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COLLEGE OF ENGINEERING TRIVANDRUM


       INDUSTRIAL ENGINEERING
       MANAGEMENT ASSIGNMENT
                  04/04/2011




     MARKETING
    MANAGEMENT

SUBMITTED 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
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                 CONTENTS




 INTRODUCTION


 MARKETING ENVIRONMENT


 MARKETING-DEFINITIONS


 MARKETING CONCEPTS


 PRODUCT LIFE CYCLE


 LIMITATIONS OF PLC
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#INTRODUCTION
  Marketing has become such an integral part of life that we cannot imagine even a
day without experiencing the process or the product of marketing. The marketing
process has become a vital ingredient to success in business organizations. It has
gained a great deal of importance within this relatively short period and today,
most management thinkers and practitioners all over the world, regard marketing
as the most important of all management functions of any business.


#The Marketing Environment

Elements Of The Environment
  The marketing environment involves factors that, for the most part, are beyond
the control of the company. Thus, the company must adapt to these factors. It is
Important to observe how the environment changes so that a firm can adapt its
strategies appropriately. Consider these environmental forces:


1.Competition

    Competitors often “creep” in and threaten to takeaway markets from firms. For
example, Japanese auto manufacturers became a serious threat to American car
makers in the late 1970s and early 1980s. Similarly, the Lotus Corporation, maker
of one of the first commercially successful spreadsheets, soon faced competition
from other software firms. Note that while competition may be frustrating for the
firm, it is good for consumers. (In fact, we will come back to this point when we
consider the legal environment).Note that competition today is increasingly global
in 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 product
or service. Coca Cola and Pepsi, for example, compete for the cola drink market,
and United and American Airlines compete for the passenger air transportation
market. Firms also face less Direct—but frequently very serious—competition at
the product level. For example, cola drinks compete against bottled water. Products
or services can serve as substitutes for each other even though they are very
different in form. Teleconferencing facilities, for example, are very different from
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airline passenger transportation, but both can “bring together” people for a
“meeting.” At the budget level, different products or services provide very
different benefits, but buyers have to make choices as to what they will buy when
they cannot afford—or are unwilling to spend on—both. For example, a family
may decide between buying a new car or a high definition television set. The
family may also have to choose between going on a foreign vacation or remodeling
its kitchen. Firms, too, may have to make choices. The firm has the cash flow
either to remodel its offices or install a more energy efficient climate control
system; or the firm can choose either to invest in new product development or in a
promotional 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 new
homes in bad times. In contrast, in good times, firms serving those needs may have
difficulty keeping up with demand. One important point to realize is that different
industries are affected to different degrees by changes in the economy. Although
families can cut down on the quality of the food they buy—going with lower
priced brands, for example—there are limits to the savings that can be made
without greatly affecting the living standard of the family. On the other hand, it is
often much easier to put off the purchase of a new car for a year or hold off on
remodeling the family home. If need be, firms can keep the current
computers—even though they are getting a bit slow—when sales are down. The
economy goes through cycles. In the late 1990s, the U.S. economy was quite
strong, and many luxury goods were sold. Currently, the economy fluctuates
between increasing strength, stagnation, or slight decline. Many firms face
consequences of economic downturns. Carmakers, for example, have seen
declining profit margins (and even losses) as they have had to cut prices and offer
times, there is a great deal of demand, but this introduces a fear of possible
inflation. In the U.S., the Federal Reserve will then try to prevent the economy
from “overheating.”. This is usually done by raising interest rates. This makes
businesses 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
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demands. Some businesses, however, may take this opportunity to invest in growth
now that things can be bought more cheaply.

