MARKETING MANAGEMENT

Dr. RAJIV KHOSLA

BASIC CONCEPTS

Marketing is meeting needs profitably Marketing in social sense signifies barter system Marketing in managerial sense is the art of selling products to the target customers by way of providing superior customer products. Exchange and transaction

BASIC CONCEPTS
1. 2. 3.

Demand can be of following types:

Negative demand Non existent demand Latent demand Declining demand Irregular demand Full demand Overfull demand Unwholesome demand

4.
5. 6. 7. 8.

BASIC CONCEPTS
Key Customer Markets
Consumer markets Business markets Global markets Nonprofit/Government markets Need Want Demand

HOLISTIC MARKETING
It is completely a new approach that is complete and cohesive and goes beyond the traditional applications of the marketing concept. It has four broad themes. 1. Relationship marketing: it aims at building strong economic, social and technical ties among the partners. Four key constituents in it are customers, employees, marketing partners and members of the financial community. ltimate outcome of it will be a strong marketing network.

HOLISTIC MARKETING
2. Integrated marketing: it aims at giving delivering value to its customers. It consists of 4 Ps of marketing given by McCarthy which were later developed into 4 Cs of Lauterborn.
a) b) c) d)

Product: Customer Solution Price : Customer Cost Promotion : Convenience Place : Communication

3. Internal Marketing: i.e. sales force, advertising, customer service and marketing research go hand in hand. Also other departments be included in the same.

HOLISTIC MARKETING
4. Social marketing: it holds that organizations task is to determine the needs, wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves the consumers and the society's well being. It is also called cause related marketing. Companies perceive it as an opportunity to enhance the corporate reputation, raise brand awareness, increase customer loyalty, build sales and increase press coverage.

EVOLUTION OF MARKETING

Marketing is what a marketer does. In the BARTER SYSTEM goods were exchanged for goods In the PRODUCTION ORIENTATION stage a little attention was being paid to the consumer preferences In SALES ORIENTATION stage no heed was paid to the satisfaction of the customers

EVOLUTION OF MARKETING

In the MARKETING ORIENTATION stage customer was seen as a tool for disposing off the goods. Moreover, stringent efforts were made in terms of advertising too In the CUSTOMER ORIENTATION stage only the products admired and favored by the customers are brought into the market

Meaning of Market

Origin from the Latin word Marcatus meaning merchandise Commonly market is a

place where goods are bought and sold Buyers and sellers come together for transactions An organization through which exchange of goods takes place An area of operation of commercial demand for commodities

Classification of Markets
AREA Family Local National World ECONOMICS Perfect Imperfect TRANSACTION Spot Future VOLUME Wholesale Retail

REGULATION Regulated Unregulated

TIME Very short Short Long

IMPORTANCE GOODS Primary Commodity Capital Secondary Produce Money Tertiary Manufactured Foreign Bullion Stock

Distinction Marketing and Selling

Marketing
Producing product according to customer needs

Selling
Simply obtaining orders from the customers and selling them the products focus is on making money by selling goods Selling begins after the production and ends after the sales Companys need is the motive Cost determines price

Focuses on satisfying customer needs Starts before the production of goods and lasts even after the sales of the product Buyers need is the motive Customer determines price

Distinction Marketing and Selling

Marketing
It is a wider term which includes Selling

Selling
It is a part of marketing which includes other activities like marketing research, product planning etc. It is a routine activity with a short term perspective Aims at earning profits through Sales Volume

Directed towards long term objectives of growth and stability Aims at earning Profits through customer satisfaction

Difference Market and Marketing

Physical presence of men and material market simply provides goods to the buyers from the sellers whereas marketing is concerned with providing satisfaction to the customers. Market is a narrow concept as it involves place and the atmosphere where buyers and sellers meet. Marketing is a comprehensive term representing the process of distribution and the process before distribution.

Difference Market and Marketing

Market is a price fixing mechanism and once the transactions are struck the movement of goods takes place. Marketing comes after the price fixing mechanism. Market may undergo a change with respect to the customer requirements whereas the philosophy of marketing does not change at all.

Factors influencing marketing

ECONOMIC FACTORS Income : because of the split up of families, incomes have increased. Thus, the concept of marketing gained speed. Inflation: people dont purchase owing to higher prices. Companies should try to look for better methods of production and cheap inputs. Recession: demand falls so companies must try to improve the existing products, extend credit to buyers & offer quality products to retain their confidence. Exchange rate : advisable to export when the currency of exporting country is weaker than the importing currency.

Factors influencing marketing

TECHNOLOGICAL FACTORS

Technology for factors: UDCs to focus more on applied research and develop better products with existing technologies while DCs to concentrate more on basic research. Technology for production: production of new G&S facilitated. Technology for business models: like online information given by the firms.
SOCIAL-CULTURAL FACTORS :

Values: customers cant tolerate ineffective products . They ask uncomfortable question before settling for a brand.

Factors influencing marketing

Time starved customers: because of time constraint generally people purchase branded products. Multiple life styles: like expensive holidays with food in ordinary restaurants. Difficult to categorize people. Changing structure of families: women are working & it has doubled incomes also. Companies need to cater them. DEMOGRAPHIC FACTORS Adolescents: dont earn but enjoy on parents income. They are stylish and fashion conscious companies cant ignore them.

Factors influencing marketing

Youth: they want to have their own website, movies thru webcam and write online. Companies need to provide something unique to them. Between 35 and 45: income rises at a good speed. They dine well, purchase their first car, and look for opportunities to go on holidays. Good spending power. Between 45 and 60: peak of their careers. People spend less and spend money for their children education. People above 60: income spent on buying gifts for grand/children. Substantial amount is spent on health. POLITICAL-LEGAL ENVIRONMENT : prosperity in business if there is political and judicial stability .

IMPORTANCE OF MARKETING
To the society: a) Marketing brings new items to the retail outlets from where the customers purchase it. b) Marketing helps to have mass production and thus cheap rates for the products thereby leading to an increased standard of living of the people. c) Reduction in prices means more purchasing power of the people and the increased national income. d) It helps to create numerous employment opportunities. e) Even the cultivators get improved techniques and implements for production at their doorsteps.

IMPORTANCE OF MARKETING
To the firms: a) It generates revenue for the firms by expanding its base b) It helps to take information from the market and disseminating it at the top management. c) Behaviour and demand of the customers keep on changing. Marketing helps to collect all the updates relating to the changing preferences, styles and fashions. d) It helps in developing the business and creating employment opportunities for people.

OBJECTIVES OF MARKETING
a)

b)

c)

To apply effective and intelligent modern marketing policies: As the world is experiencing rapid changes in terms of high inflation, high interest rates and rapidly changing techniques. To develop the market field: change may come gradually or spontaneously: Once a pattern is established by noticing the changes, the trends can be ascertained. To develop guiding policies for better results: Innovation is the key to success. In many cases it may come by keeping a close contact with the customers. Thus two mantras for success are innovation and customer building.

OBJECTIVES OF MARKETING
d)

e)

To suggest solutions by studying the problems relating to marketing: low sales for a product may be due to weakness in sales team, poor product design, defective supply, non availability of the spare parts etc. Marketing is involved with the identification of the problem and suggesting the remedies to cure it. To find sources for further information concerning the market problems: To find out with the sixth and seventh sense the problems that are going to erupt in the near future and posing problems for the company.

