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1. Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.COLLEGE OF ENGINEERING TRIVANDRUM INDUSTRIAL ENGINEERING MANAGEMENT ASSIGNMENT 04/04/2011 MARKETING MANAGEMENTSUBMITTED BY ROLL-NO NAME OF STUDENT 53 SRUTHI .K 54 SRUTHI RAJ 55 SUDARSHAN 56 THEJUS JAYADEV 57 TREESA SEBASTIAN 58 VIJESH V NAIR 59 VYSHAK MURALI
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. CONTENTS INTRODUCTION MARKETING ENVIRONMENT MARKETING-DEFINITIONS MARKETING CONCEPTS PRODUCT LIFE CYCLE LIMITATIONS OF PLC
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.#INTRODUCTION Marketing has become such an integral part of life that we cannot imagine even aday without experiencing the process or the product of marketing. The marketingprocess has become a vital ingredient to success in business organizations. It hasgained a great deal of importance within this relatively short period and today,most management thinkers and practitioners all over the world, regard marketingas the most important of all management functions of any business.#The Marketing EnvironmentElements Of The Environment The marketing environment involves factors that, for the most part, are beyondthe control of the company. Thus, the company must adapt to these factors. It isImportant to observe how the environment changes so that a firm can adapt itsstrategies appropriately. Consider these environmental forces:1.Competition Competitors often “creep” in and threaten to takeaway markets from firms. Forexample, Japanese auto manufacturers became a serious threat to American carmakers in the late 1970s and early 1980s. Similarly, the Lotus Corporation, makerof one of the first commercially successful spreadsheets, soon faced competitionfrom other software firms. Note that while competition may be frustrating for thefirm, it is good for consumers. (In fact, we will come back to this point when weconsider the legal environment).Note that competition today is increasingly globalin scope. It is important to recognize that competition can happen at different“levels.” At the brand level, two firms compete in providing a very similar productor service. Coca Cola and Pepsi, for example, compete for the cola drink market,and United and American Airlines compete for the passenger air transportationmarket. Firms also face less Direct—but frequently very serious—competition atthe product level. For example, cola drinks compete against bottled water. Productsor services can serve as substitutes for each other even though they are verydifferent in form. Teleconferencing facilities, for example, are very different from
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.airline passenger transportation, but both can “bring together” people for a“meeting.” At the budget level, different products or services provide verydifferent benefits, but buyers have to make choices as to what they will buy whenthey cannot afford—or are unwilling to spend on—both. For example, a familymay decide between buying a new car or a high definition television set. Thefamily may also have to choose between going on a foreign vacation or remodelingits kitchen. Firms, too, may have to make choices. The firm has the cash floweither to remodel its offices or install a more energy efficient climate controlsystem; or the firm can choose either to invest in new product development or in apromotional campaign to increase awareness of its brand among consumers.2.Economics Two economic forces strongly affect firms and their customers:>Economic Cycles Some firms in particular are extremely vulnerable to changes in the economy.Consumers tend to put off buying a new car, going out to eat, or building newhomes in bad times. In contrast, in good times, firms serving those needs may havedifficulty keeping up with demand. One important point to realize is that differentindustries are affected to different degrees by changes in the economy. Althoughfamilies can cut down on the quality of the food they buy—going with lowerpriced brands, for example—there are limits to the savings that can be madewithout greatly affecting the living standard of the family. On the other hand, it isoften much easier to put off the purchase of a new car for a year or hold off onremodeling the family home. If need be, firms can keep the currentcomputers—even though they are getting a bit slow—when sales are down. Theeconomy goes through cycles. In the late 1990s, the U.S. economy was quitestrong, and many luxury goods were sold. Currently, the economy fluctuatesbetween increasing strength, stagnation, or slight decline. Many firms faceconsequences of economic downturns. Carmakers, for example, have seendeclining profit margins (and even losses) as they have had to cut prices and offertimes, there is a great deal of demand, but this introduces a fear of possibleinflation. In the U.S., the Federal Reserve will then try to prevent the economyfrom “overheating.”. This is usually done by raising interest rates. This makesbusinesses less willing to invest, and as a result, people tend to make less money.During a recession, unemployment tends to rise, causing consumers to spend less.This may result in a “bad circle,” with more people losing their jobs due to lowered
