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Marketingfor managers


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Marketingfor managers

  1. 1. Marketing for Managers Salil Sabnis Prof. Marketing-AMPD
  2. 2. Contents Marketing an Its Applications Marketing planning and Organisation Understanding Consumers Product Management Pricing an Promotion Strategy Distribution and Public Policy
  3. 3. Block 1Marketing and its Applications
  4. 4. Chapter 1Introduction to Marketing
  5. 5. The Meaning of MarketingMarketing is the performance of business activities that directs the flow of goods and services from producer to consumer or userPRODUCER CONSUMER Product Need Marketing activities
  6. 6. The Marketing Mix Product Promotion C Price Place
  7. 7. Marketing StrategyNeeded to create and retain a satisfied customersStrategies STDP Strategies Marketing Mix Strategies
  8. 8. STPD Strategies Segmentation  Aggregating process – A cluster of people with similar needs.  A Homogeneous group of customer who will respond to a marketing mix in a similar way. Targeting  Once the market segment is defined, it has to decide how many and which one to target.
  9. 9.  Differentiation  Product Differentiation  Service Differentiation  Channel Differentiation  Personnel differentiation Positioning  It’s a perception about your offering in the minds of the consumer.
  10. 10. Product Mix StrategiesWhat is Product Mix  Set of all products offered by an organisation to its customersConsists of  Width  Length  Depth  Consistency
  11. 11. Case Study Product-Mix Width and Product-Line Length for PepsiCo India Product-Mix Width Beverages Juice Snacks Pepsi Tropicana Lays Mountain Dew  Orange CheetosProduct-line Aquafina  Nature Sweet LeharLength Mirinda  Apple Numkeens 7-Up  Grape Nutyumz Dukes Soda  Pineapple Kurkure Dukes Mangola  Tomato Slice  Mixed Fruit
  12. 12. Strategy of Product Mix Expansion of product mix Contraction of product mix Altering existing products Positioning the product
  13. 13. PlaceIs concerned with all the decisions involved in the getting right product tothe target market’s place. Distribution Channels – any series of firms that participate in the flow of products from producer to its final consumers. Manufactures or producer Toyota Raymonds Nestle Wholesaler Wholesaler Wholesaler Retailer Retailer Retailer Consumer
  14. 14. Promotion Mix Strategy Push Strategy  directing communications to channel members Pull Strategy  directing communications to end users Factors  type of product/market  buyer readiness stage  product life-cycle stage
  15. 15. Pricing Strategy PRICE HIGH MEDIUM LOW 1) Premium 2) High-value 3) Super-value HIGH Strategy strategy strategyQUALITY 4) Overcharging 5) Medium-value 6) Good-value MEDIUM Strategy strategy Strategy 8) False 7) Rip-Off 9) Economy LOW economy Strategy Strategy strategy
  16. 16. Chapter 2Marketing in a Developing Economy
  17. 17. Marketing functions performed at different levels of development
  18. 18. Relevance of Marketing in adeveloping economy Marketing and planned economic growth How to view the marketing effort Significance of macro and micro marketing General role of marketing  Stimulates potential aggregate demand and thus enlarge the size of the market  It helps in the discover of entrepreneurial talent
  19. 19. Areas of Relevance Marketing in agriculture, basic industries, mining and plantation Intermediate industrial goods Semi-industrial products Export trade & services like tourism and banking
  20. 20. The Relevance of SocialMarketing 4 P’s Social Marketing planning system
  21. 21. Chapter 3Marketing of services
  22. 22. The service sector The services sector has been growing at a rate of 8% per annum in recent years More than half of our GDP is accounted for from the services sector This sector dominates with the best jobs, best talent and best incomes
  23. 23. “There are no such thing asservice industries.There are only industries whose service components are greater or less than those of other industries. Everybody is in service.” -Theodore Levitt-
  24. 24. What is services? It is the part of the product or the full product for which the customer is willing to see value and pay for it.
  25. 25. Growing Importance of Services Economic well being increases the demand of services Changing lifestyle Complexity of the product
  26. 26. Characteristics of Services Intangibility Perishability Inseparability Variability Client relationships Right of owner-ship
  27. 27. Intangibility Hard to grasp, concept is abstract Dramatization often necessary for concept Hard to separate the service provider and the service
  28. 28. Perishability  Services cannot be stored or held in inventory.  If not used when available, they “go to waste”.
  29. 29. Inseparability Outlet accessibility can limit the area covered by the service. Image is important: Image affects the perception of the service.
