SESSION 1 & 2: CORE CONCEPTS OF MARKETING

COURSE: SALES AND DISTRIBUTION MANAGEMENT

INSTRUCTOR: Dr Raghav Manocha
Marketing Department, GITAM School of Business,
Hyderabad
CODE: MKTG3011
SEMESTER VI
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Introduction
• Dr Raghav Manocha
• Email: [email protected]
• BSc – University of Delhi - India
• Master in Management - ESCP Business School - France
• PhD - ESCP Business School - France
• Research Interests: Luxury Marketing, Consumer Behaviour

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Evaluation
• 70 marks: internals
• 30 marks: midterms
• 10 marks: assignment 1
• 10 marks: assignment 2
• 10 marks: academic activity 1: Case study discussion
• 10 marks: academic activity 2: Project
• 30 Finals

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Course Description
• Sales Management focuses on the sales techniques and the
management of the sales force.
• The success of any sales and marketing department lies in the
effectiveness of the sales force.
• The goal of the Sales Management course is to examine the elements
of an effective sales force as a key component of the organization's
total marketing effort.
• A successful Sales Manager needs to understand the fundamentals
of the sales process, the relationship between sales and marketing,
sales force structure and issues in recruiting, selecting, training,
motivating, compensating and retaining sales people.
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Course Objectives
• To understand the planning and staffing needs in professional sales.
• To learn how to manage and motivate a professional sales team as a
Sales manager.
• To analyse the key success factors for sales executive performance.

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Book
• Krishna K Havaldar, Vasnt M Cavale, Sales and Distribution
Management, 3rd edition, Mcgraw Hill, 2017.

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Objectives
Why is marketing important?
What is the scope of marketing?
What are some core marketing concepts?
What forces are defining the new marketing realities?
What new capabilities have these forces given consumers and
companies?
What does a holistic marketing philosophy include?
What tasks are necessary for successful marketing management?

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Bird e-scooter

https://www.youtube.com/watch?v=eU8_TV3AaZI
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Bird e-scooter

Riders in global markets can access an

affordable, non-polluting Bird e-scooter
via smart phone (or have it brought to
their home or business), wisk across
town, and drop it off at a public space.

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Bird e-scooter
• Bird is an electric-scooter-sharing company dedicated to offering
affordable, environmentally friendly commuter transportation.
• Founded in September 2017 and headquartered in Venice, California
• Provides a fleet of shared electric scooters that can be accessed via
smartphone
• No docking areas required - Bird scooters can be picked up and
dropped off on sidewalks throughout the city
• In its first year of operation its scooters were available in over 100
cities throughout North America, Europe, and Asia, and they logged
10 million rides.
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 Bird e-scooter
• Facing growing competition from other
dockless scooter-sharing start-ups, such as
Lime and Spin
• Introduced Bird Delivery service, which
enables consumers to request a Bird to be
delivered to their home or business early in
the morning
• Introduced Bird Platform, a suite of
products and services that gives
entrepreneurs the opportunity to become
independent operators and manage a fleet
of shared e-scooters in their community
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The Value of Marketing
• Financial success often depends on marketing ability
• Successful marketing builds demand for products and services,
which, in turn, creates jobs
• Marketing builds strong brands and a loyal customer base,
intangible assets that contribute heavily to the value of a firm
MySpace Facebook
Yahoo! Google
Blockbuster Netflix
Barnes & Noble Amazon

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The Scope of Marketing
• Marketing is about identifying and meeting human and social needs
• AMA’s formal definition: Marketing is the activity, set of
institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large

(Kotler & Keller, 2016) 13

Marketing Management
• The art and science of choosing target markets and getting, keeping,
and growing customers through creating, delivering, and
communicating superior customer value

(Kotler & Keller, 2016) 14

What Is Marketed? (1 of 2)
• Goods
• Services
• Events
• Experiences
• Persons

(Kotler & Keller, 2016) 15

What Is Marketed? (2 of 2)
• Places
• Properties
• Organizations
• Information
• Ideas

(Kotler & Keller, 2016)

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Who Markets?
• A marketer is someone who seeks a response—attention, a
purchase, a vote, a donation—from another party, called the
prospect

(Kotler & Keller, 2016) 17

8 Demand States (1 of 2)
• Negative demand—Consumers dislike the product and may even pay
to avoid it.
• Nonexistent demand—Consumers may be unaware of or uninterested
in the product.
• Latent demand—Consumers may share a strong need that cannot be
satisfied by an existing product.
• Declining demand—Consumers begin to buy the product less
frequently or not at all.