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.demands. Some businesses, however, may take this opportunity to invest in growthnow that things can be bought more cheaply.>Inflation Over time, most economies experience some level of inflation.It is useful toexplicitly state whether a reference to money over time involves the actual dollar(or other currency) amount exchanged at any point (e.g., one dollar spent in 1960and one dollar in 2007) or an “inflation adjusted” figure that “anchors” a givenamount of money to the value of that money at some point in time. Suppose, forexample, that cumulative inflation betweenv1960 and 2007 has been 1,000%--thatis, on the average, it costs ten times as much to buy the same thing in 2007 as it did47 years earlier. If the cumulative inflation between 1960 and 1984 had been500%, we could talk about one 1984 dollar being worth fifty 1960 cents or two2007 dollars. It is important to note that inflation is uneven. Some goods andservices—such as health care and college tuition—are currently increasing in costmuch higher than the average rate of inflation. Prices of computers, actuallydecline both in absolute numbers (e.g., an average computer cost $1,000 one yearand then goes for $800 two years later) and in terms of the value for money paidonce an adjustment has been made for the improvement in quality. That is, twoyears later, the computer has not only declined in price by 20%, but it may also be30% better (based on an index of speed and other performance factors). In thatcase, then, there has actually been, over the period, a net deflation of 38.5% for thecategory.3.Political. Businesses are very vulnerable to changes in the political situation. For example,because consumer groups lobbied Congress, more stringent rules were made on theterms of car leases. The tobacco industry is currently the target of much negativeattention from government and public interest groups. Currently, the desire toavoid aiding the enemy may result in laws that make it more difficult for Americanfirms to export goods to other countries. Many industries have a strong economicinterest in policies that benefit the industry may have a negative impact on thenation as a whole but enhance profits for the industry. For example, regulationsthat limit the amount of sugar that can be imported into the United States isestimated to cost each American approximately $10.00 a year. The total increase inprofits to the sugar industry is difficult to estimate because many of the largeproducers of refined sugar are privately held corporations, but it is likely that the
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.net gain to the industry is as much as the roughly $3 billion lost by Americans awhole. However, the interests of the industry are much more concentrated. Theindustry can rally its stockholders, unions and employees, and suppliers (e.g.,fertilizer manufacturers and manufacturers of sugar cane processing equipment)together to lobby for their special interests. In turn, the industry can join forceswith other agricultural interests which each support each other’s programs. Legalfirms are very vulnerable to changing laws and changing interpretations by thecourts. Firms in the U.S. are very vulnerable to lawsuits. McDonald’s, for example,is currently being sued by people who claim that eating the chain’s hamburgerscaused them to get fat. Firms are significantly limited in what they can do byvarious laws—some laws, for example, require that disclosures be made toconsumers on the effective interest rates they pay on products bought oninstallment. A particularly interesting group of laws relate to antitrust. These lawsbasically exist to promote fair competition among firms. We will consider suchlaws when we cover pricing later in the term. Technological Changes intechnology may significantly influence the demand for a product. For example, theadvent of the fax machine was bad news for Federal Express. The Internet is amajor threat to travel agents. Many record stores have been wiped out of businessby the trend toward downloading songs(or illegally “ripping” songs from friends’CDs—an act to which even the President of the United States has confessed).Although technological change eliminates or at least greatly diminishes somemarkets, it creates opportunities for others. For example, although Federal Expresshas lost a considerable amount of business from documents that can now be faxedor sent by the Internet rather than having to be physically shipped, there has been alarge increase in demand for packages to be delivered overnight or “second dayair.” Just-in-time manufacturing techniques, in addition to online sales, havedramatically increased the market for such shipments. Online sites such as eBaynow makes it possible to sell specialty products that, in the old days, would havebeen difficult to distribute. Although it has been possible for more than a hundredyears to sell merchandise by catalog, buyers of these specialty products often hadno easy access to the catalogs.4.Social Changes in customs or demographics greatly influence firms. Fewer babies todayare being born, resulting in a decreased demand for baby foods. More women workoutside the home today, so there is a greater demand for prepared foods. There aremore unmarried singles today. This provides opportunities for some firms,butcreates problems for others (e.g., manufacturers of high quality furniture that many
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.people put off buying until marriage). Today, there are more “blended” familiesthat result as parents remarry after divorce. These families are often strapped formoney but may require “duplicate” items for children at each parent’s residence.#MARKETING -DEFINITIONS Marketing is the performance of the business activities that direct the flow of goods and services from the producer to the consumer or end user. It is the process of getting right product to the right place in the right quantity at the right price and right time. Marketing is the economic process by which goods and services are exchanged between the producer and consumer and their values determined in terms of money prices. Marketing activities are concerned with the demand stimulating and demand fulfilling efforts of the enterprises. Marketing is a total system of interfacing of business activities designed to plan, promote and distribute need-satisfying products and services to existing and potential consumers. Marketing starts with the identification of a specific need on the part of the consumer and ends with the satisfaction of that need.Simply to produce the products is not enough. The products must be transported,stored, priced, advertised and sold before the satisfaction of the human needs andwants is accomplished.
