MARKETING MANAGEMENT
Introduction to Marketing Management
According to American Marketing Association, Marketing is the activity, set of institutions,
and processes for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large.
It is the process by which companies create value for customers and build strong customers
relationships in order to capture value from customers in return.
Role of Marketing
1. As a business function
Marketing serves the business organization as a separate functional area. Generally, a
separate department is established in organisations to execute this marketing function.
Marketing department is involved with handling marketing techniques and strategies such as
purchasing, sales, production, pricing, distributing, advertising and promotion, marketing
research, planning and after sales services.
2. As a business philosophy
Without limiting to a function, Marketing covers the entire business. It sees the whole
business from the customer’s viewpoint. Many successful companies see marketing as the
foundation of their business. They are not viewed it as a separate function, but rather as a
profit – oriented approach to business that covers not just the marketing department but the
entire business. It highlights the customer centered thinking throughout the organization and
a sound inter-functional support and coordination.
Role of Marketing as both a Business Philosophy and a Business Function
Marketing as a business philosophy is concerned with the achievement of effectiveness - the
ability to achieve appropriate objectives. In other words, it reflects the ability to create and
keep a profitable customer. It brings right products, right markets, and right strategies to the
minds of marketers.
On the other hand, marketing functions as a function, tries to achieve efficiency which is
minimizing the use of resources in achieving organizational objectives
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MARKETING MANAGEMENT
Business organizations, which are operationally efficient and strategically effective, will thrive,
but even a relatively inefficient organization will at least survive if it can create and keep
customers. Companies which are ineffective, which are unable to adopt as their market
changes, are designed to die, increasing efficiency ultimately delay this.
3. As a skill
To give the business the best chance of success, it is essential to invest in marketing skills.
Marketing is not just a single skill, but a combination of different skills. Marketers need these
skills to identify opportunities, adopt to changes and form sound strategies.
Is Marketing Selling/ Advertising?
Marketing is everywhere and as consumers, we see it daily. However,
marketing is not just
selling and advertising, even though selling and advertising make up a critical role in marketing.
Selling and advertising can be considered as a middle stage of the marketing process, but marketing
involves lot more functions. Other than selling and advertising, marketing includes market research,
analyzing, market identification, product designing, promoting, delivering, maintaining customer
relationships and much more.
If marketing is considered as an iceberg, selling and advertising is just like the tip of that iceberg. The
larger portion of the iceberg is hidden under the ocean so as the marketing.
According to Drucker, “the
aim of marketing is to make selling unnecessary” . The aim
of marketing is to know and understand the customer so well that the product or service fits him and
sells itself.
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MARKETING MANAGEMENT
Marketing is for Every Organization
At presents all most all types of organizations are benefitting from marketing.
Marketing is not only for profit-oriented business organisations. Not for profit organisations also use
marketing to achieve their objectives such as communicating with their target customers, build
awareness of an issue and gain financial support from the public fir its cause etc.
Other than that, Marketing is not limited to tangible items. In contrast to production-oriented
businesses, service providing corporations are also increasingly adopting marketing strategies to sell
their services.
On the other hand, no matter the scale, any business which can be large or small needs to apply
marketing strategies for their survival and improvements.
Importance of Marketing
▪
Finance, operations, accounting, and other business functions won’t really matter without
sufficient demand for products which is influenced by the marketing function.
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Marketing encourages innovation which lead to higher standard of living of people.
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Successful marketing builds demand for products and services, which, in turn, creates jobs.
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Marketing also allows firms to more fully engage in socially responsible activities.
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Standard of living of people of any society is determined by the level and quality of marketing
activities carried out by various parties within a society.
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Individuals and households are fulfilling their needs and wants through the marketing function
taking place within the society.
Market Offerings
Consumer needs and wants are fulfilled through market offerings. A market offering is a
product
or service that an organization provides to customers to meet their needs.
Companies address customer needs by putting forth a value proposition, a set of benefits that satisfy
those needs. The intangible value proposition is made physical by an offering, which can be a
combination of products,
services, information, and experiences, events, persons,
places, properties, organizations, and ideas.
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MARKETING MANAGEMENT
Customer Value
Customer value of a product is the product’s perceived ability to satisfy the customer’s
need. Value is primarily a combination of quality, service, and price.
The total customer value is the “bundle of benefits” customers expect from a given product or service.
Customers compare value of alternative products with costs of obtaining and purchasing these
alternatives. The buyer chooses the offerings they perceive to deliver the most value to them.
Net customer value (Customer Delivered Value) is the
difference between the total customer benefits that the
consumer gains from owning and using a product and total
customer cost of obtaining the product.
Total customer benefit is the perceived monetary value of the
economic, functional, and psychological benefits customers
expect from a given product because of the product, service, people, and image. Total customer cost
is the perceived bundle of costs customers expect to incur in evaluating, obtaining, using, and
disposing of the given market offering, including monetary, time, energy, and psychological costs.
Perceived value refers to the value that the consumers expect before the actual consumption. It is the
psychological expectation. This perception of value is affected by the aesthetic and unique appearance
of the product, type of distribution channels, promotions, as well as the price of the product.
Actual value is the value that the consumer places upon the good or the service after consuming it. It
is the actual experience of satisfaction or dissatisfaction.