>Inflation

  Over time, most economies experience some level of inflation.It is useful to
explicitly 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 1960
and one dollar in 2007) or an “inflation adjusted” figure that “anchors” a given
amount of money to the value of that money at some point in time. Suppose, for
example, that cumulative inflation betweenv1960 and 2007 has been 1,000%--that
is, on the average, it costs ten times as much to buy the same thing in 2007 as it did
47 years earlier. If the cumulative inflation between 1960 and 1984 had been
500%, we could talk about one 1984 dollar being worth fifty 1960 cents or two
2007 dollars. It is important to note that inflation is uneven. Some goods and
services—such as health care and college tuition—are currently increasing in cost
much higher than the average rate of inflation. Prices of computers, actually
decline both in absolute numbers (e.g., an average computer cost $1,000 one year
and then goes for $800 two years later) and in terms of the value for money paid
once an adjustment has been made for the improvement in quality. That is, two
years later, the computer has not only declined in price by 20%, but it may also be
30% better (based on an index of speed and other performance factors). In that
case, then, there has actually been, over the period, a net deflation of 38.5% for the
category.

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 the
terms of car leases. The tobacco industry is currently the target of much negative
attention from government and public interest groups. Currently, the desire to
avoid aiding the enemy may result in laws that make it more difficult for American
firms to export goods to other countries. Many industries have a strong economic
interest in policies that benefit the industry may have a negative impact on the
nation as a whole but enhance profits for the industry. For example, regulations
that limit the amount of sugar that can be imported into the United States is
estimated to cost each American approximately $10.00 a year. The total increase in
profits to the sugar industry is difficult to estimate because many of the large
producers of refined sugar are privately held corporations, but it is likely that the
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net gain to the industry is as much as the roughly $3 billion lost by Americans a
whole. However, the interests of the industry are much more concentrated. The
industry 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 forces
with other agricultural interests which each support each other’s programs. Legal
firms are very vulnerable to changing laws and changing interpretations by the
courts. 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 hamburgers
caused them to get fat. Firms are significantly limited in what they can do by
various laws—some laws, for example, require that disclosures be made to
consumers on the effective interest rates they pay on products bought on
installment. A particularly interesting group of laws relate to antitrust. These laws
basically exist to promote fair competition among firms. We will consider such
laws when we cover pricing later in the term. Technological Changes in
technology may significantly influence the demand for a product. For example, the
advent of the fax machine was bad news for Federal Express. The Internet is a
major threat to travel agents. Many record stores have been wiped out of business
by 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 some
markets, it creates opportunities for others. For example, although Federal Express
has lost a considerable amount of business from documents that can now be faxed
or sent by the Internet rather than having to be physically shipped, there has been a
large increase in demand for packages to be delivered overnight or “second day
air.” Just-in-time manufacturing techniques, in addition to online sales, have
dramatically increased the market for such shipments. Online sites such as eBay
now makes it possible to sell specialty products that, in the old days, would have
been difficult to distribute. Although it has been possible for more than a hundred
years to sell merchandise by catalog, buyers of these specialty products often had
no easy access to the catalogs.

4.Social

  Changes in customs or demographics greatly influence firms. Fewer babies today
are being born, resulting in a decreased demand for baby foods. More women work
outside the home today, so there is a greater demand for prepared foods. There are
more unmarried singles today. This provides opportunities for some firms,but
creates problems for others (e.g., manufacturers of high quality furniture that many
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people put off buying until marriage). Today, there are more “blended” families
that result as parents remarry after divorce. These families are often strapped for
money 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 and
wants is accomplished.
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#MODERN CONCEPT OF MARKETING
       The modern concept of marketing gives emphasis on consumer needs and
the freedom of consumer to choose. The marketing department becomes the main
management force in a company. Most companies realize that production is no
longer a problem, having the technical ability is not enough, marketing the product
is very important.

             The basic features of modern concept of marketing are :

                  a)      Consumer orientation

                  b)      Integrated marketing

                  c)      Profitable sales through customer's satisfaction.



