Marketing – Introduction and Concepts

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Marketing Introduction and

Concepts


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Marketing is the management processthat identifies, anticipates and

satisfies customer requirementsprofitably

The Chartered Institute of Marketing


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The right product, in the right place,at the right time, and at the rightprice


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Marketing is a social and managerialprocess by which individuals andgroups obtain what they want and

need through creating, offering andexchanging products of value withothers

Kotler 1991


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A better definition of marketing:

Marketing is War!


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The true nature of marketing todayinvolves the conflict betweencorporations.

Not the satisfying of human needsand wants!


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What leads to defeat in bothWar and Marketing?

Over-pessimism (Fear of Failure)

Over-optimism (Failure to FearFailure)


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Marketing

Implications of marketing

Who are our existing / potential customers?

What are their current / future needs?

How can we satisfy these needs? Can we offer a product/ service that the customer

would value?

Can we communicate with our customers?

Can we deliver a competitive product orservice?

Why should customers buy from us?


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Is this enough?

Is knowing what the customer wantsenough when all of your competitorsknow it as well?

Or is success based primarily onstrategies and tactics?


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Most Common MarketingErrors

Failure to keep products/services up-to-date

Failure to estimate market potential accurately

Failure to gauge the trend of the market

Failure to appreciate regional differences in

market potential and in trend of market

Failure to appreciate seasonal differences in

your customers demand


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Failure to establish the advertising budget

based on the job to be done

Failure to adhere to policies established in

connection with long-range goals Failure to test-market new ideas

Failure to differentiate between long-term

strategies and short-term tactics

Failure to admit defeat


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Failure to try new ideas while a brand is

climbing

Failure to integrate all phases of the

marketing operation into the over-all program Failure to appraise objectively your

competitors brands

Failure to get the facts and interpret them

correctly


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Good Marketing professionals need tounderstand the nature, causes,andcures of marketing failures
http://en.wikipedia.org/wiki/Image:Tupolev_Tu-154.jpg


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http://en.wikipedia.org/wiki/Image:Tupolev_Tu-154.jpghttp://en.wikipedia.org/wiki/Image:Aeroflot_logo.PNG


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WE'RE NOT DELTA - BUTWE'RE TRYING TO FLY!

"We want to be like Delta!" proclaimed Anatoly Brylov, ChiefExecutive of the Russian airline Aeroflot in an interview withTime Magazine. That's quite an easy thing to say, but posessuch an enormous challenge for an airline that has beenstruggling to come to terms with marketing. Delta has grown

steadily from its 1920s origins as a southern crop sprayingcompany to be the USA's number 3 airline. By all accounts, itis popular with its customers and it has to be, for most of itsroutes are operated in competition with other airlines. Aeroflotby contrast has been associated with everything that isanathema to the management of Delta. During the Soviet era,travel on Aeroflot had been so dire that the airline -

disparagingly referred to as "Aeroflop", was frequentlydescribed as "the world's worst airline".


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The contrast between Delta and Aeroflot can be explained in terms of theextent to which the two airlines have adopted a marketing orientation. Deltahas had to fully embrace the principles and practices of marketing because if itdidn't, competitors who did would soon win over customers. Aeroflot on theother hand traditionally had little need for marketing. It operated in a centrallyplanned economy where consumer sovereignty had little meaning. If apassenger wanted to fly somewhere, they usually had no choice but to fly withAeroflot. Aeroflot's managers were not really concerned with attracting more

passengers or making life better for their existing passengers - they sawthemselves just like any other government bureaucrat who was charged withimplementing a centrally planned economic program. So long as they met veryloosely defined targets, they were OK. The targets themselves weren'tmarketing targets at all but operational targets referring to the number offlights operated or the fuel consumption of aircraft. There was little concern forwhether the flights were going to the right places at the right times, or withthe right level of facilities before, during and after the flight.


