Marketing by tanay

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Marketing DefinedMarketing Defined

Marketing is a Marketing is a Social and Social and Managerial processManagerial process by which by which individuals and groups obtain what individuals and groups obtain what they they need and wantneed and want through through creating, offering and creating, offering and exchangingexchanging products of value with products of value with others.others.

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Core Concept of MarketingCore Concept of MarketingNeeds, Wants and DemandsNeeds, Wants and DemandsOfferOfferValue Cost and SatisfactionValue Cost and SatisfactionExchange Transfer and RelationshipExchange Transfer and RelationshipMarketsMarketsMarketing & MarketersMarketing & Marketers

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Marketing Management Marketing Management DefinedDefined

It is the process of planning and It is the process of planning and executing the Conception, Pricing, executing the Conception, Pricing, Promotion and Distribution of Goods, Promotion and Distribution of Goods, Services and Ideas to create and Services and Ideas to create and exchange with target markets that exchange with target markets that satisfy customer and organizational satisfy customer and organizational objectives.objectives.

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Marketing Management Marketing Management ProcessProcess

Analyzing Marketing OpportunitiesAnalyzing Marketing OpportunitiesResearching and Selecting Target Researching and Selecting Target

MarketsMarketsDesigning Marketing StrategiesDesigning Marketing StrategiesPlanning Marketing ProgrammesPlanning Marketing ProgrammesOrganizing, Implementing and Organizing, Implementing and

Controlling Marketing EffortControlling Marketing Effort

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Service DefinedService Defined

A Service is any A Service is any act or act or performanceperformance that one party can that one party can offer to other that is offer to other that is essentially essentially intangibleintangible and does not result in the and does not result in the ownership of anything. Its production ownership of anything. Its production may or may not be tied to a physical may or may not be tied to a physical product.product.

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More distinctions about More distinctions about ServicesServices

Whether Whether equipment basedequipment based or or people basedpeople based

Some services require Some services require client’s client’s presencepresence

Whether service meet a Whether service meet a personal personal needneed or or business needbusiness need

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Categories of Service MixCategories of Service MixPure Tangible GoodsPure Tangible GoodsTangible Goods with accompanying Tangible Goods with accompanying

servicesservicesHybridHybridMajor service with accompanying Major service with accompanying

minor goodsminor goodsPure ServicePure Service

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Characteristics of ServicesCharacteristics of Services IntangibilityIntangibility InseparabilityInseparabilityVariabilityVariabilityParishabilityParishability

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Determinants of Service QualityDeterminants of Service Quality

Reliability – Ability to perform the Reliability – Ability to perform the promised Servicepromised Service

Responsiveness – The willingness to help Responsiveness – The willingness to help customerscustomers

Assurance – The knowledge and courtesy Assurance – The knowledge and courtesy of employeesof employees

Empathy – The provision of caring, Empathy – The provision of caring, individual attentionindividual attention

Tangibles – The appearance of physical Tangibles – The appearance of physical facilityfacility

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Managing Service QualityManaging Service Quality Gap between Consumer expectation and Gap between Consumer expectation and

Management perceptionManagement perception Gap between management perception and Gap between management perception and

service quality specificationservice quality specification Gap between service quality specification and Gap between service quality specification and

service deliveryservice delivery Gap between service delivery and external Gap between service delivery and external

communicationcommunication Gap between perceived service and expected Gap between perceived service and expected

serviceservice

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Consumer Consumer BehaviourBehaviour

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Model of Buyer BehaviourModel of Buyer Behaviour

MarketingStimuli

•Product

•Price

•Place

•Promotion

Other Stimuli

•Economy

•Tech.

•Political

•Cultural

BuyersCharacteristics

Buyer’sDecision Process

•Cultural

•Social

•Personal

•Psychological

•Problem Recognition

•Information Search

•Evaluation of Alternatives

•Decision

•Post purchase Behaviour

Buyer’s Sub Decisions

•Product Choice

•Brand Choice

•Dealer Choice

•Purchase Timing

•Purchase Amount

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Factors affecting Buyers Factors affecting Buyers BehaviourBehaviour

CulturalCultural SocialSocial PersonalPersonal PsychologPsychologicalical

CultureCulture Reference Reference GroupGroup

Age & Life Age & Life Cycle StageCycle Stage

MotivationMotivation

SubcultureSubculture FamilyFamily OccupationOccupation PerceptionPerceptionSocial ClassSocial Class Roles & Roles &

StatusStatusEconomic Economic CircumstanceCircumstancess

LearningLearning

Life StyleLife Style

Personality Personality & Self & Self ConceptConcept

Beliefs & Beliefs & AttitudesAttitudes

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Cultural FactorsCultural Factors CultureCulture IIt is the most fundamental determinant of a person’s wants t is the most fundamental determinant of a person’s wants

and Behaviour.and Behaviour. Sub cultureSub culture It includes nationalities, religions, racial groups, and It includes nationalities, religions, racial groups, and

geographical regions.geographical regions. Social classSocial class These are relatively homogeneous and enduring divisions in a These are relatively homogeneous and enduring divisions in a

society which are hierarchically ordered and whose members society which are hierarchically ordered and whose members share similar values, interests and behaviour.share similar values, interests and behaviour.

Persons in each social class tend to behave more alikePersons in each social class tend to behave more alike Individuals move from one class to another classIndividuals move from one class to another class

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Social FactorsSocial Factors Reference GroupReference Group Reference Group consist of all the groups that Reference Group consist of all the groups that

have a direct (Face to Face) or indirect influence have a direct (Face to Face) or indirect influence on the person’s attitude or behaviour.on the person’s attitude or behaviour.

Four type of Reference Groups:Four type of Reference Groups:Primary Reference GroupPrimary Reference GroupSecondary Reference GroupSecondary Reference Group Inspirational Reference GroupInspirational Reference GroupDissosiative Reference GroupDissosiative Reference Group

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FamilyFamily

Family of Orientation – with ParentsFamily of Orientation – with Parents

Family of Procreation – Spouse and Family of Procreation – Spouse and ChildrenChildren

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Roles & StatusesRoles & Statuses

A person participates in many groups through out A person participates in many groups through out life. The person’s position in each group can be life. The person’s position in each group can be defined in terms of roles and status.defined in terms of roles and status.

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Personal FactorsPersonal FactorsAge & Life Cycle StageAge & Life Cycle Stage Bachelor Stage Bachelor Stage Newly Married Couple – No ChildNewly Married Couple – No Child Full Nest 1 – Youngest child under age of six Full Nest 1 – Youngest child under age of six

yearsyears Full Nest 2 – Youngest child six or aboveFull Nest 2 – Youngest child six or above Full Nest 3 – Older married couple with Full Nest 3 – Older married couple with

dependent childrendependent children Empty Nest – Older married couple, no child Empty Nest – Older married couple, no child

living with themliving with them Solitary Survivor 1 – Single, WorkingSolitary Survivor 1 – Single, Working Solitary Survivor 2 - RetiredSolitary Survivor 2 - Retired

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OccupationOccupation

Economic CircumstancesEconomic Circumstances

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Life StyleLife Style It is persons pattern of living in the world as It is persons pattern of living in the world as

expressed in the person’s activities, interests expressed in the person’s activities, interests and opinions.and opinions.

Personality & Self ConceptPersonality & Self Concept Person’s distinguishing psychological Person’s distinguishing psychological

characteristics that lead to relatively consistent characteristics that lead to relatively consistent and enduring responses to his or her and enduring responses to his or her environment.environment.

