MARKETING MANAGEMENT
Marketing emphasizes that ‘customer is the king’ and his satisfaction
must be the ultimate aim of a business activity. If a business unit
desires long time success –a belief handed down to posterity(Future
generations) by sound marketing people.
Marketing has been defined in several ways by different writers….
---Marketing management is defined as the process of overseeing and
planning new product development, advertising, promotions and sales.
An example of marketing management is creating an advertising plan
and implementing that plan.
---According to Philip Kotler, “Marketing management is the analysis,
planning, implementation and control of programmes designed to bring
about desired exchanges with target markets for the purpose of
achieving organizational objectives.
---"Marketing management is "the art and science of choosing target
markets and getting, keeping, and growing customers through creating,
delivering, and communicating superior customer value"
---Marketing is the process used to determine what products or
services may be of interest to customers and the strategy to use in
sales, communications and business development. The American
Association of Marketing define marketing management as the process
of planning and executing the conception, pricing, promotion and
distribution of ideas, goods and services in order to create, exchange
and satisfy individual and organizational objectives.
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---The position within our marketing management department requires
that the individual be able and willing to target specific markets. Recruit
new customers, while retaining current customers and establishing the
business name within new areas by delivering and communicating
superior customer value.
---Marketing is a social and managerial process by which individuals and
groups obtain what they need and want through creating and
exchanging products and value with others.
---The performance of business activities that directs the flow of goods
and services from producer to consumer/user.
Marketing is performed within a certain environment which itself
always changing. We can divide these marketing activities into four
basic elements,
1.
2.
3.
4.
Product
Price
Promotion &
Place
These are referred to as 4p’s in marketing.
Here the product stands for the goods or services offered by the organ.
Price refers to the money value that the customer has to pay.
Promotion is the aspect of selling and advertising.
Place or physical distribution refers to the aspect of the channels of
distribution through which the product has to move before it reaches
the customer.
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Role of Marketing in a Developing Economy
A developing economy is one which is trying to achieve growth in the
gross national product through the generation of additional income in
various sectors of an economy such as agriculture, industry, mining,
internal and external trade.
Considering the typical characteristics of a developing economy and its
growth needs, it appears that certain factors of the economy need
relatively a greater level of marketing efforts than the others, as
1) Marketing in agriculture, basic industries, mining and plantation.
a) Agriculture: food grains and agriculture raw materials; b) Basic
Industries: steel and power generation c) Mining and plantation.
All these sectors need for a minimal level of marketing efforts.
2) Intermediate industrial goods: these include engineering goods,
machine tools, components, accessories etc. the marketing efforts
required is medium level for careful product planning, informative
advertising and personal selling in addition to essential packaging,
storing, and physical distribution.
3) Semi industrial products: these include pharmaceuticals and
fertilizers, appliances for business and household use. Required
high marketing efforts.
4) Export trade and services: these include tourism and banking. The
efforts required for marketing will have to be enhanced in order
to bring in steady returns.
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Marketing of services
Service marketing is a sub-field of marketing, which can be split into
the two main areas of goods marketing (which includes the marketing
of fast moving consumer goods (FMCG) and durables) and services
marketing.
The term service includes a wide variety of services. A service is an
activity or benefit that one party can offer to another that is essentially
intangible and does not result in the ownership of any goods.
Services can be distinguished from products on the basis of the
following five characteristics
1. Intangibility--- A service which cannot be seen, touched, smelt or
tasted but can only be perceived. Ex: copyright, patent,
reputation, Teachers provide a service that is intangible. You can't
feel, touch, or taste the service of teaching as shown in. However,
it is possible to give tangible proof for the quality of service. You
cannot hold or touch a service unlike a product. This is because a
service is something customers experience and experiences are
not physical products.
2. Inseparability--- A service that cannot be separated from the
person/firm responsible for providing it. i.e. Airline service.
Personal services cannot be separated from the individual.
Services are created and consumed simultaneously. The service is
being produced at the same time that the client is receiving it; for
example, during an online search or a legal consultation. Dentist,
musicians, dancers, etc. create and offer services at the same
time.
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3. Heterogeneity(or variability)--- difficult to standardize quality as
human element is involved in providing and rendering services.
