 learners. Welcome to KK Hendrick State Open University. Today we are going to do a program on marketing management. Introduction to marketing management. So what is marketing management? We'll go through this process gradually. So what is marketing? We've heard about marketing everywhere. But what is marketing? Let us understand this statement. Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of value freely with others. Then again there's another definition of marketing. Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, to create exchanges that satisfy individual and organization goals. As can be seen, marketing is a societal process. What does it mean? It means that it is a process that is within the society. So without society there is no marketing and with marketing there's always a society. By which individuals and groups, so marketing can be done both by individuals and by groups. And there's a concept of need and want. We'll come to that later on. And it is done through a process of creating, offering, and exchanging products and services. We'll again come to what is products and services at a later phase of the presentation. So you see, secondly also it is given here. Marketing is a process. It is not a singular event. It is a continuous series of events. And there's a concept of planning and executing. There's a concept of pricing. There's a concept of promotion. There's a concept of distribution. There's a concept of goods and services. There are concepts of exchanges. So we'll come to all these concepts one by one. So you see what is a marketing triangle? And why do markets exist? We had said initially that it is a societal process. It means in a society we have what is called a customer. We have a company. And we have what is we all know as competition. So who is a customer? Dear learners, see anyone who is in the market, anyone who is in the market looking at a product or service for attention, for acquisition that is to purchase, for use or consumption that satisfies a want or a need. It must satisfy a want or a need. Once again, anyone who is in the market looking at a product, service for attention, acquisition and use or consumption that satisfies a want or a need is a customer. What are the characteristics of a customer? A customer has needs, wants, demands and desires. The need is a starting point of the entire marketing process. What does it mean? It means marketing starts with the start of need in a person. When a person starts having needs, you can be sure the marketing process is going to start. These needs and wants arise within the framework of an ecosystem. Both the needs and the ecosystem is the starting point of a very long term relationship. It is not a short term. It is a long term relationship. So you see, what is a customer focus? Identify what they need. This is very important. If you want to do something related to a customer, the first point that you need to really focus on is that you need to identify what does a customer need. You have to understand the problem. Why does a need comes forward? Because there is a problem. So we need to understand what is the problem of a customer. It is the job. It is our work then to provide options to avoid those problems. So you see, when you look at a customer focus, we are looking at identification of a need, understanding the problem and providing options by which we can actually avoid these problems. Then customer looks for value. We use this word frequently, value, value, value. But what is value? It is, if you look at it mathematically, the numerator is benefit and the denominator is cost. It means for how much benefit you are going to get for the amount of cost that you are willing to invest. Benefits can be variety of benefits. It can be functional benefit. We have a camera here. If the camera collects them images correctly, there is a functional part of it. Emotional benefit of it. I must find happiness out of it. I must like using the camera. So there is a benefit, both functional benefit and emotional benefit. Then there is a cost. The cost is very important. What is the cost? It could be monetary in terms of paisa, rupees. It could be in matters of time. We call it time value. Every minute counts. Then energy. Energy is wasted. Anything you do, you need to spend energy on it. Then psychic cost, your mental cost, the amount of stress that you might be willing to take. So when you want to do something, want to purchase something, you look for benefits and those benefits can be a variety of benefits. And for that, you are willing to give a lot of costs. This cost could be monetary, time cost, energy cost and psychic cost. Then what is needs, wants and demands? This is a very, very interesting concept. What is the difference between need and want and demands? See, needs describe basic human requirements. Need is a basic human requirement, such as food, air, water, clothing and shelter. What does it mean? We cannot live without it. People also have a strong need for recreation, education and entertainment. We cannot live our life only working. We need some element of recreation. So recreation is also a very vital need. These needs become wants when they are directed to specific objects that might satisfy the need. Wants are shaped by one society. Let me give you an example. I am feeling very hungry and there is another person from South India who is also very hungry. But when we go to the restaurant, the person from South India will ask for a dosa. He will ask for a masala dosa. I will ask for a plate of rice. Maybe I would like to have a plate of rice with fish tanga. So you see, we both need food but I want fish tanga and he wants a dosa. So our wants are shaped by one society. I am from the Asami society. The other is from the South Indian society. So you see, needs and wants. You need to understand this concept very, very clearly in marketing management. Demands are wants for specific products backed by an ability to pay. Now, if I am hungry and I go to the restaurant but I am not willing to pay for the lunch that I want to have, then there is no transaction. There must be a demand in terms of money. I must be willing to pay for that. I must be willing to pay for satisfying my need and want. See, for example, many people may want a Mercedes. Only a few are able and only few would be willing to buy one. So there are some key concepts that you need to understand in marketing management. Number one, products. What is a product? A product is any offering that can satisfy a need or want. Value and satisfaction. Value, as we have already said, value is defined