting of uncontrollable forces,
to which the company must adapt.
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31. • Marketing is the sum total of trading forces
operating in a market place, over which a
business has no control, but which shapes the
manner in which the business functions and is
able to satisfy its customers.
• A marketing environment is what surrounds and
creates impact on business organizations.
• Marketing environment is un-controllable and
ever changing.
Marketing Environment
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32. • The key elements of marketing
environment are as follows :-
• Internal Environment,
• Micro Environment, and
• Macro Environment.
Marketing Environment
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33. Internal Environment
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The internal environment refers to the forces and actors that are
within the organization and affects its ability to serve its customers.
A Company’s marketing system is influenced by its capabilities
regarding production, financial & other factors. Hence, the marketing
management/manager must take into consideration these
departments before finalizing marketing decisions.
It includes marketing managers, sales representatives, marketing
budget, marketing plans, procedures, inventory, logistics, and
anything within organization which affects marketing decisions, and
its relationship with its customers.
The Research & Development Department, the Personnel
Department, the Accounting Department also have an impact on the
Marketing Department.
It is the responsibility of a manager to company-ordinate all
department by setting up unified objectives.
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34. Micro Environment
• The micro environment refers to the forces that
are close to the marketing organization and
directly impact the customer experience.
• It includes the organization itself, its suppliers,
marketing intermediaries, customers, markets or
segments, competitors, and publics.
• Happenings in micro environment is relatively
controllable for the marketing organization.
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35. Some Factors in
Micro Environment
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Suppliers are the people who provide necessary resources needed to produce goods & services.
Policies of the suppliers have a significant influence over the marketing manager’s decisions. A
company must build cordial & long-term relationship with suppliers.
Marketing Intermediaries are the people who assist the flow of products from the producers to the
consumers; they include wholesalers, retailers, agents, etc. These people create place & time utility. A
company must select an effective chain of middlemen, so as to make the goods reach the market in
time.
• Consumers are the center point of all marketing activities. The main aim of production is to meet the
demands of the consumers. Each type of consumer has a unique feature which have to be considered
by the marketers before taking the decisions. otherwise the company is bound to fail in achieving its
objectives. A company’s marketing strategy is influenced by its target consumer
Competitors: A prudent marketing manager has to be in constant touch regarding the information
relating to the competitor’s strategies. He has to identify his competitor’s strategies, build his plans to
overtake them in the market to attract competitor’s consumers towards his products.
Public: A Company’s obligation is not only to meet the requirements of its customers, but also to satisfy
the various groups. A public is defined as “any group that has an actual or potential ability to achieve its
objectives”. The significance of the influence of the public on the company can be understood by the fact
that almost all companies maintain a public relation department. A positive interaction with the public
increase its goodwill irrespective of the nature of the public. A company has to maintain cordial relation
with all groups, public may or may not be interested in the company, but the company must be interested
in the views of the public.
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36. Macro Environment
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Macro environment refers to all forces that are part of
the larger society and affects the micro environment.
It includes demography, economy, politics, culture,
technology, and natural forces.
These are the factors/forces on which the company has
no control. Hence, it has to frame its policies within the
limits set by these forces:
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Demography is defined as the statistical study of the human population & its distribution that forms
the market. A company should study the population, its distribution, age composition, status, etc
before deciding the marketing strategies.
Economic Environment: The economic environment affects a consumer’s purchasing behavior either
by increasing his disposable income or by reducing it. Eg: During the time of inflation, the value of
money comes down. Hence, it is difficult for them to purchase more products.
Physical Environment or Natural Forces: A company has to adopt its policies within the limits set by
nature. A man can improve the nature but cannot find an alternative for it. Nature offers resources, but
in a limited manner. Companies must find the best combination of production for the sake of efficient
utilization of the available resources. Otherwise, they may face acute shortage of resources. Eg:
Petroleum products, power, water, etc.
Technological Factors: Every new invention builds a new market & a new group of customers. A new
technology improves our lifestyle & at the same time creates many problems.
Social & Cultural Factors: Most of us purchase because of the influence of social & cultural factors.
The lifestyle, values, believes, etc are determined among other things by the society in which we live.
Each society has its own culture which shapes our behavior. A marketing manager must study the
society and culture in which he operates and must try to anticipate the changes and new marketing
opportunities.
• political Factors includes all laws, government agencies, and groups that influence or limit other
organizations and individuals within a society. It is important for marketers to be aware of these
restrictions as they can be complex and can profoundly affect a firm’s marketing.
Some Factors in
Macro Environment
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38. CUSTOMER SATISFACTION
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The most important asset of any organization is its
customers.
Satisfied customers are the lifeblood of any
organization.
Product’s perceived performance in delivering value
relative to buyer’s expectations is customer
satisfaction
