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An ISO 9001:2000 Certified Organization

MCO-06MARKETING

MANAGEMENT

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BL

OCK-I

UNIT-1

Presentation Title | November 9, 2010 | <document2

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© Copyright PCTI Group 2009

Marketing Definition

Activities necessary for:

± Planning and executing the

± conception (product), pricing, promotion and

distribution (place)

± of ideas, goods and services to

± create exchanges

± that satisfy individual and organizationalobjectives

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Marketing Mgmt. Philosophies

1. Production

2. Sales

3. Marketing

4. Societal marketing

orientations

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1. Production Orientation

Focuses on internal capabilities of firm.

³ Field of Dreams´ strategy ± ³If we build it, they will come´

Best used when ± competition is weak

± demand exceeds supply ± generic products competing solely on price

Problem is that they don¶t understandwants/needs of marketplace.

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2. Sales Orientation

People will buy more goods/services if aggressive sales techniques are used.

High sales will result in high profits.

Used with unsought products ± life insurance

± encyclopedias

Problem is that they don¶t understandwants/needs of marketplace.

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3. Marketing Orientation

Marketing concept:

The social and economic justification for an

organization¶s existence is the satisfaction of

customer wants and needs, while meeting organizational objectives.

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3. Marketing Orientation . . .

Focusing on customer wants so the organization

can distinguish its products from competitors¶ .

Integrating all the organization¶s activities,

including promotion, to satisfy these wants. Achieving long term goals for the organization

by satisfying customer wants and needs legally

and responsibly.

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3. Marketing Orientation . . .

Requires:

± Top management leadership

± A customer focus

± Competitor intelligence strengths

weaknesses

± Interfunctional coordination to meet customer

wants/needs and deliver superior values.

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4. Societal Marketing Orientation

Organization exists not only to satisfy

customer wants/needs and to meet

organizational objectives, but also to

preserve and enhance individuals¶ andsociety¶s long-term best interests.

Extends marketing concept to serve one

more customer - society as a whole.

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Differences between Sales & Marketing

Orientations

Sales Focus

Organization¶s needs

Selling goods/services

Everybody

Profit through max.sales volume

Intensive promotion

Marketing Focus

Customer¶s needs

Satisfying customer wants/needs

Specific groups of people

Profit through customer satisfaction

Coordinated mktg.activities (4 p¶s)

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Relationship Marketing

Forging long-term partnerships with customers

and contributing to their success.

Companies benefit from

± repeat sales/referrals that lead to increases in sales,market share and profits, and

± decreased costs - it¶s less expensive to serve existing

customers than attract new ones.

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3. Relationship Marketing. . .

Keeping a customer costs 1/4 of what it

costs to attract new customer.

Probability of keeping current customer =

60%.

Probability of gaining new customer <

30%.

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3. Relationship Marketing. . .

Customers benefit from:

± stable relationships with suppliers (especially

in business-to-business)

± greater value and satisfaction ± discounts, perks (frequent flyer programs,

shopper clubs, etc.)

± sense of well-being/bonding (doctor, hair stylist, etc.)

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3. Relationship Marketing . . .

Successful relationship marketershave:

± customer-oriented personnel

± effective training programs

± employees with authority to make

decisions and solve problems

± teamwork

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The Marketing Process

1. Understand the org.¶s mission & the rolemktg. plays in fulfilling that mission.

2. Set the marketing objectives.

3. Gather, analyze and interpret the org.¶ssituation - ³SWOT´ analysis. Strengths

Weaknesses

Opportunities Threats

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The Marketing Process . . .

4. Develop marketing strategy

± target market

± marketing mix

5. Implement marketing strategy.

6. Design performance measures.

7. Periodically evaluate marketing efforts

and make changes, if needed.

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The 7 p¶s

Price

Product

Promotion

Place

People

Packaging Process

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BLOCK-I

UNIT-2

MARKETINGENVIRONMENT


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Objectives4 To Recognize the Importance of Environmental Scanning and

Analysis

4 To Become Familiar With How Competitive and Economic

Factors Affect Organizations¶ Ability to Compete and Customers¶

Ability and Willingness to Buy Products

4 To Identify the Types of Political Forces in the Marketing

Environment

4 To Understand How Laws, Government Regulations, and Self-

Regulatory Agencies Affect Marketing Activities

4 To Explore the Effects of New Technology on Society and onMarketing Activities

4 To Be Able to Analyze Socio-cultural Issues That Marketers

Must Deal With As They Make Decisions

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Examining and Responding to the

Marketing Environment

EnvironmentalScanning

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Examining and Responding to the

Marketing Environment

EnvironmentalScanning

Environmental Analysis

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Examining and Responding to

the Marketing Environment

Reactive

Response

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Examining and Responding to the Marketing

Environment

Reactive

Response

Proactive

Response

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Competitive Forces

Types of Competition ± Competition Defined

± Brand Competitors

± Product Competitors ± Generic Competitors

± Total Budget Competitors

Types of CompetitiveStructures

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Competitive Forces

Type Number of Type Number of Ease of Entry Product Ease of Entry Product

CompetitorsCompetitors into Market into Market

Monopoly Monopoly

Oligopoly Oligopoly

Monopolistic Monopolistic

CompetitionCompetition

PurePure

CompetitionCompetition

OneOne

Few Few

Many Many

Unlimited Unlimited

Many Many BarriersBarriers

SomeSome

BarriersBarriers

Few BarriersFew Barriers

No BarriersNo Barriers

Almost No Almost No

SubstitutesSubstitutes

Homogeneous or Homogeneous or

Differentiated Differentiated

Product Differ Product Differ--

entiation, withentiation, with

Many SubstitutesMany Substitutes

HomogeneousHomogeneous

ProductsProducts

S elected Characteristics of Competitive S tructuresS elected Characteristics of Competitive S tructures

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Competitive Forces

Types of Competition ± Competition Defined

± Brand Competitors

± Product Competitors ± Generic Competitors

± Total Budget Competitors

Types of CompetitiveStructures

Monitoring Competition

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Economic Forcesl Business Cycle

l Prosperity

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Economic Forces

l Business Cyclel Prosperity

l Recession

l Depression

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Economic Forces

l Business Cyclel Prosperity

l Recession

l Depressionl Recovery

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Economic Forces

l Buying Power

± Disposable

Income

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Economic Forces

l Buying Power

± DisposableIncome

± Discretionary

Income

± Wealth

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Economic Forcesl Buying Power

± Disposable

Income

± Discretionary Income

± Wealth

l Willingness to

Spend

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Political Forces

4 Relationship

to Legal andRegulatory

Forces

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Legal and Regulatory Forces

Sherman Antitrust Act (1890)

Clayton Act (1914)

Federal Trade

Commission (1914)

Robinson-Patman Act (1936)

Wheeler-Lea Act (1938)

Lanham Act (1946) Celler-Kefauver Act (1950)

Fair Packaging and Labeling Act (1966)

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Magnuson-Moss Warranty (FTC) Act(1975)

Consumer Goods Pricing Act (1975)

Trademark Counterfeiting Act (1980)

Trademark Law Revision Act (1988)

Nutrition Labeling and

Education Act (1990)

Telephone Consumer Protection Act (1991)

Children¶s Online Privacy

Act (1998)

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Procompetitive Legislation Consumer Protection

Legislation

Encouraging Compliance

with Laws and

Regulations

Regulatory Agencies

± Federal Trade Commission(FTC)

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Procompetitive Legislation Consumer Protection

Legislation

Encouraging Compliance

with Laws and

Regulations

Regulatory Agencies

± Federal Trade Commission(FTC)

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Self-Regulatory Forces ± Better Business Bureau

± National Advertising Review

Board (NARB)

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Self-Regulatory Forces ± Better Business Bureau

± National Advertising Review

Board (NARB)

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Technological Forces

Impact of

Technology

Adoption

and Use of

Technology

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Socio-cultural Forces

Demographic Diversity and

Characteristics

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Cultural Values

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Consumerism

R alph Nader

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TYPES OF MARKETING ENVIRONMENT

MICRO: The environmental forces that are

relevant to the firm. It includes organization¶s

internal environment, suppliers, marketing

intermediaries, customers and competitors.

MACRO: Large societal forces which exert

influence on firm¶s marketing system. It includes

demographic, economic, natural, technological,

political, legal and cultural forces.

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Microenvironment

± Marketing must

consider other parts of

the organization

including finance, R&D,

purchasing, operations

and accounting

± Marketing decisions

must relate to broader company goals and

strategies

Actors Actors

The company Suppliers

Marketingintermediaries

Customers

Competitors

Publics

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Microenvironment

± Marketers must watch

supply availability and

pricing

± Effective partnership

relationship

management with

suppliers is essential

Actors Actors

1. The company 2. Suppliers

3. Marketingintermediaries

4. Customers

5. Competitors

6. Publics

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Microenvironment

± Help to promote, sell and

distribute goods to final

buyers

± Include resellers, physical

distribution firms,

marketing services

agencies and financial

intermediaries ± Effective partner

relationship management

is essential

Actors Actors



4. Customers

5. Competitors

6. Publics

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Microenvironment

± The five types of

customer markets

Consumer

Business

Reseller

Government

International

Actors Actors



4. Customers

5. Competitors

6. Publics

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Microenvironment

± Conducting competitor

analysis is critical for

success of the firm

± A marketer must

monitor its competitors¶

offerings to create

strategic advantage

Actors Actors



4. Customers

5. Competitors

6. Publics

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Microenvironment

± A group that has an actualor potential interest in or impact on an organization

± Seven publics include:

Financial

Media

Government

Citizen-action

Local

General

Internal

Actors Actors



4. Customers

5. Competitors

6. Publics

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GOVERNMENT REGULATIONS AFFECTING

MARKETING

1. The Indian Contract Act, 1872

2. Sales of Goods Act, 1930

3. The Industries (development & regulation) Act, 1951

4. The Prevention of food adulteration Act, 1954

5. The Drugs and Magic Remedies (objectionable advertisement)

Act, 1954

6. The Essential commodities Act, 1955

7. The Companies Act, 1956

8. The Trade marks Act, 1999

9. The Monopolies and restrictive Trade Practices Act, 196910. The Patent Act, 1970

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GOVERNMENT REGULATIONS AFFECTING

MARKETING

11. The Standards of weights and measures Act, 1976

12. The Consumer Protection Act, 1986

13. The Environment Protection Act, 1986

14. The Bureau of Indian Standards Act, 1986

15. The Agricultural Produce Grading and marketing Act (AGMARK),

1937

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4 R ecognize the Importance of Environmental

Scanning and Analysis

4 Know How Competitive and Economic Factors

Affect Organizations¶ Ability to Compete and

Customers¶ Ability and Willingness to Buy Products4 Be Able to Identify the Types of Political Forces in

the Marketing Environment

4 Understand How Laws, Government R egulations,

and Self-R egulatory Agencies Affect Marketing

Activities

4 Know the Effects of New Technology on Society

and on Marketing Activities

4 Be Able to Analyze Socio-cultural Issues That

Marketers Must Deal With As They Make Decisions

BY N OW, Y OU

SH OULD . . .

