Core Marketing Concepts

Core Marketing Concepts
Core Marketing Concepts Dr. Anupamaa S. Chavan Students are strictly warned not to share/upload this PPT with any person/website. copyright© anupamaa.chavan@nmims.edu 1
CORE CONCEPTS OF MARKETING • Need, Want, Demand • Target Market, Positioning, Segmentation • Offerings and Brand • Marketing Channels, Paid, Owned, Earned Media • Impression & Engagement • Value & Satisfaction • Supply Chain & Competition • Marketing Environment anupamaa.chavan@nmims.edu 2
NEED Needs : Human requirements Basic human requirements: Eg. Air, Food, Water, Clothing and Shelter We also need….. Recreation Education Entertainment Needs become wants when directed to specific objects that satisfy needs Want : Specific Objects that satisfy the needs Met needs and Unmet needs….. anupamaa.chavan@nmims.edu 3
TYPES OF NEEDS • Need can be distinguished in 5 types: • Stated needs • Real needs • Unstated needs • Delight needs • Secret needs anupamaa.chavan@nmims.edu 4
Product : Watch • Stated need: BrandedWatch • Real need: good brand with reasonable price • Unstated need: Shows correct time • Delight need: Get a discount • Secret need: adds to your status/appreciation from friends anupamaa.chavan@nmims.edu 5
Product : Car • Stated needs: The customer wants an inexpensive car. • Real needs: The customer wants a car whose operating cost, not initial price, is low. • Unstated needs: The customer expects good service from the dealer. • Delight needs: The customer would like the dealer to include an onboard GPS system. • Secret needs: The customer wants friends to see him or her as a savvy consumer. anupamaa.chavan@nmims.edu 6
EXERCISE Think of a purchase which you made recently and give the brief description of various types of needs related to that purchase. Example: Purchase of a Watch 1. Stated need: Branded and in fashion 2. Real need: Branded and in fashion and reasonable 3. Unstated need: Shows time correctly 4. Delight need: Getting 20% off 5. Secret need: Appreciation from peers. https://youtu.be/XhMVWzVXNNk 7
WANT • Need becomes want when directed to specific objects. • When hungry what will you have…….. • Wants are specific …. • Burger, Dosa, Pizza, Paratha, Puffed rice…. • Wants are shaped by society… • Time /Period is also important….. anupamaa.chavan@nmims.edu 8
DEMAND • Demands are wants for specific products backed by an ability and willingness to pay. • Marketers are sometimes criticized for making people buy things they don’t want. anupamaa.chavan@nmims.edu 9
Demand States • Negative Demand • Non Existing Demand • Latent Demand • Declining Demand • Irregular Demand • Full Demand • Overfull Demand • Unwholesome Demand anupamaa.chavan@nmims.edu 10 S4
Demand States Demand State 1. Negative Demand 2. Non Existing Demand 3. Latent Demand 4. Declining Demand 5. Irregular Demand 6. Full Demand 7. Overfull Demand 8. Unwholesome Demand Marketing Task 1. Disabuse Demand 2.Create Demand 3. Develop Demand 4. Revitalize Demand 5. Synchronize Demand 6. Maintain Demand 7. Reduce Demand 8. Destroy Demand Format 1. Conversional Marketing demand states.pptx 2. Stimulation Marketing noddnodd.pptx 3. Developmental Marketing develomental marketing.pptx 4. Remarketing remarketingremarketing.pptx 5. Synchro-marketing irregulardemandirregulardemand.pptx 6. Maintenance Marketing fullddfulldd.pptx 7. Demarketing overfulldd.pptxoverfulldd.pptx 8. Counter Marketing unwholesomeddunwholesomedd.pptx anupamaa.chavan@nmims.edu 11
Exercise • Give 5 examples of every demand state. anupamaa.chavan@nmims.edu 12
Case Study : anupamaa.chavan@nmims.edu 13 Coca Cola was invented in the late 19th century by John Stith Pemberton and was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coca- Cola to its dominance of the world soft-drink market https://youtu.be/XhMVWzVXNNk John Stith Pemberton
Assignment • Enumerate the strategies used by Coca Cola in the audio visual seen. anupamaa.chavan@nmims.edu 14
Target Markets • Market is an arena for Potential Exchange • Market is a set of existing and potential buyers for a product • Market is heterogeneous • Target Markets are prospects to whom the product is to be sold. anupamaa.chavan@nmims.edu 15 S5