as a ratio between what the customer gets and what the customer gives. The customer gets benefits and assumes cost. What is a marketing channel? To reach the target market, the marketer uses three kinds of marketing channels. So those variety of channels are your marketing channels. Relationship and network. Relationship marketing aims to build long-term, mutually satisfying relationship with key parties, customers, suppliers and distributors in order to earn and retain their long-term preferences. And what is a exchange and transaction? This is again a very important concept in marketing. Exchange is the core of marketing and it involves obtaining a desired product from someone by offering something in return. You need something, you have to give out something. For exchange potential to exist, five conditions must be satisfied. Number one, there are at least two parties. Number two, each party has something that might be of value to the other party. The third, each party is capable of communication and delivery. Number four, each party is free to accept or reject. Number five, each party believes it is appropriate or desirable to deal with the other party. So when we have these five conditions, then we feel that there is a potential for an exchange process to start. Number one, there must be two parties. Each party must have something of value for the other. Third, each party is capable of communication and delivery. Each party is free to accept or reject. And each party believes it is appropriate or desirable to deal with the other party. Now, let us talk about what is marketing mix. Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. So there are four P's in marketing mix. What are the four P's? Product, price, place and promotion. Corresponding to the four P's, we have four C's for the customer. Customer solution, customer cost, customer convenience and communication. So if you look at it, product is a customer solution. The price, customer cost, place, convenience, promotion, communication. We will come to understand this better in the next presentation. See, what is a marketing mix? There is a product, there is a price, there is a promotion and there is place. And along with it, customer solution comes from the product, customer cost is the price, place is the convenience and promotion is the communication. What does this signify? It means that the product gives a solution to the person's need or want. The price is what the customer is willing to pay. Promotion is the process by which a customer comes to know the existence of a product and then place. If I want my food here, I must get it here. It must be conveniently located for me. So there are some very interesting conflicting and what you call competing concepts. The concept is the production concept. The production concept holds that customers will favor products that are widely available and low in cost. Managers of production oriented organization concentrate on achieving high production efficiency and wide distribution coverage. What is the product concept? The product concept holds that the consumer will favor those products that offered a most quality performance and features. Managers in these product oriented organizations focus their energy on making good products and improving them over time. What is the selling concept? The selling concept holds that consumers if left alone will ordinarily not buy enough of the organization's products. The organization must therefore undertake an aggressive selling and promotional effort. Now you will understand students as to why there is huge market for advertisements. Marketing concepts, the marketing concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors. This is the fifth concept. This is called the societal marketing concept. The social marketing concept holds that the organization's task is to determine the needs, wants and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer and the society's well-being. In reality, all the five concepts are existing together. So we come across this word sales. Some says it is marketing. So what is sales and what is marketing? Sales is trying to get the customer to want what the company produces. See, I produce something and I want that my customer should want it or should have it. So that is a selling process. Marketing is quite different. Trying to get the company produce what the customer wants. Okay, so you have a sales and you have a marketing here. You're trying to give to the customer something that the company produces. Here, you want to generate a product which a consumer wants. Then again, marketing is a sum of all activities that take you to a sales outlet. Marketing is all about creating a pull. Sales is all about creating a push. Marketing is all about managing the four P's, product, price, place and promotion. Then we have something called service marketing. We've heard about service. Let me go straight to what is called the service marketing mix. You'll see it includes the four and three more added concepts. These are the people, physical evidence and process. So the seven P's of service marketing as product, price, promotion, place, people, physical evidence and process. Now what is the difference between goods and services? When we talk about marketing, we have to understand the concept of marketing of product and marketing of services. So what is the difference between goods and services? This is a good. You can see it's a mouse. There's a newspaper. You can see it. There's a display device. You can see it. This is a table. You can see it. But what is the service? Can you see the service? No, it is intangible. The first and most interesting. It is interesting. Characteristics of a service is that a service is intangible. Then it is heterogeneous. Variety of services are there. It is perishable. It is simultaneous production and consumption. We'll understand this in the next slide. So what are the implications of intangibility? What does it mean intangible? Services cannot be inventor. I cannot actually keep it that I'll use this service later on. I'm speaking right now. I'm speaking right now. The delivery is taking place right now. Services cannot be patented. Services cannot be readily displayed or communicated. It is not very easy. Pricing is very difficult. What is the price of a good class? What is the price of a good lecture? Implications of heterogeneity. Service delivery and customer satisfaction depends on employee actions. This is a very interesting concept. We cannot go very deep into this concept, but if you go to see a movie and you find that the gate man doesn't