Services involve people, and people are all different. There is a
strong possibility that the same enquiry would be answered
slightly
differently
by
different
people (or even by the same person at different times). For
example, returning to the same garage time and time again for a
service on your car might see different levels of customer
satisfaction, or speediness of work. If you watch your
favourite/favorite music group on DVD the experience will be the
same every time you play it,
4. Perishability--- if not used or consumed it will be lost forever.
Services cannot be stored and are perishable. (likely to decay or
go bad quickly, cannot save for later use, things, especially
foodstuffs, likely to decay or go bad quickly.) Services have a high
degree of perishability. Unused capacity cannot be stored for
future use. If services are not used today, it is lost forever. For
example, spare seats in an aeroplane cannot be transferred to the
next flight. Similarly, empty rooms in five-star hotels and credits
not utilized are examples of services leading to economic losses.
5. Ownership--- Customer has access to, but not ownership of,
facility or activity. You can not own a service and you cannot store
a service like you can store a product. Services are used or hired
for a period of time. For example when you buy an aeroplane
ticket to fly to the USA, you are buying a service which will start at
the beginning of the flight and finish at the end of the flight. You
cannot take the aeroplane flight home with you.
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MARKETING PLANNING AND ORGANIZATION
Two important management dimensions of marketing---- Planning and
Organizing
Planning Marketing Mix
Four basics elements—Product, price, promotion, and Place constitute
the marketing mix. These four elements called 4p’s are used for
grouping different marketing activities.
1) Product: Activities relating to the product, service, or idea to be
offered.
2) Price: Activities relating to the price to be charged for the product,
service or idea.
3) Promotion: Activities relating to the promotion i.e. Advertising,
personal selling, sales promotion and publicity of the product,
service or idea; and
4) Place: Activities relating to the distribution of the product, service
or idea by physical distribution and channel distribution.
Elements of Marketing Mix
The four basic elements of marketing mix are
1) Product: Activities related to the product are quality, style, brand
name, features, size, packaging, warranty, services and returns.
Ex: LIC introduces the home saving plans, MRF introduces the
concept of tyre service centers, Titan launches Quartz watches for
Indian market.
2) Price: the following factors are generally considered by the
marketers by seeting prices --- target customers, cost
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competition, the law, social responsibility apart from other factors
as well.
3) Promotion: Important promotional methods are i.e. Advertising,
personal selling, sales promotion and publicity of the product,
service or idea; and
4) Place: Place is made up of two components—physical distribution
and channel distribution.
Relationship between Marketing Planning Process and Marketing Mix
Following components constitute a typical marketing plan:
a) Current Marketing situations: the data relate to the market,
product, competition, distribution and macro environment.
b) Identification of problems and opportunities: Identification of
SWOT analysis—strength, weaknesses, opportunities and threat
of a company’s product.
c) Defining Aims: Financial& Marketing aims to achieve the objective
d) Marketing strategies: It consists of broad decisions on target
markets, market positioning and mix. Marketing strategy also
involves an awareness the expected environment and competitive
conditions
e) Marketing programme development: In developing each element
of the marketing strategy, it is required to know i) what will be
done? ii) When will it be done? iii) Who will do it? iv) How much
will it cost
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Relationship between Marketing Mix and Marketing Strategy
Marketing mix is the mixture of controllable marketing elements that
the firm uses to achieve the target market. Marketing strategy is a set
of sub categories concerned with competition, segmentation, pricing,
promotion, and distribution.
The product life cycle concept helps us understand how the
components of the marketing mix changing during different phases of
the life cycle-curve. The product life cycle curve (S-shaped) of
Introduction, Growth, Maturity, and Decline as shown.
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Marketing Organization
Marketing is an important function in every firm irrespective of
marketing a product or service.
We define an organization as any system, body or group of people,
comprising various sub-systems or parts which are interrelated or
interdependent on each other.
Factors involved in designing marketing organizations
In designing a marketing organization the following factors taken into
considerations
a) Marketing objectives and goals--- these include the desired
market share, desired sales and profit levels, desired positions in
the industry and market
b) Nature of the product--- depending on the kind of product which
the firm is marketing, there is need to induct educated and
trained person
c) Marketing of specialty product--- these includes ethical drugs and
medicines, medical and scientific equipments. For these purpose,
formal educational background is foremost before the product is
marketed.
