Marketing Management

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Title: Marketing Management


1
MARKETING MANAGEMENT
  • Dr. ANANDA KUMAR
  • Professor
  • Department of Management Studies,
  • Christ College of Engg. Tech.,
  • Puducherry, India.
  • Mobile 91 99443 42433
  • E-mail searchanandu_at_gmail.com

2
MARKETING
  • flow of goods services from producers to
    customers.
  • consists of those activities involved in the
    flow of goods services from the point of
    production to the point of consumption.
  • finding out what people wants creating
    products, services or ideas that match those
    needs.

3
DEFINITION OF MARKETING
  • An American Marketing Association as defined,
    Marketing is the process of planning and
    executing the conception, pricing, promotion and
    distribution of ideas, goods and services to
    create exchanges that satisfy individual and
    organizational objectives.
  • Kotler has defined marketing as a social and
    managerial process by which individuals and
    groups obtain what they need and what through
    creating and exchanging products and value with
    others.

4
OBJECTIVES OF MARKETING
  1. To analyse marketing problems and suggest
    suitable solutions.
  2. To develop policies and their implementation for
    a good result.
  3. To derive intelligent appreciation of modern
    marketing practices.
  4. To develop successful distribution.
  5. To analyse existing marketing function and remove
    unnecessary procedures.

5
MARKETING FUNCTIONS
Marketing Functions
Functions of Exchange
Functions of Facilities
Functions of Physical Distribution
Buying
Assembling
Selling
Financing
Risk taking
After Sales Services
Transportation
Material Handling
Warehousing
Inventory
6
MARKET MARKETING
  • total demand of potential
    buyers
  • all activities aimed consumer satisfaction
  • place or area (covers exchange functions)
    where buying selling take place
  • other facilitating functions (financing, risk
    bearing, after sales services etc.)

7
SELLING MARKETING
  • Starting Focus
    Means Objectives
  • point
  • Selling
  • Concept
  • Market
  • -ing
  • Concept

Factory Product
Selling Profit
through
Promotion
Sale Volume
Target Customer
Integrated Profit
through market needs
marketing
customer


satisfaction
8
SELLING MARKETING
Sl. No SELLING MARKETING
1. Selling begins with the seller and the emphasis is on the product. Marketing starts with the consumer and the emphasis is on the needs of the customers.
2. Narrow in scope. Considers business as a consumer satisfying process.
3. Considers business as a goods producing process Considers business as a consumer satisfying process.
4. The product that is to be offered is determined by the seller. The product that is to be offered determined by the buyer.
5. Packaging is considered as a mere protection or a mere container for the goods. Packaging is designed to provide the maximum satisfaction and convenience to the customer.
9
Sl. No SELLING MARKETING
6 Price is determined on the basis of cost. Price is determined by the consumer.
7 Production is the central function and sales is a secondary function. Marketing is the central function. The whole concern is organized around the marketing function.
8 Internal, company orientation External, marketing orientation.

10
CONCEPTS OF MARKETING
  • The Exchange Concept
  • The Production Concept
  • The Product Concept
  • The Selling Concept
  • The Marketing Concept
  • The Societal Marketing Concept

11
Concepts of Philosophies Stage 1 Stage 2 Stage 3 Result of Stage 1-3 Profits
Production Concept Vague idea about customer wants Mass Production Mass Production Product availability at a low price Profit through mass standardization
Product Concept Vague idea about customer needs Superior product by R D Distribution without proper marketing mix Superior performance product availability Profit through marketing myopia
Selling Concept Vague idea about customer needs Mass production and distribution Maximum use of selling technique Product availability buyer inertia Profit through hard-sell
Marketing Concept Analyses target market Know what customer needs Integrated marketing Product as per customer requirements Profit through customer satisfaction
12
The Marketing Mix
13
The Marketing Mix
  • The tools available to a business to gain the
    reaction it is seeking from its target market in
    relation to its marketing objectives
  • 4Ps Product, Price, Place and Promotion

14
MARKETING MIX 4 PS
Product
Price
Marketing Mix
Place
Promotion
15
The Marketing Mix
16
The 4 Ps 4Cs
Marketing Mix
Convenience
Customer Solution
Customer Cost
Communication
17
PRODUCT
  • 1. Brand
  • 2. Style
  • 3. Color
  • 4. Design
  • 5. Product Line
  • 6. Package
  • 7. Warranty
  • 8. Service

18
PRICE
  • 1. Price Strategy
  • 2. Pricing Policy
  • 3. Basic Price
  • 4. Terms of Credit
  • 5. Discount
  • 6. Allowances

19
PLACE
  • 1) Distribution Channels
  • 1. Wholesalers
  • 2. Retailers
  • 3. Mercantile Agents
  • 2) Physical Distribution
  • 1. Transport
  • 2. Warehouse
  • 3. Inventory

20
PROMOTION
  • 1. Personal Selling
  • 2. Advertising
  • 3. Publicity
  • 4. Sales Promotion

21
OLD CONCEPT or PRODUCT ORIENTED CONCEPT
  • Marketing is the performance of business
    activities that direct the flow of goods and
    services from the producer to consumer or user.
  • - American Marketing Association
  • Marketing comprises both buying and selling
    activities.
  • - Prof. J.F. Pyle

22
OLD CONCEPTS OF MARKETING
Goods and Services
Sales
Profit through Sales
23
NEW or MODERN or CUSTOMER ORIENTED CONCEPT
  • Marketing is the delivery of standard of living
    to the society.
  • Prof. Paul Manure
  • Marketing is the process of discovering and
    translating consumer needs and wants into product
    and service specifications, creating demand for
    these products and services and then in turn
    expanding this.
  • - Prof. Malcolm, McNair

24
NEW CONCEPTS OF MARKETING
Discovery of Consumer Needs
Production of Goods Services
Creation of Demands
Sales
After Sales Service
Profit through Customer Satisfaction
25
MARKETING ENVIRONMENT

26
(A) Micro Environment
  • 1. Company
  • 2. Suppliers
  • 3. Marketing Intermediaries
  • 4. Customer Markets
  • 5. Competitors

