Marketing management

MARKETING MANAGEMENT
UNIT I
Versatile Business School, Egmore, Chennai - 600 008

DEFINITION
• Marketing is the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods
and services to create exchanges that satisfy individual and
organizational objectives.

Exploring
Creating Delivering
VALUE
Different
from
competitors
Acc to
customer
requirement
MARKETING

EVOLUTION
PRODUCT
SALES
MARKETING
MYOPIA
MARKETING
RELATIONSHIP
MARKETING
PRODUCTION

PRODUCTION
• Consumer favor products that are available and
highly affordable.
• Improve production and distribution
• Availability and affordability is what the consumer
wants.

PRODUCT
• Consumers favor products that offer the most
quality, performance and innovative features
• A good product will sell itself

SALES
• Consumers will buy products only if the company
promotes/sells these products.
• Creative advertising and selling will overcome
consumers resistance and convince them to buy.

MARKETING MYOPIA
• A short-sighted and inward looking approach
to marketing that focuses on the needs of the company
instead of defining the company and its products in terms of
the customers' needs and wants.
• It results in the failure to see and adjust to the
rapid changes in their markets.

MARKETING
• Focuses on needs, wants of target markets and
delivering satisfaction better than competitors.
• The consumer is king! Find a need and fill it.

RELATIONSHIP MARKETING
• Focuses on needs, wants of target markets and
delivering superior value.
• Long term relationship with customers and other
partners lead to success.

MARKETING SALES
APPROACH
Determine future needs and has a
strategy in place to meet those needs
for the long term relationship.
Makes customer demand
match the products the
company currently offers.
PROCESS
One to many Usually one to one
FOCUS
Fulfil customer's wants and needs
through products and/or services the
company can offer.
Fulfil sales volume objectives
HORIZON
Longer term Short term
STRATEGY pull push

MARKETING SALES
SCOPE
Identifying customer needs
(research), creating products
to meet those needs,
promotions to advertise said
products.
Once a product has been
created for a customer need,
persuade the customer to
purchase the product to fulfil
her needs
PRIORITY
Marketing shows how to reach
to the Customers and build
long lasting relationship
Selling is the ultimate result of
marketing.
IDENTITY
Marketing targets the
construction of a brand
identity so that it becomes
easily associated with need
fulfilment.
Sales is the strategy of
meeting needs in an
opportunistic, individual
method, driven by human
interaction. There's no
premise of brand identity,
longevity or continuity. It's
simply the ability to meet a
need at the right time.

CORE MARKETING CONCEPT
Needs, wants and demands
Products
Value and satisfaction
Exchange transactions and relationships
Market

MARKETING MIX
• "Marketing mix" is a general phrase used to describe the
different kinds of choices organizations have to make in the
whole process of bringing a product or service to market.
• The 4Ps is one way probably the best-known way of defining
the marketing mix, and was first expressed in 1960 by E J
McCarthy

MARKETING MIX
PRODUCT PRICE PLACE PROMOTION

PRODUCT
• Refers to the item actually being sold.
• The product must deliver a minimum level of
performance; otherwise even the best work on the
other elements of the marketing mix won't do any
good.

PRICE
• Refers to the value that is put for a product.
• It depends on costs of production, segment targeted,
ability of the market to pay, supply - demand and a
host of other direct and indirect factors.
• There can be several types of pricing strategies, each
tied in with an overall business plan.
• Pricing can also be used a demarcation, to
differentiate and enhance the image of a product

PLACE
• Refers to the point of sale.
• In every industry, catching the eye of the consumer
and making it easy for them to buy it is the main aim
of a good distribution or 'place' strategy.
• The mantra of a successful retail business is 'location,
location, location'.

PROMOTION
• This refers to all the activities undertaken to make
the product or service known to the user and trade.
• This can include advertising, word of mouth, press
reports, incentives, commissions and awards to the
trade.
• It can also include consumer schemes, direct
marketing, contests and prizes.

