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Marketing management

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almost everything covered related to markrting management............ …

almost everything covered related to markrting management............
DHEERAJ KARUNAKAR

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  • 1. Social definition Marketing is a societal process by which individuals and group obtain what they need and want through creating, offering and freely exchanging , products and servicesof values with others. Acc. To A.M.A. Marketing is a process of planning and executing the conception, pricing, promotion and distribution of ideas , goods and services to create exchange that satisfy individuals and organizational goals Marketing System Market Industry Marketing mix In the early 1960s, Professor Neil Borden at Harvard Business School identified a number of company performance actions that can influence the consumer decision to purchase goods or services.  Borden suggested that all those actions of the company represented a “Marketing Mix”. Professor E. Jerome McCarthy, also at the Harvard Business School in the early 1960s, suggested that the Marketing Mix contained 4 elements: product, price, place and promotion Marketing mix is the set of marketing tool the firm uses to pursue its marketing objectives in target market.
  • 2. The four Ps are: Product: The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants. The scope of a product generally includes supporting elements such as . Product variety Quality Design Features Brand name Packaging Size and services warranties, guarantees, and returns Price:- This refers to the process of setting a price for a product, including discounts. The price need not be monetary - it can simply be what is exchanged for the product or services, e.g. time, energy, psychology or attention. Eg. List price Discounts Allowences Payment period Credit terms Promotion This includes - Advertising Sales promotion Personal selling Public relation Sales force Place It refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or services is sold. Ex.- Channels Coverage Location Inventory Transport
  • 3. 7 Ps People Process Physical evidence Four New Ps Personalization: It is here referred customization of products and services through the use of the Internet. Early examples include Dell on-line and Amazon.com, Participation: This is to allow the customer to participate in what the brand should stand for; what should be the product directions and even which ads to run. Peer-to-Peer: This refers to customer networks and communities where advocacy happens. The historical problem with marketing is that it is “interruptive” in nature, trying to impose a brand on the customer. Predictive modeling: This refers to algorithms that are being successfully applied in marketing problems (both a regression as well as a classification problem). Marketing Mix Strategy Sales promotion Company- Advertising Distribution Target Products aServices Sales force Channels Customer prices Public Relation Direct mail
  • 4. Concepts of Marketing Exchange Concept Production Concept Product Concept Sales Concept Marketing Concept Exchange Concept Exchange of a product between the seller and the buyer. It is a significant part of Marketing, However, Marketing in itself a broader term. Exchange comprise distribution aspects and price mechanism, which is most vital in transaction. However, value satisfaction, creative selling are out of the context of exchange concept. Production Concept Marketing depends upon production, whatever is being produced, that only to sell. In this concept production is superior i.e. ‘Marketing can be managed by managing production’. Believes the volume of production followed by low cost attracts customer. Product Concept Marketing is best acknowledged and succeed with best product attributes. Concept is based on customer’s preference to high quality product. Sales Concept Aggressive promotion and push its products. Heavy advertising, high-power personal selling, large-scale promotion, public relations the main tools used by organization. Marketing Myopia is found in this concept too. Shift in Orientation Production Orientation to Marketing Orientation Product Orientation to Customer Orientation Supply Orientation to demand Orientation Sales Orientation to satisfaction Orientation Internal Orientation to External Orientation Comparisons between various concepts Consumer Orientation Integrated Management, with Marketing as the Fulcrum Consumer Satisfaction Realization of all organizational goals, including profits Relationship marketing
