Marketing Management

INTRODUCTION TO MARKETING

BEFORE MARKETING, LET US UNDERSTAND “MARKET” FIRST.

MARKET - GROUP OF BUYERS & SELLERS WHO WANT TO

NEGOTIATE FOR PURCHASE / SALE OF GOODS / SERVICES.

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Involves exchanges, Negotiations which can be:-

Face to Face

At certain place

Even on telephone

Internet

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Midllemen Also play role,

facilitate marketing function / exchange Wholesalers Retailers Dealers Agents Franchises

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Sellers – Buyers

Two parties and more

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Exchange may take place:-

With Money

or

Without Money (credit)

Money – the most common medium of exchange

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Philip kotler, the famous marketing Guru and Scientist

Defines- Market

As an area for potential exchanges.

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Marketing communication

Sellers Buyers MARKETING –THE CIRCLE OF EXCHANGE

Flow of Products Flow of

Money

Feedback-Information-Satisfaction -dissatisfaction

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As per American Marketing Association

The Marketing is performance of business activities that direct the flow of goods and services from producer to the consumer”

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MODERN DEFINITION OF MARKETING

Marketing is an ongoing process of:-

• Discovering and translating consumer wants into appropriate products and services,

• Creating demand for these products, under keen competition and serving the demand with the help of channels of distribution such as wholesalers, Retailers, Agents.

• Covers product planning, pricing, promotion and physical distribution.

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MARKETING COVERS THREE BASIC ACTIVITIES:-

• Discovery of consumer needs, desires, interests, choices revealing the marketing opportunities which can be exploited by the firms.

• Matching the organizational Resources and limitations (Competition, Govt. Regulation with the products. Strengths & weaknesses of the firm to be matched with the product demanded by the customers-Important managerial function.

• Formulating and implementing the marketing programme called marketing mix, covering product, price, promotion and distribution with the ultimate goals of profitability for the firm & consumers satisfaction.

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IMPORTANCE OF MARKETING

• For existence, we need clothes, shelter, comforts, entertainment, education. Marketing alone puts all above at our doorstep giving satisfaction & we spend money.

• Concept of exchange leads to the concept of marketing. • A market consists of all the potential customers sharing a

particular need or want who are willing and able to engage in exchange to satisfy that need or want.

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Buyers Market:-• When supply of goods abundant and demand

is relatively limited, buyers decide and choose, leads to tough competition, prices become lower & buyer is the king.Sellers market:-

• When supply is limited, scarce and demand is heavy like for essential goods, prices high buyers don’t have much choice.

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Marketing • Marketing, in simple words- selling of goods and

services, involves transfer of ownership of goods and also possession of goods. Also involves human activities taking place in relation to marketing.

BUTMarketing is much more than that –Has wider coverage • Marketing is a group of business activities to create and

promote consumer demand and to direct their flow of goods, services from the original manufactures to final consumers through the process of various levels of distribution.

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Marketing work-carried out formally by:- •Sales Managers, •Salesmen, •Advertising,•Promotion Managers,•Marketing Managers,•Marketing Researchers, •Customer Service Managers, •Brand Managers, •Marketing Vice-President etc.

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MARKETING CONCEPT

• To achieve organization goals, understand the needs and wants of target market.• Deliver the desired satisfaction to target customers more effectively than the competition.• Marketing concept starts with a well defined market, customer needs and co-ordination of all the marketing activities to make profit by creating long term customer relationship.• The end gain is customer satisfaction through profits.

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Marketing Concepts

The following Marketing concepts guide different companies:-• 1. PRODUCTION CONCEPT:- consumers will favour those

products and services that are readily affordable & available. Co. adopting this concept focusses on improving production and distribution efficiency.

• This concept useful in two types of situations:-• i) When the demand for a product exceeds supply, the

management looks for different ways to increase the production.

• ii) When the product cost is too high, the improved productivity is needed to bring the cost down.

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2. PRODUCT CONCEPT:- The consumers favour products that offer best of quality, performance and innovative features.- Co. thinks of making continuous product improvements. Competition also forces companies to focus on product, service, additional features in products etc.

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3. SELLING CONCEPT:- The Consumers will not buy the company’s products, unless the company undertakes a large selling and sales promotion efforts.

- Goods may be unsought goods and the buyers do not think of buying such goods like encyclopedia and fire extinguishers or vaccum cleaners, when a firm has over-capacity, it is a good concept.

