marketing sxc second semester

8/2/2019 Marketing SXC Second Semester

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Marketing Concept

Marketing is a process through which themarketer tries to identify the needs and wants of

the consumers or society at large and thenconvert them into tangible products orservices in order to deliver them back to theconsumers against some consideration in asocially responsible manner.


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Want: Specification of Need.

Need is more Generic

Want is Specific Marketing involves Transactions, Exchange and

building Relationships (Customer-Marketer/Brand)


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Societal Marketing

Marketing with Long term social objective andmission.

Time Dimension: Refers to Environmental aspectsof product usage.

Breadth Dimension: Refer towards ensuringprotection of interest of the non-user of the

product.

Social Marketing Marketing Ideas towardsremoving social evils and taboos


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Nature, Scope and Importance

Marketing is Flexible, Soft and Matching concept

Marketing is what business is all about

Marketing is about ONE BIG IDEA

Creativity regarding Product Development

Creativity regarding Technology Development

Creativity regarding Marketing Strategies

Scope of Marketing beyond common understandingsregarding Marketer, Product and Market


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Building Customer Relationships and Equity

Developing Tie-ups: Co-branded cards

Creating Loyalty Programs

Delighting your consumer Retaining your customer

Identifying High-Value/Return segment and serve

Product Merchandising


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Emerging Dimensions of Marketing

Rural Marketing (Fortune lies at the Bottom of thePyramid) India specific

Digital Age

Global Market Place Social Responsibility

Services


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Consumerism

Consumerism in short refers to the socialmovement that seeks to increase the rights andpowers of consumers.

Introduction of Bill of Rights by PresidentKennedy in 1962 towards seeking:

Right to Choice

Right to Information Right to Safety

Right to be Heard


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Traditional Rights of Sellers:

Right to introduce any product

Right to ask any price

Right to use any message accompanying the product

Right to use any buying incentive scheme

Right to spend any amount to promote the product

Traditional Rights of Buyers:

Right not to buy any product offered for sale

Right to expect the product to be safe

Right to expect the product to perform as claimed


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Marketing Environment

Macro:

Demographic

Economic

Natural Political

Technological

Cultural


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Micro:

Company

Suppliers

Intermediaries

Customer Markets Competitors

Public


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Basic SWOT Analysis

EXPLOIT COUNTER/CHALLENGE

OVERCOMEWEAKNESS

AVOID

Strength

Weakness

Opportunities Threats


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Designing Business Portfolio

BCG Matrix/SBU Analysis

STARS (Invest) ? / PROBLEM CHILDS(Adopt RemedialMeasures/Rectify)

CASH COWS (Harvest) DOGS (Divest)

HighMarketGrowthRate

LowMarketGrowthRate

High Relative Market Share Low Relative Market Share


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Adopting Competitive Strategies

IgorAnsoffs Product Market Expansion Grid

MarketPenetration

ProductDevelopment

MarketDevelopment

Diversification

ExistingMarkets

New Markets

Existing Products New Products


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Market Segmentation

Market segmentation refers to the process ofclassifying or segmenting a market into certainuniformity or homogeneity with respect to theconsumers in that segment. The consumer may on thebasis of various behavioural characteristics (buyingpatterns) that are common to that zone or on accountof some inherent features possess such uniformity orhomogeneity.


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Market segmentation methods may be of followingtypes:

Geographical segmentation

Demographic segmentation

Geo-Demographic segmentation Buyer behaviour segmentation

Benefit segmentation or USP

Psychographic or lifestyle segmentation


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Product Differentiation:

Product differentiation is on the other hand a processof making a product different on some small accountin order to carve in niche in a highly competitivemarket segment.


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Adoption Process of New Product

Awareness Interest Evaluation Trial Adoption

Need RecognitionInformation

SearchEvaluation ofAlternatives

PurchaseDecision

Post-PurchaseBehavior

COGNITIVE AFFECTIVE CONNATIVE


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Consumer Behaviour

Refers to the process of studying how various stimuliaffect the decision making process of consumers inchoosing a particular brand.

Marketing and

other Stimuli

Buyer choiceand decision

process

Buyer

Response


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Factors influencing Individual Buying Behaviour

Cultural Culture Sub-Culture Social Class

Social Reference Groups Family Roles and Status

Personal Age and Family Life Cycle Stage Occupation Economic Situation Lifestyle Personality and Self-concept

Psychological Motivation Perception

Learning Beliefs and Attitudes


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Marketing Mix

Marketing Mix as a concept refers to the variousingredients and components that give shape to thepackage or the product portfolio offered by themarketer to its target audience. These ingredients,

which form the package is also popularly known as 4 Pin marketing management. In other words, Product,Price, Place and Promotion form the package of themarketer.


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Components of Marketing Mix

Product

Product portfolio

Design, Shape, Size

Packaging

Branding Product Merchandise

Price

Resale Pricemaintenance

Pricing strategies

Channel margin

Place

Channel design andstructure

Logistics management

Physical transportation

Promotion

Advertisement

Personal selling

Sales Promotion

Publicity


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Service

Reasons for Growth of Service Industry

Growing complexity of products

Changing social order

Urge for more leisure and pastime

Women joining workforce

Increasing work related stress

Features of a Service

Intangibility

Heterogeneity

Inseparability

Perishability

Non-ownership


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Measures for overcoming such drawbacks associatedwith Service

Make Service look more tangible

Use Automation where mechanisation can replace thehuman component associated with the service

Use Database, Training and Policy guidelines in caseswhere human component is indispensable

Ensure better matching of demand and supply toarrest perishability

Make use of staggered payment plans to manage theissue of non-ownership


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Marketing mix of a Service (7 P)

Product Price (Differential pricing place, time and customer

differential, Diversionary, Guaranteed, Discount orHappy hour pricing)

