pre-ph.d. notes for marketing
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8/3/2019 Pre-ph.d. Notes for Marketing
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MARKETING PROCESS
1.Analysing marketing opportunities
2.Selecting target markets
3.Developing marketing mix
4.Managing the marketing effort
1.Analysing marketing opportunities
1.Marekting Information System
2.Marketing Research System
3.Marketing environment PEST
2.Selecting target markets
1.Segmentation
2.Target Marketing
3.Positioning
3.Developing marketing mix
1.Product
Line,mix,depth,consistency
Branding, Brand Extension
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Packaging
New Product development process
Product life cycle
2.Price
3.Place
4.Promotion mix- AD,SP,PS,PR,DR
4.Managing the marketing effort
1.Markeing Organisation
2.Marketing Control
1.Annual Plan control
2.Efficienty control
3.Profitability control
4.Strategic control
BRANDING
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A BRAND IS A NAME,TERM, SIGN, SYMBOL, DESIGN OR A COMBINATION OF THEM INTENDED TOIDENTIFY THE GOODS OR SERVICES OF ONE SELLER OR GROUP OF SELLERS AND TODIFFERENTIATE THEM FROM THOSE OF COMPETITORS.
WORLDS MOST 10 VALUABLE BRANDS
COCO-COLA MARLBORO IBM MCDONALDSDISNEY SONY KODAK INTELGILLETTE BUDEWISER
BRAND-IS THAT PART OF THE BRAND THAT CAN BE VOCALISED-BUSH,ANACIN,COLGATE,
A BRAND MARK IS THAT PART WHICH CAN BE SEEN BUT IS NOT UTTERABLE.
(FEVICOL,CAMLIN,ASIAN PAINTS,BOMBAY DYEING)
A TRADE MARK IS A LEGALLY PROTECTED BRAND
CHARACTERISTICS OF GOOD BRAND NAME
1.IT SHOULD BE EASY TO PRONOUNCE, RECOGNISE AND REMEMBER
2.IT SHOULD BE ASSOCIATED WITH AN ATTRACTIVE PICTURE OR IMAGE, SO THAT IT GETS
RECORDED IN THE HUMAN MIND AND WILL FACILITATE RECALL.
3.IT SHOULD SUGGEST SOMETHING ABOUT THE PRODUCT LIKE ACTION, COLOUR, TYPE , ORTHE BENEFITS DERIVED IN USING THE PRODUCT.
E.G., STOPACHE,QUICKFIX,DUROPLY,BAND-AID, GROMOR,SRINGAR ETC.,
4.IT SHOULD GIVE THE RIGHT CONNOTATION TO THE BUYER. (KOOLAIR , SUNFLAME)
5.IT SHOULD NOT CARRY POOR MEANINGS IN OTHER COUNTRIES AND LANGUAGES
SEARCHING FOR BRAND NAMES - METHODS
1.ASSOCIATION TESTS: WHAT IMAGES COME INTO MIND
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2.MEMORY TESTS- HOW WELL IS THE NAME REMEMBERED
3.PREFERENCE TESTS-WHICH NAMES ARE PREFERRED
BRAND EXTENSION/LINE EXTENSION
BRAND EXTENSIONS- A COMPANY MAY USE ITS EXISTING BRAND NAME TO LAUNCH NEWPRODUCTS IN OTHER CATEGORIES.
LINE EXTENSIONS - CONSIST OF INTRODUCING ADDITIONAL ITEMS IN THE SAME BRAND NAME
SUCH AS NEW FLAVOURS, FORMS , COLOURS, ADDED INGREDIENTS, PACKAGE SIZES,
ADVANTAGES OF THESE EXTENSIONS1.ESTABLISHES THE PRODUCTS QUALITY
2.MUCH HIGHER CHANCE OF SURVIVAL THAN NEW BRAND LAUNCHES
3.SAVING HUGE NEW BRAND LAUNCHING EXPENSES
DISADVANTAGES OF THESE EXTENSIONS
1.BRAND NAME LOSING SPECIFIC MEANING
2.MIGHT DAMAGE RESPECT FOR ORIGINAL PRODUCT
3. MAY BE INAPPROPRIATE TO THE NEW PRODUCT
4.BRAND MAY LOSE ITS SPECIAL POSITIONING IN THE
CONSUMERS MIND THROUGH OVEREXTENSION
5.BRAND CANNIBALISATION.
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BRAND NAMES WHICH HAVE BECOME GENERIC NAMESEXAMPLES
NYLON, VASELINE, FIBREGLASS, THERMOS, ASPIRIN,KEROSINE, LINOLEUM, CELLOPHANE,ESCALATOR, ZIPPER,JEEP ETC.,DECOLAM, DALDA.XEROX,
CHOICES IN SELECTION OF A GOOD BRAND NAME1.INITIALS/ACRONYMNS :
2.INDIVIDUAL NAMES WITH NUMBERS:VICKS ACTION-500, TIK-20,
3.PERSONAL/FAMILY OR FOUNDER NAME:JOHN BOYD DUNLOP
4.GEIOGRAPHICAL/HISTORICAL NAMES;
5.PART OF COMPANYS NAME-
6.COMBINATION OF TWO WORDS- FAIR & LOVELYTIPS&TOES,
7.ANIMALS- KINGFISHER,TORTOISE
TOP INDIAN BRANDS
COLGATE BATA PONDS DETTOL BRITANNIA
PHILIPS VICKS IODEX RIN GODREJ
TATA LIFEBUOY DALDASURF HORLICKS
AMUL ARIEL LUX NIRMA REYNOLDS
MRF TITAN ANACIN VIP EVEREADY
J&J BAJAJ PARLE BAND-AID WHIRLPOOL
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COCA-COLA BPL VIM GLAXOCOMPLAN
DABUR CINTHOL ATLAS TOPAZ THUMS-UP
SONY RASNALIRIL PEPSI SUNLIGHT
HERO TVS CERELAC MAGGI RED LABEL
DHARA KWALITY BATA DETTOL CADBURYS
HAWKINS HORLICKS DUNLOP PONDSPAARACHUTE
USHA MAGGI LAKMENESCAFE THUMS-UP
ROBIN BLUE BURNOL KORES HMT ANCHOR
BRANDING
A BRAND IS A NAME,TERM, SIGN, SYMBOL, DESIGN OR A COMBINATION OF THEM INTENDED TO
IDENTIFY THE GOODS OR SERVICES OF ONE SELLER OR GROUP OF SELLERS AND TO
DIFFERENTIATE THEM FROM THOSE OF COMPETITORS.
WORLDS MOST 10 VALUABLE BRANDS
COCO-COLA MARLBORO IBM MCDONALD SDISNEY SONY
KODAK INTEL GILLETTE BUDEWISER
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TOP INDIAN BRANDS
COLGATE BATA PONDS DETTOL BRITANNIA
PHILIPS VICKS IODEX RIN GODREJ
TATA LIFEBUOY DALDASURF HORLICKS
AMUL ARIEL LUX NIRMA REYNOLDS
MRF TITAN ANACIN VIP EVEREADY
J&J BAJAJ PARLE BAND-AID WHIRLPOOL
COCA-COLA BPL VIM GLAXOCOMPLAN
DABUR CINTHOL ATLAS TOPAZ THUMS-UP
SONY RASNALIRIL PEPSI SUNLIGHT
HERO TVS CERELAC MAGGI RED LABEL
DHARA KWALITY BATA DETTOL CADBURYS
HAWKINS HORLICKS DUNLOP PONDSPAARACHUTE
USHA MAGGI LAKMENESCAFE THUMS-UP
ROBIN BLUE BURNOL KORES HMT ANCHOR
BRAND-IS THAT PART OF THE BRAND THAT CAN BE VOCALISED-BUSH,ANACIN,COLGATE,
A BRAND MARK IS THAT PART WHICH CAN BE SEEN BUT IS NOT UTTERABLE.
(FEVICOL,CAMLIN,ASIAN PAINTS,BOMBAY DYEING)
A TRADE MARK IS A LEGALLY PROTECTED BRAND
CHARACTERISTICS OF GOOD BRAND NAME
1.IT SHOULD BE EASY TO PRONOUNCE, RECOGNISE AND REMEMBER
2.IT SHOULD BE ASSOCIATED WITH AN ATTRACTIVE PICTURE OR IMAGE, SO THAT IT
GETS RECORDED IN THE HUMAN MIND AND WILL FACILITATE RECALL.
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3.IT SHOULD SUGGEST SOMETHING ABOUT THE PRODUCT LIKE ACTION, COLOUR,
TYPE , OR THE BENEFITS DERIVED IN USING THE PRODUCT.
E.G., STOPACHE,QUICKFIX,DUROPLY,BAND-AID, GROMOR,SRINGAR ETC.,
4.IT SHOULD GIVE THE RIGHT CONNOTATION TO THE BUYER. (KOOLAIR , SUNFLAME)
5.IT SHOULD NOT CARRY POOR MEANINGS IN OTHER COUNTRIES AND LANGUAGES
BRAND EXTENSION/LINE EXTENSION
BRAND EXTENSIONS- A COMPANY MAY USE ITS EXISTING BRAND NAME TO LAUNCH NEW
PRODUCTS IN OTHER CATEGORIES.
LINE EXTENSIONS - CONSIST OF INTRODUCING ADDITIONAL ITEMS IN THE SAME
BRAND NAME SUCH AS NEW FLAVOURS, FORMS , COLOURS, ADDED INGREDIENTS,
PACKAGE SIZES,
ADVANTAGES OF THESE EXTENSIONS
1.ESTABLISHES THE PRODUCTS QUALITY
2.MUCH HIGHER CHANCE OF SURVIVAL THAN NEW BRAND LAUNCHES
3.SAVING HUGE NEW BRAND LAUNCHING EXPENSES
DISADVANTAGES OF THESE EXTENSIONS
1.BRAND NAME LOSING SPECIFIC MEANING
2.MIGHT DAMAGE RESPECT FOR ORIGINAL PRODUCT
3. MAY BE INAPPROPRIATE TO THE NEW PRODUCT
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4.BRAND MAY LOSE ITS SPECIAL POSITIONING IN THE
CONSUMERS MIND THROUGH OVEREXTENSION
5.BRAND CANNIBALISATION.
