Marketing Management Bcom Notes 60i2v

Marketing management NOTES marketing management notes Unit 1 Basic Concepts of Marketing Marketing is the business function that identifies unfulfilled needs and wants, defines and measures their magnitude, determines which target market the organisation can best serve, decides on the appropriate products, pricing and promotion and distribution programs to serve these markets to develop a market orientation. From a societal point of view, marketing is the link between a society’s material requirements and its economic patterns of response. Marketing satisfy these needs and wants through exchange processes and building long-term relationships. It is the process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organisational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that benefit the organisation and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value. Unit 2  The Marketing Environment There are many variables that operate within an organisations environment that have a direct or indirect influence on its strategy. A successful organisation is one which understands and can anticipate and take advantage of changes within their environment. An organisations operating environment can be analyzed by looking at: • External forces (those factors that an organisation has no control over), • Internal forces (factors that an organisation has direct control over) An organisation’s macro environment consists of external factors in the organisation’s surroundings that have the potential to affect the organisation’s strategies. Unless marketing managers understand the external environment, the firm cannot intelligently plan for the future. Many organisations put together teams of specialists to continuously put collect and evaluate information, a process known as environmental scanning. This task usually falls upon marketers, as, more than any other group within the organisation; marketing managers need to be able to track trends and opportunities. Unit 3 Market-Oriented Strategic Planning The fortunes of all companies, depends in a large measure on their ability to analyse their environmental and competitive context and make sound strategic decisions. This book is intended to provide you with the concepts, methods and procedures by which the quality of

strategic decision-making can be improved; this unit introduces you to many of these concepts, which you will understand better as you progress through the book. Unit 4 Competition and Competitive Strategy  The fundamental purpose of a business unit is to create value for its customers and capture value for its owners. A firm’s understanding of the structure of an industry and the competition within will reflect in its business strategies. Competitive forces within the industry determine the appropriateness of a firm’s strategies and its ability to capture value for itself as competitive strategy is essentially a search for a viable position in the industry. Many companies fail to establish a viable position, simply because they fail to truly understand the competition within their industries and performance factors critical to success, in a given industry. Consequently, their competitive strategy is inadequate to achieving their strategic goals. Unit 5 Market Research and Demand Forecasting The emphasis in marketing is on the identification and satisfaction of customer needs. In order to determine customer needs and to implement marketing strategies and programs aimed at satisfying those needs, marketing managers need information, They need information about customers, competitors and other forces in the market place. In the recent years, many factors have increased the need for more detailed information. As firms have become national and international in scope, the need for information on larger and more distant markets has increased. As consumers have become more sophisticated and knowledgeable, managers need better information on how consumers will respond to products and their marketing programs. As competition becomes more intense, managers need information on the effectiveness of their marketing tools. The task of market research is to assess the information needs and provide management with relevant, accurate, reliable valid and current information. Today’s competitive marketing environment and ever increasing costs attributed to poor decision making, require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition or even pure judgment; they are based facts and sound information. Unit 6 Consumer Behavior The aim of marketing is to meet the needs of target markets profitably. Consumer behavior studies how consumers search for, purchase, use, evaluate and dispose of products and services that they expect will satisfy their needs. Consumer behavior focuses on how individuals make decisions to spend available resources (time, money and effort) on consumption related products and services. Understanding consumers and “knowing why consumers do what they do” is very complex. Customers may say one thing and mean another. They may not be aware of their own deepest motivations and may respond to influences in very impulsive ways. To understand consumers, marketing theorists have borrowed concepts from other scientific disciplines such as psychology (study of an individual), sociology (study of groups), social psychology (study of how an individual operates in groups), anthropology (influence of society on groups) and economics to form a new marketing discipline known as consumer behavior. The field of consumer research has emerged as an important area of marketing research, to enable marketers to predict how consumers will react to messages and to understand why they make the purchase decisions they do.