27
1. Company
  • Interrelated groups
  • Company objectives, strategies policies
  • Marketing manager makes decisions within plans

28
2. Suppliers
  • Provide resources to produces goods services
  • Must watch supply availability
  • Supply storage or delay affects sales

29
3. Marketing Intermediaries
  • Middlemen (includes wholesalers retailers)
  • Selecting the right middlemen is difficult
  • Transportation
  • Market research
  • Financial intermediaries

30
4. Customer Market
  1. Consumer markets
  2. Business markets
  3. Reseller markets
  4. Government market
  5. International market

31
5. Competitors
  • Satisfy the needs wants better than competitors
  • Different types of competitive strategy has to be
    adopted.
  • Best strategy

32
(B) Macro Environment
  • 1. Demographic Environment
  • 2. Economic Environment
  • 3. Natural Environment
  • 4. Technological Environment
  • 5. Political Environment
  • 6. Cultural Environment

33
1. Demographic Environment
  • Population

34
2. Economic Environment
  • Market requires consumers purchasing power and
    spending patterns
  • Upper class consumers luxury goods
  • Middle class consumers some what careful
  • Working class consumers excluded food, clothing
    shelter
  • Under class consumers included food, clothing
    shelter

35
3. Natural Environment
  • It refers to the natural resources which are
    needed as inputs by marketers or that they are
    affected by marketing activities

36
4. Technological Environment
  • Every new technology replaces an older
    technology.
  • New technologies create new markets and
    opportunities

37
5. Political Environment
  • Marketing decisions are strongly influenced by
    the political environment.
  • The political environment comprises laws, govt.
    agencies and pressure groups.
  • Every marketing activity is subject to laws and
    regulations.
  • Laws affecting business has increased over the
    years mainly for protecting the consumers from
    unfair business practices.

38
6. Cultural Environment
  • Cultural environment consists of forces that
    affect societys basic values, perceptions,
    preferences and behaviours.

39
IMPORTANCE OF MARKETING
  1. Importance of Marketing to the society
  2. Importance of marketing to the company
  3. Importance of marketing in developed economy
  4. Importance of marketing in underdeveloped or
    developing economy
  5. Importance of marketing in Indian economy

40
1. Importance of Marketing to the society
  1. Delivery of standard of living to the Society
  2. Decrease in distribution cost
  3. Increasing employment opportunities
  4. Protection against business slump
  5. Increase in national income

41
2. Importance of marketing to the company
  1. Helpful in business planning and decision
    marketing
  2. Increase in the profit
  3. Helpful in communication between society and
    business

42
5. Importance of marketing in Indian economy
  • Increases in employment opportunities
  • Balanced growth of the country
  • Increase in the sale of goods
  • Increase in profits
  • Development of the means of communication
  • (vii) Development of the means of transportation
  • (viii) Development of the means of warehousing
  • Development of new media of advertisement and
    sales promotion
  • Development of banking and insurance industries.

43
Evolution of Marketing Concept
  1. Self-sufficient stage
  2. Exchange-oriented stage
  3. Production-oriented Stage (1869 -1930)
  4. Sales-oriented Stage (1930-1950)
  5. Marketing-oriented Stage (1950-1960)
  6. Consumer-oriented Stage (1960s present)

44
Marketing Planning
  • Marketing planning is the work of setting up
    objectives for marketing activity and of
    determining and scheduling the steps necessary to
    achieve objectives.
  • A written document that acts as a guidebook of
    marketing activities for the marketing manager

45
Marketing Planning
  • Marketing plans typically include a description
    of
  • - Market Conditions
  • - Products
  • - Buyers
  • - Sales potential
  • - Contract terms or pricing strategy
  • - Promotion and Distribution ideas
  • - Resources

46
Features of Marketing Plan
  • It gives plan to allocate of marketing
    resources in the best and most economical way.
  • It gives guidance and direction of marketing
    activities.
  • It is future course of marketing activities.
  • Marketing planning is aim to achieve the goals
    of the company.
  • Marketing plan is Blue print of marketing
    future actions.
  • Marketing planning is one of the most effective
    management tools.
  • Careful planning leads for successful operation.

47
Importance of Marketing planning
  • It is very helpful for identification of
    marketing opportunities and threats.
  • It focus on objectives.
  • It is very helpful for identification of future
    development.
  • Improve the coordination of all the
    departments.
  • Increases the effective actions.
  • It reduces time and economical factor.
  • It is very helpful for developing a company
    profile.
  • Marketing planning achieves customer
    satisfaction

48
Elements/Components of Marketing planning
Elements of Marketing Planning
Determining the objectives
Policies
Procedures
Programme
Schedules
Sales Forecast
Budgets
49
STRATEGIC PLANNING
  • Strategic Planning is the managerial process of
    creating and maintaining a fit between the
    organizations objectives and resources and the
    evolving market opportunities.
  • It is a process which involves a set of
    decisions and actions to achieve the objectives
    of an organisation.
  • It is a set of objectives, policies and rules
    that guide over time firms marketing efforts.

50
STRATEGIC PLANNING
  • Definition
  • The formulation and implementation of
    plans and carrying out of activities relating to
    the matters which are of vital, pervasive or
    continuing importance to the total organisation.

  • - Sharplin

51
Strategic Planning Process
Business Mission
External Environment (Opportunities Threats
Analysis)
Internal Environment (Strength / Weakness
Analysis)
SWOT Analysis
Formulation of Business Goal
Formulation of Business Strategy
Formulation of Programs
Implementation of the Plan Program
Feedback Control
52
1. Deciding on the business Mission
  • the business mission should stem from the
    overall corporate mission and objective of the
    firm.
  • it should essentially express why it is in
    the business portfolio of the company and what
    function the corporate expects it to play.
  • when a company expects the business unit to
    give more market share in that particular
    industry segment, it should set the mission
    statement for the business.

