marketingfor managers
TRANSCRIPT
Marketing for Managers
Salil SabnisProf. Marketing-AMPD
Contents Marketing an Its Applications Marketing planning and Organisation Understanding Consumers Product Management Pricing an Promotion Strategy Distribution and Public Policy
Block 1Marketing and its Applications
Chapter 1Introduction to Marketing
The Meaning of Marketing
Marketing is the performance of business activities that directs the flow of goods and services from producer to consumer or user
PRODUCERProduct
CONSUMERNeed
Marketing activities
The Marketing Mix
C
Product
Price
Promotion
Place
Marketing Strategy
Needed to create and retain a satisfied customers
Strategies STDP Strategies Marketing Mix Strategies
STPD Strategies Segmentation
Aggregating process – A cluster of people with similar needs.
A Homogeneous group of customer who will respond to a marketing mix in a similar way.
Targeting Once the market segment is defined, it has to
decide how many and which one to target.
Differentiation Product Differentiation Service Differentiation Channel Differentiation Personnel differentiation
Positioning It’s a perception about your offering in the
minds of the consumer.
Product Mix StrategiesWhat is Product Mix
Set of all products offered by an organisation to its customers
Consists of Width Length Depth Consistency
Case StudyCase Study
Product-line Length
Product-Mix Width
Beverages Juice Snacks
PepsiMountain DewAquafinaMirinda7-UpDukes SodaDukes MangolaSlice
Tropicana Orange Nature Sweet Apple Grape Pineapple Tomato Mixed Fruit
LaysCheetosLeharNumkeensNutyumzKurkure
Product-Mix Width and Product-Line Length for PepsiCo IndiaProduct-Mix Width and Product-Line Length for PepsiCo India
Strategy of Product Mix Expansion of product mix Contraction of product mix Altering existing products Positioning the product
PlaceIs concerned with all the decisions involved in the getting right product to the target market’s place.
Distribution Channels – any series of firms that participate in the flow of products from producer to its final consumers.
Manufactures or producer
Consumer
Nestle
Wholesaler
Wholesaler
Retailer
Wholesaler
Retailer
Toyota
Retailer
Raymond's
Promotion Mix Strategy
Push Strategy directing communications to channel
members Pull Strategy
directing communications to end users Factors
type of product/market buyer readiness stage product life-cycle stage
Pricing Strategy
HIGH MEDIUM LOW
HIGH1) Premium
Strategy2) High-value
strategy3) Super-value
strategy
MEDIUM 4) Overcharging Strategy
5) Medium-value strategy
6) Good-value Strategy
LOW7) Rip-Off Strategy
8) False economy strategy
9) Economy Strategy
PRICE
QU
AL
ITY
Chapter 2Marketing in a Developing Economy
Marketing functions performed at different levels of development
Relevance of Marketing in a developing economy Marketing and planned economic growth How to view the marketing effort Significance of macro and micro marketing General role of marketing
Stimulates potential aggregate demand and thus enlarge the size of the market
It helps in the discover of entrepreneurial talent
Areas of Relevance Marketing in agriculture, basic industries, mining
and plantation Intermediate industrial goods Semi-industrial products Export trade & services like tourism and banking
The Relevance of Social Marketing
4 P’s Social Marketing planning system
Chapter 3Marketing of services
The service sector The services sector has been growing
at a rate of 8% per annum in recent years
More than half of our GDP is accounted for from the services sector
This sector dominates with the best jobs, best talent and best incomes
“There are no such thing as service industries.There are only
industries whose service components are greater or less than those of other industries.
Everybody is in service.”
-Theodore Levitt-
What is services?
It is the part of the product or the full product for which the customer is willing to see value and pay for it.
Growing Importance of Services
Economic well being increases the demand of services
Changing lifestyle Complexity of the product
Characteristics of Services Intangibility Perishability Inseparability Variability Client relationships Right of owner-ship
Intangibility Hard to grasp, concept is abstract
Dramatization often necessary for concept
Hard to separate the service provider and the service
Perishability Services cannot be stored or held in
inventory.
If not used when available, they “go to waste”.
Inseparability Outlet accessibility can limit the area covered
by the service.
Image is important: Image affects the perception of the service.
Variability Service quality tends to vary
considerably.
Haircut from your hair dresser vs. “Javed Habib”
Client Relationships Relationships between service organizations
and customers are often close
Potential for loyalty longterm
Right of owner-ship It is not taken to the service, we merely
experience it. e.g. Services of a doctor, lawyer, teacher,
mechanic, etc..