  30. 30. Variability  Service quality tends to vary considerably.  Haircut from your hair dresser vs. “Javed Habib”
  31. 31. Client Relationships  Relationships between service organizations and customers are often close  Potential for loyalty longterm
  32. 32. Right of owner-ship  It is not taken to the service, we merely experience it.  e.g. Services of a doctor, lawyer, teacher, mechanic, etc..
  33. 33. Difference between physicalgoods and services Physical goods Services tangible intangible homogeneous heterogeneous Production and distribution are Production, distribution and separated from consumption consumption are simultaneous processes A thing An activity or process Core value processed in factory Core value produced in the buyer- seller interaction Customers do not participate in Customers participate in the production process production Can be kept in stock Cannot be kept in stock Transfer of ownership No transfer of ownership
  34. 34. SERVICES MARKETING MIX Product Place Prize Promotion People Physical Evidence Process
  35. 35. In services, the last experience remains uppermost in your mind.Therefore, it is not enough to be good, you have to be consistently good
  36. 36. Service quality is directlyproportional to employee satisfaction
  37. 37. Block 2Marketing Planning and Organisation
  38. 38. Chapter 4Planning Marketing Mix
  39. 39. The Elements of Marketing Mix Product activities  Quality, features, style, brand name, packaging, sizes, services, warranties, returns Pricing activities  Target customers, cost, competition, the law, social responsibility Promotional activities  Advertising, personal selling, sales promotion, publicity and public relations Place or Distribution related activities  Physical distribution  Transportation, warehosuing and storage, Order processing, Inventory control, Location  Channels of distribution
  40. 40. The Place of the Marketing Mix inMarketing planning Current Marketing Situation Identification of Problems and Opportunities Defining Objectives Designing the Marketing Strategy Developing the marketing programme
  41. 41.  The Relationship between Marketing Mix and Marketing Strategy The concept of Optimum Marketing Mix
  42. 42. Marketing Mix and some specific Situation New product development and marketing mix Product life cycle and marketing mix Role of Advertising in marketing mix Role of price in marketing mix
  43. 43. TheProductLifeCycle
  44. 44. Chapter 5Market Segmentation
  45. 45. The Concept of Market In respect of the network of institutions like wholesalers and brokers dealing in a product To refer to the nature of demand for the product, as when we speak of the market for soap
  46. 46.  The concept of segmentation  Relationship of a segment to a market Market Segmentation versus product development Benefits and doubts about segmentation What is grouped in forming segments  What, how, where, when, why, who
  47. 47. Bases for SegmentationGeographicRegion, City or MetroSize, Density, Climate Demographic Age, Gender, Family size and Life cycle, Race, Occupation, or Income ...PsychographicLifestyle or Personality Behavioral Occasions, Benefits, Uses, or Attitudes
  48. 48. Segmenting Business Markets…Contd. Personal Demographics Characteristics Bases Bases for Segmenting for SegmentingSituational Business Business Operating Factors Markets Markets Characteristics Purchasing Approaches
  49. 49. How is the basis for segmentation selected? Methods that companies use Logical division Perceptual mapping technique Considerations in using perceptual maps
  50. 50. Selection of Segments General factors  Company trust  Size & growth potential  Investment needed  Profitability  Risk  Competition Specific Segmentation factors  Segment durability  Mobility  Visibility  accessibility
  51. 51. Chapter 6Marketing Organisation
  52. 52. Principles of Designing an Organisation Specialisation Departmentalisation Standardisation Formalisation Centralisation Evaluation Structure
  53. 53. Marketing Organisation The changing role of Marketing Organisation  Simple sales department  Sales department with some marketing function  Separate marketing department  Integrated marketing department  Marketing oriented organisation Considerations involved in designing the marketing organisation  Statement of objective and goals of the firm  Nature of the product/Line of activity  Areas of operation  Nature of Industry  Computerisation & up-gradation of information system  External environment & Government intervention.
