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Module 1: Introduzione al marketing

    Study Reminders

    We are looking at marketing management as the process of planning and executing theconception, pricing, promotion and distribution of ideas, goods and services to createexchange that satisfy individual and the organizational objectives. Look at theseterminologies which are used here. So, I just explained to you how management has gotincluded in their definition of marketing.Look at it; it is the process of planning and executing the conception, pricing, promotionand distribution of ideas, goods and services to create exchange that satisfy individualand organizational objectives. Now, look at what is conception, you may look at an
    example, a mundane example could be where a few decades back, it may be there evennow also you may find your neighbor in a terrific rush in the morning times. He may be,wanting to catch the bus which takes him to the workplace that bus might be coming tothe bus stop at around 7 o’ clock. So, he might like to leave his house around 6:45 to bein time for the work for this bus stop to reach the bus stop before the bus comes.Now, when you look at this persons’ schedule he would have got up early in the morningmaybe around 5 o’ clock and goes through his daily course and the last portion of thatdaily core might be that he might like to have a small breakfast before he packs off withhis lunch or goes to the bus stop. Now, this last portion is something which we normallyif you look at the individual schedule, normally you find that this is the portion which itcuts into from the time aspect. He does not get the time to go through his breakfast in aleisurely manner. Now, he may be your neighbor, but he does not want to talk to you heis in a rush to reach the bus stop.The people who have done the breakfast for him maybe it is his wife or a mother they arealso gotten up perhaps even earlier than him readied the breakfast they may find thatafter readying the breakfast taking all the trouble this individual is not having time tohave the breakfast and leave for the bus. So, if you are observing all this, some thingsmight strike you, oh this individual normally cuts into his breakfast time the last 10minutes he wants to have the breakfast, but he does not have that time. he does not getthat 10 minutes.So, what he may do is, he may skip the breakfast instead of that you may think suppose Icome with a product which can satisfy his breakfast needs that is it can be in a liquidform or it can be from a tablet form or some other form where he can take his breakfasteven standing at the gate. So, if you are able to give him that breakfast in this type ofcapsule form or a drink form where he does not require that 10 minutes he can finish thatbreakfast within some few minutes that is 1 or 2 minutes and he is off to his bus stop.So, this could give you an idea of a product, can a product be manufactured which cantake care of the needs of this individual during the rush hours in the morning and stillhave all the effect of having their breakfast for him that is he does not think that he isstarving while going to the breakfast.
    You may think that this type of product maybe a good seller for this type of markets thatis, the individual who is in a rush in the morning, place wants to have a quick breakfastand leave. So, you may come up with a drink which can satisfy his needs that is abreakfast needs, it can be a low calorie or a high calorie, high protein or a low proteinwhichever it might be the type of thing. This drink can be good for the what do you callthe person who is going, it can be good for his children also, it can be good for hisparents also, when they are retiring for the day this is called conceptualizing an idea.There was an idea and you conceptualized this idea if you are able to convert this ideainto a product what you have done is you have really created a product from thisconception of the idea. So, this is where you come to so many of the products which arecoming in the present day market and each product which is being exhibited in themarketplace you will many times appreciate the lot of conceptualization which has gonein before it comes over with the product.After this it can be when you are through with this product the idea of pricing thisproduct how much should it be priced? If a product already is there to satisfy this type ofneeds in the market and how is it actually priced, then how this new product should bepromoted in the marketplace and after promoting this product how should you look at thedistribution of this product.So, it can be an idea, it can be a good or it can be a service and all this or what is the endobjective, you are looking at the end objective of satisfying the individual, through thesatisfaction of the individual you are also achieving the organizational objectives. That isyou wanted to market this product and marketing of this product by satisfying theindividual that is his needs is what you are looking at in marketing management. It is theformal process of marketing management where you look at planning, executing, theconception, pricing, promotion and distribution of ideas, goods and services to createexchange that satisfied individual and organizational objectives ok.Now, the next question is in an organization at what level are you going to havemarketing? If you look at any organization, an organization can how marketingmanagement at any level, be it personnel, be it marketing, be it finance. What is thewhole underlying objective here?