Actual Self Concept – How do you view yourself ?Actual Self Concept – How do you view yourself ? Ideal Self Concept – How would you like to view Ideal Self Concept – How would you like to view

yourself ?yourself ? Others Self Concept – How do you think others see you ?Others Self Concept – How do you think others see you ?

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Psychological FactorsPsychological FactorsMotivationMotivation Physical NeedsPhysical Needs Psychological NeedsPsychological Needs

PerceptionPerception Selective AttentionSelective Attention Selective DistortionSelective Distortion Selective RetentionSelective Retention

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LearningLearning It describes changes in an individuals It describes changes in an individuals

behaviour arising from experience.behaviour arising from experience.

Beliefs & AttitudesBeliefs & Attitudes Beliefs – A descriptive thought that a person Beliefs – A descriptive thought that a person

holds about something.holds about something. Attitude – Favorable or unfavorable cognitive Attitude – Favorable or unfavorable cognitive

evaluation, emotional feelings and action evaluation, emotional feelings and action tendencies towards some object or idea.tendencies towards some object or idea.

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Buying Decision ProcessBuying Decision ProcessBuying RolesBuying Roles

Types of Buying BehaviourTypes of Buying Behaviour

Stages in the Buying Decision Stages in the Buying Decision ProcessProcess

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Buying RolesBuying Roles InitiatorInitiator InfluencerInfluencerDeciderDeciderBuyerBuyerUserUser

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Types of Buying BehaviourTypes of Buying Behaviour

High InvolvementHigh Involvement

Low InvolvementLow Involvement

Significant Significant Differences Differences

among brandsamong brandsComplex Complex Buying Buying

BehaviourBehaviour

Variety Variety Seeking Seeking Buying Buying

BehaviourBehaviour

Few differences Few differences among brandsamong brands Dissonance Dissonance

Reducing Reducing Buying Buying

BehaviourBehaviour

Habitual Habitual Buying Buying

BehaviourBehaviour

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Complex Buying BehaviourComplex Buying BehaviourBeliefBelief AttitudeAttitude Purchase Purchase

Marketers need to differentiate the Marketers need to differentiate the brand’s features.brand’s features.

Customers first evaluate available Customers first evaluate available options and than purchase.options and than purchase.

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Dissonance Reducing Buying Dissonance Reducing Buying BehaviourBehaviour

ActionAction Belief Belief AttitudeAttitude

Marketers communicate to supply Marketers communicate to supply beliefs and evaluation that helps beliefs and evaluation that helps customer to feel good about his or customer to feel good about his or her brand choice. her brand choice.

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Variety Seeking Buying Variety Seeking Buying BehaviourBehaviour

Consumers are involved in brand Consumers are involved in brand switching.switching.

Market leaders try to encourage Market leaders try to encourage dominating the self space, avoid out-dominating the self space, avoid out-of-stock situation, sponsoring of-stock situation, sponsoring frequent reminder advertising.frequent reminder advertising.

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Habitual Buying BehaviourHabitual Buying BehaviourNo Belief / Attitude / Behaviour chain.No Belief / Attitude / Behaviour chain.Customers are Brand Familiar rather Customers are Brand Familiar rather

Brand Conviction.Brand Conviction.Marketers use Price and Promotion to Marketers use Price and Promotion to

attract buyers.attract buyers.Marketers try to convert low Marketers try to convert low

involvement product to high involvement product to high involvement product.involvement product.

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Buying Decision Buying Decision processprocess

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Stages in Buying Decision Stages in Buying Decision ProcessProcess

Problem RecognitionProblem Recognition Information SearchInformation SearchEvaluation of AlternativesEvaluation of AlternativesPurchase DecisionPurchase DecisionPost Purchase BehaviourPost Purchase Behaviour

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Problem RecognitionProblem Recognition

Information SearchInformation Search Heightened AttentionHeightened Attention Active Information SearchActive Information Search

Consumer Information Sources fall into Four Consumer Information Sources fall into Four categories:categories:

Personal Sources – Family, Friends, NeighboursPersonal Sources – Family, Friends, Neighbours Commercial Sources – Advertising, Salespersons, Commercial Sources – Advertising, Salespersons,

Dealers, Dealers, Packaging, Displays etc. Packaging, Displays etc. Public Sources – Mass Media, Consumer Rating Public Sources – Mass Media, Consumer Rating

OrganisationsOrganisations Experiential Sources – Handling, Examining, Using the Experiential Sources – Handling, Examining, Using the

productproduct

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Evaluation of AlternativesEvaluation of Alternatives

Consumer is trying to satisfy a Consumer is trying to satisfy a NeedNeed. He is . He is looking for certain benefits.looking for certain benefits.

Consumer will develop a set of Consumer will develop a set of Brad BeliefBrad Belief about about where each brand stands on each attribute.where each brand stands on each attribute.

The brand belief make up the The brand belief make up the Brand Image. Brand Image. This This will very with the effect of selective perception, will very with the effect of selective perception, selective distortion and selective retention.selective distortion and selective retention.

Total Set

Awareness Set

ConsiderationSet

ChoiceSet

DecisionSet

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Marketers could apply the following Marketers could apply the following strategies to influence consumers to strategies to influence consumers to show a greater interest in their brands:show a greater interest in their brands:

Modify the product – Modify the product – Real RepositioningReal Repositioning Alter belief about the brand – Alter belief about the brand – Psychological Psychological

RepositioningRepositioning Alter beliefs about competitors brand – Alter beliefs about competitors brand – Competitive Competitive

DispositioningDispositioning Shift the Buyer’s Ideals Shift the Buyer’s Ideals

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Purchase DecisionPurchase DecisionTwo factors can intervene between purchase Two factors can intervene between purchase intention and the purchase decision :intention and the purchase decision :- Attribute of Others- Attribute of Others- Unanticipated Situational Factors- Unanticipated Situational FactorsIn executing a purchase intention, consumer In executing a purchase intention, consumer may make up to may make up to Five Purchase Sub decisions:Five Purchase Sub decisions:

Brand DecisionBrand Decision Vendor DecisionVendor Decision Quantity DecisionQuantity Decision Timing DecisionTiming Decision Payment Method DecisionPayment Method Decision

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Post Purchase BehaviourPost Purchase Behaviour Post Purchase SatisfactionPost Purchase Satisfaction Post Purchase ActionPost Purchase Action Post Purchase Use and DisposalPost Purchase Use and Disposal

Store the ProductStore the ProductNew use of ProductNew use of ProductSell the ProductSell the ProductThrow the Product awayThrow the Product away

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S. T. P. MarketingS. T. P. Marketing

SegmentationSegmentationTargetingTargetingPositioningPositioning

S.T.P. can be described as S.T.P. can be described as “ Heart of “ Heart of Modern Strategic Marketing”.Modern Strategic Marketing”.

