Mod D : Marketing Management for Bankers What is Marketing…?? Selling? Advertising? Promotions? Making products available in stores? Maintaining inventories?
All of the above, plus much more! Marketing = ? Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals American Marketing Association Marketing = ? 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. Simple Marketing System Marketing = ? Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over. Marketing is all about creating a pull, sales is all about push. Marketing is all about managing the four P’s – product price place promotion The 4 Ps & 4Cs
Scope – What do we market Goods Services Events Experiences Personalities Place Organizations Properties Information Ideas and concepts Core Concepts of Marketing Based on : Needs, Wants, Desires / demand Products, Utility, Value & Satisfaction Exchange, Transactions & Relationships Markets, Marketing & Marketers.
Core Concepts of Marketing Need – food ( is a must ) Want – Pizza, Burger, French fry's ( translation of a need as per our experience ) Demand – Burger ( translation of a want as per our willingness and ability to buy ) Desire – Have a Burger in a five star hotel In order to understand Marketing let us begin with the Marketing Triangle
Who is a Customer ?? Customer – CUSTOMER has needs, wants, demands and desires Understanding these needs is starting point of the entire marketing These needs, wants …… arise within a framework or an ecosystem Understanding both the needs and the ecosystem is the starting point of a long term relationship
How Do Consumers Choose Among Products & Services? Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product. Satisfaction - Based on a comparison of performance and expectations. Performance > Expectations => Satisfaction Performance < Expectations => Dissatisfaction Customers - Problem Solution As a priority , we must bring to our customers “WHAT THEY NEED” We must be in a position to UNDERSTAND their problems Or in a new situation to give them a chance to AVOID the problems Customer looks for Value Value = Benefit / Cost Benefit = Functional Benefit + Emotional Benefit Cost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost Analysis Of Competition Who are your competitors? What are their strengths and weaknesses? What have been their strategies? How are they likely to respond to your Marketing plan?
Strategic Planning Strategic Planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.
Also called Strategic Management Process All organizations have this Can be Formal or Informal
Business Strategic-Planning Process Strategy Formulation The Marketing Plan A written document that acts as a guidebook of marketing activities for the marketing manager
Marketing Environment Why a product like radio declined and now once again emerging as an entertainment medium ?
What Were the Drivers of This Change ? Technology ? Government policy ? Other media substitutes ? Why Market Leaders Suffered ? HMT vs. Titan HLL vs. Nirma Bajaj vs. Honda Dot.com boom, then bust and now resurgence Market leadership today cannot be taken for granted.New and more efficient companies are able to upstage leaders in a much shorter period.
Types of Products Product Items, Lines, and Mixes Product Mix Width – how many product lines a company has Length – how many products are there in a product line Depth – how many variants of each product exist within a product line Consistency – how closely related the product lines are in end use Gillette’s Product Lines & Mix What is a Service? Defining the Essence An act or performance offered by one party to another (performances are intangible, but may involve use of physical products) An economic activity that does not result in ownership A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets Some Industries - Service Sector Banking, stock broking Lodging Restaurants, bars, catering Insurance News and entertainment Transportation (freight and passenger) Classification of Services
Intangibility – Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase. Inseparability - Services are produced and consumed simultaneously. Variability or Heterogeneity – Services are highly variable Perishability – Services cannot be stored. Non Ownership - Services are rendered but there is no transfer of title
The Marketing Mix The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion. Generally acknowledged that this is too narrow today; now includes , Processes, Productivity [technology ]People [employees], Physical evidence Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers. The “8Ps” of Integrated Service Management vs. the Traditional “4Ps” Product elements Place, cyberspace, and time Process Productivity and quality People Promotion and education Physical evidence Price and other user outlays The Give and Get of Marketing Great Words on Marketing “The purpose of a company is ‘to create a customer…The only profit center is the customer.’” “A business has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.” “The aim of marketing is to make selling unnecessary.” “While great devices are invented in the Laboratory, great products are invented in the Marketing department.” “Marketing is too important to be left to the marketing department.”
Drivers of Customer Satisfaction Many aspects of the firm’s value proposition contribute to customer satisfaction: The core product or service offered Support services and systems The technical performance of the firm Interaction with the firm and it employees The emotional connection with customers Ability to add value and to differentiate as a firm focuses more on the top levels Marketers and Markets Marketers are focused on stimulating exchanges with customers who make up markets – B2C or B2B. The market is comprised of people who play a series of roles: decision makers, consumers, purchasers, and influencers. It is absolutely essential that marketers have a detailed understanding of consumers, their needs and wants. Much happens before and after the sale to affect customer satisfaction Stages of Customer Interaction What Changed in Marketing… Organize by product units Focus on profitable transactions Look primarily at financial scorecard Focus on shareholders Marketing does the marketing Build brands through advertising Focus on customer acquisition No customer satisfaction measurement Over-promise, under-deliver
Myth 1 – The larger the range of products, the more customer-centric I am.