    The underlying objective of this statement is that marketing need not actually occur onlyin the marketing department of an organization, when you are recruiting personnel alsoyou are doing marketing, when you are looking at finance decisions also you are lookingat marketing. So, you want to buy a product at a lower price, how do you convince thesupplier to offer you the discounts.So, formal marketing if you look at in an organization it is done by sales managers,salesman, advertising managers, marketing research managers or customer servicemanagers or product managers or it can be your marketing vice president. Now, havinglooked at the formal definition of marketing let us now look at some concepts which arethere in the in marketing management.The first concept that you have to look at when you are looking at marketing is what iscalled the product concept. What is this product concept? The product concept states thatconsumers will respond favorably to good products that are reasonably priced and littlemarketing effort is required to achieve satisfactory sales and profits. What does thatmean? It means that you are having a good product when you are having a good productthe organization or the producer of the product thinks that marketing is not required inthat sense to sell this product it will sell on it is own that is a product concept.So, because the consumer knows about your product and when the consumer knows aabout your product and he knows that it is a good product he will respond favorably to it.Contrast this with the production concept. What is the production concept? You producea mass of this particular product that is a large number of this product, that is you areproducing in bulk volume. When you are producing in bulk volume what is likely tohappen. The result is the cost per unit of this product is likely to come down.So, there is a product concept where the organization thinks that the consumers willrespond favorably to good products that are reasonably priced and little marketing effortis required to achieve satisfactory sales and profits. In contrast to this the productionconcept looks at bulk volume and lower cost you produce in a mass cycle the cost willcome down when it costs will come down. So, it is likely to attract the customer this iswhat the organization might think ok.Compared to that what is the selling concept? The selling concept says that consumerswill normally not buy enough of company’s products unless they are approached with a
    substantial selling and promotion effort. So this can be appreciated by taking a fewexamples, it is especially true for many unsought goods that is the consumer does notrequire this good in the real sense. It can be in the present day circumstance look at theencyclopedias the how many of the individuals go through an encyclopedia.Suppose you are given the unenviable task of selling these encyclopedias it is quite ahard task. So, nobody wants to buy these encyclopedias and they are priced fairly high.So, what could be your potential market place for these encyclopedias? It can be thelibraries of well known institutions and they are also when you approach this well knowninstitutions to stock you encyclopedia again you have to sell these encyclopedia theremay be one another person who is selling the same encyclopedias in a different form.So, even these unsought goods you have to do a lot of selling before your product moves.The very good example for this is selling of this life insurance policy. So, you will findmany of these life insurance policy agents finding it very hard to sell those insurancepolicies to customers. So, they have to keep on telling this prospective customers thatlook you may be healthy now, you have got that family to support, suppose somethinggoes wrong, then what will you do?Make an insurance policy for that during that time when your family requires it so badlythis insurance policy is going to come handy and useful for which the consumer or theprospective consumer may say this insurance policy is giving me very low returns, whyshould I make this insurance policy. If I am going for the different options which isavailable in the marketplace I will get better returns for which the insurance agent shouldhave a satisfactory answer which can convince this individual.Now, take the example of the American automobile industry. So, you can walk into anautomobile showroom you can pick a car of your choice you can walk out with a car.The car is yours and the sale is done very fast. Now, in order to make this sale you go toa well known company showroom in any of the cities in the United States you will findthere is no one in that showroom you are entering that showroom it looks as though youare the only person in that showroom with so many cars around.So, you see the different cars which are exhibited and when you see the different carsone product or one exhibited product model, one exhibited product model might catchyour attention. You may try to spend a few more minutes looking at this model saying
    what does this model have to offer me, what are the types of features which it is going tooffer. So, yes you spend 3 to 4 minutes looking at this car saying what a beautiful car.So when you are spending this time you find that one person he is approaching you, fromwhere he approaches you are yourself not sure hey where did this person come, but theperson has come and he is standing by your side he tells you sir this car can acceleratefrom 0 to a 100 within a few seconds and it can provide you all these types of facilities.It can zoom it has so many gears, it can it can it has an auto function it has this that allthose types of things. When he gives you this type of product features you may be takenin by this seller that is who is selling this product for you and then you may just wonderthe last thing that you may normally do is look at the price tag. For all these featureswhat is a price? That price may look a little beyond your reach, but this seller is wellprepared for this situation.He may ask you sir can you give your credit card, we will tell you what could we thebest EMI options available for you. So, in a different in a typical market situation in theUnited States that credit card gives the seller what are all the, what is the salary packet ofthe individual, what are all the types of EMI options which he has already exercised andwhat could be a reasonable EMI option for this particular product. So, you may find thatthis person the salary is coming out with an EMI option saying sir you can afford to givethis much of EMI for this particular car.So you are all in all most psyched out by this individual and you wanted this car and thisseller has given you all these types of options which is more or less making you to go forthe car and you will find that this deal is done. I am walking away with the car. So, withall that you can choose your name plate also in the car. So, this is not just giving thenumbers registration numbers, but it can do additional features also. This is normallyreferring to in the American parlance that is the automobile industry parlance as psychhim out. So, but this is not the method of marketing that you should be really doing.