BRAND NAMES WHICH HAVE BECOME GENERIC NAMES
EXAMPLES
NYLON, VASELINE, FIBREGLASS, THERMOS, ASPIRIN,KEROSINE, LINOLEUM, CELLOPHANE,
ESCALATOR, ZIPPER,JEEP ETC.,DECOLAM, DALDA.XEROX,
CHOICES IN SELECTION OF A GOOD BRAND NAME
1.INITIALS/ACRONYMNS :
2.INDIVIDUAL NAMES WITH NUMBERS:VICKS ACTION-500, TIK-20,
3.PERSONAL/FAMILY OR FOUNDER NAME:JOHN BOYD DUNLOP
4.GEIOGRAPHICAL/HISTORICAL NAMES;
5.PART OF COMPANYS NAME-
6.COMBINATION OF TWO WORDS- FAIR & LOVELY
TIPS&TOES,
7.ANIMALS- KINGFISHER,TORTOISE
Brand equity The value of a brand, based n the extent to which it has high brand loyalty, name awareness,perceived quality, strong brand associations, and other asses such as patents, trademarks, and channel
relationships.
COMMUNICATION & CONSUMER
BEHAVIOUR
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TYPES OF COMMUNICATION
INTERPERSONAL COMMUNICATION
COMMUNICATION THAT OCCURS ON APERSONAL LEVEL BETWEEN TWO OR
MORE PEOPLE.
FORMAL INTERPERSONAL
COMMUNICATION IS THE KIND OFCOMMUNICATION THAT TAKES PLACE
BETWEEN A SALESPERSON AND A
PROSPECT, IN WHICH THE
SALESPERSON SERVES AS THE
SENDER AND THE PROSPECT THE
RECEIVER OF THE PRODUCTINFORMATION.
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FACE TO FACE COMMUNICATION CAN
BE BOTH VERBAL AND NONVERBAL.
SOME FACIAL AND BODILY
MOVEMENTS
SIMPLE SMILE
BROAD SMILE
COMPRESSED SMILE
GRIN
UPPER LIP OUT
LOWER LIP OUT
BIT LIPS
COMPRESSED LIPS
OPEN MOUTH
CHEW
GRIND TEETH
TONGUE BETWEEN LIPS
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TONGUE OUT
BLINK
CLOSE EYES
WINK STARE WIDEN EY4ES
LOOK DOWN
LOOK AROUND
BLUSH
SHRUG
SCRATCH
ADJUST CLOTHING
COVER EYESFINGERS ON FACE
STROKE CHIN STROKE MUSTACHE
STROKE BEARD
TWIST HAIRS
CLAP
HANDS CLASPED
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HANDS FOLDED
IMPERSONAL COMMUNICATION OR
MASS COMMUNICTION
COMMUNICATION DIRECTED TO A
LARGE AND DIFFUSE AUDIENCE.
IMPERSONAL COMMUNICATION IS
CARRIED BY SUCH MASS MEDIA
CHANNELS AS TELEVISION, RADIO,
NEWSPAPERS, MAGAZINES ETC.,
NOT ALL MASS COMMUNICATIONS
HAVE COMMERCIAL OBJECTIVES
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DEVELOPING EFFECTIVE
COMMUNICATIONS STEPS
1.IDENTIFY THE TARGET AUDIENCE-
IMAGE ANALYSIS, FAMILIARITY,
FAVOURABILTY ANALYSIS
2.DETERMINE THE COMMUNICATION
OBJECTIVES COGNITIVE, AFFECTIVEOR BEHAVIORAL
COGNITIVE- PUT SOMETHING IN
CONSUMERS MIND
AFFECTIVE CHANGE AN ATTITUDE
BEHAVIORAL - GET THE CONSUMER
TO ACT
3.DESIGN THE MESSAGE
4.SELECT THE COMMUNICATION
CHANNELS
5.BUDGET
6.DECIDE ON THE COMMUNICATIONS
MIX
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7.MEAUSRE RESULTS
8.MANGE THE INTEGRATED
COMMUNICATION PROCESS
BARRIERS TO COMMUNICATION AND
CONSUMER BEHAVIOUR
SELECTIVE EXPOSURE AND SELECTIVE
PERCEPTION
BALANCE THEORY - POSTULATES
THAT INDIVIDUALS SEEK
INFORMATION THAT IS CONSISTENT
WITH THEIR NEEDS, INTERESTS, AND
ATTITUDES AND AVOID INFORMATIONTHAT IS NOT.
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PREPARED FOR MBA (DAY) IV
SEMESTER 2001
PSYCHOLOGICAL NOISE- DISTRACTING
THOUGHTS, ADCLUTTER,
DAYDREAMING
REDUNDANCY IS CONSTANTLY
PRACTICED BY MARKETERS WHO
REPAT THE SAME ADVERTISEMENTS
OVER AND OVER IN THE SAME
MEDIUM.(DIFFERENT TYPES OF
ADVERTISEMENTS)
REPEATED EXPOSURE TO AN
ADVERTISING MESSAGE HELPS
SURMOUNT PSYCHOLOIGICAL
BARRIERS TO MESSAGE RECEPTION.
ROADBLOCKING - TO ENSURE
VIEWING OF THEIR COMMERCIALS
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DESPITE FREQUENT CHANNEL
SWITCHING DURING COMMERCIALS ,
SOME ADVERTISERS BROADCAST THE
SAME COMMERCIALS
SIMULTANEOUSLY IN EACH
NETWORK.
OVERLAPPING AUDIENCES - SINCE
MANY MEDIA - ESPECIALLY THOSE
WITH SIMILAR EDITORIAL FEATURES
AND FORMATS HAVE OVERLAPPING
AUDIENCES, ADVERTISERS USUALLY
PLACE THEIR ADVERTING MESSAGES
SIMULTANEOUSLY OR SEQUENTIAL INA NUMBER OF MEDIA WITH SIMILAR
AUDIENCE PROFILES.
COMMUNICATION TECHNIQUES TO
MAKE A MESSAGE MEMORABLE
1.GET THE AUDIENCE AROUSED
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2.GIVE THE AUDIENCE A REASON FOR
LISTENING
3.USE QUESTIONS TO GENERATEINVOLVEMENT
4.CAST THE MESSAGE IN TERMS
FAMILIAR TO YOUR AUDIENCE
5.TIE MATERIAL BY A THEME AND
PRESENT IN A LOGICAL MANNER6.REPEAT KEY POINTS
7.USE RHYTHM AND RHYME
8.ASK YOUR AUDIENCE FOR A
CONCLUSION
ONE SIDED VERSUS TWO SIDED
MESSAGES
TELLING AUDIENCE ONLY THE GOOD
POINTS ABOUT THEIR PRODUCTS
TWO-SIDETELLING THE AUDIENCE THE BAD
POINTS ABOUT THEIR PRODUCTS
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A PRACTICAL ILLUSTRATION OF TWO-
SIDED ADVERTING IS COMPARATIVE
ADVERTISING. - ADVERTISING THAT
EXPLICITLY NAMES OR IDENTIFIES
ONE OR MORE COMPETITORS OF THE
ADVERTISED BRAND FOR THE
PURPOSE OF CLAIMING SUPERIORITY.
ORDER EFFECTS
ON TV THE COMMERCIALS SHOWN
FIRST ARE RECALLED BEST, THOSE IN
THE MIDDLE THE LEAST AND ONES AT
THE END SLIGHTLY BETTER THAN
THOSE IN THE MIDDLE.
THE MEDIA RECOGNIZE THE IMPACT
OF ORDER EFFECTS BY ASSIGNING
"PREFERRED POSITION" PLACEMENT
TO FRONT, BACK, AND INSIDE
COVERS OF MAGAZINES,
HUMOUR IN ADVERTISING
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1.HUMOUR HEIGHTENS AWARENESS
OF AND BRINGS ATTENTION THECOMMERCIAL.
2.HUMOROUS COMMERCIALS HAVE A
SHORT LIFE SPAN.
3.HUMOUR SHOULD NOT BE USED
FOR SENSITIVE GOODS AND SERVICESLIKE MONEY, SAFETY
SEX IN ADVERTISING
THERE ARE FEW APPEALS IN
ADVERTISING THAT EQUAL THE
ATTENTION GETTING VALUE AS SEX .
SEXUALLY ORIENTED ADS COULD BEUSED AS
1.ATTENTION GETTING DEVICE
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2.TO DISPLAY THE FUNCTION OF THE
PRODUCT
3.AS FANTASY IMAGES4.SYMBOLICALLY -
MEN AND WOMEN RESPOND
DIFFERENTLY TO SEX IN
ADVERTISING. FOR EXAMPLE,
PERCEPTIONS AMONG MEN OF AN
AD'S SEXINESS DEPEND ON THE
EXTENT OF NUDITY PORTRAYED. FOR
WOMEN, ROMANTIC CONTENT IS THEPRIMARY DETERMINANT OF WHETHER
AND AD IS "SEXY".
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CULTURAL, SUBCULTURAL AND CROSS-CULTURAL ASPECTS OF CONSUMERBEHAVIOUR
Culture is the sum total of learned beliefs, values and customs that serve to
direct the consumer behaviour of members of a particular society.
Given the broad and pervasive nature of culture, its study generally requires a
global examination of the character of the total society, including such factors as
languages, knowledge laws, religions, food customs, music, art, technology, work
patterns, products, and other artificats that give the society its distinctive flavour. In a
sense, culture is a societys personality. For this reason, it is not easy to define its
boundaries.
The belief and value components of our definition refer to the accumulated
feelings and priorities that individuals have about things. More precisely, beliefsconsist of the very large number of mental or verbal statements (i.e., I believe) that
reflect a persons particular knowledge and assessment of something (another person,
a store, product, a brand). Values are also beliefs. However, values differ from other
beliefs in that they meet the following criteria:
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1. they are relatively few in number,2. they serve as a guide for culturally appropriate behaviour,3. they are enduring or difficult to change,4. they are not tied to specific objects or situations.5. they are widely accepted by the members of a society.
Therefore, in a broad sense, both values and beliefs are mental images
that affect a wide range of specific attitudes, which in turn influence the
way a person is likely to respond in a specific situation. In contrast to
beliefs and values, customs and overt modes of behaviour that constitute
culturally approved.or acceptable ways of behaving in specific situations.
Customs consist of everyday or routine behaviour. Thus, while beliefs and
values are guides for behaviour, customs are usual and acceptable ways
of behaving.
The Invisible Hand of Culture:
The impact of culture is so natural and so automatic that its influence on
behaviour is usually taken for granted. A true appreciation of the influence culture has
on our daily life requires some knowledge of atleast one other society with difference
cultural characteristics.
Culture Satisfies Needs:
Culture exists to satisfy the needs of the people within a society. It offers order,
direction, and guidance in all phases of human problem solving by providing tried andtrue methods of satisfying physiological, personal, and social needs.