Positioning • Positioning refers to an overall strategy that ‘aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer’ • A good position gives the product a USP (Unique selling proposition). anupamaa.chavan@nmims.edu 16
Positioning • The objective of market positioning is to establish the image or identity of a brand or product so that consumers perceive it in a certain way. • For example: • A handbag maker may position itself as a luxury status symbol • A TV maker may position its TV as the most innovative and cutting-edge • A fast-food restaurant chain may position itself as the provider of cheap meals anupamaa.chavan@nmims.edu 17
Positioning • A few examples are positioning by: • Product attributes and benefits: Associating your brand/product with certain characteristics or with certain beneficial value • Product price: Associating your brand/product with competitive pricing • Product quality: Associating your brand/product with high quality • Product use and application: Associating your brand/product with a specific use • Competitors product: Making consumers think that your brand/product is better than your competitors product anupamaa.chavan@nmims.edu 18
Examples • Volvo – Drives safely • Maruti Suzuki – Economy, Reliability, Service • Safola – No Cholesterol • Nokia – Connecting people: Complan – Complete food healthy drink • Hero Honda – Better Mileage • Business Today – Business Magazine anupamaa.chavan@nmims.edu 19
Market Segmentation • Definition: • ‘Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub markets or segment each of which tends to be homogeneous in all significant aspects’ anupamaa.chavan@nmims.edu 20 S6
Bases of Market Segmentation • Kotler provides four classes of variables used in segmenting consumer market: • Geographic : Country, Zones, Cities, Villages, Density, Climate • Demographic: Age, Gender, Family size, Education, Income, Occupation, Religion, Nationality • Psychographic: Social class, Lifestyle, Personality • Behavioral: Occasions, User rate, Benefit, User status, Loyalty, Readiness stage, Attitude anupamaa.chavan@nmims.edu 21
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OFFERING • An offering in marketing is the total offer made to your customers. • An offering is more than the product itself and includes elements that represent additional value to your customers, such as availability, convenient delivery, technical support or quality of service. • An offering can also consists of a tangible product or service plus related services such as installation, repair, warranties or guarantees, packaging, technical support, field support, and other services. anupamaa.chavan@nmims.edu 24
OFFERING • Offer is the tangible or intangible value added to the product. • The intangible Value Proposition is made physical by an offering, which can be combination of product, services, information and experience. anupamaa.chavan@nmims.edu 25
BRAND • A brand is a name, term, design, symbol, or other feature that distinguishes an organization or product from its rivals in the eyes of the customer. • Trademarks are registered brands • You have : • Individual brand: eg – Surf, Lux • Family brand: Amul, Ponds • Umbrella brand: Godrej • Combination brand: Maruti Suzuki • Private or Middlemen brand: Shopper’s Stop anupamaa.chavan@nmims.edu 26
MARKETING CHANNELS • It includes: • Communication channels • Distribution Channels • Service Channels anupamaa.chavan@nmims.edu 27
COMMUNICATION CHANNELS • Communication Channels deliver and receive messages from target buyers. • Includes the conventional media and also digital media anupamaa.chavan@nmims.edu 28
DISTRIBUTION CHANNELS Distribution channels helps display, sell or deliver the physical products or services to the buyer or user These channels may be direct via Internet, phone, mail or indirect through distributors, wholesalers, retailers, agents and other intermediaries anupamaa.chavan@nmims.edu 29
SERVICES CHANNELS • Service channels include warehousing, transportation companies, banks and insurance companies • Marketers need to choose the best mix of communication, distribution and service channels for their offerings anupamaa.chavan@nmims.edu 30
Paid, Owned,& Earned Media • Paid Media: • Conventional methods • Various media available: indoor, outdoor, direct and indirect anupamaa.chavan@nmims.edu 31
