7/31/2019 109745_633626598620263750

1/48

MARKETING MANAGEMENT

7/31/2019 109745_633626598620263750

2/48

Topics

Introduction to Marketing concept, Evolution of Marketing and Customer

orientation

Marketing Environment and Evaluation of Market opportunities

Market Research & Marketing Information Systems

Demand forecasting and Market Potential analysis

Consumer buying process & Organizational buying behavior Pillars of Marketing- Target market positioning & Differentiation

Marketing Mix

Product Decisions- PLC

New product development process

Distribution decisions- Logistics & channel decisions

Promotion Decisions-IMC concept, communication tools

Personal selling & sales Management

Pricing decisions

7/31/2019 109745_633626598620263750

3/48

Marketing Concept

The Marketing concept arises out of the awareness that a business should

start with the determination of consumer wants and end with the

satisfaction of those wants. The concept puts the consumer at both the

beginning and end of the business cycle. The marketing concept has 4

major distinguishing features:

Consumer orientation: Emphasizes on the consumer and his need being

the 1st distinguishing feature of the marketing concept

Integrated management, with Marketing as the fulcrum: Integrated

management means that all the different functions of the business must

be tightly integrated with one another, keeping marketing as the pivot

Consumer satisfaction:

Realization of all organizational goals including profits

7/31/2019 109745_633626598620263750

4/48

7/31/2019 109745_633626598620263750

5/48

Market environment

Besides the marketing mix variables, one has to tackle another set of

variables that lie outside the control of the firm. These relate to the

environment. Environmental variables are referred to as the non

controllable variables of marketing while the marketing mix are referred to

as the controllable variables of marketing.

Factors covered under Environment analysis:(Macro environment)

a)Demographic envt b) Socio cultural envt c)Economic envt d)Political envt

e)Natural envt f)Technology envt g)Legal envt h) Govt policies

Environment that is specific to the business: The market/ the demand/ the

consumer/ the industry/ the competition/ govt policies specific to the

business concerned

7/31/2019 109745_633626598620263750

6/48

Market Research & Marketing Information Systems (MIS)

MIS benefits the company in the following ways:

Provides valuable market intelligence

Helps quick spotting of changing trends

Helps tap opportunities and build defences against threats

Helps implement all marketing action programmes

Helps deliver customer oriented marketing offers- all Ps of marketing mix

Helps product innovations

Helps reduce product failure

Supports channel management, channel choice, channel motivation andmulti channel marketing

Supports sales promotion

7/31/2019 109745_633626598620263750

7/48

Steps involved in designing and developing an MIS

Defining information needs

Classifying information appropriately and identifying whether it is for

planning, or implementation or control purposes

Evaluating the cost of collecting and processing the information and

comparing cost v/s benefits Identifying the sources of information

Designing the mechanisms & procedures for gathering, processing, storing

and retrieval of information

Deciding the frequency and timing of collection & supply of information

Processing, analyzing and interpreting the information and disseminating

it to the right persons at the right time

Monitoring, maintaining, reviewing and improving the system

7/31/2019 109745_633626598620263750

8/48

Marketing Research

Marketing research is the systematic, objective and exhaustive search for

the study of the facts relating to any problem in the field of marketing. It is

the research on the manifold problems of marketing. Its purpose is to aid

decision making in marketing. It is the systematic gathering and analysis of

information. Marketing research jobs can be classified in different ways

such as:

Routine problem analysis and research on routine problems

Research on short term and long term problems

Classification based on the actual subject of the research

7/31/2019 109745_633626598620263750

9/48

Subjects of Research

Research on consumer

Research on Market and demand

Research on product or brand

Research on competition

Research on distribution

Research on price

Research on advertising and promotion

Research on sales methods

7/31/2019 109745_633626598620263750

10/48

Steps involved in the Marketing research process

Defining the marketing problem and identifying the MR problem involved

Specifying the information required

Developing the research design and research procedure

Gathering the data/ information

Analyzing the information and interpreting it in terms of the problemsbeing tackled

Summarizing the findings

Preparing the research reports

7/31/2019 109745_633626598620263750

11/48

Demand forecasting and Market Potential analysis

Commonly used terms:

Market potential or industry potential

Company potential or sales potential

Market demand or Industry demand

Company demand or company sales possibilities

Market forecast or Industry forecast

Company forecast or sales forecast

7/31/2019 109745_633626598620263750

12/48

Consumer buying behavior

Factors influencing buyer behavior:

Personal factors: Age, Education, Economic position, status and self

esteem

Cultural factors: Religion, language, up bringing etc

Psychological factors: Beliefs, attitudes, motivation, perception

7/31/2019 109745_633626598620263750

13/48

The Buying process

Problem or need recognition

Awareness

Evaluation or comprehension

Attitude or feelings towards the product

Legitimate the course of action

Trial

Adoption of the product

Post purchase behavior

7/31/2019 109745_633626598620263750

14/48

STP

Benefits of segmentation to the marketer:

Facilitates proper choice of target market

Facilitates tapping of the market, adapting the product offer to the target

Makes the marketing effort more efficient and economic

Helps to identify less satisfied segments and concentrate on them

Benefits the customer as well

7/31/2019 109745_633626598620263750

15/48

Major bases for segmentation

Geographics

Demographics

Psychographics

Buyer behavior

Benefits

Volume of purchase

7/31/2019 109745_633626598620263750

16/48

Marketing Mix

4 Ps of marketing: extension of the same

Environmental variables are referred to as the non controllable variables

of marketing while the marketing mix variables are referred to as the

controllable variables of marketing

7/31/2019 109745_633626598620263750

17/48

PLC

Stages of PLC

Introduction or pioneering stage

Growth stage

Maturity stage

Decline stage

7/31/2019 109745_633626598620263750

18/48

BCG matrix: market growth rate / relative market share

High Low

High stars ?marks

Low Cash cows Dogs

GE d l k t tt ti / b i t th

7/31/2019 109745_633626598620263750

19/48

GE model: market attractiveness/ business strength

Strong bus. strength medium Weak bus. strength

High market

attractiveness

Strong: Invest to grow/

concentrate efforts on

maintaining strengths

Medium: Challenge

for leadership/

reinforce vulnerable

areas

Weak: specialize

around limited

strengths

medium Build selectively: Invest

heavily in attractive

segments/ build ability to

counter competition

Manage for earnings:

protect existing

program/ concentrate

investments where

profitability is good

Limited expansion or

harvest: Look for ways

to expand with out

risk. Minimize

investment

Low market

attractiveness

Protect and refocus:

manage for current

earnings/ concentrate on

attractive segments

Manage for earnings:

protect position in

most profitable

segments/ minimizeinvestment

Divest: Sell all time

that will maximize

cash value/ cut fixed

costs and avoidinvestment

7/31/2019 109745_633626598620263750

20/48

Product Decisions

New products are classified in to two groups:

New products arising out of technological innovations

New products arising out of market oriented modifications

7/31/2019 109745_633626598620263750

21/48

Stages in new product development

Generating new product ideas

Idea screening

Concept testing

Business/ market analysis

Actual product development Market test

Commercialization

7/31/2019 109745_633626598620263750

22/48

Factors responsible for success and failure of products

Success rate in new products is correlated to the presence of 3 critical

factors:

A unique and superior product idea that yields a real benefit to the

customer

Strong technical and production expertise A strong market orientation on the part of the company.

7/31/2019 109745_633626598620263750

23/48

Distribution decisions- Logistics and channel decisions

Physical distribution is the process of delivering the product to the

marketing channels and consumers. It encompasses the various activities

involved in the physical flow of the product from the product to the

consumer.

The importance of physical distribution are:

Ensures the physical flow of the product from the producer to the

consumer. Without this flow, marketing cannot take place.

Confers place and time utility on products

Helps build clientele

Where production locations and markets are distanced, physicaldistribution becomes all the more crucial

A promising area of cost of reduction

7/31/2019 109745_633626598620263750

24/48

Component functions of physical distribution

Planning the overall physical distribution system

In plant warehousing

Transportation

Receiving handling

Secondary transportation, secondary handling and sub distribution Inventory management at each level in the chain

Order processing and execution

Accounting and record keeping

communication

7/31/2019 109745_633626598620263750

25/48

Steps involved in designing a physical distribution system

Articulating distribution objectives and specifying the minimum service

level desired in product delivery

Finding out what the customers want in product delivery

Finding out what the competitors do

Keeping the cost of the system as low as possible, without sacrificing theguaranteed minimum service level

Keeping the system sufficiently flexible

7/31/2019 109745_633626598620263750

26/48

Managing the Distribution Function

Marketers realize that if they were to make the brands available in the

right size, at the right time and at the right price, the Indian consumer

can be motivated to buy it and consume it..