MODERN MARKETING
1.

2.

3.

Define the market area: A firm has to define where it wants to sell its products i.e. in the consumer market, industrial or service market or to the government. Research consumer needs and wants: through a properly carried out consumer research a company may come to know about what does the consumer want and what do they need? Developing and redeveloping the product or service: R&D in a company is a continuous process which needs to be carried on continuously in the changing times.

MODERN MARKETING
4.

5.

Selecting, Training, Motivating and controlling manpower: Developing Sales approach and Advertising support: Before selling it must be decided what is to be sold, at what price it is to be sold and at which place. Further, advertising should be taken the help of to sell the product.

IMPORTANT TERMS IN MARKETING

Social concept: To think about the consumer interest in the long run. Not to produce any such goods which are harmful to the ecological balance or creates pollution. Meta Marketing Concept: It is the marketing done by even the non business units like by temples, gurudwaras, schools, colleges and clubs etc. Demarketing Concept: To discourage a certain class of buyers to purchase a certain product. The company does not want to lose its loyal customers. Mercedes Benz

IMPORTANT TERMS IN MARKETING

Macro Marketing concept: Here the marketing concepts are used for the promotion of economic development. Remarketing Concept (morph marketing): finding out the new uses or alternative uses of an existing product. Morph is changing the size, structure or features of a product. Over marketing: In order to earn high profits early company sacrifices the quality and make efforts to increase the sales through over marketing.

IMPORTANT TERMS IN MARKETING

Synchro Marketing: certain products have their seasonal demand only and during the off peak season nobody purchases those products. In order to woo the customers in the off peak season by giving allurements is synchro marketing. Counter marketing: Deliberately telling the negative effects of a commodity in the long run on the health of a consumer

IMPORTANT TERMS IN MARKETING

Mega marketing: when closed markets are opened up new firms have to spend a hefty amount on the advertisement of their products. Green marketing: in order to protect the flora and fauna (eco system) a subsequent amount these days is spent by the advertising companies on the marketing of their products. Speed marketing: to bring the new products into the market as early as possible. Product to be introduced must be made as per customer requirements.

MARKETING TASKS
Marketing is not only concerned with providing products to the customers rather it is meeting needs profitably. Marketing tasks: 1. Understanding customer needs: As wants are influenced by the society, religion, region etc. hence, a company needs to develop the products according to the needs of the customers. 2. Defining Customer value and satisfaction: Customer needs to have a real value for their money. Just satisfied customers seek to have a higher satisfaction. Thus, the companies need to provide higher customer satisfaction.

MARKETING TASKS
To provide satisfaction two ways are: 1. A marketer can increase the value of the product or 2. decrease the cost. Sometimes it is not feasible to increase the value of the product (i.e. increasing the benefits) so the company has to reduce the cost of the product thereby reducing the benefits too. But the decrease in benefits must not be substantial. A company need to study the customer needs and should then produce.

MARKETING TASKS
To achieve high performance business: It can be done in four contexts a) Stake holders (shareholders, customers, suppliers, distributors): All their needs must be fulfilled taking into consideration the customer satisfaction. b) Processes: Different processes need to be linked properly so that no haphazard jobs are done. Cross functional teams to be made responsible for their own job. c) Resources: Deciding which processes to be outsourced by the company and which processes to be handled by the company itself.
3)

MARKETING TASKS
d) organization: through a network of good organization only can a company succeed in achieving its objectives. Structure and policies of a business can be changed but not the culture. 4) Delivering customer value and satisfaction: The firm while delivering products takes into consideration the cost structure of its rivals too. It helps to determine the costs in the market. Moreover, the product reaches the final consumer through a supply chain. Firm has to keep satisfied the members of the chain too otherwise they will start ignoring the company.

MARKETING TASKS
5.

Attracting and retaining the customers: first of all the customers are given the awareness about the product through mass media. Then sales men of the company visit the customers personally and clear all their doubts. Company must make efforts to keep the old customers as high customer churn is dangerous for the company. Retaining customers for a long time make them loyal towards the company.

Marketing Planning
Planning refers to the process of deciding in advance what is to be done in the future. It is a deliberate and continuous process. Marketing Planning: According to American Marketing Association Marketing Planning is the work of setting up objectives for marketing activity and of determining and scheduling the steps necessary to achieve such objectives.

Marketing Planning
Benefits: Promotes successful marketing operations Coordinate activities which facilitate the attainment of objectives Resources can be used properly in the light of objectives determined. Review of operations could be done under the pursuit of planning It helps in the SWOT analysis It can be used to minimize the risk of failure of a product.

THREE LEVELS OF MARKETING PLANNING

STRATEGIC PLANNING it covers companys long term goals and dictate the direction for all the departments and divisions within the company. TACTICAL PLANNING (Making short term goals by the middle management) OPERATIONAL PLANNING (Undertaken by the supervisory staff for the improvement of present sales)

MARKETING PLANNING PROCESS

Steps: 1 SCANNING THE MARKETING ENVIRONMENT:

To see if the environment is congenial for trading See the tastes of the consumers See the unfulfilled demands of the customers Locate the marketing opportunities Reaction of the consumers to the products The causes of the customers patronage of a particular brand

MARKETING PLANNING PROCESS

2. Internal Scanning:

It is the identification of the strengths, weaknesses and the core competencies. While external scanning helps to identify various opportunities in areas of interest to the firm, internal scanning helps a firm to be selective in nature and decide on the nature of the opportunities to be tapped.

MARKETING PLANNING PROCESS

3. Setting Marketing Objectives:

A business unit may have to set marketing objectives after weighing the opportunities available in the environment, the threats, the forces of competitions, the forces and the capabilities of the units. 4. Formulating Marketing Strategy: It is the unbeatable plan drawn in order to achieve the above mentioned marketing objectives.

MARKETING PLANNING PROCESS

5. Developing Functional Plans: A plan has to be drawn for each marketing function to be performed. Even the best marketing strategy will fail if the plans are made in a haphazard manner.

Components of a marketing plan

1. 2.

3.
4.

5.
6.

7.
8.

Executive summary Situation analysis Threats and opportunities analysis Objectives Marketing strategy Marketing action programmes Budget allocation Monitors and controls

Problems Of Marketing Planning

Problem of inaccuracy: Because of either the wrong information supplied or the dynamic market factors which affect the plans. 2. Inbuilt inflexibilities: Internal : because of the problems posed by the employees External: problems relating to ecological, political, social and technological matters
1.

Problems Of Marketing Planning

3.

4.

Problem of work pressures: Marketing personnel preoccupied with other tasks so there is hardly any scope left for the marketing plans. Cost : The cost of planning is high in terms of both the men and material.

STRATEGIC PLANNING
It is a process of identifying suitable market opportunities, investing funds in the same and predicting the outcome of the same. It focuses on 4 Cs (customer needs, cost, communication and the convenience) and 4 Ps beside taking into consideration marketing, production and research and development. Its focus is on the whole business unit rather than the individual departments or a unit.

DIFFERENCE STRATEGIC AND MARKETING MANAGEMENT

1. 2. 3.

4.
5. 6. 7.