1.Customer Orientation
            According to Charles. G. Mortimer,

    Look at the company through the customer's 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.
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2.Integrated Marketing
  It should be remembered that “The purpose of the company is to create
customer". Integrated marketing means,

            The various departments in the company must recognize that the
      action they take, may have a profound effect on the company's 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 intelligent
adaption and coordination of the four P's of produce, price, place and promotion
to built strong exchange relationships with customers.




3.Customer Satisfaction
     The objective of the company should be to achieve the satisfaction of the
customers.

     The concept of seller's market which was in existence in the past has been
converted into buyer's market.

     A person buying a product has to be satisfied with his choice. He has to be
happy about the performance, features and price of the product.

     The aim of the firm should be to earn more profits though satisfaction of the
customers.
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#PRODUCT LIFE CYCLE

  Like human beings, products also have a life-cycle. From birth to death, human
beings 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 goes
through multiple phases, involves many professional disciplines, and requires
many skills, tools and processes. Product life cycle (PLC) has to do with the life of
a product in the market with respect to business/commercial costs and sales
measures.

    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 stage


1.Market Introduction stage


1.costs are very high

2 . slow   sales volumes to start

3. little or no competition

4. demand has to be created

5. customers have to be prompted to try the product
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2.Growth stage


1. costs   reduced due to economies of scale

2. sales volume increases significantly

3. profitability begins to rise

4. public awareness increases competition begins to increase with a few new
competition begins to increase with a few new players in establishing market

5. Increased competition leads to price decreases



3.Maturity stage


1. costs are lowered as a result of production volumes increasing and experience
curve effects

2. sales volume peaks and market saturation is reached

3. increase in competitors entering the market


4. prices tend to drop due to the proliferation of competing products

5. brand differentiation and feature diversification is emphasized to maintain or
increase market share

6. Industrial profits go down
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Limitations Of PLC
    The PLC model offers some degree of usefulness to marketing managers, in
that it is based on factual assumptions. Nevertheless, it is difficult for marketing
management to gauge accurately where a product is on its PLC graph. A rise in
sales per se is not necessarily evidence of growth. A fall in sales per se does not
typify decline. Furthermore, some products do not (or to date, at the least, have
not) experienced a decline. Coca Cola and Pepsi are examples of two products that
have 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 a
steep sloped decline stage. A product such as Coca Cola and Pepsi would
experience growth, but also a constant level of sales over a number of decades. It
can probably be said that a given product (or products collectively within an
industry) may hold a unique PLC shape, and the typical PLC model can only be
used as a rough guide for marketing management. This is why its called the
product life cycle. The duration of PLC stages is unpredictable. It is not possible to
predict when maturity or decline will begin. Strict adherence to PLC can lead a
company to misleading objectives and strategy prescription.

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Marketing Management Assignment Report

