Marketing management

1. Marketing Management Product Price Place Promotion Akhila Ramesh M.Com; MBA

2. Expected Outcome • What is Marketing • Differences between marketing & selling • Important functions of marketing • Role of marketing in the development of the society, firm, economy and consumers • Marketing mix and its elements • Products and its different categories • Pricing and factors affecting the same • Channels of distribution • Major tools of promotion like sales promotion, advertising, personal selling and publicity You will be able to understand:-

3. Concept & Definition • Exchange of goods and services for money or something of value to them • Meeting needs profitably • Identify a need and satisfy it • Philip Kotler – Marketing is a social process by which individual groups obtain what they need and want through creating offerings and freely exchange products and services of value with others

4. Modern concept of Marketing • Goods • Services • Ideas • Persons • Organisation • Place • Events • Experience • Properties • Information WHAT IS MARKETED? WHO IS A MARKETER? A PERSON WHO TAKES MORE ACTIVE PART IN THE PROCESS OF EXCHANGE OF GOODS & SERVICES Concept of Marketing Identification of markets Understanding needs and wants of customers Developing goods / services to satisfy customer needs Satisfy the needs better than the competitors Profit maximisation

5. Features of marketing Needs and wants • Needs – Basic human requirements like food, shelter, clothing • Wants – demand of specific products • Needs give rise to wants Creating a market offering • Developed after analysis of needs and preferences of potential customers Customer value • At a profit. Customers are made to prefer the products in relation to the competing products Exchange mechanism • Essence of marketing • Exchange of goods & services for money or something value to them • Conditions for exchange • Two parties | each to have something of value to be exchanged | ability to communicate and deliver the product or services | freedom to accept or reject the offer | willing to enter into transactions

6. Marketing Management The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals American Marketing Association Process of Marketing Management involves Choosing a target market Identifying, satisfying, retaining the customer base Attract more customers so that the organisation can grow Creating, developing and communicating superior values for the customers

7. Marketing & Selling BASIS SELLING MARKETING SCOPE / PROCESS Limited. Part of marketing process. Concerned with promotion of selling a product Wider scope; consists of number of activities such as identification of customer needs, developing the products as per their requirement, fixing prices, persuading the potential customers to buy them FOCUS / TRANSFER OF TITLE Transfer of title & possession of products Achieving maximum customer satisfaction AIM / OBJECTIVE Profit maximisation through sales maximisation Proft maximisation through customer satisfaction START & END ACTIVITIES Start after development of product Start with collection of customer needs EMPHASIS Bending the customer according to the product Developing the product as per customer needs STRATEGIES Selling involves efforts like promotion & persuasion Integrated marketing efforts like product, promotion, pricing and physical distribution

8. Marketing Management - Philosophies BASIS PRODUCTION CONCEPT PRODUCT CONCEPT MEANING Profit maximisation through large quantity of production thereby reducing per unit production cost Profit maximisation through superior quality of products FOCUS Quantity of production Quality, performance, features of the product MEANS Availability and affordability of product; improving Continuous improvement in quality; incorporating new features ENDS Profit through large volume of production Profit through product quality improvements STARTING POINT Factory factory

9. Philosophies (contd.,) BASIS SELLING CONCEPT MARKETING CONCEPT SOCIETAL CONCEPT MEANING Customers will buy only if attracted & convinced. So aggressive selling & promotional activities should be undertaken Identifying customer needs and profit maximisation through customer satisfaction Identifying customer needs; Profit maximisation through customer satisfaction in effective & efficient manner; benefit to the society in the long run FOCUS Existing product Customer’s needs Customer’s needs & society’s well being MEANS Advertising, sales promotion, personal selling etc., Integrated marketing involving 4Ps’ Integrated marketing involving 4Ps’ ENDS Profit through sales volume Profit through customer satisfaction Profit through customer satisfaction & social welfare STARTING POINT Factory Market Market, Society

10. Functions of Marketing Gathering and Analysing Market Information • Primary function to identify the needs of the customers • Most important to take decisions for the successful marketing of goods and services • Analyse opportunities and threats as well as strengths and weakness of the organisation • With technological explosion, it has become easier to collect necessary information through interactive portals Marketing planning • Develop appropriate marketing plans covering various important aspects to achieve organisational objective • Also to include level of production, promotion of products, specifying action programmes Product designing & development • A good design makes the product attractive to the consumer • It also improves performance of the product and gives a competitive edge in the market • Hence decision regarding the design and development of the product is very crucial for a marketing manager

