POM: Session6 New Marketing Realities Part2

New environment has not only provided new capabilities to the consumers, but also have contributed towards the growth of the markets. Sellers these days are marketing their products and services more efficiently and effectively, using internet and mobile technology. Some of the important changes seen are evident in most of the categories. Let’s understand this with the example of The TripAdvisor. 

(http://www.tripadvisor.com)

Internet: Internet is increasingly becoming an effective media for advertising. If we go by the theory of Lavidge and Steiner in Hierarchy of effects model of response, we see that internet is useful is each and every stage of consumer response process. Studies revealed that most use of internet is evident in acquiring information and comparing brands. Internet is also a very strong medium for sales. Consumers can purchase product and services using online payment getaway. 

Tripadvisor's website also provide option through expedia.com, booking.com and many such portals for the online sale of hotels and flights.

Consumer Tracking: Internet is also be helpful getting the information regarding customers. Companies are using data mining to fragment their customer database. Now, marketing efforts are more strategically targeted. Companies are sending emails, coupons and discounts to the members signed-in their website. They are also being encouraged to write a review or testimonials. 

Social Media: Almost all companies have their presence in social media. Platforms like Facebook, Tumblr and Myspace are the strong mediums to create and increase brand awareness. Also, they are less costly than traditional mediums.

Affiliate Marketing: Companies are using third party platform or affiliate marketer to showcase their products. This reduces the cost of intermediaries. Affiliate marketing is also helpful in servicing the industry meta-market.

Sales Promotion: Internet is being used as a strong medium for sales promotion. Companies are offering discounts, premiums and coupons on online purchases. Internet is also acting as a media to inform consumers about the offers. Companies are sending emails and using search engine optimization. Google's Adword and Adsense are very popular for the same.

Product Differentiation: Internet is not only helping in promoting and selling, but it is equally helping in creating the value. Many companies are offering customize option on their website, where consumers are putting specification yo design the product (www.nike.com).

Apps: Mobile technology has given information on the go to the consumers. Many mobile applications are designed in the category to facilitate reach on the go.

Management: Internet and mobile technology have increased the overall efficiency of the management. Companies are using them in recruitments, purchasing, internal and external communications.

POM: Session5 New Marketing Realities Part1

After a short discussion on marketing mix and marketing process, we shall now discuss how different it is these days to market. Think about the days when there was no internet and mobile!

The world around us has tremendously changed. The new environment has opened up new opportunities for marketers. At the same time, it is bringing numerous challenges to the marketers as well.  But every lock comes with a key. There are very strong environmental forces that cannot be ignored. Also these days’ marketers are equipped with new capabilities that help them to respond to the challenges. Companies that failed to keep the pace couldn't survive in this competitive world. Once very successful TV manufacturers, BPL and Beltek are hardly seen these days. Some other companies like Motorola, revived the whole marketing strategy and also changed its names to Moto. This is the time when most of the soft products and services are available on our internet or phone or as an app. (just one click away!!!)

Let us have look on the new marketing realities that have changed the marketing world completely. To begin with, the consumers are not a passive recipient of the marketing information. They are equipped with technology and are more participative than ever. New liberalised environment also gave consumers better choice and service. Marketers need to keep a check on this DAVINCI CODE:

D – Deregulation: Post 1990’s we have seen the era of LPG (Liberalization, Privation and Globalization) where many private sectors like insurance and airlines were open up to private companies. This led to a new competitive environment and more demanding consumer.

A – Availability: Retail transformation had made shopping a very delightful experience. All the products categories from grocery to electronics are now available with the convenience of parking and a comfort of food court. All this is happening inside an air-conditioned mall or specialized store. The variety in products displayed is never seen before types. For those looking for more convenience, there is online retail. E-retailers offer variety of products, discounted prices and facility of easy returns of merchandise. According to recent reports, many American and Chinese companieswant to invest in ecommerce.

Also, According to the latest report by IAMAI and IMRB International, the ecommerce industry in India reached a value of INR 81,525 crore (US$13.5 billion) in 2014.  