  54. 54. Marketing Organisation Methods of designing the Marketing Organisation  Functional Organisation  Product Management Organisation  Market Centered Organisation Organisation of Corporate Marketing  No corporate marketing support  Minimal corporate marketing support  moderate corporate marketing  Strong corporate marketing
  55. 55. Chapter 7Marketing Research & Its Applications
  56. 56.  The Context of Marketing Decisions Definition of Marketing Research Purpose of Marketing Research Scope of Marketing Research Marketing Research Procedure  Problem Definition  Research design  Field Work  Data Analysis  Report presentation and implementation Marketing Research in India Problems of conducting marketing research
  57. 57. Application of Marketing Research Sales & Market Analysis  Determination of market potential  Determination of market share  Sales forecasting  Design of market segmentation studies  Target market  Distribution channel studies  Determination of market characteristics  Determination of competitive information Product Research  Evaluation of new product ideas  Testing for new product acceptance  Evaluating the need for change in product information  Testing package design  Testing of product positioning
  58. 58. Application of Marketing Research Business Economics and corporate research  Studies of business trends  Pricing studies  Diversification studies  Product mix studies  Plant & warehouse location studies Advertising Research  Audience Measurement  Determining the most cost effective media plan  Copy Testing  Determining advertising effectiveness  Consumer behaviour research
  59. 59. Block 3Understanding Consumers
  60. 60. Chapter 8Determinants of Consumer Behaviour
  61. 61.  Importance of consumer behaviour for marketers Types of consumers Buyers v/s Users
  62. 62. Figure 16.2 A Simple Model of Consumer Decision Making External Influences Sociocultural Environment Firm’s Marketing Efforts 1. Family Input 1. Product 2. Informal sources 2. Promotion 3. Other noncommercial sources 3. Price 4. Social class 4. Channels of distribution 5. Subculture and culture Consumer Decision Making Psychological Field 1. Motivation Need Recognition 2. Perception 3. LearningProcess Prepurchase Search 4. Personality 5. Attitudes Evaluation of Alternatives Experience Postdecision Behavior PurchaseOutput 1. Trial Postpurchase Evaluation 2. Repeat purchase
  63. 63. Factors influencing consumer behaviour External Environment Individual Determinants culture Problem Recognition others Information search learning perception Purchasing decisionfamily subculture Postpurchase behaviour motivation personality attitudes social group social class
  64. 64. Chapter 9Models of Consumer Behaviour
  65. 65.  What is a decision? Process of decision making  Involvement  Alternative differentiation  Time pressure
  66. 66. Types of Consumer DecisionMaking What to buy How much to buy Where to buy When to buy How to buy
  67. 67. Levels of Consumer DecisionMaking Buying Roles Buying Behaviour  Extensive problem solving  Routinized buying behaviour  Variety seeking behaviour
  68. 68. Stages in the Buyer DecisionProcess Gather EvaluateIdentify the information the problem about the alternativerecognition product s and and brands select the best possible alternative Purchase Post decision/ purchase buying the Evaluation product • Post purchase use and disposal
  69. 69. Models of Buyer Behaviour Horward-Seth Model  Inputs  Perceptual & learning constructs  Outputs  Exogenous or external variable Engel-Kollat-Bloackwell Model  Information processing  Central control unit  Decision process  Environmental influences Model of family decision making  Influencers  Gatekeepers  Deciders  Preparers  Buyers  users Model of industrial buyer behaviour
  70. 70. Chapter 10 Indian Consumer Environment Demographic Characteristics Income and consumption characteristics Characteristics of organisational consumers Geographic characteristics Market potential Socio cultural characteristics
  71. 71. Block 4Product Management
  72. 72. Chapter 11Product decision and strategies
  73. 73. ProductAnything that can be offered to a market to satisfy a want or need  Physical goods  Services  Experiences  Events  Persons  Places  Properties  Organizations  Information  Ideas
  74. 74. Productbenefit Marketer has to turn core Levels Encompasses all possible into basic product augmentation and transformations Bank accounts like savings account, Thethe product might undergo in future fundamental service or current account product the customer is buying Anywhere banking, ATM sharing, In a CRM the customer is looking for bank priority banking, portfolio security of his money managementA product that exceeds customerexpectations A set of attributes and conditions theA bank can offer facilities like buyers expect when they buy the productATM/Debit cards, Telebanking, Internet The bank customer would expect a chequeBanking and also other financial book, locker and other deposit products likeservices FD, RD
  75. 75. Product Mix Product mix has a certain…  Width  Length  Depth  Consistency
  76. 76. Case Study Product-Mix Width and Product-Line Length for PepsiCo India Product-Mix Width Beverages Juice Snacks Pepsi Tropicana Lays Mountain Dew  Orange CheetosProduct-line Aquafina  Nature Sweet LeharLength Mirinda  Apple Numkeens 7-Up  Grape Nutyumz Dukes Soda  Pineapple Kurkure Dukes Mangola  Tomato Slice  Mixed Fruit
  77. 77. Case Study The Times GroupPrint Net Entertainment Retail