Time frame: (long term impact) Decision orientation: (inductive in nature) Decision process: (goes from bottom to the top) Organizational behavior: (all departments engaged) Environmental relation: (can change very much) Nature of Job: (more creativity is required) Mission: (to determine the future path)

STRATEGY FORMULATION
Michael Porters Generic Strategies: Overall Cost Leadership: For this a firm have to have the best engineering, purchasing, manufacturing and physical distribution network. Differentiation: The products being manufactured by the firm should have the best ingredients in it so that it may compete with others. Focus: Business focuses on narrow segments. The firm gets to know about these segments and pursues either cost leadership or differentiation. Dell, Southwest airlines, Infosys totally different from their competitors.

STRATEGIC ALLIANCES
National and international alliances formed by the Even big companies like Philips, Siemens etc. Types of alliances: Product or service alliances: A company licenses other to produce its products. (E.g. HLL and Pepsico) Promotional Alliances; one company agrees to carry on a promotion for other companys products. (P&G India used Bombay Dyeing ads to add for ariel detergent)

STRATEGIC ALLIANCES
Logistics alliances: Where one company offers logistical services for another companys product. E.g. Transystem of India and Mitsui Company of Japan provides logistics services to Toyota Kirloskar motors for their automotive plant near Bangalore. Pricing collaborations: These collaborations could be between airways and hotels and car companies.

STRATEGIC MARKETING PLANNING PROCESS

Development of mission statement and objectives A mission symbolizes the activities that an enterprise intends to undertake and how differently it performs those activities from the competitors. e.g/ Modi Xerox mission is your documents are our business. Objectives are made in order to measure the actual performance. Prof. Peter Drucker defines following objectives: consumer creation, productivity, social and profit objectives.

STRATEGIC MARKETING PLANNING PROCESS

SITUATION ANALYSIS: It involves market analysis, competitive analysis, market environment and productivity analysis. Market analysis: here the aim is to develop the product as per the requirements of the customers. It includes: defining the relevant market analyzing the primary demand for the market defining market segments and identify the potential target markets

SITUATION ANALYSIS
Relative market potential: It stands for the benefits arising out of a particular area. E.g.. Where to send the sales personnel for sales, where to establish warehouses, companys head office or sales offices etc. Profitability and productivity analysis: It is the assessment of the impact of marketing strategies on the profits of a company on a particular product or a product line.

SITUATION ANALYSIS
Competitive analysis: it includes identifying the direct competitors of the firm examining the competitive market forces assessing competitive advantage (SWOT) Market Measurement: Absolute market potential: it is simply the estimation of market demand for the product estimated through evaluation of marketing opportunities or through the number of retail outlets.

STRATEGIC MARKETING PLANNING PROCESS

Determining the business composition: Core Business New products New markets for existing markets for existing products diversification entry into New products & new markets Core Related Business Core unrelated business

STRATEGIC MARKETING PLANNING PROCESS

Strategic analysis of business units: to look into the past, present and future of the business. Can be Boston consulting group (BCG) or GE multifactor planning process. Stars Question Marks

Cash Cows

Dogs

STRATEGIC MARKETING PLANNING PROCESS

GE MULTIFACTOR PLANNING PROCESS: High High Medium Medium low High Medium

Low

Low

SELECT BUSINESS UNIT OBJECTIVES

Here the objectives are set for a business unit. The objectives tell where a firm has to go or which goal it wants to achieve whereas the strategy provides a design how to reach that goal. Clearly defined unit objectives helps a corporate to accomplish its mission. Moreover they help in the easy implementation of plans with minimum errors, wastes and confusion.

MARKETING STRATEGY
It is basically a plan shaped in order to attain the market objectives of a firm. Market strategy is essential in order to beat the Competition. It could be Reducing competition: Through takeovers Joining competitors To create barriers To differentiate the products To improve the speed of service

DIFFERENCE STRATEGY AND TACTICS

1. 2.

3.

4. 5. 6.

Strategy formulated at a top level whereas tactics take place at a lower level. Strategy is continuously made whereas tactics are made periodically. Strategy more concerned with long time period and vice versa. Strategy has a broader scope. Strategy and tactics are complement complementary and supplementary to each other just as two sides of a coin.

MARKETING INFORMATION SYSTEM

Marketing information takes an important place in the modern world. Through the marketing information managers come to know about the consumer wants and desires, untapped customers and customer desires. Importance 1. Consumer demand 2. Analyzing marketing environment 3. Helps in innovations 4. Setting updated goals after scanning environment 5. To bridge the communication gap with consumers

MARKETING INFORMATION SYSTEM

Three methods for MIS include 1. internal records 2. Marketing intelligence activities and 3. Marketing Research Components
1. INTERNAL RECORDS AND MARKETING INTELLIGENCE

Managers by relying on orders, sales and prices etc. can spot important opportunities and problems. Order to payment cycle: sales representatives or customers send their respective orders. Orders sent to the accounts department for making invoices and the items are then shipped to meet the timely delivery. Use of internet taken to ensure speedy and accurate performance.

MARKETING INFORMATION SYSTEM

Sales Information Systems: These are desperately required by the managers so that right products be supplied and sold. Moreover, the sales staff should provide accurate information about the sales. Use of technological gadgets can help to keep the salesmen updated about the latest information. Databases, Data Warehousing and Data Mining Data about the valuable consumers is stored in the form of database. It helps to give offers to those who purchased in bulk. This data is given to statisticians so that they can mine the data and garner some important information. Company can give suitable offers to those customers who are loyal to the company.

MARKETING INFORMATION SYSTEM

2. Marketing Intelligence System: It supplies happenings data. Marketing managers collect marketing intelligence by reading books, newspapers, journals, customers, distributors and other company managers. Steps to improve marketing intelligence: Train sales people to spot and report new developments. Motivating distributors, retailers etc. to supply important intelligence. Network externally: scrutinize the rival companys ad,, published reports, attend open house shows etc.

MARKETING INFORMATION SYSTEM

Set up a customer advisory panel having people who speak high about company products. Make use of government data resources. Use online customer feedback system Analyzing the Macro Environment Fad Trend Megatrend

MARKETING INFORMATION SYSTEM Need to analyze six major areas 1. The Demographic Environment: More the population more the marketing opportunities. But the population must have a sufficient purchasing power. India constitutes worlds 17 per cent population. Moreover, the number of males outnumber the females. 34% population below the age group of 25 years. Another 24% in the age group of 25 to 34 years. Hence the marketers try to tap the young generations as the trends once set will last long.

MARKETING INFORMATION SYSTEM

Economic Environment
According to NCAER, Five categories of Indian consumers are : 1. Destitute (not active in purchasing): Income Rs. 16000 p.a. 2. Aspirants (new entrants due to an increase in their real income) : Income Rs. 16000 to Rs. 22000 p.a. 3. Climbers (have desire to purchase but no cash): Income Rs. 22000 to Rs. 45000 p.a. 4. Consuming class (have money and are willing to spend) : Income Rs. 45000 to Rs. 215000 p.a. 5. Rich (have money and own a wide range of products): More than Rs. 215000 p.a.

MARKETING INFORMATION SYSTEM

Socio-Cultural Environment: India has so many languages, regions, social systems, Values, norms and religions. A marketer needs to understand all these and address all these issues creatively. Natural Environment: The companies need to address these issues otherwise they may take political turns. E.g. the campaign against coca cola in Kerala, steel companies to invest several billions in pollution control equipments and Euro II standards for the car manufacturing firms. Rules concerning pollution are more strict in developed countries rather than the poor.

