Marketing Concept, Functions, and Role in Society

MARKETING NOTES
For 5th Semester Engineering students
As per GTU syllabus
Nov. 2011

www.profmanishparihar.blogspot.com

Notes for marketing students of SSESGI (for private circulation only) © www.profmanishparihar.blogspot.com

Index:

Pg. 3

Pg. 11

Pg. 17

Pg. 23

Pg. 24

Pg. 29

Reading Tips:
• These notes can be best read on a PC with an internet connection, but if you don’t have one,
reading with your copy of Kotler will also be sufficient.
• Below the titles of each module, you can click the URL to view the ppt that was covered in
class. Alternatively, you can click the following URL to find all the ppts at one place:
http://profmanishparihar.blogspot.com/p/marketingclass.html
• The small colored text box on the right shows the page number in your Kotler (13th edition)
where you may find the related topics.
• The URLs at the bottom of each page shows the sources from where the corresponding
theories have been taken. You can click on them to visit the source websites, if you want.
• Marketing is fun to learn..! Happy reading and all the best..!

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1. Introduction to Marketing
Before reading this module, spare 10 mins and go through my ppts at:
http://www.scribd.com/fullscreen/60238229?access_key=key-1at2imnovp5hm093zkhe
http://www.slideshare.net/profmanishparihar/introduction-to-marketing-management

What is Marketing?
The process of planning and executing the conception, pricing, promotion and distribution
of offers (ideas, goods and services) to create exchanges that satisfy individual and
organisational objectives.
Kotler 13e pg. 4
Marketing in society1:

Socio-cultural factors
The social&-cultural environment relates to the attitudes of members of society toward
goods and services as well as pricing, promotion, and distribution strategies Society
demands that business be concerned with the quality of life, which has broadened the
social impact of marketing. More specifically the social&-cultural environment has the
following influences: (1) It influences the general readiness of society to accept a new
marketing idea; (2) the public's trust and confidence in business as a whole influence
legislation regulating business and marketing; and (3) although it affects domestic
marketing it is an even more critical factor in international marketing. Consumerism is the
social force within the environment designed to aid and protect the consumer by exerting
legal, moral, and economic pressures on business. Consumer rights include: (1) the right to
choose freely; (2) the right to be informed; (3) the right to be heard; and (4) the right to
be safe.

Describe the role of marketing in society.
Marketing operates in an environment external to the firm. These environmental
relationships exist with customers, employees, the government, vendors, and society as a
whole. They form the basis of the societal issues that confront contemporary marketing.
Marketing's relationship to its external environment has a significant effect on the relative
degree of success the firm achieves. Marketers must continually find new ways to deal with
the social issues facing our competitive system.

Identify the two major social issues in marketing.
Current issues in marketing include marketing ethics and social responsibility. Marketing
ethics are the marketer's standards of conduct and moral values. Social responsibility is the
marketer's acceptance of the obligation to consider profit consumer satisfaction, and
societal well&-being of equal value in evaluating the performance of the firm.

The Marketing Concept2: Kotler 13e pg. 14,20
The marketing concept holds that the key to achieving organizational goals consists of
being more effective than competitors in integrating marketing activities toward
determining and satisfying the needs and wants of target markets.

1
source: http://www.angelfire.com/blues/cannonsessays/marketing/Marketing_Its_Environment_and_Role_in_Society.htm
2
source: http://knol.google.com/k/the-marketing-concept-kotler#

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The marketing concept rests on four pillars: target market, customer needs, integrated
marketing, and profitability.

Target market
No company can operate in every market and satisfy every need. Nor can it always do a
good job within one broad market.

Customer needs
Marketing is about meeting needs of target markets profitably.
The key to professional marketing is to understand their customers’ real needs and meet
them better than any competitor can.

Some marketers draw a distinction between responsive marketing and creative marketing.
A responsive marketer finds a stated need and fills it. A creative marketer discovers and
produces solutions that customer did not ask for but to which they enthusiastically respond.

Integrated Marketing
When all the company’s departments work together to serve the customer’s interests, the
result is integrated marketing. Integrated marketing takes on two levels. First, the various
marketing functions-sales force, advertising, product management, marketing research,
and so on – must work together.

Second must be well coordinated with other company departments.
The company is doing proper marketing only when all employees appreciate their impact on
customer satisfaction. To foster teamwork among all departments, the company carries out
internal marketing as well as external marketing. External marketing is marketing directed
at people outside the company. Internal marketing is the task of successfully hiring,
training, and motivating employees who want to serve the customers well. In fact internal
marketing must precede external marketing. It makes no sense to promise excellent
service before the company’s staff is ready to provide excellent service.

Profitability
The ultimate purpose of the marketing concept is to help organizations achieve their goals.
In the case of private firms, the major goal is profit. Marketing managers have to provide
value to the customer and profits to the organization. Marketing managers have to evaluate
the profitability of all alternative marketing strategies and decisions and choose most
profitable decisions for long-term survival and growth of the firm.

Basic Functions of Marketing3: Kotler 13e pg. 28

1. Buying:-
This is an important function of marketing and occupies much of the time of both business
undertaking and consumers. This may be relatively simple or exceeding complex whether
this function is conducted by the manufacturer, the wholesale or the retailer. In the present
economic stage, the success of business depends on the effective purchasing system. So
large business concerns have separate purchasing department, may have experienced staff
of buyers. The buying function includes the determination of needs, the selection of proper

3
source: http://absarforex.blogspot.com/2011/03/main-functions-of-marketing.html

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source of supply, title from the seller to the buyer. The buying function includes the
determination of needs, the selection of proper source of supply, title from the seller to the
buyer.

2. Selling:-
Selling is indispensable function of every marketing and is basic reason for the operation of
business concerned that more sales must be obtained at less cost. But this function, is
expensive because it involves many activities i.e. creating demand, finding buyer,
negotiating price and transferring the title.

3. Assembling:-
Assembling is the physical act of putting together and collection of goods to obtain larger
quantities of similar goods. It is more essential in case of marketing of agriculture
commodities which are generally grown in similar quantities by larger number of producers
in territories spread over vast areas.Concentration of raw material is necessary for the
regular supply of the standardized materials because these are used in large volume by
manufacturers.

4. Standardizing and Grading:-
Standardizing involves the determination of basic measure or limits to which articles being
standardized. To standardize into give performance to grades.

Grading is an reality a part of standardization. It is process which tests the conformity of
commodities to standards that have been previously set up. Product of agriculture and the
extractive industries are usually graded according to general standard. Grading may be
based on shape, size, color, strength, appearance,specific gravity and chemical contents.

