making marketing decisions - marketing management

7/28/2019 Making Marketing Decisions - Marketing Management

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Welcome to Marketing

Management


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Making Marketing Decisions


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Product Line Decisions

A group of products that are closely related.

They function in a similar manner.

They are sold to the same customer groups.

Marketed through the same types of outlets.

Fall within the given price range.


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Product Line

In offering a product line,

companies develop a basicplatform that can be added to

meet different customer

requirements.


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Sales and Profit

A company can classify its products into

4 types that yield different gross margins.

This depends on the sales, volume and

promotion.

1) Core Products

High sales volume

Low margin


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2) Staples

Lower sales volume

Higher margin

3) Specialists

Lower sales volume Highly promoted

4) Convenience items High sales volume

Less promotion


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Product-Line Length

There are a number of different products

in product line. A company places its

products in product line in two ways.They are:

Line Stretching

Line Filling


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Line Stretching

This occurs when a firm lengthens itsproduct-line beyond the current range. The

company can stretch its line in three ways.

They are:Down-market Stretch

Up-market Stretch

Two-way Stretch


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Line Filling

Line filling is the introduction of new

product line at about the same price as

existing product.


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Line Modernisation

Line modernisation is a strategy in which

items in product line are modified to suitmodern styling and tastes and then

re-launched.


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Line Featuring

The product line featuring is used to boostdemand for slower selling products.


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Line Pruning

Line pruning is used in identifying weakitems through sales and cost analysis.


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Brand

The origin of the wordbrand leads us to the

Norwegian word brandr

meaning to burn.

According to Philip KotlerA brand is a name,

term, sign, symbol, or design, or a combination of

these, that identifies the maker or seller of aproduct or service.


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Brand Equity

According to David AakerBrand equity is

the unique set of brand assets and

liabilities that is linked to a brand.

A measure of brands equity is the extent to

which customers are willing to pay more

for the brand.


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Structure of Assets Creating Brand Equity

Brand LoyaltyName Awareness

Perceived Quality

Brand Association

Other Assets


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Brand Name or Symbol

Value to Customers by

Enhancing

Interpretation & processing of

Information

Ease of making choice & decisions

Confidence in the purchase

decision

Use satisfaction

Value to the Firm by

Enhancing

Efficiency & Effectiveness of

marketing program

Brand Loyalty

Prices and margins

Brand extensions, trade leverage,

competitive advantage.


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Brand Strategy Decisions


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Brand Positioning

Level 1

Level 2

Level 3

Positioning based on product attributes

Positioning based on a desired benefit

to the customer

Positioning based on beliefs and values


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Brand Name Selection

A brand name is selected after careful analysis of theproduct and its benefits, the target market and

proposed marketing strategies.

Desirable qualities of a brand name: Suggestive of products benefits and qualities.

Easy to pronounce, recognize and remember.

Must be distinctive.

Should be extendable.

Should translate into foreign languages.

Capable of registration and legal protection.


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Brand Name Protection

The brand name, after selection, has to be

legally protected to prevent competitors

using the same name. Occasionally some

brands become highly successful and leadto generic names used by all.

For ex: Purohit Sweets in Belgaum.


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Brand Sponsorship

Manufacturers Brand: The product could be

launched as a manufacturers brand.

For ex: Philips, IBM, Bajaj, Amul etc

Private Brand: The manufacturers may sell the

product to resellers who give it a privatebrand name which is also known as store

brand or distributor brand.

For ex: FabMall, Nilgiris etc


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Distinction of Brands

Brand No Brand

ManufacturersBrand

PrivateBrand

IndividualBrand

FamilyBrand

Combination


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Advantages of Various Brands

Manufacturers Brand Private Brand

Develops Customer Loyalty Earns Higher Profits

Attracts New Customers Less Pressure to mark downprices

Enhances Prestige Direct Competition to

Dealers

Offers Rapid Delivery Ties Customer to Wholesaler

Ensures Dealer Loyalty No Control Over Distribution

of Manufacturers Brand


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Licensing

Licensing is the practice of leasing a legally protectedproperty to another party in conjunction with a product,

service or promotion.

It is the contractual licensing of a right by a trade mark

owner to a third party, to develop, distribute and sell a

product or service, under that trademark name.

TrademarkOwner

Trademarklicenses

given to 3rdparty

3rd partyuses the

licenses forcommercialpurposes

Trademarkowner getbenefits


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Co-Branding

Co-branding is a pairing of two or more

branded products to form either a separate

and unique product or brand, or to attach

the popularity of one product or brand to anewly formed brand.