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In a communist centrally planned economy, it was not surprising to findAeroflot adopting a production orientation to its business. Operationalconsiderations came first, customers came second. Stories aboundedabout what this actually meant for passengers. Planes were known toleave late because members of the crew were drunk, baggage wasroutinely stolen by ground staff and ticketing and reservations systemwere corrupt and inefficient. It was commonplace for passengers to

bribe flight attendants to be allowed on an aircraft, even though allseats were full. As for in-flight services, there weren't any, unless warmwater in plastic cups is counted.

The break up of the former Soviet Union and the rapid disintegration of thecentrally planned economy propelled Aeroflot into a new era in whichmarketing took on significance for the first time. The spur to marketingwas the withdrawal of the heavy subsidies that the airline received fromthe government - the airline now had to earn all of its income from fares

paid by passengers. And those passengers were able to exerciseincreasing choice as the domestic civil aviation market was opened tocompetition for the first time.


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The first thing the new management did was to repaint its fleet ofaircraft with a new name - Aeroflot Russian International Airlines.That was a skin-deep change - to achieve a true marketingorientation, the airline had to embark on much morefundamental change. Part of that fundamental change was toimpress upon staff that passengers were important people whoseneeds had to be satisfied, rather than being brushed aside asnuisances. Staff had to be made aware that over 70 new regionalairlines had appeared on the scene, many of them competingwith Aeroflot for passengers' business. Many of these - such asUzbekistan Air - had acquired modern western aircraft and put itscrews through a customer care programme which even Deltamight have approved of. The management structure also had tochange from an authoritarian structure to one which was able tointegrate operational and marketing functions, in order to allownew opportunities to be profitably exploited.


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Despite the enormity of the airline's task, changes were put inhand. The aircraft fleet has being modernized, including the lease ofa number of European Airbuses. This has gone some way to allaypotential customers' fears over the safety record of Aeroflot'sprimitive Tupolev and Illuyshin aircraft, many of which have beenscrapped. Locally prepared in-flight meals have been replaced withwestern made products. Flight attendants have been attending

politeness seminars, often run in conjunction with westernconsultants. A number of key executives have been enrolled onwestern run marketing and management courses. Fares are nowdetermined with due regard to market considerations, rather thanbeing set according to a central plan. Marketing research is nowtaken very seriously to monitor customers' reactions to the airlinesservice levels. In short, "passengers" have become "customers"

whose business can no longer be taken for granted.


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Is Delta worried by the regeneration of Aeroflot? At themoment, the two airlines compete only indirectly, but overthe longer term, Aeroflot has expressed its desire to becomea global airline. It signed an agreement with British Airwayswhich will help it to expand beyond its Russian base. Global

success would have seemed preposterous to an observer ofDelta back in 1924. But by putting customers first andadopting the principles and practices of marketing, Delta hasachieved its current enviable position. With the same attitudeand determination, Aeroflot could just do the same.


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MARKETING VS SELLING

Example: M. Institute is an institute

specializing in preparing students for CAT.It opened a branch at Bhopal inJune 2002.To open the branch, it recruited the followingpersons: Branch Manager (BM), Marketing

Executive(ME), Student Counselor (SC),Operations Executive (OE) and an office boy.Faculty was not recruited initially.


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BM, ME and SC were responsible for selling. OE wasresponsible for administration of branch includinghousekeeping and accounting. Due to the efforts of selling

team and an aggressive advertising campaign, more thantwenty enrolments were done in various courses within thefirst two months. Faculty recruitment was done in a hastymanner within a week of first enrolments. Students of firstbatch complained of poor course material, inadequatelyprepared faculty, and absenteeism of faculty. In the months

from November 2002 to January 2003, there have been nofresh enrolments. By the end of January 2003, M. Institutehad sacked its complete original selling team and hadadvertised for fresh executives who could givecommitments about meeting targets of enrolments.


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Task for Today

Newspapers have been facing declining salesall over the world due to onslaught oftelevision in the past two decades. However,some newspapers have suffered more than

others. A rare few have managed to grow inspite of

difficult times. The picture seems confusing. Ifyou have to start a new newspaper in your

town, what will be the key factors that youwill devote your attention to?


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Documents

Marketing – Introduction and Concepts