- idea is to sell whatever has been made. More sales transactions desired.

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4. MARKETING CONCEPT:- Understanding needs, wants of the consumers are more important. It is required to achieve the organizational goals .- Focus on delivering customer satisfaction more effectively than the competitors.- Concept starts with a well defined market, customer needs and coordinating all the marketing activities to make profit by creating long term customers relationship. The end gain is customer, satisfaction through profits.

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5. THE SOCIETAL MARKETING CONCEPT:-- Society has a concern for environment, overall health of the people .- Cos. also need to take care of the society and its concerns.- Fast food items have high fat content, causing damage to consumers health.- Consumers prefer soft drinks in tetrapack, as plastic bottles which later create environmental hazards.- Societal Marketing concept holds that the firm’s task is to determine and to deliver desired satisfaction in such a way that preserves or enhances the consumer’s and the society’s will being. - Take care of social and ethical consideration while dev. Marketing strategies.

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DIFFERENCE BETWEEN SELLING AND MARKETING

Marketing 1.Marketing is an enire process2.Marketing activities include sales promotion,

advertising, publicity, packaging, support sales, efforts

3.Two-way activity where more listening takes place and thus products can also be improved-time spent to understand changing needs of consumers.

4. Long term view-encash opportunities & Understand threats-Make changes, launch new products. Search new mkts/needs.

5.Different marketing segments given special emphasis. Develop methods to offer best value to most profitable segments. (Flying return-A.I)

6.Develop plans, strategies, marketing analysis, planning and control. Marketing managers want to know results of marketing plans.

7.Feedback sought for future planning and also changes in his needs.

8.First understand customers wants / needs as it is thought that if needs are fulfilled by the co’s products, profits will be made.

9.Marketing takes outside-in angle. First have well defined marketing study, customer-his needs, make products, makes profits from customer satisfaction. Co. makes what customers. Want.

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Selling 1. Selling is part of Marketing 2. Selling is an act of Persuading / Influencing a

customer to buy the product - simple activity.3. Selling becomes one-way activity. Aim is to quickly

complete a transaction No time is spent to learn what consumers want more.

4. Oriented towards current products, marketing, customers,

5. Short term view6. Selling Today7. Individual customers given more importance than

marketing segments. Very low interest in developing / strengthen marketing segments.

8. More field work. Takes more time, No interest in developing plans, strategies / sales targets etc.

9. Feedback not obtained No effort to learn about cust . needs.

10. Sell the products as early as possible to fullfill sales targets and earn profits.

11. Selling takes an inside- out angle. Products made-pushed to market whatever made given to dist. Channels –must be sold-sell

MODERN COMPLEX MARKETING SYSTEM

– Before Indl. revolution, goods produced for nearby customers, knows buyers.–With Indl. revolution-larger Quantities produced at cheaper costs.– Factory made better quality products– Various forms of business organizations- Sole Trader, Partnership, Companies, J.Vs developed-separate deptts created for marketing also.–Retailers, wholesalers, dealers created to perform marketing functions.–Competition came in big way.–Marketing research, advertising, personal selling, sales promotion –inevitable function of marketing.–Improved Technology, innovation have brought in e-marketing, tele-marketing, CRM, shopping malls, franchisee, Direct marketing & so on.

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MARKETING MIX (4 Ps of marketing)

Marketing mix is the set of marketing tools that the firm uses to achieve its marketing objectives in the target market

Marketing Mix-4 Ps.

MarketingMix

Target Market

Product Place

Price Promotion

Product Price Place Promotion

Brand Pricing –Strategy Channels Personal-Selling

Quality List Price Coverage Sales –Promotion

Design Discounts Locations Advertising

Product – Line Credit-Terms Transport Publicity

Packaging Payment – Periods Inventory Sales force

Sizes Distributors Public – Relations

Service Wholesalers Direct Marketing

Warranty Retailers

Style Agents

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1. PRODUCT:- Most Basic Marketing Mix Tool

- Tangible offer by the firm

- Products Possess utility

-Refers to goods and services, combination the Company offers

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2. PRICE:- The valuation placed on the product by the co.-Covers pricing, Discounts, Allowances & Terms of Credit -Also Deals in Price competition-Price is Amout of Money customers are willing to pay.-A critical marketing mix tool.

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3. PLACE:- Also Termed as distribution –Delivery of goods by various channels.

-Make goods available at target market and customers.