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UNIT-3

MARKETING INFORMATION &

RESEARCH


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Introduction

Marketing was the first functional area to exhibit

an interest in MIS

The marketing information system has threesubsystems; the accounting information system,

marketing research, and marketing intelligence

Functional information systems: the conceptual

systems should be "mirror images" of the physicalsystems

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The Marketing Information System

(MKIS)

Kotler's marketing nerve center

3 information flows

± Internal

± Intelligence (from environment)

± Communications (to environment)

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Firm Environ-

ment

M arketing intelligence

M

arketing communications

Internal

marketing

informatio

n

Kotler·s Information Flows Kotler·s Information Flows

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Marketing Information System (MKIS) Definition

A computer-based system that works in

conjunction with other functionalinformation systems to support the

firm's management in solving problems

that relate to marketing the firm'sproducts.

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An MKIS Model

Output ± product

± place

± promotion

± price

± integrated mix

Database

Input ± AIS

± marketing research

± marketing intelligence

D tD t I f tiI f tiM k ti I f ti S t M d lM k ti I f ti S t M d l

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I nput

subsystems

Output subsystems

DD

A A

T T A A

BB

A AS S

E E

Accounting

information

system

Marketing

research

subsystem

Marketing

intelligence

subsystem

I nternal sources

Environmental sources

Product

subsystem

Place

subsystem

Promotion

subsystem

Pricesubsystem

I ntegrated-

mix

subsystem

Users

Dat Dat

aa

I nformatioI nformatio

nnMarketing Information System Model Marketing Information System Model

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Accounting Information System

Sales order data is input.

AIS provides data for

± Periodic reports

± Special reports

± Mathematical models and knowledge-

based models

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Primary versus Secondary Data

Primary data are collected by thefirm

Examples of primary data

± Survey ± In-depth interview

± Observation

± Controlled experiment

P i S d D t

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Primary versus Secondary Data(continued)

Secondary data

± Mailing lists

± Retail sales statistics

± Video retrieval systems

Some secondary must be bought and

some is free

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Marketing Research Software

Graphics packages (print maps) CATI (computer-aided telephone

interviewing) where the computer

displays the next question to ask Statistical analysis

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Marketing Intelligence Subsystem

Ethical activities aimed at gathering

information about competitors

Each functional information system has

an intelligence responsibility

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Product Subsystem

Product life cycle; introduction, growth,maturity, and decline

Information answers 3 key questions:

1.Introduce?

2.Change strategy?

3.Delete?

The Product Life Cycle and Related DecisionsThe Product Life Cycle and Related Decisions

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Sal es Sal es

VolumeVolume

STAG E S STAG E S

I ntrod uction G rowth M at urity Decl ine

S houl d the

prod uct be

introd uced

S houl d the prod uct str ategy

be changed

S houl d the

prod uct be

del eted

The Product Life Cycle and Related Decisions The Product Life Cycle and Related Decisions

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New Product Evaluation Model

New product committee

Explicitly considers production as well

as marketing

Lists decision criteria and their weight

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Place Subsystem

Channel of distribution may be short or long

Material, money, and information flow

through the distribution channel ± Resource flows

± Feed forward information

± EDI fits in here

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Material, Money, and Material, Money, and

Information Flow Information Flow

Two-way information flow

S upplier S upplier Manu Manu- -

facturer facturer

WholeWhole- -

saler saler Retailer Retailer Consumer Consumer Materia

l

Materia

l

Materia

l

Materia

l

Money Money Money Money Money Money Money Money

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Promotion Subsystem Includes:

(1) advertising

(2) personal selling

(3) sales promotion

Wh t i R h ?

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What is Research ?

Research is simply the process of thoroughly studying and analysing the

situational factors surrounding a problem

in order to seek out solutions to it.

T f B i R h

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Types of Business Research

Applied ± done with the intention of applying results to specific problems in the

business

Basic ± to enhance the understanding of problems that commonly occur across a

range of organisations

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Redefining Marketing Research

The American Marketing Association (AMA)redefined Marketing Research as:

The function which links the consumer, the

customer, and public to the marketer

through I NFORMAT I ON

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Used to identify and define market

opportunities and

problems

Generate, refine, and evaluate marketing

performance

Monitor marketing

performanceImprove understanding

of marketing as a

process

Redefining Marketing Research

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Definition of Marketing Research

Marketing research is the systematic and objective

identification

collection

analysis

dissemination

and use of information

for the purpose of improving decision making related to the

identification and

solution of problems and opportunities in marketing.

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Market Research

Specifies the information necessary to address

these issues

Manages and implements the data collectionprocess

Analyzes the results

Communicates the findings and their

implications

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Classification of Marketing Research

Problem Identification Research Research undertaken to help identify problems which are not

necessarily apparent on the surface and yet exist or are likely toarise in the future. Examples: market potential, market share,image, market characteristics, sales analysis, forecasting, andtrends research.

Problem Solving Research Research undertaken to help solve specific marketing problems.

Examples: segmentation, product, pricing, promotion, and

distribution research.

A Cl ifi ti f M k ti R h

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A Classification of Marketing Research

Marketing R esearch

ProblemIdentification R esearch

Problem Solving

R esearch

Market Potential R esearch

Market Share R esearchMarket Characteristics

R esearchSales Analysis R esearch

Forecasting R esearch

Business TrendsR

esearch

Segmentation R esearch

Product R esearch

Promotion R esearch

Distribution R esearch

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Problem Solving Research

Determine the basis of segmentation

Establish market potential and

responsiveness for various

segments

S elect target markets

Create lifestyle profiles:

demography, media, and

product image characteristics

SEGMENTATION RESEARCH

Test concept

Determine optimal product design

Package tests

Product modification Brand positioning and

repositioning

Test marketing

Control score tests

PRODUCT RESEARCH

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Research Process

Seven inter-related steps1. Specifying research objectives

2. Preparing a list of needed information

3. Designing the data collection project

4. Selecting a sample type

5. Determining sample size

6. Organizing & carrying out the field work

7. Analyzing the collected data & report thefindings

Research Process & Problems in

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Research Process & Problems in

Achieving Scientific Method

To achieve Validity & Reliability,Marketing Research should be

conducted as a proper Scientific Method

At each of the seven steps let us analyze A. Problems in achieving Scientific Method

B. Steps to minimize the potential sources of

errors

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1. Specifying Research Objectives

A. Problems in achieving Scientific Methoda. Manager¶s Expectations of research results

B. Minimizing potential sources of errors

a. Write research objectives

b. Manager & researcher must discuss the

objective statements & if necessary modify

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2. Preparing a list of needed information

Problems in achieving Scientific Methoda. Due to busy schedule manager may not get

adequately involved

b. May think researcher knows what to do

Minimizing potential sources of errors

a. Manager & researcher should develop µList of

needed information¶ together & evaluate usefulness

Research is not needed if manager is forced to select a

particular course of action irrespective of research

findings

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3. Designing data collection project

Problems in achieving Scientific Methoda. Using inappropriate research design

b. Wrong selection of respondents

c. Asking unclear or ambiguous questionsd. Using large scale study instead of small

scale & vice versa

e. Using poor experimental design

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3. Designing data collection project

Minimizing potential sources of errorsFive important issues that must be addressed:

± Should the research be exploratory or conclusive?

± Who should be interviewed & how?

± Should only few cases be studied or large samples? ± How well experiments be incorporated?

± How should data collection form be designed?

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4. Selecting a sample type

Why samples? Probability Vs. Non Probability Problems in achieving Scientific Method

a. Sample not representative of the population


a. Define sampling frame carefully

b. Select proper sampling method ± Simple

Random

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5. Determining Sample size

Problems in achieving Scientific Method

a. Sample size depends upon

i. Nature of the problem

ii. Budget

iii. Accuracy needed

b. Small sample ± Lower reliability

Large sample ± Likely to give higher reliability


a. Use Sampling Statistics to calculate sample size for a givenaccuracy (Confidence Interval)

b. Care exercised in determining sample size & sample type willminimize errors

6 Organizing &

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6. Organizing &

Carrying out field work

Field work: Selecting, Training, Controlling & Evaluatingfield force

Involves substantial portion of budget

Potential source of errors through lack of Validity &Reliability


a.Varying skills of field workers

b.Forms filled without interview

c.May not follow instructiond.Investigator¶s bias

e.Respondents¶ bias

6 Organizing &

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6. Organizing &

Carrying out field work

Minimizing potential sources of errorsa.Follow good practices in selection, training,

controlling & evaluating field workers

b.Incorporate Back Checks & Spot Checksc.Motivate supervisors

d.Deploy adequate field force ± release time

pressure

7 Analyzing Data &

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7. Analyzing Data &

Report Preparation


a.Care & precaution not taken during editing,coding & data entry

b.List of needed information not prepared properly

c. Research objectives not established correctly Minimizing potential sources of errors

a.Editing & Coding done carefully

b.Incorporate extensive validity checks

c. Inferences to be drawn based on factual data &not based upon researcher¶s personalunderstanding

The Role of Marketing Research

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The Role of Marketing Research

Controllable

Marketing

Product

Pricing

Promotion

Distribution

V ariables

Marketing Research

Marketing Decision

Making

Providing I nformation

Assessing I nformation

Needs

Marketing Managers

Market S egmentation

Performance & Control

Target Market S election

Marketing Programs

Uncontrollable

Environmenta

l Factors

Economy

Technology

Laws &R egulations

Social & Cultural Factors

Political Factors

Customer Groups

Employees

S hareholdersS uppliers

Consumers

When is marketing research not

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When is marketing research not

needed?

± The information is

already available.

± Decisions must be

made now.

± We can¶t affordresearch.

± Costs outweigh the

value of marketing

research.

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UNIT-4

BUYER BEHAVIOUR

BLOCK-II

INTRODUCTION

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INTRODUCTION

One of the few common features among all of us isthat we are all buyers irrespective of what we are.

As buyers, we play a vital role in the economy-

local, national, and international. We need to study

buyer behaviour to gain insights into our ownconsumption related decisions like what we buy,

why we buy, how we buy, and the promotional

influences that persuade us to buy. Marketers too

need to adapt and dovetail (fit together)their strategies by taking the buyer into consideration.

MEANING OF BUYER

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MEANING OF BUYER

BEHAVIOUR

According to Schiffman and Kanuk consumer behaviour is the behaviour that buyers or

consumers display in searching for,

purchasing, using, evaluating, and disposing

of products and services that they expect willsatisfy their needs. Moven has defined it as

the study of decision- making units arid the

process involved in acquiring, consuming, and

disposing of goods, services, experiences,and ideas.