V – Voice: Consumers now have a voice and it can ask for what they want and what all they don’t.  Social networking sites and micro blogging are very common platforms to raise and share opinions. So "what’s trending"?

I – Information: Almost everything from newspapers to magazines to TV channels to government agencies are present online. This means, they are accessible through mobile phones as well.  So no "Ullu banaowing!"

N – Network: India is moving towards 4G network technology. The challenge though is to make it available to wider population.

C – Competition: Highly competitive markets offer wide variety and price ranges to consumers. These days the products are restricted to country or regional boundaries. It is available online world-wide.

I – Income: Increase in income led to more purchasing power and hence more demand for quality and innovative products.

C – Convergence: Look at your mobile phone; it is a phone, a camera, a music player, a GPS device and a mini computer. Earlier there were different products for all these purposes. Convergence has reached new heights. You have more apps than books.

O – Open: The marketers have taken liberty to invite the consumers and take openly about needs and wants. They are participating openly in creating a better marketing mix through crowdsourcing.

D – Disintermediation: Many companies are making their products available direct through a company outlet or online portals. This helps them in providing discounts as they save on distribution and intermediation costs. Third party marketing portals like Snapdeal, Flipkart and amazon are also playing an important role in keeping the distribution costs low. Companies like Reliance and ITC applying disintermediation in rural markets when they buying directly from the farmers.

E – Ecommerce: Online shopping made possible through plastic money and ecommerce. 

Next: What marketers can do?

POM: Session4 Marketing Orientations

Marketing is understood and interpreted in different ways. This is translated into the various ways companies do their business. They need to take a stand on how to present themselves as an organization and their products. This standing reflect in their product design, pricing, distribution and promotional strategies. These orientations or philosophies towards marketplace are:

Mass Production

According to this marketing philosophy, consumers will favour those products that are widely available and low in cost. Therefore the best way is to increase production and cut down costs and build profit through volume. This was very evident in times when industrial revolution was extended to the production of mass goods. Companies following production orientation assume that:

• Consumers are primarily interested on product availability and low price
• Demand for a product exceeds supply the consumers are more interested in obtaining the product than in its fine points.
• The supplier will concentrate in finding ways to increase production.

The early example was Ford Model T. It was produced at a relatively lower cost cutting the cosmetic feature to make it affordable to many. Production orientation does not only applicable to production of goods; it is also seen in services. Many medical and dental practices are organized in assembly line principles. Some government agencies such as immigration offices and licenses bureaus also work on this philosophy as they need to provide service to many in limited time. This type of orientation in services often results in the situation where many cases are handled per hour and hence the agencies or companies are open to charges of poor service quality.

This orientation towards marketplace is fairly best fit the companies producing products for masses, need based products, and where the objective is to generate more numbers without worrying of quality. China products availability is high and prices are low because they are practicing production concept. The popular example may be Akshay Kumar movies in Indian Film Industry.

The biggest drawback of this concept is that it provides lot of scope to others to produce the similar or even better product. Thus, companies aim at given a better product. They started following FAB (Features, Advantages and Benefits) principle which gave rise to Product concept.

Quality Products

This orientation towards marketplace assumes that consumers will favour those products that offer the most quality, performance, or innovative features. Therefore, they strive on improving quality performance and features. 

The believers in product concept make their product unique and novel so that it would sell and lead to increased sales and profits. They are confident that the consumer would pay any price for a product which is of a very high quality. These marketers do not aim at selling to masses. They rather target a profitable novelty seeking class. For example Sony and Aamir Khan!

Marketing Myopia

This is term coined by Theodore Levitt for situations where firms lose focus on their business and starts emphasizing on other details. In other words, too much stress on product orientation leads management’s failure to recognize a company’s scope of business. In some cases sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. In the process of making the product absolutely novel, they tend to forget the basic function of the product. They focus on the “wants” and lose sight of the “needs.” The whole concept of value proposition is lost in the process. Such phenomenon is known as “Marketing Myopia”.

It is not only companies pursuing product concept suffer from marketing myopia, too much of production concept also leads to marketing myopia. Low cost airlines are one example in such category. 