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S. T. P. ProcessS. T. P. ProcessMarket Market

SegmentatioSegmentationn

Market Market TargetingTargeting

Market Market PositioningPositioning

Identify Identify Segmentation Segmentation Variables and Variables and Segment the Segment the Market.Market.Develop Develop Profile of Profile of resulting resulting segmentssegments

Evaluate Evaluate alternatives of alternatives of each segmenteach segmentSelect the Select the Target MarketTarget Market

Identify Identify possible possible Positioning Positioning concept for concept for each target each target segmentsegmentSelect, Select, Develop and Develop and Communicate Communicate chosen chosen positioning positioning conceptconcept

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Basis for SegmentationBasis for SegmentationGeographGeograph

icicDemographDemograph

icicPsychograpPsychographichic

BehaviorBehavioralal

RegionRegionCity or City or Metro SizeMetro SizeDensityDensityClimateClimate

AgeAgeGenderGenderFamily SizeFamily SizeF.L.C.F.L.C.IncomeIncomeOccupationOccupationEducationEducationReligionReligionRaceRaceNationalityNationality

Social ClassSocial ClassLife StyleLife StylePersonalityPersonality

OccasionOccasionssBenefitsBenefitsUser User StatusStatusUsage Usage RateRateLoyalty Loyalty StatusStatusReadinesReadiness Stages StageAttitude Attitude towards towards ProductsProducts

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Geographic VariablesGeographic VariablesRegionRegionCity or Metro SizeCity or Metro SizeDensityDensityClimateClimate

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Demographic VariablesDemographic Variables AgeAge GenderGender Family SizeFamily Size F.L.C.F.L.C. IncomeIncome OccupationOccupation EducationEducation ReligionReligion RaceRace NationalityNationality

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Psychographic VariablesPsychographic Variables Social ClassSocial Class Life StyleLife Style PersonalityPersonality

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Behavioural VariablesBehavioural Variables OccasionsOccasions BenefitsBenefits User StatusUser Status Usage RateUsage Rate Loyalty StatusLoyalty Status Readiness StageReadiness Stage Attitude towards ProductsAttitude towards Products

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OccasionsOccasionsBenefits – U S PBenefits – U S PUser Stage User Stage Non user, Ex user, Potential user, First Non user, Ex user, Potential user, First

time user, Regular usertime user, Regular userUsage RateUsage Rate Light, Medium and Heavy userLight, Medium and Heavy user

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Loyalty StatusLoyalty Status Hard core LoyalHard core Loyal Split LoyaltySplit Loyalty Shifting LoyalShifting Loyal SwitchersSwitchers Buyers Readiness StageBuyers Readiness Stage UnawareUnaware AwareAware InformedInformed InterestedInterested DesireDesire Intend to buyIntend to buy

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AttitudeAttitude

Enthusiastic – Thanks & RemindEnthusiastic – Thanks & Remind Positive – ReinforcePositive – Reinforce Indifferent – Try to win voteIndifferent – Try to win vote Negative – Spend no timeNegative – Spend no time Hostile – Spend no timeHostile – Spend no time

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Requirement for Effective Requirement for Effective SegmentationSegmentation

Measurable:Measurable:The size, purchasing power and profile of the The size, purchasing power and profile of the

segment can be measured.segment can be measured. Sustainable:Sustainable:

The segments are large and profitable enough to The segments are large and profitable enough to serve.serve.

Accessible:Accessible:The segment can be effectively reached and The segment can be effectively reached and

served.served. Differentiable:Differentiable:

The segments respond differently to different The segments respond differently to different marketing mix elements and programmes.marketing mix elements and programmes.

Actionable:Actionable:Effective programmes can be formulated for Effective programmes can be formulated for

attracting and serving the segments.attracting and serving the segments.

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Market TargetingMarket Targeting( Evaluating the Market ( Evaluating the Market

Segments)Segments) Segment Size and GrowthSegment Size and Growth

Segment Structural AttractivenessSegment Structural Attractiveness

Threat of intense Segment RivalryThreat of intense Segment Rivalry Threat of New EntrantsThreat of New Entrants Threat of Substitute ProductsThreat of Substitute Products Threat of Growing Bargaining Power of CustomersThreat of Growing Bargaining Power of Customers Threat of Growing Bargaining Power of SupplierThreat of Growing Bargaining Power of Supplier

Company’s Objectives and ResourcesCompany’s Objectives and Resources

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Patterns of Target Market Patterns of Target Market SelectionSelection

Single Segment ConcentrationSingle Segment ConcentrationSelective SpecializationSelective SpecializationMarket SpecializationMarket SpecializationProduct SpecializationProduct SpecializationFull Market CoverageFull Market Coverage

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Differentiation & PositioningDifferentiation & Positioning

““It is the act of designing a set of It is the act of designing a set of meaningful differences to distinguish meaningful differences to distinguish the company’s offer from the company’s offer from competitor”competitor”

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Techniques to DifferentiateTechniques to DifferentiateProductProduct ServiceService PersonalPersonal ImageImage

FeaturesFeaturesPerformancePerformanceConformancConformanceeDurabilityDurabilityReliabilityReliabilityReparabilityReparabilityStyleStyleDesignDesign

DeliveryDeliveryInstallationInstallationCustomer Customer TrainingTrainingConsulting Consulting ServicesServicesRepairRepair

CompetenceCompetenceCourtesyCourtesyCredibilityCredibilityReliabilityReliabilityResponsiveneResponsivenessssCommunicatiCommunicationon

SymbolSymbolMediaMediaAtmosphAtmosphereereEventsEvents

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Positioning – Positioning – Things to Things to RememberRemember

It should be It should be ImportantImportant It should be It should be DistinctiveDistinctive It should be It should be SuperiorSuperior It should be It should be CommunicableCommunicable It should be It should be PreemptivePreemptive It should be It should be AffordableAffordable It should be It should be ProfitableProfitable

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Product Product Life Cycle Life Cycle

P L CP L C

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Why Products have Life Why Products have Life Cycle:Cycle:

Products have a limited life.Products have a limited life.Product sales pass through distinct Product sales pass through distinct

stages, each posing different challenges, stages, each posing different challenges, opportunities and problems to the seller.opportunities and problems to the seller.

Profits rise and fall at different stages of Profits rise and fall at different stages of the PLC.the PLC.

Products require different marketing, Products require different marketing, financial, manufacturing, purchasing and financial, manufacturing, purchasing and human resource strategies in each stage human resource strategies in each stage of their life cycle.of their life cycle.

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Stages of Product Life CycleStages of Product Life Cycle IntroductionIntroduction A period of slow sales growth as the product is A period of slow sales growth as the product is

introduced in the market. Profits are non existent introduced in the market. Profits are non existent in this stage because of the heavy expenses in this stage because of the heavy expenses incurred with product introduction.incurred with product introduction.

GrowthGrowth A period of rapid market acceptance and A period of rapid market acceptance and

substantial profit improvement.substantial profit improvement.

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MaturityMaturity A period of a slowdown in sales growth because A period of a slowdown in sales growth because

the product has achieved acceptance by most the product has achieved acceptance by most potential buyers.potential buyers.

DeclineDecline The period when sales show a downward drift and The period when sales show a downward drift and

profit decrease.profit decrease.

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Introduction StageIntroduction Stage(CHARACTERISTICS)(CHARACTERISTICS)

Profits are negative or low.Profits are negative or low.Low sales and heavy distribution and Low sales and heavy distribution and

promotion expenses.promotion expenses.Firms focus their selling on those Firms focus their selling on those

buyers who are the readiest to buy.buyers who are the readiest to buy.Prices tends to be on higher side.Prices tends to be on higher side.