Phases of Buyer Behavior

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Phases of Buyer Behavior

a) Acquisition Phase: This refers to howbuyers acquire the products and services

for their consumption. Much of the

research in the buyer behaviour has

focused on the acquisition phase. Wheninvestigating the acquisition phase

marketers should analyse the factors that

influence the product and service choice of

buyers or consumers.

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b) Consumption Phase: This refers to howbuyers use or consume the products and

services. Here the marketers should analyse

how buyers actually use a product or service

and the experiences that the buyer obtains from

such use. The investigation is important both for

tangible products as well as for services.

c) Disposition Phase: It refers to what buyersdo with a product once they have completed its

use.

IMPORTANCE OF BUYER BEHAVIOUR

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IMPORTANCE OF BUYER BEHAVIOUR

The most obvious is for marketing strategy-i.e., for

making better marketing decisions. For example, by

understanding that buyers are more receptive to food

advertising when they are hungry, we learn to schedule

snack advertisements late in the afternoon.

A second application is public policy. In the 1980s,

when Accutane, a near miracle cure for acne, resulted

in severe birth defects in pregnant women, Federal

Drug Administration (FDA) of US took the step of

requiring that very graphic pictures of deformed babiesbe shown on the medicine containers.

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Social marketing involves getting ideas across to buyers

rather than selling something. Understanding buyer

behaviour will help in espousing for social causes such

as planned families,, prohibition, equality of girl child etc.

Government agencies with the help of buyer behaviour

knowledge may develop appropriate promotionalstrategies for greater acceptance of social causes.

As a final benefit, studying buyer behaviour should make

us better buyers. Common sense suggests, for example,

that if you buy a 200 ml liquid bottle of laundry detergent,you should pay less per ml than if you bought two 100 ml

bottles. In practice, however, you often pay a size

premium by buying the larger quantity.

TYPES OF CONSUMERS

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TYPES OF CONSUMERS

Personal Consumer: Personalconsumer buys goods or services for

his or her own use (e.g., shaving

cream, shampoo, lipstick) are for use of the household (TV, VCR) or family. In

each of the above, the goods are

brought for final use by the individualswho are referred to as "end users" or

"ultimate users".

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Organizational Consumer: Organizationalconsumer can be for profit and not for-profit

businesses, government agencies,

institutions (schools, colleges, Markets

hospitals). In each of the above examples we

note that the products/services are being

bought in order to run the organization. For

example, a travel agency purchasing acomputer and printer so as to render

services they sell.

FACTORS INFLUENCING BUYER

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BEHAVIOUR

Psychological Factors Personal Factors

Social Factors

Cultural Factors

Refer book for details««

Buying Behaviour Situations

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Buying Behaviour Situations

Complex buying behaviour,

Dissonance reducing buying behaviour,

Variety seeking Buying behaviour and

Habitual buying behaviour.

CONSUMER BUYING DECISION PROCESS

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CONSUMER BUYING DECISION PROCESS

1) Problem recognition,

2) Information search,

3) Evaluation of alternatives,

4) Actual purchase decision, and

5) Post purchase behaviour.

UNIT 5

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U 5

MARKETS AND MARKET SEGMENTATIONS

basic purpose of a company's marketing department is to pel-

form "three S" for its consumers. The first S stands for sensirzg

the consumer, the second S stands for sewing the consumer, and

the third S stands for sati.yfyirag the consumer. In doing so the

marketer is basically looking towal-ds its market, which is the setof actual and potential buyers of ~l product with want satisfying

products and services. To be successful in its m:u-lteting efforts a

company should understand the characteristics of the market in

order to sense, serve and satisfy its consumers-market with its

products.

WHAT IS A MARKET?

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WHAT IS A MARKET?

the term market stood for the place where buyers andsellers gathered to exchange their goods, such as a village

bazaar. Another popular way of describing a market is in the

context of a particular place where several shops or buyers

or users may be located. For example, Connaught Place is

considered a market in New Delhi. Economists use the term

market to refer to a collection of buyers and sellers who

transact a particular product category or a range of products

such as computer market, two-wheelers market, car market,

etc. But marketers do not agree with economists as theyconsider the sellers \ as constituting the industry and the

buyers as constituting the market.

TYPES OF MARKETS

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AND THEIR CHARACTERISTICS

Consumer Market

Organizational Market

Types of Organizational Market

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Types of Organizational Market

The Industrial Market

The Reseller Market

The Government Market

The Institutional Market

Characteristics of Organizational

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g

Market

Fewer Buyers Larger Buyers

Geographical

Concentration

Derived Demand

Inelastic Demand

Fluctuating

Demand Professional

Purchasing

Close-supplier-customer

relationship

Multiple Buying

influences Multiple Sales calls

Direct purchasing

Reciprocity Leasing

MEANING AND CONCEPT OF MARKET

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SEGMENTATION

Market segmentation as the process of dividing the total market for a product or

service into several smaller groups, such

that the members of each group arc similar

with respect to the factors that influencedemand. Therefore, companies through

market segmentation divide large,

heterogeneous market into smaller

segments that can be reached more

efficiently and effectively with products and

services that match their unique needs.

IMPORTANCE OF MARKET

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SEGMENTATION

By tailoring marketing programs to eachmarket segment, a company can do a better

marketing job and can make more efficient use

of itsµ marketing resources.

A small company with limited resourcesmay be ill a better position to compete

more effectively in one or two small market

segments, whereas the same company would

be overwhelmed by the competition from

bigger companies if it aimed for a major

segment.

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A company with effective market segmentationstrategy can create a more fine and Selecting Target

tuned product or service offering and price it

appropriately for the target segment markets.

The comp

any can more easily select the mostappropriate distribution network and communication

strategy, and it will be able to understand its

competitors in a better way, which are serving the

same segment.

By developing strong position in a specialized

market segments, a medium sized company can

grow rapidly.

REQUIREMENTS OF EFFECTIVE MARKET

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SEGMENTATION

Identifiable and measurable,

Sufficient (in terms of size),

Stability, Reachable (accessible) in terms of media

and costs,

Differentiable, and Actionable

Bases for Segmenting

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Consumer Markets

Geographic Segmentation Demographic Segmentation

Psychographic Segmentation

Personality Segmentation

Personality Segmentation

Value Segmentation

Socio-cultural Segmentation

Culture Segmentation

Use-related Segmentation

Hybrid Segmentation

Bases for Segmenting

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Organizational Markets

Type of customer segmentation

Customer Size segmentation

Type of buying situations segmentation

Micro Segmentation & Mass

C i i

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Customization Micromarketing: Segment and niche marketers

tailor their offers and marketing programs to meet

the needs of various market segments. At the

same time, however, they do not customize their

offers to each, individual customer. Thus segment

marketing and niche marketing fall betweenextremes of mass marketing and micro marketing.

Micromarketing is the practice of tailoring products

and marketing programs to suit the tastes of

specific individuals and locations. Micro marketingincludes local marketing and individual

marketing or mass customization.

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UNIT-6

MARKET TARGET

& POSITIONING


MARKET TARGETING

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MARKET TARGETING

By applying the learning from the market segmentation,

you as a business manager will be able to identify your

firm's markets segment opportunities. These

opportunities have to be evaluated to select either one

or a number of strategically significant segments for

launching your marketing program. It is a stage where

the firm has to evaluate different segments and decide

how many and which ones to target for . This method is

called market targeting. A target market is defined as

a set of buyers sharing common needs or characteristics that the company decides to serve.

Evaluation of Potential Targets

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Evaluation of Potential Targets

After the firm has identified the target markets, the

next task is to evaluate the target segments. The

Marketing manager should look at five factors for

evaluating each segment. They are: segment size

and worthwhile ness, segment measurability,segment attractiveness, accessibility of the

segment, company objectives and resources. The

company should first collect and analyse data on

size of the current segment, growth rates in the pastand the likely rate of growth from the market

indicators for the future on short term and long term

basis, and expected profitability horn each segment.

Market Targeting Strategies

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Market Targeting Strategies

The targeting strategy will largely dependupon the kind of product market coverage

that the firm takes for the future. The

resources, capabilities and intent of therespective firms influence this product

market coverage decisions. The product

market coverage strategies are broadly

classified as concentrated marketing,differentiated marketing and

undifferentiated marketing.

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Concentrated Marketing : When companyresources are limited and the competition is intense

enough that the marketing manager has to stretch

the market budget for market coverage, the

companies follow a concentrated marketing strategy.The company decides to cover a large niche than

fighting for a small share in a large market. It is an

excellent strategy for small manufacturers those can

stay closer to the segment and cater to the emergingneeds of a close loop customers. This helps them to

gather market share in small markets against strong

and large competitors.


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Differentiated Marketing: In differentiated marketing

strategy, marketers target several market segments

and design separate offers for each segment. They

target several segments or niches with a varied

marketing offer to suit to each segment needs. For

example, Maruti as an automobile company has the

distinction of having products for different segments.

Where as its Maruti 800 is targeted for the upcoming

middleclass, the Baleno is targeted for the upper rich

class people and Maruti Omni is targeted for largefamilies. The main objective of offering varied

marketing offer is to cater to different segments and get

higher sales with a dominant position on each segment.Presentation Title | November 9, 2010 | <document124

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Undifferentiated Marketing: Marketers may goagainst the idea of a segmented market and

decide to sale the product in the whole market.

Here the marketing manager ignores the idea of

segment characteristics differences and developa marketing program for the whole market. This

approach keeps the over all marketing costs low

and makes it easier to manage and track the

market forces uniformly. Here the marketer triesto find out the commonality across the segments

rather than focusing on the differences.


Choosing a Product - Market Strategy

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g gy

The market coverage strategy largely depends on companyµs

resources and ability to cater to the market. The best strategyalso depends on the product variability. Undifferentiated

marketing suits best to uniform products and commodities like

petrol, steel and sugar. The product's life cycle is also another

important factor considered while selecting a market coverage

strategy. At the introductory stage of a product, the company will

prefer a single product in an undifferentiated market or

concentrated market. In the maturity stage of the product life

cycle, many players follow differentiated marketing strategy. If all

the customers have uniform taste, buy the same amount andrespond to a marketing program in the same way then market

variability is minimum. So an undifferentiated marketing strategy

is most suitable. Every marketing manager should also look at

the competitor's marketing strategy.Presentation Title | November 9, 2010 | <document126

POSITIONING

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POSITIONING

After the company has decided its market targeting strategy,

the next managerial challenge is to decide what position it

wants to occupy in the selected segment(s). Kotler has

defined product positioning as the way the product is defined

by consumers on important attributes - the place - the

product occupies in consumerµs mind relative to competingproducts. Thus product's position reflects important attributes

which a consumer gives to the product. It is the position in

the perceptual space of the consumer¶s mind that the

product takes in relation to competitorµs products, which is

often verbalized by customers on certain attributes. Productpositioning depends on market structure, competitive

position of the firm and the concepts of substitution and

competition among products.


