Marketing Module 2
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Marketing Module 2 Marketing Module 2 Document Transcript

  • Introduction : Marketing Management before formulating marketing mix must take a look at the environment in which enterprises will to operating in future. It is well known that environment affects the business planning. The more a business understands its environment, better chance it has for profitable growth. Environment represent a complex of shipts in the structure of society and economy, in the state of technology, in the customer demand in the market place and in the requirement of Govt. The knowledge of changing of environmental force will on able the enterprises to tune its plan correctly change in the marketing environment. Gathering information / Marketing information System The Marketing environment is changing at an acceleration rate, the need for real time market information is great than at any time in the past. The shifts are from local to national to global marketing, from buyers needs to buyer wants from price to non price competition. As companies expand their geographical market coverage, there Managers need more information more quickly. As incomes improve buyers become more selective in their choice of goods. To predict buyer’s responses to different features, style and other attributes, sellers must turn to marketing research. As Seller’s increase their use of branding product differentiation, advertising and sales promotion they require information on the effectiveness of these marketing tools. 1
  • Scanning the Environment. Successful companies take an outside view of their business. They recognize that the marketing environment is constantly presenting new opportunities and treats and they understand the importance of continuously monitoring and adapting to that environment. One company that has constantly reinvested one of its brands to keep up with the changing marketing environment is Mattel with its Barbie doll. The major responsibility for identifying significant market place changes falls to the company’s marketer’s more than any other group in the company. They must be trend trackers and opportunity seekers. Although every manager in an organization needs to observer the outside environment, marketers have two advantages. They have disciplined methods – Marketing intelligence and Marketing Research for collecting information about the marketing environment. They spend more time with customers and more time watching competitors. Marketing Environment External Macro environment The following external forces have considerable influence on any organizations marketing opportunities and activities. Therefore they are macro environmental forces. 2
  • Economic condition Competition Demographics Company Marketing Program Technology Social & Cultural forces Political and Legal forces A change in any one of them can cause changes in one or more of the others. Hence they are inter related. One thing they all have in common is that they are dynamic forces that are subject to change and at an increasing rate. Demographics : Refer to the characteristic of populations including such factors as size , distribution and growth because people constitute markets, demographics are of special interest to marketing executives. Economic conditions: People alone do not make a market. They must have money to spend and be willing to psend it. Hence the economic environment is a significant t force that affects the marketing activities of just about any organization. A Mareketing program is affected especially by such economic factors as the current and anticipated stage the business cycle as well as inflation and interest rates. Stages of Business Cycle The tradition business cycle goes through four stages • Prosperity • Recession 3
  • • Depression • Recovery which return full cycle to Prosperity Prosperity Inflation Recession Recovery Prosperity: Is the period of economic growth. During this stage organization tend to expand their marketing programmers as they add new products and enter new markets. Recession : is a period of retrenchment ( cut down, reduce in expenses) for customers and business. We tighten our economic belts. Recovery : is the period when the economy is moving from recession to prosperity. The marketers challenge is to determine who quickly prosperity will return and to what level. Inflation: The rice in prices of the goods and services represent inflation. When the price rises at a faster than personal incomes , customer buying power declines. Interest Rate: are another external economic factor that influences marketing programmers. When interest rates are high customers tend not to make long term purchase such as housing. Marketers some time offer below market interest rates a s a Promotion device to increase business. 4
  • Competition: A company’s competitive environment is a major influence on its marketing programmers. A firm faces mainly three type of competition External micro environment Three additional environmental forces are external to an organization and affect is marketing activities. These are the firm’s market suppliers and marketing intermediaries. They represent microenvironmental forces for a company dealing effect with them is critical to business success. Recognizing that many companies are using customer relationship management software to keep a track of their customers buying activities and to communicate better with them Company Suppliers Marketing Marketin Market The Market Intermediates g Intermediates Program Firm, markets, suppliers and marketing intermediaries represent micro- environmental forces for a company. Te arrow reflect the inter relationship of product, payments, information and influence between the company and its external environment. INTRODUCTION TO MARKETING RESEARCH  What is Marketing Research? Marketing Research involves “the gathering, processing, analysis, storage & dissemination of information in a very systematic way to market goods and services and to improve decision making.” 5