  • 5. It is a form of marketing developed from direct response marketing campaigns conducted in the 1960's and 1980's which emphasizes customer retention and continual satisfaction rather than individual transactions and per-case customer resolution. Relationship marketing differs from other forms of marketing in that it targets an audience with more directly suited information on products or services which suit retained customer's interests, as opposed to direct marketing, which focuses upon acquisition of new clients by targeting majority demographics based upon prospective client lists. According to Leonard Berry relationship marketing can be applied when there are alternatives to choose from; when the customer makes the selection decision; and when there is an ongoing and periodic desire for the product or service. A key principle of relationship market is the retention of customers through varying means and practices to ensure repeated trade from preexisting customers by satisfying requirements above those of competing companies through a mutually beneficial relationship. Relationship marketers speak of the "relationship ladder of customer loyalty". Social marketing Itis the systematic application of marketing along with other concepts and techniques to achieve specific behavioral goals for a social good. Social marketing can be applied to promote, for example, merit goods, make the society avoid demerit goods and thus to promote that considers society's well being as a whole. This may include asking people not to smoke in public areas, for example, ask them to use seat belts, prompting to make them follow speed limits. social marketing has two parents - a 'social parent' = social sciences and social policy, and a 'marketing parent' = commercial and public sector marketing approaches. Eight Essential Components Of Social Marketing A consumer orientation to realize organizational (social) goals An emphasis on the voluntary exchanges of goods and services between providers and consumers Research in audience analysis and segmentation strategies The use of formative research in product and message design and the pretesting of these materials An analysis of distribution (or communication) channels Use of the marketing mix- utilizing and blending product, price, place and promotion characteristics in intervention planning and implementation A process tracking system with both integrative and control functions A management process that involves problem analysis, planning, implementation and feedback functions Customer Relationship Management It is a combination of philosophies, polices and strategies connecting different players within an organization so as to coordinate their efforts in creating an overall valuable series of experiences, products and services for the customer.
  • 6. It is a term applied to processes implemented by a company to handle their contact with their customers. CRM software is used to support these processes, storing information on customers and prospective customers. Information in the system can be accessed and entered by employees in different departments, such as sales & personnel. Details on any customer contacts can also be stored in the system. The rationale behind this approach is to improve services provided directly to customers and to use the information in the system for targeted marketing and sales purposes. Types of CRM Operational CRM Analytical CRM Sales Intelligence CRM Collaborative CRM Geographic CRM Consumer Needs Stated needs Real needs Unstated needs Delight needs Secret Needs Value Chain Analysis Michael Porter gave this concept in his two books. He proposed that every activity performed by the firm create some value reflecting product & services thereby creating value chain. Whole business is observed as single unified chain meant to deliver value to the customer. Comparisons are made between close competitors. Value Delivery Process Value Selection It paves the way for production, sales, promotion Value Creation/Value Delivery Successful execution of firm’s promise Additional benefits are associated Value Communication-Info to customer Value Enhancement- feedback is followed by search of new expectations. Ex: Standard Chartered offers Global credit cards while rest offer country specific cards, ABN Amro offers several facilities on savings A/C Strategic Planning Management Task future growth of business. Decisions leading to effective strategies for timely accomplishment of goals.
  • 7. Rapid changes make it necessary Ensure optimum utilization of resources which in turn make the production and product cost & quality competitive. Concern of Strategic Planning Growth Direction of Growth Extent of Growth Pace of Growth Timing of Growth Long-term planning Business Portfolio Business & Marketing Integration Long-term sustainable organizational design Components of Strategic Planning Establishing the Organizational long-term goals. Defining business for every business. Understanding of internal/external environment. Internal appraisal Formulation of Corporate strategy Followed by comprehensive marketing Plan Marketing Plan It is a written document that details the necessary actions to achieve one or more marketing objectives. It can be for a product or service, a brand, or a product line. Marketing plans cover between one and five years. A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. Content of the marketing plan A marketing plan for a small business typically includes Small Business Administration Description of competitors, including the level of demand for the product or service and the strengths and weaknesses of competitors. The brief contents of marketing plan are: Description of the product or service, including special features Marketing budget, including the advertising and promotional plan Description of the business location, including advantages and disadvantages for marketing Pricing strategy Market Segmentation Medium-sized and large organizations Executive Summary Situational Analysis