53
2. Conducting SWOT analysis
  • the firm needs to conduct a strength,
    weakness, opportunity and threat analysis for the
    business unit.
  • while strengths and weakness is analysis of
    internal strength of the firm, opportunity and
    threat analysis is the analysis of external
    environment to identity the potential risks and
    returns opportunities in the business.

54
3. Formulating Goals for the Business Unit
  • these goals are used to describe business
    objective with respect to marketing expenditure
    of the firm for a specific period of time.
  • goals can be explained in terms of market
    share, sales, profit, profitability in achieving
    the sale, level of reputation and image desired
    by the business unit in the industry.

55
4. Formulating Business Strategy
  • Strategies are long-term goal directed
    actions.
  • a company deliberately chooses a particular
    strategy depending upon its strengths and goals
    set for the business unit.
  • Companies follow cost strategy when they can
    produce and distribute goods and services at the
    lowest possible cost compared to competitors to
    win a larger market share.

56
5. Program Formulation and implementation
  • once the business unit planning is over, the
    marketing manager should develop detailed
    supporting programs.
  • these programs are purely functional plans to
    execute the strategies.
  • marketing managers need to develop a
    marketing plan, which should include cost
    estimates, budget allocations on various
    functional activities and link the investments
    with the likely returns to decide whether it is
    worth executing a particular program.

57
6. Feedback and Control
  • for successful business planning and
    implementation, it is important to monitor and
    evaluate the execution at different points of
    time.
  • firms design milestones and targets to
    measure the performance and it they find a gap
    between what was planned and the results of the
    plan, they need to take corrective actions.
  • feedback flow also helps in finding out the
    validity of assumptions on likely market response.

58
INTEGRATED MARKETING
  • The marketing manager co-ordinates the activities
    of all the departments in an organization engaged
    in manufacture. The policies of all the other
    departments are adjusted on the direction and
    suggestion of the Marketing manager. The
    following are some of the important activities of
    the marketing management under integrated
    marketing.

59
  • Collection of necessary data relating to market.
  • Analyzing the data so collected and drawing
    conclusions.
  • Developing the product.
  • Developing new techniques of marketing.
  • Framing a detailed marketing programme.
  • Implementing the marketing programme.
  • Co-ordinating the wants and satisfaction of the
    customers.

60
SOCIAL MARKETING
  • Marketing can be used to bring not only products
    and services but also social cause to the
    attention of a market.
  • The efforts make by such organisations to gain
    the support of the society for a social cause or
    change is called social marketing.
  • The social causes include population control,
    energy conservation, environmental protection and
    cigarette smoking, drug control etc.

61
QUESTIONS
  • Marketing is Business. Comment
  • Consumer is King. Comment on the statement in
    the light of modern concept of Marketing.
  • How consumer satisfaction leads to better sales?
  • Discuss on the problems of Marketing Management
    in India.
  • Marketers can create needs. Do you agree?
    Give reasons to support your answer.
  • What are the qualities of a sales manager?
  • Are Middlemen necessary? Discuss

62
QUESTIONS
  • 8. The money spends on advertising a product is
    an investment and is not waste. Do you agree?
    Give reasons for your answer.
  • 9. All advertisement is a social waste
    Discuss.
  • 10. Good salesmen are born and not made
    Comment on this statement.
  • 11. Customer relationship is very important for
    marketing. Explain.
  • 12. Marketing begins with consumer and ends with
    consumer.

63
QUESTIONS
  • 13. Marketing should aim at meeting a given
    customers need rather than selling a given
    product. Do you agree with the statement? If
    so, why? Who benefits from marketing concept and
    how?
  • 14. Instead of trying to market what is the
    easiest for us to make, we must try to find out
    much more what is the consumer willing to buy?
    In other words, we must apply our creativeness
    more intelligently to people rather than
    products. Explain this statement in the context
    of the modern marketing concept.

64
BUYER or CONSUMER BEHAVIOUR
  • The modern marketing concept the buyer or
    consumer is the Fulcrum he is the life blood he
    is the very purpose of the business. He has to
    be closely followed
  • What he wants?
  • When he wants?
  • Where he wants?
  • How he wants?
  • The answer to those questions can be found
    through consumer research. The answer of these
    questions are important to marketers because they
    plan to strategy of marketing.

65
CONSUMER BEHAVIOUR
  • Glenn Wilters defines, human behaviour refers
    to the total process by which individuals
    interact with their environment. To be specific
    consumer behaviour refers to the act of consuming
    a good or service.
  • According to Webster, Buyer behaviour is all
    psychological, social and physical behaviour of
    potential customers as they become aware of,
    evaluate, purchase, consume and tell other people
    about products and services.

66
CONSUMER MIND

Stimulus
Company controlled
Product Price Advertising Display Distribution
Buy
Consumer Mind
Response
No Buy
Social
Word of mouth Reference group
67
Difference between Consumer Customer
  • A consumer refers to individuals who buy for
    themselves or their family, whereas a customer
    can also mean the retailer or person who buys
    from the manufacturer, etc. for ultimate sale to
    others.
  • The one who buys the product is called a
    customer and the who uses the product is called a
    consumer.
  • Every customer is a consumer but not every
    consumer a customer.

68
IMPORTANCE OF CONSUMER BEHAVIOUR
  • To identify consumer needs and wants.
  • Understanding of consumer behaviour is
    essential for the long run success of any
    marketing program.
  • To design new products and marketing strategies
    that would fulfill consumer needs.
  • Consumer behaviour is thus the study of how
    individuals make consumption decisions.
  • To achieve consumer satisfaction the marketer
    should know and understand consumers behaviour.