Customer Satisfaction
Satisfaction is a person’s
feelings of pleasure or disappointment that result from
comparing a product’s perceived performance to expectations.
Customer satisfaction occurs when a product’s perceived performance matches a buyer’s
expectations.
If the performance is lower than expectations, the customer is disappointed. If it matches
expectations, the customer is satisfied. If it exceeds them, the customer is highly satisfied/ delighted.
Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers
often switch to competitors and disparage the product to others.
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MARKETING MANAGEMENT
Tracking and measuring customer satisfaction
For customer centered companies, customer satisfaction is both a goal and marketing tool.
Organizations use following methods to measure how much customer satisfaction they are creating.
1. Complaints and Suggestion Systems
Provide forms for customer to report their likes and dislikes about the product. This includes
keeping suggestion boxes, supplying comment cards to customers and establishing customer
hotlines which customer can inquire, make suggestions or complaints.
2. Customer Satisfaction Survey
Organizations can send questionnaires or make telephone or personal interviews to a random
sample of their potential customers to find out how they feel about various aspects of the
company’s product and its performance. They can track customer satisfaction directly and ask
questions to measure repurchase intention and the likelihood or willingness to recommend
the company and brand to others.
3. Lost Customer Analysis
Organizations can monitor their customer loss rate and contact those who have stopped
buying or who have switched to another supplier to find out why.
4. Ghost Shopping/ Mystery shoppers
A company can hire persons to pose as potential buyers to report their findings on strong and
weak points they experienced in buying the company’s products.
Building Customer Relationships
Creating loyal customers is at the heart of every business. The only value a company will ever create
is the value that comes from customers. Businesses succeed by getting, keeping, and growing
customers.
“Marketing is managing profitable customer relationships”
Customer Relationship Management is the process of building and maintaining profitable customer
relationships by delivering superior customer value and satisfaction.
Successful marketers try to build up long – term trusting “win – win” relationships with valued
customers. This is accomplished by promising and delivering high quality goods and services and fair
prices to the customers overtime. Good customer relationship management creates customer
satisfaction. Satisfied customers remain loyal and talk favorably to others about the company and its
products. Therefore, the task of creating strong customer loyalty is called ‘relationship marketing’.
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MARKETING MANAGEMENT
According to relationship marketing, four groups of customers have been recognised based on their
profitability and projected loyalty.
True Friends: are highly profitable and loyal. They are happy
about the organization and deal with the organization regularly.
Therefore, businesses should protect these customers, satisfy
them and retain their loyalty by communicating with them
regularly.
Butterflies: are potentially profitable but not loyal. There is a
good fit between the company's offerings and their needs. However, they stay with the organization
for only a short while and then they will leave. An organization should make them happy while they
are interested, enjoy them while they last. After that, cease investment in them.
Barnacles: are customers who are loyal but give little profit to the company. For an example, some
savings accounts in banks for a long time period with few moneys in it. In this case, the bank does not
profit much; in fact, the bank might lose money because of the maintenance costs of keeping the
customer's banking account. The relationship management for these customers would be to try to
cross-sell or up-sell to them, i.e., encourage the customers to buy more or different types of products
such as promoting same banks credit cards, loans etc.
Strangers: are customers who are neither loyal nor profitable. An example is a passerby who does
not stay, work or study in the area, but just makes a one-time purchase of a can of soft drink at a shop.
The key to dealing with strangers is to differentiate them quickly, and do not invest in them at all.
Marketing Process
Marketing process includes ways in which value can be created for the customers to satisfy their
requirements. It is an endless series of actions and reactions between the customers and the
companies making attempt to create value for and satisfy the needs of customers.
In marketing process, the situation is examined to identify opportunities, the strategy is formulated
for a value proposition, tactical decisions are taken, plan is executed, and results are monitored.
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MARKETING MANAGEMENT
Understanding marketing
management
•Understanding the importence of marketing along with key
concepts of marketing and chosing a suitable marketing
orientation for the organization.
Identifying market
opportunities
•Gather and analyze the information gathered from the market
and identify feasible market opportunities which can be fulfilled.
Selecting target market
strategies
•Identifying market segments along with the target market and
develop market strategies to exploit target market.
Developing marketing
programs
•This is about managing markeing mix. In this stage, organization
consider about product designing, pricing and value creation,
place and deleivering and promotional strategies
Evaluating marketing efforts
•Implementing developed strategies, evaluating whether they are
executed properly and assessing the success of the marketing
program.
Changing Marketing Landscape
The past decades have witnessed an incredible change in the marketing landscape due to following
reasons.
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Uncertain economic environment
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The digital age
The digital age has provided marketers with exciting new ways to learn about and track
customer needs. The most dramatic digital change was the internet. Online marketing is now
the fastest growing form. Other than that, marketing automation, artificial intelligence and
emergence of new social media platforms also affected the marketing field significantly.
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Social Responsibility
Marketers are now focusing more on social values and responsibilities alongside the
environment that sustains us. Corporate ethics and social responsibility have become hot
topics for almost every business.
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Not-for-profit Marketing
Schools, hospitals, museums, zoos and other not-for-profit organisations now use marketing
for gaining support and memberships. Government agencies have also shown an increased
interest in marketing.
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Globalization
Marketers are taking a look at the ways in which they relate with the broader world around
them.
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