In a cultural context, a firms products and services can be viewed as
offering appropriate or acceptable solutions for individual or societal needs. If a product
is no longer acceptable because a value or custom that is related to its use does not
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adequately satisfy human needs, then the firm producing it must be ready to revise its
product offering. Marketers must also be alert to newly embraced customs and values.
Culture is Learned:
Unlike innate biological characteristics (eg., sex, skin, hair colour, intelligence),
culture is learned. At an early age we begin to acquire from our social environment a set
of beliefs, values and customs that constitute our culture.
How Culture is Learned Anthropologists have identified three distinct forms of
cultural learning: formal learning, in which adults and older siblings teach a young family
member how to behave, Informal learning, in which a child learns primarily by imitating
the behaviour of selected others (family, friends, TV heroes), and technical learning, in
which teachers instruct the child in an educational environment as to what should be
done, how it should be done, and why it should be done.
Encujturation and Acculturation:
In discussing the acquisition of culture, anthropologists often distinguish between
the learning of ones own, or native, culture and the learning of some other culture. Thelearning of ones own culture is known as Enculturation, the learning of a new or foreign
culture is known as acculturation;
Culture is Shared:
To be considered a cultural characteristic, a particular belief, value or practice
must be shared by a significant portion of the society. Accordingly, culture is frequently
viewed as group customs that link together the members of a society.
Various social institutions within a society transmit the elements of culture and
make the sharing of culture a reality. Chief among such institutions if the family, which
serves as the primary agent for enculturation the passing along of basic cultural
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beliefs, values, and customs to societys newest members. A vital part of the
enculturation role of the family is the consumer socializations of the young.
In addition to the family, educational institutions also shares the responsibility for
the transfer of selected aspects of culture. Educational institutions are specifically
charged with imparting basic learning skills, history, patriotism, citizenship, and the
technical training needed to prepare people for significant roles within society. Another
social institution that plays a major role in the transfer of culture throughout society is the
mass media.
Culture is Dynamic:
Many factors are likely to produce cultural changes within a given society (new
technology, population shifts, resource shortages, wars, changing values, customs
borrowed from other cultures). For this reason, the marketer must carefully monitor the
socio cultural environment in order to market an existing product more effectively, or to
develop promising new products.
THE MEASUREMENT OF CULTURE;
A wide range of measurement techniques are employed in the study of culture.
For example, the projective tests used by psychologists to study motivation and
personality and the attitude measurement techniques used by social psychologists and
sociologists, are relatively popular tools in the study of culture.
In addition, content analysis, consumer field work, and value measurement
instruments are three research approaches that are frequently associated with the
examination of culture and the spotting of cultural insights and trends.
Content Analysis:
Conclusions about a society, or specific aspects of a society, can sometimes be
drawn from an examination of the content of its messages. Content analysis, as the
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name implies, focuses on the content of verbal, written, and pictorial communications
(eg., the copy and art composition of an ad.)
Content analysis can be used as a relatively objective means for determing
whether social and cultural changes have occurred in a specific society.
SUB CULTURE
A subculture can be thought of as a distinct cultural group that exists as an
identifiable segement within a larger, more complex society. The members of a specific
subculture tend to possess beliefs, values, and customs that set them apart from other
members of the same society. In addition, they adhere to most of the dominant cultural
beliefs, values and behavioural patterns of the larger society.
Thus the cultural profile of a society or nation can be viewed as a composite of
two distinct elements: (1) the unique benefits, values and customs subscribed to by
members of specific subcultures; and (2) the central or core cultural themes that are
shared by most of the population, regardless of specific subcultural memberships.
Subcultural analysis enables the marketing manager to focus on rather large and
natural market segments. In carrying out such analysis, however, the marketer must
determine whether the beliefs, values and customs shared by members of a specific
subgroup make them desirable candidates for special marketing attention. Subcultures
are therefore relevant units of analysis for market research.
SUBCULTURAL CATEGORIES;
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1. Nationality subculture2. Religion subculture3. Regional subculture4. Age subculture
5. Sex subculture
NATIONALITY SUBCULTURES;
While most Indian citizens, see themselves as Indian they frequently retain a
sense of identification and pride in the language and customs of their ancestors.
When it comes to consumer behaviour, this ancestral pride is manifested moststrongly in the consumption of ethnic foods, in travel to the homeland, and in the
purchase of numerous cultural artifacts (ethnic clothing, art, music.
RELIGIOUS SUBCULTURES;
Difference religious groups flourish in
any country. The members of all thesereligious groups are at times likely tomake purchase decisions that areinfluenced by their religious identity.Nevertheless, consumer behaviour isdirectly affected by religion in terms of
products that are symbolically andritualistically associated with thecelebration of various religious holidays.Though marketers are often reluctant toreach religious subcultures through
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religious publications, advertising inreligious media can be rewarding. Verylittle consumer research has been devoted
to examining how religious affiliation andcommitment influences consumerpreferences and loyalties.GEOGRAPHIC SUBCULTURES;
India is a large country, one that enjoys a wide range of climatic and geographic
conditions. Given the countrys size and physical diversity, it is only natural that the
Indian people have a sense of regional identification and use this identification as a wayof describing others. Such labels often assist us in developing a mental picture a
stereotype of the person in question.
In India there are many regional differences in consumption behaviour. For
example, coffee drinking is more in the South.
AGE SUBCULTURES:
All major age subgroupings of the population might broadly be thought of as
separate subcultures. Within the context of the family life cycle. Each stage of the life
cycle (bachelorhood, honeymooners, parenthood, postparenthood, and dissolution)
could be considered a separate subculture, since important shifts occur in the demand
for specific types of products and services.
SEX SUBCULTURE;
All known societies assign certaintraits and roles to males and others tofemales, for instance, aggressiveness,
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competitiveness, independence, and selfconfidence were long considered to betraditional masculine traits, neatness,
tactfulness, gentleness, and talkativenesswee considered to be traditional femininetraits. In terms of role differences,women have historically been cast ashomemakers with responsibility for childcare, and men as the providers or
breadwinners. Many advertisers appeal tosuch sex-linked roles, and consumertastes are frequently influenced by sex-role factors.
THE WORKING WOMAN:
Marketers and consumer researchershave been increasingly interested in theworking women, especially the marriedworking woman. They recognize thatworking wives are a large and growingmarket segment whose needs differ from
those of women who do not work outsidethe homes.
CROSS CULTURE
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To determine whether and how to enter a foreign market, marketers should
conduct cross-cultural consumer analysis is defined as the effort to determine to what
extent the consumer of two or more nations are similar or difference. Such an analysis
can provide marketers with an understanding of the differences in psychological, social,
cultural, and environmental characteristics so as to permit the design of effective
marketing strategies for each of the specific countries involved.
Today many companies almost all major corporations sell their products
throughout the world. Infact, the issue is generally not whether to sell a brand in other
countries, but how to do it (i.e., one product, one global advertising campaign worldwide,
or tailored products and localized ads for each country).
FACTORS:
1. Language differences2. Differences in consumption patterns3. Differences in potential market segments4. Differences in the way that products or services are used5. Differences in the criteria for evaluating products and services6. Differences in economic and social conditions7. Differences in marketing research opportunities.
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(OU Campus)-For private circulation only
DECISION AREAS IN ADVERTISING
Advertising is any paid form of nonpersonal presentation and promotion of ideas,goods or services by an identified sponsor.
STEPS IN DEVELOPING AN ADVERTISING PROGRAMME
1.Setting the advertising objectives2.Deciding on the advertising budget3.Choosing the advertising message4.Decding on the Media5.Evaluting advertising effectiveness
I. SETTING THE ADVERTISING OBJECTIVES
The advertising objectives must flow from prior decisions on target market,market positioning and marketing mix. Advertising objectives can be classifiedaccording to whether the aim is to inform, persuade or remind. Informativeadvertising figures heavily in the pioneering stage (to build a primary demand).Persuasive advertising becomes important in the competitive stage and Reminderadvertising is important with mature products.
II. DECIDING THE ADVERTISING BUDGET
There are five specific factors to consider when setting the advertisingbudget.
1.Stage in the Product Life Cycle New Products require more advertising2.Market Share High market share -less advertising3.Competition and clutter More advertising4.Advertising frequency High frequency requires more advertising
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5.Product substitutability More advertising
Methods of setting the advertising budget:
1.Affordable method2.Percentage of sales method
3.Competitive parity method4.Objective and task method
III.CHOOSING THE ADVERTISING MESSAGE
Ideally the message should gain attention, hold interest, arouse desire andelicit action (AIDA) Model.
1.What to say? MESSAGE CONTENTThere are 3 types of appeals. Rational, emotional and moral. Rational appealsclaim that the product has certain benefits. Emotional appeals attempt to stir upnegative or positive emotions that will motivate purchase. Ego, Fear, guilt, shame:
Humour, love, pride and joy. Moral appeals are directed to the audience sense ofwhat is right and proper.
2.How to say it? MESSAGE FORMAT & EXECUTION
In a print ad, the communicator has to decide the headline, copy,illustration and colour. If the message is over the radio the communicator has tochoose words and voice qualities. If the message is be carried on TV all theseelements plus body language have to be planned. Presenter has to pay attentionto facial expression, gesture, dress and posture and hairstyle.
Creativity is required in every aspect o message format and execution.
Creative people must find a cohesive style, tone, words and format for executingthe message. Memorable and attention-getting words must be found.
Any message can be presented indifferent execution styles:
1. SLICE OF LIFE This style show one or more typical people suing theproduct in a normal setting.
2. LIFESTYLE: This style shows how a product fits in with a particularlifestyle.
3. FANTASY This style creates a fantasy around the product or its use.(Dream themes)
4. MOOD OR IMAGE - This style BUILDS A MOOD OR IMAGE AROUND THE
PRODUCT, SUCH AS BEAUTY, LOVE OR SERINITY. No claim is mad aboutthe product except through suggestion
5. MUSICAL this style shows on e or more people or cartoon characterssinging a song about the product.
6. PERSONALITY - This style creates a character that represents the product.7. TECHCHNICAL EXPERTISE - This style shows the companys expertise in
making the product.8. SCIENTIFIC EVIDENCE - This style presents survey or scientific evidence
that the brand is better.
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9. TESTIMONIAL EVIDENCE - This style features a highly believable or likablesource endorsing the product.