69
FACTORS INFLUENCING CONSUMER BEHAVIOUR
  • 1. Internal Psychological factors
  • 2. Social factors
  • 3. Cultural factors
  • 4. Economic factors
  • Personal factors

70
1. Internal Psychological factors
  • a. Motivation
  • b. Perception
  • c. Learning

71
2. Social factors
  • a. Family
  • b. Reference group
  • c. Roles and status

72
3. Cultural factors
  • a. Culture
  • b. Sub culture
  • C. Social class

73
4. Economic Factors
  • a. Personal Income
  • b. Family Income
  • c. Income expectations
  • d. Savings
  • f. Consumer credit

74
5. Personal Factors
  • 1. Age and Stage in Life Cycle
  • 2. Occupation
  • 3. Lifestyle

75
Stages of the Consumer Buying Process
Need
Motive
Problem Recognition
Internal Search
External Search
Information Search
Evaluation of Alternatives
Buy Later
Do not buy
Purchase Decision
Purchase
Satisfaction
Post Purchase Behavior
Dissatisfaction
Habit Formation
76
  • Problem Yes
  • Recognition No
  • T.V. Show room
  • Information Advertisement
  • Search Stage Friends
  • Family
  • Magazines
  • Price
  • Alternative Clarity Size
  • Evaluation Model
  • Stage Expert Opinion
  • Purchase buy
  • Decision
  • Stage do not buy

Information collection About the T.V.
Need for a new T.V.
Criteria of Selection
Purchase Decision
77
  • Economy
  • No luxury version
  • now
  • later
  • dealer A
  • dealer B
  • Post Satisfied
  • Purchase
  • Stage Dissatisfied

Type of T.V.
Timing of Purchase
Where to Purchase
Degree of Satisfaction
78
Consumer Marketing
  • The Marketing activities involved in selling
    their good to consumers. Manufacturers supply
    goods directly to retailers. Retailers keep the
    right good to satisfy the customers. In consumer
    marketing manufacturers and retailers advertise
    the products extensively.

79
Consumer Goods
  • Consumer goods are those goods which are directly
    consumption by ultimate consumers.
  • For example Car, Television, Radio, Cycle, Shoe,
    Soap, Toys, Toothpaste.

80
Classification of Consumer Goods
  • 1. Shopping Goods
  • 2. Convenience Goods
  • 3. Speciality Goods

81
1. Shopping Goods
  • Shopping goods are consumers products. These
    goods are not purchased frequently by the buyers.
    The cost of goods are high.
  • Examples T.V. Jewellery, Furniture, Washing
    Machines, Radio, etc.
  • This types of goods are not purchased
    frequently.
  • This types of goods are high cost.
  • Brand name is not essential.
  • Shopping goods are some durable in nature.
  • Shopping goods are distributed by selected
    number of retail outlets.
  • Comparison and evaluation are done by buyers.

82
2. Convenience Goods
  • This types of goods are purchase frequently.
    These goods are purchase daily. Minimum effort
    is enough for buying such goods.
  • Examples Soap, Detergent, Toothpaste, Shaving
    Cream.
  • This type of good are easily availble.
  • This type of goods costs are less.
  • The buyers gives importance to the Brand value.
  • There is a regular are continuous demand for
    these goods.
  • This type of goods are distributed by all the
    channels.

83
3. Speciality Goods
  • This types of goods are know as luxurious goods.
    The cost of goods are very high. Such goods
    possess certain special characteristics that
    attract the buyers.
  • Examples Cars, Computers, Refrigerators.
  • These are very high.
  • Buyers gives importance to the brand value.
  • Special buying efforts are necessary.
  • Long time is taken for purchasing.
  • Marketing channels are very short.

84
Industrial Market
  • The industrial market is the market consisting of
    individuals and organisations prepare goods and
    services to be used in the production of further
    products.
  • Industrial marketing is defined as the process of
    marketing industrial goods. Which are used in
    producing consumer goods.

85
MARKET SEGMENTATION
  • In total market may differ in their wants,
    purchasing power, buying attributes and buying
    practices. A market segment is a meaningful
    buyer group having similar wants. Segmentation
    helps in grouping these consumers having similar
    wants or desires.
  • Marketing Segmentation is the process of
    dividing the total heterogeneous market for a
    product into several submarkets or segments each
    of which tends to be homogeneous in all
    sufficient aspects.

86


LUXURY MID SIZE FAMILY ECONOMY

Mercedes Benz BMW Toyota Lexus
Chevrolet Optra Sonata
Baleno Accent
Honda Civic Toyota Corolla
Esteem
Indigo Opel Corsa Ford Ikon
Getz, Swift
Santro
Maruti 800
Zen Alto
Market Segmentation Brand Positioning in Indian
Passenger Car Industry
87
Bases/Methods of Market Segmentation
  • 1. Geographic Segmentation
  • 2. Demographic Segmentation
  • 3. Psychographic Segmentation
  • 4. Behavioural Segmentation
  • 5. Benefit Segmentation

88
1. Geographic Segmentation
  • Region by continent, country, state, or even
    neighborhood
  • Size of metropolitan area segmented according
    to size of population
  • Population density often classified as urban,
    suburban, or rural
  • Climate according to weather patterns common
    to certain geographic regions

89
2. Demographic Segmentation
  • Age
  • Gender
  • Family size
  • Income
  • Occupation
  • Education
  • Religion
  • Social class

90
3. Psychographic Segmentation
  • buyers are divided on the basis of the life
    style and personality characteristics.
  • way of living
  • reflects the persons living as a combination
    of his actions, interests and opinions.

91
4. Behavioural Segmentation
  • The market is divided on the basis of purchase
    decision and product or brand usage made by
    consumers.
  • Behavioral segmentation is based on actual
    customer behavior toward products.
  • Behavioral segmentation has the advantage of
    using variables that are closely related to the
    product itself. It is a fairly direct starting
    point for market segmentation.

92
5. Benefit Segmentation
  • These methods helps in describing the
    characteristics of different segments rather than
    finding out what causes these segments to
    develop.
  • People suggesting benefit segments ground their
    idea on assumption that benefits people expect
    out of the product consumption situation are the
    basic reason of purchase and customers can be
    grouped as per the basic reason of their
    purchase.

93
Importance of Market Segmentation
  • Markets have a variety of product needs and
    preferences.
  • Marketers can better define customer needs.
  • Decision makers can define objectives and
    allocate resources more accurately.