UNIT II

PRODUCT MIX
• Set of all product offered for sale by a company.
• It consist of various product line.
• Any company’s product mix has four dimension
▫ Width
▫ Length
▫ Depth
▫ Consistency

PRODUCT MIX
• Width : Number of different product lines
carried by the company.
• Length : Total number of items in the
product mix of the company.
• Depth : Assortment of size, color and models offered in
each item of a product line.
• Consistency : It refers to the relationship of various product
line either in their end use, production requirement,
distribution channel or other way.

Product Mix of Hindustan
Unilever Limited
Home & Personal
Care
Beverages
Personal
Wash
Laundry Skin Care
Hair
Care
Oral Care Tea CoffeeDeodorants
Lux
Lifebuoy
Liril
Hamam
Breeze
Dove
Pears
Rexona
Surf excel
Rin
Wheel
Fair &
Lovely
Ponds
Vaseline
Sunsilk
Clinic +
Pepsodent
Close-up
Axe
Rexona Lipton
Brooke
Bond
Bru

UNIT III
PRICING

PRICING
• Pricing is the process of determining what a company
will receive in exchange for its product. Pricing factors
are manufacturing cost, market place, competition,
market condition, brand, and quality of product
• Pricing is a fundamental aspect of financial
modeling and is one of the four Ps of the marketing mix.

OBJECTIVES OF PRICING
• Current profit maximization
• Current revenue maximization
• Maximize quantity
• Maximize profit margin
• Quality leadership
• Partial cost recovery
• Survival
• Status quo

METHODS OF PRICING
• Cost based pricing
• Demand based pricing
• Competition oriented pricing
• Product line pricing
• Tender pricing
• Affordability based pricing
• Differentiated pricing

COST BASED PRICING
• Mark-Up Pricing(cost plus pricing)
• Absorption cost pricing (full cost pricing)
• Target rate of return pricing
• Marginal cost pricing

COST BASED PRICING
Mark-up pricing
• The selling price is fixed by adding Mark-up or
Margin to its cost
• Usually used by: Distributers, Marketing firms
etc..

COST BASED PRICING
Absorption cost pricing
• Mainly used by manufacturing firms.
• It uses standard costing techniques.
• It includes : Fixed cost-Variable cost + PROFIT-
Selling and administering cost – Advertisement
cost
• It is also known as full cost pricing.

COST BASED PRICING
Target rate of return pricing
• Similar to Absorption cost pricing.
• The difference is in fixing the profit margin.
• The profit margin/ mark up is fixed by considering the
ROI.
• Firm will have return objectives, like 5% of invested
capital, or 10% of sales revenue.
• Then you arrange your price structure so as to achieve
these target rates of return.
• Market leaders or monopolists uses this pricing strategy.Versatile Business School, Egmore, Chennai - 600 008

Marginal Cost Pricing
• It takes cost and demand into consideration while fixing
the price.
• It aims at maximizing contribution towards fixed cost.
• It gives flexibility to recover the fixed cost depending on
the market condition.
• It also gives flexibility in recovering a large portion of
cost from certain segment and a small portion from
some other segment.

Demand Based Pricing
• The pricing decision is also depending on
Demand and supply of the commodity.
• More realistic .
• Types of cost based pricing are: • Skimming
pricing • Penetration pricing

DEMAND BASED PRICING
Penetration Pricing:
• Price set to ‘penetrate the market’
• ‘Low’ price to secure high volumes
• Typical in mass market products-chocolate bars, food
stuffs, household goods, etc.
• Suitable for products with long anticipated life cycles
• May be useful if launching into a new market

DEMAND BASED PRICING
Market Skimming
• High price, Low volumes
• Skim the profit from the market
• Suitable for products that have short life cycles or
which will face competition at some point in the future
(e.g. after a patent runs out)
• Examples include: digital technology, new DVDs, etc.

COMPETITION ORIENTED PRICING
Competition Oriented Pricing
• It need not mean that pricing the commodity
matching its competitors, it can also be the
following:
-Premium pricing
-Discounted Pricing
-Parity Pricing/going rate pricingVersatile Business School, Egmore, Chennai - 600 008

PRODUCT LINE PRICING
Product line pricing
• The products in a given product line are related to
each other.
• The manufacturing cost of these products also will
not be much different.
• It is mainly indented to get optimum profit from the
line.

