MBA Made Easy
These essays are an attempt to make an easy to understand the basic modules of an MBA course. This can be useful for anybody. Be it a student planning to take admission in a B-school or an entrepreneur trying to get a glimpse of the much acclaimed degree in the world. Even if somebody has finished his MBA course and wants to refer something to refresh his learning, these essays can be useful.
Marketing And Its Environment
“Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably” ---(CIM, 2001)
“Marketing is 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.” -----(AMA, 1985)
To understand these definitions let us focus on keywords. Common keywords are satisfying customer and meeting organizational objective. Then both definitions talk about planning and execution of processes to meet these objectives. It can be said that marketing starts with need identification and anticipation. Product planning follows after that. Once a product or a service has been conceptualized then planning to deliver it to the end users comes in the picture. In other words marketing is about planning to make a win-win situation for both; organization as well as customers.
Customers And Markets
Customer and Consumer: A consumer is the end user of the product, while a customer can be either an end user or an intermediary between the end user and the product provider. To further clarify it can be said that all consumers are customers but vice versa is not true. For example a doctor can be a customer and his patients can be consumers.
B2B and B2C: If the prime focus of marketing is the retail customer then it comes in the domain of B2C. If the prime focus of marketing is some business house or a group of individuals then it comes in the domain of B2B. Let us once again take the example of a doctor. A doctor having his own nursing home may purchase drugs in bulk. So for a pharmaceuticals company that doctor is a B2B customer.
Consumer Behaviour: The behaviour of a consumer depends on his/her categorization from B2B and B2C. Apart from that it also depends on the type of product. While buying decision for a chocolate can more often than not be an impulse decision, buying a car cannot be so. Usually in B2B buying decisions there are many stakeholders who take a group decision to buy a certain product or service.
Market Segments: The segment also decides the buying behaviour of consumers. Segmentation can be chalked out on various parameters. They can be based on socio-economic profiling.
Marketing Information and Research: To understand the current need or to discover future need it is important to gather marketing information by proper research. Frontline sales people are an important source of marketing information as they are in touch with the end user day in and day out. Apart from them regular marketing research assignments can be carried out by research specialists. They can be in house or can be outsourced. Apart from giving information about consumer needs marketing research also gives timely feedback on what is working and what is not working. This is important for required change of course in the original marketing plan.
A product can be either tangible or intangible. A product has many dimensions. The most important of them is the core product or the basic aspect for what it is meant. For example the main purpose of a car is to provide a means of transport. The second aspect is tangible product. If a car has better mileage and comfort then it has more potential to sell than a basic car. Then comes the augmented product. Apart from basic engine and comfort if the car has airbags, music system and latest fuel injection system then it will attract more affluent customers. The last dimension is potential product which is about foreseeing future needs and planning to satisfy those needs. Let us take example of hybrid cars which give a glimpse of what future cars may look like. While planning to add some extra features no organization can afford to ignore the core product. If a car has all the comfort, music system and air bags, but it cannot move an inch then it cannot serve the basic purpose for what it is made.
Product management is about managing a product’s sales throughout its life cycle. If a product is in the launch phase then it needs a different kind of strategic input compared to a product which is in the maturity stage. Try to visualize the recent launch of Bingo by ITC. Everywhere you could have seen Bingo. It was everywhere right from the newspaper to the hoarding on the highway. Almost every retailer in the remotest street was displaying the yellow coloured rack stuffed with packets of Bingo. Compare it with the visibility of any old brand like Lux or Lifebuoy. If some brand variants are launched then you may happen to see some ad spots otherwise they are left to carry on their legacy.
If you will compare ad space filled with promotional themes of a Hyundai i10 with that of a Hyundai Santro then you can easily understand the idea of product management.
Pricing is basically governed by the profitability targets of an organization. But there are many external factors which influence pricing strategy of a product. If the product is meant for mass consumption then there can be bare minimum profitability assured by it. If a product is meant for niche market then extra profiteering can be planned by the organization. Product innovation also governs pricing and sometime companies resort to skim the market in case of launch of an innovative product. When SONY launched VCRs then it was costing about $ 1500 and people were happy to pay that price.
Place is about making a product available to the end user thorough proper supply chain management. A company manufacturing a product in Himachal Pradesh cannot supply everything on its own to a customer in Tamil Nadu. To achieve that goal organizations take help of many intermediaries like C&F agents, wholesalers and retailers. For logistics management transporters come in picture. Once a product is on the retail self then presentation becomes important. You will not expect to find a Mercedes on sales in shabby showroom selling autorickshaw. Compare a jewellery shop with a grocer and you can understand the importance of display and presentation.
In the world of internet many businesses are conducted solely through internet. In such cases the showroom is in the virtual world. An appealing design with user friendly navigation becomes important to lure customers.
Once a product is made and supply chain is well oiled then comes the turn of cajoling the customer to buy a product or service. Marketing communication is about communicating a product’s features and resultant benefits so that the customer will be forced to buy the product. For products meant for retail customers communication requires the use of many platforms like newspaper, electronic media and outdoor advertising. For B2B selling the most widely used means of communication is one to one.
ATL and BTL: Above the line promotion is promotion by a media which ensures reaching the masses. This is like machinegun firing which does not have accuracy but it is still a potential weapon. All promotional activities involving mass media comes under the ATL. Below the line promotion is like hand to hand combat. Things like pamphlet distribution, consumer awareness programmes come under BTL.
In the normal course none of the way of promotion is sufficient or effective on its own. A proper combination of all means of promotion is required to make the desired impact.
Strategic Marketing is about long term planning to achieve long term business goals of an organization. The first step of strategic marketing starts with the environmental analysis followed by SWOT analysis. The environmental analysis is helpful in identifying present and future challenges and SWOT analysis gives an idea of battle readiness of the organization to meet those challenges. Once the analysis part is over then planning for all the 4 Ps of marketing is done. This planning paves the way for tactical or day to day planning.