Requirements for Positioning

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Requirements for Positioning A product's position is the complex set of perceptions,

impressions and feelings that consumers have for the productin comparison with the competing alternatives available in the

market. They position with or without the help of the

marketers. A successful marketer provides requisite

information to the consumer while the consumer is still in the

process of developing a position through company's marketing

communication program. Therefore, a marketer can plan

positions to his product and can create a sustainable

competitive advantage for the product in the selected

segments. Rest other marketing strategy can support theposition that is capable of providing sustainable competitive

advantage to the firm. Each firm must create a set of

differentiation or unique bundle of benefits that appeals to a

substantial segment of the market place.Presentation Title | November 9, 2010 | <document128

Topic for Discussion

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Positioning Process


Bases for the Product Positioning

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ases o t e oduct os t o g

Positioning on Benefits, Problem Solution or Needs

Positioning for Specific Usage Occasions

Positioning for User Category

Positioning against another Product

Production Class Dissociation

Hybrid bases : In this strategy, marketers use a

hybrid approach incorporating features frommore than one bases for positioning.


Communicating and Delivering the

Chosen Positioning Strateg

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Chosen Positioning Strategy

The managers should take the next step incommunicating the selected position to the

target audience. The marketing mix should

support the desired positioning communication

through integrated marketing communication of the brand is communication talks about a

specific positioning proposition then the brand

should deliver the same at trial as well as the

adoption stage of the product. The marketingmix design involves the practical execution

of the strategic brand position decision.


REPOSITIONING

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OS O G

Repositioning is a critical decision in marketing. The

manager can go for repositioning due to two reasons viz.

the failure of the current positioning strategy due to the

three positioning mistakes like under positioning, over

positioning and confused positioning, the opening up of

another positioning opportunity due to evolution of thecustomers on value life cycle or emergence of new

technology to redefine the structure of competition. Brand

managers normally undertake brand tracking and

monitoring studies to identify the gap between the desired

positioning or stated position through brand communicationall the perceived position by the customers. Any substantial

gap in these two measures will warn the brand managers

to go for a reposition decision.


UNIT 7 PRODUCT CONCEPTS AND

CLASSIFICATION

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CLASSIFICATION

A product may be defined in a narrow as well as

broad sense. In narrow sense, it is a set of tangible

physical aid chemical attributes in an identifiable and

really recognizable form. In a broader sense we may

look at it in the form of an object, idea, service,

person, place, activity, goods, or an organisation. It

can even be a combination of some of these factors.

Let us study how 'product' is being defined by Philip

Kotler, A product is anything that can be offered to amarket for attention, acquisition, use or

consumption, it includes physical objects, services,

personalities, place, organizations and ideas.


Essential Attributes of a Product

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Tangible or Intangible Associated Attributes

Exchange Value

Satisfaction


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©Copyright PCTI Group 2009

A product, therefore, can be considered ascomprising of three distinct levels. Al the First

level is the core product i.e., the core benefit

which the consumers seek to buy. The second

level of the product can be described as theactual product. This includes the packaging,

brand name, features of the product, design, the

shape, quality etc. The third level is the

augmented product. In addition to the actualproduct, the provider may give additional

customer services such as after sales service,

warranty, delivery, installation etc.Presentation Title | November 9, 2010 | <document135

CLASSIFICATION OF PRODUCTS

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1) On the basis of the user status, products maybe classified as consumer goods and industrial

goods.

2) On the basis of the extent of durability, products

may be classified as durable goods and non-durable goods.

3) On the basis of tangibility, products may be

classified as tangible goods and non tangible

goods. These non-tangible goods are referred to

as services.


Discuss Major types of Products

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j yp

1 ) Consumer goods2) Industrial goods

3) Durable and Non-durable goods

4) Services


PRODUCT MIX

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A product mix is the set of all products anditems that a particular seller offers for sale.

It is also termed as product assortment.

Product mix consists of product lines. For

example, the product mix of ITC consists

of product lines like hotels, cigarettes,

ready-made garments, grocery, and

paper. Refer Fig: 7.2


PRODUCT MIX AND PRODUCT LINE

STRATEGIES

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STRATEGIES

Contraction of the Product Line Expansion of Product Mix

Changes in Quality Standards: Trading Up

& Trading Down Affecting Change in Model of style of an

Existing Product

Product Differentiation Product Positioning

New Product


SERVICES - MEANING AND SCOPE

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A product is an object, a device, a tangible thing; and

service is a deed, a performance, an effort. This

captures the essence of the difference between

products and services. Services are a series of

deeds, processes and performances; hence tend to

be more intangible, personalized, and custom-made

than products. The services offered by SBI, LIC,

IGNOU and MTNL are not tangible things that can be

touched, seen and felt, but rather are intangibledeeds and performances. Similarly, the core offerings

of hospitals, hotels, and utilities comprise primarily

deeds and actions performed for customers.


Difference between Services and Products

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(1) intangibility,(2) heterogeneity,

(3) simultaneous production and

consumption, and

(4) perishability


SERVICE CLASSIFICATION

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The Nature of the Service Act Relationship between Service

Organisation and Customers

How the Service is Delivered Proportion of Tangibility and Intangibility

Service Inputs

Contact between the Consumer and the

Service Provider

Profit and Public vs Private Services


THE SERVICES MARKETING MIX

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People: All human actors who play part in servicedelivery mid thus influence the buyer's perceptions;

namely, the firm's personnel, the customer, and other

customers in the service environment.

Physical evidence: The environment in which theservice is delivered and where the firm and customer

interact, and any tangible components that facilitate

performance or communication of the service.

Process: The actual procedures, mechanism and flowof activities by which the service is delivered - the

service delivery and operating system.


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UNIT-8

PRODUCT

DEVELOPMENT AND

PRODUCT LIFE CYCLE


PRODUCT INNOVATION - MEANING, TYPES AND

IMPORTANCE

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The term "innovation" means "bringing in novelties" or

"making changes". As far as "product innovation" is

concerned, it covers a wide range from making minor

or major changes in the existing product to introduction

of substitute products or totally new products. It is true

that it is not easy to claim any product as totally "new"

since the idea for a new product originates from the

existing products. That is why it is advised that a

company should define its business in broad terms i.e.

it is in "dental hygiene business" and not in "tooth

paste or tooth powder business" or in "transportation

business" and not in "bicycle or automobile or rail road

business.Presentation Title | November 9, 2010 | <document145

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Defined this way, no product can be construed as a

"new product". As far as business is concerned, a "new

product is one which the target consumer segment

considers new" in the sense the consumer feels that the

need is met by the "new product" cannot be met by any

other substitute product at a particular point of time.

Why do companies go in for new products? A simple

answer to this question is "to meet the changes in

environment". The changes can encompass one or

more of environment factors viz., competitiveenvironment, technological environment, cultural

environment, political environment, legal environment.


PRODUCT DEVELOPMENT PROCESS

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Idea Generation Idea Screening

Concept Development

Business Analysis Engineering Development & Marketing

Strategy Development

Test Marketing Commercialization


WHY NEW PRODUCTS FAIL?

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The failure may be traced to one or more of the

following factors:

Product: Product factors such as functional quality, size,

shape, colour, design, materials used in its production

etc. of the product not up to customers' requirement .

Package: Functional quality, the material used in the

package, size, shape, colour; design, and instructions

on the package including the languages used,

disposability or reusability of the package, compatibility

with the product, aesthetic appeal, ease of opening

and closing the package etc., determine acceptability or

otherwise of the package and, along with it, the product.


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Label: The size, colour, language(s) used,shape and material influence customer

preference.

Brand: Brand name and brand logo are, along

with trademark, major considerations inpurchase decisions.

Service: Pre-sale, point-of-sale and after sales

service play a major role in the purchase,

particularly of high unit value durable consumer

goods and capital equipment.


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Distribution: Selection of inappropriate channelsand outlets, lack of motivation among distributors,

inconvenient location of distributors and poor

service quality of distributors are some of the

problems associated with the failure of theproduct.

Pricing: Product quality & price relationship not

being optimal, non-availability of credit for high

unit value items, lack of incentives such as pricediscounts, and frequent price revisions cause

product failure.


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Promotion: Selection of inappropriate promotionaltool, non-availability of effective promotional tool,

communication mistakes, poor literacy level of the

market, non-availability of capable promotional

firms, problems in personal selling and salespromotion lead to poor communication with the

customer affecting product sales.

Environment: Changes in environment -

technological, legal, competitive, cultural, political -which could not be anticipated in advance and

provided for, lead to product failures.


PRODUCT LIFE CYCLE (PLC)

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© Copyright PCTI Group 2009Presentation Title | November 9, 2010 | <document

152

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Introduction: The need for immediate profit is not a

pressure. The product is promoted to create

awareness. If the product has no or few competitors,

a skimming price strategy is employed. Limited

numbers of product are available in few channels of

distribution.

Growth: Competitors are attracted into the market

with very similar offerings. Products become more

profitable and companies form alliances, jointventures and take each other over. Advertising

spend is high and focuses upon building brand.

Market share tends to stabilise.


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Maturity: Those products that survive the earlier stagestend to spend longest in this phase. Sales grow at a

decreasing rate and then stabilise. Producers attempt to

differentiate products and brands are key to this. Price

wars and intense competition occur. At this point the

market reaches saturation. Producers begin to leave themarket due to poor margins. Promotion becomes more

widespread and use a greater variety of media.

Decline: At this point there is a downturn in the market.

For example more innovative products are introduced or consumer tastes have changed. There is intense price-

cutting and many more products are withdrawn from the

market. Profits can be improved by reducing marketing

spend and cost cutting.Presentation Title | November 9, 2010 | <document

154

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BLOCK-III

PRODUCT DECISIONS

UNIT-9

BRANDING, PACKAGING AND SERVICING


A brand is a collection of images and ideas representing aneconomic producer; more specifically, it refers to the descriptive

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p p y pverbal attributes and concrete symbols such as a name, logo,

slogan, and design scheme that convey the essence of acompany, product or service.

Brand recognition and other reactions are created by theaccumulation of experiences with the specific product or service,both directly relating to its use, and through the influence of advertising, design, and media commentary.

A brand is a symbolic embodiment of all the informationconnected to a company, product or service.

A brand serves to create associations and expectations amongproducts made by a producer .

A brand often includes an explicit logo, fonts, color schemes,symbols and sound which may be developed to represent implicitvalues, ideas, and even personality.

The key objective is to create a relationship of trust.

Brand as a legal Instrument

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The brand name is often used interchangeably with

"brand", although it is more correctly used to specificallydenote written or spoken linguistic elements of a brand. Inthis context a "brand name" constitutes a type of trademark, if the brand name exclusively identifies thebrand owner as the commercial source of products or services.

A brand owner may seek to protect proprietary rights inrelation to a brand name through trademark registration.