  78. 78. The Times Group contd.. Print
  79. 79. The Times Group contd.. NetGROUP SITES
  80. 80. The Times Group contd.. Entertainment
  81. 81. The Times Group contd.. Retail
  82. 82. Product Line DecisionsB. Product line Length a. Objectives b. Cycle 1. Line Stretching  a. Down market Stretch  b. Up market Stretch  c. Two way stretch 2. Line Filling  Just-noticeable difference 3. Line Modernization, Featuring and Pruning
  83. 83. Chapter 12 Product Life cycle and New Product Development The Product Life Cycle Concept Marketing Mix at different stages
  84. 84. Strategy Introduction Growth Maturity Decline1. Objective Aggressive Entry Maximize Share Boast Milk Profits Products2. Focus Non- Users New Segments Defend Cut Costs Share3.Customer Innovators Early Majority Laggards Targets Adopters4.Competitor Few Growing Number Many Declining5.Differentiated Product Brand Image Price & Service Price Advantage PerformanceMarketing MIX Introduction Growth Maturity Decline1. Product Basic Extension & Differentiation Rationalize Enhancement & Variety Range2. Price High Lower Lower Stabilizing3.Promotion High High Falling Low4. Advertisement Awareness Brand Loyalty Selective Forms. Performance5.Distribution Selective Intensive Intensive Rationalize
  85. 85. New Product Development Strategy Stages in new product development  Ideas generation  Screening of ideas  Concept testing  Product designing and evaluation  Product testing  Product launching
  86. 86. Chapter 13Branding and packaging decison
  87. 87. BrandingDefinition: “A brand is a name, Term, Sign, Symbol,Brand or combination of them intended to identifythe goods or services of one seller or group ofsellers and to differentiate them from those ofcompetitors.”-American Marketing Association•Trademarks – legal right to the exclusive use of that name or mark
  88. 88. Challenges in Branding and decisionsBranding to be or not to be..Whether Produce Manufacturer Brands orDistributor / Private BrandsWhich Brand Name/s to useWhether to use Line extensions, BrandExtensions, Multi Brands, New Brands orCobrands
  89. 89. Brand Name FeaturesA Brand name should  suggest something about the product’s benefits  suggest the product or service category  suggest concrete, “high imagery” qualities  be easy to spell, pronounce, recognize, and remember  be distinctive  not carry poor meanings in other countries and languages
  90. 90. Packaging What is packaging Packaging Industry  Used materials : Metals, plastics, wood, paper, glass, laminates, polysters, etc. Functions of packaging  Protection,  Appeal  Performance  Offer convenience to the end-users  Cost effective Legal dimensions of packaging  Statutory requirements  Net weight, when packed  Date of manufacture  Date of expiry  Directions of storage  MRP  Directions for use
  91. 91. Block 5Pricing and Promotion Strategies
  92. 92. Chapter 14Pricing policies and practices
  93. 93. Price• Three variables that determine profit: Sales Sales X Price - Cost = Profit Price Cost ProfitVolumeVolume Benefit Seller Customer Price
  94. 94. Determinants of Price Demand Competition
  95. 95. Setting the Price
  96. 96. Pricing Strategies Price-Quality Strategies Price Higher Lower Premium Higher Good-Value Good-Value Strategy Strategy Strategy (Mercedes,Evian)Quality (Amul) (Amul) Overcharging Overcharging Economy Economy Strategy Strategy Strategy Strategy Lower (Cielo) (Cielo) (Akai,OK) (Akai,OK)
  97. 97. Corporate Pricing Objectives •Survival •Low Prices to Cover Variable Costs and Some Fixed Costs to Stay in Business. •Current Profit Maximization •Choose the Price that Produces the Maximum Current Profit, Etc. •Market Share Leadership •Low as Possible Prices to Become the Market Share Leader. •Product Quality Leadership •High Prices to Cover Higher Performance Quality and R & D. •Market Skimming •Initially setting up High Prices to Skim the market
  98. 98. Selecting the Price Objective Survival Survival Maximum current Maximum current (Mobile Operators) (Mobile Operators) profit profit (Aiwa) (Aiwa) Maximum market Maximum market share share (Kodak KB) (Kodak KB) Maximum market Maximum market Product-quality Product-quality skimming skimming leadership leadership(Nokia Handsets / Intel Micro Chips)(Nokia Handsets / Intel Micro Chips) (Maruti) (Maruti)
  99. 99. Estimating Cost Fixed Costs Fixed Costs Variable Costs Variable Costs (Overhead) (Overhead) Costs that don’t Costs that don’t Costs that do vary Costs that do vary vary with sales or vary with sales or directly with the directly with the production levels. production levels. level of production. level of production. Executive Salaries Executive Salaries Raw materials Raw materials Rent Rent Total Costs Total CostsSum of the Fixed and Variable Costs for a GivenSum of the Fixed and Variable Costs for a Given Level of Production Level of Production
  100. 100. Selecting a Pricing Method  Markup Pricing  Target Return Pricing  Perceived Value Pricing  Value Pricing  Going-Rate Pricing  Sealed-Bid Pricing
  101. 101. Pricing Methods Markup price = unit cost (1-desired return on sales)Where unit cost is variable cost + (fixed cost/unit sales) Target return pricing (target ROI) =Unit cost + desired return X invested capital Unit sales Break even volume = fixed cost Price – variable cost
  102. 102. Pricing Methods Value-based Pricing  Pricing strategy reflects the beliefs and attitudes of the customer.  Perceived price/quality relationship.  Price is based on an understanding of the value of the product as perceived by the customer.