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4. PROMOTION:- Persuasive communication tools

-Merits/features explained

-Decision on above four to be properly co-ordinated & balanced. Additional 3Ps of marketing Mix

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5. PEOPLE:- Firm’s Personnel & customers

6. PHYSICAL EVIDENCE:- Environment where service is delivered & where firms & customers interact.

7. PROCESS:- Actual procedure / mechanism / flow of activities by which service / goods delivered

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MARKETING ENVIRONMENT Every company needs to understand the marketing Environment • Good cos. take an outside-inside view of their business.• Opportunities and threats always exist in the market • Cos. must continuously monitor and adapt to the changing environment• Two methods- Marketing intelligence and Marketing research used to collect information about marketing environment.• Cos. operate in a larger macro environment of forces and trends that provide opportunities/ threats.• These forces are non controllable which the cos. must monitor and respond.• Marketing environment comprises external factors on which the organization and management has little control. • Environment is the physical and biological world where we live in.• Marketing environment is the conditions, factors, phases in which marketing gets done by the cos.

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• Goods & services provided by the organizations must be acceptable to the environment –Society, who will provide feedback• Organization must respond positively to the dynamic environment • A business enterprise and the environment are mutually interdependent, as it will provide opportunities and resources. •The marketing system is the set of institutions; activities and flows with help exchange, operations bet. Firms & customers.• Marketing environment constitute the framework of the uncontrollable elements, of the marketing.

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Marketing strategies / mix / plans are made within these variables called marketing parameters.These environmental factors are:-1. Demography:- is study of Population. People make markets and with Money and will to spend their money, buy products to satisfy their demands.•For effective marketing, cos. are interested in demography- scientific study of human pop, and its distribution structure.•Growing pop. indicates growing marketing. Pop. changes will affect the formulation of marketing plans and policies. •In demographic Analysis, cos. Study/ analyse elements like /age/ sex/ education / occupation/ income / geographic concentration / urban-rural population etc.•Attitudes / behaviour / perceptions of customers also studied. •Study of demographic elements helps cos.’s marketing people to segment/target the proper markets. •Pop. movements also affect co’s marketing policies.

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2. Economic environment:-• What is purchasing power of the customers & willingness to spend?• Economic conditions of customers play important role in creating demand.• High economic growth of a economy leads to higher employment- Higher income higher & sales for many industries. • Interest Rates / consumer credit / also affect cos marketing plans & strategies.• Poor economic conditions and low purchasing power of rural people, affect cos marketing policies to offer smaller size goods to them.• Cos make marketing policies based on the personal disposable incomes• Marketers must pay close attention to major trends in income and the consumer spending patterns, cost of living, borrowing patterns etc.

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3. Social & cultural environment • Social and cultural forces also influence the marketing policies. • Ever changing society give rise to new demands and cos. try fulfilling them.• Changes in lifestyles and social values-changing role of women, demand for quality goods, greater emphais on recreational activities. • Society more aware about pollution ill effects. Cos. bring socially responsible products and marketing policies. • Growing consumerism in society influence cos. to make marketing policies.• Cultural changes also influence co’s marketing policies. New offerings

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4. Political & legal forces:-• Political power and legal rules of a country also influence the marketing activities of a Co.• Public sector companiesSome sectors opened to Pvt-sector also• Marketing policies of cos. affected by Govt’s import-export policies, custom duties, legislation reg. saving physical environment.• Consumer legislation, protecting consumer interests affect cos to offer better goods & services. • Govt. Policies and legislation affect marketing policies of cos. all over the world.• Legislation to curb false advertising, unfair practices, opening up local marketing for foreign goods. Rules / punishment for adulteration

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5. Technology:- Rapid changes in science and technology over the last few years have changed the lifestyle and the consumption patterns. •Technology changing very fast and keeping Cos. on their toes all over the globe. •Technology –A driving force behind many new product innovations and development of new markets.•Cos. to take note and include new technology in their products. •Advances in electronics, telecom, computers, Biology and plastics have very wide impact on all business and marketing activities all over the world.•Cos. must adopt technology changes and offer products accordingly Cos. must understand how new technology can serve changing human needs- fax, computers, amusement parks.•Cos. create R & D wings and spend money on obtaining new technologies. •As products become more complex public needs to be assured of their safety.