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.#MODERN CONCEPT OF MARKETING The modern concept of marketing gives emphasis on consumer needs andthe freedom of consumer to choose. The marketing department becomes the mainmanagement force in a company. Most companies realize that production is nolonger a problem, having the technical ability is not enough, marketing the productis very important. The basic features of modern concept of marketing are : a) Consumer orientation b) Integrated marketing c) Profitable sales through customers satisfaction.1.Customer Orientation According to Charles. G. Mortimer, Look at the company through the customers eyes. The customer is at the top of the organization chart. We are not the boss; the customer is. What the customer eats the customer gets. The firm should produce what customer wants and not what they can sell. The businessman should always be in search of such needs of customers which are not known to them. Consumer research should be carried onto study the new and changing needs of the consumers so that the firm may cope with them.
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.2.Integrated Marketing It should be remembered that “The purpose of the company is to createcustomer". Integrated marketing means, The various departments in the company must recognize that the action they take, may have a profound effect on the companys ability to create and retain customers. Some means must be developed to co-ordinate the impacts of all the departments of the firm on the customer. It also means that within the marketing function proper there is intelligentadaption and coordination of the four Ps of produce, price, place and promotionto built strong exchange relationships with customers.3.Customer Satisfaction The objective of the company should be to achieve the satisfaction of thecustomers. The concept of sellers market which was in existence in the past has beenconverted into buyers market. A person buying a product has to be satisfied with his choice. He has to behappy about the performance, features and price of the product. The aim of the firm should be to earn more profits though satisfaction of thecustomers.
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.#PRODUCT LIFE CYCLE Like human beings, products also have a life-cycle. From birth to death, humanbeings pass through various stages e.g. birth, growth, maturity, decline and death.A similar life-cycle is seen in the case of products. The product life cycle goesthrough multiple phases, involves many professional disciplines, and requiresmany skills, tools and processes. Product life cycle (PLC) has to do with the life ofa product in the market with respect to business/commercial costs and salesmeasures. To say that a product has a life cycle is to assert three things: Products have a limited life, Product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, Products require different marketing, financing, manufacturing, Purchasing , and human resource strategies in each life cycle stage1.Market Introduction stage1.costs are very high2 . slow sales volumes to start3. little or no competition4. demand has to be created5. customers have to be prompted to try the product
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.2.Growth stage1. costs reduced due to economies of scale2. sales volume increases significantly3. profitability begins to rise4. public awareness increases competition begins to increase with a few newcompetition begins to increase with a few new players in establishing market5. Increased competition leads to price decreases3.Maturity stage1. costs are lowered as a result of production volumes increasing and experiencecurve effects2. sales volume peaks and market saturation is reached3. increase in competitors entering the market4. prices tend to drop due to the proliferation of competing products5. brand differentiation and feature diversification is emphasized to maintain orincrease market share6. Industrial profits go down
Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only.Limitations Of PLC The PLC model offers some degree of usefulness to marketing managers, inthat it is based on factual assumptions. Nevertheless, it is difficult for marketingmanagement to gauge accurately where a product is on its PLC graph. A rise insales per se is not necessarily evidence of growth. A fall in sales per se does nottypify decline. Furthermore, some products do not (or to date, at the least, havenot) experienced a decline. Coca Cola and Pepsi are examples of two products thathave existed for many decades, but are still popular products all over the world.Both modes of cola have been in maturity for some years. Another factor is that differing products would possess different PLC "shapes".A fad product would hold a steep sloped growth stage, a short maturity stage, and asteep sloped decline stage. A product such as Coca Cola and Pepsi wouldexperience growth, but also a constant level of sales over a number of decades. Itcan probably be said that a given product (or products collectively within anindustry) may hold a unique PLC shape, and the typical PLC model can only beused as a rough guide for marketing management. This is why its called theproduct life cycle. The duration of PLC stages is unpredictable. It is not possible topredict when maturity or decline will begin. Strict adherence to PLC can lead acompany to misleading objectives and strategy prescription.
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