(Kotler & Keller, 2016) 18

8 Demand States (2 of 2)
• Irregular demand—Consumer purchases vary on a seasonal, monthly,
weekly, daily, or even hourly basis.
• Full demand—Consumers are adequately buying all products put into
the marketplace.
• Overfull demand—More consumers would like to buy the product
than can be satisfied.
• Unwholesome demand—Consumers may be attracted to products that
have undesirable social consequences.

(Kotler & Keller, 2016) 19

A Simple Marketing System

(Kotler & Keller, 2016) 20

Key Customer Markets (1 of 2)
• Consumer Markets Companies selling mass consumer goods and
services such as juices, cosmetics, athletic shoes, and air travel
establish a strong brand image by developing a superior product or
service, ensuring its availability, and backing it with engaging
communications and reliable performance.
• Business Markets Companies selling business goods and services
often face well-informed professional buyers skilled at evaluating
competitive offerings. Advertising and Web sites can play a role, but
the sales force, the price, and the seller’s reputation may play a
greater one.

(Kotler & Keller, 2016) 21

 Key Customer Markets (2 of 2)
• Global Markets Companies in the global marketplace navigate cultural,
language, legal, and political differences while deciding which countries to
enter, how to enter each (as exporter, licenser, joint venture partner, contract
manufacturer, or solo manufacturer), how to adapt product and service
features to each country, how to set prices, and how to communicate in
different cultures.
• Nonprofit and Governmental Markets Companies selling to nonprofit
organizations with limited purchasing power such as churches, universities,
charitable organizations, and government agencies need to price carefully.
Much government purchasing requires bids; buyers often focus on practical
solutions and favor the lowest bid, other things equal.
(Kotler & Keller, 2016) 22
Core Marketing Concepts (1 of 10)

• Needs: the basic human requirements such as for air, food, water,
clothing, and shelter
• Wants: specific objects that might satisfy the need
• Demands: wants for specific products backed by an ability to pay

(Kotler & Keller, 2016) 23

Types of Needs
• Stated needs: The customer wants an inexpensive car.
• Real needs: The customer wants a car whose operating cost, not initial
price, is low.
• Unstated needs: The customer expects good service from the dealer.
• Delight needs: The customer would like the dealer to include an
onboard GPS system.
• Secret needs: The customer wants friends to see him or her as a savvy
consumer.

(Kotler & Keller, 2016) 24

Core Marketing Concepts (2 of 10)
• Target markets
• Positioning
• Segmentation

(Kotler & Keller, 2016) 25

Core Marketing Concepts (3 of 10)
• Value proposition: a set of benefits that satisfy those needs
• Offerings: a combination of products, services, information, and
experiences
• Brands: an offering from a known source

(Kotler & Keller, 2016) 26

Core Marketing Concepts (4 of 10)
• To reach a target market, the marketer uses three kinds of Marketing
channels
• Communication channels: deliver and receive messages from
target buyers and include newspapers, magazines, radio, television,
mail, telephone, smart phone, billboards, posters, fliers, CDs,
audiotapes, and the Internet
• Distribution: help display, sell, or deliver the physical product or
service(s) to the buyer or user
• Service channels: To carry out transactions with potential buyers,
the marketer also uses service channels that include warehouses,
transportation companies, banks, and insurance companies.

(Kotler & Keller, 2016) 27

Core Marketing Concepts (5 of 10)
• Paid media: TV, magazine and display ads, paid search, and
sponsorships
• Owned media: a company or brand brochure, web site, blog, facebook
page, or twitter account
• Earned media: word of mouth, buzz, or viral marketing

(Kotler & Keller, 2016) 28

Core Marketing Concepts (6 of 10)
• Impressions: occur when consumers view a communication
• Engagement: the extent of a customer’s attention and active
involvement with a communication

(Kotler & Keller, 2016) 29

Core Marketing Concepts (7 of 10)
• Value: a combination of quality, service, and price (qsp: the
customer value triad)
• Satisfaction: a person’s judgment of a product’s perceived
performance in relationship to expectations