TENDER PRICING
Tender pricing
• Industrial products
• The customers go by competitive bidding
through sealed tenders.
• The seller can only get the best possible price.
• He should thoroughly analyze the competitors.

AFFORDABILITY BASED PRICING
Affordability based Pricing
• Essential commodities
• Social welfare pricing
• The idea of this pricing is to make the product
available to the targeted population at an affordable
rate.
• Items usually distributed through public distribution
system.
• Subsidies may be involved

DIFFERENTIATED PRICING
Differentiated pricing
• Different price for the same product in different
location. (SanDisk cruzer balde Pen-drive, Petrol )•
• The price difference may also be made in the case
of customer class.
• Volume of purchase. ( Offer packs Lux soap,
Colgate value packs etc

PRICING STRATEGIES
Value Pricing
• Price set in accordance with customer perceptions about
the value of the product/service
• Examples include status products/exclusive products

PRICING STRATEGIES
Loss Leader
• Goods/services deliberately sold below cost to
encourage sales elsewhere
• Typical in supermarkets, e.g. at Diwali, selling sweets at
low cost in the hope that people will be attracted to the
store and buy other things
• Purchases of other items more than covers ‘loss’ on item
sold

PRICING STRATEGIES
Psychological Pricing
• Used to play on consumer perceptions
• Classic example-Rs.999 instead of Rs.1000!
• Links with value pricing-high value goods priced
according to what consumers THINK should be the price

PRICING STRATEGIES
Price Discrimination
• Charging a different price for the same good/service in
different markets
• Requires each market to be impenetrable
• Requires different price elasticity of demand in each
market
• Example: Prices for rail travel differ for the same journey
at different times of the dayVersatile Business School, Egmore, Chennai - 600 008

PRICING STRATEGIES
Destroyer/Predatory Pricing
• Deliberate price cutting or offer of ‘free gifts/products’ to
force rivals (normally smaller and weaker) out of
business or prevent new entrants
• Anti-competitive and illegal if it can be proved

INTERNAL FACTORS AFFECTING PRICING
DECISIONS
• Marketing objectives
• Marketing mix strategy
• Cost
• Organization

INTERNAL FACTORS AFFECTING
PRICING DECISIONS
Marketing objectives
Survival in the
market Maximizing
profit
Market share
leadership
Product
quality
leadership

INTERNAL FACTORS AFFECTING
PRICING DECISIONS
• Marketing mix strategy: Price should be related
to the product design, distribution and promotion
strategies
• Cost: Directly related to price
• Organization: Large organizations-Line
managers
Industrial organization-Versatile Business School, Egmore, Chennai - 600 008

EXTERNAL FACTORS AFFECTING PRICING
DECISIONS
i) The nature of the market and demand
ii) Elasticity of demand
iii) Competitor’s cost, price and offers
iv) Inflation and deflation
v) Interest rate
vi) Reseller reaction
vii) Social consideration
viii) Government policies and regulation
ix) Customer Expectation

PRODUCT DIFFERENTIATION
• “the process of distinguishing a product or offering
from others, to make it more attractive to a
particular target market in comparison with
competitors' products as well as a firm's own
product offerings

• Offered under different brands by competing firms, products
fulfilling the same need typically do not have identical
features.
• The differentiation of goods along key features and minor
details is an important strategy for firms to defend their price
from levelling down to the bottom part of the price spectrum.
• Within firms, product differentiation is the way multi-product
firms build their own supplied products' range

• At market level, differentiation is the way through
which the quality of goods is improved over time
thanks to innovation.
• Launching new goods with entirely new
performances is a radical change, often leading to
changes in market shares and industry structures.
• In an evolutionary sense, differentiation is a strategy
to adapt to a moving environment and its social
groups

BASIS OF DIFFERENTIATION
• Attributes of the product or service
• Relationship between the firm and its customers
• Linkages between/within firms