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39. Customer Satisfaction
• It is the person’s feeling of pleasure or
disappointments, resulting from comparing a
product’s perceived performance (outcome), in
relation to his/ her expectations.
 Perceived performance below expectations = dissatisfied customer
 Perceived performance meets expectations = satisfied customer
 Perceived performance exceeds expectations = delighted customer
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40. Customer Value
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Also known as Customer Perceived Value.
It is the difference between the prospective customer’s evaluation of
all the benefits and all the costs of an offering and the perceived
alternatives.
“The perceived worth of the set of benefits received by a customer
in exchange for the total cost of the offering, taking into
consideration available competitive offerings and pricings.”
• Value is the perception of the benefits associated with a good,
service, or bundle of goods and services (i.e., the customer benefit
package) in relation to what buyers are willing to pay for them.
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41. Customer Value
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42. • Total customer value is the perceived
monetary value of the bundle or
economic, functional, and psychological
benefits customers expect from a given
market offering.
• Total customer cost is the bundle of
costs customers expect to incur in
evaluating, obtaining , using, and
disposing of the given marketing offering.
•
Customer Value
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43. •
Example: Customer Value for
“Fossil Watch”
A customer will derive value from a Fossil Watch, based on
following parameters:
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44. Concept of Value Chain
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Underlying purpose of every organization is to provide
value to its customers and stakeholders.
To analyze the specific activities through which firm
can create competitive advantage, it is useful to model
the firm as a chain of value creating activities.
Value chain can be understood as the entire series of
organizational work activities that add value at each
step, beginning with the processing of raw materials
and ending with finished products in the hands of end
users.
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45. • Interlinked value-adding activities that convert
inputs into outputs which, in turn, add to
the bottom line and help create competitive
advantage.
• Michael Porter identified a set of interrelated
generic activities, which are common to a wide
range of firms, and framed it as a model called
Value Chain.
• Michael Porter suggested that the organization
is split into ‘primary activities’ and ‘support
activities’.
Concept of Value Chain
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46. Michael Porter’s Model of Value Chain
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47. Primary Activities
• Porter identified two sets of activities:
 Primary activities are directly concerned with
creating and delivering a product. These
activities aim at creating value that exceeds the
cost of providing the product or service, thus
generating a profit margin.
 Support Activities facilitate the primary value
chain activities. Support activities assist the
primary activities in helping the organisation
achieve its competitive advantage.
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48. Primary Activities
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Inbound logistics : Refers to goods being obtained from the organization's
suppliers and to be used for producing the end product.
Operations : Process where raw materials and goods are manufactured
into the final product. Value is added to the product at this stage as it moves
through the production line.
Outbound logistics : Once the products have been manufactured they are
ready to be distributed to distribution centers, wholesalers, retailers or
customers. Distribution of finished goods is known as outbound logistics.
Marketing and Sales: Marketing must make sure that the product is
targeted towards the correct customer group. The marketing mix is used to
establish an effective strategy, any competitive advantage is clearly
communicated to the target group through the promotional mix.
Services: After the product/service has been sold what support services
does the organization offer customers? This may come in the form of after
sales training, customer support, repair services, guarantees and
warranties.
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49. Support Activities
• Procurement: This department must source raw materials for the business and
obtain the best price for doing so. The challenge for procurement is to obtain the best
possible quality available (on the market) for their budget.
• Technology development: The use of technology to obtain a competitive advantage
is very important in today’s technological driven environment. This includes research
and development, process automation, and other technology development, used to
support the value chain activities.
• Human resource management: These are the activities associated with recruitment,
development and compensation of employees. The organization will have to recruit,
train and develop the correct people for the organization to be successful. Staff will
have to be motivated and paid the ‘market rate’ if they are to stay with the
organization and add value.
• Firm infrastructure: Every organization needs to ensure that their finances, legal
structure and management structure work efficiently and helps drive the organization
forward. Inefficient infrastructure is waste resources; could affect the firm's reputation
and even leave it open to fines and sanctions.
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50. SITUATIONAL ANALYSIS
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53. ORGANISATION SITUATION
ANALYSIS
• SWOT ANALYSIS
• Porter’s Five Forces Model
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54. SWOT ANALYSIS
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56. Introduction
• The Five ForcesModel was developed by Michael E.Porter to help companies
assess the nature of an industry’s competitiveness and develop corporate
strategiesaccordingly.
• Thestrength of the five forces will determine the level of profit within an
industry
that acompetitor canexpect to make
• Through his model, Porter classifies five main competitive forces that affect
any market and all industries. It is these forces that determine how much
competition will exist in a market and consequently the profitability and
attractiveness of this market for a company. Through sound corporate
strategies, a company will aim to shape these forces to its advantage to
strengthen the organizations position inthe industry.
• Cont…