94

No Market Segmentation

95

Segmented by Gender

96

Segmented by Age

97
TARGET MARKETING
  • Market targeting is a process of taking
    decision regarding the market segments to be
    served.
  • Choosing one or more segments for which to
    design your marketing operations

98
POSITIONING
  • The place the product occupies in consumers
    minds relative to competing products.
  • Typically defined by consumers on the basis of
    important attributes.
  • Positioning maps that plot perceptions of
    brands are commonly used.
  • Example
  • Lux is positioned as beauty soap of Cine Stars
  • Vicks is an ointment for cold etc

99
why do this ?
100
Positioning Strategies
  • 1. Positioning on Product Attributes
  • 2. Positioning on Benefits
  • 3. Positioning according to Usage Occasions
  • 4. Positioning the product for certain classes
    of users

101
Competitive Advantage
  • Almost all the firms in the market try to
    achieve a sustainable competitive advantage.
  • a firms that offers the consumer the same value
    as the competitors, but at a lower cost.

102
PRODUCT
  • It is a goods, services or idea, including all
    attributes provided in an exchange between buyer
    seller.
  • A product is a set of tangible and intangible
    attributes, including packaging, color, price,
    manufacturers prestige, retailers prestige and
    manufacturers and retailers services which the
    buyer may accept as offering want satisfaction.
  • A product is determined by the needs desires
    of the customer.
  • A product is almost combinations of tangible
    intangible.

103
CLASSIFICATION OF GOODS OR PRODUCTS
Products / Goods
Consumer Goods
Industrial Goods
Convenience Goods
Speciality Goods
Shopping Goods
Equipments Physical Facilities
Management Materials
Manufacturing or Services supplies
Materials Entering Into the product
104
  • Convenience Goods Goods which consumer buys
    frequently, immediately and with minimum shopping
    effort are classified as convenience goods.
    Example Cigarettes, newspapers, magazines etc.
  • Shopping Goods Goods which consumer selects
    and buy only after making comparisons on such
    bases as suitability, quality, price and style
    are called as shopping goods. Example
    Furniture, ready-made garments, etc.

105
  • Speciality Goods Goods for which significant
    number of buyers is habitually willing to make a
    special purchasing effort are known as speciality
    goods. They should possess unique features or
    have a high degree of brand identification or
    both.

106

107
PRODUCT MIX
  • Is the full list of all products offered for
    sale by a company.
  • Product mix is the set of all product lines and
    items that a particular seller offers for sale to
    buyers.
  • Example
  • Kodaks Cameras, photographic supplies,
    Chemicals, plastics and fibers.
  • Tatas hair oil, cosmetics, locomotives,
    texiles, iron and steel goods etc.
  • Godrej soaps, office equipments, edible oil,
    computers and other products.

108
PRODUCT LINE
  • a group of related similar products that are
    considered a unit because of marketing, technical
    or use similarity.
  • possessing reasonably similar physical
    characteristics

109
PRODUCT ITEM
  • a specific product
  • product item is a distinct unit that is
    distinguishable by size, price, appearance or
    some other attribute.

110
DIMENSIONS OF PRODUCT MIX
  • 1. Length
  • 2. Width
  • 3. Depth
  • 4. Consistency

111
  • Length
  • The length of the product mix refers to the
    total number of items in its product mix.
  • Width
  • The width of the product mix refers to the
    number of different product lines the company
    carries.
  • Depth
  • Depth refers to how many varieties are offered
    in each product line. In other words, the depth
    is measured by assortment of sizes, colours,
    models, prices and quantity offered within each
    product line.

112
  • Consistency
  • The consistency of product mix is a measure of
    how closely related its various product line are
    to one another.
  • The relationship may be due to the use,
    production requirements, distribution channels,
    consumer behaviour and other characteristics.

113
width
Color Cosmetics Hair Care Skin Care Oral Care Deodorants Soaps Detergent Toilet Soaps Beverages
Lakme Aviance Sunsilk Clinik Fair Lovely Ponds Pepsodent Toothpaste Tooth brush Close-up Axe Ponds Rexona Denim Surf Rin Wheel OK 501 Sunlight Ala Vim Liril Lifebuoy Lux Breeze Pears Hamam Rexona Dove Savlon 3 Roses Lipton Yellow lable Lipton Green lable Lipton Ice Tea Red Lable Taj Mahal Brooke Bond Taaza Bru

114
PRODUCT LINE DECISIONS
  • 1. Changes in Market Demand
  • 2. Competitive Action and Reaction
  • 3. Marketing Influences
  • 4. Product Influences
  • 5. Financial Influences

115
FACTORS DETERMINING THE PRODUCT MIX
  • 1. Changes in Demand
  • 2. Cost of Production
  • 3. Advertising Distribution Costs
  • 4. Competitive Action and Reaction

116
BENEFITS OF PRODUCT MIX
  • 1. Sales Growth
  • 2. Sales Stability
  • 3. Profits

117
PRODUCT LIFE CYCLE
118

119
PRODUCT LIFE CYCLE
Sales and Profits ()
Sales
Profits
Time
Product Develop- ment
Introduction
Growth
Maturity
Decline
Losses/ Investments ()
120
PRODUCT LIFE CYCLE
  • 1. INTRODUCTION
  • 2. GROWTH
  • 3. MATURITY
  • 4. SATURATION STAGE
  • 5. DECLINE

121
1. Introduction
  • profits are negative or low
  • volume of sale is less
  • heavy expenses on distribution
  • more money is required
  • promotional expenditure is heavy
  • highly risk
  • advertising focus

122
2. Growth
  • refers to a period of rapid market acceptance
    and increasing profits
  • competitors are enter
  • product survival in the market

123
3. Maturity
  • competition becomes more accurate
  • sales continue to increase but the decreasing
    rate
  • producer spend more advertising
  • capture the market
  • modification of marketing mix
  • attract more customers

124
4. Saturation Stage
  • sales of the product reach to the peak
  • no further possibility increase it
  • other competitors shall also become popular

125
5. Decline
  • sales decline
  • sales decline due to technological advances
  • consumers shifts in taste
  • increased competition
  • some firms may withdraw from the market

126
NEW PRODUCT DEVELOPMENT
  • A product introduce to the market as new
    whether they are genuine innovation or slight
    modifications of the existing products.
  • In most cases, the newness of the product is
    the result of combining characteristics of
    products already in existence.