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Introduction StageIntroduction Stage(MARKETING STRATEGIES)(MARKETING STRATEGIES)

PromotionPromotion

High High

Low Low

HighHigh

PricePrice

Rapid Rapid Skimming Skimming StrategyStrategy

Slow Slow Skimming Skimming StrategyStrategy

LowLowRapid Rapid

Penetration Penetration StrategyStrategy

Slow Slow Penetration Penetration

StrategyStrategy

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Market SizeMarket Size LargeLarge SmallSmall LargeLarge LargeLarge

Consumer Consumer AwarenessAwareness

LowLow HighHigh LowLow HighHigh

Ability & Ability & Willingness Willingness to payto pay

MoreMore MoreMore LessLess LessLess

Potential Potential CompetitionCompetition

StronStrongg

WeakWeak StrongStrong WeakWeak

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Growth StageGrowth Stage(CHARACTERISTICS)(CHARACTERISTICS)

Rapid climb in sales.Rapid climb in sales.New competitors enter, attracted by New competitors enter, attracted by

the opportunities.the opportunities.Prices remain where they are or fall Prices remain where they are or fall

slightly.slightly.Promotional expenditure are same or Promotional expenditure are same or

slightly increased.slightly increased.Profits increase during this stage. Profits increase during this stage.

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Growth StageGrowth Stage(MARKETING STRATEGIES)(MARKETING STRATEGIES)

Improve product quality and add new Improve product quality and add new product features.product features.

Enter new market segments.Enter new market segments. Increase distribution coverage and enter Increase distribution coverage and enter

new distribution channels.new distribution channels. Shift from Product - Awareness advertising Shift from Product - Awareness advertising

to Product - Preference advertising.to Product - Preference advertising. Lower prices to attract next layer of price Lower prices to attract next layer of price

sensitive buyers.sensitive buyers.

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Maturity StageMaturity Stage(CHARCTERISTICS)(CHARCTERISTICS)

This stage normally lasts longer than This stage normally lasts longer than the previous stages.the previous stages.

The sales slowdown creates over The sales slowdown creates over capacity in the market which leads to capacity in the market which leads to intensify competition.intensify competition.

Dominating the industry are a few Dominating the industry are a few giant firms – perhaps a quality leader, giant firms – perhaps a quality leader, a service leader and a cost leader.a service leader and a cost leader.

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Maturity StageMaturity Stage(MARKETING STRATEGIES)(MARKETING STRATEGIES)

Market ModificationMarket Modification

Product ModificationProduct Modification

Marketing Mix ModificationMarketing Mix Modification

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Market ModificationMarket Modification Volume = No. of brand users x Usage rate Volume = No. of brand users x Usage rate

/ User/ User

Brand users can be increased in three ways:Brand users can be increased in three ways: Convert non usersConvert non users Enter new market segmentsEnter new market segments Win competitors customersWin competitors customers Usage rate can also be increased in three Usage rate can also be increased in three

ways:ways: More frequent useMore frequent use More usage per occasionMore usage per occasion New and more varied usesNew and more varied uses

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Product ModificationProduct Modification

Style ImprovementStyle Improvement

Quality ImprovementQuality Improvement

Feature improvementFeature improvement

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Marketing Mix ModificationMarketing Mix Modification

Price ModificationPrice ModificationAdvertising ModificationAdvertising ModificationSales Promotion ModificationSales Promotion ModificationPersonal Selling ModificationPersonal Selling ModificationServices ModificationServices Modification

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Decline StageDecline Stage(CHARACTERISTICS)(CHARACTERISTICS)

Sales of most products and brands Sales of most products and brands decline.decline.

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Decline StageDecline Stage(MARKETING STRATEGIES)(MARKETING STRATEGIES)

Increasing the firms investment.Increasing the firms investment.Maintaining the firms investment level Maintaining the firms investment level

until the uncertainties about the until the uncertainties about the industry are resolved.industry are resolved.

Deceasing the firms investment level Deceasing the firms investment level selectively by dropping unprofitable selectively by dropping unprofitable products.products.

Harvesting the firms investment to Harvesting the firms investment to recover cash quickly.recover cash quickly.

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ProductProduct That which can be offered to a market for That which can be offered to a market for

attention, acquisition, use, consumption & attention, acquisition, use, consumption & that might satisfy a need or a want. that might satisfy a need or a want.

Product can be:Product can be: PhysicalPhysical ServiceService PersonsPersons PlacePlace OrganisationOrganisation IdeaIdea

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Five levels of ProductFive levels of Product1. Core Benefit1. Core Benefit

Fundamental service or benefit that a Fundamental service or benefit that a customer is really buying.customer is really buying.

2. Generic Product2. Generic Product Conversion of core benefit in to a generic Conversion of core benefit in to a generic

product.product.3. Expected Product3. Expected Product

It is a set of attributes and conditions that a It is a set of attributes and conditions that a buyer normally expects and agrees to buyer normally expects and agrees to purchase.purchase.

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4. Augmented Product4. Augmented Product A product that offers additional services. It A product that offers additional services. It

describes what is included in the product describes what is included in the product today.today.

5. Potential Product5. Potential Product It is possible evaluation of product where It is possible evaluation of product where

companies search aggressively for new ways companies search aggressively for new ways to satisfy the customers and distinguish their to satisfy the customers and distinguish their offer. offer.

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Product Mix DecisionsProduct Mix Decisions A Product Mix is a set of all product lines and A Product Mix is a set of all product lines and

items that a particular seller offers for sale to items that a particular seller offers for sale to buyer.buyer.

A Product Mix has….A Product Mix has…. LengthLength BreadthBreadth DepthDepth Consistency Consistency

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LengthLength Total number of items in product lines.Total number of items in product lines.

BreadthBreadth Total number of product lines.Total number of product lines.

DepthDepth How many variants are offered of each How many variants are offered of each

product in the line.product in the line. ConsistencyConsistency

How closely related the various product How closely related the various product lines are in…lines are in…

End UseEnd UseProduction RequirementProduction RequirementDistribution ChannelDistribution Channel

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Product Line AnalysisProduct Line Analysis

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Product Line Manager needs Product Line Manager needs twotwo type of information:type of information:

1.1. Sales and profit of each item in the Sales and profit of each item in the lineline

2.2. How is product line performing in How is product line performing in comparison to competitors product comparison to competitors product lineline

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Product Line Length Product Line Length DecisionsDecisions

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Enlargement of Product Line Enlargement of Product Line LengthLength

It can be done in two ways:It can be done in two ways:

Line StretchingLine StretchingLine FillingLine Filling

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Line StretchingLine Stretching When a company lengthens its product When a company lengthens its product

line beyond its current range. line beyond its current range.

It can be done in It can be done in THREETHREE ways: ways:1.1. Downward StretchingDownward Stretching2.2. Upward StretchingUpward Stretching3.3. Two Way StretchingTwo Way Stretching

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1.1. Downward StretchingDownward Stretching

Many companies initially locate at the Many companies initially locate at the high end of the market and high end of the market and subsequently stretching their line subsequently stretching their line downward.downward.

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Reasons for Downward Stretching:Reasons for Downward Stretching: If company is attacked at higher end and If company is attacked at higher end and

decides to counter attack by invading the decides to counter attack by invading the low end.low end.

If company finds slower growth at higher If company finds slower growth at higher end.end.

If company initially entered the high end If company initially entered the high end to establish a quality image and intended to establish a quality image and intended to sell downward.to sell downward.

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2.2. Upward StretchUpward Stretch

Many companies initially locate at the Many companies initially locate at the low end of the market and low end of the market and subsequently stretching their line subsequently stretching their line upward.upward.

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Reasons for Upward Stretching:Reasons for Upward Stretching:

Attracted by a higher growth rate Attracted by a higher growth rate and higher margins.and higher margins.

To position themselves as full line To position themselves as full line manufacturers or service providers.manufacturers or service providers.