Advertising spokespersons have also become part of some brands, for example: Mr. Whipple of Charmin toilettissue and Tony the Tiger of Kellogg's.

The act of associating a product or service with a brandhas become part of pop culture. Most products have somekind of brand identity, from common table salt to designer clothes.

What Is A Brand? What Is A Brand?

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Asset Asset thatthat drivesdrives premiumpremium pricingpricing andandfuturefuture cashcash flowsflows

SignalSignal of of qualityquality andand aa trusttrust markmark

RelationshipRelationship

A A setset of of rationalrational andand emotionalemotional

associationsassociations thatthat identifyidentify andand differentiatedifferentiate

aa companycompany or or itsits offer offer A A formform of of self self expressionexpression

A good brand name should:

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be protected (or at least protect able) under trademark law

be easy to pronounce be easy to remember

be easy to recognize

be easy to translate into all languages in the markets where thebrand will be used

attract attention

suggest product benefits (e.g.: Easy-Off ) or suggest usage (notethe tradeoff with strong trademark protection)

suggest the company or product image

distinguish the product's positioning relative to the competition.

be attractive

stand out among a group of other brands

Challenges or limitations of Branding:

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here are several challenges associated with setting objectives for a

brand or product category. Brand managers sometimes limit themselves to setting financial and

market performance objectives. They may not question strategicobjectives if they feel this is the responsibility of senior management.

Most product level or brand managers limit themselves to setting shortterm objectives because their compensation packages are designed toreward short term behavior. Short term objectives should be seen asmilestones towards long term objectives.

It is sometimes difficult to translate corporate level objectives intobrand or product level objectives. Changes in shareholders' equity areeasy for a company to calculate. It is not so easy to calculate thechange in shareholders' equity that can be attributed to a product or category. More complex metrics like changes in the net present valueof shareholders' equity are even more difficult for the product manager to assess.

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In a diversified company, the objectives of some brands may

conflict with those of other brands. Or worse, corporateobjectives may conflict with the specific needs of your brand.This is particularly true in regard to the trade-off betweenstability and riskiness. Only when these conflicts and tradeoffsare made explicit, is it possible for all levels of objectives to fittogether in a coherent and mutually supportive manner.

Brand managers sometimes set objectives that optimize theperformance of their unit rather than optimize overall corporateperformance. This is particularly true where compensation is

based primarily on unit performance. Managers tend to ignorepotential synergies and inter-unit joint processes.

Often product level managers are not given enough informationto construct strategic objectives.

Brand development In terms of existing products, brands may be developed in a

number of ways:

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yBrand extension

The existing strong brand name can be used as a vehicle for new or modified products; for example, many fashion and designercompanies extended brands into fragrances, shoes andaccessories, home textile, home decor, luggage, (sun-) glasses,furniture, hotels, etc.

Mars extended its brand to ice cream, Caterpillar to shoes and

watches, Michelin to a restaurant guide, Adidas and Puma topersonal hygiene.

There is a difference between brand extension and line extension. When Coca-Cola launched "Diet Coke" and "Cherry Coke" they stayed within the originating product category: non-alcoholiccarbonated beverages. Procter & Gamble (P&G) did likewise

extending its strong lines (such as Fairy Soap) into neighboringproducts (Fairy Liquid and Fairy Automatic) within the samecategory, dish washing detergents.

LABELING

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A label is a piece of paper, polymer,cloth, metal, or other material affixed toa container or article, on which isprinted a legend, information

concerning the product, addresses, etc. A label may also be printed directly onthe container or article.

Labels have many uses: productidentification, name tags, advertising, warnings, and other communication.

A pplication and use

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Labels can be supplied: separately on a roll on a sheet

Many labels are pre-printed by the manufacturer.Other have printing applied manually orautomatically at the time of application.

Some labels have protective overcoats, laminates,or tape to cover them after the final print is

applied. This is sometimes before application andsometimes after.

Specialized high speed application equipment isavailable for certain uses.

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LA BEL provides:

Picture of the product, accurate as to size,color & appearance

Description of raw products used along with

methods of processing Directions for use, including cautions against

misuse

Possible adverse effects, and Brand name

PACKAGING

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Packaging is the science, art and technology of enclosing or protecting products for distribution,storage, sale, and use. Packaging also refers to theprocess of design, evaluation, and production of packages.

Packaging can be described as a coordinatedsystem of preparing goods for transport,

warehousing, logistics, sale, and end use.

Packaging contains, protects. preserves,transports, informs, and sells. .

It is fully integrated into government, business,institutional, industry, and personal use.

The purposes of packaging and packagelabels

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Phy sical protection

Containment or agglomeration

Information transmission

Marketing

Securit y

Convenience

Packaging t y pes

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Primary packaging is the material that firstenvelops the product and holds it. This usually isthe smallest unit of distribution or use and is thepackage which is in direct contact with thecontents.

Secondary packaging is outside the primary packaging ± perhaps used to group primary packages together.

Tertiary packaging is used for bulk handling, warehouse storage and transport shipping. Themost common form is a palletized unit load thatpacks tightly into containers.

Packaging Strategies or Techniques

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Discount pack

Coupon pack

Premium pack

Prime packing

Self-liquidator

Re-designing of the package

Odd size packaging

Packaging the product line Bundle packaging

Packaging in perishables

THANKS«««.

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UNIT-10

OBJECTIVES AND

METHODS OF PRICING


PR ICING

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Pricing is one of the four p's of the marketing mix. Theother three aspects are product, promotion, and place.

It is also a key variable in microeconomic priceallocation theory. Price is the only revenue generatingelement amongst the 4ps,the rest being cost centers.

Pricing is the manual or automatic process of applyingprices to purchase and sales orders, based on factorssuch as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailingon entry, shipment or invoice date, combination of multiple orders or lines, and many others.

Automated systems require more setup andmaintenance but may prevent pricing errors.

O bjectives of Pricing

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A well chosen price should do three things :

achieve the financial goals of the company (eg.: profitability)

fit the realities of the marketplace (will customers buy at thatprice?)

support a product's positioning and be consistent with the other variables in the marketing mix

price is influenced by the type of distribution channel used,the type of promotions used, and the quality of the product

price will usually need to be relatively high if manufacturing isexpensive, distribution is exclusive, and the product is supported by extensive advertising and promotional campaigns

a low price can be a viable substitute for product quality,effective promotions, or an energetic selling effort by distributors

Factors Influencing Price Determination

h ³ l ´ f h d i d

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The ³value´ of the product, as perceived by the buyer

Product costs

Competition

Company¶s policiesGovernment regulations

Other elements of marketing (i.e.

decisions, customer preferences,quality etc.)

Pricing Methods

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Cost based pricing Buyer based pricing

Competition based pricing

Note: refer book f or details.

THA NKS«««.

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UNIT-11

PRICE ADJUSTMENT

STRATEGIES


PRICING DECISIONS

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Pricing does not end once the basic price of aproduct has been arrived. In fact the job hasonly begun.

The company has to decide as to how it isgoing to recover the costs incurred intransporting the product from theproduction point to each one of the

customers.

WHY PRICE ADJUSTMENTS?

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Price adjustments may be brought about as partof a deliberate marketing strategy or due tofactors beyond the control of the company.

Competition

Increase/decrease in cost Repositioning of the product

Incentives to intermediaries

Trade- In (promotional activity) Product mix

DISCOUNT & ALLOWANCES

CASH DISCOUNT: It refers to the reduction in price when

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CASH DISCOUNT: It refers to the reduction in price when

bills are settled promptly i.e. payments are madeimmediately.

QUANTITY DISCOUNT: Discount given on the basis of thenumber of units of the products purchased. ³buy one getone free´, ³3 for 2´ & ³buy one & get 50% off on second´.

Cumulative & Non-Cumulative FUNCTIONAL OR TRADE DISCOUNT: discounts offered to

channel members for performing various functions likestoring, delivering, distributing etc.

SEASONAL DISCOUNT: Discount offered from list priceduring certain seasons, like during off-seasons, festivalseasons etc.

ALLOWANCES: Promotional allowances (display,demonstration, trade fair, exhibitions) & Trade-in

allowances.

PR ICE CHA NGES

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Product & price share a specialrelationship & often adjustments are madein the product to meet some problemscropping up in the pricing area. Some

product-price adjustment strategies are: Initiate price change: price cuts, price

increase, customer reactions to pricechanges, competitors reactions to pricechange.

R espond to price changes by competitors

PRICING A NEW PRODUCT

One of the greatest challenges a company may

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One of the greatest challenges a company may

face relate to the pricing strategy it should adoptwhen it introduces a ³new product´ into the market.Two approaches are available as regards pricing anew product:

Market-skimming pricing strategy: Setting highprices for the product initially is referred as market-skimming pricing strategy. Skimming meanscreamy segments of the market, generate as muchrevenue as possible & then, as competitiondevelops, bring out lower priced versions of theproduct to draw in new segments.

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PRODUCT-MIX PRICING STRATEGIES

It is not often that a company manufactures only

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It is not often that a company manufactures only

one product & hence has to formulate pricingstrategies taking into account only one set of relevant factors. In a product-mix pricing strategy,the firm has to look for a set of prices thatmaximizes the profits on the total product mix.

Product-line pricing: product line means differentversions of the same product such as differentcapacities of refrigerators, various models of carsetc.

Optional-product pricing: in this buyer is giventhe option to buy accessory products along withthe main product. For eg: TV stand, TV cover withtelevision set.

Captive Product pricing: There are certain products

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Captive-Product pricing: There are certain products,

which cannot be used without certain other products.Examples of such products are safety razor with razor

blades & shaving cream.

By-product pricing: In a number of industries,

production of main products throws up by-productswhich also find usage. For eg: number of by-products

emerge in petroleum refining.

Product-bundle pricing: Under this strategy, sellers

can combine a number of their products & offer thebundle at attractive price. for eg: like in festive

seasons.

Different prices to different customers

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Fixed Price

Flexible Price

Unit pricingTHANK S««««.

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UNIT-12

REGULATION OF

PRICES


INTRODUCTION

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While designing pricing strategies it is important for you tokeep in mind the legislative provisions regarding price.

Regulation of prices is considered as one of the important

means of achieving the socio-economic goals in many

countries.

Short supply of goods & services, unreasonable level of prices, unfair trade practices, black marketing, low levels of

income of a large number of people etc. requires number

of legislations seek to regulate pricing policies & practices.

Which includes ³Monopolies and Restrictive TradePractices Act, 1969´. Etc.

Regulation of Prices under the MRP Act

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The practices regulated under this Act are: Resale price maintenance

Price discrimination

Collective price fixing Predatory pricing

Bargain sale &

Deceptive pricing

Charging of unreasonably high prices.