Media of Advertising: Conventional anupamaa.chavan@nmims.edu 32 Press Newspaper Magazines Radio Films T.V Posters Painted Display Travelling Display Electrical Signs Skywriting Sandwichmen Sales Letters Envelops Circulars Gifts Package - Inserts Catalogues Window Display Interior Display Showrooms Exhibitions Indoor Outdoor Direct Indirect
Paid, Owned,& Earned Media • Owned Media: • Owned by company • Company/Brand Brochure • Website, Facebook,Twitter account, Instagram acct. Snapchat acct. etc. anupamaa.chavan@nmims.edu 33
Paid, Owned,& Earned Media • Earned Media: • Consumers, Press, Outsiders voluntarily speak about companies brand/product via word of mouth, buzz, or viral marketing anupamaa.chavan@nmims.edu 34
IMPRESSION • Impression occurs when consumers view a communication • An impression is an estimate of the number of people a particular advertisement is reaching. • But impressions don’t provide any insight into the results of viewing the communication. anupamaa.chavan@nmims.edu 35
ENGAGEMENT Its all about the extent of a customer’s attention and active involvement with a communication Some online ‘engagements’ are Facebook – likes Twitter – tweets Comments on Blog/Websites Sharing of video or other content. Engagement can augment/transform the firm’s products or services anupamaa.chavan@nmims.edu 36
SATISFACTION Satisfaction reflects a person’s judgment of a product’s performance in relationship to expectations. In other words satisfaction is derived when the product is able to meet the expectation of the consumer. When the product surpasses the expectation level and gives much more to the customer beyond his expectation it creates delight. anupamaa.chavan@nmims.edu 37
VALUE • Value is the sum of the tangible and intangible benefits over costs. • Value is a central marketing concept which is primarily a combination of quality, service and price (qsp), known as customer value triad • ‘Marketing is all about creating communicating and delivering value to target market to build profitable customer relationship’ anupamaa.chavan@nmims.edu 38
VALUE • Value is dynamic • Value changes depending upon innovation, competition etc, therefore create a value which is sustainable and continuous anupamaa.chavan@nmims.edu 39
EXERCISE • You want to buy a smart phone. • Enlist the value addition you seek in it. anupamaa.chavan@nmims.edu 40
CustomerValue • Customer value is the difference between the values the customer gains from owning and using a product and the cost of obtaining the product. • Total CustomerValue is the total sum of product value, services value, personnel value and image value. • Total Customer Cost is the sum total of all the costs a customer incurs in acquiring the product which include monetary, time, psychological and energy costs anupamaa.chavan@nmims.edu 41
Building CustomerValue, Satisfaction, and Loyalty • Customer-Perceived value (CPV) • The difference between the prospective customer’s evaluation of all the benefits and costs of an offering and the perceived alternatives • Total customer benefit vs. Total customer cost anupamaa.chavan@nmims.edu 42
Determinants of CPV anupamaa.chavan@nmims.edu 43
Exercise anupamaa.chavan@nmims.edu 44
Exercise • Customer-Perceived value (CPV): The difference between the prospective customer’s evaluation of all the benefits and costs of an offering and the perceived alternatives • Total Customer Benefit is the total sum of product value, services value, personnel value and image value. • ProductValue : Super fast train with Automatic doors, bio-vacuum toilet • Service Value: GPS enabled compartments and WIFI connectivity • Personnel Value: Good onboard staff • ImageValue: Travelling byVande Bharat Express (an Engineering Marvel) • Total Customer Cost is the sum total of all the costs a customer incurs in acquiring the product which include monetary, time, psychological and energy costs • Monetary value: Rs. 510 to Rs. 3310 • Time cost: Amount of time spent to check the alternatives and decide the travel plan byVande Bharat Express • Energy cost: Physical efforts put in to arrange and fix the travel by Vande Bharat Express (booking tickets) • Psychological Cost: Efforts put in analyzing, evaluating and decision making to travel byVande Bharat Express anupamaa.chavan@nmims.edu 45