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6. Competition:-• Cos. must make management policies/strategies only after assessing the competition in a free economy.• No control possible over the action of competitors. Co. can anticipate / study the actions of the competitors and take action accordingly.• Presence of competitors greatly influence the co’s choice of marketing strategies, target marketing, marketing channels, product mix, price mix and promotion mix. • Cos. make various policies to win over the competitors.• Competitors moves can be judged by marketing intelligence• Competitive conditions in an industry are ever-changing.

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7. Customer demand:- •Customer demands are ever-changing, unpredictable and can’t be measured with accuracy.•Consumer behaviour complex and ever changing. •Customers demands are the central focus point around which all marketing policies made•Customer satisfaction and services become the basis on which marketing policies will be made •Enterprises can earn profits only by serving customers needs. Marketing begins and ends with customers.

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PRODUCT POSITIONING•The way the manufacturer would like their products / brands to be perceived by the consumers. • Positioning is the act of fixing the exact focus of the product offer in the chosen market.• Decides how and what distinctive features have to be communicated to the consumers.• While positioning the product, the company analyses the competitor’s positions, its competitive advantages and finally identifies the best position for its product. • Philip Kotler says “Positioning is the act of communicating company’s offer so that it occupies a distinct and valued place in customer’s mind”/e.g. Camplan:- Complete health Drink, Superior to milk. Aaj Tak:- Sabse Tej. Rasna:- So simple to make that even a child can make it.

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CORE PRODUC

T

CORE PRODUC

T

STYLING

COLORATTRIBUTES

INSTRUCTIONS

MANUAL

BRAND NAME

PACKAGINGQUALITY

AFTER SALES

SERVICEDELIVERY POINTS

& SYSTEMS

INS

TALLA

TION

CUSTOMERS EDUCATION & TRAINING

CUSTOMER

COMPLAINT

MANAGEMENT

PAYMENT

OPTION

RE

PLA

CE

ME

NT

PO

LIC

YGUARANTEES

&

WARRANTIE

S

FORMAL PRODUCT

AUGMENTED PRODUCT

FUTURE PRODUCT

THE TOTAL PRODUCT CONCEPT

PRODUCT LINE & PRODUCT MIXGodrej has many product lines:-

• Soaps line• Storewell line•Refrigerators line • Cosmetics line

-Many companies started as single product line. Companies like – Nirma (Detergent) T-Series (Audio Cassettes) –emerged as winners, earned huge profits and then added other product lines.

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A product line is a group of products that are closely related because they perform a similar function, are sold to the same customer group, are marketed through the same channels.Tooth Paste by Colgate Cars by Hyundai-Colgate Plain - Santro- Gel - i10-Blue - i20-Herbal-Salt A Product line Manager needs to know the sales / profits of each item in the line.

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Product Mix-The product mix is the full list of all the products offered for sale by the Company.- Consists of all product lines.L.G. / Samsung product mix:-TV/ Washing Machine / Music system/ Mobiles/ Fridge /A.CS etc. -Firms deal with multi-products-Helps a firm to diffuse its risks across different product groups -Enables the firm to appeal to a much larger group of customers or to different needs of the dame customer groups- The number of products carried by a firm at a given time is called the product mix.- Bajaj Electricals has about 100 products in its portfolio.

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TARGETTING (Target Market)

•Target market is a group of customers (People or organization) for whom a seller designs a particular marketing Mix, intended to meet the needs of that group resulting is mutually beneficial and satisfying exchanges.•For targeting the market, the requirements & characteristics of customers are understood. Marketing, Research helps.•Customers grouped as per their requirements & targeted. •One or more markets chosen for targeting & Marketing mix developed by keeping in mind what customers value

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TARGETTING STRATEGIES OR

APPROACHES TO TARGET MARKET •While selecting the target markets, companies have to make a choice of whether they are going to be focused on one or few segments OR they are going to cater to the mass market.

1. Undifferentiated targeting:-•A company essentially adopts a mass-market philosophy.•Views the market as one big market with no individual segments.•Co. uses one marketing mix for the entire market, assuming that individual customers have similar needs.

e.g. Co. selling sugar, salt etc.

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2. Concentrated Targetting - a company selects one segment to serve.- Understands the needs & and motives of the segment’s customers and design a specialized marketing mix.- Here a company discovers that concentrating resources and meeting the needs of a narrowly defined market segment is more profitable than spreading resources over several different segments.e.g. Mercedees offers premium cars for the upper segment of the market only. Does not offer cars for middle class segments.