    (Refer Slide Time: 22:51)
    The aim of marketing is not selling. So, if you look at what Drucker says; Drucker saysthat the marketing's aim should being to make selling superfluous, that is effectiveselling should be proceeded by needs assessment, market research product development,pricing and distribution.In other words you should not be selling a product just because you are manufactured iteven though it does not satisfy the needs of the consumer. So, you should assess hisneeds first. How do you assess his needs? In other words you assess his needs through asustained or systematic market research process. So, this is the importance of havingmarket research in the present day markets.Before you come out with a product you go into market research find out whether thisproduct is required for the individual, when you are able to a conclusion that this productis required for the individual, then you can go through your market research study, thenyou can going for your product development and it is likely that this product may be ableto sell or capture the market in a good measure. So, this is what is called effectiveselling.The psyche him out type of thing which I just mentioned that is the American automobileindustries many times the psyching him out is referred to in the present day circumstanceas aggressive selling. This aggressive selling carries high risks you should not go in foraggressive selling because suppose you mentioned so many features in the product.
    Suppose that are 10 features which you have mentioned suppose it is 1 or 2 which is notthere in the product, then the consumer might excuse you in inverted commas may thinksay just 1 or 2 features he has added the remaining 8 are there I am reasonably happy.Suppose you gave him 10 features and the consumer finds that it is only 4 or 5 which arethere in the product. So, 5 are not there in the product then it will have a deleteriouseffect on your selling process, it will not be effective selling. In other words what you arelooking at as aggressive selling may actually backfire. It may backfire through this wordof mouth marketing the consumer might tell others the prospective buyers that 10features were offered to me only 4 or 5 are there you better be careful when going in forthis product.So this marketing concept becomes very essential where you are giving more or less atrue picture of what the product is capable of offering to the individual. So, the formaldefinition of the marketing concept which we look at is where you can say it is key toachieving organizational goals. It consists in determining the needs and wants of targetedmarkets and delivering the desired satisfaction more effectively and efficiently thancompetitors. Kindly note that there may be a lot of competitors for your product theymay also be satisfying the needs of the same market segment only, suppose your productis offered in the same market segment it has to offer something extra than what is alreadyan offer.Selling focuses on the needs of the seller marketing and the buyers needs. Kindly notethis selling always on the needs of the seller that is he wants his product to be pushed atany cost, but whereas, marketing looks at the buyers needs, it is preoccupied with theneed to convert product into cash. Marketing at satisfying consumer’s needs by means ofproduct and the whole cluster of things associated with creating delivering and finally,consuming it this is a statement which is attributed to Levitt.And this is given to you in a wonderful manner in his article called marketing myopia,which he gave in the year 1960 this was published by Harvard business review in theyear 1960 and this is considered to be a classic article even to this day this statement isattributed to him. So, you look at the selling concept, you are looking at products, sellingand promotion, you make profits through sales volume, you look at the marketingconcept. What are you looking at marketing, you are looking at customer needs, you are
    looking at integrated marketing, you are looking at profits through customer satisfaction.So, you are looking at profits through customer satisfaction which is always verydesirable.I have given a few examples here one of the examples is that the Maruti car in the Indianmarket when it was introduced in the 80s what are the type of marketing focus theMaruti car had? The marketing focus which the marketing Maruti had was the middleclass customer orientation. So, in the 80s what is the type of Indian market which wasthere? If you had a car, then you are you are from the upper class of society or the uppereconomic state of society. As a middle class in division individual you could never havea car or you could never buy a car.So, the Maruti car when it came out into the market it wanted to offer to the individualthe Indian the Indian consumer. A compact car; at an affordable price a compact car at anaffordable price with an Indian tag, the Indian tag was it was called Maruti car and theMaruti 800 which came in the 80s it was priced at about 54000 rupees. So, and it waslooking sleek with good painting and all those types of things.Naturally the middle class Indian he was attracted to the Maruti car, but he was alsoconcerned during that time when he looked at the ambassador car or the premier Padminithat is a Fiat car. He use to the thing that this Fiat and the ambassador they are morerugged or compared to the Maruti that is a safety aspect of this in the whether it is beingcompromised? This was one of the questions which were coming to his mind right in the80s only and which has us more or less proved by many of the types of accidents whichoccurred where this Maruti car could not sustain those accidents.So, if you hit an ambassador car there used to be a small this things suppose you even ifa Dharwad bison where to hit a ambassador car it is not the ambassador car which wouldbe hurt it would be the bison which will be hurt [Laughter] you car will be standing stillin the road, but the bison will be moving the [Laughter] other way, this was how theyused to look at the ambassador car. Now, suppose you are many times this is a is Maruticars. So, I have taken on more example, this example is from the telephone industry.What is the type of phone which we had in the 80s? We had a mechanical phone comingout from the Indian telephone industries incidentally Indian telephone industries is thefirst public sector to be started in the independent Indian sovereign Indian state. So, in