  103. 103. Value-Based PricingCost-Based Pricing Value-Based Pricing Product START Customer Cost Value Price Price Value CostCustomers Product
  104. 104. Pricing MethodsGoing-RateCompany Sets Prices Based On What Competitors AreCharging.Sealed-BidCompany Sets Prices Based On What They ThinkCompetitors Will Charge.
  105. 105. Selecting the Final Price Psychological pricing  Sometimes price is equated to quality  Reference Price Influencing of other marketing-mix elements  The final price must be take in to account the brands quality and advertising relative to competition Company pricing policies  The Price must be consistent with company pricing policies Impact of price on other parties  such as dealers and distributors
  106. 106. Geographical PricingAdjusting prices to account for the Geographical Locationof CustomersMarketing Management –Philip KotlerUS Price  $124.67India Price  Rs. 310 Harry Potter – J. K. Rowling US Price  $17.99 India Price  Rs. 636
  107. 107. Discount & Allowance Discount & Allowance Reducing Prices to Reward Reducing Prices to Reward Customer Responses such as Customer Responses such as Paying Early or Promoting Paying Early or Promoting the Product. the Product. Cash Discount Cash Discount Quantity Discount Quantity Discount Functional Discount Functional DiscountSeasonal DiscountSeasonal DiscountTrade-In AllowanceTrade-In Allowance Promotional Allowance Promotional Allowance
  108. 108. Promotional Pricing• Reducing Prices to Increase Short-Run Sales• Reducing Prices to Reward Customer Responses suchas Paying Early or Promoting the Product.
  109. 109. Product mix Product-Mix Pricing Tactics: Product-line Pricing Two-Part PricingOptional-feature pricing By-Product PricingCaptive-product pricing Product-Bundle Pricing
  110. 110. Product Mix Pricing Strategies Optional-Product Pricing Optional-Product Pricing Pricing Optional or Accessory Products Pricing Optional or Accessory Products Sold With The Main Product Sold With The Main Product i.e. Car Options such as a CD player i.e. Car Options such as a CD player Captive-Product Pricing Captive-Product Pricing Product Product Pricing Products That Must Be Pricing Products That Must Be Used Along With The Main Product Mix Mix Used Along With The Main Product e.g. Printer cartridges e.g. Printer cartridges Pricing Pricing By-Product Pricing By-Product PricingStrategiesStrategies Pricing Low-Value By-Products To Pricing Low-Value By-Products To Get Rid of Them Get Rid of Them e.g. Sugarcane e.g. Sugarcane Product-Bundle Pricing Product-Bundle Pricing Bundles Of Products Sold Bundles Of Products Sold Together at a Reduced Price Together at a Reduced Price e.g. Gillete razor blades & foam e.g. Gillete razor blades & foam
  111. 111. Product Line PricingSetting Price Steps Between Product Line Items
  112. 112. Analyzing Competitors ’Cost ,Prices and Offers The company needs to benchmark its costs against its competitors’cost to learn whether it is operating at a cost advantage or disadvantage. The company also needs to learn the price and quality of competitors’ offers
  113. 113. Assessing & Responding to Competitor Price Changes Has Competitor Cut Has Competitor Cut No Hold Current Price; Price? Hold Current Price; Price? Continue to Monitor Continue to Monitor Competitor’s Price. Competitor’s Price. Yes Will Lower Price Will Lower Price Negatively Affect Our No Negatively Affect OurMarket Share & Profits?Market Share & Profits? Reduce Price Reduce Price Yes Raise Perceived Raise PerceivedCan/ Should Effective No Quality QualityCan/ Should Effective Action be Taken? Action be Taken? Improve Quality Improve Quality & Increase Price & Increase Price Yes Launch Low-Price Launch Low-Price “Fighting Brand” “Fighting Brand”
  114. 114. Chapter 15Marketing Communication
  115. 115. The Communication Process M essageSender E n c o d in g M e d ia D e c o d in g R e c e iv e r N o is e Feedback Re sp o n se
  116. 116. Marketing Communication Mix Advertising SalesPromotion Marketing Direct Communication MarketingPublicRelation s Personal Selling
  117. 117. The Promotion Mix Personal Selling Direct Marketing Personal Selling Public Relations Special Offer Sales Promotion Advertising Advertising
  118. 118. AdvertisingA paid nonpersonal communicationabout an organization and itsproducts transmitted to atarget audience through mass media  Mass Media  Newspapers  TV  Radio  Magazines  Billboards  Eg : Johnson & Johnson