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3. Multi-segment Targetting- a company servers two or more well - defined segments and develops a distinct marketing mix for each one of them.-separate brands developed to serve each of the segments.-most sought after target market strategy because it has the potential:-- to generate sales volume.- higher profits- larger market share and - economies of scale in manufacturing and marketing- the strategy involves greater product design, promotion, inventory, marketing researchese.g. Car companies like, General motors, Suzuki, Hyundai follow this strategy and offer small cars, luxury cars, sports utility vehicles, vans etc.

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PRODUCT INNOVATION & DIFFUSION •A Company’s success will increasingly depend on bringing new Products to the market.•Changing customer needs, technological advances and competitive pressure mean that companies can’t rely on past product successes.• Most new products may not be successful.•Real test for a company is the number of successful products that the company is able to launch.•Invention is the discovery of new ideas and methods.•Innovation occurs when an invention is commercialized by bringing it to the market.•Cos. have to be active on both these fronts.

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COMPANY’S PERSPECTIVE IN PRODUCT INNOVATION-A company may define an innovation differently based on what the co. tries to achieve from the new products. 1. Product Replacement:-- Include revisions and adjustments of existing products, repositioning and cost reduction. e.g. Tata Motors- improved its first offering Indica and relaunched it a after receiving customer complaints.

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2. Addition to existing lines:-- Additions of new technologies, new brands (Pentium IV over III, Mach III over Mach II from Gillette) (ice cream, colgate toothpaste now in 50 and 100 gms alongwith 250 gms.-product forms (liquid soaps in addition to bars) (Dabur’s pudin hara now in tablet alongwith liquid one)

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3. New product lines:-- the co. moves to a new product lines that hitherto did not exist in its portfolio.-Co’s product mix widens.

LG-Korea’s Electronics Co. is now manufacturing soaps and shampoos in the Indian market, besides being a major player in the consumers electronics market.

T-series Launching their cell phones

Reliance entering the organised retail business with Reliance Fresh

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PRODUCT DIFFUSION (Diffusion of Innovation)

- In the process of new product development, a large number of factors are examined to know the reaction of consumers regarding adoption of new product.The process of accepting new product idea is known as Diffusion process.- the process by which the acceptance of an innovation (a new product / a new service, new ideas or new practice) is spread by communication (Mass Media, sales people or informal conversation ) to the members of the social systems.- A new product spreads throughout a market, overtime .- Different customers have varying degree of willingness to try new products.

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STAGES IN THE ADOPTION PROCESS:-

•Awareness:- Consumers explained and information given about a new product / service•Interest:- When consumers develop an interest they search for more information, which may benefit them. •Evaluation:- Involves mental trail of the product innovation. If evaluation is satisfactory, product tried otherwise rejected. •Trial:- Product used on a limited basis. Their expressions with the product provide them with critical information, that they need for adopting or rejecting the product.

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PRODUCT DECISION

•Basis of any marketing activity is “Product’•Is the key element and preceeds

Price Promotion Place•Good products are keys to marketing success•Customer satisfaction provided through products.•Products represent expectation of the consumers & society and the capabilities of the manufacturers.•Product –more than a bundle of physical attributes- is a total concept •Bundle of satisfactions that a consumer buys.

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Product –combination of physical and psychological benefits.

•Philip Kotler says “A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want /need.”

R.S. Davar “A product may be regarded of benefits which are being offered to the consumer”.

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Concept of Product

• Product - a bundle of satisfaction that a consumer buys.• Represents a solution to a customer’s problem• A combination of tangible and intangible benefits eg. a water filter in not only some plastic, steal, candle , pipes, wire, brand etc but also involves after-sale service, delivery and installation, dealer network.

(Show round Diagram-the Total product concept )

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Core Product:- The problem solving service or the basic benefit which is sought while buying the product. TV for Entertainment , News, Sports, Visuals.

Formal product:- Product packed, branded, additional features added, safety of the product taken care-differentiated from other products.

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Augmented Product:- When different branded products give same technology, price and promotion wars are on, Marketers look for intangibles.

• After sale service, delivery & Installation, offering low cost financing options. One can be creative and offer more.

• This intangible component of the product alongwith formal and core components is called “Augmented Product.

• Marketer can keep on expanding this concept to add value to product. Not applicable to all the products and all the customers. All customers may not be able to use such service.

Future product:-Consists of those things required to enhance utility to keep holding existing customer and attract new ones. Thus product is a total concept being bought.