CustomerValue Analysis 1. Identify the major attributes and benefits that customers value 2. Assess the quantitative importance of the different attributes and benefits 3. Assess the company’s and competitors’ performances on the different customer values against their rated importance 4.Examine how customers in a specific segment rate the company’s performance against a specific major competitor on an individual attribute or benefit basis 5. Monitor customer values over time anupamaa.chavan@nmims.edu 46
CreatingValue for Customers • Customer value can be bifurcated into two broad categories: 1.Tangible values 2. Intangible values anupamaa.chavan@nmims.edu 47
CustomerValue TangibleValues • Functional value • Economic value • Convenience value • Sensory/Aesthetic value • Service value IntangibleValues • Social value • Prestige/StatusValue • Sentiment value • Experience value • BeliefValue anupamaa.chavan@nmims.edu 48
Components ofValue Delivery Process: • Selecting theValue • Creating theValue • Communicating theValue • Delivering theValue • Capturing the value back fro the Market • Enhancing theValue anupamaa.chavan@nmims.edu 49
Exercise: • Select any five goods which you have bought and identify the values added to those products. • Using the components of customer value, design the value proposition for a new brand of toothpaste. Support your answer with an appropriate brand name. • value exercise.docx anupamaa.chavan@nmims.edu 50
Marketing Mix Concept • McCarthy classified various marketing activities into marketing mix tools of four broad kinds, which he called the four P’s of marketing. • Product • Price • Place • Promotion In addition to the above, 4P’s are updated to represent the Holistic Marketing Concept that encompasses the Modern Marketing realities: • People • Processes • Programs • Performances anupamaa.chavan@nmims.edu 51
4A’s FRAMEWORK – by Sheth and Sisodia • Sheth and Sisodia (2012), emphasis on the 4 A’s that are the four important customer values – • Acceptability: It is the measure of the extent to which a company’s total product offering exceeds customer expectations. • Affordability: The extent, to which, customers in the target market are able and willing to pay the product’s price. It has two dimensions: economic (ability to pay) and psychological (willingness to pay). Acceptability combined with affordability determines the product’s value proposition • Accessibility: The extent, to which customers are able to readily acquire the product, has two dimensions: availability and convenience. • Awareness: The extent, to which customers are informed regarding the product’s characteristics, persuaded to try it, and reminded to repurchase. It has two dimensions: brand awareness and product knowledge. anupamaa.chavan@nmims.edu 53
Building CustomerValue, Satisfaction, and Loyalty anupamaa.chavan@nmims.edu 54
Exercise • Discuss the elements of traditional marketing mix for Dettol handwash • ExplainTraditional Marketing Mix • Product: Brand name, Variety in colour and fragrance, packages • Promotion: Advertising, Sales Promotion • Place:Widely available in retail outlets and also on online platforms • Price: Value Based Pricing anupamaa.chavan@nmims.edu 55
Supply Chain (SC) • Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer. • A supply chain is a system of organizations, people, activities, information, and resources involved in moving product or service from supplier to customer anupamaa.chavan@nmims.edu 56
SUPPLY CHAIN anupamaa.chavan@nmims.edu 57
Typical stages in Supply Chain anupamaa.chavan@nmims.edu 58
Flow of Product, Information & Funds anupamaa.chavan@nmims.edu 59
COMPETITION • Competition includes all the actual and potential rival offerings and substitutes a buyer might consider. anupamaa.chavan@nmims.edu 61
MARKETING ENVIRONMENT • Marketing environment consist of: • 1.Task environment • 2. Broad environment anupamaa.chavan@nmims.edu 62
Task Environment • Includes actors in engaged in producing, distributing and promoting the offering • These are suppliers (material suppliers and service suppliers), distributors, dealers and target customers anupamaa.chavan@nmims.edu 63
