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Module 1: Introduzione al marketing

    Study Reminders

    In the last class, we looked at the four pillars of the Marketing concept that is marketfocus, customer orientation, coordinated marketing and profitability. The question thatexercises many minds is why Indian companies have not turned into marketing rightfrom the time of independence. In order to find answers to these questions you have tolook at when does a company turn towards marketing, that is, the marketing concept. Itnormally companies turned towards marketing concept when the sales decline.There was a company called Scooters India and it use to come with based in Lucknowcome with Pushpak scooters all those types of different models, it was supposed to be acompetitor to Lambretta. Initially when it came it was a public sector unit it was thoughtthat it will click in the market place, but did not. So, when it did not click in the marketplace this companies scooters India started looking or turning towards the marketingconcept when its sales steadily declined.
    So, you had a situation when the sales [is] declining and the company not reacting; thiscompany, again another example, slow growth, failure to react, sales have declined, thecompany turns towards marketing. So, it should not be that you turn towards marketingwhen it becomes a fait accompli that is you lose all hopes. Similarly, if you look at HMTwatches, a very strong buying brand made a mark in the Indian market, but in the 90scame a very strong competitor to HMT in the form of Titan. They projected watches asthough it is not just something to see time or give you time, but something which youshould be proud of wearing.So, the marketing promotion of Titan caught HMT totally unawares. The result is thetrusted loyal customer of HMT also started changing patterns of buying. So, you had achanging buying pattern even your trusted customer would not recommend your watchto his friends or kith and kin, but he would recommend Titan. So, this is a changingbuying patterns when the company started looking at marketing very intensely again itwas clock was ticking out for HMT, HMT did not was not able to cope with it is type ofwhat do you call the market barrages which was put one after the other by Titan andHMT watches has now almost become extinct, a sad story.Similarly, if you looked at ITI a very strong public sector in grant taking consider a gianttelecom company and the first Indian public sector unit to be started, but it was given aknock in 1984 when the doors of the telecom sector was thrown open to competitor youhad competition to ITIs telecom. So, the result was so long in a sheltered market ITI, itwas unable to really cope up with this type of competition which was being offered byother players.The sum and substance of all these examples tell you that it would be good for the Indiancompanies at least now whether it is a public sector or a private sector immaterial. Tostart practicing the marketing concept right from day 1, do not wait for things to go badand then start looking at the marketing concept. It is no longer a seller’s market in Indiawhether it is a computer market or whether it is an electronics market or whether it is aconsumer buying a durable markets everything is becoming a consumers market.Consumer is having lot of choices and when he has lot of choices he can always take adecision which is most favorable to him whether it is with respect to product features,whether it is with respect to prices whichever is the one which you would like to
    exercise. So, the result of all this is that the present day Indian market has becomefiercely competitive and any company which enters this market right now it has to tuneinto marketing concept right from day one cannot wait for things to go bad and youcannot keep on complaining that the market expenditure has increased. You can startcontrolling the market expenditure when you when you look at marketing concept rightfrom your inception. In other words, you can rationalize the marketing expenditure.This was one of the problems which was faced by a state run company like the nationaltextiles cooperation. The serious problem it faced was increasing market expenditures.When market expenditures started bloating up it was not able to really contain thisexpenditure the result is NTC buckled. So, any of these things which is going to happenis going to have a demoralizing effect on the organization itself. Take the HMTs case,take the ITIs case, take the Scooters India’s case or take the national textiles cooperationcase.Now, what these companies have failed that is failed to turn to the marketing conceptright from the beginning the private players who have come in they have turned in rightfrom the beginning to the marketing concept, example is that of reliance. Take your Jiotelecom it is giving such a stiff competition to BSNL, the telecom experts feel that BSNLdays in Indian market are numbered. It is really sad. If BSNL itself is getting gobbled upby this type of competition you can imagine what will happen to other public sectorswhich as still somewhat surviving.So, this is what can happen to a company when marketing becomes very fierce. If you donot turn towards the marketing concept your very survival will be at stake. So, it is likelythat the organization may become extent which was happen to many of the public sectorunder takings. So, this what the imperative is in the present day circumstances to turntowards marketing, but in a government setup you may find that when you want to turntowards marketing you may phase organized resistance from other departments.Why does this organized resistance come the other departments especially the productiondepartment may start thinking that this marketing department is becoming more andmore prominent at the expense of the production department that is the productiondepartment produces the marketing department takes the credit, but not really so. If youlook at the marketing concept you cannot produce something which is not required by
    the market. Most of our public sectors where producing products which were run of themill that is there was no up gradation in technology, there was no eye to the customer’srequirements. So, these products where thought of sometimes in the 50s or the 60s. So,no changes or no drastic changes came about and when they started coming about werealso you found that the prices of these new products which this companies introducedwas extraordinarily high compared to what was being offered in the gray market places.So, this is in other words you have organized resistance from other departments and acase like ITI the example of the slim line telephone it is slow learning you are notpicking up what is the pricing which is existing in a market place. When you are notpicking up what is the pricing which is existing in a market place you find that your endconsumer base is getting strong and when your end consumer base is getting strong it isstriking at your very survival. This is also what happened if you look at ITI.Many times most of our public sectors make this mistake of forgetting the target marketwhat is your target market and if you never do that and when there is a target market youshould know how to satisfy it. In other words, what is in the present day circumstanceswhat is imperative for the public sector undertakings is to look at customer relationshipmanagement through the eyes of a binocular. You never looked at it earlier the way youshould have.Now, it is imperative for you to look at customer relationship management through theeyes of a binocular, now try to satisfy the customer. So, keep in touch with a customer,you have sold a customer consumer durable to him let us say you do not forget him assoon as this durable is sold. You keep in regular contact with him how is find out how isyour product doing, is it satisfied, does he want something more, how can it be servicedbetter all those types of questions which the consumer might have you should try toanswer ok.
