mrkting mix

7/31/2019 mrkting mix

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MARKETING MANAGEMENT


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Topics

Introduction to Marketing concept, Evolution of Marketingand Customer orientation

Marketing Environment and Evaluation of Marketopportunities

Market Research & Marketing Information Systems

Demand forecasting and Market Potential analysis Consumer buying process & Organizational buying behavior

Pillars of Marketing- Target market positioning &Differentiation

Marketing Mix

Product Decisions- PLC

New product development process

Distribution decisions- Logistics & channel decisions

Promotion Decisions-IMC concept, communication tools

Personal selling & sales Management ricin decisions


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Marketing Concept

The Marketing concept arises out of the awareness that abusiness should start with the determination of consumerwants and end with the satisfaction of those wants. Theconcept puts the consumer at both the beginning and endof the business cycle. The marketing concept has 4 majordistinguishing features:

Consumer orientation: Emphasizes on the consumer and hisneed being the 1st distinguishing feature of the marketingconcept

Integrated management, with Marketing as the fulcrum:Integrated management means that all the differentfunctions of the business must be tightly integrated withone another, keeping marketing as the pivot

Consumer satisfaction:

Realization of all organizational goals including profits


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Selling ad Marketing

Selling

Selling starts with seller &is preoccupied all the timewith the needs of the seller

Emphasizes on saleablesurplus available with thecompany

Seeks to convert productsin to cash

Views business as goodsproducing process

Selling views the customeras the last link in the

business

Marketing

Marketing starts with thebuyer and focusesconstantly on the needs of

the buyer

Emphasizes onidentification of marketopportunity

Seeks to convert customerneeds in to products

Views business as acustomer satisfyingprocess

Marketing views thecustomer as the very


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Market environment

Besides the marketing mix variables, one has to tackleanother set of variables that lie outside the control of thefirm. These relate to the environment. Environmentalvariables are referred to as the non controllable variables ofmarketing while the marketing mix are referred to as thecontrollable variables of marketing.

Factors covered under Environment analysis:(Macroenvironment) a)Demographic envt b) Socio cultural envtc)Economic envt d)Political envt e)Natural envtf)Technology envt g)Legal envt h) Govt policies

Environment that is specific to the business: The market/the demand/ the consumer/ the industry/ the competition/govt policies specific to the business concerned


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Market Research & Marketing Information Systems(MIS)

MIS benefits the company in the following ways:

Provides valuable market intelligence

Helps quick spotting of changing trends

Helps tap opportunities and build defences against threats

Helps implement all marketing action programmes

Helps deliver customer oriented marketing offers- all Ps ofmarketing mix

Helps product innovations

Helps reduce product failure

Supports channel management, channel choice, channelmotivation and multi channel marketing

Supports sales promotion


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Steps involved in designing and developing an MIS

Defining information needs

Classifying information appropriately and identifyingwhether it is for planning, or implementation or controlpurposes

Evaluating the cost of collecting and processing theinformation and comparing cost v/s benefits

Identifying the sources of information

Designing the mechanisms & procedures for gathering,processing, storing and retrieval of information

Deciding the frequency and timing of collection & supply ofinformation

Processing, analyzing and interpreting the information anddisseminating it to the right persons at the right time

Monitoring, maintaining, reviewing and improving the

system


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Marketing Research

Marketing research is the systematic, objective andexhaustive search for the study of the facts relating to anyproblem in the field of marketing. It is the research on themanifold problems of marketing. Its purpose is to aiddecision making in marketing. It is the systematic gatheringand analysis of information. Marketing research jobs can beclassified in different ways such as:

Routine problem analysis and research on routine problems

Research on short term and long term problems

Classification based on the actual subject of the research


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Subjects of Research

Research on consumer

Research on Market and demand

Research on product or brand

Research on competition

Research on distribution Research on price

Research on advertising and promotion

Research on sales methods


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Steps involved in the Marketing research process

