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Introduction
 

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    Introduction Introduction Document Transcript

    • IntroductionIn the sequence of strategic analysis and decisions, "marketing mix" analysisfalls after various external and internal environmental analyses such asPESTEL analysis, Porters Five Forces analysis, SWOT Analysis and evenformulation of competitive strategies (Porters Generic Strategies).Marketing mix is an imperative concept in modern marketing andacademically it is referred to as the set of controllable tools that the firmblends to produce the response it wants in the target market, so it consists ofeverything the firm can do to influence the demand for its product (Kotler andArmstrong, 2004). It is important to realize that marketing mix strategy of anycompany can have one major function, that is, strategic communication ofthe organization with its customers (Proctor, 2000). It was further argued thatmarketing mix provides multiple paths as such communication can beachieved either in spoken form and written communications (advertising,selling, etc.) or in more symbolic forms of communication (the imageconveyed in the quality of the product, its price and the type of distributionoutlet chosen). However, the key element is that the main aspects ofmarketing mix that will be discussed below "should not be seen as individualentities, but as a set of interrelated entities which have to be set inconjunction with one another"Main Aspects of Marketing MixThe easiest way to understand the main aspects of marketing is through itsmore famous synonym of "4Ps of Marketing". The classification of four Psof marketing was first introduced and suggested by McCarthy (1960), andincludes marketing strategies of product, price, placement and promotion.The following diagram is helpful in determining the main ingredients of thefour Ps in a marketing mix.Marketing
    • Marketing is the total system of business activities designed to plan,prices, promotes and distribute want satisfying goods, services, And ideas to targetmarkets to achieve organizational objectives. In other word we can say that marketing means entire process of satisfying theneeds of customers. It starts with discovery of needs and want of the consumer andit continues till these need and wants are satisfied. The old concept of marketing is product oriented concept, according to thisconcept manufacturer must produce the goods and distributes them to theconsumers.But new concept of marketing is customer oriented, according to this conceptbusiness and industrial enterprises can achieve its object of maximizing the profitonly when it considers the need and wants of its consumers and it tries thesatisfaction of these needs and wants.Marketing management has the task of influencing the level, the timing, andcomposition of demand in a way that help the organization achieve its objectives.MARKETING MANAGEMENT IS ESSENTIALLY DEMANDMANAGEMENT. The actual demand may be low, equal to or above the desiredlevel of demandMarketing managers cope with these tasks by carrying out Marketing research,planning, implementation and control.Within the marketing planning the marketer must make decisions on target market,market positioning, product development, and pricing, channel of distribution,physical distribution, communication and promotion.CORE CONCEPT OF MARKETING1. Needs, wants, and demands2. Markets3. Exchange, transactions, and relationships
    • 4. Products5. Value, satisfaction, and qualityNEED:- A human need is a state of felt deprivation of some basissatisfaction. Need are basically basic like need of food, cloth, shelter. Theneeds are not created by marketer but they are the unseparable part ofhuman biology.WANT:- Want is desire for specific satisfiers of these deeper needs. Forexample for satisfying the hunger need the person may want a Chinese food,south Indian food etc. although people’s needs are few, their wants aremany. Human wants are continually shaped and reshaped by social forcesand institutions. DEMAND:- demand are wants for specific products that are backed by anability qualification and willingness to buy them. Want become demand whensupported by purchasing power. MARKET:- IN ORDINARY SENSE MARKET refers to place where goodsare bought and sold. Market is a physical place to exchange goods andservices. According to Phillp kotler: a market consist of all the potential customerssharing a particular need or want who might be willing and able to engage inexchange to satisfy that needs or want.” so the size of the market dependsupon the number of person who have the unsatisfied needs and arepotentially capable of doing the exchange. Product:- people satisfy their needs and wants with goods and services.According to Philip cotler a product is “any thing that can be offered to satisfya need or want”. According to W.J.STANTON “A product is a set of tangibleand intangible attributes, including packaging,colour,price,manufacturer’sprestige, retailer’s prestige and manufacturer’s and retailer’s services. Thekey idea in this definition is that consumers are buying more than set ofphysical attributes. Fundamentally, they are buying want satisfaction. Product is an any thing an organization offers for exchange thatsatisfies a consumer need. In marketing terms, a product may be a tangiblegood or an idea that offers some benefit. For example if customer havemoney for exchange, he can buy a physical goods, a service or an idea. Foran exchange to succeeds, it must lead to utility for consumer.