Broad Environment • Includes six components: • 1. Demographic environment - 7 • 2. Economic environment - 8 • 3. Socio-Cultural environment – 9 • 4. Natural environment- 10 • 5.Technological environment - 11 • 6. Political-Legal environment - 12 anupamaa.chavan@nmims.edu 64
Activity • Explain the elements of Broad environment with examples. anupamaa.chavan@nmims.edu 66
Scope of Marketing • Marketing is all about identifying and meeting human and social need • Its all about: • ‘Meeting Needs Profitably’ • The aim of marketing is to know and understand the customer so well that product or service fits him and sells by itself. anupamaa.chavan@nmims.edu 67
Scope of Marketing • The scope of marketing addresses the question what is marketing, what is marketed, the marketing process and who performs the marketing. • The scope of marketing is vast. It is the focal point of all business activities. • The production and selling process loses its significance without efficient marketing. • Marketing begins with conception of idea to be sold in form of a product which will lead to attainment of marketing goal. • Marketing involves identifying the target market whose needs and wants are to be satisfied, developing appropriate product, pricing, promotion and distribution of the product and identifying the post purchase behavior of consumers and identifying the reaction of consumer towards marketing mix strategies. anupamaa.chavan@nmims.edu 68
What is Marketed Marketers market 10 types of entities: • Goods : • Services: • Events: • Experiences: • Persons: • Places: • Properties: • Organizations: • Information: • Ideas Consumer Goods, Industrial Goods Types of goods.pptx Airlines, Hotels, Car Rentals, Insurance World Cup, Olympics, AsianGames Walt DisneyWorld, Imagica,Trekking Artists, Musicians, Physicians Tourism, Cities,Towns Real Property, Financial Properties Museums, PerformingArts Organizations Books, Schools, Universities Every market offering include a basic idea Eg.Charles Revson of Revlon asserts :‘ In factory we make cosmetics, but in the drug store we sell hope.’
• Exercise 6 • List down the various products or services that you have purchased under the 10 entities that are marketed
Caselets anupamaa.chavan@nmims.edu 71 https://youtu.be/iOi4b7XeSMg
Company Philosophies/concepts/Orientations to Market Place • We need to understand the evolution of marketing philosophies. • Marketing as a Concept/Philosophy/Orientation • The different marketing concepts are as follows: • The Exchange Concept • The Production Concept • The Product Concept • The Sales Concept • The Marketing Concept • The Holistic Marketing Concept
The Exchange Concept • The central idea of marketing is just ‘exchange’ of product between the buyer and the seller • Business /Marketing is simply a matter of giving a product to someone in exchange. • Most short sighted view • Marketing is much broader than exchange
The Production Concept • Marketers believe in : • Mass Production • High Production Efficiency • Creates economies of scale thus reduces cost • Mass distribution • Eg: Lenovo largest PC manufacturer, Haier domestic appliances, also
The Product Concept • Under this concept the marketers think : • ‘product excellence’ is the supreme thing • Consumers prefer high quality/performance/innovative features • Better product will by itself lead people to beat a path to their door • Eg: • Eg:Apple - Iphone • Many start ups failed as they concentrated only on product s offered • Dazo, an app-based service that curated and delivered meals, has suddenly shut down its operations —barely a year after it started. It came as a surprise to many as the company was backed by bigwigs such as Google India chief Ranjan Anandan, TaxiForSure co-founder Aprameya Radhakrishna, and former Freecharge chief executive Alok Goel
Marketing Myopia • The term 'marketing myopia' was first expressed in a famous article written by Theodore Levitt for the Harvard Business Review in 1960. • In 'Marketing Myopia,' Levitt argued that many companies incorrectly take a shortsighted approach to marketing, viewing it as merely a tool for selling products. • Instead, he argued that companies should look at marketing from the consumer's point of view and not from the point of view of company. Example: Kodak and Nokia – leaders at one time failed to understand the market trend which led to their downfall