Unit 7 Market Segmentation and Selecting Target Markets One of the earliest proponents of market segmentation was Alfred P Sloan, President and chairman of General Motors. He inherited a company that was built through takeovers of small car companies and hence produced many ill-sorted models unguided by clear business objectives. Sloan re-organised the company and in 1924, articulated the company’s product strategy as “a car for every purse and purpose”. In the meanwhile, Ford continued to produce the Model T until 1927, as the market continued to grow through mass production and mass marketing, guided by Henry Ford’s philosophy, “consumers can buy any color, so long as it is black”. GM, on the other hand, offered a variety of affordable mass produced models from the autocratic Cadillac to the proletarian Chevrolet and took over a large part of Ford’s market share. Long before the birth of the marketing concept, Alfred Sloan realized that all customers are not created equal and are therefore not alike. Unit 8 Positioning The idea of ‘positioning’ a product or service emerged in the early 1970s when Al Ries and Jack Trout, advertising executives, wrote a series of articles called ‘The Positioning Era’ for Advertising Age. In their 1981 book, “Positioning: The Battle for your Mind”, Ries and Trout describe how positioning is used as a communication tool to reach target customers in a crowded market place. Not long thereafter, the advertising industry the world over began to develop positioning slogans for their clients and very soon ‘positioning’ became a key aspect of marketing communications. “Positioning: The Battle for your Mind” (recommended reading), has become a classic in the field of marketing. The concept of positioning has evolved from being just a communication tool to being a very important marketing concept in an era of hyper competition. Unit 9 Product Concepts We have learnt so far that marketing strategy is built on the concept of segmentation — targeting — positioning. A company discovers different needs in the marketplace, targets those needs that it can satisfy in a superior way and then positions its offering so that the target market recognises the company’s distinctive offering as most appropriate to satisfy its needs. Once a company has carefully segmented the market, chosen its target customers, identified their needs and determined its market positioning, the company is in a better position to develop a product. Marketers play a key role in planning and developing new products and working with R&D departments at every stage of development. Every company must develop new products, as new products shape the future of the company. Continuous improvements and replacements of products must be done to ensure future revenue streams. Boston Consulting Group recently surveyed 940 senior managers in the US; increasing top-line revenues through innovations was rated as the key managerial challenge. Unit 10 Distribution Channels and Marketing of Services During the past three decades, vast progress has been made in our understanding of the design and management of distribution channels. Markets have evolved and matured and technological

developments have made distribution a strategic competitive tool, as against a mere process of marketing which was the case in the past. In India, distribution channels have evolved in three distinct phases. The first phase spanning the 1950s to early 1960s was when the multinationals and a few Indian companies concentrated their efforts on reaching out to urban markets. Trade channels performed limited functions of merely redistributing the merchandise to retailers. Their own view of their business was limited to that of being merely “re sellers”. Unit 11 Strategic Pricing Pricing as a management function has undergone a vast revolution over the years. What was largely seen as decision taken by finance and ing, using cost-plus pricing procedures because they were seen as financially prudent, pricing has assumed a key strategic role today. Attitudes towards pricing changed radically when marketers encountered the challenges of the 1980s and 1990s. Fierce competition, erosion of brand loyalty and pricing power, e-competitors, guerrilla brands and the shift in the balance of power between manufacturers and distribution channels brought a new approach to pricing. Marketing managers realized that blindly chasing market share and customer satisfaction often resulted in margin erosion and ultimately erosion of shareholder value. Managers were jolted into realizing that the ultimate purpose of a business is to create value for the shareholder or owner of the business through the process of creating value for the customer. Unit 12 Integrated Marketing Communications (IMC) Marketing communications are the mcans by which firms attempt to inform, persuade and remind its target markets, using both direct and indirect means, about the brands they sell as well as about the company as a whole. Although communications directed to target markets are the mainstay of the communications programmed, firms need to communicate with all its stakeholders (customers, shareholders, suppliers, channel partners, customers, employees and government agencies). Firms develop specific communications plans directed to the stakeholders. BEST OF LUCK