11. Standardisation & grading • Standardisation refers to producing goods as per pre-determined specifications. • Helps in achieving uniformity and consistency in the output. • Reduces the need for inspection, testing and evaluation from the consumer’s perspective • Grading is the process of classification of products into different groups • This is done where products are not produced as per pre-determined specifications eg; agricultural products • It helps in realising higher price for higher quality products Packaging & labelling • Both are considered as pillars of modern day marketing tools • Packaging wraps the product and labelling forms the information printed on the package. • Packaging not only protects the product but also used as a promotional tool • Quality of the product is also assessed by looking at the package and label

12. Branding • Important decision area for marketing – to sell in the generic name (fan pen etc.) or specific brand name (usha, reynolds) • Helps in creating product differentiation • Branding strategy – each product a separate brand name (Lux, Surf etc., ) or same brand name for all products of a company (philips, samsung etc.,) Customer support services • Includes after sales services, handling customer complaints, procuring credit services, maintenance services, technical services & consumer information • Aim at providing maximum customer satisfaction the key to marketing successes • Effective in bringing repeated sales and developing brand loyalty

13. Pricing of product • Amount of money a customer has to pay to obtain the product or service • Most important factor deciding the success of failure • Demand is directly related to the price of the product • Important decisions marketer has to take are:- pricing objective, pricing strategy, determining and changing the price Promotion • Providing information to the customers regarding the product and its features; persuading them to buy the product • Four important tools – personal selling, advertising, publicity and sales promotion • Marketer has to decide on the combination of the promotional tools and budget thereon.

14. Physical distribution • Two major areas – choice of marketing intermediaries and selection of physical movement of the product • Marketer has to decide on – inventory levels, storage and warehousing & transportation of goods from the place of production to the end user Transportation • End users of products are wide spread and geographically separated • Various factors to be considered before deciding the mode of transportation:- nature of the product, cost and location of target market Storage and warehousing • There is a time gap between production and procurement of goods due to irregular demand or supply • To maintain smooth flow & supply of the products and also to protect against contingencies proper storage is needed • Storage is performed by different intermediaries

15. Role of Marketing In a firm •Important role in achieving a firm’s objective in a most effective manner •Emphasises that customer satisfaction is key to the survival and growth of the firm •Helps in focusing on the needs and wants of the customer In the economy •Significant role in economic development of a nation and rising the standard of living of the people •Inspire people to undertake new activities and set up new enterprises •Ensures smooth flow of goods through efficient distribution channels •Helps in overcoming obstacles by bridging the gap between production & consumption •Accelerates economic activity leading to higher incomes, more consumption and increased savings and investment

16. Elements of Marketing Mix Product • Product mix • Quality • New product • Design & development • Packaging • Labelling • Branding Price • Level • Margins • Policy • Strategy • change Place • Channel strategy • Selection • Conflict • Cooperation • Physical distribution Promotion • Mix • Advertising • Personal Selling • Sales Promotion • Publicity • Public Relations

17. What is a Product Product means goods or services or ‘anything of value’ which is offered to the market for sale It also relates to the benefits offered by it from the consumers view point Also include the extended product or what is offered to the consumers by way of after sales service, handling complaints, availability of spare parts etc., Important product decisions include features, quality, packaging, labelling and branding

18. Classification of Products Products Consumer Durability Non-durable Durable Services Shopping Convenience Shopping Speciality Industrial

19. Durability Products Non-durable • Products normally consumed in one or few uses • Ex: tooth Paste, stationery Products, Toiletry Products • Requires small margin, • Need to be made available in many locations • Need for heavy advertising Durable • Tangible consumer products which survive many uses • Ex; Fridge, TV, Mobile etc., • Used for a longer period, command higher margin • Requires greater personal selling efforts, guarantees & after sales services Services • Intangible nature • Inseparable from its source • Cannot be stored. Highly perishable in nature • Highly variable as their type and quality depends on the person providing them