Creativity is especially required for headlines. There are six basic types ofheadline:
1.NEWS New boom and more inflation ahead2.QUESTION Have you heard?3.NARRATIVE They laughed at me.4.COMMAND Dont buy5.1-2-3 WAYS 12 ways to save income tax6.HOW-WHAT-WHY -
Format elements such as ad size, colour and illustration will affect an adsimpact. Larger and colour ads gain more attention. Picture, headline and Copy areimportant in that order. Even then a really outstanding ad will be noted by about50% of the exposed audience.
IV.DECIDING ON THE MEDIA
Media selection involves finding the most t cost-effective media to deliverthe desired number of exposures to the target audience.
Choosing among the major media types:
Newspapers Flexibility, timeliness, short lifeTV Combines sight, sound, motion; has clutter, costlyDirect Mail Audience selectivity, Junk mailRadio Low cost, fleetingMagazines Long life, some waste circulation
Outdoor Low cost, creative limitationsYellow Pages Wide reach, high competitionInternet Interesting Low customers
Prof.V.Shekhar, Dept., of Business Management, Osmania University, Hyderabad-500 007
SELECTING SPECIFIC VEHICLES:The media planner must search for the most cost-effective media vehicles
within the chosen media type. Media planners calculate the Cost Per ThousandPersons reached by a vehicle. The media planner ranks each media by a cost perthousand and favors media with the low cost per thousand. However, severalfactors have to be considered in applying the cost per thousand measure. Theseare audience quality, audience attention probability, magazine editorial quality and
the magazines ad placement qualities and extra services like lead-time.DECIDING ON THE MEDIA TIMING
In choosing media, the advertiser faces a macro scheduling problem and amicro scheduling problem. The macro-scheduling problem involves schedulingthe advertising in relation to season and business cycle. The firm can vary itsadvertising expenditure to follow the seasonal pattern, oppose the seasonalpattern or to be constant throughout the year. Most firms pursue a seasonalpolicy.
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The micro-scheduling problem calls for allocating expenditure within ashort period to obtain maximum impact. Continuity is achieved by schedulingexposures evenly throughout the given period. Concentration calls for spendingall the advertising money in a single period. Fighting calls for advertising for someperiod, followed by a hiatus with no advertising, followed by a second period ofadvertising activity. Pulsing is continuous advertising at low-weigh levels
reinforced periodically by waves of higher activity.
V. EVALUATING ADVERTISING EFFECTIVENESS
A) COMMUNICATION EFFECT- RESEARCH seeks to determine whether anad is communication effectively. Called copy testing, it can be done before an adis put into media and after it is printed or broadcast.
1.DIRECT RATING METHOD asks consumers to rate alternate ads. These rating are
used to evaluate the following:
How well does the ad catch the readers attention?
How well does the ad lead the reader to read further?
How clear is the message?
How effective is the particular appeal?
How well does the ad suggest follow-through action?
2.PORTFOLO TESTS ask consumers to view or listen to a portfolio of advertisements,
taking as much time as they need. Consumers are then asked to recall all the ads and
their content, aided or unaided y the interviewer. Recall level indicates an ads ability to
stand out and to have its message understood and remembered.
3.LABORATORY TESTS use equipment to measure physiological reactions like
heartbeat, blood pressure, pupil dilation and perspiration to an and. These tests
measure attention getting poser but reveal nothing about the impact on beliefs,
attitudes, or intensions.
SALES EFFECT RESEARCH
Advertisings sales effect is generally harder to measure than its communicationeffect because sales are influenced by many factors as products features, price,
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availability and competitors actions. One way to measure the sales effect of advertisingis to compare past sales with past advertising expenditures (Historical approach).Another way is through experiments. i.e. to test the effects of different advertisingspending levels in different markets and measure the differences in the resulting saleslevel. It could spend the normal amount in one market area, half the normal amount inanother area, and twice the normal amount in a third area, If the three market areas are
similar, and if all other marketing efforts are the same, the differences in sales in thethree cities could be related to advertising levels.
FACTORS RESPONSIBLE FOR CONSUMER BEHAVIOUR
AS AN INDIVIDUAL
1.Personalilty
Personality is defined as those inner psychological characteristics that both
determine and reflect how a person responds to his or her environment
1)It reflects individual differences 2)It is consistent and enduring3)it can change
Sigmund Freuds psychoanalytic theory
Id pleasure principle Ego Superego-
2.-MOTIVATION
can be described as the driving force within individuals that impels them to action
Motivational research is research designed to uncover the consumers subconsciousor hidden motivations.
LEARNINGIs the process by which individuals acquire knowledge and experience.
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STRUCTURE OF MEMORY
SENSORY STORE- just for a second
SHORT TERM STORE BRIEF PERIOD, Look at tel no and forget before dialing. If
rehearsal takes place it goes to the long-term store
LONG TERM STORE- relatively extended periods of time for days, weeks, and even
years.
Pavlovian experiment Skinners experiment
ATTITUDES
Attitude is a learned predisposition to behave in a consistently favorable orunfavorable with with respect to a given object
Object here means such as issues, actions, behavior persons or events
PERCEPTION
Is the process by which an individual selects, organizes, and interprets stimuli into
meaningful and coherent picture of the world.
SOCIAL AND CULTURAL SETTINGS
GroupMay be defined as two or more people who interact to accomplish individual or
mutual goals.
FAMILYTwo or more persons related by blood, marriage or adoption that reside together.
Husband-dominated; wife dominated, Joint
SOCIAL CLASSDivision of members of a society into a hierarchy of distinct status classes, so that
members of each class have relatively the same statues and members of all other
classes have either more or less status
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UU LU UM Lm Ul LL
CULTURE
Is the sum total of learned beliefs, values, and customs that serve to direct the
consume behaviour s of members of a particular society.
Sub culture is a distinct cultural group that exists as an identifiable segment within a
larger more complex society.
INDUSTRIAL MARKETS/BUSINESS MARKETS
THE BUSINESS MARKET COMPRISES ALORGANISATIONS THAT BUY GODS AND SERVICESFOR USE IN THE PRODUCTION OF OTHER GOODSAND SERVICES FOR USE IN THE PRODUCTION OFOTHER PRODUCTS AND SERVICES OR FOR THE
PURPOSE OF RESELLING OR RENTING THEM TOOTHERS AT PROFIT.
CHARACTERISTICS OF AN INDUSTRIAL MARKET:
1.FEWER BUT LARGER BUYERS
THE INDUSTRIAL MARKET NORMALLY DEALSWITH FAR FEWER BUT LARGER BUYERS ANDTHEY PURCHASE IN BULK. FOR EXAMPLE, ATYRE MANUFACTURER HAS MANY CUSTOMERS INREPLACEMENT MARKET, BUT THE MAIN SALES
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WOULD BE BULK PURCHASES FROM ONE ORTWO MAJOR AUTOMOBILE MANUFACTURERS.
2.GEOGRAPHICALLY CONCENTRATED
MOST OF THE BUSINESS MARKETS AREGEOGRAPHICALLY CONCENTRATED AT FEWPLACES. CONSIDER FOR EXAMPLE PITAMPURNEAR INDORE, IN MADHYA PRADESH, WHEREALL LEADING AUTOMOBILE FIRMS HAVE PUT UPTHEIR MANUFACTURING UNITS THERE.(INDIASDETROIT).
3.DEMAND IS DERIVED
I.E., DEMAND IS DERIVED FROM DEMAND
FOR CONSUMER GOODS. A CAR MANUFACTURESBUYS STEEL BECAUSE CONSUMERS BUY CARS. IFCONSUMERS DEMAND FOR CARS DROPS, SOWILL THE DEMAND FOR STEEL AND OTHERPRODUCTS USED TO MAKE CARS. FOR EXAMPLE,INTELS LONG RUNNING INTEL INSIDEADVERTISING CAMPAIGN SELLS PERSONAL
COMPUTER BUYERS ON THE VIRTUES OF INTELMICROPROCESSORS. THE INCREASED DEMANDFOR INTEL CHIPS BOOS DEMAND FOR THE PCS
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CONTAINING THEM, AND BOTH INTEL AND ITSBUSINESS PARTNERS WIN.
4.DEMAND IS NOT EFFECTED BY PRICECHANGES
I.E., TOTAL DEMAND FOR MANY BUSINESSPRODUCTS IS NOT AFFECTED MUCH BY PRICECHANGES, ESPECIALLY IN THE SHORT RUN. ADROP IN THE PRICE OF LEATHER WILL NOTCAUSE SHOE MANUFACTURES TO BUY MUCHMORE LEATHER.
5.FLUCTUATING DEMAND
THE DEMAND FOR MANY BUSINESS GOODS
AND SERVICES TENDS TO CHANGE MORE ANDMORE QUICKLY- THAN THE DEMAND FORCONSUMER GOODS AND SERVICES DOES. ASMALL PERCENTAGE INCREASE IN CONSUMERDEMAND CAN CAUSE LARGE INCREASES INBUSINESS DEMAND. SOMETIMES A RISE OF ONLY10% IN CONSUMER DEMAND CAN CAUSE AS
MUCH AS A 200 % RISE IN THE DEMAND DURINGTHE NEXT PERIOD.
6.PROFESSIONAL PURCHASING
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A BUSINESS PURCHASE USUALLY INVOLVESMORE BUYERS AND MORE PROFESSIONAL
PURCHASING EFFORT. OFTEN, BUSINESS BUYINGIS DONE BY TRAINED PURCHASING AGENTS WHOSPEND THEIR WORKING LIVES LEARNING HOWTO BUY BETTER, THE COMPLEX THE PURCHASE,THE MORE LIKELY THAT SEVERAL PEOPLE WILLPARTICIPATE IN THE BUYING DECISIONPROCESS. BUYING COMMITTEES MADE UP OFTECHNICAL EXPERTS AND TOP MANAGEMENTARE COMMON IN THE BUYING OF MAJORGOODS.
7.COMPLEX BUYING DECISIONS
BUSINESS BUYERS USUALLY FACE MORECOMPLEX BUYING DECISIONS THAN DOCONSUMER BUYERS. PURCHASES OFTENINVOLVE LARGE SUMS OF MONEY, COMPLEXTECHNICAL AND ECONOMIC CONSIDERATIONS,AND INTERACTIONS AMONG MAY PEOPLE ATMANY LEVELS OF THE BUYERS ORGANISATION.
BUSINESS BUYERS MAY TAKE LONGER TIME TOMAKE THEIR DECISIONS BECAUSE OF THECOMPLEXITY OF DECISIONS. FOR EXAMPLE THEPURCHASE OF A LARGE COMPUTER SYSTEM MAY
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TAKE MANY MONTHS OR MORE THAN A YEAR TOCOMPLETE AND COULD INVOLVE A FEW CRORESOF RUPEES, THOUSANDS OF TECHNICAL
DETAILS, DOZENS OF PEOPLE RANGING FROMTOP MANAGEMENT TO LOWER-LEVEL USERS.