Defining the marketing problem and identifying the MRproblem involved

Specifying the information required

Developing the research design and research procedure

Gathering the data/ information Analyzing the information and interpreting it in terms of the

problems being tackled

Summarizing the findings

Preparing the research reports


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Demand forecasting and Market Potential analysis

Commonly used terms:

Market potential or industry potential

Company potential or sales potential

Market demand or Industry demand

Company demand or company sales possibilities Market forecast or Industry forecast

Company forecast or sales forecast


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Consumer buying behavior

Factors influencing buyer behavior:

Personal factors: Age, Education, Economic position, statusand self esteem

Cultural factors: Religion, language, up bringing etc

Psychological factors: Beliefs, attitudes, motivation,perception


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The Buying process

Problem or need recognition

Awareness

Evaluation or comprehension

Attitude or feelings towards the product

Legitimate the course of action Trial

Adoption of the product

Post purchase behavior


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STP

Benefits of segmentation to the marketer:

Facilitates proper choice of target market

Facilitates tapping of the market, adapting the product offerto the target

Makes the marketing effort more efficient and economic Helps to identify less satisfied segments and concentrate on

them

Benefits the customer as well


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Major bases for segmentation

Geographics

Demographics

Psychographics

Buyer behavior

Benefits Volume of purchase


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Marketing Mix

4 Ps of marketing: extension of the same

Environmental variables are referred to as the noncontrollable variables of marketing while the marketing mixvariables are referred to as the controllable variables ofmarketing


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PLC

Stages of PLC

Introduction or pioneering stage

Growth stage

Maturity stage

Decline stage


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BCG matrix: market growth rate / relative market share

High Low

High stars ?marks

Low Cash cows Dogs

GE d l k t tt ti / b i t th


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GE model: market attractiveness/ business strength

Strong bus. strength medium Weak bus. strength

High marketattractiveness

Strong: Invest to grow/concentrate efforts onmaintaining strengths

Medium: Challengefor leadership/reinforce vulnerableareas

Weak: specializearound limitedstrengths

medium Build selectively: Invest

heavily in attractivesegments/ build abilityto counter competition

Manage for

earnings: protectexisting program/concentrateinvestments whereprofitability is good

Limited expansion

or harvest: Look forways to expandwith out risk.Minimizeinvestment

Low marketattractiveness

Protect and refocus:manage for currentearnings/ concentrateon attractive segments

Manage forearnings: protectposition in mostprofitablesegments/ minimizeinvestment

Divest: Sell all timethat will maximizecash value/ cutfixed costs andavoid investment


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Product Decisions

New products are classified in to two groups:

New products arising out of technological innovations

New products arising out of market oriented modifications


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Stages in new product development

Generating new product ideas

Idea screening

Concept testing

Business/ market analysis

Actual product development Market test

Commercialization


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Factors responsible for success and failure ofproducts

Success rate in new products is correlated to the presenceof 3 critical factors:

A unique and superior product idea that yields a real benefitto the customer

Strong technical and production expertise A strong market orientation on the part of the company.


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Distribution decisions- Logistics and channeldecisions

Physical distribution is the process of delivering the productto the marketing channels and consumers. It encompassesthe various activities involved in the physical flow of theproduct from the product to the consumer.

The importance of physical distribution are:

Ensures the physical flow of the product from the producerto the consumer. Without this flow, marketing cannot takeplace.

Confers place and time utility on products

Helps build clientele Where production locations and markets are distanced,

physical distribution becomes all the more crucial

A promising area of cost of reduction


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Component functions of physical distribution

Planning the overall physical distribution system

In plant warehousing

Transportation

Receiving handling

Secondary transportation, secondary handling and subdistribution

Inventory management at each level in the chain

Order processing and execution

Accounting and record keeping

communication


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Steps involved in designing a physical distributionsystem

Articulating distribution objectives and specifying theminimum service level desired in product delivery

Finding out what the customers want in product delivery

Finding out what the competitors do

Keeping the cost of the system as low as possible, withoutsacrificing the guaranteed minimum service level

Keeping the system sufficiently flexible


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Managing the Distribution Function

Marketers realize that if they were to make thebrands available in the right size, at the right timeand at the right price, the Indian consumer can bemotivated to buy it and consume it..