MARKETING INFORMATION SYSTEM

Technological Environment Technology keeps on changing fast. E.g. Mobile PCs are sure to out show the Desktops and laptops. Marketer needs to keep track of all the latest technological up gradations. The marketers must monitor the pace of change, opportunities for innovation, and the increased regulations.

MARKETING INFORMATION SYSTEM

Political Legal Environment: The companies must produce the goods taking into Consideration the legal environment of the country. E.g. in India the food companies need special approval to launch brands that duplicate what already exists in the market. Moreover red dot required to be put on the non veg items and green on the veg items.

MARKETING RESEARCH
Helps the business managers to make the right market decisions after finding and analyzing the facts. Objectives
1. 2. 3. 4. 5.

To know the buyers To measure the impact of promotional efforts To study the price trends To analyze the market size To know the development of science and technology

MARKETING RESEARCH
6. 7. 8. 9.

10.

To assess the volume of future sales. To study the customer acceptance of products To know the estimation of demand To evaluate the profitability of different markets To study the advantages and limitations of the products.

SCOPE OF MARKETING RESEARCH

1.

2.

3.

4.

Consumer research: (understanding Consumer problems and their rectification in order to have better relations) Market research: (understanding Market trends, size, nature and characteristics of markets) Research on Sales: (forecasting sales territory design, sales quota, sales forecasting, sales volume etc.) Research on Product: (involves new product development, brand image, product tests, product testing etc. )

SCOPE OF MARKETING RESEARCH

Advertising and promotion research: (media research, effectiveness of mass media, copy research etc.) 6. Business economic research: (economical and technological forecasting, measuring company image, mergers, acquisitions, location etc. Procedure of Marketing Research 1. Defining the problem 2. Determining the information needed
5.

PROCEDURE OF MARKETING RESEARCH

3. 4. 5.

6. 7.

Determining the source of information Deciding the research methods Tabulation, analysis and interpretation of data Preparation of the report Follow up study

MARKETING RESEARCH
Methods of Marketing Research: 1. Survey Method: (obtaining required information from the respondents for the purpose of understanding some aspects of interest). It could be obtained through Personal Interview, Mail Interview and Telephone interview. 2. Observation Method: (just keeping a close watch on the person/customer form whom the information is sought)

MARKETING RESEARCH
3.

4.

Experimental Method: (producer carries on a small scale experiment and tries to get valuable information out of that and that serves as a basis for designing a large scale Marketing Programme). This method includes test marketing. It can take place through i) in Depth Interview ii) Projective Techniques. External Research: (through some paid agencies the research work is got done. Small and medium size units use this type of practice).

MARKETING RESEARCH
Agencies can be of three types
1.

2.

3.

Syndicated or continuous service agencies: (have got the ready information simply pass the information to the company in lieu of money) Research facility agencies: (they take research work only when briefed about the nature of problem the firm is undergoing and the answer it requires) Custom Research Agencies: general solutions are offered to the company.

CONSUMER BEHAVIOUR
CB is a process whereby the individuals decide whether, what, when, how and from whom to purchase the goods and services. Factors affecting consumer behaviour: 1. CULTURAL FACTORS:

Culture different in US and India Subcultures and hence Multi marketing is required Even there is social stratification

CONSUMER BEHAVIOUR
2.

Social Factors

Reference groups: membership groups, aspirational and dissociative groups Family of orientation or procreation Roles and statuses

3.

Personal Factors
Age and stage in the life cycle Occupation and economic circumstances Personality and self concept like sincerity, excitement, competence, sophistication and ruggedness.

CONSUMER BEHAVIOUR
Lifestyles and values: Achievement oriented products Time constrained products STEPS IN BUYING PROCESS 1. Need recognition: The needs have to be addressed properly otherwise the consumer will feel restless. 2. Information Search: consumer need can be satisfied only when he is provided the right product. Consumer should be provided timely and adequate information about the product.

CONSUMER BEHAVIOUR
Evaluation and intention: the consumer evaluates and tests all the pros and cons of the product. Also looks for the alternative products. Purchase decision: final stage in the process. Ist time users look for the trial packs. The consumer places repeat order only when he is satisfied. Post Purchase decision: if satisfied then the consumer will go on for the repeat order otherwise may have a negative opinion (cognitive dissonance) and purchase the alternatives.

Buyer Behaviour Models

THE ECONOMIC MODEL: Price effect Income effect Substitution effect Communication effect But this model could not satisfactorily answer the real life situations which the consumers are confronting.

Buyer Behaviour Models

LEARNING MODEL (Stimulation Response Model) DRIVES Strong internal feelings which impels an action CUES Stimuli coming from the markets and the social environment RESPONSE It is needed to fulfill the drive

Buyer Behaviour Models

Psychoanalytical Model: When a person examines specific brands, he will not react to their stated capabilities but also to other less conscious cues. Three deep seated motives which drives an individual person to purchase a commodity are: ID Super Ego and Ego

MARKET SEGMENTATION
Process of grouping buyers into different categories having common desires or needs. Marketers identify the different groups of buyers having same desires or requirements. Flexible market offering has two parts: i) Naked solution (which all segment members give due weightage) ii) Discretionary options (only some segment members value)

MARKET SEGMENTATION
Human Preferences can be of three types: i) Homogeneous preferences ii) Diffused preferences iii) Clustered preferences NICHE MARKETING Where a customer group seeks a distinctive mix of benefits. Niche is different from product differentiation.

MARKET SEGMENTATION
Benefits of market segmentation: 1. Better understanding of consumer needs 2. Can help to make appealing and effective plans 3. Better assessment of the competition 4. Better allocation of resources. Local Marketing Catering to the need and wants of local customer groups.

MARKET SEGMENTATION
CUSTOMERIZATION : It empowers consumers to design the product and service of their choice. SEGMENTING CONSUMER MARKETS Geographic Demographic Psychographic Behavioral

MARKET SEGMENTATION
GEOGRAPHIC SEGMENTATION The market is divided into different regions like North, East, West, and South. In case of Indian context the segmentation assumes greater importance as most of the people live in rural areas. The priorities in rural areas are different to that of the urban areas. However, 77 percent of the urban population accounts for 80 percent of the market potential value.

MARKET SEGMENTATION

DEMOGRAPHIC SEGMENTATION Age and Life Cycle Life Stage Gender Income Generation Social Class

MARKET SEGMENTATION
PSYCHOGRAPHIC SEGMENTATION : Psycho + Demography = Psychographic The buyers are divided into different groups according to their lifestyle, values and personality. Tendencies of people can be Higher lower Innovators Believers Thinkers Strivers Achievers Makers Experiencers Survivors

MARKET SEGMENTATION
BEHAVIORAL SEGMENTATION Decision Roles Initiator Influencer Decider Buyer User

MARKET SEGMENTATION

Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude

MARKET SEGMENTATION

Models of Sequential Segmentation Stage of decision

First-time prospects (who have not yet purchased the product but can purchase the product from a person whom they trust) Novices (who are starting their purchasing relationship and want easy to read manuals or knowledgeable sales reps) Sophisticates (established customers who want speed in repairs and maintenance and high technical support)

MARKET SEGMENTATION

Orientation Price-oriented customers: (who want value through lowest price) Solution-oriented customers: (who want value through more benefits) Strategic-value customers: (who want value through the supplier co-investing in the customers business)

MARKET SEGMENTATION
SELECTING THE MARKETING SEGMENT S Single segment concentration: where a firm specializes in a single product. Selective specialization: a firm selects a number of segments where it has to sell its product. Product specialization: firm makes a single product that it sells to different market segments. Market specialization: the firm concentrates on serving the many needs of a single consumer group.