  • 8. Opportunities / Issue Analysis - SWOT Objectives Strategy Action Programme (the operational marketing plan itself for the period under review) Financial Forecast Controls Marketing Research Marketing Research is the research on manifolds problems of Marketing. It is systematic gathering of information, presentation and interpretation of the data. It aims to accomplish marketing goals of the organization. It is complex but functional science study about consumer, competitiors and products attributes. Objectives To provide data analysis about consumer, market, demand. To predict the trends of competition in market. To assess the change in market scenario. To chalk out right pricing strategy. To select aqnd approve the methods of advertising & promotion. Primary & Secondary Research Research using own objective and fresh data at initial source is called primary research or empirical study. Research based on available data but using fresh objective is called secondary research. Both are found in marketing. The steps Formulating the problem Determining the research design Preparation for the field work Implementing the field work Process the data Tabulation and analysis Prepare the report Types of MR Quantitative Qualitative Uses of MR Filling in the gaps in knowledge Concept identification and exploration Identify relevant behaviour patterns Identify attitudes, beliefs, opinions To shortlist options where a large no. of options exist Assessing comprehension, likeability, memory of business communication
  • 9. Limitations of MR It is not an exact science Appreciation of the fact that there would be a difference from test conditions to actual practice MR depends on responses. This can change depending on test conditions. Validation is a problem. Element of subjectivity. Biases can creep in owing to lesser skill of the MR team Inadequate preparation and analysis can lead to erroneous conclusions Lack of motivation due to MR not being appreciated by many companies Formulating the problem What is the marketing problem? Translate it to the research problem Data Collection Primary & Secondary Data Customer Database Other sources of secondary data collection. Sampling Panel Research Consumer Panels Retail Shop Panels Advertising Audience Panels Data analysis Averages Variances Proportions Std. Deviation Hypothesis testing Regression Correlation Factor analysis Cluster analysis Multivariate analysis Discriminant analysis Report Writing Title Contents Preface Acknowledgements Introduction Objectives Methodology Results and discussion
  • 10. Conclusions/findings Recommendations Appendices Bibliography Consumer Buying Behavior Distinct characteristics of purchase decision-making in the contexts of professional consumer services and organizational and consumer buying. Three aspects: the factors involved, the purchase-decision task, and the nature of the decision-making process. Professional consumer services represents a unique setting for purchase decision- making and cannot be considered equivalent to the organizational or consumer setting. More… Buyer behaviour is focused upon the needs of individuals, groups and organisations We begin at the bottom level. Physiological needs such as food, air, water, heat, and the basic necessities of survival need to be satisfied. At the level of safety, man has a place to live that protects him from the elements and predators. At the third level we meet our social and belongingness needs i.e. we marry, or join groups of friends, etc. The final two levels are esteem and self-actualisation. Fewer people satisfy the higher level needs. Esteem means that you achieve something that makes you recognized and gives personal satisfaction, for example writing a book. Self-actualisation is achieved by few. Here a person is one of a small number to actually do something. For example, Neil Armstrong self-actualised as the first person to reach the Moon. Buyer Decision Process The marketing mix inputs (four P's price, place, promotion, and product) are adapted and focused upon the consumer The psychology of each individual considers the product or service on offer in relation to their own culture, attitude, previous learning, and personal perception The consumer then decides whether or not to purchase, where to purchase, the brand that he or she prefers, and other choices. Conceptual Model of Sustainable Consumer Behavior
  • 11. Industrial Buying Process Steps in Industrial Buying Process Problem recognition Assignment of buying authority Search procedures Evaluation and selection Step 1 Problem Recognition What is the need? Who has the need? Step 2 Assignment of Buying Authority Who knows the most about the product Who has the problem Who is in the position of responsibility Step 3 Search Procedures Locate the product Company salespeople Other purchasing agents Trade associations Advertisements in journals, web Product literature Company employees Develop a rating system for selection Step 4 Evaluate and Select Lowest bid Most specs met Other criteria Influences in Industrial Buying Product / Purchase Influences Organizational / Structural Influences Behavioral Influences Target Marketing Identifying those particular groups of customers which your product/service is capable of meeting their requirements (needs) most. Each of these groups constitute a market segment Selecting one or more segments to enter Establishing and communicating the product’s key distinctive benefits in that market Market Segment
