Session - 2

Core Marketing Concepts & Indian Scenario

Core Marketing Concepts

Needs, wants, and demands

Products and Services

Core Marketing Concepts

Markets Value, satisfaction, and quality Exchange, transactions, and relationships

What motivates a Consumer to take action?

Needs

- state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am thirsty Wants - form that a human need takes as shaped by culture and individual personality. i.e. I want a Coca-Cola. Demands - human wants backed by buying power. i.e. I have money to buy a Coca-Cola.

What Will Satisfy Consumers Needs and Wants?

Products - anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or want. Examples: persons, places, organizations, activities, and ideas.

Services - activities or benefits offered for sale that are essentially intangible and dont result

in the ownership of
anything.

Examples: banking, airlines, haircuts, and hotels.

How do Consumers choose among Products and Services?

Customer

Value - benefit that the customer gains from owning and using a product compared to the cost of obtaining the product. Satisfaction - depends on the products perceived performance in delivering value relative to a buyers expectations.

Customer

How do Consumers obtain Products and Services?

Exchanges

- act of obtaining desired benefit(s) from someone by offering something in return. Transactions - trade of values between parties. Usually involves money and a response. Relationships - building long-term relationships (bond) with consumers, distributors, dealers, and suppliers.

Marketing Channels:

How to convey to Consumers about Products and Services?

Communication Channels deliver and receive messages from
target buyers. e.g. TV, Radio, Billboards, Posters, Internet etc. Distribution channels: display, sell or deliver the products or services. Service channels: Facilitate transactions. e.g. Warehouses, Transportation companies, Banks and insurance companies.

Supply chain: channel stretching from raw materials to the final buyers. Marketing Environment:

Task environment company, suppliers including services (like MR agencies, Ad agencies, Banking, Insurance, Transportation Companies etc), distributors, dealers, target customers. Broad environment demographic, economic, technological, Socio-cultural, political and legal.

Who Purchases Products and Services?

Market - buyers who share a
Actual

Buyers

particular need or want that can be satisfied by a companys products or services.

Potential Buyers

Modern Marketing System

Suppliers
Company (Marketer) Environment

Competitors Environment

Marketing Intermediaries

End User Market

Marketing Management
Marketing Management
Implementing programs to create exchanges with target buyers to achieve organizational goals
Need to understand

Demand Management
Finding and analysing the demand pattern and increasing it over time; Changing or reducing demand (e.g. old models of Co.s in Automobile mkt)

To understand and achieve

Profitable Customer Relationships Attracting new customers and retaining current customers

New Marketing Challenges

New Marketing paradigms & Information Technology

Nonprofit Marketing

Ethical Concerns

Emerging Challenges
Changing World Economy

Globalization

Marketplace, Marketspace & Metamarkets

Marketplace is physical; Marketspace is virtual

(internet).

Metamarkets: cluster of complementary

products and services in the same industry.

E.g. Automobile Co.s, Car dealers, financial

companies, Insurance companies, spare parts dealers,

service shops, auto magazines auto sites over internet.

Target Markets, Positioning & Segmentation

Segmentation: based on demographic, psychographic and/or behavioural similarities/ dissimilarities. Target Markets: Identifying & profiling distinct group of buyers prefer varying product/services mixes examining the Macroenvironment (Demographic, psychographic, and behavioural differences

among buyers) For SEGMENT(S) company may offer customized or

standardized benefit(s).

Positioning: Offering (value proposition) is suitably/ appropriately

placed in the mind of the customer based on unique

features/identified gap(s) in the market. E.g. Scorpio launched by M&M in 2002 Sports utility vehicle (SUV) luxury and comfort

(positioning: luxury of a car and adventure of a SUV).

Demand States

Negative demand: consumers dislike the product but still pay for it. (e.g.
Vaccination, dental treatment etc.)

Nonexistent demand: consumer may be unaware or not interested in the product/ service. (e.g. Pharma retail chains Membership schemes)

Latent demand: consumers may have a strong need- which either may not be satisfied by existing products or may not have specified. (e.g. Insurance
etc.)

Declining demand: consumer begin to buy the product less frequently. (e.g.
ice-creams, cold beverages during Winter)

Irregular demand: consumer purchase very occasionally. (e.g. Cement, Wall

Paint, electric switches and other appliances etc)

Full demand: consumers are adequately buying all products available in the market. (e.g. Milk products) Overfull demand: More consumers would like to buy than the supply. (e.g.
Milk pdts. during Shivratri festival)

Unwholesome demand: consumers may be using products that have undesirable social consequences. (e.g. Cigarettes, Alcoholic drinks etc.)

Factors influencing Marketing Strategies

Demographic/ Economic MARKETING Social/ Cultural PUBLIC

INTERMEDIARIES PRODUCT

PLACE

TARGET CUSTOMERS

PRICE

SUPPLIERS Political/ Legal

PROMOTION

COMPETITORS Technological

Designing a Customer driven Marketing Strategy

To design a effective marketing strategy, managers follow two important guidelines:
What

customers will we serve?

(target markets)
How

can we serve these customers best & better than competitors ? (value proposition)

Choosing an appropriate Value Proposition

Value Proposition: set/ mix of benefits and values, a company promises to deliver to the customer to satisfy their needs.

How to differentiate and How to position it in the marketplace and market space.

e.g. Value propositions:

BMW : the ultimate driving machine

Nokia: Connecting People anyone, anywhere Apples iPhone: Touching is believing

Indian Marketing Scenario

Conversion of EPZs into SEZs. Retail and Real Estate boom. Growth in Medical Insurance & Tourism. Branding of Tourism (Services). Demographic changes in India society. Branding of Commodities Enhancement in Pharmaceutical value chain. Jewellary market witnessing more organised activities.