DIFFERENTIATING FACTORS
PRODUCT
SERVICE
IMAGECHANNEL
PERSONNEL

Positioning in the market place
- It is the act of designing the company’s offering and image
to occupy a distinctive place in the target market’s mind.
- Positioning is not what you do to the product
- Positioning is what you do to the mind of the prospect
- Customer does the Positioning

POSITIONING IN THE MARKET PLACE
Examples
Crest toothpaste
• Promotes its anti-cavity protection
Mercedes
• Promotes its great engineering
BMW
• Ultimate driving machine
Attribute can be single or even multiples

DEVELOPING AND COMMUNICATING A
POSITIONING STRATEGY
▫ Four major positioning errors
1. Under positioning
2. Over positioning
3. Confused positioning
4. Doubtful positioning

Under positioning
▫ Seen as just another entry in a crowded market
▫ Pepsi introduces its clear crystal Pepsi 1993
▫ Customer was not impressed
▫ “Clarity” not seen as an important benefit

Over positioning
- Narrow image of the brand
- Trying to widen
- Customer do not accept this
- Maruti Baleno
 Customers think Maruti can make cars pricing only up to 5 lacs
 Not higher end
 Image issue
 Poor sales

Confused Positioning
Company making too many claims
Milkmaid
Started as Tea Whitener
Did not click
As a topping on pudding
Did not click
Finally clicked as base for dessert

Doubtful Positioning
Find it to difficult believe in what company claims
Maruti 1000
- Launches in ’89
- Positioned as ‘ultimate in luxury’
- Only luxury car
- Launch of Esteem in ’94
- More luxurious than Maruti 1000
- Is it now ‘Ultimate in luxury
- Sales dipped
- Customer confused
- Repositioned as ‘Affordable luxury’

DEVELOPING A POSITIONING STRATEGY
▫ Positioning possibilities:
 Attribute positioning
 Benefit positioning
 Use or application positioning
 User positioning
 Competitor positioning
 Product category positioning
 Quality or price positioning
• Which Positioning to Promote?

ATTRIBUTE POSITIONING
ATTRIBUTE POSITIONING
- Positioning on attribute
 Size
 No of years in existence
 Culture
Disneyland
Positioned as the largest manmade park in the world
Dove soap
Contains moisturizing cream

BENEFIT POSITIONING
BENEFIT POSITIONING
▫ Positioned as a leader in certain benefit
McDonald’s
▫ Positioned as a family restaurant (QSCV)
Honda
▫ Economy and reliability
BMW
▫ Ultimate driving machine
Volvo
▫ Safety and Durability.

USE / APPLICATION POSITIONING
USE / APPLICATION POSITIONING
▫ Positioning for some use or application
Nestle ‘Maggi Noodles’
 Positioned as a snack item
 Between meals
 Fast to cook, good to eat
Nestle Milkmaid
 Positioned as a base for dessert preparation.

USER POSITIONING
USER POSITIONING
▫ Positioning the product as best for some user group.

COMPETITOR POSITIONING
COMPETITOR POSITIONING
▫ Product claims to have better performance than
competitors
Brooke Bond Taj Mahal Tea
Endorsed by Zakir Hussain
▫ “If you find a better tea than Taj Mahal, then Zakir Hussain
will stop playing Tabla.
▫ Directly or indirectly refer competitors.

PRODUCT CATEGORY POSITIONING
PRODUCT CATEGORY POSITIONING
▫ Positioning as a leader in certain category.
Maruti 1000
 Launched in 1990
 Only luxury car in India
 Positioned as ‘ultimate in luxury’
Livon
 After hair wash oil
 Smooth and silky hair

QUALITY OR PRICE POSITIONING
QUALITY OR PRICE POSITIONING
▫ Positioning as offering the best scooters
Bajaj Scooters
 Lowest prices
 You just cannot beat a Bajaj
 Repositioned as ‘Hamara Bajaj’

UNIT IV
CHANNELS OF DISTRIBUTION

DISTRIBUTION CHANNELS
• A set of interdependent organizations (intermediaries) involved
in the process of making a product or service available for use or
consumption.
• Channel decisions
– affect other marketing decisions
– involve long-term commitments

ROLE OF INTERMEDIARIES
• Greater efficiency in making goods available to target markets.
• Intermediaries provide
– Contacts
– Experience
– Specialization
– Scale of operation
• Match supply and demand.