Place

Promotion

People

Process (Delivery system)

Physical evidence (Essential and Peripheral)


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Product Mix Decisions

Width of the Portfolio: Number of Product lines

Length of the Portfolio: Number of Product items perline

Depth of the Portfolio: Number of Product variationsper item

Strategies:

Line Stretching: Upwards and Downwards

Line Filling

Line Pruning


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New Product Development process

Reasons for development of New Product

Changing taste and preferences

Technological advancement

Government policies

Various forms of New Product

Re-launched Product

Re-formulated Product

Product in new package New to the market

New usage

Totally new product


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Steps in New Product Development Process

Idea generation Concept development

Initial feasibility study

Concept testing Product development

Product testing

Market testing

Commercialisation


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New Product formations

Re-launchedProduct

Re-formulatedProduct

ProductReplacement

Re-Merchandising ProductAugmentation

RelatedDiversification

New Usage ExtensiveDifferentiation

ExtensiveDiversification

ExistingMarket

Strengthened

Market

New Market

Existing Technology Improved Technology New Technology


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Product Life Cycle

Product life cycle refers to the various stages in thelife of a successful product. A successful productusually passes through five distinct stages in its life,from product planning and development,

introduction, growth, maturity to decline. Thesestages through which a successful product usuallytravels in course of its entire life span is known as thelife cycle of a product.


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A successful product usually passes through fivedistinct stage in its life.

Product planning and development

Introduction / Market pioneering stage

Market growth stage

Market maturity stage

Market decline stage


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Strategies adopted by Marketers

Core Product Skimming /Penetration Selective Heavy

Extend Line Competitive Extensive Scaled down

Renovate Discount New/VirginMarkets

Heavy

Phase Out Flexible Selective Minimal

Introduction

Growth

Maturity

Decline

Product Price Place Promotion


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Limitations of Product Life Cycle Theory

Considers Universality of Market

Considers Universality of Brand

Price

Any product in the market, whether tangible or intangible,signifies some kind of utility being attached to it and isusually marketed with an objective to provide this utility tothe target consumer. This utility, when translated in

monetary terms become a price. However Utility maycreate some ambiguity in understating pricing variations.Therefore Value may provide a better replacement andunderstanding of the price structure of products.


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Factors influencing Pricing Decisions

Internal Factors

Objective of the Firm

Product elastic to price

Manufacturing policy(Scale and Technology)

External Factors

Demography of themarket

Consumer buying pattern Existence of Price Cartel

Competitors Price

Government restrictions ifany


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Pricing Strategies

Cost Based:

Cost plus/Mark-up

Marginal Cost

Demand Based

Skimming

Penetration

What the traffic can bear

Monopolistic price competition

Competition Based

Going rate

Discount

Premium

Perceived Value Pricing

Psychological Pricing/Odd Value Pricing


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Resale Price Maintenance

Resale price maintenance refers to the practice

adopted by the marketer towards specifying the finalprice at which the product should be sold to the finalconsumer. The basic objective of the manufacturer isto implement control over the prices at which the

retailer resell their products. Apart from control, thepractice of resale price maintenance also instil somesense of confidence among the consumers andimprove the image of the brand because huge

disparity among the prices of the same product is notexperienced by the consumer when buying fromdifferent retailer.


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Resale price maintenance may be implemented in anyof the three forms:

A suggestive maximum price.

A suggestive minimum price.

A suggestive fixed price.

In Indian context the practice of suggesting minimumprice is not allowed, especially in life saving drugs. This

is in view of the theory that under monopolisticsituation suggesting minimum price would amount togiving absolute freedom to the retailer in effectingconsumer exploitation.


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Marketing Channels

Functions rendered by channel members:

Information

Promotion

Contact

Matching

Negotiation


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Factors to be considered while designing an effectivechannel

Objective of Distribution (Reach)

Nature and Characteristic of the product

Competitors channel policy

Availability of funds

Extent of control the firm intend to impose ondistribution network

Legal parameters


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Retailing

Role of large format retailing

Adds to the brand image

Brings greater sense of trust and confidence

Gives better exposure and visibility

Builds better brand awareness

Helps in providing better schemes and bundled offers


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Logistics and Supply chain management

Warehousing Inventory management

Transportation

Logistics information system


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Marketing Communication Mix

The priorities and combination of the components ofPromotion mix is determined by the following issues:

Availability of funds (Plenty or Scarce)

Extent of dispersion of customers (Wide orconcentrated)

Nature of Product (Complex, High Unit Price or

simple standardised and Low unit price) Stage of Product Life Cycle


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Advertisement may be defined as any form of paid,non-personal presentation of products in any mediumhaving an identified sponsor

Publicityon the other hand refers to any form of non-paid, non-personal presentation of products in anynews item or editorial comment having unidentified

sponsor

Public Relation refers to the management functionthat determines the attitudes and opinions of

organisations publics, identifies its policies with theinterest of its publics and then formulates andexecutes a program of action to earn theunderstanding and goodwill of its publics


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Steps in Developing effective marketing communication

Identifying the Target audience Determining communication objective

Designing the message (AIDA) appeals, structure,format

Choosing the right media reach, frequency, coverage,budget and competition

Selecting the message source brand endorsers

Collecting feedback

S l P i


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Sales Promotion

Pull(Consumer Promotion) and Push(TradePromotion) Strategy.

.

Consumer Promotion Tools

DiscountsCouponsSamplesCash refund offersDemonstrationsPremium offersSelf liquidating offersBundled offers

ContestsGiftsPrice-offs

Trade Promotion Tools

MerchandisingSponsoring major Nationaland International eventsParticipation in Trade fairsand ExhibitionsDealer level contests

marketing sxc second semester

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