127
NEW PRODCT DEVELOPMENT PROCESS / STAGES
  • 1. Idea Generation
  • 2. Idea Screening
  • 3. Concept Testing and Analysis
  • (a) Business Analysis
  • (b) Total Sales Estimation
  • (c) Estimating Cost Profits
  • 4. Product Development
  • 5. Test Marketing
  • 6. Commercialization

128
Failure of a Product
  1. Inadequate market analysis
  2. Product deficiencies
  3. Lack of effective marketing effort
  4. Higher costs than anticipated
  5. Competitive strength or action
  6. Improper timing of introduction
  7. Technical or production problems

129
BRANDING
  • The traditional orientation of branding suggests
    that brand name is a part of the brand consisting
    of words or letters that form a means to identify
    and distinguish a firms offer. A brand market
    is the symbol or pictorial diagram that helps in
    the identification of the product.

130
PRODUCT PRICING
  • Pricing means the exchange value of a product
    or service in terms of money.
  • Price can decide the success or failure of a
    concern.
  • The amount of money charged for a product or
    service, or the sum of the values that consumers
    exchange for the benefits of having or using the
    product or service.

131
PRICING OBJECTIVES
  • 1. Target of returns
  • 2. Stability of Price
  • 3. Maintenance of Market Share
  • 4. Meet or Prevent Competition
  • 5. Maximising Profits

132
FACTORS AFFECTING PRICING DECISIONS
Competition
Government
Channels
Demand
Economical Factor
Product
Pricing Decision
Suppliers
Demand
Cost of the Product
Consumer
Organisation
133
KINDS OF PRICING
  • 1. Odd Pricing
  • 2. Psychological Pricing
  • 3. Customary Pricing
  • 4. Prestige Pricing
  • 5. Dual Pricing
  • 6. Skimming Pricing
  • 7. Negotiated Pricing
  • 8. Geographical Pricing
  • 9. Monopoly Pricing
  • 10. Expected Pricing

134
1. Odd Pricing
  • When the price of a product is an odd number such
    a pricing method is called odd pricing.
  • Psychological pricing is based on customer price
    perceptions. It has special appeal in certain
    target markets. Bata shoe company adopts
    psychological pricing. They are setting price
    such as Rs.299.95, Rs.199.99 The buyers feel it
    in a marked down price.

2. Psychological Pricing
135
3. Customary Pricing
  • These prices are fixed by custom. Some products
    prices are same by different manufacturers.
  • Example Soap, Toothpaste, Soft Drinks.
  • Many customers judge the quality of a product by
    its price. Luxury goods are undergo prestige
    pricing method. Customer may fear that at the
    low price, it cannot be of good quality.

4. Prestige Pricing
136
5. Dual Pricing
  • When a manufacturers sells the same product at
    two or more different prices. It is called as
    dual pricing. The same products the prices are
    different at two places. This pricing policy is
    followed in railway like First Class, Second
    Class etc.
  • For same distance travel, same vehicle, the
    services are sold to passengers at different
    prices under different classes.

137
6. Skimming Pricing
  • A product introduced in the market by high
    initial price of the product. It gives enormous
    profits in the initial stage of market period.
    It is a strategy of recovering rapidly the
    investment. The market of the product does not
    respond satisfactorily the price can be lowered.

138
7. Geographical Pricing
  • Geographical pricing involves the company in
    deciding how to price its products to customers
    in different locations. Added the price of
    transportation cost to the goods to different
    regions or zone.
  • The price is fixed by manufacturers who has no
    competition in the market. It is termed as
    monopoly pricing.

8. Monopoly Pricing
139
9. Expected Pricing
  • This type of price will be accepted by the
    consumers. The customer response is analyzed and
    then fix a price of the product.

140
Process / Stages of Price Determination of a
Product
Estimating Demand

Anticipate Competition
Expected Determining Share of Market
Selection of Pricing Strategy
Marketing Policies of the Company
Setting the Price
141
CHANNEL OF DISTRIBUTION
  • A Channel of distribution or marketing channel
    is the structure of intra-company organisation
    units and extra company agents and dealers,
    wholesalers and retailers through which a
    commodity, product or service is marketed.
  • - American Marketing Association
  • pathway taken by the goods as they move from
    the production point to point of consumption
  • direct or indirect transfer of title of goods
  • through whole seller, retailer or agencies

142
CHANNEL DISTRIBUTION

Intermediaries
Producer
Consumer
Distribution Channel
143
LEVELS OF CHANNELS
  • 1. Direct Marketing Channel/Zero Level Channel
  • 2. Indirect Marketing Channel
  • a. One-Level Channel
  • b. Two-Level Channel
  • c. Three-Level Channel
  • d. Four-Level Channel

144
  • Direct Marketing Channel/Zero Level Channel
  • Indirect Marketing Channel
  • a. One-Level Channel
  • b. Two-Level Channel

Producer
Consumer
Producer
Consumer
Retailer
Distributor
Producer
Consumer
Producer
Consumer
Retailer
Wholesaler/Distributor
145
  • c. Three-Level Channel
  • d. Four-Level Channel

Producer
Consumer
Retailer
Wholesaler
Distributor
Producer
Retailer
Wholesaler
Distributor
Agent
Consumer
146
FUNCTIONS OF MARKETING CHANNELS
  • 1. Buying
  • 2. Selling
  • 3. Transporting
  • 4. Financing
  • 5. Promoting
  • 6. Negotiating

147
FACTORS INFLUENCING THE SELECTION OF A CHANNEL
Distribution Policy
Product Characteristics
Competition
Factors influencing the Selection of a Channel
Environmental Characteristics
Cost of Channel
Customer Characteristics
Company Characteristics
Middlemen Characteristics
148
Channel Design Decisions

Analysis of Customers Desired Service Output
Levels
Establishing Channel Objectives
Identifying Major Channel Alternatives
Evaluating the Major Alternatives
149
Channel Management Decision

Selection of Channel Members
Training of Channel Members
Motivation of Channel Members
Evaluation of Channel Members
Modification of Channel Arrangements
150
DIRECT MARKETING
  • Direct marketing is also called as channel less
    retailing.
  • It uses non-personal communication media i.e.,
    advertising media to make a sale at any location.
  • Under this method, customers can be contacted
    through sales personnel, by post namely,
    mail-order sale, by phone, radio, newspaper,
    television, magazines, by home computers, etc.