Lays with Masterpiece Barbecue sauce HP laptop with Intel processor


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Brand Development

BrandDevelopment

Brand

Extensions

Line

Extensions

Product

Flanking

Multi

Brands


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Brand Extension

Brand extension means extending an

established and successful brand name to

more products which may or may not be

related to the core brand.

Main product of Maggie Extension of brand to others


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Line Extension

Line extension involves introduction of

additional items in a given product

category under the same brand name,

such as new flavours, forms, colours,ingredients, package sizes etc.


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Product Flanking

Product flanking is the introduction ofsame product in different combinations

with respect to sizes and prices to tap

market opportunities.

Flanking helps the consumers to choose

the same product according to their needs.

500gm

200gm100gm

50gm

1 kg


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Multi Brands

Additional brands are launched in the samecategory. It facilitates product differentiation,

i:e to establish different features, attributes

and appeal to different buying motives.

HLLs Soaps


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New Brands

A new brand name is created by a company

when it enters a new product category for

which the present brand name is found not

suitable.

Original Brand New Brand

Fast Track


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Other Decisions related to Brand

Brand Rejuvenation: It is the act of adding value to

an existing brand by improving product attributesand enhancing its overall appeal.

For ex: HLLs Surf became Surf Excel, Surf Ultra.

Brand Re-launch: Companies give one more trial

with some modified attributes or features and

aggressive promotional campaigns.

This process is called brand re-launch.

Sweet for children position

to a product meant for celebration.


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Brand Portfolios

Brand portfolio is the set of all brands and

brand lines which a particular firm offers

for sale in a particular category or market

segment.

For ex: HLL offers product lines in bathing

soaps, fabric wash, beverages etc in the

FMCG category.


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Pricing Decisions

Price

Price is the amount for which a

product, service, or idea is

exchanged or offered for a sale.

Ex: Rent for a house, wages to

workers etc


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Pricing

Meaning of pricing:

Pricing is the art of translating value of the

product into quantitative terms.

Pricing involves selling pricing objectives,identifying the factors governing the price,

ascertaining their relevance, formulation of

price policies and strategies etc.


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Importance of Pricing Decisions

1. Legal basis of a sale transaction.

2. Source of revenue

3. Influencing factor on demand4. Determinant of profitability.

5. Complexity in pricing.

6. Competitive strategy


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Internal Factors External Factors

Marketing mix strategy Market competition

Product life cycle Economic situation

Distribution Policy Suppliers

Organization Moral consideration

Objectives Govt. regulation

Factors Affecting Pricing Decisions


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Pricing Objectives

1. To meet the competition

2. To secure target market share

3. To maximize profits4. To mobilize resources

5. To utilize ideal capacity


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Methods of Price Determination

Cost Based Pricing (Markup Pricing)

Break Even Pricing (Target profit pricing)

Demand Based Pricing

Competition Based Pricing


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Cost based pricing

Cost Based

Pricing

AbsorptionCost

MarginalCost


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Break Even Pricing

Break even is a situation in business where

in the profits meet the costs incurred

exactly. It is a position where the business is

not making any losses but neither is itmaking profits.


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Demand Based Pricing

Demand

BasedPricing

Pricing

Based onMarket

Conditions

PerceivedValuePricing

Charge

whatcustomerscan bear

SalesForecasting

TestMarketing


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Competition Based Pricing

CompetitionBased

Pricing

Going RatePricing

Sealed BidPricing

Import

basedPricing

ExternalAgency

DeterminedPricing


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Promotion

Promotion: Activities meant to gain approval forones products or ideas in the minds ofconsumers.

Definition: According to Brink & KellyPromotionis the coordination of all seller initiated effort toset up channel of information and persuasion tofacilitate the sale of goods or services or theacceptance of an idea.


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Promotion Decision

Meaning:

Promotion decisions are guided by

previous results. They are concerned not

only with the target market channel of

distribution to be used but also with price

and product.


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Setting of clear

objective

Knowing

about the

MarketDetermining

Promotion

Budget

Appealing to its

nature and

timing

Patterning the

promotion

mix

Steps in Promotion Decision


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Objectives of Promotional Activities

Demand Objectives

Communication Objectives

Specific Objectives


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Components of Promotion Decisions

Components

Personal

Selling

Advertising

Sales

Promotion

Publicity


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Personal Selling

Personal sellingItis oral communicationwith potential buyers of a product with the

intention of making a sale. The personal

selling may focus initially on developing arelationship with the potential buyer, but will

always ultimately end with an attempt to

close the sale.


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Objectives of Personal Selling

To do the entire job.

To serve the existing people.

To obtain new customers.

To obtain sales volume which contribute toprofit objective.