Selling Products

According to advocates of this orientation, consumers, if left alone, will not buy enough of company’s products. Therefore, they promote sales aggressively and build profit through quick turnover. They offer heavy discounts and often rely on personal selling.

Marketing Products

This philosophy assumes that the key to achieving organizational goals comprises of determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. They aim at building profit through customer satisfaction and loyalty. Companies need to come to market with proper market research to understand what customers will be willing to buy.

Highly customized products & services fall under the philosophy of customer orientation. These day individual marketing or one to one marketing is possible through internet & database marketing software. 

Selling Vs Marketing

Points	Selling	Marketing
Start	Factory	Consumer research
Focus	Products	Customers
Concerns	Tricks and techniques to sell	Identifying and meeting consumer needs
Views	Goods-producing	Customer-satisfying
Emphasis	Exchange	Value satisfaction
Distribution	Extension to sell	Value delivery network
Promotion	Push product through Sales promotion	Pull demand by communicating value
Price	Cost based	Value based

Holistic Outlook

Holistic marketing orientation as described by Kotler, is based on the development, design, and implementation of marketing programs, process, and activities that recognize their breath and interdependencies. It includes these dimensions:

Customer Relationship Management: These days, a key goal of marketing is to retain current customers and build profitable, long – term relationships. These relationship would result in company’s market network that includes, customers, employees, suppliers, distributors, retailers and others. P&G enjoys excellent network of suppliers and distributor to help them maintain their huge product network worldwide.

Integrated marketing: Many different marketing activities are used to create, communicate and deliver value. Integrated marketing aims at coordinating all marketing activities to maximize their joint effects.

Internal Marketing: This component of holistic marketing emphasis that employees contribute to building long-term relationships with customers. Hence, all departments to be committed to vision, mission and strategic planning. Internal marketing requires vertical alignment with senior management and horizontal alignment with all the departments.

Performance marketing

Financial Accountability: Companies should be able to give justification of investments & profitability. They should work towards building its brand value and continuously grow customer base.

Social Responsibility Marketing: Companies must consider ethical, environmental, legal and social implications of their business. They should aim at delivering the desired satisfaction more effectively and efficiently than competitors but also preserves or enhances the well-being of both consumer and society.

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POM: Session3 Scope of Marketing

So far, I have been mentioning that it is products or services that are marketed. Often, I have also brought up them as brands. Actually, anything that provides a solution is marketed. Point to be noted here is that the customers will pay a price for that solution only if it gives them value. Depending upon its value products are termed and known by different names. 

For example, when we buy rice from wholesale market it is called as “commodity”, when we buy Indiagate basmati rice from a grocery store, it is called “brand”, when we go to Mainland China and order Fried Rice, it is called an “item”. Infosys is company whose products are known as “solutions”. In all cases, whatever name is given, the product is marketed on the basis of its value proposition.

Broadly, the scope of marketing can be identified as

Goods Marketing: This includes all the physical products including grocery, vegetables, furniture, electronics, personal care, stationery and so on. Marketers add attributes and features to the product to claim the superior value and attract customers.

Services Marketing: Services are products are mostly intangible. Consumers pay for the services and do not get the possession of any physical good. Airlines, hotels, health, insurance are some examples of services. Since the value depends upon the service provider, the companies vary a lot and command a different value proposition. Being one of the most growing sectors, it has tremendous competition.

Experience Marketing: It is form of service. Experience marketing derives value in giving a one in a life time experience to its customers. Bungee jumping, skydiving, parasailing, scuba diving, are the experiences that people are ready to pay for. Theme parks and restaurants offer entertainment and dinning experience with a difference. Heard about NASA’s Space Travel Program?

Events Marketing: Some events are marketed like anything. Think about your own college fest! You will immediately recall the effort that you have put it. In India, after IPL, Kabbadi League, Football League and now Hockey League are some examples of extreme marketing. Film award nights, Beauty Pageants, concerts,Fashion weeks also marketed a lot. Sunburn has created a unique position in India in a very short time through it's marketing efforts. The other traditional examples are Dandiya Night, Ganapati Festival and Gokul Asthami.