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METHODS OF DIRECT MARKETING
  1. Direct Mail
  2. Tele Marketing
  3. Personal Selling
  4. Direct Response Television
  5. Direct Response Print Media
  6. Online Marketing
  7. Mobile Marketing

152
MARKETING INTERMEDIARY
  • Marketing intermediary wholesaler or retailer
    that operates between producers and consumers or
    business users also called a middleman.

153
CLASSIFICATION OF MIDDLEMEN
  • Agent Middlemen
  • Kinds of Agent Middlemen
  • a. Brokers
  • b. Commission Agents
  • c. Manufacturers Agents
  • d. Selling Agent
  • Merchant Middlemen
  • a. Wholesalers
  • b. Retailers

154
WHOLESALER
  • Wholesale means marketing of goods in
    relatively large quantities. The wholesalers are
    the connecting link between the manufacturers and
    the retailers. They buy in large quantities and
    resell them to retailers in smaller lots.

155
WHOLESELLER
  • Serviced of wholesaler to requirements of
    manufacturer
  • He keeps price steady and prevents their
    fluctuations.
  • He provides storage facilities for the goods
    till they are needed by manufacturers.
  • He takes participate in advertising and sale
    promotion tasks in the manufacturers.
  • Wholesaler gives information about the product
    market, consumer needs and opinions to the
    manufacturers.

156
WHOLESELLER
  • Services of Wholesaler to the retailer
  • He is delivering the goods promptly to the
    retailer.
  • He provides credits facilities to the
    retailers.
  • The wholesaler offers advice and assist
    retailer with their operations. Management
    assistance regarding techniques of stocking,
    displaying, point of sale promotion and trainings
    are providing by wholesaler.
  • He shares the risk involved in marketing.
  • He provides facilities for concentration and
    handling of goods.

157
FUNCTIONS OF THE WHOLESALERS
  1. Buying and Assembling
  2. Warehousing
  3. Transporting
  4. Financing
  5. Risk-bearing
  6. Grading, Packing and Packaging
  7. Selling

158
RETAILING
  • is the last link in the chain of channel.
  • is a business enterprise which sells primarily
    to consumers.
  • it consists of the activities involved in
    selling directly to the consumers, producers find
    it convenient to distribute their goods through
    the retailers.

159
FUNCTIONS OF THE RETAILERS
  1. Buying and assembling of goods from various
    producers or wholesalers
  2. Storing of the goods
  3. Risk-bearing
  4. Transportation of goods from the godown of
    wholesalers.
  5. Grading and packaging.
  6. Providing market information
  7. Extension of credit facilities to the consumers.
  8. Selling

160
RETAILERS TYPES
  • There are many ways retailers can be categorized
    depending on the characteristics being
    evaluated.  For our purposes we will separate
    retailers based on six factors directly related
    to major marketing decisions
  • target markets served
  • product offerings
  • pricing structure
  • promotional emphasis
  • distribution method
  • service level

161
Methods of Retailing
Method of Retailing
Small Scale
Large Scale
  • Independent Stores
  • Vending Machines
  • Discount Houses
  1. Department Stores
  2. Chair or Multiple Shops
  3. Mail Order
  4. Supermarkets
  5. Hyper Markets

162
ESSENTIAL REQUISITES FOR SUCCESS IN RETAILING
  • 1. Selection of goods
  • 2. Effective buying
  • 3. Proper location
  • 4. Display of goods
  • 5. Advertising

163
Channel Design
  • Channel design includes decisions concerning
    channel length and channel width
  • Decisions associated with forming new or
    altering existing channels.
  • In a market the number of middlemen i.e.,
    selling agents, few wholesalers, established
    retailers. Deciding upon the best channel is a
    important role for successful marketing.

164
SELECTION OF CHANNEL DESIGN
Analyzing of Customers desired service output
levels
Establishing Channel Objectives
Identifying the Major Channel Alternatives
Evaluating Channels
165
CHANNEL MANAGEMENT DECISIONS
Selection of Channel Members
Training of Channel Members
Motivation of Channel Members
Evaluation of Channel Members
Modification of Channel Arrangements
166
INTEGRATED MARKETING COMMUNICATION
  • The products design, its price, the shape and
    colour of its package and the stores sell it
    all communicate something to buyers.
  • Manager need to communicate promote the final
    product
  • Communication refers unified message about the
    product or services of the firm.
  • 20th century idea generate integrated marketing
    communication

167
INTEGRATED MARKETING COMMUNICATION PROCESS
Sender The Company The Marketing Co. The
Intermediaries The Retailer
Encoding
Media Mix
Decoding by Self
Receiver
Message
Decoding by others
NOISE
Responses Sales Increase Awareness Increase Other
Communication Objectives
Feedback
168
PROMOTION MIX
  • 1. Personal Selling
  • 2. Advertising
  • 3. Publicity
  • 4. Sales Promotion

169
1. Personal Selling
  • Oral communication with potential buyers of a
    product with the intention of making a sale. The
    personal selling may focus initially on
    developing a relationship with the potential
    buyer, but will always ultimately end with an
    attempt to "close the sale".

170
2. Advertising
  • Any paid form of non-personal communication of
    ideas or products in the "prime media" i.e.
    television, newspapers, magazines, billboard
    posters, radio, cinema etc. Advertising is
    intended to persuade and to inform. The two basic
    aspects of advertising are the message (what you
    want your communication to say) and the medium
    (how you get your message across)

171
3. Publicity
  • It is non-personal stimulation of demand for a
    product. Business unit by placing commercially
    significant news about it in a publication or
    obtaining favourable presentation of it upon
    radio, T.V.
  • The communication of a product, brand or business
    by placing information about it in the media
    without paying for the time or media space
    directly. otherwise known as "public relations"
    or PR.