CHANNEL FUNCTIONS
•Information
•Promotion
•Contact
•Matching
•Negotiation
•Physical Distribution
•Financing
•Risk taking

Physical Distribution - Nature and Importance
- Physical distribution: Moving tangible products through
distribution channels
- Physical distribution (or logistics) consists of all activities
involved in moving the right amount of the right products
to the right place at the right time
- In the past years, the surge of e-commerce has
underscored the importance of physical distribution
 the challenge relates to fulfillment, which entails
having the merchandise that is ordered by a
customer in stock and then packing and shipping it in
an efficient, timely manner

THE ROLE OF MARKETING CHANNELS
IN MARKETING STRATEGY
• Marketing channels are key because they are the means of making goods and
services available to ultimate users.
• Four functions of marketing channels:
• Channels facilitate the exchange process by reducing the number of marketplace
contacts necessary to make a sale.
• Distributors adjust for discrepancies in the market’s assortment of goods and
services via sorting, channeling products to meet the buyer’s and producer’s needs.
• Channel members tend to standardize payment terms, delivery
schedules, prices, purchase lots, and other conditions.
• Channels facilitate searches by both buyers and sellers and bring them together
to complete the exchange process.

TYPES OF MARKETING CHANNELS
• Most channel options involve at least one marketing intermediary, an
organization that operates between producers and consumers or business
users.
• A retailer owned and operated by someone other than the manufacturer
of the products it sells.
• A wholesaler who takes title to the goods it handles and then
distributes these goods to retailers, other distributors, or sometimes end
consumers.
• Service firms market primarily through short channels because they sell
intangible products and need to maintain personal relationships within
their channels.

DIRECT SELLING
• Direct channel-carries goods directly from a producer to the business
purchaser or ultimate user.
• Direct selling-a marketing strategy in which a producer establishes direct
sales contact with its product’s final users.
• Internet and direct mail are also potentially important tools for direct
selling.
CHANNELS USING MARKETING INTERMEDIARIES
• For some products, using intermediaries may be more efficient, less
expensive, and less time-consuming.

DUAL DISTRIBUTION
• Movement of products through more than one channel to reach the
firm’s target market.
• Used to maximize the firm’s coverage in the marketplace or to
increase the cost-effectiveness of the firm’s marketing effort.
REVERSE CHANNELS
• Channels designed to return goods to their producers.
• Growing importance because of rising prices for raw materials,
increasing availability of recycling facilities, and passage of additional
antipollution and conservation laws.
• Also used for recalls and repairs.

CHANNEL STRATEGY DECISIONS
SELECTION OF A MARKETING CHANNEL
• Multiple factors affect selection of a marketing channel.
Market Factors
Product Factors
Organizational Factors
Competitive Factors

DETERMINING DISTRIBUTION INTENSITY
• Intensive distribution: Distribution of a product through all available channels.
• Selective distribution: Distribution of a product through a limited number of
channels.
• Exclusive distribution: Distribution of a product through a single wholesaler or
retailer in a specific geographic region.
• Restrictions are illegal if they reduce competition or create a monopoly.
WHO SHOULD PERFORM CHANNEL FUNCTIONS?
• Intermediary must provide better service at lower costs than manufacturers or
retailers can provide for themselves.
• Consolidation of channel functions can represent a strategic opportunity for a
company. Versatile Business School, Egmore, Chennai - 600 008

CHANNEL MANAGEMENT AND LEADERSHIP
• Marketers have relationships with intermediaries in distribution channels.
• Channel captain Dominant and controlling member of a marketing channel.
CHANNEL CONFLICT
• Horizontal conflict—disagreements among channel members at the same level, such as
two competing discount stores.
• Vertical conflict occurs among members at different levels of the channel.
• The gray market—goods produced for overseas markets that re-enter the home market
and compete against domestic versions.
ACHIEVING CHANNEL COOPERATION
• Best achieved when all members of channel see themselves as equal components; channel
captain should provide this leadership.