57. Introduction
• This model aimed to provide a new way to use effective strategy to identify,
analyze and manage external factorsin an organization’s environment.
• Porter’s five forces model is an analysis tool that uses five industry
forces to
determine the intensity of competition in an industry and itsprofitability level.
• An attractive market place does not mean that all companies will enjoy similar
successlevels. Rather, the unique sellingpropositions, strategiesandprocesses
will put one company over theother.
• The Five Forces were Porter’s conclusions on the reasons for differing levels of
competition, and hence profitability, in differing industries. They are empirically
derived, i.e. by observation of real companies in real markets, rather than the
result of economicanalysis.

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60. Competitive Rivalrywithin an
Industry
• This force is the major determinant on how competitive and
profitable an industry is. In competitive industry, firms have to
compete aggressively for a market share, which results in low
profits. Rivalry among competitors is intensewhen:
- There are manycompetitors
- Exit barriers arehigh
- Industry growth is slow ornegative
- Products are not differentiated and canbe easilysubstituted
- Competitors are of equalsize
- Lowcustomer loyalty

61. Competitive Rivalrywithin anIndustry- Example
McDonald’s faces tough competition because the fast food
restaurant market is alreadysaturated.
This element of the Five Forces analysis tackles the effect of
competing firms in the industry
environment. In McDonald’s case, the strong force of
competitive rivalry is based on the following external
factors:
High number of firms (strongforce)
High aggressiveness
of firms (strong force)
Low switching costs
(strong force)

62. BargainingPowerof Suppliers
• Strong bargaining power allows suppliers to sell higher priced or low
quality raw materials to their buyers. This directly affects the buying
firms’ profits because it has to pay more for materials. Suppliers
have strong bargaining power when:
- There are few suppliers but manybuyers
- Suppliers are large and threaten to forwardintegrate
- Fewsubstitute raw materialsexist
- Suppliers hold scarceresources
- Costof switching raw materials is especiallyhigh.

63. Exampleof Suppliersalsoinfluencethe competivenessof an industry
• Thebargaining power of Toyota’ssupplier isWeak
• Toyota has many suppliers in its automotive manufacturing sector. Resources
like metal, raw materials, leather, plastic, computers, cooling system, electrical
system, breaking system and fuel supply system are all bought from hundreds
of different suppliers and different bargaining prices distributed across the
globe.
• One of the competitive advantages of Toyota is its strong relationship with the
suppliers and its efficient manner of monitoring supply chain places low
bargaining power on the suppliers.
• In addition most vehicle manufactures own many interchangeable suppliers,
and also have the ability to produce the components by their own in the
short time. Thus, the suppliers do not own the power to change the price.

64. BargainingPowerof Buyer
• Customers have the power to demand lower price or higher product
quality from industry producers when their bargaining power is
strong. Lower price means lower revenues for the producer, while
higher quality products usually raise production costs. Both
scenarios result in lower profits for producers. Customers exert
strong bargaining power when:
- Buying in large quantities or controlmany
access points to the final customer
- Only few customers exist
- Switching costs to other supplier are low
- They threaten to backward integrate
- There are many substitutes
- Customers are price sensitive

65. Threatof NewEntrants
• This force determines how easy (or not) it is to enter a particular industry. If an
industry is profitable and there are few barriers to enter, rivalry soon
intensifies. When more organizations compete for the same market share,
profits start to fall. It is essential for existing organizations to create high
barriers to enter to deter new entrants. Threat of new entrants is highwhen:
- Lowamount of capital is required toenter amarket
- Existing companiescando little toretaliate
- Existing firms do not possess patents, trademarks or do not
have established brandreputation
- There is no governmentregulation
- There is low customerloyalty
- Productsare nearly identical
- Economiesof scalecanbe easilyachieved