Regulation of pricing under the Consumer

Protection Act

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The Consumer Protection Act, 1986

includes two types of pricing practices:

Excessive Pricing

Bargain and deceptive Pricing

Regulation Of Pricing Under other Acts

Some other legislations which seek regulation

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Some other legislations which seek regulation

of pricing policies & practices in India include: The Essential Commodities Act, 1955

The Drugs (control) Act, 1950

The Industries (development & regulation) Act, 1951

The Standard of weights & measures(packaged commodities) rules, 1977

Refer book for details.

THANKS««««««.

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UNIT-13DISTRIBUTION

CHANNELS

INTRODUCTION

Chain of intermediaries each passing the product down the

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Chain of intermediaries,each passing the product down the

chain to the next organization, before it finally reaches theconsumer or end-user.This process is known as the'distribution chain' or the 'channel.' Each of the elements inthese chains will have their own specific needs, which theproducer must take into account, along with those of the all-important end-user.

Distribution channels may not be restricted to physicalproducts alone. They may be just as important for moving aservice from producer to consumer in certain sectors, since

both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, touristboards, centralized reservation systems, etc.

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FUNCTIONS

Information: Gathering and distributing market research and

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Information: Gathering and distributing market research and

intelligence - important for marketing planning Promotion: Developing and spreading communications about

offers

Contact: Finding and communicating with prospective buyers

Matching: Adjusting the offer to fit a buyer's needs, includinggrading, assembling and packaging

Negotiation: Reaching agreement on price and other terms of the offer

Physical distribution: Transporting and storing goods

Financing: Acquiring and using funds to cover the costs of thedistribution channel

Risk taking: Assuming some commercial risks by operatingthe channel (e.g. holding stock)

DISTRIBUTION CHANNELS USED

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Marketing Channels for Consumers &

Industrial Products

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Factors influencing the choice of channel

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Market Considerations

Product Considerations

Middlemen Considerations Company Considerations

Channel Design Decisions

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Analyze Customers¶ desired service outputlevels

Establish Objectives and Constraints

Identify Major Channel Alternatives Determine Terms & Responsibilities of

Channel Members

Evaluate the major alternatives

Channel Management

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Selecting Channel Members Training Channel Members

Motivating Channel Members

Evaluating channel members Modifying Channel arrangements

Channel Conflicts

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Vertical Channel Conflict

Horizontal Channel Conflicts

Multi-channel conflicts

Causes of Channel Conflict

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Conflict between the nationalaccounts managers and the field¶s

sales force

Conflict between the field sales forceand the telemarketers

Conflict between the field sales force

and the dealers

Managing Channel Conflict

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Diplomacy

Mediation

Arbitration

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UNIT-14

MARKETING

INTERMEDIARIES

MIDDLEMEN

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It refer to the business organizations whichare the link between producers and

consumers of goods, and refer services in

connection with the purchase and/or sale

of products as they move from producer tothe consumers.They undertake all the

channel functions such as assembling,

grading, packaging, storing, financing,risk-bearing etc.

Role of Middlemen

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Role of Middlemen

Creation of utilities

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Creation of utilities

Economy in effort

Market Coverage

Provide local convenience to consumers

Provide field stocks

Financing

Servicing

Acting as Channels of Communication Help in promotion

Marketing Intermediary

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A business firm that operates between producers and consumers or business

users, also called a middleman.

May be a wholesaler, retailer, or

facilitating intermediary.

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Activities involved in sellinggoods and services toultimate consumers

Retailing

© PhotoDisc

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Activities involved in sellinggoods and services to ultimateconsumers

Wholesaler

Retailing

An intermediary that handles

the redistributes of goods toretailers, other distributors,

and sometimes end

consumers

© PhotoDisc

Activities involved in sellinggoods and services toultimate consumers

Retailing

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ultimate consumers

Wholesaler An intermediary that takes title

to the goods it handles and

redistributes them to retailers,

other distributors, and

sometimes end consumers

Direct

Marketing A distribution channelconsisting of direct

communication to a consumer

or business recipient

Types of Middlemen

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Types of Wholesalers

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Retailers

Retailing consists of the sale of goods or

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Retailing consists of the sale of goods or merchandise from a very fixed location, such as adepartment store, boutique or kiosk, or by mail, insmall or individual lots for direct consumption bythe purchaser. Retailing may include subordinated

services, such as delivery. Purchasers may beindividuals or businesses. In commerce, a "retailer"buys goods or products in large quantities frommanufacturers or importers, either directly or

through a wholesaler, and then sells smaller quantities to the end-user. Retail establishmentsare often called shops or stores. Retailers are atthe end of the supply chain.

Functions of Retailers

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Estimating the demand Procurement of goods

Transportation

Storing goods Grading and packaging

Risk-bearing

Selling

Classification of Retailers

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1) Itinerant Retailers Hawkers or Peddlers

Pavement Traders

Market Traders

2) Small-Scale Retail shops

Stalls on streets

General Merchandise shops Specialty Shops

Large Scale Retail Shops

Departmental Stores

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Departmental Stores

Super-Market

Multiple shops or chain stores

Mail order house

Consumer co-operative stores

Hire purchase traders

Discount houses

Super bazaars Automatic Vending machines

Forms of Ownership

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Independent Retailer

Retail Chain

Retail Franchising

Cooperatives

Non Store Retailing

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In home retailing Telesales/Telephone retailing

Catalog Retailing

Direct response retailing Automatic Vending

Electronic retailing/E-tailing


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Trends in Wholesalingand

Retailing

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UNIT-15

MARKETING

LOGISTICS

Marketing Logistics

Marketing Logistics has been described by

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Marketing Logistics has been described byPhilip Kotler as ³planning, implementingand controlling the physical flows of materials, final goods and related

information from point of origin to point of consumption to meet customer¶srequirements at a profit´. In short, itinvolves getting the right product in right

quantity to the right customer in the rightplace at the right time.

LOGISTICS describes the entire process of

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p

moving raw materials and component parts into a

firm, moving in-process inventory through the

firm, and moving finished goods out of the firm.

SUPPLY CHAIN MANAGEMENT or logisticsmanagement,involves planning, implementation

and controlling a chain of organizational

relationships to assure the efficient low of both

inbound materials and outbound finishedproducts.

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Supply Chain Management, thus,includes two aspects:

1) Inbound Logistics/ Production

Logistics2) Outbound Logistics/ Marketing

Logistics

Elements of Marketing Logistics

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Transportation Inventory Maintenance

Order Processing

Acquisition Protective Packaging

Warehousing

Materials Handling Information Maintenance

Objectives of Marketing Logistics

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Improving Customer Service Reduce Distribution Costs

Generating Additional Sale

Creating Time and place utilities Price Stabilization

Marketing Logistics Tasks

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Components of Marketing Logistics Tasks: Order Processing

Warehousing

Inventory Control

Transportation

Information Monitoring

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Marketing Logistics Approaches

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Total Cost Approach: Optimization of theoverall cost-customer service relationship

of the entire physical distribution system.

Total Systems Approach: Looking at and

managing physical distribution activity as

an integrated exercise where decisions in

respect of different components are taken

not in isolation one another but as awhole.

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UNIT-16

MARKETING

COMMUNICATION


MARKETING COMMUNICATION

It is the process of systematic and scientific way of

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disseminating the relevant marketing information by acompany to its target market and other publics by using amix of media.

«..is a systematic relationship between a businessand its market in which the marketer assembles a

wide variety of ideas, designs, messages, media,forms and colors, both to communicate ideas to,and to stimulate a particular perception of productsand services by individual people who have beenaggregated into a target market.

Functions Of Marketing Communication

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Providing Information and persuasion. Providing information about a new

brand or brand extension

Building and maintaining Brand loyalty

among consumers

Communication Process

The communication process is the guide toward realizing

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effective communication. It is through the communicationprocess that the sharing of a common meaning betweenthe sender and the receiver takes place. Individuals thatfollow the communication process will have theopportunity to become more productive in every aspect of

their profession. Effective communication leads tounderstanding.

The communication process is made up of four keycomponents. Those components include encoding,medium of transmission, decoding, and feedback. Thereare also two other factors in the process, and those twofactors are present in the form of the sender and thereceiver. The communication process begins with thesender and ends with the receiver.

Fields of Experience

The Communications Process

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Response Feedback Loop

Channel

ME SS AGE Decoding Receiver /

AudienceS ource / S ender

Encoding

NoiseNoise

T he E l ements of T he E l ements of

Communi cationCommuni cation

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Messa ge Messa ge

&&Channel Channel

Receivers/

Decoders

Noise

Context

Feedback Feedback

F rame of

Reference

Feed forward Feed forward F rames of

Reference

Sender/

Encoder

Six Basic Steps or Elements of

Communication Process

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1) Develop the idea ± is the messageworthwhile?

2) Encode the message ± writing is different

from speaking

3) Transmit ± most appropriate channels4) Receive the message ± transfer of initiative

5) Decode the message ± interpretation

6) Feedback ± ³you said«´

S d if i h di

Ste s in Devel in Effective

mm nicati n

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© ri t I r

Step 1. Identifying the Target Audience

Step 2. Determining the Communication Objectives

Buyer Readiness Stages

Purchase

Conviction

Preference

Liking

Knowledge

Awareness

S 3 i i


mm nicati n

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© ri t I r

Step 3. Designing a Message

Message Content Rational Appeals

Emotional Appeals

Moral Appeals

Message Structure Draw Conclusions

Argument Type

Argument Order

Message Format Headline, Illustration,

Copy, & Color

Body Language


mm nicati n

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© ri t I r

Step 4. Select the Communication Channels

Personal Communication Channels

Face to Face, Telephone, Presentation

Non Personal Communication Channels

Print, Broadcast and Display Media

Step 5. Selecting the Message Source

Step 6. Measure the Communications Results

Effective Marketing Communication

In developing effective marketing communication, following

t h ld b t k

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steps should be taken:1.Identifying the target audience characteristics

2.Determine the response sought or the Communicationobjective

3.Designing the effective message: it includes

a) Message content (what to say?)

b) Message structure (how to say it logically?)

c) Message format (how to say it symbolically?)

d) Message source (who should say it?)

4.Selecting the Communication channel:

Ad t h l i it l l

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Advocate channel: in it company salespeoplecontacting buyers in the target market.

Expert channel: it consist of independentexperts making statements to target buyers.

Social channel: consists of neighbors, friends,family members etc. talking to target buyers.³Word-of-mouth´.

5. Measuring the Communication results

Appeal by Marketers

Marketers use 3 basic types of appeals in their marketing

i ti

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communication:

Rational appeals- show that the product will deliver theclaimed benefits.

Emotional appeals- attempts to stir up either negative or

positive emotions that may motivate the target audienceto purchase the product or brand of the company.

Moral Appeals- aim to give the audience a sense of whatis right and good. Like related to environment, familyplanning etc.

PROMOTION MIX

Promotion Mix is careful blending of total

f ti t l il bl t th

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array of promotion tools available to thecommunicator whose major role is persuasive

communication.

Specific combination of promotional methods

such as print or broadcast advertising , direct

marketing , personal selling , point of sale

display , merchandising , etc., used for one

product or a family of products .