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3.3. Two Way StretchingTwo Way Stretching

Companies in the middle range of the Companies in the middle range of the market decide to stretch the lines in market decide to stretch the lines in both the directions.both the directions.

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Line Filling DecisionsLine Filling Decisions

It is lengthening of the product line It is lengthening of the product line by adding more items within the by adding more items within the present range of line.present range of line.

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Motives for Line Filling Decisions:Motives for Line Filling Decisions:

Reaching for incremental profits.Reaching for incremental profits.Trying to utilize excess capacity.Trying to utilize excess capacity.Trying to be leading full line Trying to be leading full line

company.company.Trying to plug holes to keep out Trying to plug holes to keep out

competitors.competitors.

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Line Modernization DecisionLine Modernization Decision

Even when product line is adequate, it Even when product line is adequate, it might need to be modernize, especially in might need to be modernize, especially in rapidly changing high tech product rapidly changing high tech product market.market.

It is necessary because competitors are It is necessary because competitors are constantly upgrading their products and constantly upgrading their products and offer.offer.

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Line Featuring DecisionsLine Featuring Decisions Product Line managers select one or few items in Product Line managers select one or few items in

the line to feature all products in the Product the line to feature all products in the Product Line.Line.

Sometimes, Managers feature low end Sometimes, Managers feature low end promotional models to serve as ‘Traffic Builders’.promotional models to serve as ‘Traffic Builders’.

Sometimes, Managers will feature a high end Sometimes, Managers will feature a high end item to lend prestige to the all products in the item to lend prestige to the all products in the product line.product line.

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Line Pruning DecisionsLine Pruning Decisions Product Line Mangers must periodically Product Line Mangers must periodically

review items for pruning.review items for pruning.

There are There are TWOTWO occasions for pruning: occasions for pruning:

1.1. The product line includes depressing profits.The product line includes depressing profits.2.2. Company is short of production capacity.Company is short of production capacity.

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It is only ‘P’ in Marketing Mix which It is only ‘P’ in Marketing Mix which generate generate REVENUEREVENUE for company. for company.

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Most common mistakes in handling Most common mistakes in handling Prices are:Prices are:

Price is too cost oriented.Price is too cost oriented. Price is not revised enough to capitalize on Price is not revised enough to capitalize on

market changes.market changes. Price is set independent of the rest of the Price is set independent of the rest of the

marketing mix rather than as an intrinsic marketing mix rather than as an intrinsic element of market positioning strategy.element of market positioning strategy.

Price is not varied enough for different Price is not varied enough for different product items, market segments and product items, market segments and purchase occasions.purchase occasions.

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Setting Price Policy for New or Setting Price Policy for New or Existing Product or Service (Process)Existing Product or Service (Process)1.1. Selecting the Pricing ObjectivesSelecting the Pricing Objectives2.2. Determination of DemandDetermination of Demand3.3. Estimation of CostEstimation of Cost4.4. Analysis of Competitor’s Cost, Price Analysis of Competitor’s Cost, Price

and Offerand Offer5.5. Selection of a Pricing MethodSelection of a Pricing Method6.6. Selection of Final PriceSelection of Final Price

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1.1. Selecting Pricing Selecting Pricing ObjectivesObjectives

Company may opt for one of following Company may opt for one of following FOURFOUR Pricing Pricing Objectives:Objectives:

i.i. SurvivalSurvival

ii.ii. Maximum Current ProfitMaximum Current Profit

iii.iii. Maximum Market ShareMaximum Market Share

iv.iv. Maximum Market SkimmingMaximum Market Skimming

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2. Determination of Demand2. Determination of Demand Each price will lead to a different level Each price will lead to a different level

of demand and therefore have a of demand and therefore have a different image on a company’s different image on a company’s marketing objectives.marketing objectives.

Demand and Prices are inversely Demand and Prices are inversely related: the higher the price, the lower related: the higher the price, the lower the demand.the demand.

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3. Estimation of Cost3. Estimation of CostTwo type of costs: Fixed & VariableTwo type of costs: Fixed & Variable

Average Cost is the cost per unit at the Average Cost is the cost per unit at the production level. It is equal to the total production level. It is equal to the total cost divided by production.cost divided by production.

Managers want to charge the price that Managers want to charge the price that will at least cover the total production will at least cover the total production cost at a given level of production.cost at a given level of production.

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4. Analysis of Competitor’s Cost, 4. Analysis of Competitor’s Cost, Price and OfferPrice and Offer

To analysis competitor’s cost, following is given THREE To analysis competitor’s cost, following is given THREE C’s concept:C’s concept:

i.i. The The CCost Function – Floor to Priceost Function – Floor to Price

ii.ii. The The CCompetitor’s Price – Orientation Pointompetitor’s Price – Orientation Point

iii.iii. The The CCustomer’s Demand Schedule – Ceiling ustomer’s Demand Schedule – Ceiling PointPoint

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To analyze competitor’s offer, To analyze competitor’s offer, THREETHREE options are available: options are available:

i.i. If company’s offer is If company’s offer is SIMILARSIMILAR to competitor… to competitor…

ii.ii. If company’s offer is If company’s offer is INFERIORINFERIOR to competitor… to competitor…

iii.iii. If company’s offer is If company’s offer is SUPERIORSUPERIOR to competitor… to competitor…

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5. Selection of a Pricing Method5. Selection of a Pricing Methodi.i. Mark – up PricingMark – up Pricing To add a mark-up to the product cost.To add a mark-up to the product cost.

ii.ii. Perceived Value PricingPerceived Value Pricing Companies see the buyers perception of Companies see the buyers perception of

value not the sellers cost, as the key to value not the sellers cost, as the key to pricing.pricing.

iii.iii. Value PricingValue Pricing Companies charge a fairly low price for a Companies charge a fairly low price for a

high quality offering.high quality offering.

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iv.iv. Going Rate PricingGoing Rate Pricing Company’s price is largely based on Company’s price is largely based on

competitor’s price.competitor’s price.

v.v. Sealed Bid PricingSealed Bid Pricing Competition oriented pricing is common Competition oriented pricing is common

where firms submit sealed bid for job.where firms submit sealed bid for job.

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6. Selection of Final Price6. Selection of Final Price In selecting final price, company must evaluate following In selecting final price, company must evaluate following

FOURFOUR additional factors: additional factors:

i.i. Psychological PricingPsychological Pricing

ii.ii. Influence of other Marketing Mix elementsInfluence of other Marketing Mix elements

iii.iii. Company’s Pricing PolicyCompany’s Pricing Policy

iv.iv. Impact of Price on other PartiesImpact of Price on other Parties

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Adoption of Price PolicyAdoption of Price Policy Companies usually do not set a single price rather a pricing Companies usually do not set a single price rather a pricing

structure that reflects variations in: structure that reflects variations in:

Geographical Demand and CostGeographical Demand and Cost Market Segment RequirementsMarket Segment Requirements Purchase TimingPurchase Timing Order LevelsOrder Levels Delivery FrequencyDelivery Frequency GuaranteesGuarantees Service Contracts etc.Service Contracts etc.