172
4. Sales Promotion
  • Providing incentives to customers or to the
    distribution channel to stimulate demand for a
    product.

173
MARKETING RESEARCH
  • Marketing basically consists of identifying the
    needs of consumers and satisfying them.
    Marketing research plays a key role in the area
    of consumers, competition and marketing
    environment.
  • As the systematic gathering, recording and
    analysing of data about problem relating to do
    marketing of goods and services.
  • A study of the facts relations to any problem
    in fixed of marketing.
  • It is the study of marketing problems,
    techniques and other related decision making and
    their implementation.

174
OBJECTIVES OF MARKETING RESEARCH
  • To evaluate various plans, policies etc.
  • To define the market for a product.
  • To forecast the market share and future sales.
  • To formulate various Marketing strategies,
    Programmes and Policies.
  • Marketing research can bring about the right
    product, right place, right consumers, right
    price and right sales promotion techniques.
  • To find out most suitable channel.
  • To find out most suitable pricing.
  • To asses the effectiveness of advertising.

175
IMPORTANCE OF MARKETING RESEARCH
  • To understand why customers buy a particular
    product.
  • To know the marketing opportunity.
  • To understand marketing problems.
  • To help in the selection of a right course of
    action.
  • To know about customer acceptance of the
    product.
  • To understand the distribution network of the
    product.
  • To forecast the probable volume of the future
    sales.
  • To forecast the expected market share.
  • To asses competitive strengths policies.

176
ADVANTAGES OF MARKETING RESEARCH
  1. Marketing research is used to measure market
    potential, characteristics and share of markets
    for a particular brand or company.
  2. It helps in obtaining information that could lead
    to the formulation of short and long-range
    forecasts.
  3. Companies can use marketing research to evaluate
    new product opportunities, and product
    opportunities, and product acceptance and to test
    existing products relative to the competitors
    products.

177
ADVANTAGES OF MARKETING RESEARCH
  1. Marketing research helps make better advertising
    decisions.
  2. It also helps to evaluate the effectiveness of
    marketing activities and draws attention to a
    potential problem.
  3. Marketing research is helpful in planning
    questionnaires to test comprehension, work norms,
    memory factors, etc.

178
SCOPE OF MARKETING RESEARCH
  1. Sales Analysis
  2. Sales Distribution Methods Policies
  3. Product Management
  4. Advertising Research
  5. Media Research
  6. Corporate Research
  7. Syndicated Research

179
STEPS IN MARKETING RESEARCH

  • Primary Data
  • Secondary Data
    Preliminary
    Section

  • Main Body

  • Reference Section

Identifying the Marketing problem its objectives
Framing Research Design
Techniques of Data Collection
Analysis of Data
Presentation of Report
180
IMPORTANT QUESTIONS
  • What is the Product? Explain different concept
    of a product.
  • Discuss the possible pricing policies for the
    product of a new manufacturing company. What
    factors will you take into account in formulating
    a suitable price strategy?
  • What is the use of discriminating pricing?
  • Explain the concept of Product Mix decision in
    marketing with examples.
  • Explain the New Product development stages with
    examples.

181
IMPORTANT QUESTIONS
  • 6. Describe the pricing strategy that can be
    followed by Functional organisation.
  • 7. What are the marketing problems and
    opportunities of a product management structure
    for an insurance company?
  • 8. Why a new product fails? How to solve the
    problems of new products failure?
  • 9. Briefly explain the different stages of
    Product Life Cycle (PLC).
  • 10. What is the Penetration pricing?

182
IMPORTANT QUESTIONS
  • 11. What is meant by product positioning? How it
    can be done?
  • 12. Explain the factors contributing to the
    success and failure of the product.
  • 13. Analyse the reason for the Increasing number
    of discount sales in the country.
  • 14. When should be company in take a price
    change?
  • 15. Discuss the Marketing Strategy in the various
    stages of PLC.

183
IMPORTANT QUESTIONS
  • 16. What are the functions performed by market
    intermediaries?
  • 17. What is Promotion Mix? Describe its elements
    with suitable examples.
  • 18. Differentiate Advertising with Public
    Sector.
  • 19. Analyse the importance of major decisions in
    Sales Promotion.
  • 20. Write a short note on Franchisee.
  • 21. Differentiate Advertising with Sales
    Promotion.
  • 22. Describe different types of Promotional
    pricing.

184
IMPORTANT QUESTIONS
  • 23. Explain the factors that influence promotion
    mix of a company.
  • 24. Explain the role of retailers and wholesalers
    in the distribution channels.
  • 25. How can Advertiser overcome the problems of
    literacy in their markets?
  • 26. Explain the reason for channel conflicts in
    marketing.
  • 27. Give on appropriate promotion mix for a
    departmental store.
  • 28. Explain the different modes of the marketing
    mix.
  • 29. Discuss the various steps involved in
    Developing programme.
  • 30.Discuss the various steps involved in
    Advertising programme.

185
INDUSTRIAL MARKETING
  • is also treated as Business-to-Business
    Marketing, or Business Marketing, or
    Organizational Marketing.
  • Industrial marketing/business marketing is to
    market the products and services to business
    organizations manufacturing companies,
    government undertakings, private sector
    organisations, educational institutions,
    hospitals, distributors, and dealers.
  • The business organizations, buy products and
    services to satisfy many objectives like
    production of goods and services, making profits,
    reducing costs, and, so on.

186
Characteristics of Industrial Marketing
  • 1. Market Characteristics
  • a. Size of the Market
  • b. Geographical Concentration
  • 2. Product Characteristics
  • 3. Buyer Behaviour
  • 4. Channel Characteristics
  • 5. Promotional Characteristics
  • 6. Price Characteristics

187
TYPES OF INDUSTRIAL CUSTOMERS
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