20. Shopping Products Convenience • Purchased frequently, immediately and with least time and effort • Low unit value and bought in small quantities • Have regular and continuous demand • Standardised prices and mostly branded • Competition is more as supply is greater than the demand • Sales promotion and short term incentives plays a major role in marketing such products Shopping • Purchased after comparing the quality, price, style, suitablity etc., • Ex: clothes, shoes, jewellery, etc., • Generally of durable nature • Unit price and profit margin is high • Purchases are pre- planned very little degree of impulse purchases • Retailers play an important role as lot of persuasive effort is needed Speciality • Demand is limited as small number of people buy these products • Generally costly and unit price is very high • Available for sale in very few places; customers are willing to take extra efforts to purchase these products • Aggressive promotion is required • After sales services is required for many of the products

21. Industrial Products Used as inputs in producing other products • Ex: raw materials, engineering products etc., Characteristics • Number of buyers are very less – sugar cane and sugar • Shorter channels of distribution is used – direct selling or one level • Markets are geographically concentrated – textile industry to Mumbai, Sholapur, Tiruppur, Coimbatore • Demand derived from consumer products • Complex in nature – technical considerations assume greater significance • Reciprocal buying – supply raw materials and buy finished products • New trend- instead of outright purchase leasing them due to the heavy price of the industrial products

22. Classification Industrial Goods Materials & parts Raw material Farm products Natural products Mfd materials & parts Component material Component parts Capital Items Installations Equipments Supplies & Business Services Maint. & Repair Items Operating Supplies

23. • Branding is creating a corporate brand identity for consumer and getting that identity imprinted on the minds of the consumers, which require brand positioning & brand management

24. Related terms Brand • Name, term, sign, symbol or a combination of all Brand Name • Verbal component of the brand Brand Mark • Distinct colour scheme or lettering Trade Mark • Brand registered and given legal protection

25. Advantages to Marketers Product differentiation • Distinguishing its product from that of competitors • Enables to secure and control the market Advertising & display programmes • Without brand image, advertising will not be successful. Only can create awareness Differential pricing • If customers like the brand, they become loyal to it. Hence advantage over competitors Introduction of new products • New products can be launched under a renowned brand to get off to an excellent start • Ex: samsung, Maggie etc.,

26. Advantages to customers Helps in product identification • facilitates repeat purchase of the product • Creates brand loyalty Ensures quality • Builds up confidence of the customers • Increasing his level of satisfaction Status symbol • Due to the quality of the product it becomes a status symbol • Feel proud and adds to the level of satisfaction

27. Characteristics of a good Brand Name Brand Name Easy to pronounce Benefits & qualities Distinctive Adaptabilit y Versatility Legally protected Staying power

28. Packaging refers to designing and developing the package for the products

29. Levels of packaging Primary • Immediate container / packing : Eg: toothpaste, Match box Secondary • Additional layer of protection till the product is used: toothpaste box Tertiary • Storage & transportation package • Eg: corrugated boxes containing number of toothpaste tubes

30. Labelling • Labelling refers to designing the label to be put on the package – Simple tag attached to the product – Complex graphics on the package

31. Functions / Importance • Identification • Protection • Promotion • Differentiation • Easy handling • Rising standards of health & sanitation • Innovational opportunity

32. Functions / Importance • Describe the products / specify the contents • Identification of the product / brand • Grading of products • Help in promotion of products • Providing information required by law

33. Pricing • Amount of money paid by the customer in lieu of the product or service purchased • Crucial for manufacturers, intermediaries and consumers

34. Factors affecting pricing strategy Objectives Product cost Competition Utility and demand Govt. regulations Marketing Methods

35. Utility & Demand • Utility provided by the product and intensive demand will impact price fixation • Demand inelastic – higher price – no change in quantity demanded • Demand elastic – small rise in price – results in decrease in demand. Hence lower price to be fixed Government & Legal Regulations • Protect public interest against unfair practices, government fixes prices of essential commodities • A firm cannot fix a higher price than the government price Marketing methods • Distribution system used • Quality of salesmen employed • Quality of advertising • Type of packaging • Eg; Home delivery then a relatively higher price will be fixed

36. Objectives • Profit maximisation • Obtaining market leadership • Surviving in the competitive market • Attaining product quality leadership Product cost • Procuring + production + distribution + selling • Fixed cost & variable cost • Margin of profit over and above total cost Competition • No competition – absolute freedom in fixing the price • Intense competition – fix lower price to capture large market share