7/31/2019 109745_633626598620263750

27/48

Role of Middlemen or Intermediaries

a) Provide information about the market to the manufacturer

b) Maintain price stability in the market

c) Promotion of the products in his territory

d) Financing by providing the necessary working capital in the form of

advance payments for goods and services

e) Middlemen also take the title of the goods and services and trade in

their own name

7/31/2019 109745_633626598620263750

28/48

Channel Level

Decisions that a firm must take regarding the number of channel levels

appropriate to serve a given market

From zero-directly from the manufacturer to the customer- to as high as 4

to 5 levels involved in distribution.

Zero level in industrial product marketing, project marketing

7/31/2019 109745_633626598620263750

29/48

Firm adopts a one channel level when:

a) Number of customers is high

b) Customers in specific geographical area

c) Order lot size not uniform

d) Firm sells goods to wholesaler or a large dealer

2, 3 or even 4 levels in case of:

a) Consumer products

b) Customers spread across the country

c) Market is large

7/31/2019 109745_633626598620263750

30/48

Factors Influencing Distribution Decisions

Market Characteristics

Company Characteristics

Product Characteristics

Middlemen Characteristics

Intensity of Competition

Environmental Characteristics

7/31/2019 109745_633626598620263750

31/48

Terms and Responsibilities of Intermediaries

a) Price policy-the middlemen have to ensure that everyone involved gets afair and equitable deal

b) Payment terms-the manufacturing firm stipulates the mode and terms of

payment

c) Returns policy-this indicates the warranty that the manufacturer extendsto the intermediary

d) Territorial rights-the territorial jurisdiction should be spelt spelt out toavoid territory jumping

e) Mutual services and responsibilities-should be spelt out,particularly incase of franchised and exclusive agency channels

7/31/2019 109745_633626598620263750

32/48

Sales Promotion

Importance of sales promotion to a marketer is attributed to the following

reasons:

Fast growing market

Increasing competition among brands

The maturing and standardization of products

7/31/2019 109745_633626598620263750

33/48

Factors Contributing to Growth of Sales Promotions:

(a) Growing consumerism in India and an upwardly mobile Indian

market

(b) Heightened inter-firm rivalry within the industry

(c) Trades resistance to invest additional resources in the product mix of

different companies

(d) Fragmentation of viewers and readers arising out of multiple

television channels, newspapers and magazines

(e) The mass media cost has been on the rise and most companies find

sales promotion as a more cost effective alternative

(f) With technologies and products getting standardized, differentiation

between firms has got blunted and price wars have now become a

reality in most consumer goods

7/31/2019 109745_633626598620263750

34/48

Sales Promotion Helps

Helps in securing trial and defending shelf space against competition;

(ii) Smoothens out the manufacturing capacities of firms in such a way

that the peaks and the valleys are minimized;

(iii) Provides opportunities to manufacturers to reach out to market

segments with differing price sensitivity;

(iv) Adds excitement to the in-store merchandizing of consumer goods;

(v) Motivates trade to keep more and push more of those brands that are

on promotion

7/31/2019 109745_633626598620263750

35/48

Personal selling and Sales Management

Personal Selling

In today's world marked by complex technologies, and multiple choices,

the customer is increasingly becoming dependent on the salesperson

The customer wants to be sure that he/she is getting value for his or hermoney

The salesperson provides competitive product information to the

customer, and also reassure the customer regarding price and service

7/31/2019 109745_633626598620263750

36/48

Personality and Motivation Profile of an Effective Salesperson

The personality traits required by a good salesperson are:

Dominance-assures assertiveness

Achievers- Effective salesperson are high achievers

Affiliation-Effective salesperson show moderate affiliation

Creativity-Effective salespeople are creative people

Exhibitionism-Involves taking legitimate pride in achievements and

sharing experiences with others

Problem solving-Effective salespeople have been found high on problem

solving

7/31/2019 109745_633626598620263750

37/48

Role of Salesperson

Diagnostic-salesperson finds cause of a problem

Analyst-analyze customer needs and market trends

Information provider-Role of an intelligence agent

Strategist- Evolve a strategy to emerge as a market leader

Tactician-Evolves tactics to win over the customer or enhance dealer

satisfaction

Change agent-Introduces new product ideas and influences the life styles

and consumption patterns

7/31/2019 109745_633626598620263750

38/48

Selling Theories

Stimulus Response Theory: some of the stimuli the salesperson has

control over are:

Self-physical appearance, mannerism, voice modulation, interpersonal

skills

Price concessions

Announcement of price changes

Preferential treatment to important buyers

7/31/2019 109745_633626598620263750

39/48

Product Oriented Selling:

It is the responsibility of the salesperson to make the prospect aware of:

(a) technological / scientific developments

(b) how these can be useful to him/her

(c) make the prospect aware of his/her needs

7/31/2019 109745_633626598620263750

40/48

Salesperson and Customer Perceptions in a Typical Sales Situation

Salesperson Objective & Role

Objective

Hook the customer

Process

Romanticize the customer

Create high expectations

Over promise

Bulldoze objections if need be

Throw weight, if required

Quit, if going gets tough

Pusher

Result

Sales order not necessarily with the

desired profit margin

Post Sales

Keep assuring customer

Indifferent/ I dont care

Justify delays

Customer Objectives & Concern

Solution to my problem

Do you understand my needs ?

Do you understand my budget constraints ?

Can I trust you ?

Will you deliver in time ?

Will you stay with me in my hour of need ?

Evaluate

Waiting for order to be delivered

Expectant

Follow up with salesperson

Tension builds up

Frustration

Given a choice I will never buy from you

7/31/2019 109745_633626598620263750

41/48

Relationship Intensifier

Initiate contact with the customer

Know his business and background

Listen empathetically

Show appreciation

Involve customer in presentation Understand customers objection

respond immediately to service requests

Follow up on customers service needs with other concerned individuals

and departments in your company

Avoid throwing weight and jargons in your presentation

Accept responsibility for failure

Plan for future

7/31/2019 109745_633626598620263750

42/48

Selling Process and Skills Required

The selling process is a five stage process:

1. Opening of a call-effective salesperson is sensitive to verbal and non-

verbal message which the prospect gives

2. Need exploration-this requires the use of probing and sensitivity skills

3. Presentation-should be meaningful and convincing

4. Managing objections-these should be perceived as opportunities for

creative thinking to nail competition

5. Closing the call-provide the prospect sufficient reason to buy the product.The skills used here are explanatory and probing

7/31/2019 109745_633626598620263750

43/48

Role of Integrated Marketing Communications

Marketing communications

are the voice of the brand and are a meansby which it can establish a dialogue and build

relationships with consumers. allow marketers to inform, persuade, incent,

and remind consumers directly or indirectly

can contribute to brand equity by establishingthe brand in memory and linking strong,favorable, and unique associations to it.

7/31/2019 109745_633626598620263750

44/48

Role of Integrated Marketing Communications (Cont.)

Consumers can be told or shown how and why a productis used, by what kind of person, and where and when;

Consumers can learn about who makes the product andwhat the company and brand stand for

Consumers be given an incentive or reward for trial or

usage Brands can be linked to other

People Places Events Brands Experiences Feelings Things

7/31/2019 109745_633626598620263750

45/48

Pricing decisions

Factors influencing pricing: (Internal factors)

Corporate and marketing objectives of the firm

The image sought by the firm thru pricing

The characteristics of the product

Price elasticity of demand of the product

The stage of the product in the PLC

Use pattern and turnaround rate of the product

Costs of manufacturing and marketing

Extent of distinctiveness of the product and extent of differentiation

practiced

Composition of the product line of the firm

7/31/2019 109745_633626598620263750

46/48

External factors:

Market characteristics( demand, customer and competition)

Buyer behavior in respect of the product

Bargaining power of major customers

Bargaining power of major suppliers

Competitors pricing policy

Govt controls and regulations on pricing

Other relevant legal aspects

7/31/2019 109745_633626598620263750

47/48

Objectives which Firms seek in pricing

Profit maximization in short term

Profit optimization in long term

A minimum ROI

A minimum return on sales turn over

achieving particular sales volume

Achieving a particular market share

Deeper market penetration

Enter new markets

Keeping competition out or under check

Parity with competition

Providing commodities affordable by weaker sections

7/31/2019 109745_633626598620263750

48/48

Categories of pricing methods

Cost based pricing: under which one can have :a)Mark up pricing or cost

plus pricing b)Target Rate of Return pricing

Demand based pricing: under which one can have: a) what the traffic can

bear pricing b)Skimming pricing c) Penetration pricing

Competition oriented pricing

Value pricing

Tender pricing

Affordability based pricing

Differentiated pricing