MARKET SEGMENTATION
Full market coverage: the firm tries to sell all the products to all the consumers. Only big firms succeed in doing so. There could be undifferentiated marketing or differentiated marketing in it. Undifferentiated marketing: only one offer Differentiated marketing: firm operates with different products for different segments.

PRODUCT PLANNING AND DEVELOPMENT

PRODUCT: a product is a bundle of utilities consisting of various product features and accompanying services. Segmentation (discovering needs and groups in the market place) Targeting (to satisfy those needs of the customers which can be catered in a superior way) Positioning (to position the offers of the company in a way that the target market may come to know about the offers)

Points of parity and points of difference

Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared with other brands

PRODUCT PLANNING
COMPONENTS OF PRODUCT PLANNING

Product innovation: to bring out something new that is not yet known. Product diversification: it can take place in case of both product depth or in product width Product standardization: only standardized products available in the market instead of unnecessary so many goods. Product elimination: when some of the products are withdrawn from the market.

PRODUCT MIX
It is a set of all product lines and items that a particular seller offers for sale to buyers. e.g. A firm manufacturing watches, machinery items, electric lamps etc. Product mix variables are Product line and range; product design; Product package, Product labeling, Product branding

PRODUCT DIFFERENTIATION

Brands can be differentiated on the basis of a number of different product dimensions, product form, Conformance, Durability, Reliability and Reparability. Quality will depend upon actual product performance, but it is also communicated by physical signs and cues. A car mfr. makes sure its cars doors make a solid sound when they slam shut because many buyers slam shut the doors of a new car to check its built. A lawnmower mfr deliberately gives a high noise to it so that it may claim that its lawnmower is more powerful A brand of bathing soap lost its quality image because it used transparent package and consumers could trace the defective product. This brought a bad name to the company.

Product Differentiation
Personnel distribution: Cos. may gain a strong competitive advantage through having better trained people. Channel differentiation: companies can achieve competitive advantage through the way they design their distribution channels coverage, expertise and performance. Image differentiation: buyers respond differently to different to company and brand images.

PRODUCT LIFE CYCLE

Normally a PLC has the following four stages i.e. Introduction 2.Growth 3. Maturity 4. Decline But it can have some other shapes too Growth slump maturity pattern Cycle recycle pattern Scalloped pattern

PRODUCT LIFE CYCLE

INTRODUCTION STAGE High advertisement expenses Risky stage Established companies dont let settle down Low or no profits Being a pioneer into the market has its own merits and Demerits. But a strategy of launching a new product needs to be devised so that the imitators may be avoided.

PRODUCT LIFE CYCLE

GROWTH STAGE Sales rise Prices stable Less advertisement New competitors enter Low production costs The firm must have a strategy to sustain in market Firm can enter new markets Improve product quality Lower down the prices

PRODUCT LIFE CYCLE

MATURITY STAGE There could be Growth Stable and decaying maturity STRATEGY A firm can go in for market modification by way of attracting new customers or changing the product.

PRODUCT LIFE CYCLE

Other strategies Price cut More advertising Sales promotion Personal selling in order to revive the taste The company needs to have a meeting of all its core members to decide the future.

Product Classification Schemes

Durability Tangibility Use Durability and Tangibility Nondurable goods Durable goods Services

Five Product levels

The customer level hierarchy in case of Air conditioners 1. Cooling and comfort Core benefit 2. Sufficient cooling capacity, reasonable air Basic product

intakes, exhausts and so on 3. Atleast two cooling speeds, removable air Expected product filter, vent for exhausting air, one year parts warranty Augmented product 4. Optional features might include electric touch pad controls, a display to show indoor and outdoor temps, toll free no. to customer care etc. 5. Silent operation, temperature completely Potential product balanced across the room and energy self sufficient

Consumer Goods Classification

Convenience (staples, impulse, emergency) Shopping Specialty Unsought Industrial Goods Classification Raw material: basic goods that become a part of tangible product. E.g. fruits, vegetables, cotton etc. it also includes manufactured items such as chemicals, cement etc. Capital equipment: expensive large machines e.g. cranes and bull dozers. Accessory part: tangible products usually less expensive and are relatively less long lasting Component parts: like spark plugs, Microchips and Hard drives Process materials: used in producing another final product e.g. alcohol used in cosmetics products

Product Differentiation

Product form Features Performance Conformance Durability Reliability Reparability

Style Design Ordering ease Delivery Installation Customer training Maintenance

SERVICES DIFFERENTIATION

Ordering ease Delivery Installation Customer training Maintenance and repair

PRODUCT SYSTEMS

Product width (how many different product lines the company carries. E.g. Reliance, Tata) Product length (it is the total number of items in a mix or average length i.e. total length/number of lines) Product depth (how many variants are offered for each product in a line) Product consistency (how closely the product lines are related)

Product Line Analysis

CORE PRODUCT: sales high; margins low; advertisement high STAPLES: Low sales: higher margins; no advertisement SPECIALTIES: low sales; high margins; high advertisement CONVENIENCE ITEMS: unimportant items; less advertisement; high margins

PRODUCT LINE LENGTH

A company can lengthen its product length by two ways: 1. Line stretching There could be down market stretch or up market Stretch or the company may resort to two way stretch 2. Line filling (by adding more items)

Steps In New Product Development

INTERNAL SOURCES 1. Basic research; 2. improvements in the ongoing manufacturing 3. Through sales people 4. Top management
1. 2. 3. 4. 5.

EXTERNAL SOURCES Competitors Customers Published lists Resellers Inventors

Methods In Idea Generation

Focus groups: (where an in depth discussion about the proposed product takes place) Attribute listing: (what features are to be given alongwith the product) Forced relationship: (different ideas correlated ) Brainstorming: (several heads put together) Reverse Brainstorming (finding out the shortcomings)

SCREENING STAGE AND BUSINESS ANALYSIS

SCREENING STAGE Most important stage as majority of the ideas do not cross this stage. It is because of lack of promising ideas or resource constraints. BUSINESS ANALYSIS: related to the future Projections. Cost, profits and demand analysis made at this stage.

PRODUCT DEVELOPMENT
Actually the practical stage. It pertains to the technical aspects (engineering) on one side and market development aspects (product testing) on the other side. Product testing is accompanied by consumer preference testing, product branding, product packaging, and product labeling.