  119. 119. Sales Promotion Consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade Types of sales promotions  Coupon  Point-of-Purchase  Premium: free/ reduced-price  Trade Show  Contests & More Britannia Khao World Cup Jao
  120. 120. Public Relations & PublicityPromotional tool Identify, establish, andmaintain beneficial relationships betweena company and its stakeholders Benefits  Corporate visibility  Image Building  Product Information Patni Computers i-flex solutions
  121. 121. Personal Selling Promotional tool in which a salesperson communicates one-on-one with potential customers Advantages  Immediate response  Tailored message  Ability to measure effectiveness Disadvantages  Relies on ability of sales rep.  Expensive per contact JCI Franco Indian Pharma
  122. 122. Direct Marketing & Others Direct Communications with Carefully Targeted Individual Consumers to Obtain an Immediate Response Face-to-Face Face-to-Face Online Online Selling Selling Marketing Marketing Direct-Mail Direct-Mail Marketing Marketing Kiosk Kiosk Marketing Marketing Catalog Catalog Marketing Marketing Direct-Response Direct-Response Telemarketing Telemarketing TV Marketing TV Marketing Tracmail Rohini International
  123. 123. Push & Pull Strategy Push Policy  Promoting a product only to the next institution down the marketing channel Pull Policy  Promoting a product directly to consumers to develop stronger consumer demand that pulls products through the marketing channel
  124. 124. Determinants of promotion mix Type of product Target Nature of Audience market Determinants Company Stage in Policy the PLC Budget
  125. 125. Must Set the Communications Budget for Each After Determining Its Objectives, the MarketerEstablish the Communication Product and Market. Affordable Percentage Percentage o Based on What the Based on a Certai Based on a Certain Company Can Afford of Current or Fore of Current or Forec Objective-and-Task Objective-and-Task Competitive Competitive Based on Determining Based on Determining Based on the C Based on the Co Objectives & Tasks, Then Objectives & Tasks, Then Promotion B Promotion B Estimating Costs Estimating CostsBudget
  126. 126. Factors in designing promotionmix strategies
  127. 127. Chapter 16 Advertising and Publicity How advertising works? Types of advertising Role of advertising Advertising expenditure Advertising management Setting advertising objective Developing advtg. Copy and message Selecting and scheduling media Measuring advertising effectiveness Coordinating with ad agency Publicity  Use of publicity  Measuring effectiveness of publicity
  128. 128. Chapter 17Personal Selling and Sales Promotion
  129. 129. Personal Selling Role of personal Selling Types of selling jobs  Merchandise deliveries  Inside order-taker  Outside order-taker  Missionary salesperson  Sales engineer  Tangible product seller  Intangible product seller The selling process  Preparation  Prospecting  Preapproach  Approach  Sales presentation  Handling objectives  Closing the sale  Post-sale follow-up
  130. 130. What is sales promotion? Sales promotion consists of a diverse collection of incentive tools, mostly shortterm, designed to stimulate quicker and or greater purchase of particular products/services by consumers or trade -Kotler “Below the line”
  131. 131. What is sales promotion? Non personal promotional effort that are designed to have immediate impact on sales Employed for a pre-determined limited period to increase consumer demand or stimulate market demand
  132. 132. What is sales promotion? Sales promotion offers an incentive to buy Encompasses everything that is outside of advertising, PR and DM Uses advertising, PR and DM to deliver the sales promotion Can be planned to increase sales over a long period and not necessarily about immediate results (privilege / mileage points)
  133. 133. Why has SP grown so much? Results ! - immediate / quick boost to sales Results over finite period of time - v/s advertising or PR Results are measurable Easy and inexpensive to implement Costs & efficiency of mass media / advertising has risen considerably
  134. 134. …. Product managers face pressure to increase sales Companies face more competition Consumers have become more deal oriented Sales Promotions work!
