34 Marketing Management

Dr.Shafali Nagpal

37.1 Learning Objective

37.2 Introduction

37.3 Marketing Concept

37.4 Marketing Planning process

37.5 Need for marketing planning

37.6 Marketing Planning Process

37.7 Summary

Learning Objectives

After completing this module, you will be able to:

To study marketing management
To know about marketing mix
To understand marketing strategies
To know about 8Ps

Introduction

Marketing management facilitates the activities and functions which are involved in the distribution of goods and services.

According to Philip Kotler, “Marketing management is the analysis, planning, implementation and control of programs designed to bring about desired exchanges with target markets to achieve organizational objectives.

It relies heavily on designing the organizations offering regarding the target markets needs and desires and using effective pricing, communication and distribution to inform, motivate and service the market.” Marketing management is concerned with the chalking out of a specific program, after careful analysis and forecasting of the market situations and the ultimate execution of these plans to achieve the objectives of the organization. Further, their sales plan to a greater extent rest upon the requirements and motives of the consumers in the market. To achieve this objective, the organization has to pay heed to the right pricing, effective advertising and sales promotion, distribution and stimulating the consumers through the best services.

There are five alternative concepts under which organizations design and carry out their marketing strategies.

Marketing Concepts

Marketing is the process used to determine what products or services may be of interest to customers and the strategy to use in sales, communications and business development (Kotler et al. 1996). The American Association of Marketing define marketing management as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create, exchange and satisfy individual and organizational objectives.

Marketing concepts relate to the philosophy a business use to identify and fulfil the needs of its customers, benefiting both the customer and the company. The Same philosophy cannot result in a gain to every business. Hence different businesses use different marketing concepts (also called marketing management philosophies).

1. Production Concept,

2. Product Concept,

3. Selling Concept,

4. Marketing Concept,

5. Societal Marketing Concept.

These concepts are described below;

Production Concept

The idea of production concept – “Consumers will favour products that are available and highly affordable”. This concept is one of the oldest Marketing management orientations that guide sellers. Companies adopting this orientation run a major risk of focusing too narrowly on their operations and losing sight of the real objective. Most times; the production concept can lead to marketing myopia. Management focuses on improving production and distribution efficiency.

Although; in some situations; the production concept is still a useful philosophy.

Product Concept

The product concept holds that the consumers will favour products that offer the most in quality, performance and innovative features. Here; under this concept, Marketing strategies are focused on making continuous product improvements. Product quality and improvement are important parts of marketing strategies, sometimes the only part. Targeting only on the company’s products could also lead to marketing myopia.

For example;

Suppose a company makes the best quality Floppy disk. But a customer does need a floppy disk? She or he needs something that can be used to store the data. It can be achieved by a USB Flash drive, SD memory cards, portable hard disks, etc. So that company should not look to make the best floppy disk. They should focus to meet the customer’s data storage needs.

Selling Concept

The selling concept holds the idea- “consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort”. Here the management focuses on creating sales transactions rather than on building long-term, profitable customer relationships.

In other words; the aim is to sell what the company makes rather than making what the market wants. Such aggressive selling program carries very high risks. In selling concept the marketer assumes that customers will be coaxed into buying the product will like it, if they don’t like it, they will possibly forget their disappointment and repurchase it later. This is usually very poor and costly assumption.

Typically the selling concept is practised with unsought goods. Unsought goods are that buyers do not normally think of buying, such as insurance or blood donations. These industries must be good at tracking down prospects and selling them on a product’s benefits. Selling is one part of marketing which deals with persuading customers to buy products that are available to the seller. Merchandising refers to the process offering a variety of products to a retail consumer in a manner which stimulates demand.

Marketing Concept

The marketing concept holds- “achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do”. Here marketing management takes a “customer first” approach.

Under the marketing concept, customer focus and value are the routes to achieve sales and profits. The marketing concept is a customer-centred “sense and responds” philosophy. The job is not to find the right customers for your product but to find the right products for your customers.

The Societal Marketing Concept

This concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors (this is the original Marketing Concept). Additionally, it holds that this all must be done in a way that preserves or enhances the consumer’s and the society’s well-being.

This orientation arose as some questioned whether the Marketing Concept is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world hunger and poverty, and neglected social services.

Are companies that do an excellent job of satisfying consumer wants necessarily acting in the best long-run interests of consumers and society?

The marketing concept possibly avoids the potential conflicts among consumer wants, consumer interests, and long-run societal welfare. For example:

The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a high-fat content, and the restaurants promote fries and pies, two products high in starch and fat. The products are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these restaurants may be hurting consumer health and causing environmental problems.