VERTICAL MARKETING SYSTEMS
• Vertical marketing system (VMS) Planned channel system designed to
improve distribution efficiency and cost-effectiveness by integrating various
functions throughout the distribution channel.
CORPORATE AND ADMINISTERED SYSTEMS
• Corporate marketing system—single owner runs organizations at each
stage of the marketing channel.
• Administered marketing system—dominant channel member exercises
power to achieve channel coordination.
CONTRACTUAL SYSTEMS
• Contractual marketing system—coordinates distribution through formal
agreements among channel members.
• Include wholesaler-sponsored voluntary chains, retail cooperatives, and
franchises.

Tasks in Physical Distribution Management
- Physical distribution refers to the actual physical flow of products
- In contrast, physical distribution management is the development
and operation of processes resulting in the effective and efficient
physical flow of products
- Effective physical distribution management requires careful
attention to five interrelated activities:
1. Order processing
2. Inventory control
3. Inventory location and warehousing
4. Materials handling
5. Transportation

1. Order Processing
- The starting point in a physical distribution system is order
processing, which is a set of procedures for receiving, handling,
and filling orders promptly and accurately
- Electronic data interchange (EDI):
- Between customer and supplier orders, invoices, and other
business functions are transmitted by computer
- Originally, EDI required a direct computer link between supplier
and customer, now it is being conducted via the Internet
- EDI can trim the cost of order processing significantly, which in

2. Inventory Control
- The goal of inventory control is to satisfy the order-fulfillment
expectations of customers while minimizing both the investment
and fluctuations in inventories
- Just-in-Time:
- JIT combines inventory control, purchasing, and production
scheduling
- Applying JIT, a firm buys in small quantities that arrive just in
time for production and then it produces in quantities just in

2. Inventory Control (continued)
- Just-in-Time:
- …
- Benefits of JIT are:
- Dramatic cost savings
- Shortened and more flexible and reliable production and delivery
schedules
- Quick responses to quality problems
- Market-Response Systems:
- The central promise is that those who intend to consume a product
should activate a process to produce and deliver replacement items
- In this way, a product is pulled through a channel on the basis of
demand

3. Inventory Location and Warehousing
- Management must make critical decisions about the
size, location, and transportation of inventories
- These areas are interrelated, often in complex ways
- One key consideration in managing inventories is
warehousing, which embraces a range of functions, such
as assembling, dividing, and storing products and
preparing them for reshipping

4. Materials Handling
- Selecting the proper equipment to physically handle
products, including the warehouse building itself, is the
materials handling subsystem of physical distribution
management
- Equipment that is well matched to the task can minimize
losses from breakage, spoilage, and theft
- Efficient equipment can reduce handling costs as well as
time required for handling

5. Transportation
- Management must decide on both the mode of
transportation and the particular carriers
- The leading modes of transportation are railroads,
trucks, pipelines, water vessels, and airplanes
- Using two or more modes of transportation to move
freight is termed intermodal transportation; this
approach is intended to seize the advantages of multiple
forms of transportation

Designing the Marketing Channel

Decisions involving the development of new marketing
channels either where none had previously existed or to the
modification of existing channels
Channel Design:

Channel Design
1. A decision made by the marketer
2. The creation or modification of channels
3. The active allocation of distribution tasks in an attempt to
develop an efficient structure
4. The selection of channel members
5. A strategic tool for gaining a differential advantage
Distinguishing points of the definition include:

Who Engages in Channel Design?
• Producers,
manufacturers, service
providers, franchisors
• Look down the
channel
toward the market
• Look up the
channel
to secure
suppliers
• Look both up and
down
the channel
Firms Wholesalers
Retailers

Channel Design Paradigm
1. Recognize the need for
channel design decision
7. Select
channel members
5. Evaluate
relevant variables
6. Choose the “best”
channel structure
2. Set & coordinate
distribution objectives
3. Specify
distribution tasks
4. Develop alternative
channel structures