  • 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 MANAGEMENT SUBMITTED 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
  • 2. 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
  • 3. 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 a day without experiencing the process or the product of marketing. The marketing process has become a vital ingredient to success in business organizations. It has gained a great deal of importance within this relatively short period and today, most management thinkers and practitioners all over the world, regard marketing as the most important of all management functions of any business. #The Marketing Environment Elements Of The Environment The marketing environment involves factors that, for the most part, are beyond the control of the company. Thus, the company must adapt to these factors. It is Important to observe how the environment changes so that a firm can adapt its strategies appropriately. Consider these environmental forces: 1.Competition Competitors often “creep” in and threaten to takeaway markets from firms. For example, Japanese auto manufacturers became a serious threat to American car makers in the late 1970s and early 1980s. Similarly, the Lotus Corporation, maker of one of the first commercially successful spreadsheets, soon faced competition from other software firms. Note that while competition may be frustrating for the firm, it is good for consumers. (In fact, we will come back to this point when we consider the legal environment).Note that competition today is increasingly global in 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 product or service. Coca Cola and Pepsi, for example, compete for the cola drink market, and United and American Airlines compete for the passenger air transportation market. Firms also face less Direct—but frequently very serious—competition at the product level. For example, cola drinks compete against bottled water. Products or services can serve as substitutes for each other even though they are very different in form. Teleconferencing facilities, for example, are very different from
  • 4. 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 very different benefits, but buyers have to make choices as to what they will buy when they cannot afford—or are unwilling to spend on—both. For example, a family may decide between buying a new car or a high definition television set. The family may also have to choose between going on a foreign vacation or remodeling its kitchen. Firms, too, may have to make choices. The firm has the cash flow either to remodel its offices or install a more energy efficient climate control system; or the firm can choose either to invest in new product development or in a promotional 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 new homes in bad times. In contrast, in good times, firms serving those needs may have difficulty keeping up with demand. One important point to realize is that different industries are affected to different degrees by changes in the economy. Although families can cut down on the quality of the food they buy—going with lower priced brands, for example—there are limits to the savings that can be made without greatly affecting the living standard of the family. On the other hand, it is often much easier to put off the purchase of a new car for a year or hold off on remodeling the family home. If need be, firms can keep the current computers—even though they are getting a bit slow—when sales are down. The economy goes through cycles. In the late 1990s, the U.S. economy was quite strong, and many luxury goods were sold. Currently, the economy fluctuates between increasing strength, stagnation, or slight decline. Many firms face consequences of economic downturns. Carmakers, for example, have seen declining profit margins (and even losses) as they have had to cut prices and offer times, there is a great deal of demand, but this introduces a fear of possible inflation. In the U.S., the Federal Reserve will then try to prevent the economy from “overheating.”. This is usually done by raising interest rates. This makes businesses 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
  • 5. 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 growth now that things can be bought more cheaply. >Inflation Over time, most economies experience some level of inflation.It is useful to explicitly 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 1960 and one dollar in 2007) or an “inflation adjusted” figure that “anchors” a given amount of money to the value of that money at some point in time. Suppose, for example, that cumulative inflation betweenv1960 and 2007 has been 1,000%--that is, on the average, it costs ten times as much to buy the same thing in 2007 as it did 47 years earlier. If the cumulative inflation between 1960 and 1984 had been 500%, we could talk about one 1984 dollar being worth fifty 1960 cents or two 2007 dollars. It is important to note that inflation is uneven. Some goods and services—such as health care and college tuition—are currently increasing in cost much higher than the average rate of inflation. Prices of computers, actually decline both in absolute numbers (e.g., an average computer cost $1,000 one year and then goes for $800 two years later) and in terms of the value for money paid once an adjustment has been made for the improvement in quality. That is, two years later, the computer has not only declined in price by 20%, but it may also be 30% better (based on an index of speed and other performance factors). In that case, then, there has actually been, over the period, a net deflation of 38.5% for the category. 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 the terms of car leases. The tobacco industry is currently the target of much negative attention from government and public interest groups. Currently, the desire to avoid aiding the enemy may result in laws that make it more difficult for American firms to export goods to other countries. Many industries have a strong economic interest in policies that benefit the industry may have a negative impact on the nation as a whole but enhance profits for the industry. For example, regulations that limit the amount of sugar that can be imported into the United States is estimated to cost each American approximately $10.00 a year. The total increase in profits to the sugar industry is difficult to estimate because many of the large producers of refined sugar are privately held corporations, but it is likely that the