5. Packaging and Packing:-
Packing is meant the placing of goods in small packages i.e. can or bottles etc. It may be
regarded as an aspect of marketing because it has a considerable influence on sales in the
domestic consumer market.

Packing is concerned with the wrapping and crating necessary for the transport or storage
of goods. Many goods must be packed in order to be preserved or delivered to the buyers.

6. Dividing:-
Dividing is an other important function of marketing. As the wholesale require the product
in large units according to the requirements of retailers. But retailer require the products in
small quantity so they divide the stock into small units according to the need of customers.
It enables the businessmen to reduce the bulk of commodities in order to take them more
readily transportable.

7. Storage or Warehousing:-
Storage is a major marketing function which involves the utilization of substantial
manpower and capital resources. The ultimate consumer finds it necessary to purchase
some goods in advance of need and to store them for the future use.On the other hand,
goods are produced in large quantities in anticipation of future demand and for the
unknown customers. Warehouses are required to store the goods for the adjustment of
supply to demand.

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8. Transportation:-
Transportation involves all kinds of movement of persons and goods from one place to
another. It is the function of transportation to convey commodities from places where their
utility is relatively low to places where it is higher. Because of the nature of natural
resources, variations in climatic conditions, concentration of skilled or unskilled labor, large
scale manufacturing, and raised or manufactured largely or exclusively in certain places.
The principal economic basic for transportation is the enhancing the value of goods by the
creation of place utility. Thus effective transport is indispensable to economic progress.

9. Financing:-
The whole modern production and marketing mechanism is based on credit and money. No
person can think of conducting business without sufficient finance. There is wide gap
between the production of goods and consumption of goods. So the product, distributing
and consuming require large funds. When a retailer sells commodities on credit, he is
rendering a financing services. He may, in part shift this function back on the wholesaler
who has extended credit to him, while the wholesaler, in return, may pass part of burden
back to the credit granting manufacturer.

10. Risk Taking ( Insurance ) :-
When the goods are sent by the seller to the buyer through rail, road and ship, there may
be risk of loss. The goods may be lost or damaged or destroyed by sea perils, flood, fire,
theft, storm and change in the temperature. The businessman and other exporters think,
therefore, in terms of minimizing these risks by shifting them on others shoulder's. So
insurance provides safety against any unforeseen circumstances and ways to the business
people to cover losses or dangers.

11. Market Information's:-
As the demand for various products in national or international market have raised, the
amount of information needed has also regarding trademark, quality go goods, method of
packing, test and fashion of consumer nature of demand, prices to considerably increased.
It helps a businessman to secure information regarding trademark, quality of goods,
method of packing, test and fashion of consumer nature of demand, prices of goods are
procedure of distribution. There are various method and ways by which such investigations
and experiment may be conducted. It thus enables the producers to formulate and to carry
out selling policies.

Model for making marketing decisions4: Kotler 13e pg. 49

Traditionally, marketing researchers were responsible for providing the relevant information
and marketing decisions were made by the managers. However, the roles are changing and
marketing researchers are becoming more involved in decision making, whereas marketing
managers are becoming more involved with research. The role of marketing research in
managerial decision making is explained further using the framework of the "DECIDE"
model:

The DECIDE model conceptualizes managerial decision making as a series of six steps. The
decision process begins by precisely defining the problem or opportunity, along with the
objectives and constraints. Next, the possible decision factors that make up the alternative

4
source: http://en.wikipedia.org/wiki/Marketing_research

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courses of action (controllable factors) and uncertainties (uncontrollable factors) are
enumerated. Then, relevant information on the alternatives and possible outcomes is
collected. The next step is to identify and select the best alternative based on chosen
criteria or measures of success. Then a detailed plan to develop and implement the
alternative selected is developed and put into effect. Last, the outcome of the decision and
the decision process itself are evaluated.

The role of marketing managers5:

For the small business, there are several different organisational approaches to marketing.
The duty may lie with a single member of the team, or it could be a group responsibility.
The great thing about a small team is the ability to quickly instill a marketing led ethos
which can become the operational soul of your business.

Depending on budget availability and the skills of the team, you may chose to outsource
certain elements of the marketing process (such as market research) or decide to do these
jobs in-house. Key responsibilities of the marketing manager / director vary according to
the business but can include:

• Instilling a marketing led ethos throughout the business

5
source: http://www.marketing-made-simple.com/articles/marketing-manager-role.htm#axzz1enJER0E3

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• Researching and reporting on external opportunities
• Understanding current and potential customers
• Managing the customer journey (customer relationship management)
• Developing the marketing strategy and plan
• Management of the marketing mix
• Managing agencies
• Measuring success
• Managing budgets
• Ensuring timely delivery
• Writing copy
• Approving images
• Developing guidelines
• Making customer focused decisions

The marketing role can be diverse or focused but now we'll elaborate further on some key
aspects which should be at the heart of the job.

Identifying and selecting markets6:

Segmentation is very important to identify and select markets. In segment marketing
companies identify consumer with similar needs and wants. For example, an airline is
looking forward to providing no frills’ connectivity between metro cities on US east coast
compare. This segment is within airline industry but needs of customer is different. T target
audience is low budget travelers. However, customers within the segment look for different
attributes, for example, lunch or beverages as part of travel. Here companies can offer this
by charging the customer.

In niche marketing, companies target limited customer set. A niche market is worth
exploring where customers are willing to pay a premium for product, entry barriers are high
and market has growth potential. In local marketing, customers are local neighborhood,
trading stores, etc. For example, many banks prefer local marketing for better
understanding of client and provide them right type of service. In individual marketing,
companies look forward to satisfying needs and wants of individual customer. Internet is
facilitating the process of individual marketing, where in customer log on to the site and
creates products from available options. This process is not feasible for high technology
products like automobiles.

The market segmentation task has to follow a scientific process.

The first task is to group customer according to product and service they want.
The second task is to analyze customer by summarizing demographic, lifestyle and
usage pattern, which helps in the definition of market segment.
The third task is due diligence of the market for growth potential, competition and
other factors.
The fourth task is to profitability of market segment.
The fifth task is to undertake positioning activity for pricing and marketing programs.

6
source: http://www.managementstudyguide.com/identifying-market-segments.htm

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The sixth task is to explore different positioning and marketing strategies to explore
the market to its full potential.