  

Person Marketing: Many a times we see an actor as a celebrity judge in a dance competition, or a cricketer attending a social event or a singer performing in the opening ceremony of a mega sports event! What or rather who makes them do that? Well, all these people are marketed by professional people management companies. Recently, British tennis icon Andy Murray has signed a contract with Mahesh Bhupati’s sports management company Globsport. These companies are also responsible for celebrity labelled merchandise.

Place Marketing: Many countries like, Singapore, Turkey, Thailand, Philippines and Malaysia market themselves as tourist destinations. Some other places like Dubai and Bangkok and Paris are marketed as shopping destinations. Las Vegas and Macau are marketed as gaming and fun destinations. Disneyland in California, Paris and Hong Kong and many other theme parks around the world are marketed as destination for kids. Indian prime minister Mr. Modi is promoting India as a manufacturing destination with make in India initiative.

Property Marketing: Developers market their property to the prospective buyers. They promise value and offer several schemes to individual and business buyers. They organize trade shows and exhibitions to show case their projects. This market varies form budget properties to world class luxury accommodations. Some other form of property is also heard of like intellectual property like patents and trademarks, financial property like share, bonds and other financial instruments.

Organization Marketing: The organizations market themselves as socially responsible business entities. Some non-profit organizations also market themselves to make people aware about the causes they are supporting and seek their contribution. Some examples are CRY, PETA and WWF. Government organizations market themselves to get the support of publics. Military organizations like Army, Navy and Airforce promote their existence and also for recruitments. Business organizations promotes their corporate social responsibility initiatives to built favourable perception in consumer's minds. 

Information Marketing: The information related to gardening, carpentry, machine and car repairs, home décor, and instruments is available as it marketed through magazines or websites. There are online portals and forums that aim at creating a platform for people to discuss and solve their problems.

Idea marketing: Every marketing offering has some basic idea. This idea may be related to benefit its consumers or to support a social cause. Save Tiger, Pulse Polio Campaign, and Organ Donation are some examples of idea supporting social cause. Surf Excel’s “Daag Achche hain” is an example of big idea in advertising world. Many companies like Samsung and IBM continuous work towards identifying new ideas to develop new products and solutions. cosmetic companies claim that they don't sell beauty products they sell hopes.

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POM: Session2 Core Concepts

To understand marketing, the first step is to know the core concepts of marketing. The basic idea behind explanation to these core concepts is to find answers to these questions:

Why to serve?

What to serve?

Whom to serve?

How to serve?

Where to serve?

Why to serve?

This is the first prerequisite for marketing. Before any marketing activity, marketers should conduct proper market research to find out whether the product is needed by the people. If yes, what is the profile of people needing the product (target markets) and if no, what else they need. No product can be sold unless there is a demand for it.

WudStay an accommodation start up is sensing increasing demand for budget stay among working professionals and students. WudStay has ventured into this segment by introducing paying guest (PG) accommodations. The startup has already signed up with 50 PGs in Delhi, Gurgaon, Mumbai, Bengaluru and Kota offering close to 2,500 beds. Since number of working professionals and students move to these cities for work or studies, the demand and hence rentals for such accommodations have increased. Also the PG market is very unorganized and it is difficult for many to find a decent accommodation. WudStay is working on a asset light model where they are planning is to partner with small hotel and branding them for standardize service.

Needs at very basic level of motivation to buy product, but when they are specific objects they become wants. For example, if I am hungry, I may need anything to eat but I may want to eat a burger! Wants, when backed by availability and purchasing power, they become demands.

Q List ten mobile apps that you think are need based. Why these apps are needed?

The early work regarding types of needs is Abram Maslow’s Need hierarchy theory. At this level, needs may be classifies as:

TYPE	ILLUSTRATION
Stated Need	“I want a Smart Phone!”
Real Need	“I want a latest phone with all the features”
Unstated Need	“I want a good battery life”
Delight Need	“Wow! I got free apps”
Secret Needs	“Can I get 16GB?”