  • Learning more about consumers and dealers and about marketing mix generally is the heart of marketing research. Marketing management has to rely more heavily on marketing research as a managerial tool in solving any problem in the field of marketing. “Marketing Research can also be defined as the systematic gathering, recording and analysing of data about problems connected with the market place, i.e. problems relating to product, price, promotion and distribution of the 4 P’s of the marketing mix. The research may be limited to a specific problem or deals with a very comprehensive topic covering all the manifolds facets of the market, providing the basis for making decisions. While conducting Marketing Research, the emphasis is on: • OBJECTIVITY, i.e. determining the facts as they are instead of individual hunches on what the facts are ought to be. Ex: Those in the business think that they know everything whereas, professionals check and ensure that information is authentic and original and reliable. • COMPLETENESS, i.e., the availability of total data. • RELIABILITY depends on the manner in which research is conducted. OBJECTIVES OF MARKETING RESEARCH 1. Marketing research is used in the formulation of all marketing plans, policies, programmes and procedures. 2. It is employed for evaluation of these plans, policies, etc when they are brought into practise. 6
  • 3. It is used in reducing and minimising all marketing costs, particularly, selling, advertising, promotion and distribution costs. 4. Programmes of marketing research incidentally provide insurance cover for the survival and growth of the business in a dynamic economy. 5. Marketing management through marketing research can bring about the sale of right product (brand or package) through right channels to right customers at right places by evolving right plans, policies and programmes with the help of right personnel. 6. The main objective of marketing research is to enable manufactures to make goods acceptable and saleable and to see that they reach the market more easily, quickly, cheaply and profitably without sacrificing customer interest. 7. Marketing research finds out for the manufacturer where are his customers, what they want, when they want it, and where and how much they are willing to pay for it. 8. It enables producers, merchants, distributers and advertisers to avoid mistakes either in manufacturing or in marketing. To that extent it can minimize business failures and maximise profits. 9. Marketing research is responsible to provide good information. Managers bases their decisions on information, not on data. Good information is timely, up to date, accurate, adequate, relevant, reliable, economical and above all understandable, acceptable and usable by managers in decision making process. 10. Ever expanding markets require numerous middlemen between producer and consumer. The widening of communication gap is the chief single 7
  • factor for increasing importance of marketing research to fill up the communication gap between the consumer and the producer. MARKETING RESEARCH PROCEDURE 1. Define the objective/s. 2. Conduct situational analysis. 3. Conduct informal investigation. 4. Plan and conduct formal investigation. 5. Analyze data and report results. 6. Conduct follow-up. 7. End project and report results. SCOPE OF MARKETING RESEARCH  The scope of marketing research is very vast. Whether it is the government, travel agency, airlines, business firms and even non-profit organization, all can benefit from market research.  Each ought to study consumer behaviour, consumer demands and attitudes. Moreover, they have to understand the competition, the characteristics of the market, promotion campaigns, impacts, etc.  Every organization can do the market research separately themselves or a group may do the research jointly for the benefit of the members of the group.  Every organization may do the research for information on how the competition is performing, to understand its own performance and possible 8
  • ways to improve. Thus information may relate to pricing, relationship with distributors and facilities provided (to end users and intermediaries.) Marketing Environment : Company’s marketing environment is made up of sectors and forces outside the firm’s marketing function. Those forces affect the ability of marketing management to develop and maintain a successful relationship with the firms target audience. There are two types of environment : 1. Micro Environment 2. Macro Environment The Micro Environment consist of marketer and his (1) Supplier (2) Distributor (3) Competitors (4) Consumer The Macro Environment consists of 1. Economic environment 2. Demographic environment 3. Socio-economic environment 4. Technological environment 5. Political environment 6. Legal environment 9
  • 1. Economic Environment : Economic environment is the most significant among marketing environment. The very survival of business depends on economic environment. Markets require people who have purchasing power. The purchasing power depends on a. Current income b. Prices c. Savings d. Debt e. Credit available If the price of new materials, labor and utilities like electricity are showing inflating trends, the firm may have no choice but to pass on the hike to the consumer in the form of increased prices. If the firm is a monopolist or oligopolist, then it might not face much consumer resistance. But if the firm is in competitive situation then it will face stiff resistance from the customer resulting in customer shifting to another firm. 2) Demographic Environment : Demographic environment explains the pattern and changes in the society based on a) Age b) Sex c) Education Background d) Marital Status e) Family size f) Religion Demographic environment is useful for marketing decision, such as segmentation and strategies. Demography provides quantitative as well as qualitative aspect of the population. It also helps in doing behavioral analysis. 10