  • 12. A large identifiable group within a market with similar wants, purchasing power, geographical locations, buying attitudes Niche Marketing What is an attractive niche ? A distinct set of needs A premium can be charged Not likely to attract competition Gains certain economies through specialisation Sufficient size, profit and growth potential Local Marketing When the marketing mix is altered to suit the local conditions eg. Giving a higher/ lower discount than what’s prevailing in the rest of the markets or implementing a different promotion scheme Individualised Marketing When the firm deals with each customer on a one – to – one basis When products are customised for the customer Lifestyle Marketing Especially for new innovative creations. Follows change of the fashion such as Yoga and diet management, herbal marketing, marketing for best suited healthy life style with eco-friendly methods. Bases for Segmentation Geographic –territory demarcations Demographic – age, family size,sex, income,education, religion, etc. Psychographic – lifestyle,personality,values Behavioral – knowledge,attitudes,usage Behavioral variables Occasions – birthdays, lunchtime,vacations Benefits – eg.travel – business, vacation, educational User status – non users, ex users, first time users, regular users, potential users Usage rate – light, medium, heavy Consumer’s Values Loyalty status – diehards,shifters,switchers Buyer Readiness – unaware – aware – informed – interested – desire – intention to buy Attitude – enthusiastic, positive, indifferent, negative, hostile Criteria for segmentation Measurable Substantial Accessible Differentiable Actionable
  • 13. Market Targeting Single segment concentration Selective specialisation Product specialisation Market specialisation Full Market coverage - undifferentiated marketing differentiated marketing Undifferentiated Marketing Single product addressing all segments with a single marketing program. Mass production is possible giving scale economies Pushes price downwards enabling to attract price sensitive segments Differentiated Marketing A separate market offering for every segment Marketing programs for every segment could be different Pushes up costs at various levels, necessitating sufficient volumes for viability Generates inter-segment rivalry Product Differentiation Most competitive advantages lasts only a short time. Companies therefore constantly need to think up new value adding features and benefits to win the attention and interest of choice rich, price prone consumers. Differentiation It is the act of designing a set of meaningful differences to distinguish the company’s offering from competitors. How can you differentiate? Differentiation can be done in various ways depending on the industry and product category. Differentiation can occur in one or more of these areas – product, services, personnel, channel, image. Product Differentiation Form,Features,Performance,Conformance,Quality,Durability,Reliability,Repairability, Style,Design Services Differentiation Ordering Ease,Delivery,Installation,Customer Training,Maintenance and repair,Miscellaneous services Personnel Differentiation Competence,Courtesy,Credibility,Reliability,Responsiveness,Communication
  • 14. Channel Differentiation Trade Direct Image Differentiation Identity – what the company wants to project Image – what the public perceive Image can be enhanced by using, symbols, media, atmosphere, events and employee behaviour Relevant Differentiation •Differentiation must be meaningful and relevant to the consumer. So it should satisfy the following criteria Important Distinctive Superior Preemptive Affordable profitable USP This should be exclusive to the product and make a significant relevant impact to the consumer Positioning The act of designing the company’s offering and image to occupy a distinctive place in the consumer’s mind. Positioning normally takes one position in the mind. More than one, the company runs the risk of customer credibility and dilution of positioning Positioning Strategies Attribute Benefit Use or application User Competitor Product category Price/quality PLC(Product Life Cycle) Products have a limited life Product sales pass through distinct stages Profits rise and fall at different stages of the PLC Product require different strategies in each stage of the PLC Stages in PLC Market Pioneering Stage Market Growth Stage