  • 6. 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 a whole. However, the interests of the industry are much more concentrated. The industry 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 forces with other agricultural interests which each support each other’s programs. Legal firms are very vulnerable to changing laws and changing interpretations by the courts. 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 hamburgers caused them to get fat. Firms are significantly limited in what they can do by various laws—some laws, for example, require that disclosures be made to consumers on the effective interest rates they pay on products bought on installment. A particularly interesting group of laws relate to antitrust. These laws basically exist to promote fair competition among firms. We will consider such laws when we cover pricing later in the term. Technological Changes in technology may significantly influence the demand for a product. For example, the advent of the fax machine was bad news for Federal Express. The Internet is a major threat to travel agents. Many record stores have been wiped out of business by 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 some markets, it creates opportunities for others. For example, although Federal Express has lost a considerable amount of business from documents that can now be faxed or sent by the Internet rather than having to be physically shipped, there has been a large increase in demand for packages to be delivered overnight or “second day air.” Just-in-time manufacturing techniques, in addition to online sales, have dramatically increased the market for such shipments. Online sites such as eBay now makes it possible to sell specialty products that, in the old days, would have been difficult to distribute. Although it has been possible for more than a hundred years to sell merchandise by catalog, buyers of these specialty products often had no easy access to the catalogs. 4.Social Changes in customs or demographics greatly influence firms. Fewer babies today are being born, resulting in a decreased demand for baby foods. More women work outside the home today, so there is a greater demand for prepared foods. There are more unmarried singles today. This provides opportunities for some firms,but creates problems for others (e.g., manufacturers of high quality furniture that many
  • 7. 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” families that result as parents remarry after divorce. These families are often strapped for money 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 and wants is accomplished.
  • 8. 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 and the freedom of consumer to choose. The marketing department becomes the main management force in a company. Most companies realize that production is no longer a problem, having the technical ability is not enough, marketing the product is very important. The basic features of modern concept of marketing are : a) Consumer orientation b) Integrated marketing c) Profitable sales through customer's satisfaction. 1.Customer Orientation According to Charles. G. Mortimer,  Look at the company through the customer's 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.
  • 9. 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 create customer". Integrated marketing means,  The various departments in the company must recognize that the action they take, may have a profound effect on the company's 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 intelligent adaption and coordination of the four P's of produce, price, place and promotion to built strong exchange relationships with customers. 3.Customer Satisfaction  The objective of the company should be to achieve the satisfaction of the customers.  The concept of seller's market which was in existence in the past has been converted into buyer's market.  A person buying a product has to be satisfied with his choice. He has to be happy about the performance, features and price of the product.  The aim of the firm should be to earn more profits though satisfaction of the customers.
  • 10. 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, human beings 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 goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in the market with respect to business/commercial costs and sales measures. 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 stage 1.Market Introduction stage 1.costs are very high 2 . slow sales volumes to start 3. little or no competition 4. demand has to be created 5. customers have to be prompted to try the product
  • 11. Generated by Foxit PDF Creator © Foxit Software http://www.foxitsoftware.com For evaluation only. 2.Growth stage 1. costs reduced due to economies of scale 2. sales volume increases significantly 3. profitability begins to rise 4. public awareness increases competition begins to increase with a few new competition begins to increase with a few new players in establishing market 5. Increased competition leads to price decreases 3.Maturity stage 1. costs are lowered as a result of production volumes increasing and experience curve effects 2. sales volume peaks and market saturation is reached 3. increase in competitors entering the market 4. prices tend to drop due to the proliferation of competing products 5. brand differentiation and feature diversification is emphasized to maintain or increase market share 6. Industrial profits go down
  • 12. 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, in that it is based on factual assumptions. Nevertheless, it is difficult for marketing management to gauge accurately where a product is on its PLC graph. A rise in sales per se is not necessarily evidence of growth. A fall in sales per se does not typify decline. Furthermore, some products do not (or to date, at the least, have not) experienced a decline. Coca Cola and Pepsi are examples of two products that have 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 a steep sloped decline stage. A product such as Coca Cola and Pepsi would experience growth, but also a constant level of sales over a number of decades. It can probably be said that a given product (or products collectively within an industry) may hold a unique PLC shape, and the typical PLC model can only be used as a rough guide for marketing management. This is why its called the product life cycle. The duration of PLC stages is unpredictable. It is not possible to predict when maturity or decline will begin. Strict adherence to PLC can lead a company to misleading objectives and strategy prescription.