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Geographical PricingGeographical Pricing

It involves company in deciding how It involves company in deciding how to price its product to different to price its product to different customers in different locations and customers in different locations and countriescountries

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Price Discounts and Price Discounts and AllowancesAllowances

1.1. Cash DiscountCash Discount

2.2. Quantity DiscountQuantity Discount

3.3. Trade DiscountTrade Discount

4.4. Seasonal DiscountSeasonal Discount

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Promotional PricingPromotional Pricing1.1. Loss Leader PricingLoss Leader Pricing2.2. Special Event PricingSpecial Event Pricing3.3. Cash RebatesCash Rebates4.4. Low Interest FinancingLow Interest Financing5.5. Long Payment TermsLong Payment Terms6.6. Warranty and Service ContractsWarranty and Service Contracts7.7. Psychological DiscountsPsychological Discounts

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Discriminatory PricingDiscriminatory Pricing

1.1. Customer – Segment PricingCustomer – Segment Pricing2.2. Product – Form PricingProduct – Form Pricing3.3. Image PricingImage Pricing4.4. Location PricingLocation Pricing5.5. Time PricingTime Pricing

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Product – Mix PricingProduct – Mix Pricing

1.1. Product Line PricingProduct Line Pricing

2.2. Optional Feature PricingOptional Feature Pricing

3.3. Two Part PricingTwo Part Pricing

4.4. Product Bundling PricingProduct Bundling Pricing

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Distribution ChannelDistribution Channel

Distribution Channel or Marketing Distribution Channel or Marketing Channel can be viewed as set of Channel can be viewed as set of interdependent organizations interdependent organizations involved in the process of making involved in the process of making a product or service available for a product or service available for use or consumption.use or consumption.

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Functions of Marketing Functions of Marketing IntermediariesIntermediaries

1.1. InformationInformation2.2. PromotionPromotion3.3. NegotiationNegotiation4.4. OrderingOrdering5.5. FinancingFinancing6.6. Risk TakingRisk Taking7.7. Physical possessionPhysical possession8.8. PaymentPayment9.9. TitleTitle

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Types of Marketing ChannelsTypes of Marketing Channels1.1. Zero Level Channel (M – C)Zero Level Channel (M – C)

2.2. One Level Channel (M – R – C)One Level Channel (M – R – C)

3.3. Two Level Channel ( M – W – R – C)Two Level Channel ( M – W – R – C)

4.4. Three Level Channel (M – F – W – R – C) Three Level Channel (M – F – W – R – C)

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Channel Design DecisionsChannel Design Decisions1.1. Analyzing customer’s desired Analyzing customer’s desired

service output levelservice output level2.2. Establishing objectives and Establishing objectives and

constraintsconstraints3.3. Identifying major channel Identifying major channel

alternativesalternatives4.4. Evaluation of major alternativesEvaluation of major alternatives

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1.1. Analyzing customer’s desired service Analyzing customer’s desired service output leveloutput level

i.i. Lot SizeLot Size

ii.ii. Waiting TimeWaiting Time

iii.iii. Product VarietyProduct Variety

iv.iv. Service Back upService Back up

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2.2. Establishing objectives Establishing objectives and constraintsand constraints

Objectives vary with product or service characteristics:Objectives vary with product or service characteristics:

i.i. Perishable ProductPerishable Productii.ii. Bulky productBulky productiii.iii. High Unit Value ProductHigh Unit Value Product

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3.3. Identifying major channel Identifying major channel alternativesalternatives

i.i. Type of IntermediariesType of Intermediaries Company Sales ForceCompany Sales Force Manufacturing AgencyManufacturing Agency Industrial DistributorIndustrial Distributor

ii.ii. No. of IntermediariesNo. of Intermediaries Exclusive DistributionExclusive Distribution Selective DistributionSelective Distribution Intensive DistributionIntensive Distribution

iii.iii. Terms and Responsibilities of channel Terms and Responsibilities of channel membersmembers

Price PolicyPrice Policy Conditions of SaleConditions of Sale Distributors Territorial RightsDistributors Territorial Rights Mutual Service and ResponsibilitiesMutual Service and Responsibilities

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4.4. Evaluation of major Evaluation of major alternativesalternatives

i.i. Economic CriteriaEconomic Criteria

ii.ii. Control CriteriaControl Criteria

iii.iii. Adaptive CriteriaAdaptive Criteria

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Channel Management Channel Management DecisionsDecisions

1.1. Selecting Channel MembersSelecting Channel Members2.2. Training Channel MembersTraining Channel Members3.3. Motivating Channel MembersMotivating Channel Members4.4. Evaluating Channel MembersEvaluating Channel Members5.5. Modifying Channel ArrangementsModifying Channel Arrangements

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1.1. Selecting Channel Selecting Channel MembersMembers

Channel members are carefully Channel members are carefully Invited, Screened, Interviewed, Invited, Screened, Interviewed, recruited and selected through recruited and selected through proper selection policy of the proper selection policy of the company.company.

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2.2. Training Channel MembersTraining Channel Members After selection, Channel members are trained for:After selection, Channel members are trained for:

i.i. Mission and Objectives of companyMission and Objectives of companyii.ii. Offers of CompanyOffers of Companyiii.iii. Company’s policies and proceduresCompany’s policies and proceduresiv.iv. Target markets of companyTarget markets of companyv.v. Status of competition in marketStatus of competition in marketvi.vi. Technical know-how, if any Technical know-how, if any

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3.3. Motivating Channel Motivating Channel MembersMembers

A variety of A variety of POWERS POWERS is used to motivate channel is used to motivate channel members:members:

i.i. Coercive PowerCoercive Powerii.ii. Reward PowerReward Poweriii.iii. Legitimate PowerLegitimate Poweriv.iv. Expert PowerExpert Powerv.v. Referent PowerReferent Power

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4.4. Evaluating Channel Evaluating Channel MembersMembers

Following Following SIXSIX methods can be used to evaluate performance of methods can be used to evaluate performance of channel members:channel members:

i.i. Sales Quota AttainmentSales Quota Attainmentii.ii. Average Inventory LevelsAverage Inventory Levelsiii.iii. Customer Delivery TimeCustomer Delivery Timeiv.iv. Treatment of Damaged and Lost GoodsTreatment of Damaged and Lost Goodsv.v. Cooperation in Promotional and Training Cooperation in Promotional and Training

ProgrammesProgrammesvi.vi. Middleman Service owed to the CustomerMiddleman Service owed to the Customer

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5.5. Modifying Channel Modifying Channel ArrangementsArrangements

Modification becomes necessary when:Modification becomes necessary when:

i.i. Consumer’s buying patterns changesConsumer’s buying patterns changesii.ii. Market expendsMarket expendsiii.iii. Product maturesProduct maturesiv.iv. New competition arisesNew competition arisesv.v. New and innovative channel emergesNew and innovative channel emerges

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Modification could involve:Modification could involve:

i.i. Adding or dropping individual channel Adding or dropping individual channel membersmembers

ii.ii. Adding or dropping particular marketing Adding or dropping particular marketing channelchannel

iii.iii. Developing a totally new way to sale Developing a totally new way to sale goods and services in the marketgoods and services in the market

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It is It is FOURTH FOURTH P of marketing and is used to communicate P of marketing and is used to communicate with customers.with customers.

Following are Following are FOURFOUR tools and techniques which are used tools and techniques which are used for promotion and communication:for promotion and communication:

AdvertisingAdvertising Sales PromotionSales Promotion Public RelationPublic Relation Personnel SellingPersonnel Selling

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ADVERTISINGADVERTISING

It is any It is any paid formpaid form of of non personalnon personal presentation and promotion of ideas, presentation and promotion of ideas, goods or services by an goods or services by an identified identified sponsor.sponsor.