When to Make a Channel
Design Decision
• Developing a new product or
product line
• Aiming an existing product at a
new market
• Making a major change in some
other component of the
marketing mix
• Establishing a new firm
• Adapting to changing
intermediary policies that may
inhibit attainment of distribution
objectives
• Dealing with changes in
availability of particular kinds of
intermediaries
• Opening up new geographic
marketing areas
• Facing the occurrence of major
environmental changes
• Meeting the challenge of conflict
or other behavioral problems
• Reviewing and evaluating

Distribution Objectives
Setting distribution objectives
requires knowledge of which,
if any, existing objectives
& strategies may impinge
on these distribution objectives.

Channel Structure Dimensions
1. Number of
levels in the channel
2. Intensity at the
various levels
3. Types of
intermediaries
at each level
Allocation Alternatives

NUMBER OF LEVELS
• Range from two to five or more
• Number of alternatives is limited to two or three choices
• Limitations result from the following factors:
▫ Particular industry practices
▫ Nature & size of the market
▫ Availability of intermediaries

Intensity at the Various Levels
Intensive Selective Exclusive
Many Few One
Intensity Dimension
Numbers of Intermediaries (retail level)
Relationship between the intensity of distribution
dimension & number of retail intermediaries used in a
given market area

Types of Intermediaries
• Numerous types
• Manager’s emphasis on types of distribution tasks
performed by these intermediaries
• Watch emerging types
▫ Electronic online auction firms (eBay)
▫ Industrial products sold in B2B markets
(Chemdex, Converge.com)

Variables Affecting Channel Structure
1. Market Variables
2. Product Variables
3. Company Variables
4. Intermediary Variables
5. Environmental Variables
6. Behavioral Variables
Categories of Variables

Market Geography Location, geographical size,
& distance from producer
Market Size Number of customers in a
market
Market Density Number of buying units
(consumers or industrial firms)
per unit of land area
Market Behavior Who buys, & how, when, and
where customers buy
Market Variables

Product Variables
Bulk & Weight
Perishability
Unit Value
Degree of Standardization
Technical versus Nontechnical
Newness

Company Variables
6
Size The range of options is
relative to a firm’s size
Financial The greater the capital, the
Capacity lower the dependence on
intermediaries
Managerial Intermediaries are necessary
Expertise when managerial experience
is lacking
Objectives Marketing & objectives may
& Strategies limit use of intermediaries

Intermediary Variables
6
Availability Availability of intermediaries
influences channel structure.
Cost Cost is always a consideration in
channel structure.
Services Services that intermediaries
offer are closely related to the
selection of channel members.

Environmental Variables
The impact of environmental forces is
a common reason for making
channel design decisions.
Economic
Sociocultural
Competitive
Technological Legal

Behavioral Variables
Develop congruent roles for channel members.
Attend to the influence of behavioral problems
that can distort communications.
Be aware of available power bases.

UNIT V

GREEN MARKETING
• Green marketing is the marketing of products that are presumed to
be environmentally safe.
• The marketing of products that are presumed to be
environmentally safe.
• (social marketing definition) The development and marketing of
products designed to minimize negative effects on the physical
environment or to improve its quality.
• (environment definition) The efforts by organizations to produce,
promote, package, and reclaim products in a manner that is
sensitive or responsive to ecological concerns

GREEN MARKETING
• Macdonald’s have stopped packaging their hamburgers etc. in
polystyrene containers and now use cardboards which comes
from a renewable resource and is biodegradable or
recyclable.
• HCL-The key objective under HCL ECOSAFE is targeted at
integrating environmental management procedures into its
business processes thereby protecting the environment,
health, and safety of all its stakeholders

GLOBAL MARKETING
• Global Marketing is defined as Marketing activities that are
coordinated and integrated across multiple markets
• Integration can involve Standardized products, Identical Brand
names, Uniform packaging, Synchronized product
introductions, Similar advertising messages etc.
• Coordination can involve competitive pricing, sales
campaigns, market promotions etc.