    (Refer Slide Time: 14:35)
    So, if you look at the way marketing has really gone about you see thus in this particularslide if you look at the up to the 20s the evolution of marketing in India it was a colonialsystem, we use to import. And, what is the type of practice we use to adopt? We use tosupply against indents that is there must be a specific indent that is a customer mustmakes a specific request then only the supply will take place. So, what are theinstitutions which are likely to become prominent in this type of an environment? Itwould be the supply institutions.Now, look at 20s to 40s what happened in the Indian context? You started importingSKDs and CKDs. What is this SKD? SKD is a semi knocked down assembly CKD is acompletely knocked down assembly. So, when your product was in the SKD or the CKDstate what were the local units doing, that is the Indian units? The Indian units do use todo local assembly of the products. The result was the type of practice that was beingadopted was you booked your orders that is a customer used to book your his ordersthrough the distributors. So, the institutions which became prominent were the salesinstitutions and the distribution institutions. So, sales plus distribution started becomingprominent.What happened after the 40s? For the first time we had in India an early localmanufacturing with foreign inputs. So, you started having your own manufacturing units,but with foreign inputs. So, the aircraft industries one examples where you first had the
    aircraft industry in Walchandnagar, then the Hindusthan Aeronautics in Bangalore withwhose inspection the institute of science was also closely associated. So, the result wasyou had the selling and their redistribution practices becoming prominent. The result wasyou had a sales institution, you had a redistribution institution becoming prominent salesplus redistribution.From the 50s to 70s what happened? We had emergence of multiple manufacturing unitsthat is you had a exclusive stockists having their own sales force promotion. That is, wehad products from Indian industries and these products where being sold by their ownsales force with their own with their promotion mechanisms. So, the result was you hadsales plus redistribution in inserted into the middle was the promotion. You had a sales,you had a promotions plus the redistribution. All these three institutions became veryprominent.Between 70s and 80s what happened? We had the emergence of competition, we had thatdelicensing of brands, we had unrelated diversification that is not related to the core lineor not related to the core of the unit. So, you had differentiation. Example of this is HMTitself when it is started it was in the machine tools business then diversified unrelatedinto watches with inputs from citizen of Japan. So, the result was the practice wasdifferentiation.So, when you looked at HMTs watch selling in the late 60s and the early 70s it said aleader a giant in the machine tool industry now comes to watches satisfying the needs ofthe time industry for India. So, if you looked at the tagged line of HMT it used to readTime Keepers to The Nation. So, during this period what we had was we had in additionto promotion advertising also coming in. So, four types of institutions became prominent– we had sales, we had advertising, we had promotion, we had distribution. So, all thefour institutions became prominent.What happened in the 90s? For the first time in the 90s we looked at liberalization maybe we were force to look at liberalization because we were looking at a precariousforeign exchange position. So, there was a compiling need to look at liberalizationbecause there was a fear that India might default on its debt payments to the worldbodies like the World Bank or the IMF all these made the economy to be liberalized.
    So, this liberalization came in with deregulation lower entry barriers, then revival ofMNCs multinational companies all these came into being. The result of all these was forthe first time in India you started looking at niche marketing brands and you startedlooking at brands which had a niche marketing target. You looked at look at some ofthese brands which came in like your Surf looked at a particular niche market segmentand this was attacked by other brands like the Nirma which again had another nichemarket segment.So, you had niche marketing, you had brand equity. For the first time the Indiancompany started saying brand equity – what is the brand equity of this product, theHindusthan Unilever products. Then the global trends, then you had mergers andacquisitions taking place in order to survive companies smaller companies startedmerging. So, you if you looked at the reliance, the Vimal Group of textile industries, inorder to give a competition to the Vimal Group you found that many of these smaller andthe medium scale textile mills especially in the Ahmadabad belt merging together andcoming out with a brand called garden.It was just to give a stiff competition to Vimal and also for their own survival. So, withthis type of setting the institutions which became prominent was R and D. So, you haveto do R and D in order to come out with new products, then design added to that you hadall the other institutions like the sales, distribution, advertising, now came in a few morethat is the multiple brands, market research, MIS and exports. So, all these institutionsstarted coming in. So, we had to do promotion very actively in order to be in the marketplace.Now, what is happening in 2000 and beyond you are not only looking at liberalizationand privatization. Indian companies are looking at globalization. In other words Indiancompanies have made forays into foreign markets also. There are many companies in thesoftware industry which have bought out many companies in the United States as wellnot to talk of Europe and other places. So, many of them have bought over many of theUS companies also. The result is you have a very strong software industry presents inIndia and in a place like Bangalore which contributes to the highest software export fromthe country.
