L-5 Understand Customer &

8/2/2019 L-5 Understand Customer &

1/28

Understanding the customer

and his needs.


2/28

Marketing Concept

Distinction between Marketing& Selling

Market Problem Market Information

Market Assessment

Distribution Channel


3/28

Marketing Concept

It is A total system of interacting businessactivities designed to plan, price, promote,distribute- Satisfying product & service to

present & potential customer

The main Features are:

1. Customer Orientation- Customer rather thanproduct is the focus of attention


4/28

2. Marketing Research: In order to understandthe customer & their need, regular &systematic research is carried out.

3. Integrated Marketing: Marketing mix isdesigned & implemented to meet the needs &desire of the customers


5/28


6/28

Distinction between marketing & Selling

Marketing: Consumer Oriented Longterm goal (mutual satisfaction between

buyer & seller). It begin before goods are

produced & it continues.

Selling: It being after goods are

produced & finished after transfer ofownership.


7/28

Focus Means Objective

SellingConcept

Product Selling &promotion

Profit throughSales Volume

MarketingConcept

Consumer NeedsIntegrated

MarketProfit through

CustomerSatisfaction


8/28

Marketing Selling

Focus on Customer need Focus on Seller needs

Customer enjoys importanceProduct is important

Product planning & development isto be matched with market

Pressure for selling the goodsalready produced

Integrated approach to achieve longterm goal

Approach to achieve immediategain

Converting customer need intoproduct Converting product into cash

Profit through customer satisfaction Profit through sales


9/28

Market Problems of Small Business Units

SSI cannot withstand stiff competitionwith large units in terms of quality, costetc

Most of SS entrepreneurs have lessappreciation for marketing concept &strategy.

SS entrepreneurs are unable to

understand the market trends quickly &accurately.


10/28

Case Study Observation(50 SS units)

Competition from large/Mediumenterprise, e.g. copper work, Carpetweaving.

Lack of Sales Promotion: SS have to payheavy commission to the dealer as theirproducts are not branded.

Weak Bargaining Power: No payment todealer if sale is at manufacturing place.


11/28

Market Information

Price policy, Type of product, Channelof distribution & Sales Promotion may

be work out with right market

information Large Unit carried out Market research-

Collection of data, Analysis of data

problem relating to sales Small scale unit- Collect information

from personal contact with their dealer


12/28

Secondary source

Press

Govt. Publication

Publication of Financial Institutions Foreign Govt & International agencies-

UNO, IMT, World bank, ILO etc.

Publication by trade union

Private concern & research institute-FICCI (Private) IIFT, IAMR


13/28

Primary Sources

Customer

Dealer

Salesman


14/28

Market Assessment

Survey Method: Information is collected fromdealer, Sales person & expert- Analyzed anddemand is calculated

Statistical method: Say 10% increase every yearfor past 10 years than 10% increase for next 10years (Time series Analysis)

Under Regression analysis- demand is

estimated on the basis of establishedrelationship with some variable e.g. per capitaincome


15/28

Contd..

Leading Indicator Method: Say production ofvehicles are up then the related item- petrol &

diesel demand will be up


16/28

Market Segmentation

Market consist of heterogeneous customer interms of their need, Preferences & buyingcapacity. Different approach is required for

each group of customer. Total market isdivided into different segment of differentgroup.

small scale unit should focus on segmentmarket


17/28

Geographic Segmentation

Urban

Rural

Backward

Export market : different requirementthan domestic.


18/28

Demographic Segmentation

Age

Sex

Martial status

Children

Manufacture of toys, Toffes & comicsfocus on children


19/28

Socio Economic Variable

Income level influence the quality and quantityof the product- Peter England, Apple Mobilephone

Psychological Variable

Personality, Lifestyle, Attitude etc also used for

Market Segmentation


20/28

Market Mix

It is systematic & balancedcombination of product, price,

place (physical distribution)and promotion


21/28

FIRM

Product

Promotion

Place

Price


22/28

Product: Product design, Brand name,Package, Warranties, after sales service.

Price: Basic price, discount, terms of

credit etc Promotion: Advertisement, Sales

Place: Middlemen, Transportation,

Inventory etc of the product


23/28


24/28

Consumer

1. Convenience goods

Staple- Bread, butter, groceries

Impulsive--Razor blade, cosmetic

Emergency- Ambulance service2. Shopping: Shoes, dress material, mixer

grinder etc

3. Specialty goods: Fancy dress, Jewellery,

automobiles, costly camera etc.


25/28

Industrial Goods

Raw Material: Mineral, Agriculture product,Dairy product

Fabricated material: Leather into shoes, yarn

into clothes, pig iron into steel Operating supplies: Lubricant, heating fuel,

office stationary etc

Installation: Land & building, Heavy

production m/c Accessories: Welding set, hand tools etc.


26/28

Channel of Distribution

Distribution channel is a channel by whichproduct moves from producer to customer

Manufacture to customer

Producer consumer

e.g BATA (own retail store), door to door selling

Fast, shortest route & economical


27/28

Manufacturer- Wholesaler- Customer

Producer Retailer consumer

Manufacturer sell to big chain of stores who sellto customer. It is very popular e.g. TV set,refrigerator, washing m/c etc.


28/28

Manufacturer- Wholesaler- Retailer-Customer

For small products e.g. drugs, cosmetics

Market scheme- GPP

Documents

L-5 Understand Customer &