Kotler 13e pg. 144
Consumer Behavior7:
For a detailed presentation, visit the following ppt:
http://www.slideshare.net/profmanishparihar/consumerbusiness-buying-behavior

Consumer behaviour is the study of when, why, how, and where people do or do not buy a
product. It blends elements from psychology, sociology, social anthropology and
economics. It attempts to understand the buyer decision making process, both individually
and in groups. It studies characteristics of individual consumers such as demographics and
behavioural variables in an attempt to understand people's wants. It also tries to assess
influences on the consumer from groups such as family, friends, reference groups, and
society in general. Please read Kotler for more on this topic.

Key Terms used in marketing:

Market segmentation
A group or sector within a heterogeneous market consisting of consumers or organisations
with relatively homogeneous needs and wants.

Market positioning
Marketing activity intended to place a product into a desired position in a market and to
have it perceived in that way by consumers.

Market research
The systematic and objective identification, collection, analysis and dissemination of
information for the purpose of assisting management in decision making related to the
identification and solution of problems (and opportunities) in marketing.

Market research process
A set of six steps that define the tasks to be accomplished in conducting a marketing
research study. These include problem definition, developing an approach to the problem,
research design formulation, fieldwork, data preparation and analysis and report generation
and presentation.

Advertising
The paid, public non-personal announcement of a persuasive message by an identified
sponsor; the non-personal presentation or promotion by a firm of its products to its existing
and potential customers.

Promotion
Promotion is usually composed of a "promotional mix, which includes Advertising Personal
Selling Sales Promotion and Publicity (Marketing Public Relations). Some time Direct
marketing is also singled out as a separate element.

7
source: http://en.wikipedia.org/wiki/Consumer_behaviour

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Pricing
Marketing activity concerned with the setting of prices for new products and the adjustment
of prices for existing products.

Place
One of the four controllable variables (with product, price and promotion) of the marketing
mix; the delivery of a good or service to a consumer; also referred to as Distribution. See
Distribution; Marketing Mix.

Product
Something that is viewed as capable of satisfying a need or want. Also referred to as a
value offer or offer.

Consumer
The ultimate user of goods, ideas or services. The most generic and all-encompassing term
for an organisation’s targets.

Brand
Customer or user experience represented by images and ideas, often referring to a symbol
(name, logo, symbols, fonts, colours), a slogan and a design scheme. A perception of an
integrated bundle of information and experiences that distinguishes a firm and/or its
product offerings from the competition

Brand image
Perceived impressions of a brand by market segments.

Brand positioning
The distinctive position that a brand adopts in its competitive environment to ensure that
individuals in its target market can tell the brand apart from others.

Channel
The means used by firms to make their products (goods and services) available to their
target market... examples include direct channel (sold by the company's sales force),
distributors, retail stores, manufacturer’s reps and value added resellers.

Marketing Mix: 4 Ps (product, price, place, promotion)
Services Marketing Mix:7 Ps (4Ps + people, physical evidence and processes)
Promotional Mix (Advertising, Public Relations, Publicity, Sales Promotion, Direct Marketing)
Product Mix: Sum total of all products and variants offered by the organization

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2. Marketing Research
http://www.scribd.com/doc/61830393/Marketing-Research
http://www.slideshare.net/profmanishparihar/marketing-information-system-10282703

Its scope8: Kotler 13e pg. 63

Marketing research9 is "the function that links the consumer, customer, and public to the
marketer through information — information used to identify and define marketing
opportunities and problems; generate, refine, and evaluate marketing actions; monitor
marketing performance; and improve understanding of marketing as a process. Marketing
research specifies the information required to address these issues, designs the method for
collecting information, manages and implements the data collection process, analyzes the
results, and communicates the findings and their implications."[1] Marketing research is
the systematic gathering, recording, and analysis of data about issues relating to marketing
products and services. The goal of marketing research is to identify and assess how
changing elements of the marketing mix impacts customer behavior. The term is commonly
interchanged with market research; however, expert practitioners may wish to draw a
distinction, in that market research is concerned specifically with markets, while marketing
research is concerned specifically about marketing processes.[2]

Marketing Research can be classified as:
1. Basic research
2. Applied research
8
Read the full article at: http://kalyan-city.blogspot.com/2011/07/scope-of-marketing-research-mr-branches.html
9
Source: http://en.wikipedia.org/wiki/Marketing_research

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It can also be classified as:

a) Problem solving research
• Segmentation research
• Product research
• Pricing research
• Promotion research
• Distribution research
b) Problem identification research.
• Market potential research
• Market share research
• Image research
• Market characteristics research
• Forecasting research
• Business trend research

Sources of information: Kotler 13e pg. 63, 71, 74
Primary Sources
In-Person, Interview, E-Mail contact, Event, Discussion, Debate, Community Meeting,
Survey, Artifact, Observation of object (animate and inanimate)

Secondary Sources
Reference Material, Book, CD Rom, Encyclopedia, Magazine, Newspaper, Video Tape, Audio,
Tape, TV, Government records, Syndicated research data

Executing Marketing Research Studies10: Kotler 13e pg. 89

10
source: http://en.wikipedia.org/wiki/Marketing_research_process

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Problems of accuracy and Data analysis: Kotler 13e pg. 89

Data Accuracy11 is the most important as it represents all business activities, entities and
events. Two important requirements should be met for a data to be accurate. First, it has
to be or the right value. Second, it has to precisely represent the value in consistent form
in accordance with the business data model and architecture.

There are several sources and causes of data inaccuracy. The most common of these
causes come from initial data entry of users. In simple terms, it means that the user
entered the wrong value. This could also be that typographical errors were committed. This
is an aspect that can be overcome by having skilled and trained person do the data entry.
Or since mistakes can happen to everybody, data inaccuracy from data entry can be
overcome by having programmatic components in the application detect typo errors. For
instance, many applications have spell checks or some web forms like combo boxes offer a
list of possible values there can be no mistake in typing.

Data Decay can lead to inaccurate data. Many data values which are accurate can become
inaccurate through time; hence data decay. For example, people's addresses, telephone
numbers, number of dependents and marital status can change and if not updated, the
data decays into inaccuracy.

Data Movement is another cause of inaccurate data. Data warehouses extract, transform
and load data very frequently within a short period. As data moves from disparate system
to another, it could be maybe altered to some degree especially if the software running the
database is not very robust.

Analysis of data12 is a process of inspecting, cleaning, transforming, and modeling data
with the goal of highlighting useful information, suggesting conclusions, and supporting
decision making. Data analysis has multiple facets and approaches, encompassing diverse
techniques under a variety of names, in different business, science, and social science
domains.