37. Channels of Distribution

38. Types Manufacturer Customer Manufacturer Retailer Customer Manufacturer Wholesaler Retailer Customer Manufacturer Agent Wholesaler Retailer Customer Direct Selling / Direct distribution One Level Two Level Three Level / Multi Level

39. Market factors •Size of market •Geographical concentration •Size of order / quantity purchased Product related •Nature •Durability •Unit Value •Complexity Company characteri stics •Financial strength •Degree of control Competiti ve factors •To utilise or avoid the method used by the competitors Environm ental Factors •Economic condition •Legal factors Factors determining selection

40. Factors criterion Shorter channel Longer channel Market Size of market Small number of buyers / industrial goods Large number of buyers / consumer products Geographical Concentration of potential buyers Potential buyers scattered over a large area Size of order Small quantity purchased Large quantity purchased Product Nature Industrial / technical / expensive products purchased occasionally Standardised / less expensive / less bulky / frequently bought consumer goods Durability Perishable products like milk, egg, vegetables Non perishable goods like soap, paste etc Unit Value High value goods like gold, industrial machines Inexpensive products / consumer goods complexity Engineering products, technical products Non complex items, which do not require much detailing

41. Factors criterion Shorter channel Longer channel Company characteristi cs Financial Strength Company with sound financial position – own retail houses, large number of sales persons Huge funds not available – go for indirect channels Degree of control Greater control on distribution Management does not want more control over middlemen – loner channels / large intermediaries Competitive Factors Same kind of products like toothpaste, shaving products – through chemist Exclusive brand image – some times avoid channels / intermediaries chosen by the competitors Environment al Factors Depressed economy – shorter channel Otherwise longer channels

42. Functions of intermediaries Intermediaries / Wholesalers Sorting • Homogeneous groups on the basis of quality & size Accumulation • To maintain continuous flow of supply Allocation • Repacking into marketable smaller lots Assorting • Procuring from different sources & deliver in combinations Product promotion • Sales promotion activities as demonstrations, contests etc., Negotiation • Negotiate price, quality, guarantee with customers Risk taking • Price & demand fluctuations, pilferage, spoilage etc

43. Advertising Concept • Any paid form of non personal presentation & promotion of ideas, goods or services by an identified sponsor Features: • Paid form : marketer has to bear the cost of communication • Impersonal method : no direct face to face contact with the prospective buyer • Identified sponsor: advertising is done by an identified individual or company who bears the cost

44. Role of Advertising • By making people aware of new products and new uses of existing products Creates Demand • By providing useful information about the product • Also educates on the new product development and new features of the existing product Educates customer • As consumers feel more assured and confident about the product advertised Enhances consumer confidence • Through advertisement, people come to know about how organisation stands for the society Creates organisational image • Communicating the positive features of the newly introduced product Facilitates introduction of new products • Through repeated communication, creates customer loyalty Creates customer loyalty

45. Advantages Mass Reach • Reach a large number of people over a vast geographical area Expressiveness • With developments in art, computer designs and graphics, has become the most powerful medium of communication; very attractive; increases sales volume; creates image and reputation of the company Enhancing customer satisfaction & confidence • Gives stress on quality; customers are assured of quality; hence feel satisfied and comfortable; creates confidence Economy • Has wider reach and coverage; total expenditure gets spread over numerous communication links; per unit cost of production decreases de to economies of scale

46. Limitations / Disadvantages Less Forceful • No direct communication between the consumer & the marketer. Sometimes, the message does not gets conveyed. Lack of feedback • Evaluation of the effectiveness and feedback is not possible as this is an indirect form of communication Inflexibility • Message is standardised. Cannot be adjusted to the need of the consumers. Low effectiveness • This is one way communication. So customer is not able to gets his doubts clarified Difficulty in Media choice • Various media are available – print media, electronic media etc., each has its own merits and demerits. If choice is not made correctly, it will not reach the target customer