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Role of Middlemen or Intermediaries

a) Provide information about the market to themanufacturer

b) Maintain price stability in the market

c) Promotion of the products in his territory

d) Financing by providing the necessary working capitalin the form of advance payments for goods and services

e) Middlemen also take the title of the goods andservices and trade in their own name


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Channel Level

Decisions that a firm must take regarding the number of

channel levels appropriate to serve a given market

From zero-directly from the manufacturer to the customer-

to as high as 4 to 5 levels involved in distribution.

Zero level in industrial product marketing, project

marketing


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Firm adopts a one channel level when:

a) Number of customers is high

b) Customers in specific geographical area

c) Order lot size not uniform d) Firm sells goods to wholesaler or a large dealer

2, 3 or even 4 levels in case of:

a) Consumer products

b) Customers spread across the country

c) Market is large


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Factors Influencing Distribution Decisions

Market Characteristics

Company Characteristics

Product Characteristics

Middlemen Characteristics

Intensity of Competition

Environmental Characteristics


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Terms and Responsibilities of Intermediaries

a) Price policy-the middlemen have to ensure that everyoneinvolved gets a fair and equitable deal

b) Payment terms-the manufacturing firm stipulates the

mode and terms of payment

c) Returns policy-this indicates the warranty that themanufacturer extends to the intermediary

d) Territorial rights-the territorial jurisdiction should be speltspelt out to avoid territory jumping

e) Mutual services and responsibilities-should be speltout,particularly in case of franchised and exclusive agencychannels


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Sales Promotion

Importance of sales promotion to a marketer isattributed to the following reasons:

Fast growing market

Increasing competition among brands

The maturing and standardization of products


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Factors Contributing to Growth of Sales Promotions:

(a) Growing consumerism in India and an upwardlymobile Indian market

(b) Heightened inter-firm rivalry within the industry

(c) Trades resistance to invest additional resources in the

product mix of different companies

(d) Fragmentation of viewers and readers arisingout of multiple television channels, newspapers andmagazines

(e) The mass media cost has been on the rise andmost companies find sales promotion as a more costeffective alternative

(f) With technologies and products getting standardized,differentiation between firms has got blunted and price

wars have now become a reality in most consumer goods


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Sales Promotion Helps

Helps in securing trial and defending shelf space againstcompetition;

(ii) Smoothens out the manufacturing capacities of firms insuch a way that the peaks and the valleys areminimized;

(iii) Provides opportunities to manufacturers to reach out tomarket segments with differing price sensitivity;

(iv) Adds excitement to the in-store merchandizing ofconsumer goods;

(v) Motivates trade to keep more and push more of thosebrands that are on promotion


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Personal selling and Sales Management

Personal Selling

In today's world marked by complex technologies, andmultiple choices, the customer is increasingly becomingdependent on the salesperson

The customer wants to be sure that he/she is getting valuefor his or her money

The salesperson provides competitive product information

to the customer, and also reassure the customer regardingprice and service


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Personality and Motivation Profile of anEffective Salesperson

The personality traits required by a good salesperson are:

Dominance-assures assertiveness

Achievers- Effective salesperson are high achievers

Affiliation-Effective salesperson show moderate affiliation

Creativity-Effective salespeople are creative people

Exhibitionism-Involves taking legitimate pride in

achievements and sharing experiences with others

Problem solving-Effective salespeople have been found

high on problem solving


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Role of Salesperson

Diagnostic-salesperson finds cause of a problem

Analyst-analyze customer needs and market trends

Information provider-Role of an intelligence agent

Strategist- Evolve a strategy to emerge as a marketleader

Tactician-Evolves tactics to win over the customer orenhance dealer satisfaction

Change agent-Introduces new product ideas andinfluences the life styles and consumption patterns