    the 1948, what was the objective of this ITI? It was to fulfill the telecommunicationneeds of the country. It came out with a mechanical phone and this mechanical phonewas a weighing about 10 kgs ok.In other words it is a heavy phone and you have to ring this different numbersmechanically 1 2 3 4 like that. So, many times you used to wonder why this phone is soheavy, second can we not come out with a phone which is slim where it can be a pushbutton type, where you can get these types of all the features of a phone, but not havingto go through all this mechanical circles and the weight of the phone will also besubstantially reduced.The result of that was in 1988 or 87 the same Indian telephone industry came out with anelectronic phone which was a slim line phone, that slim line phone was particularlyattractive because it was very cute, it had all the push button types of features which arewhere are available. So, the consumer said what a phone to have from ITI. So, in otherwords some market was very happy with this, but when it came to the pricing of thisparticular product they found that this product is priced very high. Then there was thisgray market which was available in a place like Bangalore only in the 80s and when theywent to this gray market that is this is an art and authentic market.What do you mean by not an authentic market? It is not going to give guarantee for theproduct or whatever which ITI used to say this is a product which is guaranteed, but thisgray market the same product was available in the gray market at a much lesser price.The result of that was the slim line phone which came out from ITI could not reallypenetrate the market and had in a in a way it was a failure big on the price front this iswhat characterized the market.
    (Refer Slide Time: 36:19)
    So, what we have done in this whole lecture is we have looked at the different concepts,we have looked at why the marketing concept is more important and before we end thislecture we will look at what does a marketing concept call for it. It calls for what iscalled the coordinated marketing. What does this coordinated marketing? That is youhave to do internal marketing as well as external marketing. So, the internal marketing isamong the different functions within the organization.It can be sales force, advertising, marketing research or with other departments, theymust really get enthused to sell the product by the organization suppose you are not ableto convince your own people about the product your manufacturing then it is a differentscenario altogether. So, this internal marketing is required it can be with respect tohiring, training and motivating the employees took us to serving the customers well.So, when you look at an organization a marketing organization you should look at themarketing organization like an inverted pyramid. What is this inverted pyramid? It is ifyou see the company organization chart from a marketing this inverted pyramid hascustomers at the top. Then the next one is what is called the front line people maybe yourgeneral managers or whatever, then in the middle management maybe your managersand below, then the left front line people can the you are all your supervisors or whateverit is, the middle management can be your managers, the top management can be your
    general manager or the deputy general managers and above or whatever it is. So, theseare the people.So, in other words that top management it says should be in contact with your customers.So, it is not just customers in contact with the front line people, it is also the topmanagement of the organization which should always be in because constant touch withyour customer suppose this is what you are seeing in the present Indian market take amutual funds market. There are many mutual fund players so, in the market and theyaddress you from the top management, he can be the chief general manager of thatparticular mutual fund. He wants to give the features of that fund and say these are thefeatures which this fund is offering kindly going for this fund.So, in other words you are seeing a different situation altogether in the Indian marketwhere you looked at the top management in contact with the prospective customers, itcan be through different channels whether it is visual media or print media or directlyaddressing letters to the prospective customers. So, this is where you look at a correctview of the company organization chart from the marketing perspective. So, this is whatwe look at.So, these 4 things, that is the market focus, customer orientation, coordinated marketingand profitability they forum what is called the 4 pillars of the marketing concept. So, themarket focus, customer orientation, coordinated marketing and profitability forum whatis called the 4 pillars of the car marketing concept. We will stop here, we will continue inthe next class.Thank you.