47. Criticisms & Justifications Objections Detail Is it Justified? Adds to cost Cost is very high for a few seconds visual or in the newspaper or a magazine. This cost is included in the price of the good and passed on to the buyers This is not correct. Advertisement demand for product increases and sales also increases. Due to economies of scale, cost per unit is reduced. Thus increase in cost due to advertisement is compensated. Undermines social value Advertisement promotes materialism and multiplies the need. Buyers are induced to buy new latest products even when the old ones are functional. This is not entirely true Advertisements only inform the buyers about the new and improved products. The final choice of purchase lies with the customers. Consumers being rational, can judge their needs and take a decision accordingly. Encourages sale of inferior products The primary purpose of advertisement is to promote sale of goods. It does not distinguish between superior and inferior products This is not correct What is inferior and superior depends upon the economic status and preference of the customers. Everyone cannot afford to buy superior quality expensive products.

48. Objections Detail Is it Justified? Confuses the buyer rather than helps There are hundreds of advertisements about a single product. Each brand claims that they are the best. It becomes very difficult for the customer to make the right choice. This is not correct. Advertisements give wide choice to customers and today’s customers are smart and can make the right choice suitable for him. Buyers can analyse the information based on several factors. Some advertisements are in bad taste They are not based on values and ethics. Objectionable words and scenes have undesirable effect on the viewers This is true to certain extent But individuals differ in their taste and perception. Also standard of taste also change over a period of time. But it will be acceptable if they follow certain values and ethics and give respect to all quarters of consumers Make false claim Exaggerate about the feature or quality of the product This is correct No company should make false promises or claim about the quality of the product. If found true, the company must be prosecuted for the same.

49. Personal Selling Selling Products Personally a very effective prom otional tool

50. Features • Personal form of communication • Develop personal relationships • Flexible tool of promotion Prospecting Pre-approach Approach Presentation Meeting objections Closing the sale Follow-up Process of Personal Selling Start

51. Qualities of a good salesperson Good looking, sound health & stamina Sweet natured, good behavior, presence of mind, sharp memory, intelligence Sound technical knowledge Confident, convincing conversationalist Honest and of sound character Polite, tactful and courteous Discipline & loyal Ability to inspire trust

52. Advertising Vs Personal Selling Basis Advertising Personal Selling Nature Impersonal form Personal Form Reach Large number – Wide area Only limited number – narrow specific area Cost Cost per person reached is low High Media used TV, Radio, Newspapers & Magazines Salespersons to contact prospective buyers personally Flexibility Inflexible; the message cannot be adjusted to the needs of the buyer Highly flexible; Time / Coverage Less time – more coverage A lot of time to cover the entire area Role Creating & building interest about the firm’s products Important role in the awareness stage of decision making Suitability Useful in reaching to large number of ultimate consumers Selling products to industrial users / intermediaries who are few in numbers

53. Role of Personal Selling Businessmen • Flexible tool • Direct feedback • Minimises wastage of efforts • Role in introduction stage • Customer attention & lasting relationship • Effective promotional tool Customers • Helps in improving standards of living • Gets latest market information • Identifying needs and wants and how they can be satisfied • Get expert advice Society • Economic growth • Growth of employment & career opportunities • Mobility of sales people – promotes travel and tourism industry • Increases product standardisation & uniformity in consumption pattern in a diverse society

54. Sales Promotion Short term incentives designed to encourage the buyers to make immediate purchase of product or service with an objective to increase the sales of the company  Used for retailers and middle men also : dealer discount, extra goods free, novelties  For salespersons – bonus, sales contests, special offers etc.,

55. Sales promotion techniques Rebates Discounts Refunds Product Combinations Quantity gift Sampling Contests Lucky draw Assigned gift & instant draw Financing Usable benefit

56. Includes a variety of programmes to promote and protect a company’s image or its products, strengthen relationships with various stakeholders

57. Public Relation Tools

58. Role of Public Relation Smooth functioning of business and achievement of objectives Building corporate image that impacts favourably on its products Build interest in the established product and help in launching a new product Defending products facing adverse / negative publicity Supplement to advertising in promotion of products

59. Publicity An effective unpaid form of communication. No cost. No identified sponsor needed. Message goes as a news item Merits • Message has more credibility as information is disseminated by the press in the form of a news • Mass reach Limitations • Media would cover information of newsworthy. • A firm cannot use this as a marketing tool

60. Thank you

Marketing management

Marketing management

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