Factors in Setting Promotion Mix

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© ri t I r

Strategy that Calls for

Spending A Lot on Advertising and Consumer Promotion to

Build Up ( Pull )

Consumer Demand.

Strategy Selected Depends

on:

Type of Product- Market &

Product Life-Cycle

Stage

Strategy that Calls for Using

the Salesforce and Trade

Promotion to Push the

Product Through the Channels.

There are four main aspects of a promotional mix (or communication mix). These are:

Ad ertising An paid presentation and promotion of

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Advertising- Any paid presentation and promotion of ideas, goods, or services by an identified sponsor.Examples: Print ads, radio, television, billboard, directmail, brochures and catalogs, signs, in-store displays,posters, motion pictures, Web pages, banner ads, andemails.

Personal selling - A process of helping and persuadingone or more prospects to purchase a good or service or to act on any idea through the use of an oralpresentation. Examples: Sales presentations, sales

meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing.Can be face-to-face or via telephone.

Sales promotion- Incentives designed to stimulate the

purchase or sale of a product, usually in the short term.

Examples: Coupons, sweepstakes, contests, product

samples rebates tie ins self liquidating premiums

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samples, rebates, tie-ins, self-liquidating premiums,trade shows, trade-ins, and exhibitions.

Public relations - Non-paid non-personal stimulation of

demand for a product, service, or business unit by

planting significant news about it or a favorablepresentation of it in the media. Examples: Newspaper

and magazine articles/reports, TVs and radio

presentations, charitable contributions, speeches, issue

advertising, and seminars. Sponsorship is sometimes added as a fifth aspect.

Integrated Marketing Communication

(IMC)

The process of using promotional tools in a unified

way so that a synergistic communication effect is

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way so that a synergistic communication effect iscreated.

Integrated Marketing Communications (IMC),

according to The American Marketing Association,is ³a planning process designed to assure that all

brand contacts received by a customer or prospect

for a product, service, or organization are relevant

to that person and consistent over time.´

Integrated Marketing Communications

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Personal selling

Public relations

Direct marketing

Sales promotion

Advertising

One of the Hardest Marketing Decisions Facing a C i H M h S d P i

Setting the Total Promotion Budget

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Affordable

Based on What the Company Can Afford

Objective-and-Task

Based on Determining

Objectives & Tasks, Then Estimating Costs

Percentage of Sales

Based on a Certain Percentage of Current or Forecasted Sales

Competitive-Parity

Based on the Competitors

Promotion Budget

Company is How Much to Spend on Promotion.

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UNIT-17

PERSONAL SELLING

& SALES PROMOTION


Personal Selling ± Defined

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Personal selling refers to personal

communication with a an audience

through paid personnel of an

organization or its agents in

such a way that the audience perceives the communicator¶s

organization as being the source

of the message.

Evolution of Personal Selling

P ddl lli d

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Industrial

R evolution

Post-Industrial

R evolution

War and

Depression

Modern

Era

1800 1800 ss 1900 1900 ss 2 000 s2 000 s

Selling function

became more

structured

Peddlers selling door

to door . . . served as

intermediaries

Business organizationsemployed salespeople

Selling functionbecame more

professional

As we begin the 21st century, selling continues to develop,

becoming more professional and more relational

Contributions of Personal Selling:

Salespeople and Society

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Salespeople help stimulate theeconomy

Salespeople help with the diffusion of innovation

Contributions of Personal

Selling: Salespeople and the

Employing Firm

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Salespeople generate

revenue

Salespeople provide

market research andcustomer feedback

Salespeople become future

leaders in the organization

Contributions of Personal Selling:

Salespeople and the Customer

Salespeople provide solutions

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Salespeople provide solutions

to problems

Salespeople provide expertise

and serve as information

resources Salespeople serve as

advocates for the customer

when dealing with the selling

organization

Transaction-Focused vs.

Relationship Focused

Transaction Relationship

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Focused

Transaction-

Focused Focused

R elationship-

Focused S hort term thinking

Making the sale has

priority over most

other considerations

I nteraction between

buyer and seller is

competitive

S alesperson is self-

interest oriented

Long term thinking

Developing the

relationship takes

priority over getting the sale

I nteraction between

buyer and seller is

collaborative.

S alesperson iscustomer-oriented

Classification of

Personal Selling Approaches

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Stimulus Response Selling

Mental States Selling

Need Satisfaction Selling

Problem Solving Selling

Stimulus Response Selling

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S alesperson

Provides

S timuli

Buyer

Responses

S ought

Continue

Process until Purchase

Decision

Mental States Selling

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Attention I nterest Conviction Desire Action

Need Satisfaction Selling

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Uncover and

ConfirmBuyer Needs

Present

Offering toS atisfy

Buyer Needs

Continue

S elling until Purchase

Decision

Problem Solving Selling

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Define

Problem

Generate

AlternativeS olutions

Continue

S elling

until Purchase

Decision

Evaluate

AlternativeS olutions

Consultative Selling

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Long Long- -term term

Ally Ally

Long Long- -term term

Ally Ally

The process of helping

customers reach their

strategic goals by using the products, service,

and expertise of the

selling organization.

S trategic S trategic Orchestrator Orchestrator S trategic S trategic Orchestrator Orchestrator

Business Business

Consultant Consultant

Business Business

Consultant Consultant

The Sales Process: An

Overview

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Developing

Customer Relationships

I nitiating


Enhancing


S elling

Foundations

S elling

S trategy

e Sales r cess: Sellin

F ndati ns

I n order to be successful in today¶s global

business environment, salespeople must have a

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© ri t I r

business environment, salespeople must have asolid relationship building foundation. They

must:

Possess Excellent Communication S killsPossess Excellent Communication S kills

Understand Buyer Behavior Understand Buyer Behavior

Behave Ethically Behave Ethically

Be Trustworthy Be Trustworthy

The Sales Process:Selling Strategy

I n order to be successful in today¶s global

business environment salespeople must also

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business environment, salespeople must also

think and act strategically. The must develop

strategies for:

Their S ales Territories

EachS

ales Call

Each Customer

Each strategy is

related to the other

Why?

I t l

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Internal

External

Internal reasons

Top management is more conducive

to spending on promotions

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to spending on promotions

Line managers under greater pressure

to achieve targets

Justification of expenditure is easy

External reasons

Increase in number of brands

Consumer is more price savvy

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Consumer is more price savvy

Greater pressure from trade to liquidate

stocks

Add effectiveness declining owing to

rising costs, media clutter and legal

constraints

SP is a push strategy

Since it is at the last point where the

consumer is often at the point of

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consumer is often at the point of

buying, the additional incentive makes

a last ditch effort to convert the

customer on to the incentivised brand

SP is of two types

Trade

Consumer

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Consumer

Trade promotion

Liquidating heavy inventories

Persuade retailers to carry stock carry

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Persuade retailers to carry stock, carry

more than usual stock, promote brand

franchise

Consumer promotion

Stimulate purchase

Induce trial

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Induce trial

Create new users

Increase repurchase from occasional

customers

Reward loyal customers

Forms of trade promotion

Bulk discounts

Free materials

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Free materials

Display windows

Shelf hiring

Lucky draws µMystery¶ customer

Redistribution incentives

Shop salesmen incentives

Forms of consumer promotion

Free samples

Free gifts

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Free gifts

Coupons

In-packs

Price packs Price-offs

Sweepstakes (kind of lottery or draw)

Bundling offers

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The more the product¶s quality and its

advertising persuasiveness fail to meet

competition, the greater is the need for promotion to improve the price ± value

relationship

Promotion at different stages of the PLC

Introduction ± wise to use heavy promotion to

induce trials and promote brand franchiseG th ti h ld b li it d if

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p Growth ± promotion should be limited ,if any

Maturity ± Higher promotions required since thebrand is under attack from competitors or product quality or advertising effectiveness istapering off

Decline ± Heavy promotions. Used only to retaina set of loyal customers. Prior to withdrawal of the product, it could be used as a one time stock

clearance from the trade

Essential elements for an effective SP

programme

Significant value before promotion is effective

Promotions must be part of an overall plan

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p p

Every brand must have a promotion objective and astrategy statement

A written tactical plan ± time frame, costs, evaluation

yardsticks Factual knowledge must be gathered to plan

Specialized professional skill and knowledge must beapplied to every promotion operations

Final considerations

Don¶t promote if the product is not good

Promotions rarely stop a declining sales curve It is very easy to lose the promotional gains made if

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y p g It is very easy to lose the promotional gains made if your promotion has not been effective in retaining newcustomers. So the product has to speak for itself.

The objective of the promotion is to wean away users

from competition and create new users. Excessive promotions lead to diminishing returns and

may devalue the brand

Cont¶d

Promotions may be used in conjunction with advertising

and other marketing communication tools It should be novel and attractive

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g It should be novel and attractive

Ensure supply lines are good and adequate stock isavailable right through the promotion

Cater for contingencies. Have escape routes built intothe plan

Trade has to be handled tactfully

Reimburse incentives/ rewards/ gifts promptly

Must be within the legal boundaries

UNIT 18

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UNIT-18

ADVERTISING

AND PUBLICITY

OBJECTIVES OF

ADVERTISING

1. Building awareness

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g

2. Creating favorable attitude

(persuasion)

3. Maintenance of loyalty(reinforcement)

AIDA MODEL

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Attention

Interest

Desire Action

AIDA is an acronym used in marketing that describes acommon list of events that are very often undergone

when a person is selling a product or service: A - Attention (Awareness): attract the attention of the

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A - Attention (Awareness): attract the attention of thecustomer.

I - Interest: raise customer interest by demonstratingfeatures, advantages, and benefits.

D - Desire: convince customers that they want and desirethe product or service and that it will satisfy their needs.

A - Action: lead customers towards taking action and/or purchasing.

Nowadays some have added another letter to form

AIDA(S): S - Satisfaction - satisfy the customer so they become arepeat customer and give referrals to a product.

Lavidge & Steiner Model

This model give importance to cognitive

evaluations. It take competition into account.Steps of the model:

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Steps of the model:

Awareness

Knowledge

Liking Preference

Conviction

Purchase

Innovation & Adoption Model

This model has relevance to new product

introductions and useful for non-commercialservices or practices in developing countries

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services or practices in developing countries.

Stages of this model:

Awareness

Interest

Evaluation

Trial

Adoption

Limitations of Advertisement

Advertising is in bad taste

It insults consumer intelligence

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g It appeals mainly to emotions

It influence media

It is not productive

It increases cost

It leads to monopoly

It multiplies needs and wants

PUBLICITY

Information that attracts attention to acompany, product, person, or event Publicityis the deliberate attempt to manage the public's

ti f bj t Th bj t f bli it

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perception of a subject. The subjects of publicityinclude people (for example, politicians andperforming artists), goods and services,organizations of all kinds, and works of art or entertainment.