  135. 135. How does SP work?Consumer decision making process (except forlow cost, low involvement impulse pur.)- Awareness- Information gathering- Pre purchase evaluation- decision- PURCHASE- Post purchase evaluation
  136. 136. - Awareness Advt / PR- Information gathering- Pre purchase evaluation Per Sell- Decision SP- PURCHASE- Post purchase evaluation
  137. 137. SP works because ... It alters the price / value relationship that the product offers the buyerLowers price - use of coupons, discountsAdd value - value packs, extra free Everybody loves freebies Consumers have a reason to purchase the product NOW Justifies post purchase evaluation
  138. 138. Advantages Sales promotions help shape buying patterns - Annual sales Attract new audiences - trials for new products Increase sales - freebies, buy 1 get 1 free Increases profits Helps move stock / liquidate inventory Increases awareness - reach new buyers
  139. 139. Advantages Encourages the consumer to buy more than usual on a single shopping visit Reminder of product, especially when a new product / competitor is about to launch Improving TOM recall of the brand if promo is advertised in mass media Demoralise newly launched brands
  140. 140. Disadvantages Can seem like last minute panic measures and that can signal failure Can give an impression of hard sell Greed for sales - promos are often not related to the strategic elements of the brands mktg. mix Often viewed as simple reactionary techniques to increase sales and profits Dilutes brand value - discount brands
  141. 141. Sales promotion techniques Price deals  Trade allowances Discounts  Dealer loader Price pack deals  Trade contests Samples  POP Displays Rebates  Training programs Sweepstakes/contests  Push money / Spiffs Frequency rewards  Exhibitions Demos POP
  142. 142. ‘Samsung pinning toh winning’ All India promo Aggressive use of mass media Consumer gets an assured gift on purchase of any Samsung product 100 cr worth of prizes on offer Sms 16 digit pin and the gift u get wl b sms’d 2 u. Cash in on Diwali purchases
  143. 143. ‘Phod ke dekho’ offer Consumer promotion scheme Packaged as a coconut which cons picks on purchase of a Samsung product Breaking the coconut reveals a chance to win a gift Strong consumer acceptance helped co to achieve a growth of 35% in sales over last year - same period
  144. 144. Test drive and win Tata Motors celebrated 50 years Offer to test drive any Tata car - fill a form - and lucky winners could win Prize Indica V2 Petrol Buzz / Hype / Awareness Mass media - TV / Press / DM Helped build / gather data base Buzz around Petrol
  145. 145. Some historic cases
  146. 146. Developing a Sales Promotion and Merchandising PlanSet sales promotion and merchandisingobjectives.What is your target audience?Establish a tentative sales promotion andmerchandising budget.Select sales promotion and merchandisingtechniques.
  147. 147. Developing a Sales Promotion and Merchandising PlanSelect media for distributing promotions.Decide on timing of sales promotions andmerchandising.Pretest sales promotions and merchandising.Prepare final sales promotion andmerchandising plan and budget. Measure and evaluate sales promotion andmerchandising success.
  148. 148. 10 commandments of salespromos Know SpecificCoordinate when to objectiveswith mktg break Know Basic Support techniques brand image Creativity Simplicity Reinforce Know Attnadvertising your grabbing Be clear target visuals
  149. 149. Block 6Distribution and Public Policy
  150. 150. Chapter 18 Sales Forecasting What is a sales forecast? How to prepare a sales forecast? Product sales determinants  Consumer non-durable goods  Consumer durable goods  Industrial goods Approach to sales forecasting  Breakdown approach  Market build-up approach
  151. 151.  Methods of forecasting  Executive Judgement  Surveys  Time series analysis  Corelation and regression methods  Market tests  Combining forecast and using judgement Status of forecasting method usage The evaluation of forecasts Computerised sales forecasting Relating the sales forecast to the sales budget an profit planning
  152. 152. Chapter 19 Distribution Strategy Importance of channel of distribution Alternative channels of distribution  Direct selling  Mercantile Agents  Brokers  Commission agent  Merchant Middlemen  Wholesalers  Retailers  Functions performed by retailers  Services rendered by the retailers  Effective coordination between wholesaler and retailers  Types of retailers  Department stores  Co-operative stores  Multiple shops or chain stores
  153. 153.  Role of middlemen in Indian Economy Selecting an appropriate channel  The type of product  Nature and extent of the marker  Existing channels for comparable products  Buying habits of consumers  Cost involved in distribution Physical distribution tasks  Location of manufacturing facilities  Location of warehouses  Mode and method of transportation  Inventory decisions  Using external distribution agency Location of fixed facilities Specific issues relating to maintenance of stocks
  154. 154. Chapter 20 Managing Sales personnel Selling and sales management Recruitment and selection of salesmen Training of sales personnel Motivating the sales personnel Controlling the sales personnel
  155. 155. Chapter 21 Marketing and Public Policy Regulatory role of the government Role of government in marketing in developing economy Government control and marketing decision making process Impact of government control on product decision Impact of government control on pricing decision Impact of government control on promotion decision Impact of government control on channel and distribution decision
  156. 156. Chapter 22 Cyber Marketing What is cyber marketing Cyber marketing and conventional marketing  Interconnectivity  Interactivity  Involvement  Information  Individualisation  integrity Cyber marketing model The nature of cyber marketing  Customer profiling, segmentation and targeting  Product planning  Branding  Pricing decision  Advertising and sales promotion  Distribution  Marketing research
  157. 157.  Limitations of cyber marketing  Limits of digitisation  Shopping experience  Security issues  Internet access density  Customers used to freebies  bust Attracting traffic to the internet site
  158. 158. What is internet ?? Global network of interconnected networks. Includes millions of corporate, government, organizational and private networks. Types of network forming internet Intranet Extranet Web
  159. 159. What is E- Marketing Process of growing & promoting an organization using online media Ties creative and technical aspects of internet. Creating, communicating and delivering value to customers. Managing customer relationship.