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CLASSIFICATION OF PRODUCTS / GOODS Consumer products:- Used by final consumers or users, can be used without further commercial processing.

Convenience Goods

Shopping Goods

Speciality Goods

Unsought Goods

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1. Convenience Goods:-• Purchased with minimum of effort, as buyer has prior knowledge • No more information required • Marketer does intensive distribution, advertising, store displays, easy availability etc.• Pulses, pens, cosmetics, etc.

Three types:-a) Staple goods: - Majority of convenience shopping for these goods. • Purchased routinely with little planning • Not much effort put by consumers• Items must be available near the house.

b) Impulse Goods:- Not planned to buy the product while going to the shop. - Not purchased on regular basis. - Exposure creates the need, Normally not costly goods. c) Emergency Goods:- Result of urgent and compelling needs. e.g refill for a pen, pre-paid card for cell phone etc.

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II Shopping Goods:-• Goods purchased after going around shops and comparing the different alternatives offered by different manufacturers and retailers.• Price, Quality, fashion, style play a very important role.• Market studied before final selection. e.g furniture, A.Cs, Watches, Garments etc.•Manufacturers make attempts to get their products properly displayed at the retail outlets.

Types of Shopping Goods(i) Homogeneous Goods:-- Products have same features- Brands are different and consumers view these brands as insurance of Quality.Fridge, TV, washing machines-Usually price based shopping products.

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(ii) Heterogeneous Products:-• Non-Standardised Products • Stylish products.• Consumers get information about the products first and then the consumers evaluate the information with respect to features warranty, performance etc.• Goods with best attributes are bought.e.g. furniture, Jewellery, Readymade garments etc.

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MM 65 III Speciality Goods• Consumers make special efforts to buy these products. • Extensive search made for such items and customers are extremely reluctant to accept any substitutes. • Specialty goods are particular brands, stores and persons to which / whom the consumers are loyal.• Attributes of these goods are maintained / enhanced so that products become unique for loyal consumers. E.g. Rayban Goggles, Perfumes etc. IV Unsought Goods:-- Those which potential buyers are not aware of or don’t want to buy. a) Regularly unsought:- Existing products which consumers do not want to buy now although may be bought eventually. E.g. LIC policy, shares purchase, medical check-up etc.b) New Unsought products:- Totally new and unfamiliar to consumers. Marketers inform target customers about the products.

MM 66 NEW PRODUCT DEVELOPMENT• Due to rapid changes in consumer behaviour, technology, competition, a company cannot solely roly on its existing products.• Consumers expect the new and improved products, which are provided by the competing companies.• Companies need to have new products development Programme, because new products are the future of any business.• In India, Many new products have been offered in the market in the last about 20 years.• Indian consumers were exposed to many such new products for the first time.• Examples of such product are• Pagers, Washing machines, Home Theatres, frost-free Refrigerators etc. • The major reason for all these new products is opening up of the economy-Market environment becoming more liberal and open. Customers getting more aware / conscious

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STAGES / PROCESS OF NEW PRODUCT DEVELOPMENT

i) Generation of new product ideas:--Must visualize new product ideas- Come from scientists / sales force, Dealers, competitors, brain storming sessions of management , R&D, Trade Journals, Employees, consumer complaints etc.

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ii) Detailed study of New Product Ideas:-

- All ideas examined and best and feasible one’s shortlisted. - Important as new ideas costs money / time- Find out which ideas need further study.- Good possibilities to be examined carefully.- Parameters could be profit possibilities, the risk and the cost of capital involved.

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iii) Commercial feasibility:-- Evaluate new ideas in the light of co. capability for scientific knowledge, technological skills and financial Resources-Most feasible and profitable ideas picked up for further investigation -Marketing Res. here will help in customer behaviour competitors strategies, sales etc.

iv) Product Development:-Actual Development of the product Decision for branding, labeling, packaging taken

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v) Test Marketing:-

- Tried in selected markets and consumers before large distribution.-Feedback, Reaction noted and product improved, if necessary.

vi) Commercialization:-Test marketing successful, leads to finalising all features of the product, promotion campaign, distribution channels decided and product is made available.

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BRANDING PACKAGING

LABELING

BRANDING

Provides distinguished identity to products. Name, Logo, trade mark that separates the products /

services from others. Branding –a major issue in product.Brand provides market power

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American marketing association

“A Brand is a name, sign, symbol, or design or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors”.