(Kotler & Keller, 2016) 30

Core Marketing Concepts (8 of 10)
• Supply chain: a channel stretching from raw materials to components
to finished products carried to final buyers
The Supply Chain for Coffee

(Kotler & Keller, 2016) 31

Core Marketing Concepts (9 of 10)

• Competition: all the actual and potential rival offerings and

substitutes a buyer might consider

(Kotler & Keller, 2016) 32

Core Marketing Concepts (10 of 10)
• Marketers must pay close attention to the trends and developments in
these and adjust their marketing strategies as needed.
• Marketing environment
• Task environment: the actors engaged in producing,
distributing, and promoting the offering
• Broad environment: demographic environment, economic
environment, social-cultural environment, natural environment,
technological environment, and political-legal environment

(Kotler & Keller, 2016) 33

 The New Marketing Realities
• Technology: Massive amounts of information and data about almost everything are now
available to consumers and marketers. The old credo “information is power” is giving way
to the new idea that “sharing information is power.” Even traditional marketing activities
are profoundly affected by technology.
• Globalization: The world has become a smaller place. Globalization has made countries
increasingly multicultural and changes innovation and product development as
companies take ideas and lessons from one country and apply them to another.
• Social responsibility: The private sector is taking some responsibility for improving living
conditions, and firms all over the world have elevated the role of corporate social
responsibility. Because marketing’s effects extend to society as a whole, marketers must
consider the ethical, environmental, legal, and social context of their activities. Social
responsibility is a way to differentiate from competitors, build consumer preference, and
achieve notable sales and profit gains.
34
(Kotler & Keller, 2016)
A Dramatically Changed
Marketplace (1 of 6)
• New consumer capabilities
• Can use the internet as a powerful information and purchasing
aid
• Can search, communicate, and purchase on the move
• Can tap into social media to share opinions and express loyalty

(Kotler & Keller, 2016) 35

A Dramatically Changed
Marketplace (2 of 6)
• New consumer capabilities
Can actively interact with companies
Can reject marketing they find inappropriate

(Kotler & Keller, 2016) 36

A Dramatically Changed
Marketplace (3 of 6)
• New company capabilities
• Can use the internet as a powerful information and sales
channel, including for individually differentiated goods
• Can collect fuller and richer information about markets,
customers, prospects, and competitors
• Can reach customers quickly and efficiently via social media and
mobile marketing, sending targeted ads, coupons, and
information

(Kotler & Keller, 2016) 37

A Dramatically Changed
Marketplace (4 of 6)
• New company capabilities
• Can improve purchasing, recruiting, training, and internal
and external communications
• Can improve cost efficiency

(Kotler & Keller, 2016) 38

A Dramatically Changed
Marketplace (5 of 6)
• Changing channels
• Retail transformation
• Disintermediation

(Kotler & Keller, 2016) 39

A Dramatically Changed
Marketplace (6 of 6)
• Heightened competition
• Private brands
• Mega-brands
• Deregulation
• Privatization

(Kotler & Keller, 2016) 40

Marketing in Practice
• Marketing balance
• Marketing accountability
• Marketing in the organization

(Kotler & Keller, 2016) 41

 Evolution of the marketing concept
Production Concept Product Concept Selling Concept

• Focus on product • Focus on selling

availability at low • Consumers will the products that
prices buy products that the marketer has
• Cheap, efficient offer highest decided to
production quality, best produce Marketing
• Intensive performance and • Consumers need Concept
distribution most features to be aggressively
persuaded
• Does not consider
customer
satisfaction or
customer retention

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 Henry Ford after introducing
Model T in 1916: “consumers
can have cars in any colour
they want as long as it’s
black.”

2022 Ford Bronco colour range

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Marketing Concept
• The premise that marketing consists of satisfying consumers’ needs,
creating value, and retaining customers, and that companies must
produce only those goods that they have already determined
would satisfy consumer needs and meet organizational goals.
(Schiffman et al., 2019, p. 5)

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Marketing Concept Application

(Schiffman et al., 2019, p. 5)

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Holistic Marketing Dimensions
The holistic marketing
concept is based on the
development, design, and
implementation of
marketing programs,
processes, and activities that
recognize their breadth and
interdependencies.