  160. 160. Objectives of InternetMarketing Create Awareness. Generate Interest. Disseminate Information. Create an Image. Create a Strong Brand.
  161. 161. Characteristics of Internetmarketing Relatively Inexpensive. Wide reach. Allows research, purchase of products and services on convenience. Quick Response.
  162. 162. Differentiators from offlineMarketing One-to-one vs. one-to-many approach Demographics targeting vs. behavioral targeting. Measurability . Response and immediate results.
  163. 163. Limitations of E- Marketing Dependant on technology. Rigid mindset. Virtual aspect. Security Concern. Maintenance Cost. Global competition.
  164. 164. SWOT Analysis
  165. 165. Strength Your specialist marketing expertise. A new, innovative product or service. Location of your business. Quality processes and procedures. Any other aspect of your business that adds value to your product or service.
  166. 166. Weakness Lack of marketing expertise. Undifferentiated products or services. Location of your business. Poor quality goods or services. Damaged reputation.
  167. 167. Opportunity A developing market such as the Internet. Mergers, joint ventures or strategic alliances. Moving into new market segments that offer improved profits. A new international market. A market vacated by an ineffective competitor
  168. 168. Threat A new competitor in your home market. Price wars with competitors. A competitor has a new, innovative product or service. Competitors have superior access to channels of distribution. Taxation is introduced on your product or service.
  169. 169. Hidden Benefits Tax Breaks. Low Start up Costs. Low Operating Costs. High Profit Margin. Market for little or no money. You do not need your own Product. Time Freedom. Open 24 Hours in every country.
  170. 170. 4Ps of Internet Marketing
  171. 171. Product Make sure that your product is something that is useful to your intended customers. Make sure that the product does what it says. Ensure Quality. Packaging. Brand Consistency. Good After Sales Service.
  172. 172. Price Competitive Pricing. Customers willingness to pay. Experimentation with price.
  173. 173. Place Placement on Major Search Engines. Placement of vertical search engines/ guides and local search. Placement through affiliates.
  174. 174. Promotion Promotion through display advertising. Promotion though search marketing. Promotion through socal media. Promotion through Public Relations.
  175. 175. Strategies of E -Marketing
  176. 176. 7 Dimensions to Consider Personalization. Privacy. Customer Service. Community. Site. Security. Sales Promotion.
  177. 177. Classification of E-Marketing
  178. 178. Methods of Internet Marketing Search engine marketing. Display Marketing E-mail Marketing, Affiliate Marketing Interactive Marketing Blog Marketing. Viral Marketing
  179. 179. Segmentation and Targeting
  180. 180. Segmentation Geographic Demographic (Age, Income, Gender, Education, Ethnicity) Psycographic (Activities, Interests, Opinions, Personality, Values.) Behaviour (Benefits sort, Usage level, Brand Loyalty, User Status.)
  181. 181. Behavioral Segmentation Simplifiers Surfers Connectors Bargainers Routiners
  182. 182. Targetting Four different approaches 1) Mass Marketing. 2) Multi segment Marketing. 3) Niche Marketing. 4) Micro Marketing.
  183. 183. Differentiation and PositioningStrategies
  184. 184. Differentiation Product. Service. Personnel. Channel. Image.
  185. 185. Positioning Technology. Benefit. User Category. Competitor. Integrator.