Holistic Marketing Concept

Holistic marketing is a new addition to the business marketing management philosophies which considers business and all its parts as one single entity and gives a shared purpose to every activity and person related to that business. Business, like a human body, has different parts, but it’s only able to function properly when all those parts work together towards the same objective. Holistic marketing concept enforces this interrelatedness and believes that a broad and integrated perspective is essential to attain best results.

Services are radically different from products and need to be marketed very differently. So the classical 4 P structure of the Marketing Mix (shown below) needs to be modified suitably to incorporate the 8 Ps for services marketing, which was previously known as the 7 Ps only.

Services can range from financial services provided by the banks to technology services provided by the IT Company or hospitality services provided by hotels and restaurants or even a blog where an author provides a service (information presentation, interesting reading etc.) to his audience. Services marketing are dominated by the 7 Ps of marketing namely Product, Price, Place, Promotion, People, Process and Physical evidence.

The main focus of all the firms turned from hard selling towards Identification of customer needs, deciding to fulfil those need and maintaining long-term relationships with customers by satisfying their changing needs. The Marketing concept resulted in a separate marketing department in the organization, and today we can see much organization have structured them as marketing organization where every employee is contributing towards customer satisfaction whether or not he’s a marketing person.

So, The marketing concept relies upon marketing research that helps in identification of segments, their sizes, needs, target market and then by using the right ‘Marketing Mix‘, marketing teams makes such decisions that result in customer satisfaction.

Indeed, any marketing manager faced with a new product or a new challenge will recognise the concept even if they’ve never heard the term. As a manager with some experience, one knows already which points to pay attention to and optimise, and one does it often by instinct. As good as experience and instinct are, it can nevertheless be helpful to quantify and study the different elements to ensure maximum effectiveness. That’s what E. Jerome McCarthy did in 1960, proposing a “four Ps” classification which we still use today. Using the Four Ps, marketing managers can cut through the noise and confusion and identify which elements they must take responsibility for to ensure business success.

As with many things invented more than 50 years ago, the Four Ps have also been updated to reflect the needs of modern businesses. Instead of a total focus on products, the new Eight Ps are flexible enough to include the role of customer service and adapt to businesses which sell services instead of products.

Marketing Planning Process

The marketing planning process five steps involve both the development of objectives and specifications for how they will be accomplished. Below we outline these five basic steps that are key to this process.

1. Determination of Organizational Objective

The basic objectives, or goals, of the organization, are the starting point for marketing planning. They serve as the foundation from which marketing objectives and plans are built. These objectives provide direction for all phases of the organization and serve as standards for evaluating performance. Soundly conceived goals should be S.M.A.R.T – specific, measurable, attainable, realistic and time-specific.

2. Assessing Organizational Resources

Planning strategies are influenced by some factors both within and outside the organization. Organizational resources include capabilities in production, marketing, finance, technology, and personnel. By evaluating these resources, organizations can pinpoint their strengths and weaknesses. Strengths help organizations set objectives, develop plans for meeting objectives, and take advantage of marketing opportunities. Resource weaknesses, on the other hand, may inhibit an organization from taking advantage of marketing opportunities.

3. Evaluating Risks and Opportunities

Environmental factors – competitive, political, legal, economic, technological and social – also influence marketing opportunities. The emergence of new technologies or innovations may open new opportunities for under-marketed products. The marketing environment may also pose threats to marketing opportunities. For example, a new genetically engineered drug may be developed with the potential to become a $1 billion-a-year product. But a government agency may delay requests to market the drug due to regulations.

4. Marketing Strategy

The net result of opportunity analysis is the formulation of marketing objectives designed to achieve overall organizational objectives and develop a marketing plan. The marketing planning effort must be directed toward establishing marketing strategies that are resource efficient, flexible, and adaptable. The marketing strategy is the overall company program for selecting a particular target market and then satisfying consumers in that segment.

5. Implementing and Monitoring Marketing Plans

The overall strategic marketing plan serves as the basis for a series of operating plans necessary to move the organisation toward the accomplishment of its objectives. At every step of the marketing planning process, marketing managers use feedback to monitor and adapt strategies when actual performance fails to match expectations.

Need of Marketing Planning Process

The marketing planning process is intended to decide where you want to see your business in future. It decides how you want to target your consumer and its segmentation. It involves the rational and absolute thinking about the marketing strategies of your business. Making proper documentation of your strategies is an integral part of planning process. It is the need of the time to properly plan your marketing activities and implement it in the right direction for the survival of your product in the market. In today’s market of intense competition, without proper extended and solid planning process you can’t take success in the market. Marketing planning process makes it essential for the managers to contribute some of their time towards thinking about the company’s resources and the opportunities that may gain by effectively utilizing those resources. In today’s era of rapid digital marketing, it is necessary to focus on a proper marketing planning process to cover the maximum of the market. By applying a proper plan, we can avoid the risk of failure of the product and can satisfy and fulfil the needs of the target consumers easily.