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5 M’s Approach to Advertising5 M’s Approach to Advertising1.1. MMission – What are Advertising ission – What are Advertising

objectives?objectives?2.2. MMoney – How much can be spent?oney – How much can be spent?3.3. MMessage – What message should be essage – What message should be

sent?sent?4.4. MMedia – What media should be used?edia – What media should be used?5.5. MMeasurement – How should the result be easurement – How should the result be

evaluated?evaluated?

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1.1. Setting Advertising Setting Advertising Objectives (Objectives (MMission)ission)

i.i. Sales ObjectivesSales Objectives

ii.ii. Advertising ObjectivesAdvertising Objectives

Informative AdvertisingInformative Advertising Persuasive AdvertisingPersuasive Advertising Reminder AdvertisingReminder Advertising

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2.2. Deciding Advertising Deciding Advertising Budget (Budget (MMoney)oney)

FIVEFIVE factors are considered while deciding advertising factors are considered while deciding advertising budget:budget:

i.i. Stage in PLCStage in PLCii.ii. Market Share and Consumer BaseMarket Share and Consumer Baseiii.iii. Status of CompetitionStatus of Competitioniv.iv. Advertising FrequencyAdvertising Frequencyv.v. Product SubstutatibilityProduct Substutatibility

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After consideration of these factors, After consideration of these factors, FOURFOUR budgeting methods are suggested:budgeting methods are suggested:

i.i. Affordable MethodAffordable Methodii.ii. % of Sales Method% of Sales Methodiii.iii. Competitive Parity MethodCompetitive Parity Methodiv.iv. Objective & Task MethodObjective & Task Method

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3.3. Selecting Advertising Selecting Advertising MMessageessage

i.i. Message Generation (Advertising Message Generation (Advertising Appeal)Appeal)

Rational ThemeRational Theme Emotional ThemeEmotional Theme Fear ThemeFear Theme Fun ThemeFun Theme

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ii.ii. Message Evaluation and Selection Message Evaluation and Selection ( ( THREETHREE factors to be considered): factors to be considered):

Desirability of MessageDesirability of Message Exclusiveness of MessageExclusiveness of Message Believability of MessageBelievability of Message

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iii.iii. Message ExecutionMessage Execution

a.a. StyleStyle Slice of LifeSlice of Life Life StyleLife Style Mood or ImageMood or Image Personality SymbolPersonality Symbol Technical ExpertiseTechnical Expertise Scientific EvidenceScientific Evidence TestimonialTestimonial

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b.b. WordsWords Memorable and attention getting “words” must Memorable and attention getting “words” must

be found.be found.

c.c. FormatFormat Ad. SizeAd. Size ColourColour IllustrationIllustration

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iv.iv. Social Responsibility ReviewSocial Responsibility Review It must be seriously taken in to consideration It must be seriously taken in to consideration

that company’s any advertisement should not that company’s any advertisement should not send a irresponsible message, in any form, to send a irresponsible message, in any form, to the society which may harm anyone, anywhere, the society which may harm anyone, anywhere, and insults ethical and moral values of people and insults ethical and moral values of people living in society.living in society.

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4.4. Deciding the Deciding the MMediaedia

i.i. Deciding on Reach, Frequency Deciding on Reach, Frequency and Impactand Impact

Media is selected after considering its reach Media is selected after considering its reach to the target market, repeated frequency of to the target market, repeated frequency of promotion and overall impact on customer promotion and overall impact on customer

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ii.ii. Choosing among Major Media Choosing among Major Media alternativesalternatives

TelevisionTelevision NewspaperNewspaper Direct MailDirect Mail RadioRadio MagazinesMagazines OutdoorOutdoor Yellow PagesYellow Pages BrochuresBrochures TelephoneTelephone InternetInternet Media planners make their choice among media Media planners make their choice among media

categories by considering the following variables:categories by considering the following variables: Target Audience media habitsTarget Audience media habits Product typeProduct type MessageMessage CostCost

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iii.iii. Deciding on Media TimingDeciding on Media Timing Advertiser may have Advertiser may have TWOTWO options in options in

deciding media timing:deciding media timing:

a)a) Macro SchedulingMacro Scheduling Scheduling advertisements in relation Scheduling advertisements in relation

to seasons and business cycle.to seasons and business cycle.

b)b) Micro SchedulingMicro Scheduling Allocating advertising expenditures Allocating advertising expenditures

within a short period of time.within a short period of time.

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The timing pattern should consider The timing pattern should consider THREETHREE factors: factors:

1.1. Buyer TurnoverBuyer Turnover It expresses the rate at which new buyers It expresses the rate at which new buyers

enter the market. enter the market. Higher Buyer turnover rate ….. higher the Higher Buyer turnover rate ….. higher the advertisement frequency.advertisement frequency.

2.2. Purchase FrequencyPurchase Frequency Higher Frequency…… Higher advertisement.Higher Frequency…… Higher advertisement.

3.3. Forgetting RateForgetting Rate Higher forgetting rate..... Higher Higher forgetting rate..... Higher

advertisement.advertisement.

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5.5. MMeasurement of easurement of Advertising Advertising

EffectivenessEffectiveness Advertising effectiveness can be measured in Advertising effectiveness can be measured in TWO TWO

ways:ways:

1.1. Pre TestingPre Testing When advertisement is tested and evaluated When advertisement is tested and evaluated

before its release.before its release.

2.2. Post TestingPost Testing When advertisement is tested and evaluated When advertisement is tested and evaluated

after its release.after its release.

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Effectiveness of advertisement is evaluated on Effectiveness of advertisement is evaluated on TWOTWO attributes:attributes:

1.1. Communication Effect ResearchCommunication Effect Research

i.i. Direct Rating MethodDirect Rating Method These ratings are used to evaluate an ad’s attention and These ratings are used to evaluate an ad’s attention and

behaviour strengths.behaviour strengths.

ii.ii. Port Folio TestPort Folio Test A group of respondents is asked to see or listen ad. A group of respondents is asked to see or listen ad.

And than give their views and analysis of it.And than give their views and analysis of it.

iii.iii. Laboratory TestLaboratory Test Behavioral reactions of respondents are measured to Behavioral reactions of respondents are measured to

evaluate performance of ad. Like : Heartbeats, Blood evaluate performance of ad. Like : Heartbeats, Blood pressure, Perspiration etc.pressure, Perspiration etc.

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2.2. Sales Effect ResearchSales Effect Research It is directly measured by increase in sales. If It is directly measured by increase in sales. If

sales increase….. Ad. is effective, if sales does sales increase….. Ad. is effective, if sales does not increase….. Ad. is not effective but…..not increase….. Ad. is not effective but…..

Sales are measured by various factors.Sales are measured by various factors. Sales impact is easiest to measure in Direct Sales impact is easiest to measure in Direct

Marketing situation and hardest in Brand or Marketing situation and hardest in Brand or Image building.Image building.

No sales are generated if Brand awareness No sales are generated if Brand awareness has increased by 20% and Brand preference has increased by 20% and Brand preference has increased by 10%.has increased by 10%.

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Sales PromotionSales Promotion It consists of a diverse collection of It consists of a diverse collection of

incentive tools, mostly short term, incentive tools, mostly short term, designed to stimulate quicker or greater designed to stimulate quicker or greater purchase of particular products or services purchase of particular products or services by consumers or distribution channel by consumers or distribution channel members.members.

Whereas advertising offers a Whereas advertising offers a reasonreason to buy, to buy, sales promotion offers an sales promotion offers an incentiveincentive to buy. to buy.