  • E.g. Pepsi promised to be the drink for the youngsters generation. Today most urban women are found working Result is the need for quick recipe and fast food. 3. Socio-Economic Environment : Social environment of a nation determines the value system of the society, which in turn affects the marketing of the products. For example : social factors such as caste, custom, convention influence the demand for goods and services. One of the most significant social changes is the large number of women entering the job market. This situation has created demand for a wide range of product and services necessitated by their absence from the home. There is a lot of change in quality of life styles and people are willing to have many durable consumer goods like fridge, T.V., Oven, Geyser, frills etc. Life style have changes. Consumer Culture Consumer Behavior Life Style Pattern Marketing Activities Impact on Firms Marketing Decisions 11
  • 4. Technological environment : Technological environment provides both opportunities and threats. Its impact is direct as well as indirect. Technology has released wonders such as unclear bombs, it has also released such mixed blessings such as automobile and video games. Every new technology is a creative destruction. E.g. Transistors hurt the vacuum tube industry. Xerox hurt carbon paper business. Television hurt new papers. Instead of moving with the new technology old industries fought or ignored them, and these business declined. 5. Political Environment : Marketing decisions are strongly affected by development in the political environment. A marketer has to operate his business in given political environment and his operation are affected in greater or less degree by government programme at different levels. Change in political climate lead to changes in government policies. Political change may take place in following forms : a* Stable government leading to very few policy changes b Frequent changes in government leading to frequent changes in policies. 6. Legal Environment : Marketing decisions are strongly affected by laws pertaining to competition, price, advertising etc. It is necessary for a marketer to understand the legal environment of the country and the jurisdiction of its courts. Some of the act which a marketer should know : 12
  • a. SEBI Act, 1992 b. Factories Act 1948 c. MRTP Act 1956 d. Environmental Protection Act, 1986 e. Taxation like corporate tax, excise, sales tax, customs Micro Environment : The Micro Environment of organization consist of these elements which are controllable by the management. 1. Competitor : Demand for a firm’s product / services is also affected by the nature and industry of competition in an industry. While analyzing the competition, the firm should extends its competitive analysis to include substitutes also, besides scanning direct competitors. The objective of such analysis is to predict each competitors response to changes in the firms strategy and industry conditions. Framework for Competitors Analysis : Current & Current & Satisfaction with Motivators Future goals Future strategy current level of performance COMPETITORS 13
  • 2. Supplier : The supplier to a firm can also alter its competitive position and marketing capabilities. These are raw material suppliers, energy suppliers, suppliers of labor and capital. The relationship between suppliers and firm is based on the extent to which each of them dependent on the other. Broadly, the bargaining power of the buyer firm increased in the following circumstances : 1. The buyer firm is monopoly or in an oligopoly position and buys large volumes. 2. The products a buyer firm purchases represents a significant fraction of buyer’s cost or purchase. 3. The buyers firm can easily switch its vendors. 4. The buyer firm earns low profits and hence has a pressure to lower its purchasing costs. 3. Consumers : A marketers should know the following about the consumers : 1. Who buys the product? 2. Why do they buy? 3. What are they looking for in the way of features and prices? 4. What are their images of different brands? 5. What do they think about competitors product? 6. Is the customer price sensitive? 7. What value does the customer think by buying our product? 8. Are there any substitution products? 14
  • 4. Competitors : What are the competitive scenario in the Indian Marketing Environment : Marketing is customer focused. It is not enough if a company studies its consumers. A must also study its competitors. E.g.: Coke considers Pepsi as its competitor in India. Onida knows the BPL and Philips are its competitors in the T.V. market. Similarly Times of India knows that Indian Express and Statesman are its competitors. We should know 3 types of competitors levels based on product benefits. a. Firm competition b. Industry competition c. Brand competition. Limitations of the Marketing Research : In spite of the rapid growth of marketing research, many companies still fail to use it sufficiently or correctly, for several reasons : A narrow consumption of marketing research : Many managers see marketing research as a fact-finding operation. They expect the researcher to design a questionnaire, choose a sample, conduct interviews, and report results, often without a careful definition of the problem or of the decision alternatives facing management. Uneven caliber of marketing researchers : Some managers view marketing research as little more than a clerical activity and reward it as such. Less competent marketing researchers are hired, and their weak training and deficient creatively lead to unimpressive results. 15