66. Exampleof Threatof New Entrant– Entryof Reliance
JIOTelecommunications
1. Jiohasgrownat a scorchingpace:-the network, which hasbeen adding
1-
1.2 million subscribers aday,will likely have 25 million4Gcustomers.
2. Jiohassetoff a fierce mobiletariff war in thecountry:
3. Jioishurting the balancesheetsof other telecom companies:Airtel
sawa
4.9% decline in its Q2profit following the operator slashing data tariffs.
4. Jioisforcingthe other playersto join forces:-Vodafone and Idea
Merger
5. Jiocouldimpact the online content market in India:-The Jiosuite
offers more than 300 live streaming TVchannels and hundreds of
musicalbums and movies. This forces other incumbents to up their
gamein the online video streaming space.

67. • This force is especially threatening when buyers can easily find substitute
products with attractive prices or better quality and when buyers can switch
from one product or service to another with little cost. For example, to
switch from coffee to tea doesn’t cost anything, unlike switching from car to
bicycle.
• Determining Factors:-
 First, if the consumer’s switching costs arelow
 Second,ifthe substitute product is cheaper than the industry’s product
 Third, if the substitute product is of equal or superior quality compared to
the industry’s product, the threat ofsubstitutes is high
 Fourth, if the functions, attributes, or performance of the substitute product
are
equal or superior tothe industry’s product
Threatof Substitutes

68. • EXAMPLE–THEAIRLINEINDUSTRY
• From the point of view of airlines themselves, the flying business is very
competitive. There are hundreds of airlines all trying to get abigger piece of the
pie. Global recessionshave also meant cost cutting exercises for most airlines in
the industryand often less travel in the part of consumers.
• Depending on the nature of the airline’s business, the threat of substitutes can
range from lower on the scale tomid-range.
• For domestic or regional airlines or routes, there is always the option of taking a
car, bus or train. It may take longer but often this consideration is outweighed by
the cost advantages of substitute methods
• There is also no switching cost to dealwith.
• In the caseof international airlines, the threat of substitutes is almost non-existent
• Onlonger routes, atraveler needs to take aflight with no possiblealternates
• Threat here is from competitors who may offer better rewards, better prices ora
better
flying experience
• There is also somewhat of aswitching cost
Exampleof Threat of substitutes

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75. MARKET OPPORTUNITY
IDENTIFICATION STEPS
• IDEA GENERATION
• TRANSFORMATION OF IDEAS INTO
OPPORTUNITY
• OPPORTUNITIES ASSESSMENT
• OPPORTUNITY SELECTION
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76. CRITERIA TO ASSESS
BUSINESS OPOORTUNITIES
• INDUSTRY AND MARKET
• ECONOMICS
• COMPETITIVE ADVANTAGE
• EXIT ISSUES
• MANAGEMENT TEAM
• PERSONAL CRITERIA
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77. Designing and
Managing Services
MANASA N

78. Characteristics  Cannot be touched,
seen, tasted, heard, or
smelled before purchase
 Intangibility  Lack of trial means
higher consumer risk
 Inseparability
 Variability
 Consumers rely on cues
to draw quality
inferences
 Perishability
 Marketers must try to
“tangibilize the
intangible”
Nature of Services
MANASA N

79. Characteristics  Services are produced
and consumed at the
same time (air travel)
 Intangibility
 Inseparability
 Variability
 Service providers and
sometimes other
customers become part
of the service
(restaurant)
 Perishability  Strong preferences for
service providers exist
Nature of Services
MANASA N

80. Nature of Services
MANASA N
Characteristics
 Intangibility
 Inseparability
 Variability
 Perishability


Service providers vary
with respect to attitudes,
skills, mood, etc. Even
the same provider may
give different service on
a different day.
Quality control is critical:
– Hiring the right people
– Standardizing service
– Monitoring satisfaction

81. Nature of Services
Characteristics
 Intangibility
 Inseparability
 Variability
 Perishability
 Services can not be
inventoried or
otherwise stored
 Capacity / demand
management is
critical:
– Demand side
strategies
– Supply side strategies
MANASA N

82. Marketing Strategies
MANASA N
 People, physical evidence, and process must
be considered in addition to the 4 “P’s” when
creating external marketing plans.
 PRODUCT
 PRICE
 PLACE
 PROMOTION
 PEOPLE
 PROCESS
 PHYSICAL EVIDENCE