Several analyses can be used during the initial data analysis phase:

• Univariate statistics
• Bivariate associations (correlations)
• Graphical techniques (scatter plots)

It is important to take the measurement levels of the variables into account for the
analyses, as special statistical techniques are available for each level:[12]

• Nominal and ordinal variables
o Frequency counts (numbers and percentages)
o Associations
circumambulations (crosstabulations)
hierarchical loglinear analysis (restricted to a maximum of 8 variables)

11
source: http://www.learn.geekinterview.com/data-warehouse/data-quality/what-is-data-accuracy.html
12
source: http://en.wikipedia.org/wiki/Data_analysis

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loglinear analysis (to identify relevant/important variables and possible
confounders)
o Exact tests or bootstrapping (in case subgroups are small)
o Computation of new variables

• Continuous variables
o Distribution
Statistics (M, SD, variance, skewness, kurtosis)
Stem-and-leaf displays
Box plots

Marketing Research Reports:

Components of a research report13:

Title Page
The title page includes the title of the report, name and address of the researcher and the
organization conducting the research, the name of the client and the date research report is
being submitted. The title should be concise, clear and crisp indicating the nature of the
project.

Transmittal Letter
This part of a formal research report is usually developed at the end. The transmittal letter
introduces the research report to the recipient of the report. And can draw attention to
particular project characteristics, contractual obligations or noteworthy conclusions, and as
such can generate interest in the subject matter of the report.

Letter of Authorization
A letter of authorization is a letter which was written by the client or person who wanted
the research to be done to the researcher authorizing him to start research for the writer. A
copy of the letter is enough to be included in the report.

Table of Contents
The table of contents lists major report topics and subtopics (sections, chapters,
appendices etc.) and their beginning page numbers. It varies from being very detailed to
consisting of general topic headings only. Usually the major headings and subheadings are
included in the table of contents. The table of contents is followed by a list of tables, list of
graphs, list of appendixes, and list of exhibits, if any, if the report is lengthy.

Executive Summary
The executive summary is an important part of the report, as this the only portion of the
report that executives often read. The executive summary should be written after the rest
of the report has been completed. An executive summary is a mini report within the report.
It is not simply a brief of the report but it is a distillation of the research project outlining
the methodology, major findings, and conclusions. An executive summary is a bottom-line
report created for decision makers who have no time or desire to go into the project’s
technical details.

13
source: http://free-books-online.org/marketing/marketing-research/components-of-research-report/

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BODY—TEXTUAL PARTS
Introduction
To begin with the body of the report, an introduction to the research background,
discussions with the client and possibly the industry expert to find the direction of doing
research to solve this management problem. This part provides a clear statement of the
research problem and objectives/questions/hypotheses of the research. After reading this
section, one can understand the reason and rationale for conducting this study
Research Design and Methodology

A complete understanding and evaluation of a project depends on the research
methodology used. Methodology which ranges –from sampling frame and procedures, to
mode of data collection, to research instrument, to techniques of data analysis employed—
should be described adequately. Who collected data and how fieldwork was organized and
monitored to ensure the quality of data collection is explained in this section. Secondary
data collection methods and sources are also discussed in this section

Data Presentation
This section may contain several chapters or subsections showing data analysis in the form
of tables, description, graphs etc. Data analysis is quantitative, qualitative or both. This
part of the body is critical for the research project as the ultimate results and conclusions of
the report are based on data analysis.

Results
As stated earlier, results may comprise several chapters or sub-sections. Most of the time,
the results are presented both at the aggregate and the subgroup level, for example,
market segment, market area, wholesale, retail level.
Tables and graphs may highlight the results with the main findings discussed in the text.
The results should be organized in a coherent and logical way.
The standard formats that are used to arrange data in the tables are:
Alphabetically.
Chronologically.
Geographically.
According to size
According to interest of the reader.
According to tradition.
According to importance.

Conclusions and Recommendations
This part of the report gives the main findings, conclusions and recommendations for the
organization. A summary of the statistical findings is not enough. The researcher needs to
discuss the results in light of the management problem being addressed to arrive at major
conclusions. Based on the results, the researcher may give some suggestions to the
decision makers. Sometimesmarketing researchers are not asked to recommend anything
but confine themselves to giving their finding and conclusions.

Limitations
After the conclusions and recommendations component of the research report, limitations
of the research are mentioned. Limitations may originate due to time, budget or some
other organizational constraints. No research project is without shortcomings. A researcher
is ethically and professionally bound to fully disclose the shortcomings or setbacks of the

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research that may have an impact on its validity, reliability, or predictability. Sometimes
limitations are given before the conclusions and recommendation section so that the
readers should know the limitations of findings and conclusions.

Guidelines for Visuals
In the research report, visuals may be used for enhancing the understanding of the report.
Mostly these include tables, charts and graphs, maps, figures and flow charts. The
guidelines for preparing and using these visuals are:
Make visual aids simple and convenient to understand.
Primary objective of including such visuals should be to augment the clarity and
understanding of the content of the report. .

End Matter or Supplementary Parts
This is the section of the report which contains ‘too material’. It includes any material that
the researcher thinks should also be included in the report to aid the understanding of the
reader. It is in the form of appendixes which are labeled as Appendix A, B, C etc. and
contain the headings as well. These appendixes may range from a blank copy of
questionnaire to price lists, tables, diagrams, statistical illustrations, photographs etc.

General Guidelines
Type or print on one side only of heavy, white, unrolled paper
Paper size: 8½ X 11 inches
Double-space the entire paper
Left justify text only
Leave a minimum one-inch margin on the sides, top, and bottom of each page
Number pages consecutively in the top right corner, beginning with the title page
Just before the page number, use a shortened form of the title as a header
Font size 12-point
Times Roman or Courier are acceptable typefaces
Only black toner
Indent paragraphs 5-7 spaces
No more than 27 lines of text per page

For sample reports, visit: http://www.marketest.co.uk/market-research-report-example
http://www.marketresearchworld.net/index.php
http://www.infobanc.com/market_reports/sample-report.htm

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3. Product Policy & Marketing Mix
Before reading this module, spare 5 mins and go through my ppt at:
http://www.scribd.com/doc/61830545/Product-Policy-amp-Marketing-Mix

The Product Mix14: Kotler 13e pg. 308, 321

The product mix of a company, which is generally defined as the total composite of
products offered by a particular organization, consists of both product lines and individual
products. A product line is a group of products within the product mix that are closely
related, either because they function in a similar manner, are sold to the same customer
groups, are marketed through the same types of outlets, or fall within given price ranges. A
product is a distinct unit within the product line that is distinguishable by size, price,
appearance, or some other attribute. For example, all the courses a university offers
constitute its product mix; courses in the marketing department constitute a product line;
and the basic marketing course is a product item. Product decisions at these three levels
are generally of two types: those that involve width (variety) and depth (assortment) of the
product line and those that involve changes in the product mix occur over time.
The depth (assortment) of the product mix refers to the number of product items offered

Product Life Cycle15: Kotler 13e pg. 292, 260

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:

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source: http://www.enotes.com/product-mix-reference/product-mix
15
source: http://en.wikipedia.org/wiki/Product_lifecycle_%28marketing%29#Product_life_cycle_.28PLC.29

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• 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.