TEST MARKETING
It helps to know the actual response in the market. It helps to find out the alternative programs to develop the product. Helps to know the competitors reactions Helps to find out the improvements required in the existing product. Finally COMMERCIALIZATION (entire market Vs selected segment and Crash Vs Roll out)

CONSUMER ADOPTION PROCESS

It is the individual's decision to become a regular user of a product. Stages in the adoption process: 1. Awareness: (information is provided) 2. Interest: (customer desires to have a new information) 3. Evaluation: (decision making stage. Decision is taken to use the product or not) 4. Trial : (tries the product and decides its worth) 5. Adoption: (if satisfied adopts it fully)

Factors Influencing The Adoption Process

There are five adopter groups: Innovators: (who are technology enthusiastic. Price sensitive and believe in early reporting) Early adopters: (opinion leaders. Can support the product if the company clears all their doubts personally) Early majority: (start purchasing the product when its benefits are proven) Late majority: (conservative and risk averters. Price sensitive) Laggards: (tradition bound and resist innovation. Will purchase the product when there is no alternative present)

BRANDING AND CO-BRANDING

Branding is a name, mark or a symbol to promote a product. Uses: An intangible asset building companys image Promotional tool Helps to gain popularity CO-BRANDING stands for the dual branding.

INGREDIENT BRANDING
A special case of co-branding where a brand name is given to the materials, components or parts. Merits The company whose products are being used as ingredients by the borrower company if advertised about the matter used, goodwill enhanced for both the firms. Drawback Original identity of the company providing the ingredient is lost.

PRODUCT PACKAGING
It is the act of wrapping the product for performing the market functions conveniently. Objectives Product protection Product identification Product convenience Product promotion

PRODUCT PACKAGING
PACKING STRATEGIES Family packaging strategy Multiple packaging strategy Reuse packaging strategy Ecological packaging strategy

PRICING DECISIONS
Price is synonymous to Rent, Fee, Fare, Bribe or Salary but price to: A consumer is the sacrifice of purchasing power A Seller is the source of profit A manager it is a product feature Consumers arrive at their perception of prices by: 1. Reference prices (to compare a product with a class product) 2. Price quality inferences (high quality symbolizes high price) 3. Price cues (odd pricing as consumers read it from left to right)

PRICING DECISIONS
STEPS IN PRICE SETTING I. OBJECTIVES 1. Pricing for target return (to meet the targets set) 2. Market share (for market penetration) 3. To meet or prevent competition (pricing according to rivals) 4. Profit maximization (better in the long run than short run)

PRICING DECISIONS
5.

6. 7. 8.

II)

Maximum market skimming (setting high price initially) Stabilize price (in order to gain peoples confidence) Customers ability to pay (price discrimination) Resource mobilization (in order to get full utilization of the resources) PRICE SENSITIVITY companies need to see the elasticity of demand

PRICING DECISIONS
To estimate the demand a company may resort to Statistical analysis Price experiments Surveys III) ESTIMATING COSTS IV) ANALYZING COMPETITORS COSTS AND PRICES

PRICING DECISIONS
V) Selecting a pricing method MARKUP PRICING Unit cost = Variable cost + (Fixed Cost/Unit Sales) Mark Up Price = Unit Cost/ (1 - desired return on sales) PERCEIVED-VALUE PRICING: Setting the price as per the value perceived by the buyers

PRICING DECISIONS

VALUE PRICING: (charging low price for a highly good offer. EDLP Vs high low pricing) GOING-RATE PRICING: (charging the same price as the leader is charging) AUCTION-TYPE PRICING: Ascending bids Descending bids Sealed bid auctions

PRICING DECISIONS
SELECTING THE FINAL PRICE Impact of other marketing activities like quality & advt Company pricing policies Impact of price on other parties PRICE-ADAPTATION STRATEGIES Geographical pricing (barter, compensation deal, buyback, offset) Promotional pricing (loss leader, event, rebates, psychological) Differentiated pricing (price discrimination, product form, image, location, and channel pricing)

MARKETING CHANNELS
It is a system of relationships existing among businesses that participate in the process of buying and selling goods and services. It is a set of marketing channels employed by a firm. In managing the intermediaries, firm must decide how much effort to devote to push versus pull marketing. PUSH STRATEGY: where the company uses its sales force for selling the products. low branded products sold like this. PULL STRATEGY: where others create demand for the products. Consumers know about the product before they enter the store. High branded products sold like this.

FUNCTIONS OF MARKETING CHANNELS

1.

2.

3.

4.

5.

Some of them (wholesalers or retailers) purchase from the producers and in turn resell the products to the consumers. They are called merchants. They keep the products in their custody till the final sales are made. Brokers, agents producers and sales persons only negotiate with the buyers on behalf of the producers. Transporters, bankers and warehouses act as the facilitators in the process of distribution. Channel members create utility: time, possession or place utility Channel members facilitate exchange efficiencies: otherwise the companies find it difficult to sell the products directly

Classification Of Channels
Conventional Channels 1. Zero level channel 2. One level channel 3. Two level channel 4. Manufacturer to agents to wholesaler to retailer to consumer Non Conventional Channels Vertical Channels : one member of the chain owns the other elements Horizontal : two or more non competing organizations agree on a joint venture.

FUNCTIONS OF A WHOLESALER

Assembling and buying in bulk Warehousing Transporting Financing Risk bearing Providing market information

TYPES OF WHOLESALER
1.

a)

b)

c)

Full function : perform many functions for both the manufacturers and consumers. They can be of further three types: Wholesale merchants ( deal with consumer products. Include general merchandise, general line and specialty wholesaler) Industrial distributors (sells industrial products to the industrial users or manufacturers rather than to retailers) Rack jobbers (deals in non food products and retain title to the goods and bill the retailers only for the goods sold)

1.

2.

3.

4.

Cash and carry: make the retailers visit their warehouses for negotiation and complete the transaction for carry goods on cash payment. Truck wholesaler: perform functions like selling delivery and collection of goods in their own trucks and wagons. Drop shipper : they order the goods and deliver them directly from manufacturer to retailer. They help to reduce the operating costs by reducing transportation and warehousing costs. Mail order : carry the business through mail by telling the prospective buyers about the features of the product.

TYPES OF WHOLESALER

FUNCTIONS OF A RETAILER
1. 2. 3. 4.

5.

Buying and assembling Warehousing Risk shouldering Financing Advertisement

Small scale Unit stores Street traders Market traders Hawkers Cheap jacks

Types of retailers
Large Scale

Departmental Multiple shops Mail Order Fair Price

FACTORS AFFECTING DISTRIBUTION CHANNELS

MARKET CONSIDERATION 1. Nature of market: 2. Number of potential customers 3. Order size 4. Customer buying habit

FACTORS AFFECTING DISTRIBUTION CHANNELS

PRODUCT CONSIDERATION Sales value of a product Bulk and weight Perishable nature Technicalities Price stability

FACTORS AFFECTING DISTRIBUTION CHANNELS

MIDDLEMEN CONSIDERATION 1. Who offer facilities 2. Who gives a low unit cost CONSUMER CONSIDERATION 1. For scattered customers who want to purchase on credit 2. For the customers who require convenience INTENSITY OF DISTRIBUTION 1. Mass (Intensive) distribution 2. Franchised (Exclusive) distribution

FACTORS AFFECTING DISTRIBUTION CHANNELS

Economic conditions: Technological development Legislative and other restrictions

BRANDING

Distillers in 16th century used it as tool to demark their product (whisky) from others. it is a name, term, symbol, sign or design or a combination of them to differentiate the products of one seller from others. According to Theodore Levitt the new competition is not between what companies can produce in their factories but what they add to their factory output in the form of packaging services advertising, customer service and things people value.