    • Exchange:- the essence of marketing is a transaction an exchange-intended to satisfy human needs and want. Marketing emerges when people decide to satisfy needs and want through exchange. Exchange is the act of obtaining a desired product from someone by offering something in return. Exchange is the social concept of marketing. Whether exchange actually takes place depends upon whether the two parties are agreed to the terms and conditions of exchange. When the exchange is completed it is called as transaction. Transaction: - it can be of two types: monetary transaction and barter transaction. In monetary transaction in lieu of products or services offered by the seller, the buyer offers cash or credit but in case of barter transaction product or services are offered in lieu of product of services. Relationship marketing builds relationships with valued customers, distributors, dealers, and suppliers by promising and consistently delivering high-quality products, good service, and fair prices. Value: - Customer value is the difference between the benefits that the customer gains from owning and/or using a product and the costs of obtaining the product Satisfaction: - Customer satisfaction depends on a product’s perceived performance in delivering value relative to a buyer’s expectations Quality: - Quality begins with customer needs and ends with customer satisfaction Marketing Management Philosophies1. Production Concept2. Product Concept3. Selling Concept4. Marketing Concept5. Societal Concept
    • The Production Concept The production concept prevailed from the time of the industrial revolution until the early 1920s. The production concept was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of low-cost products would in and of itself creates the demand for the products. The key questions that a firm would ask before producing a product were: Can we produce the product? Can we produce enough of it? At the time, the production concept worked fairly well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. Virtually everything that could be produced was sold easily by a sales team whose job it was simply to execute transactions at a price determined by the cost of production. The production concept prevailed into the late 1920s. The Sales Concept By the early 1930s however, mass production had become commonplace, competition had increased, and there was little unfulfilled demand. Around this time, firms began to practice the sales concept (or selling concept), under which companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling. Before producing a product, the key questions were:• Can we sell the product?• Can we charge enough for it? The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard selling. Even today, many people use the word "marketing" when they really mean sales. Marketing concept
    • After World War II, the variety of products increased and hard selling no longercould be relied upon to generate sales. With increased discretionary income,customers could afford to be selective and buy only those products that preciselymet their changing needs, and these needs were not immediately obvious. Thekey questions became:What do customers want?Can we develop it while they still want it?How can we keep our customers satisfied?In response to these discerning customers, firms began to adopt the marketingconcept, which involves:Focusing on customer needs before developing the productAligning all functions of the company to focus on those needsRealizing a profit by successfully satisfying customer needs over the long-termWhen firms first began to adopt the marketing concept, they typically set upseparate marketing departments whose objective it was to satisfy customer needs.Often these departments were sales departments with expanded responsibilities.While this expanded sales department structure can be found in some companiestoday, many firms have structured themselves into marketing organizationshaving a company-wide customer focus. Since the entire organization exists tosatisfy customer needs, nobody can neglect a customer issue by declaring it a"marketing problem" - everybody must be concerned with customer satisfaction.The marketing concept relies upon marketing research to define marketsegments, their size, and their needs. To satisfy those needs, the marketing teammakes decisions about the controllable parameters of the marketing mixProduct concept:-the product concept holds that consumer willfavour that product that offers the most quality, performance or innovativefeatures. Manager in these product oriented organisation focus theirenergy on making superior products and improving them over time. Thesemanager assume that buyer admire product and can appraise productquality and performance. Product oriented companies often design theirproduct with little or no customer input. They trust engineers who design