83. DESIGNING AND
MANAGING
SERVICES
Manasa N

84. ELEMENTS OF SERVICE
DESIGN
Manasa N

85. TOOLS FOR DESIGNING AND
MANGING SERVICE PROCESSES
• SERVICE BLUEPRINTING
• QUALITY FUNCTIONAL DEPLOYMENT
QFD is a type of product development where the
source is the Voice of the Customer (VOC).
QFD is very structured where the needs of the customers
are understood and then converted into specific plans for
producing the products and services for fulfilling the
needs
• BACK OFFICE AND FRONT OFFICE
• SERVICESCAPE: PHYSICAL ENVIRONMENT
Manasa N

86. Manasa N

87. NEW TRENDS IN
MARKETING
Manasa N

88. Green
Marketing
According to the American Marketing association, "Green
marketing is the marketing of products that are presumed to be
environmentally safe”.
Advantages of Green Marketing
Social responsibility
Competitive Edge
Cost reduction
Disadvantages of Green Marketing
Change lead to cost

89. Network
Marketing
Network marketing also known as multi level marketing is a
business distribution model that allows a parent multi level
marketing company to market their products directly to consumers
by means of relationship , referral and direct selling.
Network marketing is a concept of marketing products pioneered
by Amway corporation( manufacturing household goods, personal
care & nutritional products)

90. Direct
Marketing
Direct marketing is the process by which a firm approaches its
customers on one to one basis and markets its products directly to
them .
According to Direct Marketing Association of USA ,”Direct
marketing is an interactive system of marketing which uses one
or more advertising media to affect a measurable response and /or
Transaction at any location.”
Method of Direct Marketing
Direct selling- For e.g.Amway
Tele –shopping/ Home shopping- For e.g. homeshop18 ,naaptol
Direct Response marketing- for e.g. rely totally on television

91. Social
Marketing
According to Andreasen, ‘‘social marketing is the adaption
of commercial marketing technologies to programmes
designed to influence the voluntary behavior of target
audiences to improve their personal welfare and that of the
society of which they are a part.”
social marketing is the systematic application of marketing
along with other concepts and techniques to achieve specific
behavioral goals for a social good. This may include asking
people not to smoke in public area e.g. ask them to use seat
belts, prompting to make them follow speed limits.

92. Social Media
Marketing
Social media marketing is a form of internet marketing
that utilizes social media to achieve branding and
marketing communication goals social media sites
such as Face book, YouTube, Flickr, Twitter ,
whatsapp, etc are used to communicate information
about a company and its brand and products.

93. Buzz Marketing
Marketing buzz or simply buzz a term used in word of mouth
marketing-is the interaction of consumers and users of a
product or service which serves to amplify the original
marketing message a vague but positive association,
excitement, or anticipation about a product or services.
Word of mouth marketing also called word of mouth
advertising, is a unpaid form of promotion of products.
Advantages
cost effectiveness-
Speed-
Easy to set up-
Disadvantages
Negative buzz
Customer Dissatisfaction

94. Viral
Marketing
Viral marketing is a marketing technique that uses
preexisting social networking services and other technologies to
produce increases in brand awareness or to achieve other marketing
objectives (such as product sales or marketing buzz ) .
Text messages, video clips etc.
These tools are received and passed by consumers through word of
mouth or social networking.
Advantages
Enhanced customer list
Better visibility
Cuts the promotional cost

95. E-Commerce:
Marketing
Ecommerce marketing is the process of driving sales by raising
awareness about an online store's brand and product offerings.
Digital marketing for ecommerce applies traditional marketing
principles to a multichannel, data-driven environment.
ADVANTAGES OF ECOMMERCE
Faster buying/selling procedure, as well as easy to find
products.
Buying/selling 24/7.
More reach to customers, there is no theoretical geographic
limitations.
Low operational costs and better quality of services.
No need of physical company set-ups.
Easy to start and manage a business.

96. Global Marketing
 Globalization means integrating the economy of a country with
the global or world economy. It means economy is open to
foreign direct investment by providing facilities to foreign
companies to invest in different fields of Indian
industry/commerce.
 According to Johansson, "Global marketing refers to
marketing activities coordinated and integrated across multiple
country markets.”

97. Opportunities in Global Marketing
 Career opportunities
 Investment opportunities
 Reaching new customers
 Increasing standard of living