To keep personal selling expenses within

certain limit. To secure a given percentage of sales of

the overall sales target.


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Process of Personal Selling

Prospecting

PreApproaching

Demonstration

HandlingObjection

Closing

Follow Up


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Advertising

According to American Marketing Association

Advertising is any paid form of non-

personal presentation and promotion of

goods and services or ideas by an identifiedsponsor.


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Central Theme in Advertising

The Theme of Beauty.

The Theme of Health.

The Theme of Pride.

The Theme of Economy.

The Theme of Patriotism.


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Advertising Media

Factors in selection of advertising media:

Objective of advertising.

Media Circulation

The class of people.

Business Unit

Message to be sent The extent of competition.

The cost of space.


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Kinds of Advertising

Indoor advertising

Outdoor advertising

Direct advertising

Promotional advertising


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Sales Promotion

Meaning: Promotion means to push forward, to move forward

or to advance and idea. Sales promotion is an attempt to

increase the sales.

According to American Marketing Association

Sales promotion is those marketing activities other than

personal selling, advertising and publicity, that stimulate

consumer purchasing and dealer effectiveness such as

display shows, expositions, demonstrations and variousnon-recurrent selling efforts not in the ordinary routine.


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Purpose of sales promotion

Before promotional activities

After promotional activities


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Objectives of sales promotion

To increase buying response.

To increase sales efforts of dealers and

sales personnel.

To inform the public about new product, itsspecialties, attraction and advantages.

To create a favourable attitude towards

product.

To motivate sales force.


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Advantages of sales promotion

It stimulates an attitude towards the product.

It creates demand.

It gives direct inducement to the consumers

to take immediate action.

It is flexible. It can be used at any stage

during a new product introduction.


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Consumer sales promotion: Activities aimed atreaching the consumer at his place maybe called

as consumer sales promotion.

Various sales promotion schemes used at consumer

level are: sampling, coupons, demonstration,

contests, money refund offers, premium offers,

price off offers etc.

ConsumerSales

Promotion

Dealer SalesPromotion

Sales ForcePromotion

Kinds of sales promotion

D l l ti


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Dealer sales promotion

The activities aimed at increasing the interest

and enthusiasm of dealers and distributors

towards the manufacturers products is

called as dealer sales promotion.

Some of the dealer sales promotion devices

are: buying allowances, merchandiseallowances, price deals, push money, dealer

sales contests, gifts, co-operative ads etc

S f


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Sales force promotion

Salesmen are a major component in thechannel of distribution. Therefore to

increase the effectiveness of salesmans

efforts sales force promotion activities arecarried out.

Tools for sales force promotion are:

1. Bonus to sales force.2. Sales force contests.

3. Salesmen meeting and conferences.

Q li i f G d S l


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Qualities of Good Salesman

Knowledge

Of

PRODUCT

FIRM

CUSTOMER

COMPETITION

MARKET

SELLING

TECHNIQUES


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Publicity

Publicity is an act of making the product of

ones company known to the general and

specific public through the use of various

methods of publicity.

For ex: Public demonstrations, exhibitionsetc.

M k ti Ch l


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Marketing Channel

Marketing channels are a set of

inter-dependant organisations involved in

the process of making a product or service

available for use or consumption.

Channel Decisions The manufacturer is

required to take certain channel decisionsi:e he struggles between what is ideal.

Marketing Distribution Channel


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Marketing Distribution Channel

1. Manufacturer Consumer

2. Manufacturer Retailer Consumer

3. Manufacturer Wholesaler Retailer

Consumer

4. Manufacturer Agent Wholesaler

Retailer Customer

Fi Ki d f Fl i M k ti Ch l


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Five Kinds of Flows in Marketing Channel

1. Physical Flow

2. Title Flow

3. Payment Flow

4. Information Flow

5. Promotion Flow

D i i Ch l S t


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Designing a Channel System

Steps involved in designing a channel system

1. Formulating the channel objectives.

2. Identifying channel functions.

3. Linking channel design to product characteristics.

4. Evaluation of distribution environment.

5. Evaluation of competitors channel designs.

6. Matching the channel design to companyresources.

7. Evaluating the alternatives and selecting the best.

F l ti th h l bj ti


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Formulating the channel objectives

In formulating the channel objectives, firms expect

from channels:

1. Effective coverage of the target market.

2. Efficient and cost effective distribution.

3. Ensuring that consumers incur minimum exertion

in procuring the product.4. Partnering the firm in financing and

sub-distribution tasks.


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Thank You

By Neeraj Kulkarniwww.NeerajKulkarni.com
http://www.neerajkulkarni.com/http://www.neerajkulkarni.com/

making marketing decisions - marketing management

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