History & Fundamentals of Marketing

Transcription

1 History & Fundamentals of Marketing Technology and Social change are Interdependent Dr. Paurav Shukla Contents Evolving new dominant logic History to present Common measure of business success The alternative approach Issue of competence & strategy 5 6 The value conundrum The new perspective Stephen, V. & R. Lusch (2004), Evolving to a New Dominant Logic for Marketing, Journal of Marketing, Vol. 68, No.1, pp Marketing orientation Marketing orientation Production Concept Product Concept Selling Concept Marketing Concept Consumers prefer products that are widely available and inexpensive Consumers favour products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products Focuses on needs/ wants of target markets & delivering value better than competitors Societal Marketing Concept Holds that the organizations task is to determine needs, wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the society s well-being Kotler, Philip (2003), Marketing Management, Pearson Education, New Jersey Kotler, Philip (2003), Marketing Management, Pearson Education, New Jersey 1

2 Measuring organisational success Profit Can be played around Past performance not future potential Growth Market led Organizations becoming too optimistic about it Shareholder value Cash orientation Service orientation than Mfg orientation Measuring organisational success Customer satisfaction? Employee satisfaction? Societal satisfaction? Financially led objectives VS. Market led objectives The alternative approach Marketing: Definition Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. Kotler, Philip (2003), Marketing Management, Pearson Education, New Jersey p. 9. Doyle, P. (2002), Marketing Management and Strategy, London: Prentice Hall. Core concepts of marketing Target Markets & Segmentation Needs, Wants, and Demands Product or Offering Value and Satisfaction Exchange and Transactions Relationships and Networks Marketing Channels Supply Chain Competition Marketing Environment Marketing management process Identifying target market Marketing research Product development Marketing mix management Monitoring Kotler, Philip (2003), Marketing Management, Pearson Education, New Jersey pp

3 Limitation of marketing concept Marketing mix: 4Ps It is an incomplete idea. It says nothing about how a company should go about satisfying customer needs. It ignores the question of company capabilities and limitations. It does not specify which customers a firm should focus its attention on. It assumes a causative relationship between customer orientation and profitability without an underlying argument or proof. It assumes that customer can articulate their needs and wants and does not consider how to anticipate customer needs, especially in the case of rapidly developing technology. It has weak strategic content. It does not define a good strategy or how to develop one. Promotion Product Marketing Mix Place Price Webster, F. E. Jr. (2002), The role of marketing and the firm, in Handbook of. Marketing, B. Weitz and R. Wensley (eds), Sage Publications, London, pp McCarthy, J Basic Marketing: A Managerial Approach (6 ed.). Homewood, IL: Richard D. Irwin. Marketing mix: 4Cs & 4As Awareness Promotion Communication Acceptability Product Affordability Customer solution Price Marketing Mix Accessibility Place Convenience Cost Kotler, Philip (2003), Marketing Management, Pearson Education, New Jersey pp Sheth, J (2004), Marketing Paradigms for Emerging Economies, Proceedings of international conference at IIMA, India Marketing Myopia What are business leaders myopic about? Paper examples Current examples Market dynamics and stagnation of marketing approaches Shortening of long-term competitive advantage The myth of superior quality and technology Levitt, T. (1960) "Marketing Myopia", Harvard Business Review, July- August, Shukla, P. (2005), Pitfalls of Traditional Marketing, under publication Marketing Myopia Four self-deceiving conditions leading companies to believe they are in a growth industry: An expanding and more affluent population No competitive substitutes Too much faith in mass production and declining unit costs Preoccupation with the product Resource optimization Timing Strategy Levitt, T. (1960) "Marketing Myopia", Harvard Business Review, July- August,

4 Myth of value Determinants of Customer Delivered Value Perceived benefits Image value Personnel value Services value Total customer value Perceived Cost Perceived value Product value Monetary cost Customer delivered value Price Time cost Energy cost Total customer cost Psychic cost Kotler, P. (2003), Marketing Management, London: Prentice Hall Factory Customer Delivered Value Starting point Focus Means Ends Existing products Selling and promotion (a) The selling concept Profits through sales volume Need satisfaction and Value Potential product Augmented product Expected product Basic product Core benefit Market Customer needs Integrated marketing (b) The marketing concept Profits through customer satisfaction Kotler, P. (2003), Marketing Management, New Jersey: Pearson Education. Theodore Levitt, (1980). Marketing success through differentiation or anything, Harvard Business Review, January February, Reprinted in Theodore Levitt (1986), The marketing imagination, Free Press, pp Types of Markets Growth strategies Existing Latent Incipient Doyle, P. (2002), Marketing Management and Strategy, London: Prentice Hall. Doyle, P. (2002), Marketing Management and Strategy, London: Prentice Hall. 4

5 Improving acceptability Psychological Acceptability Improving affordability Willingness to Pay Functional Acceptability Ability to Pay Improving accessibility Convenience Improving awareness Brand Knowledge Availability Product Knowledge Traditional Organization Chart Customer-Oriented Organization Chart Top Management Middle Management Front-line people Front-line people Middle management Top management 5

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