8.BUYING PROCESS IS MORE FORMALISED
THE BUSINESS BUYING PROCESS TENDS TO BEMORE FORMALISED THAN THE CONSUMERBUYING PROCESS. LARGE BUSINESS PURCHASESUSUALLY CALL FOR DETAILED PRODUCTSPECIFICATIONS, WRITTEN PURCHASE ORDERS,CAREFUL SUPPLIER SEARCHES, AND FORMALAPPROVAL. THE BUYING FIRM MIGHT EVENPREPARE POLICY MANUALS THAT DETAIL THE
PURCHASE PROCESS.
9. BUYING MOTIVES
FINALLY, BUSINESS PURCHASE DECISIONSARE PRIMARILY RATIONAL, WHILE CONSUMERBUYING BEHAVIOUR IS RATIONAL AS WELL AS
EMOTIONAL.
INDUSTRIAL MARKETS & CONSUMER MARKETS-DIFFERENCES
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INDUSTRIAL MARKETS CONSUMERMARKETS
GEOGRAPHICALLY CONCENTRATEDGEOGRAPHICALLY DISPERSEDRELATIVELY FEWER BUYERS MASS
MARKETS
TECHNICAL COMPLEXITY
STANDARDISATION
SERVICE-V.IMP SOMEWHAT
IMPORTANT
TECHNICAL EXPERTISE LESS
TECHNICAL EXPERTISE
RATIONAL MOTIVES
PSYCHOLOGICAL MOTIVES
INTERPERSONAL RELATIONSHIPS NON-INTERPERSONAL RELATION
FUNCTIONAL INVOLVEMENT FAMILY
INVOLVEMENT
SHORTER CHANNELS LONGER
PERSONAL SELLING
ADVERTISING
COMPETITIVE BIDDING &NEGOTIATION LIST PRICES
INDUSTRIAL BUYER BEHAVIOUR
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MAJOR TYPES OF BUYING DECISIONS
1.STRAIGHT REBUY
IN A STRAIGHT REBUY , THE BUYERREORDERS SOMETHING WITHOUT ANYMODIFICATIONS. IT IS USUALLY HANDLED ON AROUTINE BIAS BY THE PURCHASINGDEPARTMENT. BASED ON PAST BUYINGSATISFACTION, THE BUYER SIMPLY CHOOSESFROM THE VARIOUS SUPPLIERS ON ITS LIST. ITIS THE MOST COMMON BUYING SITUATION ININDUSTRIAL PURCHASING.
2.MODIFIED REBUY
IN A MODIFIED REBUY, THE BUYER WANTSTO MODIFY PRODUCT SPECIFICATIONS, PRICES,TERMS OR SUPPLIERS. THE MODIFIED REBUYUSUALLY INVOLVED MORE DECISIONPARTICIPANTS THAN THE STRAIGHT REBUY.THIS BUYING DECISION IS INVOLVED WHEN THEY
FEEL THAT SIGNIFICANT BENEFITS SUCH ASQUALITY IMPROVEMENTS, REDUCTIONS MAY BEDERIVED FROM REDEFINING ALTERNATIVES.
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3.NEW TASK
THE MOST COMPLEX BUYING SITUATION IS
NEW TASK. A COMPANY BUYING APRODUCT OR SERVICE FOR THE FIRST
TIME FACES A NEW TASK SITUATION. IN
SUCH CASES, THE GREATER THE COST OR
RISK, THE LARGER THE NUMBER OF
DECISION PARTICIPANTS AND THE
GREATER EFFORTS TO COLLECT
INFORMATION WILL BE. THE NEW TASK IS
THE MARKETERS GREATEST
OPPORTUNITY AND CHALLENGE. IN THE
NEW TASK SITUATION, THE BUYER MUST
DECIDE ON PRODUCT SPECIFICATION,SUPPLIERS, PRICE LIMITS, PAYMENT
TERMS, ORDER QUANTITIES, DELIVERY
TIMES AND SERVICE TERMS.
PARTICIPANTS IN THE BUSINESS BUYING
PROCESS
THE DECISION-MAKING UNIT OF
BUSINESS MARKETS IS CALLED BUYING
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CENTRE. I.E., ALL THE INDIVIDUALS AND
UNITS THAT PARTICIPATE IN THE
BUSINESS DECISION-MAKING PROCESS.
THEY MAY PLAY ANY OF THE FIVE ROLES
IN THE PURCHASE DECISION PROCESS:
1.USERS : ARE MEMBERS OF THE
ORGANISATION WHO WILL USE THE
PRODUCT OR SERVICE.
2.INFLUENCERS: OFTEN HELP DEFINE
SPECIFICATIONS AND ALSO PROVIDE
INFORMATION FOR PROVIDING
ALTERNATIVES.
3.BUYERS: HAVE FORMAL AUTHORITY TO
SELECT THE SUPPLER AND ARRANGE
TERMS OF PURCHASE.
4.DECIDERS: HAVE FORMAL OR
INFORMAL POWER TO SELECT OR
APPROVE THE FINAL SUPPLIERS.
5.GATEKEEPERS : CONTROL THE FLOW
OF INFORMATION TO OTHERS. FOR
EXAMPLE, PURCHASING OFFICERS OFTEN
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HAVE AUTHORITY TO PREVENT
SALESPERSONS FROM SEEING USERS OR
DECIDERS. OTHER GATEKEEPERS INCLUDE
TECHNICAL PERSONNEL AND EVEN
PERSONAL SECRETARIES.
MAJOR INFLUENCES ON INDUSTRIAL BUYERS
1.ENVIRONMENTAL FACTORS ECONOMIC,TECHNOLOGICAL, POLITICAL, COMPETITIVE &CULTURAL2.ORGANISATIONAL FACTORS POLICIES,PROCEDURES ETC.,(CENTRALISED/JIT ETC)3.INTERPERSONAL FACTORS GROUPDYNAMICS
4.INDIVIDUAL FACTORS - AGE, EDUCATION,JOB POSITION, PERSONALITY, PERCEPTIONS
ETC., ALSO, BUYERS HAVEDIFFERENT BUYING STYLES.
THE BUSINESS BUYING PROCESS
1.PROBLEM RECOGNITION 2.GENERAL NEEDDESCRIPTION 3.PRODUCT SPECIFICATION 4.SUPPLIERSEARCH 5.PROPOSAL SOLICITATION 6.SUPPLIER
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SELECTION 7.ORDER-ROUTINE SPECIFICATION8.PERFORMANCE REVIEW.
1.PROBLEM RECONGITION
LAUNCHING A NEW PRODUCT, BREAKDOWN OF AMACHINE, PURCHASING MANAGER IS UNHAPPY WITHTHE CURRENT SUPPLIERS
2.GENERAL NEED DESCRIPTION
THE BUYER NEXT PREPARES A GENERAL NEEDDESCRIPTION THAT DESCRIBES THE CHARACTERISTICSAND QUANTITY OF THE NEEDED ITEM.
3.PRODUCT SPECIFICATION
DEVELOPING THE ITEMS TECHNICAL PRODUCT
SPECIFICATIONS. VALUE ANALYSIS IS AN APPROACHTO COST REDUCTION IN WHICH COMPONENTS ARESTUDIED CAREFULLY TO DETERMINE IF THEY CAN BEREDESIGNED OR MADE BY LESS COSTLY METHODS.
4.SUPPLER SEARCH
CONDUCTING A SUPPLIER SEARCH TO FIND THE BESTVENDORS BY REVIEWING TRADE DIRECTORIES,COMPUTER SEARCH, PHONING OTHER COMPANIESETC., THE NEWER THE BUYING TASK, AND, MORECOMPLEX AND COSTLY THE ITEM, THE GREATER THE
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AMOUNT OF THEM THE BUYER WILL SPENDSEARCHING F FOR SUPPLIERS.
5.PROPOSAL SOLICITATION
INVITING THE QUALIFIED SUPPLIERS TO SUBMITPROPOSALS, IN RESPONSE, SOME SUPPLIERS, WILLSEND CATALOGUES, SALES PERSON, OR DETAILEDWRITTEN PROPOSALS.
6.SUPPLIER SELECTION
DRAWING UP A LIST OF THE DESIRED SUPPLERATTRIBUTES LIKE PRODUCT QUALITY, ON TIMEDELIVERY, ETHICAL CORPORATE BEHAVIOUR,COMPETITIVE PRICES, PERFORMCE HISTORY,REPUTATION ETC., AND RANKING THEIR RELATIVEIMPORTANCE. BUYERS MAY NEGOTIATE WITH
PREFERRED SUPPLIERS FOR BETTER PRICES ANDTERMS BEFORE MAKING THE FINAL SELECTIONS.
7.ORDER ROUTINE SPECIFICATION
PREPARING AN ORDER-ROUTINE SPECIFICATIONWHICH INCLUDES THE FINAL ORDER WITH ITEMS
SUCH AS TECHNICAL SPECIFICATION, QUANTITYNEED, EXPECTED TIME OF DELIVERY, RETURNPOLICIES, AND WARRANTIES.
8.PERFORMANCE REVIEW
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REVIEWING THE PERFORMANCE FORM USERS. THEPERFORMANCE REVIEW MY LEAD THE BUYER TOCONTINUE, MODIFY OR DROP THE ARRANGEMENT.
THE ACTUAL PROCESS IN THE ABOVE STAGES ISMUCH MORE COMPLEX THAN DISCUSSED ABOVE.ALSO SOME OF THESE STAGES MAY BE COMPRESSEDOR BYPASSED.
Professor V.SHEKAHR
MARKETING
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Marketing is typically seen as thetask of creating, promoting anddelivering goods (physical) services
(airlines, hotels, barbers, lawyers,) -Many market offerings consist of avariable mix of goods and services.Events (Olympics, sports) persons(Celebrity marketing) places (cities,nations) properties (physical/financial), organisations (Corporateimage), information(educationalinstitutions, magazines) andideas(Products and services areplatforms for delivering some idea orbenefit) to consumers andbusinesses.
Definition- Marketing is the processof planning and executing theconception, pricing promotiondistribution of idea goods, services tocreate exchanges that satisfyindividual and organisational goals.