    • or improve the product even not considering and examining competitor’sproducts.Societal concept: - in recent years people have questionedwhether the marketing concept is an appropriate philosophy in an age ofenvironment deterioration resource shortage, explosive population growthetc. these situations called for the new concept called as societalmarketing concept.Introduction of marketing mixMarketing Mix is a major concept in modern marketing and involvespractically everything that a marketing company can use to influenceconsumer perception favorably towards its product or services so thatconsumer and organizational objectives are attained, i.e. Marketing mix isa model of crafting and implementing marketing strategy.In this assignment, I will discuss the major marketing mix variables asclassified by Prof. E. Jerome McCarthy which are:i. Productii. Priceiii. Place (Distribution)iv. Promotion.Product:- A product can be either a good or a service that is sold either toa commercial customer or an end consumer. A customer buys a product,and a consumer uses it. Sometimes these are one and the same, as anindustrial firm can also be a customer and a consumer. For example,British Airways might buy aeroplanes from British Aerospace, so it is acustomer. It wont sell on the planes to another buyer, as BA needs theplanes to provide its service, so it is also a consumer. Sometimes a wideproduct range covers both (Mercedes produce lorries for haulagecompanies, and cars for domestic use).More commonly, there will be a number of sellers forming a chain ofdistribution. For example, a gold mine may sell gold to a jewellerymanufacturer, who in turn will sell on rings to wholesalers and retailers,before we get to buy them in the high street. Each is a customer, but onlythe final user is the end consumer. A marketing manager will identify who
    • his/her target market is, what they want, and sell it to them at each stagein the chain.Price:-No matter how good the product is, it is unlikely to succeed unless theprice is right. This doe’s not just mean being cheaper than competitors.Most people associate a higher price with quality, so you would expect topay more for a Rolls Royce than for a Lada. On the other hand, is onecola worth more than another, and if so, how much?As a rule, a producer of luxury or medical products will use skim pricing orpremium pricing initially, in order to maximize its profits. This is useful, asit helps them to recover expensive research and development costsquickly.For fast moving consumable goods (fmcgs) like colas, penetration pricingis usually used. The firm will want a large share of the market, so willsettle for a small profit on each item. In the long term, they hope that theturnover, and therefore their profits, will be high.The simplest method of all is cost-plus pricing , where a firm adds a profitmark-up to the unit cost.PromotionThe main aims of promotion are to persuade, inform and make peoplemore aware of a brand, as well as improving sales figures. Advertising isthe most widely used form of promotion, and can be through the media ofTV, radio, journals, cinema or outdoors (billboards, posters). The specificsections of society (market segments) being targeted will affect the typesof media chosen, as will the cost. If you were a toy manufacturer, youmight want an advertising spot during childrens TV. If you ran a localrestaurant, you might choose a local paper or radio.A small or local business would not usually advertise on TV, because it isvery expensive. Sales promotion is designed to encourage new and
    • repeat sales. Loyalty cards, free gifts, competitions and voucher schemesare the most popular.Companies use sponsorship and public relations to improve their image,notably through financing sports, the arts and public information services.PlaceDistribution channels are the key to this area. A firm has to find the mostcost-effective way to get the product to the consumer. Direct marketingthrough catalogues, via a TV shopping channel and through the Internethave become popular, because the consumer can shop from home.For the firm, they can cut out the middleman in the process, and cantherefore make more profit. Going through wholesalers and high-streetretailers, however, is the most popular form of distribution, as that is stillwhere most people shop.Limitation of Marketing Mix Analysis (4Ps ofMarketing)Despite the fact that marketing mix analysis is used as a synonym for the4Ps of Marketing, it is criticised (Kotler & Armstrong, 2004) on the pointthat it caters sellers view of market analysis not customers view. Totackle this criticism, Lauterborn (1990) attempted to match 4 Ps ofmarketing with 4 Cs of marketing to address consumer views:Product – Customer SolutionPrice – Customer CostPlacement – ConveniencePromotion – CommunicationConclusion
    • Marketing mix analysis is a fundamental step towards effective strategy. Where other analysis are more related to environment and feasibility analysis, the 4 Ps of marketing including the product itself, pricing, placement and promotion are the four wheels of the vehicle on which the path of an organisations marketing success is actually dependent. Throughout the assignment I will prefer to use my reference to Soft dot Hi-Tech Educational & Training Institute . I will refer to this Institute how it has diversify its market products, the price range, places for distribution and the promotional strategies they have used to promote their products. Soft dot In Brief A harbinger of quality education, Soft dot Hi-Tech Educational & Training Institute is an innovative Educational and Training organization. With professional expertise under the belt, the institute offers excellent education in various streams viz.• Management• Mass Communication• Insurance• CA Coaching• Information Technology• Travel & Tourism• Hardware & Networking Computer Courses Soft dot Products