From a marketing perspective, publicity is onecomponent of promotion.

The advantages of publicity are low cost, and

credibility (particularly if the publicity is aired inbetween news stories like on evening TV newscasts)

Type of promotion that relies on public

relations effect of a news story carriedusually free by mass media The main

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usually free by mass media . The mainobjective of publicity is not salespromotion , but creation of an image

through editorial or 'independent source'commentary. While the publicist cancontrol the content of the story, he or shemay not have any control over itsplacement or inter pretation by the media .

Difference b/w Advertising & Publicity

Advertising you pay for, publicity you pray for.

That's because publicity has at least ten times thecredibility of advertising.

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credibility of advertising.

Advertising is a content you pay to present.Publicity refers to free content about you that

appears in the media - what others say aboutyou

Advertising is something you get by paying for it. Publicity however, is something you hope you'llget.

Please refer table 18.1 on page 72 for details.

UNIT-19

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UNIT-19

EMERGING ISSUES

IN MARKETING

RELATIONSHIP MARKETING

Relationship marketing is a form of marketing

developed from direct response marketingcampaigns conducted in the 1960's and 1980's

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which emphasizes customer retention and continualsatisfaction rather than individual transactions andper-case customer resolution.

Relationship marketing differs from other forms of marketing in that it targets an audience with moredirectly suited information on products or serviceswhich suit retained customer's interests, as opposed

to direct or "Intrusion" marketing, which focusesupon acquisition of new clients by targeting majoritydemographics based upon prospective client lists.

According to Leonard Berry , relationship marketing can be

applied: when there are alternatives to choose from; when

the customer makes the selection decision; and when

h i i d i di d i f h d

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there is an ongoing and periodic desire for the product or

service.

Relationship marketing has been strongly influenced by

reengineering. According to reengineering theory,organizations should be structured according to complete

tasks and processes rather than functions. That is, cross-

functional teams should be responsible for a whole

process, from beginning to end, rather than having the

work go from one functional department to another.

ELEMENTS OF RELATIONSHIP

MARKETING

The three key elements of Relationship

management are:Id tif i d b ildi k ti

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Identifying and building marketingdatabases of potential and presentcustomers.

Deliver differentiated messages to targetedhouseholds.

Track the relationship to make media

expenditures more effective and moremeasurable.

MARKETING OF SERVICES

Services marketing is marketing based onrelationship and value. It may be used to market a

service or a product. Marketing a service base business is different from

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Marketing a service-base business is different frommarketing a product-base business.

There are several major differences, including:

The buyer purchases are intangible The service may be based on the reputation of asingle person

It's more difficult to compare the quality of similar services

The buyer cannot return the service .

MARKETING OF SERVICES

Service Marketing mix adds 3 more p's, i.e. people, physical

evidence, process service and follow-through are keys to asuccessful venture The major difference in the education of

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successful venture. The major difference in the education of services marketing versus regular marketing is that insteadof the traditional "4 P's," Product, Price, Place, Promotion,there are three additional "P's" consisting of People,

Physical evidence, and Process. Service marketing alsoincludes the service scope referring to but not limited to theaesthetic appearance of the business from the outside, theinside, and the general appearance of the employeesthemselves. Service Marketing has been relatively gaining

ground in the overall spectrum of educational marketing asdeveloped economies move farther away from industrialimportance to service oriented economies

INTERNET MARKETING

Internet marketing, also referred to as

web marketing, online marketing,

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Internet advertising, or e-Marketing, is

the marketing of products or services over

the Internet. When applied to the subset of website-based advertisement placements,

Internet marketing is commonly referred to

as Web advertising

The Internet has brought many unique benefits to

marketing, one of which being lower costs for thedistribution of information and media to a global

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gaudience. The interactive nature of Internetmarketing, both in terms of providing instantresponse and eliciting responses, is a unique

quality of the medium. Internet marketing issometimes considered to have a broader scopebecause it refers to digital media such as theInternet, e-mail, and wireless media; however,

Internet marketing also includes management of digital customer data and electronic customer relationship management (ECRM) systems.

ADVANTAGES

Internet marketing is relatively inexpensive when

compared to the ratio of cost against the reach of the target audience

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Internet marketers also have the advantage of measuring statistics easily and inexpensively.Nearly all aspects of an Internet marketing

campaign can be traced, measured, and tested. exposure, response, and overall efficiency of

Internet media are easier to track than traditionaloff-line media

Internet marketing can offer a greater sense of accountability for advertisers. Marketers and their clients are becoming aware of the need tomeasure the collaborative effects of marketing

LIMITATIONS

Internet marketing requires customers to use newer

technologies rather than traditional media. Low-speed Internet connections are another barrier: If

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Low speed Internet connections are another barrier: If companies build large or overly-complicated websites,individuals connected to the Internet via dial-upconnections or mobile devices may experience

significant delays in content delivery. From the buyer's perspective, the inability of shoppers totouch, smell, taste or "try on" tangible goods beforemaking an online purchase can be limiting.

insufficient ability to measure impact, lack of internalcapability, and difficulty convincing senior management.

GREEN MARKETING

According to the American Marketing Association, green

marketing is the marketing of products that are presumedto be environmentally safe Thus green marketing

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to be environmentally safe. Thus green marketing

incorporates a broad range of activities, including product

modification, changes to the production process,

packaging changes, as well as modifying advertising.Environmental issues should be balanced with primary

customer needs.

Other similar terms used are Environmental Marketing

and Ecological Marketing. Examples: Herbal

Products,CNG in Delhi, CFL etc.

µ5¶ Possible reasons for Green Marketing

O pportunities: All types of consumers, either individual or industrialare becoming more concerned & aware about the natural

environment. Social responsibility : Firms are now realized that they are members

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p y yof the wider community & therefore must behave in anenvironmentally responsible fashion.

Governmental Pressure: Government regulations relating toenvironmental marketing are designed to protect consumers toreduce production of harmful goods r by-products.

Competitive pressure: To maintain competitive position. In manycases Firms observe competitors promoting their environmentalbehaviors & attempt to emulate this behavior.

Cost & Profit issues: Cost related issues are really complex b¶coz

disposing of environmentally harmful by-products becomingincreasingly costly & difficult.

SOCIAL MARKETING

Social marketing is the systematic application of

marketing along with other concepts and techniques toachieve specific behavioral goals for a social good. Social

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marketing can be applied to promote, for example, meritgoods, make the society avoid demerit goods and thus topromote that considers society's well being as a whole.

This may include asking people not to smoke in publicareas, for example, ask them to use seat belts, promptingto make them follow speed limits.

The primary aim of 'social marketing' is 'social good',while in 'commercial marketing' the aim is primarily

'financial'. This does not mean that commercial marketerscan not contribute to achievement of social good.

Social marketers, dealing with goals such as reducing cigarette

smoking or encouraging condom use, have more difficult goals:

to make potentially difficult and long-term behavioral change in

target populations

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target populations.

It is sometimes felt that social marketing is restricted to a

particular spectrum of client -- the non-profit organization, the

health services group, the government agency. Kotler and Roberto introduced the subject by writing, ³A social

change campaign is an organized effort conducted by one group

(the change agent) which attempts to persuade others (the

target adopters) to accept, modify, or abandon certain ideas,

attitudes, practices or behavior."

Components of Social Marketing

A consumer orientation to realize organizational (social) goals

An emphasis on the voluntary exchanges of goods and servicesbetween providers and consumers

Research in audience analysis and segmentation strategies

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Research in audience analysis and segmentation strategies

The use of formative research in product and message design and theprotesting of these materials

An analysis of distribution (or communication) channels

Use of the marketing mix - utilizing and blending product, price, placeand promotion characteristics in intervention planning andimplementation

A process tracking system with both integrative and control functions

A management process that involves problem analysis, planning,

implementation and feedback functions.

Additional µ3¶ P¶s of Marketing

1. Public: it involves internal & external groups. Internal

means who are involved in the approval or implementation of the program & external include the

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implementation of the program & external include the

target audiences etc.

2. Partnership: There is a need to team up with other

organizations in the community to really be effective. So,we need to figure out organizations with similar goals &

ways to work together with them.

3. Policy: Policy change is needed to motivate individual

behavior change for the long run.

Rural Marketing

A rural market will represent a community in a rural area

with a population of 2500 to 30000. Rural marketing involves delivering manufactured or processed inputs or services to rural producers or

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processed inputs or services to rural producers or consumers.

Also rural market is getting an importance because of thesaturation of the urban market. As due to the competitionin the urban market, the market is more or so saturatedas most of the capacity of the purchasers have beentargeted by the marketers. So the marketers are lookingfor extending their product categories to an unexploredmarket i.e. the rural market.

Strategies of Rural Market

Client and Location specific promotion involves a strategydesigned to be suitable to the location and the client.

Joint or co-operative promotion strategy involvesparticipation between the marketing agencies and the client.

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'Bundling of inputs' denote a marketing strategy, in whichseveral related items are sold to the target client, includingarrangements of credit, after-sale service, and so on.

Management of demand involve continuous marketresearch of buyer¶s needs and problems at various levels sothat continuous improvements and innovations can beundertaken for a sustainable market performance.

Developmental marketing refer to taking up marketingprogrammes keeping the development objective in mind and

using various managerial and other inputs of marketing toachieve these objectives.

Media, both traditional as well as the modern media, is usedas a marketing strategy.

Unique Selling Propositions (USP) involve presenting a theme with theproduct to attract the client to buy that particular product. For examples,

some of famous Indian Farm equipment manufactures have coinedcatchy themes, which they display along with the products, to attract thetarget client, that is the farmers. English version of some of such themes

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target client, that is the farmers. English version of some of such themeswould read like:

The heartbeats of rural India

With new technique for a life time of company

For the sake of progress and prosperity Extension Services denote, in short, a system of attending to the

missing links and providing the required know-how.

Ethics in Business. form, as usual, an important plank for rural marketsand rural marketing.

Partnership for sustainability involve laying and building a foundation for

continuous and long lasting relationship.

Challenges: There are significant challenges to the entire processthe most important being the capacity building of the rural

entrepreneurs. For decades, the entrepreneurs associated withvery conventional/traditional knowledge of business, humiliationwith government so they are likely to look at these initiatives with

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with government, so they are likely to look at these initiatives withskepticism. Only consistent performance can convince the skeptics.Therefore, the industries must play a catalytic role to cope with thischallenge and should also train the entrepreneurs to develop their

managerial and IT skills. On the other hand, the products of theexisting and popular brand also stand as threat to the ruralproducts. These global giants (brand) may try to suppress the ruralproducts in the markets with its communication hype. Therefore,developing alternative and additional market linkages for these

products is an absolute necessity. Moreover, the low volumes of rural products, high operating cots, high attrition, and absence of local know how and relationships may also create problem in theprocess. Henceforth, it is essential to make a way out to cope withthese odds.

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