Exchange is the core concept ofmarketing: For exchange potential to
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exist, some conditions must besatisfied like-
1.There are atleast 2 parties2.Each party has something thatmight be of value to the other party.3.Each party is capable of communication and delivery4.Each party is free to accept orreject the exchange offer
LEVELS OF COMPETITION:
1.BRAND COMPETITION Matiz vs Santro2.INDUSTRY COMPETITION All carmanufacturers3.FORM COMPETITION All automobilemanufacturers3.GENERIC COMPETITION- All companiesthat compete at the same rupee value likemajor consumer durables, apartments.
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MARKETING MIX
Marketing mix is the set of marketing toolsthat the firm use s to pursue its marketingobjectives in the target market.
McCarthy classified these tools into fourbroad major groups that he called as 4 Ps.
PRODUCT - solution
Product variety, Quality, Design, Features,brand name, packaging, serviceswarranties,
PRICE - cost
List price, discounts, allowances, paymentperiod, credit terms etc
PROMOTION - communication
Sales promotion, advertisements, salesforce, public relations, direct marketing
PLACE - convenience
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Channels, Locations, Inventory, Transport
MARKETING PHILOSOPHIES
PRODUCTION CONCEPT holds thatconsumers will prefer products that arewidely available and inexpensive.
PRODUT CONCEPT- holds that consumerswill favour those products that offer themost quality, performance or innovativefeatures.
SELLING CONCEPT holds that consumers
and businesses, if left alone, will ordinarynot buy enough of the organisationsproducts and hence organistaions shouldundertake aggressive selling andpromotion effort.
MARKETING CONCEPT- holds that the keyto achieving its organisations goalsconsists of the company being moreeffective than competition in creating ,
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delivering and communicating customervalue to its chosen target markets.
Find wants and fill themPutting people first British AirwaysLove the customer , not the product
RELATIONSHIP MARKETING Building longterm relationships.
MANAGING PRODUCT LINES AND BRANDS
PRODUCT CLASSIFICATIONS-1. Non- Durable goods- tangible goodsnormally consumed in one or few uses-
many locations, heavy advertising, buildbrand loyalty2.Durable goods tangible goods thatnormally survive many usespersonal selling and service,3.Services intangible, inseparable,variable and perishable- Quality controlsupplier credibility etc.
CATEGORIS OF SERVICE MIX
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1.Pure tangible good toothpaste2.Tangible good with accompanyingservice car services
3.Hybrid Hotel/Restaurant4.Major service accompanying minorgoods & services Airlines- food, drinks,5.Pure service massage,
EQUIPMENT BASED OR PEOPLE BASEDAutomatic car washing Vs manual windowwashing
CLIENTS PRESENCE OR NOTBrain surgery, haircut Vs scooter repair or
TV repair
PRODUCT MIXAlso called as product assortment is the
set of all products and items that aparticular seller offers for sale.
INSEPARABILLITYIn the case of entertainment and
professional services buyers are veryinterest in the specific provider. MS
VARIABILLITY
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Because it depends on who performs
PERISHAILITY
Differential pricingNonpeak demand
PRODUCT LINE
A product mix consists of various productlines,
e.g. Detergents, toothpaste, bar soap,paper tissue
PRODUCT WIDTH
Width of a product mix refers to how maydifferent product lines the companycarries.
DEPTH refers to how may variants areoffered of each product line.
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CONSISTENCY refers to how closelyrelated the various product lines are in
end use like production requirements,distribution channels.
PACKAGINGIncludes the activities of designing andproducing the container for the product.Primary package old spice after shavelotion bottleSecondary package cardboard boxShipping package corrugated boxes forholding secondary package.
FUNCTIONS-1.Attracts attention2.Describes the products features3.Constant advertisement
SEGMENTATION
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Segmentation is an approach midwaybetween mass marketing and individualmarketing.
BASES FOR SEGMENTATION
GEOGRAPHIC - Region, city,DEMOGRAPHIC - Age, Family size, Familylife cycle, Gender, Income, Occupation,EducationOTHERS Personality, Occasions Regular, occasion, special occasion; Usagerate Light , medium, heavy
PRODUCT LIFE CYCLE
It is assumed that Products have life
cycles.
Product live cycle stages are divided into 4stages-1.Introduction A period of slwo salesgrowth as the product is introducted inthe market2.Growth A period of rapid marketacceptance and substantial profitimprovement
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3.Maturityu A period of slwodown insales growth because the product hasachieved acceptance by most potentail
buyers.4.Declilne sales show downward drift.
PLC concept is used to analyseBranded Products have shoter lifecyckles.Products may have a shorter or longer lifecylcleP roduct forms manual typewriters toelectric to electronic to -----follow thestandard PLC faithfullyProduct categories have the longest lifecycles- newspates, tvs, telephones etc.,
MARKETING STRATEGIES DURINGDIFFERENT STAGES OF PLC
Markting Research is the systematicdesign collection, anaysius and reprotingof data nd findings relevant ta specifcmarketing situation facing hthe company.
Markeing Research Process-
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1.Define the Problem and Research
Objectives-
2.Develop the Researcvh Plan
Primary data and secondary data
Researchg approcahes
Observationbal reserch
Focus group research
Survey research
Experimental research cause & effect
Research Insturments
Questionnaries- Closed End
Dichotomour tweo possible answers
Multiple choice many answers
Scales Rating, Importance, Intention to
buy, semantic differential
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Likert agreement and disagrmeent
OPEN END QUESTIONS
Completely unsturctured
Word assocition, Sentence completion,
Story completion, Picture completing, TAT
Mechanical instrumetns-
Eye cameras
Galvanometers measure the interest or
emotions aroused to a specific picture or
ad.
Audimeter is attached to televison sets
Sampling Plan
Sampling Unit Who is to be surveyed
Sample size- How many
Sampling poricedure How respondentsshould be chosenm Random, Judgement
etc.,
3.Collect the information
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4.Analyse the information
5.Present the findings
METHODS OF ESTIMATING THE FUTURE
DEMAND OF THE PRODUCT
1.Survey of Buyers intentions
2.Composite sales force opinions
3.Expert opinion
4.Past sales analysis
5.Test marketing
Elements in the Communication Process
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Sender- Encoding-Message
Decoding-Receiver
Response, feedback and noise
Developing effective Communications
Steps
1.Identify the target audience-image
analysis, familiarity, favourabilty
analysis
2.Determine the communication
objectives Cognitive, affective or
behavioral
Cognitive- Put something in
consumers mind
Affective change an attitude
Behavioral ;- get the consumer to act3.Design the message
4.Select the communication channels
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5.Budget
6.Decide on the communications mix
7.Meausre results
8.Mange the integrated
communication process
Marketing Communication Mix
Advertising Print and Broadcast
ads, Packaging, Brochures, Booklets,
Posters, leaflets, Directories,
Billboards, Reprints of ads, POP,Audiovisual material , Display signs
Sales Promotion Contests, games,
premiums, gifts, sampling, Fairs and
trades shows, Demonstrations,Rebates, Low interest financing. Tie-
ins
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1.Informative advertising-pioneeringstage2.Persuasive advertising- competitive
stage uses comparative3.Reminder advertising mature products
DAGMAR Defining Advertising Goals forMeasuring Advertising Results
ADVERTISING BUDGET
Factors considered - stage in the PLC,market share and consumer base,competition and clutter, ad frequency,
METHODS OF ADVERTISING BUDGET
Percent of sales, Affordability, Competitiveparity, Objectives and task method
David Ogilvy- brand image Confessionsof an Advertising man and oglivy onAdvertising use celebrities
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ROSSER REEVES USP Balsara cloveoil relates only to advertising whereaspositioning is a basic decision.
Leo Burnett advocated the use of commonman
ADVERTISING MESSAGE
1.Message Content What to say2.Message Structure How to say itlogically3.Message Format- How to say itsymbolically
4.Message Source Who should say it
MESSAGE CONTENTRational- quality, economy, value,performanceEmotional negative, love, pride, joy -vicksMoral-aids
Humour fevicol,amul,Fear- bad smell,licceasefireMESSAGE STRUCTURE
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One sided and two sided
M ESSAGE FORMAT
Headline, copy, illustration, colour in TVbody language
MESSAGE SOURCECelebrities, doctors, opinion leaders
Message generation benefitDesirability, Exclusiveness, believability
Message ExecutionMessages impact depends not only on
what is said but how it is said- style, tone,
words, formatExecution Styles Slice of life, lifestyle,fantasy, mood, personality symbol,technical expertise, scientific evidence,and testimonial.HEADLINES News New Boom and inflation aheadQuestion - Have you heard aboutNarrative They laughed when I sat onthe piano but whenCommand Dont buy unless
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1-2-3 Ways 12 Ways to save yourincome taxHow-What Why- How to increase the
PICTURE ,headline, copy - Reader noticesthe picture first
MEDIA SELECTION -
Reach The number of different personsor households exposed to a particularmedia schedule atleast once during aspecified time period. while launchingnew products, undefined target market,
Frequency The number of time withinthe specified time period that an averageperson or household is exposed to themessage when there are strongcompetitors, frequent purchase cycle.
Impact The qualitative value of anexposure through a give medium( Children ad in chandamama thanWomans World)
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COST PER THOUSAND
If a full-page colour ad in Times of India is
4lakhs and the estimated readership is 9lakhs, the cost of exposing the ad to 1000persons is approximatelyCost 4,00,000
Readers 9,00,000
Media schedulingBurstContinuousIntermittent
Evaluating advertising effectiveness
Communication effect research seeks todetermine whether ad is communicatingeffectively CALLED COPY TESTING
Direct rating, Portfolio, lab tests3 Methods of ad pre-testingDirect Rating Method asks consumers torate alternative ads,Portfolio tests ask consumers to view orlisten to a portfolio of advertisements,taking as much time as they need.
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Consumers are asked to recall all the adsand their content aided or unaided by theinterviewer.
Laboratory test use equipment to measurephysiological reactions Heart beats,blood pressure, pupil dilation,perspiration,
The parameters on which an ad copy has
to be evaluated or tested are desirability ,exclusiveness and believabilityRECONGITION TESTS-ADS ARE NOTSHOWNNOTED number of respondents who
remember having seen the ad
SEEN ASSOCIATED is the number ofreader showing who have seen the ad andthe brand or companyREAD MOST no of respondents whohave read the copy.
RECALL AIDED OR UNAIDED
Sales Effect research Historical approach
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SALES PROMOTION consists of a diversecollection of incentive tools mostly shortterm
PUBLIC RELATIONS involves a variety ofprograms designed to promote or protecta companys image or its individualproducts
SALES FORCE MANAGEMENT
The term sales representative can cover Deliverer, order taker, Missionary,Technician, Demand creator, solution
vendor,
FUNCTIONS OF SALES PERSON Prospecting, targeting, communicating,
selling, servicing, information gathering,etc.,
Time and duty analysisPerpetration Planning call strategyTravel means of transportationFood , Waiting, Selling,
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Administration Writing reports, billing,sales meeting, etc,
PRINCIPLES OF PERSONAL SELLINGPROSPECTING Examining datasources ,putting a booth in trade show,current customer, cultivating, coldcanvassing dropping in unannouncedoffices places.