-Brand identifies a seller / maker - A seller’s promise to constantly deliver a specific set of features, benefits, and services to the buyers.-Best brands convey warranty of quality.

BRAND - SIX LEVELS OF MEANING•Attributes:- Brings to mind certain attributes. Tata brings to mind – good quality, durable, high prestige products.•Benefits:- customers buy benefits – attributes translated into functional and psychological benefits.‘Durable’ – I don’t have to buy a new product every years as it will last.‘ Expensive’- Feel important and admired e.g. expensive cars. •Values:- says something about the manufacturer’s values. ‘Ford’ or ‘Mercedes’ stands for safety, prestige, high performance, style, speed etc. The producers look for customers who are looking for such values.•Culture:- A brand may also represent a certain culture. HONDA, SONY, SUZUKI show Japanese culture- efficient, innovative, high quality, accurate etc.•Personality:- Brand can also represent a certain personality. - Can be person, an animal or an object-what comes to mind is the personality factor. ‘Tiger’ brand biscuit ‘MDH’ shows an old man (owner) as part of the brand.•User:- Brand also suggest the kind of consumers who buys or uses the product. - User should be aware of the values, culture of the products. “Disney”, “Pogo” –children’s channels.

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FUNCTIONS OF BRANDING:-• Differentiation of the product• Better quality of goods/ services • Advertisement –Good brands advertise their products, more • Protection of goods – branded products generally packed appropriately and thus the goods remain protected.• Bridge between buyer and seller-Desired products flow to user. • Consumer protection:- Prices fixed and printed on package. Retailers cannot charge more-customers Interests protected.

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PACKAGING Packing- Wrapping and crating of goods before storing or transporting.Packaging – Group of activities concentrating on – formulating the design of a package

producing appropriate / attractive container or wrapper.

Philip Kotler – “ Packaging is an activity concerned with protection, economy convenience & promotional considerations”.

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Functions of Packaging Protection- From Mfrer to consumers.Appeal – as a marketing tool, products develop self-

sellingPackaging and sales promotion:- short –term special

measures to boost sales. (‘New’, Rs. ‘10/- off;, ‘30% Extra free)

Performance- Packaging must improve the use of the product etc.

Convenience- Makes goods convenient to use, easy to handle, store for consumers, wholesalers, Retailers etc.

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LABELLING - Govt. Regulations want manufacturer to provide basic

information in the package itself on the product. - Commonly knows as Labelling requirements

• Label is defined as a display of written, printed or graphic matter on the package of the containers.

• Need not be only a legal requirement. Good label can be an important sales tool.

• Provides crucial informations.

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General statutory Requirements for labeling • Net weight, when packed • Date of manufacture and expiry.• MRP including or excluding local taxes. • Directions for use, dosage, storage etc. = apart from above, manufacturer may give many more details in labeling.A good label helps a potential buyer to make purchase decision. Also it helps promotion of a product, labeling can also make the products distinctive

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PRODUCT LIFE CYCLE (PLC) • Understand each stage of the PLC and the consequences for

price, product, place and promotion.• Every product passes through a life cycle- fact of existence.• Five phases cycle-length / duration of each phase varies from

product to product.• Concept is that a product is born or introduced, grows, attains

maturity, sooner or later enters its declining stage – sales come down.

• The Product life cycle (PLC) portrays distinct stages in the sales history of a product.

• by identifying the stage the product is in or going to be in one, the companies can make better marketing plans.

• Profit rise and fall at different stages of PLC.

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STAGES OF PLC 1. Introduction:- - Stage starts, when a new product launched.- Sales revenue begins to grow but the rate of growth is

very slow. - Profit low due to low sales volume, large production

and distribution costs.-Product cautiously on a trial basis .- Heavy advertising and sales promotion required.- Weaknesses if any, to be promptly removed. -Cost of market development crucial and will be

considerable.

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2. GROWTH:- • Rate of increase of sales is very rapid.• Profits increase at a good rate.• Inspite of competition, may have rising sales and

profits • Top priority given to sales volume. • Manufacturing and distribution efficiency vital factors.• Distribution and advertising to be effective.• Demand of product increases rapidly .• New competitors enter• Firm improves product quality, features • Enter new market segments• Lowers price, to attract new layer of price sensitive

buyers.

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3. MATURITY:-• Keen competition brings pressure on prices• Profits reduce in the battle for marketing share, due

to falling prices and increasing marketing expenditure.