Types of Demands: Like needs, the types of demands are also identifies as

TYPE	ILLUSTRATION
Negative Demand	vaccinations
No demand	Old model Cars
Latent Demand	New technological products
Declining Demand	Qwerty Mobile phones
Irregular Demand	Woolens
Full Demand	Fast-food
Overfull Demand	US Visa
Unwholesome Demand	Cigarettes

Q Reiterate types of demand using the example of IPL auctions.

How to serve?

Needs and wants fulfilled through a marketing offer that some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Whatever is the product, one thing is certain that to be successful in such a competitive world, one need to bring a unique offer that is advantages for consumers.

What to serve?

These days, thanks to internet and mobile technology consumers are exceedingly knowledgeable and demanding. This makes marketing tasks very challenging and at the same time opens up number of opportunities. There is a mobile app for almost everything; right from finding a plumber to finding a priest, holiday package to online food ordering, schedule planners to health planners and so on. Everyone is focusing on their unique features, constant update and upgrade the offer and fully committed to quality service.

The Customer Value

Gone are the days when marketers use to believe that value is embedded in goods and services. The marketers have realized the importance of creation of value that is customer centric. Value is defined as the difference between the value that the customer gains from buying and using a product and the cost of buying the product. As already discussed, the successful marketing is all about value leadership. In this competitive world, the identification of what is valued by the consumers is a very challenging task.

The two important concepts here are value creation and value delivery. Firms may work on great detail in identifying and creating customer centric value. Number of tangible features like, design, style, functions and intangible features like prestige and status can add to value proposition. However, it is equally important all the features should be delivered as promised. For example, if grofers.com is promising delivery within 90 minutes it should deliver the same to its customers.

Q Find out one unique mobile app that you come across? What according to you is the best feature of that app and why?

Whom to serve?

The next important task is to identify the customer. In words of Kotler, marketing is identifying and meeting customer needs and wants. Since, the consumers are too numerous, it is not really possible to satisfy all of them. Thus the important aspect of marketing is to clearly identify whom they want to serve. This brings them to analyze consumer needs vis-à-vis companies resources, policies and objective to decide for segmentation and targeting strategy.

Each company wants to serve the segment that can best relate to their product, or in other words they look up to meet the expectation of their target customer segment.  Customer satisfaction depends on their ability to successfully create and meet the expectation through customer value proposition. This is built through:

EXCHANGE

Exchange is the act of obtaining an object which one needs from another by offering some other thing in return. For exchange to exist, 5 conditions must be satisfied:

1. There are at least two parties

2. Each party has something that might be of value to the other party 

3. Each party is capable of communication and delivery

4. Each party is free to reject the exchange offer.

5. Each party believes it is appropriate or desirable to deal with the other party

6. Exchange is value creating process as it is beneficial to both parties.

TRANSACTION

Transaction is a trade of values between two or more parties. It involves: at least two things of value, agreed-upon conditions, a time of agreement and a place of agreement.

RELATIONSHIPS

Keeping and maintaining customer value over a period of time is very important for marketers. Recent studies in marketing signify the important of maintaining other relationships that are equally crucial to performance of marketing function.  Relationship marketing aims to build long-term mutually satisfying relations with key parties: CUSTOMERS, SUPPLIERS, and DISTRIBUTORS.

Where to Serve?

Market is a place where buyers and sellers meet to buy or sell products: so what are you thinking? Are you thinking about Fish markets, Vegetable markets or Grain markets?

Well you are not incorrect. But as per marketing, Markets are the different groups of consumers for a product or service. It need not be a place in traditional sense. So markets are consumer market, business market and global market.

Also, a market is a set of actual and potential buyers of a product that share a particular need or want that can be satisfied through exchange relationships.

The Marketplace is physical, as when one goes for shopping in a store. On the other hand, market-space is digital, as when one goes shopping on the internet.

Meta-market is described as a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries. For example, the Automobile Meta- market where the car manufacturer, dealers, accessory companies and finances companies forms the meta-market.

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