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.

Prezi Presentation