• More expenditure in product modifications• More measures required to stimulate demand • Face competition through additional advertising

and sales promotion.• Stage normally lasts longer.• More R & D for bringing improvements.

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4. DECLINE STAGE:-• After reaching the peak point, product inevitably enters the

Decline stage.• New Innovations may delay or displace this stage.• Sales drop severely and it becomes difficult for the product

to stand in the market.• Other innovative products may even phase out the product• Price becomes primary weapon of competition.• Co. has to reduce expenses on Advertising and sales

promotion.• Cost control key to generate profits

• Reasons for the stage can be:-• Technological advances • Shifts in consumer tastes • Increased domestic/foreign competition.• Sales profits decline, some cos withdraw • Withdraw from smaller weaker segments –cut the

promotion and prices.

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Some products may not follow above stages. Time interval for each stage vary from product to product.

- Salt remains at maturity stage for ever

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MARKET SEGMENTATION

• Market place is highly diverse with consumers having different backgrounds interests, needs etc. • These differences are enough reason to segment the markets by the marketer.• Segmenting markets –A Global phenomenon.• With so many diversities on the part of consumers, markets needs to be segmented on the basis of demographic, psychological and other variables.• When marketers provide wide range of products / services to meet diverse consumer needs, consumers feel satisfied, get value for money. Becomes more happy.

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What is market segmentation?

• Market segmentation is the process of dividing a potential market into distinct sub-sets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix.• Earlier times concept was of mass marketing – offering same product and marketing mix to all consumers. • Because of divers consumer behaviour based on differing perceptions, interests, wants, income sizes, direct experience, market segmentation becomes very important.E.g. Small car v/s big car by same co.

Or

165 litre fridge v/s 440 ltr fridge or DDA offering flats with different no. of rooms.

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Segmentation helps manufactures to fight competition in marketplace by differentiating their products. These can be on the basis of differentiated price, packaging, promotional appeal and distribution style.

• Helps marketers to have increased sales and wider base of consumers.• It also helps in targeting and positioning the markets.

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Who uses market segmentation?

Today almost every product category in the consumer market is segmented. Segmentation provides the opportunity to expand the markets by better satisfying the specific needs of the consumers. Industrial manufacturers, Retailers, service promoters, media, use the concept of market segmentation.

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Bases for Segmentation

Consumers have diverse needs, preferences , Likings, personality, motivations and Motivations and accordingly these get reflected in his behaviour when he makes actual buying decisions. These get noticed and marketers have to segment their markets on the following parameters:-

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1. Geographic segmentation:-

• Divided by location divergent consumer purchasing patterns exist among urban, semiurban and rural consumers

• Easy to find geographically based differences for many products

• Different geographic segments can be easily reached through local media, newspapers, magazines, Radio and regional magazines

• Segmentation could be on the basis of region (North, South), City (Metro, Town) Climate (Hot Cold),

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2. Demographic Segmentation:- • More often segmentation – Based age, sex, income,

education etc, Helps to locate target segments.• Demographic information Cost- effective way to

identify a target market. • Demographic variables are easier to measure.• Demographic variables reveal ongoing trends of

consumer behaviour due to change in age, Income distribution etc. these variable always keep the marketers active and watchful

• Here seg. is done on basis of age (Under 19, minors, Old people) martial status (Single, Married etc.) education (High school, college students) occupation (Blue- White collared)

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3. Psychological / Psychographic segmentation:-

• Refers to inner, intrinsic qualities of the individual consumer

• Specific psychological variables of consumers help for consumer segmentation.

• Psychological segment done on the basis of needs – motivation (shelter, safety) Personality (Aggressive, Extroverts etc.) Learning – involvement (Low or high involvement) attitudes (Positive or negative)

• Psychographic is lifestyle analysis of consumers. (Straights, conservatives, status seekers etc) Here consumers asked to reveal their personal or their family’s reactions to variety of offers which can be general or product specific.

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4. Socio-cultural segmentation:-• Social or cultural variables also provide basis for segmentation• Consumer markets are segmented on the basis of stage in family life cycle, social class, core cultural values, sub-cultural groups etc. • Family lifecycle includes, - single, married and old age and different things requ. at diff. stages • Consumers in diff. social class vary in-terms of values, product preferences and buying habits. • Banks give diff. services to diff. clients from various social classes. Domestic and international clients and products modified accordingly.

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