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Major Decisions in Sales Major Decisions in Sales PromotionPromotion

Establishment of ObjectivesEstablishment of ObjectivesSelection of ToolsSelection of ToolsDevelopment of Sales Promotion Development of Sales Promotion

ProgrammeProgrammePre Testing of ProgrammePre Testing of ProgrammeEvaluation of ResultsEvaluation of Results

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1.1. Establishment of Establishment of ObjectivesObjectives

Sales promotion objectives are derived from Sales promotion objectives are derived from broader Promotional objectives, which are broader Promotional objectives, which are derived from more basic Marketing objectives derived from more basic Marketing objectives developed for the product or service.developed for the product or service.

Overall sales promotion objectives are divided in Overall sales promotion objectives are divided in to to TWOTWO broad categories: broad categories:

i.i. Objectives for consumersObjectives for consumersii.ii. Objectives for Distribution channel membersObjectives for Distribution channel members

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i.i. Objectives for ConsumersObjectives for Consumers Encouraging purchase of larger size units.Encouraging purchase of larger size units. Building trials among non users.Building trials among non users. Attracting switchers away from competitors.Attracting switchers away from competitors.

ii.ii. Objectives for Distribution Channel Objectives for Distribution Channel MembersMembers

Persuasion to carry new items and higher Persuasion to carry new items and higher level of inventories.level of inventories.

Encouraging off season buying.Encouraging off season buying. Encouraging stocking of related items.Encouraging stocking of related items. Offsetting competitive promotions.Offsetting competitive promotions. Gaining entry in to new retail outlets.Gaining entry in to new retail outlets.

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2.2. Selection of Sales Selection of Sales Promotional ToolsPromotional Tools

Sales Promotional tools may be divided in to Sales Promotional tools may be divided in to THREETHREE categories: categories:

i.i. Consumer Promotion ToolsConsumer Promotion Toolsii.ii. Trade or Distribution Channel Trade or Distribution Channel

Promotion ToolsPromotion Toolsiii.iii. Business and Sales force Promotion Business and Sales force Promotion

Tools Tools

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i.i. Consumer Promotion ToolsConsumer Promotion Tools

SamplesSamples CouponsCoupons Cash refund offersCash refund offers Price packsPrice packs Premiums or GiftsPremiums or Gifts PrizesPrizes Free trailsFree trails Product warrantiesProduct warranties POP displays and demonstrationsPOP displays and demonstrations

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ii.ii. Trade or Distribution Channel Trade or Distribution Channel Promotion ToolsPromotion Tools

Price offPrice off AllowancesAllowances Free goodsFree goods

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iii.iii. Business and Sales force Promotion Business and Sales force Promotion ToolsTools

Trade shows and ConventionsTrade shows and Conventions Sales ContestsSales Contests Specialty Advertising – Calendars, Specialty Advertising – Calendars,

Ballpoint Pens, T-shirts, Caps etcBallpoint Pens, T-shirts, Caps etc

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3.3. Development of Sales Development of Sales Promotion ProgrammePromotion Programme

In deciding to use a particular incentive or sales In deciding to use a particular incentive or sales promotion programme, marketers have promotion programme, marketers have FIVEFIVE factors to factors to consider:consider:

i.i. The size of the incentiveThe size of the incentiveii.ii. Establish condition for participationEstablish condition for participationiii.iii. Duration of the programmeDuration of the programmeiv.iv. Timing of the promotionTiming of the promotionv.v. Determination of total sales promotion Determination of total sales promotion

budgetbudget

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4.4. Pre Testing of ProgrammePre Testing of Programme

It can be done by offering It can be done by offering programme to limited area or small programme to limited area or small group of target market for group of target market for acceptance.acceptance.

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5.5. Evaluation of ResultsEvaluation of Results Marketers can use Marketers can use THREETHREE methods to measure methods to measure

Sales Promotion effectiveness:Sales Promotion effectiveness:

Sales FiguresSales Figures

Consumer SurveyConsumer Survey

ExperimentsExperiments

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Public RelationPublic Relation PublicPublic It is any group that has an actual or potential It is any group that has an actual or potential

interest in or impact on a company’s ability to interest in or impact on a company’s ability to achieve its objectives.achieve its objectives.

Public RelationPublic Relation It involves a variety of programmes designed to It involves a variety of programmes designed to

promote or protects a company’s image or its promote or protects a company’s image or its individual products.individual products.

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Functions of Public Relation Functions of Public Relation (PR) Department(PR) Department

Most of the companies operate through PR dept. Most of the companies operate through PR dept. They perform the following functions:They perform the following functions:

i.i. Press RelationPress Relationii.ii. Product PublicityProduct Publicityiii.iii. Corporate CommunicationCorporate Communicationiv.iv. LobbyingLobbyingv.v. CounsellingCounselling

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Marketing Public Relation Marketing Public Relation (MPR Department)(MPR Department)

Many companies are turning to Many companies are turning to Marketing Public Relations (MPR) to Marketing Public Relations (MPR) to promote or ‘hype’ a product, service, promote or ‘hype’ a product, service, idea, place, person or organization.idea, place, person or organization.

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MPR plays an important role in following tasks:MPR plays an important role in following tasks:

Assisting in the launch of a new productAssisting in the launch of a new product Assisting in repositioning a mature Assisting in repositioning a mature

product.product. Building interest in product category.Building interest in product category. Influencing special target groups.Influencing special target groups. Defending products that have Defending products that have

encountered public problems.encountered public problems.

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Major Decisions in Major Decisions in Marketing Public Relation Marketing Public Relation

(MPR)(MPR)

1.1. Establishing the objectivesEstablishing the objectives2.2. Selecting PR message and Selecting PR message and

vehiclesvehicles3.3. Implementing the plan carefullyImplementing the plan carefully4.4. Evaluating the ResultsEvaluating the Results

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1.1. Establishing the Establishing the ObjectivesObjectives

MPR can contribute to the following MPR can contribute to the following FOURFOUR objectives:objectives:

i.i. Build AwarenessBuild Awarenessii.ii. Build CredibilityBuild Credibilityiii.iii. Stimulate the Sales force and DealersStimulate the Sales force and Dealersiv.iv. Hold down Promotion CostsHold down Promotion Costs

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2.2. Selecting PR Message and Selecting PR Message and VehiclesVehicles

The MPR dept. must identify and The MPR dept. must identify and develop interesting stories to tell develop interesting stories to tell about the product or serviceabout the product or service

The real challenge for MPR dept. is to The real challenge for MPR dept. is to ““create newscreate news” rather than “” rather than “finding finding newsnews” ”

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3.3. Implementing the Plan Implementing the Plan carefullycarefully

MPR dept. can use following major tools for MPR dept. can use following major tools for implementing the PR plan:implementing the PR plan:

i.i. PublicationsPublicationsii.ii. EventsEventsiii.iii. NewsNewsiv.iv. SpeechesSpeechesv.v. Public-Service activitiesPublic-Service activitiesvi.vi. Website of companyWebsite of company

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4.4. Evaluating the ResultsEvaluating the Results Evaluation is difficult because other tools are Evaluation is difficult because other tools are

also implemented. Although also implemented. Although THREETHREE ways can ways can be used to evaluate effectiveness of PR be used to evaluate effectiveness of PR programme:programme:

i.i. No. of ExposuresNo. of Exposuresii.ii. Awareness, Comprehension or Attitude Awareness, Comprehension or Attitude

Change of PublicChange of Publiciii.iii. Contribution to Sales and ProfitContribution to Sales and Profit