BRANDING

Brands are believed to the real generators of wealth and determine the market value of business entities. BRAND IDENTITY: It refers to an insiders concept reflecting brand managers decisions of what the brand is all about. BRAND IMAGE: it reflects the perceptions of outsiders that is the customers about the brand.

BRANDING
1. 2.

3.
4. 5. 6.

Brand conveys six meanings: Physique Personality Culture Relationship Reflection Self image

BRANDING
BRAND EQUITY: Brands have equity because they have high awareness, many loyal consumers, access to distribution channels or to patents. BRAND IMAGE: it can take the brand upwards or downwards. It could be: Image of provider or manufacturer Image of product Image of the user

BRAND NAME SELECTION

Companies have four options to choose a brand name; Company name Individual names Separate brand family names Combination of company name and product name QUALITIES OF BRAND NAME : 1. Should be suggestive about product benefit 2. should be easy to spell 3. should not resemble other names. 4. should be distinctive

BRANDING STRATEGIES

1. product branding strategy Line branding strategy Range branding strategy Umbrella branding strategy Double branding strategy Endorsement branding strategy

SALES PROMOTION

Sales promotion is a vital link between advertising and personal selling. It stands for all those activities that coordinate the efforts of personal selling, advertising, distributors and retailers to increase their sales and stimulating the consumers in purchasing more. In short, it include all those activities that do not fall under advertising, Personal selling or publicity.

DIFFERENCE ADVERTISING AND SALES PROMOTION

1.

2.

3.

4.

Main aim is to develop a favorable attitude of the consumers towards the product It may have long term or short term goals Media used includes press, outdoor, audio-visual etc. It is more pronounced in pre and post transaction phase

1.

2.

3.

4.

Where advertising ends, sales promotion start. It start functioning by providing a specific inducement. It always has a short term perspective The media used is contests, prizes, premiums etc. It is itself in the transaction phase

OBJECTIVES OF SALES PROMOTION

1.

2.

3.

4.
5.

6.

To increase sales and encourage the present consumers to use more frequently To help the new products enter into existing and new market To attract new customers by means of incentive campaign To help stabilize a fluctuating sales trend To build buying habits which lead to brand loyalty of the potential customers To motivate and attract the sales force and get their cooperation by exhibiting their products in the importance retail markets

SALES PROMOTION METHODS

SALES PROMOTION METHODS MEANING OBJECTIVES

Price off offers

Quantity offers Premium Packaged premium Banded premium Over counter premium Container premium Personality premium the off

Offering product at lower prices than normal prices

Offering more quantity without charging extra Offer of an article as an incentive in order to sell a product Incentive article within the package of product Where an article is banded to the package of the product like cello tape Article given to the customer on the counter

Encourage immediate sales, attract new users and counter competition

To encourage longer duration consumption To encourage purchase or stimulate loyalty

Adding speed to slow moving products To counter the competition

When a product is itself placed in an attractive reusable container When a consumer is required to redeem a specified proof of purchase for the premium article

Durable reminder at home To build loyalty and reward the consumer for his choice

SALES PROMOTION METHODS

SALES PROMOTION METHODS Refund offers MEANING OBJECTIVES

Offer a refund of money to consumer for mailing in a proof of purchase (label, corks etc.) Kind of discount coupons that are redeemable after a certain time period

To induce a trial from primary users, obtain displays at he retailers, loading dealers with increased stock To encourage customer loyalty

Trading stamps

Consumer contests lucky draws

Discounts Trade allowances

and

Where individuals are invited to compete on the basis of creative skills

Other than normal discounts Temporary price reductions/ reimbursement of expenses incurred by the dealers Offer a price reduction on the purchase of certain quantity A secondary incentive which offers a certain sum of money to trade for each additional unit bought over and above the deal

To create brand awareness

To push more sales or early recovery

Trade or buying allowance Buy back allowance

To increase the trade Encourage trade cooperation

SALES PROMOTION METHODS

SALES PROMOTION METHODS MEANING OBJECTIVES

Display allowance Dealer gifts

For providing desired sales promotion Useful gifts for the family and personal use of the dealer When an additional compensation is offered to the sales personnel Those special displays, racks, banners, that are placed in the retail store to support the sale of a brand Where additional quantity of the same or the same manufacturers other products are offered to trade

To improve the sales of the product Improve relations

Premium or push money Point of purchase Merchandise deals

To push the sales of a particular product To attract traffic at sales store

Expose other products of the sponsor

ADVERTISING

It is a non-personal promotion tool of stimulating the goods and services. Derived from the word adverto employed to draw attention to any object or purpose. Advertisement and personal selling are different in terms of One way Communication Mass non personal communication

STRENGTHS OF ADVERTISING

Makes the presence felt for any commodity Induces buyer to purchase and repurchase Leads to the success of any company Acts as a middle man Helps salesperson to introduce the product Tells new uses of the product Makes demarketing possible plays the role of an educator and entertainer Changes consumers attitude towards the product

WEAKNESSES OF ADVERTISING

It is an expensive activity particularly done nationally Cannot convince any body Exaggerate the facts Strong desire is created but low income cannot purchase It leads to artificial creation of demand Cannot answer the objections raised Destruction of culture but it is a useful activity

REQUISITES OF GOOD ADVERTISING

ATTENTION VALUE: should be in a position to draw attention RETENTION VALUE: message could be remembered for a long time SUGGESTION VALUE: should convey the reader the necessity of the product EDUCATION VALUE: should educate about the use of the product. CONVICTION VALUE: should be impressive and be able to convince.

TYPES OF ADVERTISING
Consumer advertising: can be at national or local level Industrial advertising: to become a part of other product Trade advertisings: to encourage the middlemen profits Retail advertisings Whole sale advertisings Product advertisings: deals with the non personal selling of a particular good Informative product advertising: used in introductory stage of PLC. Develop an initial demand for the product.

TYPES OF ADVERTISING
Persuasive product advertising: used when the product is in the market maturity stage. Develop the demand for the product or the brand. Reminder product advertising: used in the maturity stage. To remind the prospects about the features and benefits of the product. Pioneer advertising : stimulate the primary demand for the product where it can be purchased, its uses and functions Competitive advertising: Reinforcement advertising: to convince that the consumers have made the right choice in purchasing the product.

PROMOTION MIX

Marketing is the essence of promotion. Marketing is incomplete without effective communication. Effective communication tells about the right product at right price and at right place to the prospective buyer. Marketers use the combination of advertising, sales promotion, personal selling and direct marketing to convey the message to a target group of consumers. Communication: it is an attempt to share understanding by two or more persons. It can take place through instruction, report, suggestion, observation etc.

COMMUNICATION AND MARKETING

Sender formulates the message which he wants to convey to others The sender will translate message into words, symbols or some other form which he feels will make the receiver understand the message. (encoding the message) Encoded message transmitted to the receiver with the help of certain media. Message is communicated to the receiver. Receiver decodes the message and draw meanings. Receiver will take necessary action and will send his response to the sender of the message.

1. 2. 3.

4.