  • Late and occasionally erroneous findings by marketing research : Managers want quick results that are accurate and conclusive. Vet good marketing research takes time and money. Personality and presentational differences : Differences between the styles of line managers and marketing researchers often get in the way of productive relationships. Application of Marketing Research Marketing Research covers : Market Research Sales Research Product Research Advertising & Promotion Research Research on Sale : methods & policies Distribution research including the dealers research Marketing Research may seek information on : Market - Its size spread, growth in terms of volume and revenue share of competition, segment wise. Consumer - his profiles, habits, needs, preferences, expectations, perception, both quantitatively & qualitatively. Products - To know differentials among competing products in same position, price sensitively, packaging servicing, acceptability of features. Promotion - Sales, effectiveness of communication, reach of media reaction to promotion strategies, effectiveness of sales force. 16
  • Distribution - Facilities available for stocking, merchandising outlets shelf space usages, retailer loyalties. Performance - Monitoring and Evaluation. Marketing Research is interested in 5 vital areas of marketing (1) Market (2) Product (3) Price (4) Promotion (5) Distribution Marketing research can be useful at 4 stages : In the problems solving process in any branch of marketing : 1) To identify and define the problems including causes. 2) To suggest reasonable and profitable alternative causes of action. 3) To determine most desirable alternative causes of action and to ensure optimum use of resources. 4) To test the feasibility of particularly alternative causes of action decided upon by management. INTRODUCTION TO MARKETING RESEARCH  What is Marketing Research? Ans: - Marketing Research involves “the gathering, processing, analysis, storage & dissemination of information in a very systematic way to market goods and services and to improve decision making.” Learning more about consumers and dealers and about marketing mix generally is the heart of marketing research. Marketing management has to rely more heavily on marketing research as a managerial tool in solving any problem in the field of marketing. 17
  • “Marketing Research can also be defined as the systematic gathering, recording and analysing of data about problems connected with the market place, i.e. problems relating to product, price, promotion and distribution of the 4 P’s of the marketing mix. The research may be limited to a specific problem or deals with a very comprehensive topic covering all the manifolds facets of the market, providing the basis for making decisions. While conducting Marketing Research, the emphasis is on: • OBJECTIVITY, i.e. determining the facts as they are instead of individual hunches on what the facts are ought to be. Ex: Those in the business think that they know everything whereas, professionals check and ensure that information is authentic and original and reliable. • COMPLETENESS, i.e., the availability of total data. • RELIABILITY depends on the manner in which research is conducted. OBJECTIVES OF MARKETING RESEARCH  Marketing research is used in the formulation of all marketing plans, policies, programmes and procedures.  It is employed for evaluation of these plans, policies, etc when they are brought into practise.  It is used in reducing and minimising all marketing costs, particularly, selling, advertising, promotion and distribution costs.  Programmes of marketing research incidentally provide insurance cover for the survival and growth of the business in a dynamic economy. 18
  •  Marketing management through marketing research can bring about the sale of right product (brand or package) through right channels to right customers at right places by evolving right plans, policies and programmes with the help of right personnel.  The main objective of marketing research is to enable manufactures to make goods acceptable and saleable and to see that they reach the market more easily, quickly, cheaply and profitably without sacrificing customer interest.  Marketing research finds out for the manufacturer where are his customers, what they want, when they want it, and where and how much they are willing to pay for it.  It enables producers, merchants, distributers and advertisers to avoid mistakes either in manufacturing or in marketing. To that extent it can minimize business failures and maximise profits.  Marketing research is responsible to provide good information. Managers bases their decisions on information, not on data. Good information is timely, up to date, accurate, adequate, relevant, reliable, economical and above all understandable, acceptable and usable by managers in decision making process.  Ever expanding markets require numerous middlemen between producer and consumer. The widening of communication gap is the chief single factor for increasing importance of marketing research to fill up the communication gap between the consumer and the producer. 19
  • MARKETING RESEARCH PROCEDURE  Define the objective/s.  Conduct situational analysis.  Conduct informal investigation.  Plan and conduct formal investigation.  Analyze data and report results.  Conduct follow-up.  End project and report results. 20
  • SCOPE OF MARKETING RESEARCH  The scope of marketing research is very vast. Whether it is the government, travel agency, airlines, business firms and even non-profit organization, all can benefit from market research.  Each ought to study consumer behaviour, consumer demands and attitudes. Moreover, they have to understand the competition, the characteristics of the market, promotion campaigns, impacts, etc.  Every organization can do the market research separately themselves or a group may do the research jointly for the benefit of the members of the group.  Every organization may do the research for information on how the competition is performing, to understand its own performance and possible ways to improve. Thus information may relate to pricing, relationship with distributors and facilities provided (to end users and intermediaries.) 21
  • ASSISGMENT ON MARKETING MANAGEMENT TOPIC : MARKETING ENVIRONMENT Submitted to : KRISHNA PRASAD. C.R. MBA Faculty Dr. AIT College Submitted By : CHITRA V.C. BIJOY B. DEVARAJ S. DINESH KUMAR S. DIVYA GEETHA GURURAJ BHYRALINGEGOWDA 22