The four main stages of a product's life cycle and the accompanying characteristics are:

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
6. makes no money at this stage

Growth stage

1. costs reduced due to economies of scale
2. sales volume increases significantly
3. profitability begins to rise
4. public awareness increases
5. competition begins to increase with a few new players in establishing market
6. increased competition leads to price decreases

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

Saturation and decline stage

1. costs become counter-optimal
2. sales volume decline
3. prices, profitability diminish
4. profit becomes more a challenge of production/distribution efficiency than increased
sales

18


New Product Planning16:

In business and engineering, new product development (NPD) is the term used to describe
the complete process of bringing a new product to market. A product is a set of benefits
offered for exchange and can be tangible (that is, something physical you can touch) or
intangible (like a service, experience, or belief). There are two parallel paths involved in the
NPD process: one involves the idea generation, product design and detail engineering; the
other involves market research and marketing analysis. Companies typically see new
product development as the first stage in generating and commercializing new products
within the overall strategic process of product life cycle management used to maintain or
grow their market share.

New product development process17

16
source: http://en.wikipedia.org/wiki/New_product_development
17
source: http://www.flashpointdevelopment.com/blog/index.php/newproductdevelopmentprocess/global-cost-modeling-for-
new-product-development/

19


Risks Involved18:

Opportunity Risks Organizations constantly look for opportunities to reward stakeholders,
increase customer satisfaction, and gain advantage over competitors. Making the most of
opportunities is the positive side of risk management. By managing opportunity risk
successfully, an organization can increase the likelihood that new products will achieve
expected results.

Investment Risk The primary issues related to investment risk are the assumptions used
and the source of fundamental data. Assumptions may have no basis in fact or science and
could represent different attitudes or expectations about the same situation. For example, a
product might have features that designers expect will appeal to new customers, whereas
marketing specialists for the same product may create advertising directed at existing
customers.

Project Management Risk Product development projects need to be successful to satisfy
customers' changing needs, gain market position, and take advantage of opportunities. Like
all projects, product development is subject to three main resource constraints: time,
funds, and required quality and features. Project managers must achieve balance among
these resource constraints. Product development projects should include a risk assessment
module that allows managers to identify and measure the risks associated with resource
constraints and then develop appropriate responses.

Screening Considerations19:

Some of the screening considerations for ideas in new product development can be:

• Alignment with your Product Innovation Strategy
• Degree of compatibility with the company’s values & principles (ex: moral, health,
environmental)
• Market attractiveness / opportunity
• Project feasibility
• Degree of product advantage over other options
• Ability to leverage existing company resources

Product Testing & Test Markets:

Product testing is exposing consumers to a new product, in final or prototype form, so that
they might compare it to their usual brand and rate it; the results of product testing will
indicate to the company whether further evaluation of the product in test markets is
desirable.20

18
source: http://findarticles.com/p/articles/mi_m4153/is_5_57/ai_67590524/
19
source: http://www.melodiesinmarketing.com/2007/08/20/idea-screening/
20
source: http://dictionary.babylon.com/product_testing/

20


The test market ideally aims to duplicate 'everything' - promotion and distribution as well
as 'product' - on a smaller scale. The technique replicates, typically in one area, what is
planned to occur in a national launch; and the results are very carefully monitored, so that
they can be extrapolated to projected national results. The `area' may be any one of the
following:

• Television area
• Internet online test
• Test town
• Residential neighborhood
• Test site

A number of decisions have to be taken about any test market:

• Which test market?
• What is to be tested?
• How long a test?
• What are the success criteria?

The simple go or no-go decision, together with the related reduction of risk, is normally the
main justification for the expense of test markets. At the same time, however, such test
markets can be used to test specific elements of a new product's marketing mix; possibly
the version of the product itself, the promotional message and media spend, the
distribution channels and the price. In this case, several `matched' test markets (usually
small ones) may be used, each testing different marketing mixes.

Clearly, all test markets provide additional information in advance of a launch and may
ensure that launch is successful: it is reported that, even at such a late stage, half the
products entering test markets do not justify a subsequent national launch. However, all
test markets do suffer from a number of disadvantages:

1. Replicability - Even the largest test market is not totally representative of the
national market, and the smaller ones may introduce gross distortions. Test market
results therefore have to be treated with reservations, in exactly the same way as
other market research.
2. Effectiveness - In many cases the major part of the investment has already been
made (in development and in plant, for example) before the `product' is ready to be
test marketed. Therefore, the reduction in risk may be minimal; and not worth the
delays involved. 'Competitor warning'. All test markets give competitors advance
warning of your intentions, and the time to react. They may even be able to go
national with their own product before your own test is complete. They may also
interfere with your test, by changing their promotional activities (usually by
massively increasing them) to the extent that your results are meaningless.
3. Cost- Although the main objective of test markets is to reduce the amount of
investment put at risk, they may still involve significant costs.