Thus depending upon the unique combination of what you are
marketing, where you are marketing and whom you are marketing, one
should design the marketing organization to suit ones need.
Methods of Designing Market Organizations
A Marketing Organizations can be designed in many ways, four basics
methods we are going to discussed
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1)
2)
3)
4)
Functional Organization
Product Management Organization
Market Centred Organization
Matrix Organization
1. Functional Organization: The most common type of marketing
Organization consists of various functions performed as part of
the overall marketing function. Each function is assigned to a
marketing specialist who reports to the director (marketing).
The most common functions in marketing are: sales, distribution,
advertising and promotion, dealer relation, customer service, new
product development, marketing planning, marketing research,
marketing information system.
Thus the functional marketing organization is based on various
sub-functions performed as part of the overall marketing
function.
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2. Product Management Organization: the Product Management
Organization is headed by a product manager, who supervises
several product managers in charge of specific products. Thus in a
multi-product firm, one would have as many product managersas
the number of products.
The role of product manager towards his specific product is to:
 Develop long term and competitive strategy.
 Prepare annual plan and sales forecast.
 Monitor progress
 Provide information relating to the product
 Interact with other depts. Of the organizations, customers,
distributors, and advertising agencies.
Typical responsibilities of a product manager (table 9.4)
This type of organizations offers several advantages:
a) Development of cost-effective marketing mix for the product
b) Product manager can act quickly to the problems
c) Smaller brands are less neglected
d) Excellent training arrangements for young executives
Disadvantages:
a) Product management creates some conflicts
b) Product manager becomes expert in product but rarely in function
c) Product management system often turns out o be costlier than
anticipated
d) Product manager tend to manage their brand for only a short
time.
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3. Market Centred Organization: when tasks and jobs are
differentiated on the basis of market served, the organization is
known as market centred. A Market Centred Organization is
similar to the product management organization. A chief
marketing manager supervises a number of market managers.
This type of organizations seeks its growth by serving new needs
in the market where it is already well established.
4. Matrix Organizations: a matrix organization is blend of grouping
by functions and markets and products.
Advantages:
a) Permits project focus
b) Provides increased information processing capability
c) Provides a flexible structure
d) Coordinating when the tasks are highly specific,complex.
Disadvantages:
a) Tendency to conflicts exists
b) Ambiguity in roles exist bcoz each person reports to 2 bosses.
c) Proves costly bcoz of large volume of info processing
d) Problems of designing a suitable info system,
Each type of organization is useful under specific conditions and has its
own advantages and disadvantages.
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Consumer Behaviour
Who is a Consumer?
Any individual who purchases goods and services from the market for
his/her end-use is called a consumer.
In simpler words a consumer is one who consumes goods and services
available in the market.
Example - Tom might purchase a cycle for his son or Mike might buy a
shirt for himself. In the above examples, both Tom and Mike are
consumers.
What is consumer Interest?
Every customer shows inclination towards particular products and
services. Consumer interest is nothing but willingness of consumers to
purchase products and services as per their taste, need and of course
pocket.
Let us go through the following example:
Both Maria and Sandra went to the nearby shopping mall to buy
dresses for themselves. The store manager showed them the best
dresses available with him. Maria immediately purchased two dresses
but Sandra returned home empty handed. The dresses were little too
expensive for Sandra and she preferred simple and subtle designs as
compared to designer wears available at the store.
In the above example Sandra and Maria had similar requirements but
there was a huge difference in their taste, mind set and ability to
spend.
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What is Consumer Behaviour?
Consumer Behaviour is a branch which deals with the various stages a
consumer goes through before purchasing products or services for his
end use.
Why do you think an individual buys a product?
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Need
Social Status
Gifting Purpose
Why do you think an individual does not buy a product?
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No requirement
Income/Budget/Financial constraints
Taste
When do you think consumers purchase products?
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Festive season
Birthday
Anniversary
Marriage or other special occasions
There are infact several factors which influence buying decision of a
consumer ranging from psychological, social, and economic and so on.
The study of consumer behaviour explains as to:
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

Why and why not a consumer buys a product?
When a consumer buys a product?
How a consumer buys a product?
During Christmas, the buying tendencies of consumers increase as
compared to other months. In the same way during Valentines week,
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individuals are often seen purchasing gifts for their partners.