  • 15. Market Maturity Stage Market Decline Stage Levels PLC Operates at three Levels The Product Level The Product-Sub Category Level The Brand Level Factors affecting each stage Ist Stage Product Price Launch Application of Innovation New Product Launch Brand existence and loyalty Promotional Mix Distribution Mix Product Tailoring such as assembling, vendors at a place, Product’s Association with other products for offer. IInd Stage Market Share Competition Promotional Strategy Nature and competitiveness of product. Quality and Brand competitiveness. Type of producer-Innovator/Me Too Industry localization IIIrd Stage Modification followed by promotion Expenditure on advertisement Less opportunities of innovation. Non-Price Competition prevails. Price Discrimination IVth Stage Saturation point Huge expenditure with falling revenue. Cut-throat competition forces product to withdraw. Taste, Fashion, Needs, Lifestyle & Preferences of consumers. Marketing Ethics Marketing Environment
  • 16. Product life cycle:------ Product management is critical Products are the life blood of the company A common, holistic methodology is needed to view product life cycles from beginning- to- end Product management is part of a company’s business model Product management is not just about the job of a product manager Stages in New Product Development Generating New Product Ideas Idea Screening Concept Testing Business/Market Analysis Estimating the demand for New Products Substitution/Displacement Method End Use Method Pricing-No pattern Pricing; skimming/penetration pricing Market Test/Test Marketing Commercialization Conjoint analysis – to find out the best valued attributes by consumers Product Mix Denote Range & Variety of the products. Complete set of all products for sale. Width of PM-no of Product line carried Length - No of items/brands in line. Depth – No of items in each brand Ex: 1. Reliance operates in mobile, petroleum, agri-retail (width), in Mobile range such as type of moile service (length), various types of sets for particular service (depth)
  • 17. 2. HLL-Bath Soaps, Fabric Wash, Beverages (width), Rexona, Lux, Dove (Length), three colours and varieties of Lux (depth) Stages in Product Development Decision for No of Product line that can be accomodated by firm. Decision for various inter or intra product line composition. Product Differentiation, distinction & positioning. Creating brand and managing the brands Handling PLC Appraisal of each product line and product/brand depth Line stretching, line filling, brand pruning. Packaging Managing product quality. Strategies - Introduction Skimming the market Penetrating the market Must have sufficient resources to withstand the initial losses and heavy promotion costs Incremental selling efforts at this stage is highest The competitive cycle Pioneer Growth of Excess Introduction Industry capacities New entrants Reduction High discouraged In margins Inventories Existing Weaker companies companies Pioneer increases share consolidate withdraw Strategies - Growth Improves quality and adds features Adds new models and variants Enters new market segments Increases distribution coverage and adds new channels Shifts communication from awareness to preference building Scale economies enable it to lower prices to attract the next level of price conscious buyers
  • 18. Strategies - Maturity Most products are in this stage Price wars are inevitable. Scramble for market share The fittest survive Market modification, product modification, marketing mix modification can help extend the maturity stage Strategies - Decline Withdrawal Rationalisation of products Harvesting whatever is possible Divesting the product Market Evolution Emergence Growth Maturity Decline Pricing methods Markup pricing Target return pricing Perceived value pricing Value pricing Going rate pricing Sealed bid pricing Psychological pricing It is used to lessen the impact of the actual pricing in the consumers mind It is used as a surrogate to indicate the product quality or esteem New methods of Pricing Group Pricing Gain and Risk sharing pricing Geographical Pricing Different pricing at different locations Could be in terms of barter, countertrade and foreign currency Promotional Pricing Loss leader pricing Special event pricing Cash rebate Low interest financing Longer payment terms Warranties and service contracts
  • 19. Psychological discounting Discriminatory Pricing Customer segment Product form Image pricing Location pricing Time pricing Product Mix Pricing Product line pricing Optional feature pricing Captive product pricing Two part pricing Byproduct pricing Product bundling pricing Channel Management Patterns of Channels. Design a Channel System Identifying Channel Power Issues of Channel Conflicts Creating & Administering the Channel Selection of Dealer/Retailer and other links Specific Channel for Multi-Level Marketing Setting Channel Objectives & Strategy Incorporating change of business environment Channel Functions Break the Bulk & cater to tiny requirements. Help in Price Mechanism Assist in Merchandizing Act as change agent and generate demand Take care of flows involved in distribution Look after a physical distribution & financing. Provide in Salesmanship Helps in Price Mechanism Channel Levels Each Distinctive tier of intermediaries is referred to as levels Each link is referred to as Channel member No of levels determines the length of channel. Types of Marketing Intermediaries