21


Products & Packaging Factors to be Considered in Packaging Design21:

Kotler 13e pg. 331

Here is a quick overview listing of factors that should be considered when designing a
product's packaging:

1. Protection – Packaging is primarily used to protect the product from damage during
shipping and handling, and to lessen spoilage if the protect is exposed to air or other
elements.
2. Visibility – Packaging design is used to capture customers’ attention as they are
shopping or glancing through a catalog or website. This is particularly important for
customers who are not familiar with the product and in situations, such as those
found in grocery stores, where a product must stand out among thousands of other
products. Packaging designs that standout are more likely to be remembered on
future shopping trips.
3. Added Value – Packaging design and structure can add value to a product. For
instance, benefits can be obtained from package structures that make the product
easier to use while stylistic designs can make the product more attractive to display
in the customer’s home.
4. Distributor Acceptance – Packaging decisions must not only be accepted by the final
customer, they may also have to be accepted by distributors who sell the product for
the supplier. For instance, a retailer may not accept packages unless they conform to
requirements they have for storing products on their shelves.
5. Cost – Packaging can represent a significant portion of a product’s selling price. For
example, it is estimated that in the cosmetics industry the packaging cost of some
products may be as high as 40% of a product’s selling price. Smart packaging
decisions can help reduce costs and possibly lead to higher profits.
6. Expensive to Create - Developing new packaging can be extremely expensive. The
costs involved in creating new packaging include: graphic and structural design,
production, customer testing, possible destruction of leftover old packaging, and
possible advertising to inform customer of the new packaging.
7. Long Term Decision – When companies create a new package it is most often with
the intention of having the design on the market for an extended period of time. In
fact, changing a product’s packaging too frequently can have negative effects since
customers become conditioned to locate the product based on its package and may
be confused if the design is altered.
8. Environmental or Legal Issues – Packaging decisions must also include an
assessment of its environmental impact especially for products with packages that
are frequently discarded. Packages that are not easily bio-degradable could draw
customer and possibly governmental concern. Also, caution must be exercised in
order to create packages that do not infringe on intellectual property, such as
copyrights, trademarks or patents, held by others.

21
source: http://www.businessmarketingplan.net/product-marketing-distribution/packaging-factors-overview.html

22


4. Basic Pricing Strategies & Practices Kotler 13e pg. 375, 389
Before reading this module, spare 10 mins and go through my ppt at:
http://www.scribd.com/doc/62544253/Basic-Pricing-Strategies-and-Practices

Pricing: In ordinary usage, price is the quantity of payment or compensation given by one
party to another in return for goods or services.

Objectives of pricing: Profit, revenue, quantity, differentiation, survival

Factors affecting pricing: marketing mix elements, demand, cost of goods, competition

Major approaches to pricing:

Price Vs. Non-price competition

Market entry strategies:
Skimming
Penetration

Discounts and allowances
Quantity discounts
Trade discounts
Cash discounts
Rebates

Geographic pricing strategies
Point of production pricing
Uniform delivered pricing
Zone delivered pricing
Freight absorption pricing

Special pricing strategies
One price and flexible price strategies
Price lining
Odd pricing
Leader pricing
Everyday low pricing (EDLP)
Resale price maintenance

Please read the book and my ppt to understand all the above strategies. You can also visit
http://marketingteacher.com/lesson-store/lesson-pricing.html to read more on different
pricing strategies.

23


5. Advertising & Promotion
http://www.scribd.com/fullscreen/65594167?access_key=key-rg2soqcu63zm6wg3zme
http://www.scribd.com/fullscreen/65593300?access_key=key-29dl3dj5sd9vsiyk3m7h
http://www.scribd.com/fullscreen/65592282?access_key=key-8uh7ypzeo0rdemhsr1g

Definition22:

Advertising is a form of communication used to persuade an audience (viewers, readers or
listeners) to take some action with respect to products, ideas, or services. Most commonly,
the desired result is to drive consumer behavior with respect to a commercial offering,
although political and ideological advertising is also common. Advertising messages are
usually paid for by sponsors and viewed via various traditional media; including mass
media such as newspaper, magazines, television commercial, radio advertisement, outdoor
advertising or direct mail; or new media such as websites and text messages.

Role of Consumer Research in Advertising Decisions:

Consumer Research leads to ‘Consumer insight’23 which is a flash of understanding on the
part of a marketer regarding an unidentified or unmet need in the marketplace, or a
new/better way to satisfy an existing need. Discovering this consumer insight is the Holy
Grail for marketers who want to break the clutter and get noticed.

It is NOT about a product or service. It's about a consumer need that isn't being met as
well as it could be. The marketer's challenge, having recognized the insight, is to find a way
to capitalize on the thinking that identified the need. That could lead to an advertisement,
development of product or service etc.

A good article on the role of research in advertising can be found at:
http://muse.jhu.edu/journals/asr/v007/7.4unit10.html

Control of Advertising24:

Local Planning Authorities are primarily responsible for the control of advertisements. They
are required to consider applications for permission to display adverts and to exercise
enforcement powers over existing and unlawful advertisements.

Advertising Standards Council of India is a self regulatory voluntary organization of the
advertising industry.

The Advertising Standards Council of India (ASCI), established in 1985, is committed to the
cause of Self-Regulation in Advertising, ensuring the protection of the interests of
consumers. The ASCI was formed with the support of all four sectors connected with
Advertising, viz. Advertisers, Ad Agencies, Media (including Broadcasters and the Press)

22
source: http://en.wikipedia.org/wiki/Advertising
23
source : http://wiki.answers.com/Q/What_is_consumer_insight
24
source: http://www.ascionline.org/index.php/asci-about

24


and others like PR Agencies, Market Research Companies etc. Its main objective is to
promote responsible advertising thus enhancing the public's confidence in Advertising.

ASCI is represented in all committees working on advertising content in every Ministry of
the Government of India. ASCI’s Code for Self-Regulation in Advertising is now part of ad
code under Cable TV Act’s Rules. Violation of ASCI’s Code is now violation of Govt. rules.
ASCI’s membership of The European Advertising Standards Alliance (EASA) ensures that it
gets valuable advice, learning and even influence at the international level.

The Consumer Complaints Council is ASCI's heart and soul. It is the dedicated work put in
by this group of highly respected people that has given tremendous impetus to the work of
ASCI and the movement of self-regulation in the advertising. This group comprise of 21
drawn from various disciplines. 12 are eminent people not associated with advertising (
such as lawyer, doctor, journalist, teachers, technical experts consumer activities etc.) and
9 are from industry (advertiser, media, ad agencies and allied professionals.

ASCI thus aims to achieve its own overarching goal: to maintain and enhance the public's
confidence in advertising.

Advertising Agencies25:

An advertising agency or ad agency is a service business dedicated to creating, planning
and handling advertising (and sometimes other forms of promotion) for its clients. An ad
agency is independent from the client and provides an outside point of view to the effort of
selling the client's products or services. An agency can also handle overall marketing and
branding strategies and sales promotions for its clients. Types of advertising agencies:

Generalized advertising agencies

Creative agencies specialize in "creative" or design-based business models: their basic
interest is in the creation of the advertisement or branding. Other ("full-service") agencies
offer design in conjunction with media buying. Media agencies concentrate on media
buying. (In the 1990s, media and creative were often unbundled in the interests of
economies of scale in buying media.[4])

Specialist advertising agencies

In addition to the full-service, general-line advertising agencies, there are also agencies
that specialize in particular kinds of advertising: recruitment, help-wanted, medical,
classified, industrial, financial, direct-response, retail, yellow pages,
theatrical/entertainment, investment, travel, and so on.