PREAPPROACH phone, visit, time, letter,
APPROCAH Greeting,
PRESENTTAION AND DEMONSTRATION
AIDA Gaining attention, holding interest,arousing desire, and obtaining action.Features, advantages, benefits and valueSTYLES OF PRESENTATIONCANNED memorises sales talkNEED SATISFACTION APPROACH
OVERCOMING OBJECTIONS
CLOSING
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FOLLOW UP AND MAINTENANCE
SPIN Situation, Problem, Implication,
Need Payoff
RELATIONSHIP MARKETING is based onthe premise that important accounts needfocussed and continuous attention.
VERTICAL MARKETING SYSTEM
Corporate VMS Bata,Administered VMS MarutiContractual VMS Thumps up
HORIZONTAL MARKETING SYSTEMTVS-WHIRLPOOL ONIDA Two or morenon related companies working together.(Symbiotic marketing)
Marketing process
1.Analysing marketing opportunities
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2.Researching & selecting target
markets
3.Developing marketing strategies4.Planning marketing programmes
5.Managing the marketing effort
ANALYSING MARKETING OPPORTUNITIES
*Marketing Information System Internal
Records System, Marketing IntelligenceSystem , Marketing Research, MarketingDSS
Marketing Research PROCESS- Defininingthe problem and research objective,developing the research plan, collecting
the information, analyzing theinformation, presenting the findings.
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Methods of sales forecasting Survey ofbuyers intentions, composite sales forceopinion, expert opinion, market testing.
Scanning the Marketing Environment -
Macro and Micro
Analysing Consumer Markets and BuyerBehaviour &
Analysing Business Markets andBusiness Buying Behaviour &
Cultural, subcultural, social, groups,family, age , life cycle, income,
perception, motivation, learning, attitudes
Buying Roles Initiators, influencers,deciders, buyers, users
Low involvement and high involvement
Buying stages Problem recognition,information search, evaluation ofalternatives, purchase decision, post-
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purchase behavior. ( Satisfaction Dissatisfaction Dissonance)
BUSINESS Markets have fewer and largerbuyers, closer customer supplierrelationship, more geographicallyconcetrated, demand is derived fromconsumer markets,. Professionalpurchasers,
Stages in the Business Buying processCALLED BUY PHASES1.Problem recognition 2.General needdescription 3.Product specification
4.Supplier search 5.Proposal solicitation
6.Suppllier selection 7.Order-routinuespecification 8.performance review.
*DEALING WITH COMPETITION Competitors analuyis attack or avoidCompetitive intelligenceCustomer Value analysis Market leader larget shareChallenger attacjs narket leader 5typesFrontal
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FlankEncirclementBypass
Guerilla
Follower runner up imitator, adaptorNicher- serves small market segments
*Market segmentation and target
marketingBases of market segmentation
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(OU Campus)-For private circulation only
COMPANY ORIENTATIONS TOWARD THEMARKETPLACE
PRODUCTION CONCEPTThe production concept holds that the consumers will prefer products
that are widely available and inexpensive.Managers of Production-oriented
business concentrate on achieving high production efficiency, low costs and
mass distribution. They assume that consumers are primarily interested in
product availability and low prices. This orientation makes sense in
developing countries, where consumers are more interested in obtaining the
product than its features. It is also used when a company wants to expand
the market.
PRODUCT CONCEPT
The product concept holds that consumers will favour those products
that offer the most quality, performance, or innovative features. Managers in
these organisations focus on making superior products and improving them
over time. They assume that buyers admire well-made products and can
appraise quality and performance. Management might commit the better
mouse-trap fallacy. Product oriented companies often design their products
with little or no customer input. Very often they will not examine theircompetitors products. The product concept can lead to marketing myopia.
(Theodore Levitt Marketing Myopia Harvard Business Review-
August,1960).These organisations are often looking into a mirror when they
should be looking out of the window.
SELLING CONCEPT
The selling concept holds thatconsumers and businesses, if left alone,will ordinarily not buy enough of theorganisationals products. The
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organisation must, therefore, undertakean aggressive selling and promotioneffort.The concept assumes that
consumers typically show buying inertia orresistance and must coaxed into buying.Italso assumes that the company has awhole battery of effective selling andpromotion tools to stimulate morebuying.The selling concept is practised
most aggressively with unsought goods,goods that buyers normally do not think ofbuying , such as insurance, encyclopediasetc.The selling concept is also practiced inthe nonprofit area such as fund-raisers,
political parties etc. A political party
vigorously sells its candidates to votes.But marketing based on hard sellingcarries high risks.
MARKETING CONCEPT
The marketing concept holds that the
key to achieving its organisational goalsconsists of the company being moreeffective than competitors in creating,delivering, and communicating customer
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value to its chosen target markets. Themarketing concept has been expressed inmany colourful ways.
*Find wants and fill them *Love the customer, not
the product
*Putting people first *The customer is
the king
The selling concept takes an inside-out perspective.It starts with the
factory, focuses on existing products, and calls for heavy selling and
promoting to produce profitable sales. The marketing concept takes an
outside-in perspective. It starts with a well-defined market, focuses on
customer needs, coordinates all the activities that will affect customers, and
produces profits by satisfying customers.
SOCIETAL MARKETING CONCEPT
The societal marketing concept holdsthat the organisations task is todetermine the needs, wants,and interests
of target markets and to deliver thedesired satisfactions more effectivelyefficiently than competitors. In a way thatpreserves or enhances the customers andsocietys well being.The societal marketingconcept calls upon marketers to buildsocial and ethical considerations into theirmarketing practices, They must balance
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and juggle the often conflicting criteria ofcompanys profits, consumer wantsatisfaction, and public interest. They
believe that customers will increasinglylook for demonstrations of good corporatecitizenship.
Professor V.Shekhar, Department of Business Management, Osmania University, Hyd-7
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MARKETING CONTROL
1.Annual Plan Control 2.Profitabilty control 3. Efficiency control 4. Strategic
control
ANNUAL PLAN CONTROL
The purpose of annual plan control is to ensure the
company achieves sales profits, and other goals established
in the annual plan. The heart of annual plan control is
management by objectives.
Tools of Annual Plan Control
1. Sales Analysis Consists of measuring and evaluatingactual sallies in relation to sales goals. Sales varianceanalysis measure the relative contribution of differentfactors to a gap in sales performance Microsalesanalysis looks at specific products, territories, and soforth that failed to produce expected sales.
2. Market Share Analysis It can be done in three ways:
a) Overall market share is the companys salesexpressed as a percentage of total market sales.
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b) Served market share is its sales expressed as apercentage of the total sales to its served market(Served market share is always larger than thetotal market share).
c) Relative market share can be expressed asmarket share in relation to its largest competitor.
3. Marketing Expense-to-Sales Analysis: It is the key to
watch that the company is not overspending to achieve sales
goals.
4. Financial Analysis: Here the Expense to Sales ratiosare analysed in an overall financial framework to determines
how and where the company is making its money.
5. Market Based Scorecard Analysis Here two types of
scorecards are Prepared :
a) Customer performance scorecardb) Stakeholder performance scorecard
PROFITABILITY CONTROL
Seeks to measure and control the profitability of various products, territories,
customer groups, trade channels and order sizes.
Marketing Profitability Analysis
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For example a lawnmower company wants to determine the profitability of selling its
lawnmower through three types of retail channels: hardware stores, garden supply
shops, and departmental stores. The following activities are carried out for
conducting the marketing profitability analysis -
1.Identifying functional expenses
2.Assigning functional expenses to marketing entities
3.Preparing a profit and loss statement for each
marketing entity.
Based on the analysis of this exercise the company
determines corrective action.
Activity Based Accounting
Companies are showing a growing interest in using
marketing profitability analysis or its broader version, activity
based cost accounting (ABC) to quantity the true
profitability of different activities. ABC can give managers a
clear picture of how products, brand, customers, facilities,
regions, or distribution channels both generate revenues and
consumer resources. To improve profitability, manager canthen examine ways to reduce the resources required to
perform various activities, or make the resources more
productive to acquire them at a lower cost. Alternatively,
management may raise prices on products that consume
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heavy amount of support resources. The contribution of ABC
is to refocus managements attention away from using only
labour or material standard costs to allocate full cost, and
toward capturing the actual costs of supporting individualproducts, customers and other entities.
EFFICIENCY CONTROL
Focuses on finding ways to increasethe efficiency of the sales force,advertising, sales promotion anddistribution.
1.Sales Force Efficiency key indicators are average number of calls per salesperson per day, average
sales call time per contact, average revenue per sales call, average cost per sales call, entertainment cost
per sales call etc.,
2. Advertising Efficiency Advertising cost per thousand
target buyers reached by media vehicle, percentage
audience who noted, saw or associated, and read most of
each print ad. Consumers opinion on the ads content and
effectiveness, before and after measures of attitude toward
the product, number of inquiries stimulated by the ad and
cost per Inquiry.
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3. Sales Promotion Efficiency Percentage sold on deal,
percentage of coupons redeemed, number of inquiries
resulting from demonstration.
4. Distribution Efficiency Management needs to search for
distribution efficiency in inventory control, warehouse
locations and transportation models.
STRATEGIC CONTROL
From time to time, companies need toundertake a critical review of overallmarketing goals and effectiveness. Each
company should periodically assess itsstrategic approaches to the market placewith marketing effectiveness review,marketing audit and Ethical and Social
Responsibility Review
Marketing Effectiveness ReviewA companys marketing effectiveness is reflected in the degree to which it exhibits the following
five major attributes of a marketing orientation.
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1. Customer Philosophy Whether the managementrecognises the importance of delivering the needs andwants of chosen markets
2. Integrated Marketing Organisation To check if there
is a high-level marketing integration and control of themajor marketing functions.
3. Adequate Marketing Information Whether marketingresearch studies are being conducted on a regularbasis.
4. Strategic Orientation
i. What is the extent of formal marketingplanning ?ii. How impressive is the current marketing
strategy ?iii. What is the extent of contingency thinking and
planning ?
2. Operational efficiency How well is the marketing
strategy communicated and implemented ?