Fluctuations in the financial markets and recession decrease the buying
capacity of individuals.
In a layman’s language consumer behaviour deals with the buying
behaviour of individuals.
Consumers purchase products and services as and when need arises.
According to Belch and Belch, whenever need arises; a consumer
searches for several information which would help him in his purchase.
Following are the sources of information:

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Personal Sources
Commercial Sources
Public Sources
Personal Experience
Perception also plays an important role in influencing the buying
decision of consumers.
Buying decisions of consumers also depend on the following factors:
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
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Messages, advertisements, promotional materials, a consumer
goes through also called selective exposure.
Not all promotional materials and advertisements excite a
consumer. A consumer does not pay attention to everything he
sees. He is interested in only what he wants to see. Such
behaviour is called selective attention.
Consumer interpretation refers to how an individual perceives a
particular message.
A consumer would certainly buy something which appeals him the
most.
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Various physical, social and psychological factors that characterize and
shape the behaviour of consumers are discussed.
Consumer Behaviour is the study of individuals, groups, or
organizations and the processes they use to select, secure, use, and
dispose of products, services, experiences, or ideas to satisfy needs and
the impacts that these processes have on the consumer and society.
It attempts to understand the decision-making processes of buyers,
both individually and in groups such as how emotions affect buying
behaviour.
All consumers can be classified into two types---personal and
organizational. Whenever one buys goods and services for his own or
family use, he is a representative of a personal consumer. All business
firms, government agencies, non business organizations such as trusts,
temples, hospitals are organizational consumers who purchase goods
and services for running the organizations.
Factors Influencing Consumer Behaviour
Consumer Behaviour is affected by a number of variables
Psychological Factors: these include;
a) Consumer Needs: According to maslow, all human needs can be
classified into five hierarchical categories:
i. Physiological needs: water, air, food, shelter, etc
ii. Social Needs :affections, belongingness, friendship, etc
iii. Ego needs: status, prestige, self-respect, success, etc
iv. Safety and security needs: Protection, stability, etc
v. Self-actualization: self-fulfillment.
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b) Perception: Perception can be described as ‘how one sees the
world around him through his five organs--- eye, ears, nose,
mouth, and skin. Perception is the process through which an
individual selects, organizes and interprets the information he
receives in order to do something that makes sense. Depending to
his experiences, beliefs and personal characteristics, an individual
will have a different perception from another.
c) Learning: Learning is through action. When we act, we learn. It
implies a change in the behavior resulting from the experience.
The learning changes the behavior of an individual as he acquires
information and experience.
For example, if you are sick after drinking milk, you had a negative
experience, you associate the milk with this state of discomfort
and you “learn” that you should not drink milk. Therefore, you
don’t buy milk anymore.
Rather, if you had a good experience with the product, you will
have much more desire to buy it again next time.
d) Beliefs and attitudes: Customer possesses specific belief and
attitude towards various products. Since such beliefs and
attitudes make up brand image and affect consumer buying
behavior therefore marketers are interested in them. Marketers
can change the beliefs and attitudes of customers by launching
special campaigns in this regard.
A belief is a descriptive thought that a person has about
something.
Attitude is a person enduring feeling, evaluation and tendency
towards a particular idea/object.
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Social Factors
Man is a social animal. Hence, our behaviour patterns, likes and dislikes
are influenced by the people around us to a great extent. We always
seek confirmation from the people around us and seldom do things
that are not socially acceptable. The social factors influencing consumer
behaviour are a) Family, b) Reference Groups, c) Roles and status.
Purchase decisions is influenced when the consumer interacts directly
or indirectly with various social groups, these groups are
A. Primary and secondary groups: A primary group is one with which
an individual interacts on a regular basis and whose opinion is
important to him. E.g. family, close friends, colleagues. Secondary
groups are those with which an individual’s interacts only
occasionally and whose opinion is not so important to him.
B. Formal and informal groups: rotary clubs, labour unions, lions
club, and formal institutions as they have defined structure. An
informal group is loosely defined and may have no specific roles.
E.g. meeting neighbors occasionally.
C. Membership and symbolic groups: a membership group is one to
which a person belongs to or qualifies for memberships. i.e labour
union.
Personal Factors
Purchase decisions are also influenced by the consumers personal
charecteristics such as education, occupation, age, sex, stages in family
life cycle, his ov erall personality and self-concept.