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Selling Theories

Stimulus Response Theory: some of the stimuli the

salesperson has control over are:

Self-physical appearance, mannerism, voice modulation,

interpersonal skills

Price concessions

Announcement of price changes

Preferential treatment to important buyers


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Product Oriented Selling:

It is the responsibility of the salesperson to make theprospect aware of:

(a) technological / scientific developments

(b) how these can be useful to him/her

(c) make the prospect aware of his/her needs


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Salesperson and Customer Perceptions in a TypicalSales Situation

Salesperson Objective &

Role

Objective Hook the customer Process Romanticize the customer Create high expectations Over promise Bulldoze objections if need be Throw weight, if required Quit, if going gets tough Pusher Result Sales order not necessarily with the

desired profit margin Post Sales Keep assuring customer Indifferent/ I dont care Justify delays

Customer Objectives &

Concern

Solution to my problem

Do you understand my needs ? Do you understand my budget

constraints ?

Can I trust you ? Will you deliver in time ? Will you stay with me in my hour of

need ? Evaluate

Waiting for order to be delivered

Expectant Follow up with salesperson Tension builds up

Frustration Given a choice I will never buy from

you


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Relationship Intensifier

Initiate contact with the customer

Know his business and background

Listen empathetically

Show appreciation

Involve customer in presentation Understand customers objection

respond immediately to service requests

Follow up on customers service needs with other

concerned individuals and departments in your company

Avoid throwing weight and jargons in your presentation Accept responsibility for failure

Plan for future


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Selling Process and Skills Required

The selling process is a five stage process:

1. Opening of a call-effective salesperson is sensitive to

verbal and non-verbal message which the prospect gives

2. Need exploration-this requires the use of probing andsensitivity skills

3. Presentation-should be meaningful and convincing

4. Managing objections-these should be perceived as

opportunities for creative thinking to nail competition

5. Closing the call-provide the prospect sufficient reason to

buy the product. The skills used here are explanatory and

probing


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Role of Integrated Marketing Communications

Marketing communications

are the voice of the brand and are a meansby which it can establish a dialogue and build

relationships with consumers. allow marketers to inform, persuade, incent,

and remind consumers directly or indirectly

can contribute to brand equity by establishingthe brand in memory and linking strong,favorable, and unique associations to it.


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Role of Integrated Marketing Communications (Cont.)

Consumers can be told or shown how and why a product isused, by what kind of person, and where and when;

Consumers can learn about who makes the product andwhat the company and brand stand for

Consumers be given an incentive or reward for trial or

usage Brands can be linked to other

People Places Events Brands Experiences Feelings Things


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Pricing decisions

Factors influencing pricing: (Internal factors)

Corporate and marketing objectives of the firm

The image sought by the firm thru pricing

The characteristics of the product

Price elasticity of demand of the product The stage of the product in the PLC

Use pattern and turnaround rate of the product

Costs of manufacturing and marketing

Extent of distinctiveness of the product and extent ofdifferentiation practiced

Composition of the product line of the firm


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External factors:

Market characteristics( demand, customer and competition)

Buyer behavior in respect of the product

Bargaining power of major customers

Bargaining power of major suppliers Competitors pricing policy

Govt controls and regulations on pricing

Other relevant legal aspects


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Objectives which Firms seek in pricing

Profit maximization in short term

Profit optimization in long term

A minimum ROI

A minimum return on sales turn over

achieving particular sales volume Achieving a particular market share

Deeper market penetration

Enter new markets

Keeping competition out or under check

Parity with competition

Providing commodities affordable by weaker sections


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Categories of pricing methods

Cost based pricing: under which one can have :a)Mark uppricing or cost plus pricing b)Target Rate of Return pricing

Demand based pricing: under which one can have: a) whatthe traffic can bear pricing b)Skimming pricing c)Penetration pricing

Competition oriented pricing

Value pricing

Tender pricing

Affordability based pricing

Differentiated pricing


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Documents

mrkting mix