Marketing Audit
A marketing audit is a comprehensive, systematic,
independent and periodic examination of a companys or
business units marketing environment, objectives,
strategies, and activities with a view to determining problem
areas and opportunities and recommending a plan of action
to improve the companys marketing performance. The
components of a marketing audit are marketing environment,
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marketing strategy, marketing organisation, marketing
system, marketing productivity and marketing function.
Ethical and Social Responsibility Review
There are ethical and moral issues likebribery, stealing trade secrets, false anddeceptive advertising, quality and safety
of products, price fixing, barriers to entryetc., Companies need to evaluate whetherthey are truly practicing ethical andsocially responsible marketing.
SUMMARY OF MARKETING CONTROL
ANNUAL CONTROL
1.Sales Analysis
2.Market Share Analysis
3.Marketing Expense-to-Sales Analysis
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4.Financial Analysis
5.Market Based Scorecard Analysis
PROFITABILITY CONTROL
Marketing Profitability Analysis
Activity Based Accounting
EFFICIENCY CONTROL
1. Sales Force Efficiency
2. Advertising Efficiency
3. Sales Promotion Efficiency
4. Distribution Efficiency
STRATEGIC CONTROL
Marketing Effectiveness ReviewMarketing AuditEthical and Social Responsibility Review
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(OU Campus)- For Private Circulation Only
MARKETING ENVIRONMENT
Companies must constantly watch and adapt to the marketing
environment in order to seek opportunities and ward off threats. The
marketing environment comprises of all the actors and forces influencing the
companys ability to transact business effectively with its target customers.
MICROENVIRONMENT
The microenvironment consists of forces close to the company that
affects its ability to serve its customers the company, suppliers, marketing
channel firms, customer markets, competitors and public.
1.The company Top management, and other departments
2.Suppliers Value delivery system
3.Marketing intermediaries Resellers, physical distribution firms
4.Customers Five types
a) Consumer markets personal consumption
b) Business markets further processing or for use in production process
c) Reseller markets to resell for a profit
d) Government markets Government and government agencies
e) International markets Buyers in other countries Any of the above
markets
5) Competitors for their strategies
6) Publics Banks, financial institutions, investment houses, newspapers,
magazines, television, consumer groups, environmental groups, minority
groups, neighborhood residents, general public and companys internal
public.
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MACRO ENVIRONMENT
1.Demographic 2.Economic 3.Natural 4.Technological 5.Political 6.Cultural
DEMOGRAPHIC ENVIRONMENT
Demography is the study of human population in terms of size,
density, location, age, gender, race, occupation, and other statistics.
Demography refers to the vital and measurable statistics of the population.
Marketers have to keep a close track of demographic trends and
developments in their markets. They should track changing:
Population Growth: The world population is
showing explosive growth.Age structure How many young people, old or middle aged
Family structure Late marriages, number of
working women, divorce rates, single parenthouseholds, live in companionships etc.,
Geographical shifts in population Rural to
urban to suburbanEducated population and white-collar population
Ethnic Markets: Countries also vary in ethnic and racial make-up. At one
extreme is Japan where almost every one is Japanese; at the other is United
States where people from virtually all nations can be seen.
ECONOMIC
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Markets require purchasing poweras well as people. The economicenvironment consists of factors that
affect consumer purchasing powerand spending patterns. Changes inincome, income distribution, spendingpatterns (i.e. percentage spent offood, housing, utilities, clothing,transportation, health care,
entertainment, insurance etc.
Marketers must pay carefulattention to major a changes inincomes, cost of living, interest rates,savings, and borrowing patterns
because they can have high impact onbusiness especially for companieswhose products have high income andprice sensitivity.
NATURAL
The deterioration of natural environment is a major global
concern. In many world cities air and water pollution have
reached dangerous levels. Greenhouse effect: i.e.- dangerous
warming of the earth. Marketers need to be aware of the threats
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and opportunities associated with trends in natural environment.
These are :
1. Shortages of raw material Air, water, forests, oil, coal, minerals2. Pollution disposal of chemical and nuclear waste, littering ofearth with plastic3. Increased government intervention
TECHNOLOGICAL
One of the most dramatic forces shaping people lives is technology.
Technology has released such wonders as penicillin, open- heart surgery,
birth control pill, antibiotics, organ transplantation, computers and Internet. It
has released such horrors such as hydrogen bomb, nerve gas, nuclearmissiles, chemical and biological weapons and the machine gun. It has also
released such mixed blessings as the automobile, Credit cards and the TV.
Every new technology is a force for creative destruction of old things. The
economys growth rate is affected by how many major new technologies are
discovered. Unfortunately technological discoveries do not arise evenly
through time.
Many of the todays common products were not available 50 years
ago. E.g personal computers, video recorders, fax machines, cell phones.Scientists are working on AIDS cures, happiness pills, robots for fire fighting,
under water exploration, home nursing, flying cars, space colonies etc., New
technologies create new markets and opportunities as well as threats.
Marketers should watch the technological changes closely.
POLITICAL
Marketing decisions are strongly affected by developments in political
and legal environment. The political environment consists of laws,
government agencies and pressure groups that influence and limit various
organisations and individuals in a given society. Companies Act 1956; Trade
and merchandise Act 1958;Essential commodities Act; Prevention of Food
Adulteration Act;
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CULTURAL
Society shapes our beliefs, values and norms. People absorb almost
unconsciously a worldview that defines their relationship to themselves, to
others, to organisations to society, to nature and to the universe. They must
market products that correspond to societys core and secondary values, and
address the needs of different subcultures.
Professor. V.SHEKHAR, Head, Dept. of Business Management, Osmania University
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MARKETING
MARKETING IS TYPICALLY SEEN ASTHE TASK OF CREATING, PROMOTING
AND DELIVERING GOODS (PHYSICAL)SERVICES (AIRLINES, HOTELS,BARBERS, LAWYERS,) - MANYMARKET OFFERINGS CONSIST OF AVARIABLE MIX OF GOODS ANDSERVICES. EVENTS(OLYMPICS,SPORTS) PERSONS
(CELEBRITY MARKETING) PLACES(CITIES,NATIONS) PROPERTIES(PHYSICAL /FINANCIAL),ORGANISATIONS (CORPORATEIMAGE), INFORMATION(EDUCATIONALINSTITUTIONS,MAGAZINES) AND
IDEAS(PRODUCTS AND SERVICES AREPLATFORMS FOR DELIVERING SOMEIDEA OR BENEFIT) TO CONSUMERSAND BUSINESSES.
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DEFINITION- MARKETING IS THEPROCESS OF PLANNING ANDEXECUTING THE CONCEPTION,
PRICING PROMOTION DISTRIBUTIONOF IDEA GOODS, SERVICES TOCREATE EXCHANGES THAT SATISFYINDIVIDUAL AND ORGANISATIONALGOALS.
EXCHANGE IS THE CORE CONCEPT OFMARKETING: FOR EXCHANGEPOTENTIAL TO EXIST, SOMECONDITIONS MUST BE SATISFIEDLIKE-
1.THERE ARE ATLEAST 2 PARTIES
2.EACH PARTY HAS SOMETHING THATMIGHT BE OF VALUE TO THE OTHERPARTY.
3.EACH PARTY IS CAPABLE OFCOMMUNICATION AND DELIVERY4.EACH PARTY IS FREE TO ACCEPT ORREJECT THE EXCHANGE OFFER
LEVELS OF COMPETITION:
1.BRAND COMPETITION MATIZ VSSANTRO
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2.INDUSTRY COMPETITION ALL CARMANUFACTURERS3.FORM COMPETITION ALL
AUTOMOBILE MANUFACTURERS3.GENERIC COMPETITION- ALLCOMPANIES THAT COMPETE AT THESAME RUPEE VALUE LIKE MAJORCONSUMER DURABLES, APARTMENTS.
MARKETING MIX
MARKETING MIX IS THE SET OFMARKETING TOOLS THAT THE FIRMUSE S TO PURSUE ITS MARKETINGOBJECTIVES IN THE TARGET MARKET.MCCARTHY CLASSIFIED THESE TOOLS
INTO FOUR BROAD MAJOR GROUPSTHAT HE CALLED AS 4 PS.
PRODUCT - SOLUTIONPRODUCT VARIETY, QUALITY, DESIGN,FEATURES, BRAND NAME,PACKAGING, SERVICES WARRANTIES,
PRICE - COST
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LIST PRICE, DISCOUNTS,ALLOWANCES, PAYMENT PERIOD,CREDIT TERMS ETC
PROMOTION - COMMUNICATIONSALES PROMOTION,ADVERTISEMENTS, SALES FORCE,PUBLIC RELATIONS, DIRECTMARKETINGPLACE - CONVENIENCE
CHANNELS, LOCATIONS, INVENTORY,TRANSPORT
MARKETING PHILOSOPHIES
PRODUCTION CONCEPT HOLDS THATCONSUMERS WILL PREFER PRODUCTSTHAT ARE WIDELY AVAILABLE ANDINEXPENSIVE.
PRODUCT CONCEPT- HOLDS THATCONSUMERS WILL FAVOUR THOSEPRODUCTS THAT OFFER THE MOSTQUALITY, PERFORMANCE ORINNOVATIVE FEATURES.
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SELLING CONCEPT HOLDS THATCONSUMERS AND BUSINESSES, IF
LEFT ALONE, WILL ORDINARY NOTBUY ENOUGH OF THEORGANISATIONS PRODUCTS ANDHENCE ORGANISTAIONS SHOULDUNDERTAKE AGGRESSIVE SELLINGAND PROMOTION EFFORT.
MARKETING CONCEPT- HOLDS THATTHE KEY TO ACHIEVING ITSORGANISATIONS GOALS CONSISTS OFTHE COMPANY BEING MOREEFFECTIVE THAN COMPETITION INCREATING , DELIVERING AND
COMMUNICATING CUSTOMER VALUETO ITS CHOSEN TARGET MARKETS.
FIND WANTS AND FILL THEMPUTTING PEOPLE FIRST BRITISHAIRWAYSLOVE THE CUSTOMER , NOT THEPRODUCT
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RELATIONSHIP MARKETING BUILDING LONG TERMRELATIONSHIPS.
MANAGING PRODUCT LINES ANDBRANDS
PRODUCT CLASSIFICATIONS-
1. NON- DURABLE GOODS- TANGIBLEGOODS NORMALLY CONSUMED INONE OR FEW USES- MANYLOCATIONS, HEAVY ADVERTISING,BUILD BRAND LOYALTY
2.DURABLE GOODS TANGIBLE
GOODS THAT NORMALLY SURVIVEMANY USES P
top related