    • The first market mix element is Product. A product is anything that can beoffered to a market for attention, acquisition, use or consumption thatmight satisfy a need or want.. These product attributes can bemanipulated depending on what the target market wants. Also, customersalways look for new and improved things, which is why marketers shouldimprove existing products, develop new ones, and discontinue old onesthat are no longer needed or wanted by the customerSoft dot has a variety of products ranging fromBACHELOR’S DEGREE COURSESBBA - Bachelor of Business AdministrationBCA - Bachelor of Computer ApplicationB.com- Bachelor of CommerceBMC - Bachelor of Mass CommunicationB.Sc. (IT) - Bachelor of Science in Information TechnologyMASTER’S DEGREE COURSESMBA - Master of Business AdministrationMCA - Master of Computer ApplicationMBA (IT) - Master of Business Administration in Information TechnologyM.Sc. (IT) - Master of Science in Information TechnologyM.Sc. (CS) - Master of Science (Computer Science)M.Com. - Master of CommerceSoft dot PromotionPromotion is a key element of marketing program and is concerned witheffectively and efficiently communicating the decisions of marketingstrategy, to favorably influence target customers’ perceptions to facilitateexchange between the marketer and the customer that may satisfy theobjective of both customer and the company.A company’s promotional efforts are the only controllable means to createawareness among publics about itself, the products and services it offers ,their features and influence their attitudes favorablyThe major elements of promotion mix include advertising, personalselling, sales promotion, direct marketing, and publicity. Soft Dot has usedall of these marketing communication mixElements.
    • Sales PromotionSales promotion is a marketing discipline that utilizes a variety ofincentives techniques to structure sales – related programs targeted tocustomers, trade, and/or sales levels that generate a specific, measurableaction or response for a product or service.Sales promotions for example includes free samples, discount, rebates,contents and sweepstakes, premiums, scratch cards, exchange offers,early bird prizes, etc.Soft dot has promoted its products through different sales promotionalstrategies. For example: - Providing scholarships and concessions etc.AdvertisingAdvertising is any paid form of non-personal mass communicationthrough various media to present and promote product, services andideas etc. by an identified sponsorSo far, Soft dot has advertised its products through many different waysand media. Through Newspapers and Radio we have seen differentadvertisements of its products. Also through posters, hoardings andcanopies it is advertising its products.Public Relations and PublicityPublic relations is a broad set of communication activities employed tocreate and maintain favorable relationship with employees, shareholders,suppliers, media, educators, potential investors, financial institutions,government agencies and officials and society in general.Through its website, Soft dot has its provided contacts for thosecustomers who will be in need of any information from the institute. In thisway it can create a mutual relationship with its customers and ensure thatit serves the wishes and demands of its customers.Soft dot PlaceDecisions with respect to place focus on making the product available inadequate quantities at places where customers are normally expected togo for them to satisfy their needs.
    • Depending on the nature of the product, marketing management decidesto put into place an exclusive, selective or intensive network ofdistribution, while selecting the appropriate dealers or wholesalers.Soft dot has used it in following ways• All the Institutes are located at prominent locations well connected with all modes of transport .they are located at :-• CORPORATE OFFICE-CUM-INSTITUTE K-16, South Extension Part-I, New Delhi-49 Ph. : 24601315, 24601316, 24601330, 24601347• Institute : 3rd Floor,NDM I, (Near Bikanerwala) Netaji Subhash Place, Pitam pura New Delhi-34 Ph.: 47047478 / 9• Janakpuri• Admission Office cum Institute : 8th Floor, Jaina Tower-II District Centre, (Adjacent to Satyam Cineplex), Janakpuri New Delhi-58 Ph: 41588840 / 41 / 42 /43• Preet Vihar• Admission Office cum Institute : E-367, Nirman Vihar Near Nirman Vihar Metro Station, Opp. V3S Mall, Preet Vihar New Delhi-110092 Ph: 43018620 / 21/ 22 / 23• SOFT DOT Price• Pricing decisions are almost always made in consultation with marketing management. Price is the only marketing mix variable that can be altered quickly. Price variables such as dealer price, retail price, discounts, allowances, credit terms etc. influence the development of marketing strategy, as price is a major factor that influences the assessment of value obtained by customers. Customers directly relate price to quality, particularly in case of products that are ego intensive of technology based.• Soft dot being an educational institute which emphasize product quality, it tends to sell its products with price range from moderately-
    • high to high-prices. Fee structure of soft dot is about 2.95 lacs for P.Gcourses and around 2 laces for U.G courses