    So, this niche marketing, brands, brand equity, global brands, mergers and acquisition forthe first time Indian company started looking at reengineering. In other words, theystarted looking at their own production processes in great depth. Whether should wechange the production process? If we change the production process what is likely tohappen? Are we likely to cut down the production calls? Are we likely to serve the samemarket segments? Will our market segments change? If it changes in what way it isgoing to change? In other words for the first time Indian industry started looking atbusiness process reengineering.So, Indian industry was never looking at these reengineering, now not only they startedlooking at reengineering they said we will look at business process reengineeringwhether we should have the same production process or the entire production processshould be changed in order to satisfy the customer. So, in other words the customerstarted becoming the key in the eyes of the industry. So, this is how this whole conceptthe evolution of marketing concept in India has traverse right from the 20s down to whatwe are in the present setup.In the present setup we are looking at niche marketing, we are looking at brand equity,we are looking at global brands, we are looking at M and D that is mergers andacquisitions, we are looking at reengineering companies are looking at business processreengineering and BPR has become an important tool in the changing marketing spear inthe Indian context. The result what is the type of institutions which have become moreand more pronounced? All the institutions which were earlier there some additions havetaken place. What is that addition which has taken place?The addition that has taken place especially after the 2000 is what we call the e-business.So, for the first time you are looking at business through the web. What we are nowseeing is what is called the digital marketing era. The digital marketing era is makingpeople to look at marketing online. Take many of your stores like the Myntra, theBigBasket or the Amazon. So many of these stores they are trying to fulfill the needs ofthe customer. Straight from his house he can look at all the products on his computerscreen try to order online and you get the product your house may be in 1 or 2 days.Now, some of the flows are also being pointed out saying that what the customer ordersthinking that this is what is going to be supplied when this order is being executed by the
    company may turn out to be not the same. So, the result is you may have to again sendthe come product back to the company and then get the product according to your thisthing needs. The result is there is a terrific lead time which takes place. Take forexample, you ordered a particular shirt from a well known brand and when that shirtcame when that you ordered per a particular size and that size is not the one which iswhich is the best fit for you.So, what you do? You have to exchange that. You say you have to say this is not the sizewhich is required for me give me an alternative size. The result is it has taken so manydays for the first shirt to come; it takes again so many days for the company to pick upthe product from your house. Again, it takes so many more days to for the new size tocome to you. So, you have a terrific lead time before the end product reaches you,according to your specifications and your comfort zones.So, this is what is the this is some of the problems which people are facing in digitalmarketing. Digital marketing is in a sense very good because you transact everythingonline you do not have to go through all this queues that things this thing and all that. So,but these are also some of the marketing encounters which the customer faces. So, youmay not get many times the product in the first instance itself according to yourrequirements.So, the result is you may have to go through a stage where lead time a precious lead timeyou have to be it will be sacrificed, that is, if you wanted the product immediately youmay not get it immediately according to your requires, there is a light time in theproduct. But, anyhow still there is a digital economy in place for some of the simplethings this digital economy can work. So, and you do not have to greatly bother aboutyour consumer requirements because these requirements may be very general and it willbe most more or less satisfied ok.So, take for example, your online banking you want to transfer money from one accountto the other the digital banking system allows you to transfer this money from youraccount to another account in the comfort of your home. So, in other words, what ishappening? Earlier what we thought was marketing has undergone a sea change. Theresult is we are looking at what is called the meta marketing framework. The metamarketing framework is what we are looking at right now the if you see the meta
    marketing framework you have the marketing insight, you have the focus you have thestrategic intent and you have the innovation – three things coming into being.What is happening here? If you look at marketing insight leads you to innovation. Thisinnovation leads you to a better market focus and a better strategic intent. So, it is a twoway arrow it goes forth back and forth. What does this lead you to? It leads you to abetter market insight; similarly the market insight can lead you to a better focus and abetter strategic intent. But, the arrow from the marketing focus marketing insight toinnovation kindly notice a one sided arrow. Your marketing insight should lead you toinnovation of the product. So, you should be able to come out with innovative productsthrough your marketing insight.So, this is what is called the meta marketing framework. This meta marketing frameworkhelps you to look at three aspects one is the market insight, the innovations, the focusand the strategic intent and this is a very important marketing framework in the presentday Indian context. We will stop here and we will continue in the next class.Thank you.