You can upgrade your sales volume and growth by choosing right marketing plan for your business. This planning process involves the specifications that how marketing objectives are to be attained. The marketing planning process structure discussed above can further be elaborated.

Marketing Planning Process Steps

The steps of marketing planning process we are going to discuss almost remains the same for each kind of business with little amendments according to the scenario,

1. The first step involves developing the action plan

Make vision and set your goals According to mission statement Company objectives Before moving towards the other steps of planning strategy and implementing it, the first and for most need to make your product successful, is to make a keen observation of the company’s objective. So the most prior stage of marketing planning process is to set your goals that where you want to reach. You should know your ultimate destination, your company’s vision for your product that who you are and where you expect to reach. In the first step of the planning process, you should carefully understand the company’s mission.

2. Analyze your present situation by

By analyzing and auditing market SWOT Analysis

The second step of marketing planning process includes the overview and examination of your present condition. It is a part of the strategic and long-term planning process to see your current position, your resources and view the market in which you are moving. Layout your resources, evaluate them along with evaluating other external and internal factors. Determine the environmental risks and favours attach with the launching of your product. Audit the market, target it and make their segments with the help of your resources to better penetrate your product. Do SWOT Analysis of your business in which there are different internal and external factors considered. This is the best approach for viewing and analyzing your current situation. Make an inside look at your strengths and weaknesses and the other aspects affecting them.

Make an inside view of your company that whether you understand your consumer’s need, know whom you are targeting, make the market research to know about your competitors and to know about the fact that what consumer needs are fulfilled and what are the depreciation in them and how these needs changes with the passage of time.

In the Marketing planning process, while analyzing your present situation, you have to consider few external factors that have a direct link with the internal contingencies and the performance of the company. These external components that directly influence the internal components and the position of the business, which are the political scenario, legal aspects, and the competition of market in which you are moving, the culture, economy and the other demographics.

3. Developing Marketing Strategy

Marketing mix
Creating marketing strategy and objectives Communication means & vehicles
Analyze alternative methods and procedures for marketing available

This stage of Marketing Planning process involves making of marketing objectives and marketing strategies to accomplish the overall company’s objective. This step includes analyzing all the marketing tactics available for the best promotion of the product.

This phase will help you to make a selection of different marketing strategies and will help you to identify what tactics you can apply to approach your target market. This part of planning will guide you towards the market segment you opt to reach, will also direct you that how you have to reach your desired segment by opting the right communication mode and how you want to position your product. So by properly incorporating the marketing efforts of all the prominent marketers like Kotler (focusing marketing mix) Porter (five forces model) and Ansoff (matrix worksheet for reducing the risk of failure) you can make a single marketing report in which you can analyze that how you have to market your product and which vehicle to use for its promotion. How can you nourish you target customers? Using the components of the marketing mix is the whole part of the formulation of the marketing strategy to gain the strong competitive advantage. Depending on the core competencies of the firm you decide whether you want to get the first mover advantage or have to adopt some other strategy and how to direct your marketing efforts to approach your target consumers.

Employing, Executing and Evaluating the Planning Process

Make budget

Allocate resources & implement Monitoring & Overview

This is the milestone of any planning process because it includes the operational level activities. In this stage, you have to allocate your resources, make a budget for the implementation of the above-discussed strategies and make the action plans. You have to consistently monitor and overview you marketing plan based on the customer’s opinion and feedback. So make a regular review of your promotional plan.

For Example

Macdonald is the best example of generating the right marketing planning process for its product which helps business to be on the prosperous track. So the marketing planning process is the key towards the accomplishment of the other policies and procedures of your business and should be considered of utmost importance.

Summary:

In this module we have studied through different definitions that Marketing management facilitates the activities and functions which are involved in the distribution of goods and services.

you can view video on Marketing Management

References

http://www.business-standard.com/india/index2.php http://economictimes.indiatimes.com/
http://www.bsmotoring.com/
www.businessstandard.com/bsonline/disclaimer.php www.newsgator.com/business/default.aspx
www.theiabm.org/ads/Banners/14.htm
http://www.smartinvestor.in/
Stephen P Robbins, David A Decanzo, Fundamentals of Management, 3rd Edition, Pearson Education, 2002.
Kotler, P. (1991). Marketing Management. 7th ed. Prentice-Hall
David, F.R. (2009). Strategic Management: Concepts and Cases. 12th ed. FT Prentice Hall.