  • 20. Marketer Dealers Info-channel Dealers Value Added Dealers Value Added Resellers Service Franchisees C & F Agents Wholesaler/Stockists/Distributor Authorised Representatives Brokers Commission Agents Designing Channel Systems Establishing Channel Objectives Channel Objective will decide Channel Design Ex: HLL Lifebuoy for 80 percent village objective changed whole channel design Channel objective depends on firm Ex: Reliance, NTC, Bombay Dyeing have different set of channel design. Designing Channel Systems Identifying channel objectives Find suitability of channel design for product Evaluation of channel environment Budgetary design Economic Evaluation Finalizing Channel Choice of Channel Intensity Choice of Number of tiers Selection of variant within a given design Establishment of unified system Establishment by Bottom up Method Fixing number of members Acknowledgement of contemporary channel scenario THE COMMUNICATION PROCESS
  • 21. Sender Encoding Message Decoding Media Receiver Noise Response Feedback Marketing Communications mix Advertising Direct marketing Sales Promotion Personal selling PR and Publicity Each of these has its own uses and limitations and hence a judicious mix is employed by most companies. Integrated Marketing Communications This brings about synergy and better use of communication funds Balancing the ‘push’ and ‘pull’ strategies Improves the company’s ability to reach the right consumer at the right place at the right time with the right message. Distortions in Communication Selective attention Selective distortion Selective retention Factors influencing effectiveness of communications when the recipient’s source of communication is single When message is in line with recipients opinions and beliefs When issues are unfamiliar or peripheral issues When the source is an expert, of high status, likeable, has power and can be identified with When social context or reference group will mediate the communication and influence acceptability Communications model AIDA model The hierarchy of effects model The innovation – adoption model AIDA Model
  • 22. The Hierarchy of Effects model The Innovation Adoption model Message Content Structure Format Source Message Source Source credibility Endorser
  • 23. Depending on the attitudes of the consumer, the communication will either get a +ve , neutral or -ve response depending on what attitudes the consumer has of the endorser Message Format The message has to be considered depending on which media is going to be used – eg. Layouts, props, models, music, voice, etc. Communication channels Personal – Direct selling Non Personal – media, atmosphere, events What is Advertising? It is any paid form of non – personal presentation and promotion of ideas, goods, services by an identified sponsor. The 5 Ms of Advertising Mission – objectives Money – budgets Message – communication Media – what vehicles? Measurement - evaluation Advertising objectives Informative Persuasive Comparative Reminder (reinforcement) Advertising Goal A specific communication task to be achieved to a specific degree to be communicated to a specific target audience in a specific period of time. Advertising Copy Covering written matter, pictures, labels, logo & designs Stages in Copy Development-Fact Finding Stage and Idea finding stage How much to spend? ‘Half my advertising is wasted, but the trouble is I do not know which half - John Wanamaker How much to spend? Depends on the product What stage in the PLC Market share and the consumer base Competition and clutter Ad frequency Product substitutability Media selection The most cost effective media mix to ensure achievement of the advertising goal.
  • 24. How should you select media? Reach Frequency Impact Reach No. of persons exposed to a particular media schedule at least once during a specified time period Frequency No. of times within the specified period that a person is exposed to that message Impact Qualitative value of an exposure through a given medium GRP (Gross rating points) = R * F Wt. GRP = R * F * I Sales Promotion Whereas advertising gives a reason to buy, SP gives an incentive to buy Advantages of SP Induces trials To reward loyal customers To induce stocking by the trade Adjust to short term variations in trade Liquidating inventories Preempting competition Disadvantages of SP With too many promotion schemes ‘promotion clutter’ confuses consumers Attracts ‘brand switchers’ and ‘deal prone’ customers Dilutes brand equity Preponement of purchases Lowers margins Expensive and wasteful, when not handled properly Types of SP Trade Consumer Developing a SP campaign Planning the programme Duration Incentive to be given Assessing viability Pretesting Implementing and controlling Evaluation
  • 25. Public Relations Involves a variety of programmes to promote or protect a company’s image or products Functions of PR Media relations Product publicity Corporate communications Lobbying Counseling MPR Assisting in new product launches Assisting in repositioning of product Building interest in product category Influencing specific target groups Defending products that have encountered public problems Building corporate image that rubs off on the products Advantages of MPR Building awareness Building credibility Stimulate sales force and dealers Holds down promotion costs The bottom line PR is difficult to measure, but if consistently pursued with, it can have tremendous synergy with advertising and sales promotion, thereby reducing overall promotion costs