Holistic marketing
acknowledges that
everything matters in
marketing - a broad,
integrated perspective is
often necessary

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(Kotler & Keller, 2016)
Relationship Marketing
Relationship marketing aims to build mutually satisfying long-term
relationships with key constituents in order to earn and retain their
business
• Customers
• Employees
• Marketing partners (channels, suppliers, distributors, dealers,
agencies)
• Financial community (shareholders, investors, analysts)

(Kotler & Keller, 2016) 47

Integrated Marketing
• Devise marketing activities and programs that create, communicate,
and deliver value such that the whole is greater than the sum of its
parts.

• Two key themes of integrated marketing are that

• many different marketing activities can create, communicate, and
deliver value
• marketers should design and implement any one marketing
activity with all other activities in mind.

(Kotler & Keller, 2016) 48

 Internal Marketing
• The task of hiring, training, and motivating able employees who
want to serve customers well

Marketing succeeds only when all

departments work together to achieve
customer goals: when engineering
designs the right products, finance
furnishes the right amount of funding,
purchasing buys the right materials,
production makes the right products in
the right time horizon, and accounting
measures profitability in the right ways.

49
(Kotler & Keller, 2016)
Performance Marketing
• Financial accountability
• Environmental impact
• Social impact

(Kotler & Keller, 2016) 50

Marketing Mix Components (4 Ps)

(Kotler & Keller, 2016) 51

 IKEA’s India Journey So Far

• IKEA entered India in

2018
• Opened first store in
Hyderabad
• 2 stores in Mumbai
• 1 store in Bengaluru
• Next destination:
NCR by 2025

52
 IKEA – Long Road Ahead
Competition lurks everywhere:
• Large organised players like Godrej Interio
• New-age upstarts like Pepperfry
• Huge unorganized furniture segment
• Indian Market – lowest per capita income (vs other markets of Ikea)
• Has been incurring losses
• As per IHS Markit, per capita consumption of furniture in India is a lot lower than per
capita consumption of furniture in IKEA’s two largest markets—the US and Germany
• Branded companies sell only a tenth of all furniture sold in India
• India lacks DIY culture
(Dutta, 2022)
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IKEA - Long Road Ahead
• Ikea’s big blue box stores are too
huge and expensive to develop and
run
• Ikea’s flagship Navi Mumbai
store (500,000 sq. ft) vs Godrej
Interio or Pepperfry stores
(10,000 sq. ft) in Bengaluru and
Delhi.
• Remote store locations
• Europe: Ikea is cheaper, affordable
and a reliable option vs India: Local
players would beat them in pricing

(Dutta, 2022) 54
IKEA - Long Road Ahead

(Dutta, 2022) 55
IKEA - Potential Target
Consumer ??

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IKEA - Potential Target Consumer
• Young Indian consumers (Young millennials)
• Living alone or young couples in cities
• Started earning but not yet rich
• Spent some time in Europe & North America

57
 IKEA - Silver lining
• Expected supply < expected
demand
• Adopting an omni-channel strategy
• Go to the consumer: with
smaller format city stores
• Launched such store in
Mumbai
• Gearing up to launch
similar stores in Bengaluru,
Pune, Ahmedabad, Surat
and Delhi.
• Online
(Dutta, 2022) 58
 IKEA – What they found out about
Indian consumers
• Extensive market research
• Surveyed - 2,000 households with varying incomes in different cities
• Learnings:
• Splintered, heterogenous market
• Average home in Hyderabad was double that of a home in Mumbai
• Hyderabad (bigger sofas and more beds) vs Mumbai (sofa-cum-bed, more vertical storage options)
• These preferences were reflected in rooms on display at Ikea stores in Hyderabad and Mumbai
• Indians preferred closed storage because of dust – hence Ikea offered glass cabinets and cupboards.
• Offered a range of pans, woks and stainless steel idli steamers and cookers adapted to Indian cooking
• In India people use more water to clean up in the kitchen - water was dripping off worktops in their
modular kitchens, ruining the fronts of cabinets – Ikea added a "counter top block" or a slim ledge to stop
the water from spilling over.
• Sold locally made harder mattresses
• Wanted furniture with more vibrant colors
• Hired furniture assemblers (Biswas, 2022)
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End of session 1 & 2

Thank you!

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