CONCEPT AND NATURE OF PROMOTION Promotion is a process of communication involving information, persuasion and influence. It tries to instill into consumers minds images that make them buy the product. A promotion message perform three tasks: Gain attention of the buyer Must be understood by the receiver Must stimulate the needs of the receiver and suggest an appropriate method of satisfying these needs. Three tasks are related to AIDA (attention, interest, desire, action)

AIDA
1. 2.

3.

4.

Potential customer message must be gained It must arouse interest in the product or service. Stimulate consumer desire by convincing the prospective buyer of the products ability to satisfy his or her needs. It must attempt to produce action in the form of a purchase or a more favourable attitude that may lead to future purchases.

PERSONAL SELLING
Personal selling or salesmanship is the oldest art of selling goods. It assumed greater importance owing to competitive markets. Salesmanship is the process of assisting and persuading the buyer to buy a commodity in a face to face situation Features: 1. Salesman persuade/convince people to buy product. 2. He aims at educating the customer and providing him a solution to the buyers. 3. He tell the ways how a consumer can satisfy his needs.

KINDS OF SALESMEN
Manufacturers salesmen: sells to retailers or wholesalers. He can be a) pioneer or creative salesman: create new networks b) dealer servicing salesman: training to sales force, providing free samples and collect orders from retailers. 2. Missionary salesman: develop goodwill. Keep in touch with the intermediaries stimulate and guide them. 3. Merchandise salesmen: arrange wide publicity and conduct demonstration for dealer salesmen 4. wholesalers salesmen: who keep in touch with the retailers and inform them about the new products. They can be indoor or outdoor salesmen.
1.

KINDS OF SALESMEN
5)

6)

7)

Retailer salesmen: counter salesmen or outdoor salesmen Sales engineer: who deal in high value goods. Meet potential customers and convey them the uses of the product. Also help in installation and maintenance of the machine. Service salesmen: appointed by the institutions providing intangible services like banking and insurance. They meet the people and convince them about the need of savings for future.

REQUISITES OF EFFECTIVE SALESMANSHIP 1. Personal qualities: physical, mental, social qualities, patience and dependability. 2. Training and motivation 3. Wide knowledge: a) Self (strong and weak points) b) Employer (origin and growth of his employer) c) Product (features, uses, technical details) d) Competitors products (positive and negative features) e) Customers (nature, habits and buying motives)

PROCUREMENT OF SALESFORCE
1. 2. 3. a. b.

c.
d. 4) 5) 6)

Advertisement Receipt of application Employment tests Intelligence Aptitude Professional Personality Employment interview Medical examination Appointment letter

TRAINING OF THE SALES FORCE

Types of training: 1. Induction and orientation training 2. On the job 3. Off the job 4. Conference 5. Study material

VIRAL MARKETING

Viral marketing refer to Marketing techniques that use preexisting social networks to produce increase in brand awareness or to achieve other marketing objectives. It can be word of mouth delivered or enhanced by the network effects of the internet. viral promotions may take the form of video clips, interactive flash games, ebooks, brandable software, images, or even text messages. The goal of marketers interested of creating successful viral marketing programs is to identify individuals with high social network potential and create viral messages that appeal to this segment of the population. Viral marketing has also been used negatively to refer to stealth marketing campaignsthe unscrupulous use of astroturfing on-line combined with under market advertising in shopping centers to create the impression of spontaneous word of mouth enthusiasm.

BUZZ MARKETING

Buzz marketing is a technique that attempts to make each encounter with a consumer appear to be a unique, spontaneous personal exchange of information instead of a calculated marketing pitch choreographed by a professional advertiser. Historically, the advertiser reveals information about the product or service to only a few "knowing" people in the target audience. By purposely seeking out one-on-one conversations with those who heavily influence their peers, buzz marketers create a sophisticated word-ofmouth campaign where consumers are flattered to be included in the elite group of those "in the know" and willingly spread the word to their friends and colleagues.

BUZZ MARKETING
Although buzz marketing is not new, Internet technology has changed the way it's being used. Buzz campaigns are now being initiated in chat rooms, where marketing representatives assume an identity appropriate to their target audience and pitch their product. Personal Web logs are another popular media for electronic buzz marketing campaigns; advertisers seek out authors of the "right kind of blog" and trade product or currency for promotion. Instant messaging (IM) applications are also being looked at as a vehicle for carrying out buzz marketing campaigns with either humans or doing the pitching. Some advertising experts predict that electronic buzz marketing techniques will become a standard component in all cross-media advertising campaigns.

GREEN MARKETING It involves developing products and packages that are less harmful to the environment. Includes areas from conservation of resources to control of pollution. Top management as well as internal employees must behave like environmentalists in case a successful green marketing program is to be launched. Key posts have been established by the companies for saving the environment. Even the employees are being rewarded for minimizing the wastages.

GREEN MARKETING
1. 2. 3.

4. 5. 6.

Green consumer should avoid the product which is likely to Endanger the health of the consumer or others Cause significant damage to the environment Consume disproportionate amount of energy while manufacturing Use materials derived from threatened species Involve the use of cruelty to animals Adversely affect other countries particularly third world

WHAT NEEDS TO BE DONE

Preference for green consumerism and environment friendly products will encourage marketers to add a green tint of marketing in their product. Like ECOMARK on labels Initially the products like textiles, soaps, paper, paints, packages, pesticides and drugs be brought under ECOMARK scheme. Later it should be extended to other products like petrol, lubricating oil, plastic, food additives, cosmetics, batteries etc. More consumer awareness and demand for product information Specific consumer education in schools and colleges IT be used to disseminate the information

RELATIONSHIP MARKETING It is building a long term satisfying relationship with the key parties like customers, suppliers and distributors. The ultimate outcome of this relationship is the building of a unique company asset called network followed by profits. The customers influence the future of a company to a great extent. Relationship marketing involves:
1.

2.
3. 4.

Identification of key customers Assignment of a relationship manager to old customers Preparing detailed job prescription to be given by managers Developing annual relationship customer plans

RELATIONSHIP MARKETING
Key principles of relationship marketing
Suspect

prospect

Ist Time Customers

Repeat customers

Client
advocate

Partners

Disqualified suspect

LEVELS OF RELATIONSHIP MARKETING

Basic marketing: salesman simply sell the products Reactive marketing: salesperson encourages the customer to call if he has questions, comments or complaints Accountable marketing: sales person phones the customer to check if the product is according to the needs of the customer. Proactive marketing: company salesperson contact the customer from time to time with suggestions about improved product uses. Partnership marketing: company works continuously with the customer to help the customers perform better.

STRATEGIC MARKETING

a)
b) c) d)

Strategy is a comprehensive and integrated plan that determines an organizations objectives and the broad direction in which the organization will move. Identifying strategic market position of an organization Environmental scanning Industry analysis Competition analysis Customer analysis

STRATEGIC MARKETING
Environmental scanning a) Socio cultural forces b) Economic forces c) Demographic forces d) Natural forces e) Technological forces f) Political and legal forces

STRATEGIC PLANNING
INDUSTRY ANALYSIS A. Industry attractiveness B. Industry structure Competition analysis Threats of entry a) Economies of scale b) Product differentiation c) Cost disadvantages d) Government policy

STRATEGIC PLANNING
Bargaining power of customers Bargaining power of suppliers Substitute products CUSTOMER ANALYSIS A) Customer needs B) Customer segmentation

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