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Cultural Factors
Consumer behavior is deeply influenced by cultural factors such as
buyer culture, subculture, and social class.—upper, lower upper, upper
middle, lower middle; upper lower and lower backgrounds have
different product brand preferences and need appropriate modified
products and marketing stratigies.
Basically, culture is the part of every society and is the important
cause of person wants and behavior. The influence of culture on buying
behavior varies from country to country therefore marketers have to be
very careful in analyzing the culture of different groups, regions or even
countries.
Man is a social animal. Hence, our behaviour patterns, likes and
dislikes are influenced by the people around us to a great extent. We
always seek confirmation from the people around us and seldom do
things that are not socially acceptable. The social factors influencing
consumer behaviour are a) Family, b) Reference Groups, c) Roles and
status.
Each culture contains different subcultures such as religions,
nationalities, geographic regions, racial groups etc. Marketers can use
these groups by segmenting the market into various small portions. For
example marketers can design products according to the needs of a
particular geographic group.
Every society possesses some form of social class which is
important to the marketers because the buying behavior of people in a
given social class is similar. In this way marketing activities could be
tailored according to different social classes. Here we should note that
social class is not only determined by income but there are various
other factors as well such as: wealth, education, occupation etc.
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Consumer behaviour model
Consumer Behaviour is the study of individuals, groups, or
organizations and the processes they use to select, secure, use, and
dispose of products, services, experiences, or ideas to satisfy needs and
the impacts that these processes have on the consumer and society.
Consumer bahaviour varies with the type of buying decision. There are
three types of buying behaviour
i.
ii.
iii.
Routinized response behaviour: occurs when the customer has
already some experience of buying and using the product.
Consumers do not waste time in such products since they already
have a preferred brand, e.g. soft drinks, washing powder, tea,
toothpaste etc.
Limited Problem Solving Behaviour: The consumer is familiar to
the product and various brands available, but no preferential
brand. In this, the marketer is expected to design a
communication strategy which gives the complete information on
all attributes of the brand. And enhances the customer’s
confidence to facilitate his purchase decision.
Extended Problem Solving: the consumer is encountering new
product category and needs information to this product category
as well as on several others brands available. The marketing in
these categories must be able to provide the consumer a specific
set of positive attributes. This concept of extended problem
solving is most applicable to new products.
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Product Management
Product management is an organizational lifecycle function within a
company dealing with the planning, forecasting, and production, or
marketing of a product or products at all stages of the product lifecycle
“Product Management is the process of conceiving, planning,
developing, testing, launching, delivering and withdrawing products in
the market”
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Internal: current teams, management
External: supply chain, market
Upstream: planning, development, launch
Downstream: ongoing lifecycle management
Hence Product Management means product concept, converting it to a
physical product, its brand name, packaging, and positioning in the
market.
 Product managers like to solve problems
 Product Managers spend time understanding what customers
need and want…
 …Then develop solutions that solve these problems and satisfy
needs & wants
 Product Managers have a duty to deliver and maintain financial
benefit to the business
 Product Managers see things differently
 The carpenter doesn’t want a drill. He wants a hole
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How a Product Manager sees it
The carpenter has a problem. He needs a hole in the wall. A drill
can solve this problem, but there’s much more to it than just
creating a hole. The carpenter is concerned with multiple factors:
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Speed at which the hole is made
Accuracy of the cut
Safety of the device that makes the hole
Ease of using the device
Reliability of the device
Purchased or accessed
Price of the device
support of the device
Product managers define the problem using criteria such as these
before working on possible solutions.
Product Decisions
Product Decisions include introduction of new products, improvement
of existing products, planned elimination of absolute products, packing
and branding.
Decisions regarding the product, price, promotion and distribution
channels are decisions on the elements of the "marketing mix".
In decisions on producing or providing products and services in the
international market it is essential that the production of the product or
service is well planned and coordinated, both within and with other
functional area of the firm.
Generally, products are classified into two types:
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a. Consumer product
b. Industrial product
Consumer products require elaborate channels of distribution, but
Industrial products are sold through fewer outlets.
Product Life Cycle and new Product Development
There are four stages in the life cycle of a product:
a.
b.
c.
d.
Introductory stage
Growth stage
Maturity stage and
Decline stage
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