The Portable MBA

in Marketing Alexander Hiam & Charles Schewe

Presentation By:Anshul PareekBhola SinghKartik MysoreLokesh VasnaniMayuri NegiNichay Garg

Marketing

All the new direction in management thoughts and practices are marketing. Quality marketing program align manufacturing and services standards with costumer preferences & competitors capabilities.

Peter Ducker Say's

Marketing is so basic it can not be considered a separate function its the whole business seen from the point of view of its result that is its costumer point of view.

Essence of Marketing

First Last Always

Idea of Marketing is only since 1950's

Every organization must do marketing to survive

Companies should define them selves in terms of the benefits they provide to the costumers.

Marketing is the sum total of activities that keeps costumer focus and ensures that companies offerings are valued by the costumers

4 P's in Maketing

Product (Focal point of marketing mix):- more than goods services i.e., desired or sold. It involves planning, R&D, Services(installation & maintenance)

Price:- It is the cost or what the buyer must give up to receive the product.

Place : Product is available where and when it is wanted.

Promotion:- Most visible to costumers. It is the entire field of sales communication, sales promotion and public relation.

3 More variables of Marketing

1S

Services

2C's

Costumer Sensitivity

Convenience

Rank of Elements in Marketing Mix are:

1) Costumer Sensitivity

2) Product

3) Convenience

4) Service

5) Prize

6) Place

7) Promotion

To manage costumer sensitivity manager needs to manage attitude of all employees whose work affect costumer in any way

Planning

Strategic Plan

Tactical Plan

Marketing participate in organizations Strategic Process

Approaches

Top down Approach(general)

Bottom Up (is now)

More marketing oriented

Focus & Flexibility

Focus : Determining what you do best& building on it

(it originates at the top)

Flexibility: Drafting possible scenario for the future

Environmental Trends

External Internal Analysis

Alternative Plans

Situational Analysis

Strength & Weakness

Not only tangible and observable but also intangible resources

Skills of persons and organizations image.

THE ENVIRONMENT MARKETING

KEY FORCES OF EXTERNAL FORCES

• Administrative evnironment• Technology environment• Political environment• Economic environment• Social and cultural environment

ELEMENTS OF CULTURE

• Language• Religion • Values and attitude• Ethics• Social organisation

Marketing Research & Information – Figuring out what customers want

Successful interpretation is crucial.

Management of huge data and accuracy to be maintained.

Excellent research achieved by – a)increasing sources info b)designing better studies c) managing marketing info more aggressively d)reporting info clearly e)reducing errors

Survey results seen and got through – books and journals,public documents,superiors,Employees,Consultants and research firms and employees.

Research info positively repellant for managers.

Types of Sources-• Informal Sources – supplemented by other resources. Example:

Sony,American Express,P&G

• Formal Sources – got from primary or original resources.Example-Customers

• Formal Procedures-competitors annual reports,employment ads,technological advancements.

• Newspapers and magazines are the types of sources which give us weekly research data.

• Scientific papers,speeches,displays and brochures also carry market research data.

Survey Requirements-

• The WHAT- 1) Conducting a Q&A session. 2) Systematic Observation

• The WHY- 1) To measure market potential. 2) Evaluate new products.

• HOW MUCH- the amount of money spent on survey(25%-50% usually)

• Criterion of the survey should be fixed.

Types of Research Firms-

Syndicated Services- AC nealson made a survey on demography of TV audiences.

Custom Research Firm-designs customized survey.

Speciality Line

Field Research firm

Field research interview firm

Stages of Market Research- Stage 1-Formulating a problem(toughest) goals set only after problem

identified. “NEED TO KNOW” from Nice to know associated with mangers very crucial here.

Stage 2-Determine needs,information and sources Hypothesis proved or disproved.

Stage 3-Select the research techniqueobservation,experiment and survey.

Stage 4 –Sample design1)Selecting Respondents 2)Select sample only.

Stage5 Process and analyze the data.

Marketing information defines customer needs.

Market Research Revenue-• The research industry is worth U.S. $2.5 Billion

• Inflation Adjusted revenue fell down in 1990.

• There was an 8% growth rate in 1980’s.

• Managers have a love & hate relationship with the research industry which has resulted in an extremely fluctuating growth rate.

• Useful for managers even if not directly responsible.

Profiling Markets and Forecasting Sales-The art and science behind the numbers

• Forecasting Measuring the evil.

• To develop sound strategy for a product1) Description 2)Understanding 3) Prediction.

• Complete picture of customer needsWHO,WHEN,HOW,WHERE,HOW

• DemographicsAnalize trends

• Forecasting is toughhuman behavior is slippery.

• Potential for exchange is most important for markets to exist.

• Mass statistics describe market demographics.

An instance-

In 1990, the population of USA was 250 million.

The baby boomers spent 10 times more on their first child.

Couples have a salary of more than US $35,000(dual career couple)

2/3 rd women return to work after child birth.

Older people increasing in countries like Japan,China.

The different markets are 1)Youth market 2)Baby boomers 3)Middle agers 4)Elderly

Baby boom created demographic bulgehousing market to job opportunities affected.

$60-200elderly market share(spend and don’t pass over).

Sweden 80% women are in workforce.

Segmentation Positioning and Targeting

Segmentation

• Why segmentation ?