treat you well, you come back with a bad taste in your mouth. You'll feel that you didn't like the movie, but maybe it was the people around the management of the movie hall, movie theater that affected your satisfaction. Service quality depends on many uncontrollable factors. Many uncontrollable factors. There is no sure knowledge that the service delivered matches what was planned and promoted. Implications of simultaneous production and consumption. Customers participate and affect in the transaction. They are part of the process. Customers affect each other. Again, coming back to a movie, you are seeing a movie and someone starts talking beside you on his mobile phone. He is also a customer. You are also a customer, but his behavior starts affecting you. Employees affect the service outcome. You go to a garage to fix your car and the manager doesn't treat you well. Or you go to another garage and the mechanic comes and treats you very well. You'll find a difference in your service. You go to a doctor's chamber. The doctor treats you very well, besides giving the same amount of treatment. He treats you very well. He talks to you very well. You come back feeling very good. You feel that the service was very good. Decentralization may be essential. The whole gamut of people working to give you a good service. Mass production is difficult. You cannot produce the same service repeatedly in the same manner like a mouse. Implications of perishability. It is difficult to synchronize supply and demand with services. Services cannot be returned or resold. So, you see, what are the examples of service industries? Health care, professional services, financial services, banking, hospitality, restaurant, hotels, travel, airlines, customers. There are so many other things in the service industry. As a matter of fact, wherever as you walk down the street, you'll come across service industry after service industry. So, what is a marketing system? As you can see, the marketing system is in part of a complete ecosystem. So, you have the short-term controllable factors like the product, place, price, promotion, people, physical evidence and process within. And it is covered by long-term factors like technological, economic factors, socio-cultural factors and legal factors. We all operate within the total system. But what do you market? We can market goods, we can market services, events, experiences, personalities, places, organizations, properties, information, ideas and concepts. As a matter of fact, if you see, what is the process, consumer decision-making process? It starts with awareness. We call it the ideas. Awareness, interest, decision, action and satisfaction. First state is that awareness. You get to know that there is a product that exists or a service that exists. And through advertisements, you might be interested in the product or service. Once you have an interest, you start developing the decision to either purchase it or reject it. But once you accept, you take a decision to actually purchase that product or service, you have an action to do. You need to go through the exchange process. You need to give the money. And then once you achieve that product or services, the last stage is satisfaction. You need to be satisfied with the product or services. So, this is the consumer decision-making process. So, when you look at developing an effective marketing plan, we look at many things. First of all, we conduct a marketing review. These are topics in itself. Maybe at a later date, we can have such sessions where we can talk about marketing review. We can talk about marketing strategy. We can talk about evaluation of a marketing plan. These are all stages of a marketing plan. So, what is a concept called strategic marketing? The strategic marketing management is concerned with how we will create value for the customer. That is the whole concept. You ask two main questions. What is the organization's main activity at a particular time? What are its primary goals and how will these be achieved? How will this value be delivered? So, you analyze your customer, analyze the customer, what the customer wants, trends, needs, perceptions, behavior. You assess your company's capabilities and your current marketing position. And you analyze the competitor's current position. And you develop some opportunities. You identify where you can operate. So, you see the strategic planning and implementation and control process. There is a planning, there is implementation and there is controlling. So, planning that could be at the corporate level, at the high level, then divisional, at the medium level, business planning, product planning. Then you have in the implementation part, then you have in the control, you measure results, you diagnose your results. And if there is some deviation, you would like to take some corrective measures. So, the strategic planning and implementation and controlling process is this. Then you get the business strategic planning process. You have so many things here. You look at the external environment, you look at your business mission, you look at your internal environment, you look at the goal formulation. So, all these four aspects are intermingled. As you can see, your business mission is affected by your external environment and your internal environment. Your strength and weakness analysis, your internal environment. Your opportunity and threat analysis is an external environment. You might be having some different kind of goals. Your business mission is affected by your goal formulation. Your goal formulation may in turn affect the business mission. So, each and every part affects the other. So, when you look at a marketing plan, we have a business mission statement. We have objectives. We have situational analysis. We call it strength, weakness, opportunities and threat analysis. We have a marketing strategy. All these things, the marketing mix, positioning, product, promotion, price, place, distribution, people, process, everything forms a part of your marketing plan. So, let's give a kind of a total conclusion. The whole marketing process. You see, the business mission statement, then you have an objective. You do a situational analysis and you do a marketing strategy, target market strategy. You have a marketing mix, your product, place, promotion, price and finally, you implement it. You evaluate your marketing plan and if there is some problem, you take controlling, you do some control and you try to correct what divisions takes place. Dear learners, I hope you have understood something about marketing today. Thank you.