In-House advertising agencies

Some advertisers believe that they can provide such advertising services to themselves at
a lower cost than would be charged by an outside agency.

25
source: http://en.wikipedia.org/wiki/Advertising_agency

25


Interactive agencies

Interactive agencies may differentiate themselves by offering a mix of web
design/development, search engine marketing, internet advertising/marketing, or e-
business/e-commerce consulting. Interactive agencies rose to prominence before the
traditional advertising agencies fully embraced the Internet. Offering a wide range of
services, some of the interactive agencies grew very rapidly, although some have
downsized just as rapidly due to changing market conditions. Today, the most successful
interactive agencies are defined as companies that provide specialized advertising and
marketing services for the digital space.

Agency departments:

Creative department

The people who create the actual ads form the core of an advertising agency. Modern
advertising agencies usually form their copywriters and art directors into creative teams.
Creative teams may be permanent partnerships or formed on a project-by-project basis.
The art director and copywriter report to a creative director, usually a creative employee
with several years of experience. Although copywriters have the word "write" in their job
title, and art directors have the word "art", one does not necessarily write the words and
the other draw the pictures; they both generate creative ideas to represent the proposition
(the advertisement or campaign's key message). Once they receive the creative brief from
their account team, the creative team will concept ideas to take to their creative director
for feedback. This can often be a back and forth process, occurring several times before
several ads are set to present to the client. Creative departments frequently work with
outside design or production studios to develop and implement their ideas. Creative
departments may employ production artists as entry-level positions, as well as for
operations and maintenance. The creative process forms the most crucial part of the
advertising process.

Media services

The media services department may not be so well known, but its employees are the
people who have contacts with the suppliers of various creative media. For example, they
will be able to advise upon and negotiate with printers if an agency is producing flyers for a
client. However, when dealing with the major media (broadcast media, outdoor, and the
press), this work is usually outsourced to a media agency which can advise on media
planning and is normally large enough to negotiate prices down further than a single
agency or client can. They can often be restrained by the client's budget, in which, the
media strategy will inform the creative team what media platform they'll be developing the
ad for.

Modern agencies might also have a media planning department integrated, which does all
the spot's planning and placements

Production

Without the production department, the ads created by the copywriter and art director
would be nothing more than words and pictures on paper. The production department, in

26


essence, ensures the TV commercial or print ad, etc., gets produced. They are responsible
for contracting external vendors (directors and production companies in the case of TV
commercials; photographers and design studios in the case of the print advertising or direct
mailers). Producers are involved in every aspect of a project, from the initial creative
briefing through execution and delivery. In some agencies, senior producers are known as
"executive producers" or "content architects".

Other departments and personnel

In small agencies, employees may do both creative and account service work. Larger
agencies attract people who specialize in one or the other, and indeed include a number of
people in specialized positions: production work, Internet advertising, planning, or
research, for example.

Media Decisions – Budgets26: Kotler 13e pg. 487

Method (1) Fixed percentage of sales
In markets with a stable, predictable sales pattern, some companies set their advertising
spend consistently at a fixed percentage of sales. This policy has the advantage of avoiding
an “advertising war” which could be bad news for profits.
However, there are some disadvantages with this approach. This approach assumes that
sales are directly related to advertising. Clearly this will not entirely be the case, since
other elements of the promotional mix will also affect sales. If the rule is applied when
sales are declining, the result will be a reduction in advertising just when greater sales
promotion is required!

Method (2) Same level as competitors
This approach has widespread use when products are well-established with predictable
sales patterns. It is based on the assumption that there is an “industry average” spend that
works well for all major players in a market.
A major problem with this approach (in addition to the disadvantages set out for the
example above) is that it encourages businesses to ignore the effectiveness of their
advertising spend – it makes them “lazy”. It could also prevent a business with competitive
advantages from increasing market share by spending more than average.

Method (3) Task
The task approach involves setting marketing objectives based on the “tasks” that the
advertising has to complete.
These tasks could be financial in nature (e.g. achieve a certain increase in sales, profits) or
related to the marketing activity that is generated by the campaigns. For example:
• Numbers of enquiries received quoting the source code on the advertisement
• Increase in customer recognition / awareness of the product or brand (which can be
measured)
• Number of viewers, listeners or readers reached by the campaign

26
source: http://tutor2u.net/business/marketing/promotion_advertising_budget.asp

27


Method (4) Residual
The residual approach, which is perhaps the worst of all, is to base the advertising budget
on what the business can afford – after all other expenditure. There is no attempt to
associate marketing objectives with levels of advertising. In a good year large amounts of
money could be wasted; in a bad year, the low advertising budget could guarantee a
further low year for sales.

Branding: Kotler 13e pg. 250

It is the process of creating brands. A brand can be defined as a "Name, term, design, symbol,
or any other feature that identifies one seller's good or service as distinct from those of other sellers." [1]

Refer to the following ppt to know more about branding:
http://www.scribd.com/fullscreen/65592282?access_key=key-8uh7ypzeo0rdemhsr1g

Measurement of Effectiveness27:

How can the effectiveness of an advert be judged?
The answer depends on what objectives or tasks were set for the advert.
The table below sets out some possible objectives/tasks and how the effectiveness of the
advert might be measured:

Advertising objective How success can be measured
- Number of enquiries from advert
Stimulate an increase in sales
- Number of enquiries converted into sales
- Test customer awareness both before and after the
Remind customers of the existence of a
advertising campaign
product
- Number of enquiries
- Test customer awareness
Inform customers
- Number of requests for further information
-Sales
Build a brand image -Test customer awareness of brand recognition and
perceived values
- Levels of repeat purchase
Build customer loyalty and relationship
- Levels of customer retention
- Measure demographic profile of purchases
Change customer attitudes - Measure type of goods ordered by new purchasers
- Compare with previous data

27
source: http://tutor2u.net/business/marketing/promotion_advertising_effectiveness.asp

28


6. Organizations for Marketing
http://www.scribd.com/doc/66136635/Marketing-Channels
http://www.scribd.com/doc/66136921/Sales-Management-Tasks

The major bases of performance evaluation28:

Marketing performance measurement and management (MPM) is a term used by marketing
professionals to describe the analysis and improvement of the efficiency and effectiveness
of marketing. This is accomplished by focus on the alignment of marketing activities,
strategies, and metrics with business goals. It involves the creation of a metrics framework
to monitor marketing performance, and then develop and utilize marketing dashboards to
manage marketing performance. This strategy is used by several companies such as IBM,
Intel, and Citrix.