GLOBAL MARKETING
• … the coordinated performance of marketing
activities to create exchanges across countries that
satisfy individual, organizational , and societal
objectives

BUZZ MARKETING
• Marketing that captures the attention of consumers and the
media to the point where talking about your brand or
company becomes entertaining, fascinating, and newsworthy.
• Simply put: Buzz starts conversations.
• It’s a great story or big idea that others are willing to share.

BUZZ MARKETING
1. consumer who truly like a brand and tell others
2. consumer who like a brand and are sponsored by a
company to tell others
3. company or agency employees who tell others about the
brand
• These messages can be delivered in person or via the
internet in chat rooms, blogs or e-mails.
• Many musical groups have gained fame and fortune through
this type of support by those who have seen the bands in
bars or a small concert or tour.

VIRAL MARKETING
• Any strategy that encourages individuals to pass on a
marketing message to others, creating the potential for
exponential growth in the message's exposure and influence.
• Viral marketing is a self-propagating marketing technique.
• It is spread from person to person across the Internet.

CUSTOMER RELATIONSHIP MANAGEMENT
• CRM “is a business strategy that aims to understand, anticipate and
manage the needs of an organization's current and potential customers”
• It is a “comprehensive approach which provides seamless integration of
every area of business that touches the customer- namely marketing,
sales, customer services and field support through the integration of
people, process and technology”
• CRM is a shift from traditional marketing as it focuses on the retention of
customers in addition to the acquisition of new customers
• “ The expression Customer Relationship Management (CRM) is becoming
standard terminology, replacing what is widely perceived to be a
misleadingly narrow term, relationship marketing (RM)”

DEFINITION OF CRM
• CRM is concerned with the creation, development and
enhancement of individualized customer relationships with
carefully targeted customers and customer groups resulting in
maximizing their total customer life-time value”

PURPOSE OF CRM
• The focus [of CRM] is on creating value for the customer and
the company over the longer term”
• When customers value the customer service that they receive
from suppliers, they are less likely to look to alternative
suppliers for their needs
• CRM enables organizations to gain ‘competitive advantage’
over competitors that supply similar products or services

STRATEGIC MARKETING PROCESS
EVALUATION
IMPLEMENTATION
MARKETING PROGRAM
MARKET-PRODUCT FOCUS AND GOAL
SETTING
SITUATION ANALYSIS

3 - 131
MARKETING STRATEGY IN THE DIGITAL AGE
• E-business:
▫ uses
electronic means
and platforms to
conduct
business.

3 - 132
• E-commerce:
▫ facilitates the
sale of products and
services by
electronic
means.

3 - 133
• Buyer Benefits of E-Commerce:
▫ Convenience
▫ Easy and private
▫ Greater product access/selection
▫ Access to comparative information
▫ Interactive and immediate

3 - 134
• Seller Benefits of E-Commerce:
▫ Relationship building
▫ Reduced costs
▫ Increased speed and
efficiency
▫ Flexibility
▫ Global access

3 - 135
E-MARKETING
DOMAINS

3 - 136
E-COMMERCE DOMAINS
• B2C
• B2B
• C2C
• C2B
• Online consumers
▫ Now more diverse
▫ Online consumers differ from
traditional off-line consumers
Major Domains

3 - 137
E-COMMERCE DOMAINS
• B2C
• B2B
• C2C
• C2B
• B2B sales far exceed B2C
sales
• Open trading networks
Major Domains

3 - 138
E-COMMERCE DOMAINS
• B2C
• B2B
• C2C
• C2B
• C2C web sites help
consumers exchange goods or
information
• Auction sites facilitate the
exchange process
• Newsgroups / forums
Major Domains

3 - 139
E-COMMERCE DOMAINS
• B2C
• B2B
• C2C
• C2B
• Allow consumers to search out
sellers, learn about offers, initiate
purchase, or dictate purchase
terms
• Some sites facilitate the feedback
process between customers and
companies
▫ Ex: Planetfeed.com
Major Domains

3 - 140
CONDUCTING E-COMMERCE
• Creating web sites
• Placing online ads and
promotions
• Creating or using web
communities
• Using E-mail and
webcasting
E-Marketing

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