The Selling Concepts • This concepts holds that consumers and businesses if left alone won’t buy enough. • Efforts are taken the to sell the products • Practiced aggressively for Unsought goods • Eg: Cemetry plots, Life Insurance,Vaccination https://www.youtube.com/watch?v=_rgQMsvYyps&feature=youtu.be
The Marketing Concepts • This concept emerged in mid – 1950 • Consumer Centric • Focuses on right products for your customers instead of finding right customers for your product. • Eg: Dell provides customized features in the laptops/PCs
The Holistic Marketing Concept • “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.” -Philip Kotler • According to holistic marketing concept, even if a business is made of various departments, the departments have to come together to project a positive & united business image in the minds of the customer.
The Holistic Marketing Concept • Based on four broad components: • Relationship Marketing • Integrated Marketing • Internal Marketing • Performance Marketing
Relationship Marketing • A key goal of marketing is to develop deep, enduring relationships with people and organizations that directly or indirectly affect the success of the firm’s marketing activities. • Relationship marketing aims to build mutually satisfying long term relationships with key constituents in order to earn and retain their business.
Relationship Marketing • Four key constituents for relationship marketing are: • Customers • Employees • Marketing Partners ( channels, suppliers, distributors, agencies) • Members of financial communities (shareholders, investors, analyst) • It includes : • CRM – Customer Relationship Management • PRM – Partners Relationship Management
Integrated Marketing • Synergy is to be created. • All marketing activities are required to be well integrated. • Integrate • Products/Services • Promotion (Communications) • Place (Channels) • Price Devise marketing activities and programs that create, communicate, and deliver value such that “the whole is greater than the sum of its parts.”
Internal Marketing • Internal marketing is the task of hiring, training and motivating able employees who want to serve customers well. • Marketing succeeds only when people of all departments work together in co-ordination to achieve customer goals.
Performance Marketing • Performance marketing requires understanding the financial and nonfinancial returns to business and society from marketing activities and programs • Evaluation of : • Financial Accountability: – Sales, Market share, customer loss rate, customer dissatisfaction, product quality and other measures • Social Responsibility:- Legal, Ethical, Social, effects of marketing activities and programs • Environmental Sustainability
Price
FADS • Fad: • is ‘unpredictable and short-lived and without social, economic and political significance’. • an intense and widely shared enthusiasm for something, especially one that is short-lived; a craze. • A company requires good timing and luck to get it right. • Eg: fashion Dr. Anupamaa S Chavan 87
TREND • A direction or sequence of events with momentum and durability. • A trend is more predictable and durable than a fad • Trends reveal the shape of the future and can provide strategic direction • Eg:A trend towards health and nutrition awareness has brought increased Government regulation and negative publicity for firms dealing in unhealthy food – Maggi • GoingVegan • Trend during Covid – Social Distancing Dr. Anupamaa S Chavan 88
MEGATRENDS • A megatrend is a large social, economic, political, and technological change that is slow to form, and once in place, influences us for some time 7 to 10years or longer. • Eg: Renewable energy, Bricks and Clicks Dr. Anupamaa S Chavan 89
Marketing Environment Internal Environmental Factors External Environmental Factors Micro Factors Macro Factors Customer Competitors Suppliers Society Marketing intermediaries Demographic Economic Technological Cultural/Social Political Natural Legal Dr. Anupamaa S Chavan 90 Men Money Machinery Materials Markets

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