Performance management is one of the key processes applied to business operations such
as manufacturing, logistics, and product development. The goals of performance
management are to achieve key outcomes and objectives to optimize individual, group, or
organizational performance. MPM however, is more specific. It focuses on measuring,
managing, and analyzing marketing performance to maximize effectiveness and optimize
the return of investment (ROI) of marketing.

Basic channels of distributions: Kotler 13e pg. 407

Distribution channel consists of an organization or set of organizations (go-between)
involved in the process of making a product or service available for use or consumption by
a consumer or business user.

28
source: http://en.wikipedia.org/wiki/Marketing_performance_measurement_and_management

29


Retailing / Retail Marketing: Kotler 13e pg. 432

Retailing is the last step in the supply chain. Retail marketing is comprised of the activities
related to selling products directly to consumers through channels such as stores, malls,
kiosks, vending machines or other fixed locations, according to the Free Dictionary.

Retailers buy products in bulk and sell them in small quantities to individual customers.

Wholesaling29:

Wholesaling usually, but not necessarily, involves sales in large quantity and at a cost that
is significantly lower than the average retail price.

Wholesaling became particularly advantageous after the introduction of mass production
and mass marketing techniques in the 19th century. Without wholesale organizations, large
manufacturers would have to market their products directly to a great many retailers
and/or consumers at high unit costs, and retailers or consumers would have to deal with a
large number of manufacturers at great inconvenience.

Sales Management Tasks: Kotler 13e pg. 537
Sales management is a business discipline which is focused on the practical application of
sales techniques and the management of a firm's sales operations. It is an important
business function as net sales through the sale of products and servicess and resulting
profit drive most commercial business. These are also typically the goals and performance
indicators of sales management.

29
source: http://www.britannica.com/EBchecked/topic/643010/wholesaling

30


The tasks typically involves sales planning, human resources, talent development,
leadership and control of resources such as organisational assets. They can be listed as
below:

Sales Functions30
-Sales
-Customers Sales
-Market review
-Sales Policies
-Products Performance
-Distribution
-Customer ACCOUNTS review
-Reseller MANAGEMENT
-Sales Organization
-Territories Sales
-Sales Force MANAGEMENT
-Sales Promotions
-Sales support review
-Sales training
-Competition
-Pricing
-Sales problem solving
-setting sales objectives
-field visits
-managing sales control

Classification of Industrial Products:

Like the consumer product, the industrial products also offer a vast variety in nature and
kind. The following classification would amply prove this fact:

1. Goods entering the product completely- Material and Party.
a) Raw materials:-

i. Farm Products, e.g., Cotton, Jute, Sugarcane.
ii. Natural products, e.g., Timber, petroleum, Minerals.

b) Manufactured Materials, and Parts:
i. Component materials, e.g., Steel, Cement, Chemicals.
ii. Component parts, e.g., Electric motors, Lathes.

2. Goods entering the product party- Capital Items.
a) Installations:
i. Building, Land.
ii. Fixed Equipments-Machineries.

30
source: http://en.allexperts.com/q/Sales-Sales-Management-1439/2008/1/Sales-Function.htm

31


b) Accessory Equipments, e.g., Type-writers, Loose tools.

3. Goods not entering the product-Supplies and Service.
a) Supplies:
1. Operating Supplies e.g., Lubricants, Coal.
2. Maintenance and Repair Items.

b) Business Services:
i. Maintenance and Repair Services.
ii. Business Advisory Services : e.g., Legal, Management Consultancy, etc.

The general characteristic features of industrial products have been given earlier. The
characteristic features may change according to the nature of the particular product.

Marketing Control Systems

It is a system comprising of different procedures and various levels of management
to bring efficiency and to keep a check on different marketing functions within the
organization. There are primarily four types of marketing control systems. These
are,Annual Plan Control, Profitability Control, Efficiency Control and Strategic Control

Annual plan control
– These are top and middle management tasks that try to examinewhether the
planned results are being achieved.

Profitability Control
– This is done to examine whether the company is making or losing money while carrying
out its business. Profitability is measured in terms of product category, territory, segment,
channels, order size etc

Efficiency Control
– Used to evaluate and improve the spending efficiency and impactof marketing
expenditures. Efficiency of sales force, advertising, sales promotion anddistribution is
measured.

Strategic Control
– This is used to examine whether the Company is pursuing its bestopportunities with
respect to markets, products and channels. To do a proper assessmentfor strategic control
different instruments including marketing audit, marketingeffectiveness, marketing
excellence review and the ethical and social responsibilityreview.

Marketing Audit

The marketing audit is a fundamental part of the marketing planning process. It is
conducted not only at the beginning of the process, but also at a series of points during the
implementation of the plan. The marketing audit considers both internal and external
influences on marketing planning, as well as a review of the plan itself.

32


There are a number of tools and audits that can be used, for example SWOT analysis for
the internal environment, as well as the external environment. Other examples include
PEST and Five Forces Analyses, which focus solely on the external environment.

Lets consider the marketing audit under three key headings:

• The Internal Marketing Environment.
• The External Marketing Environment.
• A Review of Our Current Marketing Plan.

Brief Idea of International Marketing31:
Kotler 13e pg. 584

International marketing is simply the application of marketing principles to more than one
country. However, there is a crossover between what is commonly expressed as
international marketing and global marketing, which is a similar term. For the purposes of
this lesson on international marketing and those that follow it, international marketing and
global marketing are interchangeable.

After the decision to expand beyond the country of origin has been made, the exact mode
of operation has to be determined. The risks concerning operating in foreign markets is
often dependent on the level of control a firm has, coupled with the level of capital
expenditure outlayed. The principal modes of engagement are listed below:

• Exporting (which is further divided into direct and indirect exporting)
• Joint ventures
• Direct investment (split into assembly and manufacturing)

***

Disclaimers:

• These notes have been compiled from various sources and as far as possible, all the sources have been
acknowledged.
• These notes are only for supplementary/additional reading and should NOT be used as a replacement to
the recommended text books and reference books.
• The material is intended for private circulation for the students of Saraswati Institute of Engineering and
Management, Rajpur, Mehsana (www.ssesic.org.in)

Compiled by: Prof. Manish Parihar, SIEM (Nov 2011)
www.profmanishparihar.blogspot.com

31
source: http://marketingteacher.com/lesson-store/lesson-international-marketing.html

33

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