• Can the Market be identified and measured

• Is the Segment large Enough

• Is the Market Reachable

• Character of the Market

(does the market change quickly)

Points for Segmentation

Basis of Segmentation

• Demography-age, sex, marital status

• Socioeconomic- education, income, occupation

• Geographic- location, nation, state

• Lifestyle- lifestyle of the consumer

• Occasion- birthday, marriages, retirement

• Knowledge of brand

How to Carry Out Segmentation

• Determine the market boundary

• Deciding the segmentation variable to be used

• Collecting segmentation data-research

• Develop a profile

• Target the segment to serve

• Design the marketing plan

Strategies

• Concentration- focuses on single group

• Differentiated- each customer is unique

Product Development-the business of innovation

“Good ideas don’t begin around the conference table. They begins with the consumer”.

by Charles hooper

Executive vice president And

chief operating officer,

helene curtis

Product life cycle

•Product Inception

•Development Six categories of new product using booz , allen and

hamilton are:1. New to the world products

2. New product line

3. Additions to existing product line

4. Improvement in or revision of existing product

5. Repositioning

6. Cot reduction

Organising the new product

Stages in the development of new productGenerating idea

Screening ideas

Developing and testing the concept

Business analysis

Product development

Test marketing

Commercialization

Factor for making product harder to initate

• Product form

• Product function

• Product intangibles

• Pricing

• Promotion

• Distribution

• Firm characteristics

• Product management strategies

• Full Versus Limited Line

• The Line - Filling Strategy

• Line and Brand Extension strategies

• Line – Stretching Strategies

• Repositioning strategies

• Product deletion strategies

• Maturity and decline

Product management( Birth ,death and resurrection)

The Nature of Pricing

• Price: Any transaction for exchange of something of value (money) for some amount of satisfaction.

• Price: Rent, Fare, Interest, Premium, Bribe

• Managers: Less importance to price

• Consumers: Most important variable

• Services: Difficult to price than goods

Setting Prices• Sales Objectives:

1. Sales Growth

2. Maintain Sales

3. Survival

• Profit Objectives:1. Profit Maximization

ROI = 𝑷𝒓𝒐𝒇𝒊𝒕

𝑰𝒏𝒗𝒆𝒔𝒕𝒆𝒅 𝑪𝒂𝒑𝒊𝒕𝒂𝒍

• Competitive Objectives:

• Price set to meet or prevent competition.

• Example: Computer Industry: IBM vs Compaq

• “Price War”

Pricing Strategies

Cost BasedDemand

BasedCompetitor

Based

1. Cost Based:

• Total Fixed Costs (TFC): Costs do not change with quantity• Examples: plant & equipment, depreciation etc.

• Total Variable Costs (TVC): Costs varies with quantity• Examples: Raw material, fuel etc.

• Total Costs(TC)= TFC + TVC

• Marginal Cost (MC): Cost of producing one extra unit

• Formula Pricing Strategy:

• To calculate price covering all costs with leaving some profit

• Cost-Plus Pricing Strategy:

• List price determined by adding profit to cost per unit

• Appropriate when demand is known and stable• Risky : Costs change rapidly, marketer cannot know whether

price is in line with consumers’ perception about value.

• Affected by intermediaries (distributors, retailers): Markup Pricing

• Target Return Pricing Strategy:

• Marketer seeks to obtain targeted percentage return on capital used to produce and distribute product.

• Breakeven Pricing Strategy:

• Volume at which no profit or loss incurred

• BEP : enough units sold to cover TFC & TVC

Breakeven volume (units)= 𝑇𝐹𝐶

𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒−𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡/𝑢𝑛𝑖𝑡

• Experience Curve Pricing Strategy:

• Average total cost decreases when more units are produced.

85% experience curve

2. Demand-Based Pricing Strategy:

• As Demand increase price upper limit increase

• Very high price, no exchange

• Prestige Pricing Strategy:

• High Price, High sales

• Price Elastic strategy:

• Changes in quantity purchased relative to change in price

1. Elastic demand: High percentage of quantity sold2. Inelastic demand: Small Percentage of quantity sold

3. Unitary demand: Same Percentage Change in Price & quantity

• Price Range strategy: People refrain when price is low or high beyond limits

3. Competition:

• Strategic Pricing:

• More context specific

• Different for new or old products

• New Product Introductions:

1. Skimming approach- Initially high price and then lowered

2. Penetration strategy: low price, high volume

• Pricing when Intangibles are important:• Marketer identifies all benefits that buyer will receive in

exchange

• Pricing in Oligopolies:

• One Company sets prices for entire industry, Dominate

• Pricing when buying is habitual

• Stick to traditional price- change in size and content

• Pricing to reflect buyer behavioral attitudes

• Consumer faces confusing choices

Pricing and Product Life Cycle

Value Pricing and Marketing Concept• Giving more for less

Place and Time- The distribution function

• Distribution: Movement of products in all stages of development, resource procurement through manufacturing to final sales

• Distribution Channels: Relationship, Business partners, manufacturers, wholesalers, retailers

• Reduce distance between buyers and sellers

• Intermediaries: • Experts in distribution activities

• Efficient and effective movement

• Middlemen, wholesalers

• Sorting, concentration and dispersion

• Services provided by Intermediaries:1. Informal marketing research

2. Buying

3. Selling

4. Bulk buying

5. Promotion

6. Transportation

7. Storage

8. Financing

9. Risk Bearing

10. Management services

Product Distribution- without intermediaries

Product Distribution- with intermediaries

•Channels of Distribution:

Resource Procurer

Producer Consumer

Product distribution channels-consumer

Product distribution channels- Industrial

Distribution Strategy

• Strategic and Tactical decisions

• Main Factors:• Market Coverage• Channel control

• Costs

PROMOTION• TV ads, Radio, Print ads, billboards, contests, coupons, direct

mail

• Objectives: • Informing• Persuading• Reminding

• Shifts Demand Curve

• Advertising

• Direct Marketing

• Personal Selling

• Sales Promotion

• Public Relations

THANK YOU