Difference between physical goods and services
Physical goods Services
tangible intangible
homogeneous heterogeneous
Production and distribution are separated from consumption
Production, distribution and consumption are simultaneous processes
A thing An activity or process
Core value processed in factory Core value produced in the buyer-seller interaction
Customers do not participate in the production process
Customers participate in production
Can be kept in stock Cannot be kept in stock
Transfer of ownership No transfer of ownership
SERVICES MARKETING MIX Product Place Prize Promotion People Physical Evidence Process
In services, the last experience remains
uppermost in your mind. Therefore, it is not enough to
be good, you have to be consistently good
Service quality is directly proportional to employee
satisfaction
Block 2Marketing Planning and Organisation
Chapter 4Planning Marketing Mix
The Elements of Marketing Mix Product activities
Quality, features, style, brand name, packaging, sizes, services, warranties, returns
Pricing activities Target customers, cost, competition, the law, social
responsibility Promotional activities
Advertising, personal selling, sales promotion, publicity and public relations
Place or Distribution related activities Physical distribution
Transportation, warehosuing and storage, Order processing, Inventory control, Location
Channels of distribution
The Place of the Marketing Mix in Marketing planning
Current Marketing Situation Identification of Problems and Opportunities Defining Objectives Designing the Marketing Strategy Developing the marketing programme
The Relationship between Marketing Mix and Marketing Strategy
The concept of Optimum Marketing Mix
Marketing Mix and some specific Situation
New product development and marketing mix
Product life cycle and marketing mix Role of Advertising in marketing mix Role of price in marketing mix
The ProductLife Cycle
Chapter 5Market Segmentation
The Concept of Market In respect of the network of institutions like
wholesalers and brokers dealing in a product
To refer to the nature of demand for the product, as when we speak of the market for soap
The concept of segmentation Relationship of a segment to a market
Market Segmentation versus product development
Benefits and doubts about segmentation What is grouped in forming segments
What, how, where, when, why, who
Bases for Segmentation
Occasions, Benefits, Uses, or Attitudes
Behavioral
DemographicAge, Gender, Family size and Life cycle, Race, Occupation, or Income ...
Lifestyle or PersonalityPsychographic
GeographicRegion, City or MetroSize, Density, Climate
Segmenting Business Markets…Contd.
Basesfor Segmenting
BusinessMarkets
Basesfor Segmenting
BusinessMarkets
DemographicsPersonalCharacteristics
SituationalFactors
OperatingCharacteristics
PurchasingApproaches
How is the basis for segmentation selected?
Methods that companies use Logical division Perceptual mapping technique Considerations in using perceptual maps
Selection of Segments General factors
Company trust Size & growth potential Investment needed Profitability Risk Competition
Specific Segmentation factors Segment durability Mobility Visibility accessibility
Chapter 6Marketing Organisation
Principles of Designing an Organisation
Specialisation Departmentalisation Standardisation Formalisation Centralisation Evaluation Structure
Marketing Organisation The changing role of Marketing Organisation
Simple sales department Sales department with some marketing function Separate marketing department Integrated marketing department Marketing oriented organisation
Considerations involved in designing the marketing organisation Statement of objective and goals of the firm Nature of the product/Line of activity Areas of operation Nature of Industry Computerisation & up-gradation of information system External environment & Government intervention.
Marketing Organisation Methods of designing the Marketing Organisation
Functional Organisation Product Management Organisation Market Centered Organisation
Organisation of Corporate Marketing No corporate marketing support Minimal corporate marketing support moderate corporate marketing Strong corporate marketing
Chapter 7Marketing Research & Its Applications
The Context of Marketing Decisions Definition of Marketing Research Purpose of Marketing Research Scope of Marketing Research Marketing Research Procedure
Problem Definition Research design Field Work Data Analysis Report presentation and implementation
Marketing Research in India Problems of conducting marketing research
Application of Marketing Research Sales & Market Analysis
Determination of market potential Determination of market share Sales forecasting Design of market segmentation studies Target market Distribution channel studies Determination of market characteristics Determination of competitive information
Product Research Evaluation of new product ideas Testing for new product acceptance Evaluating the need for change in product information Testing package design Testing of product positioning
Application of Marketing Research Business Economics and corporate research
Studies of business trends Pricing studies Diversification studies Product mix studies Plant & warehouse location studies
Advertising Research Audience Measurement Determining the most cost effective media plan Copy Testing Determining advertising effectiveness Consumer behaviour research
Block 3Understanding Consumers
Chapter 8Determinants of Consumer
Behaviour
Importance of consumer behaviour for marketers
Types of consumers Buyers v/s Users
Figure 16.2 A Simple Model of Consumer Decision Making
Firm’s Marketing Efforts1. Product2. Promotion3. Price4. Channels of distribution
Sociocultural Environment1. Family2. Informal sources3. Other noncommercial sources4. Social class5. Subculture and culture
Need Recognition
Prepurchase Search
Evaluation of Alternatives
Psychological Field1. Motivation2. Perception3. Learning4. Personality5. Attitudes
Experience
Purchase1. Trial2. Repeat purchase
Postpurchase EvaluationOutput
Process
Input
External Influences
Consumer Decision Making
Postdecision Behavior
Problem Recognition
Information search
Purchasing decision
Postpurchase behaviour
attitudes
personality motivation
learning perception
External Environment
Individual Determinants
culture
family
social group social class
subculture
others
Factors influencing consumer behaviour
Chapter 9Models of Consumer Behaviour
What is a decision?
Process of decision making Involvement Alternative differentiation Time pressure
Types of Consumer Decision Making What to buy How much to buy Where to buy When to buy How to buy
Levels of Consumer Decision Making
Buying Roles Buying Behaviour
Extensive problem solving Routinized buying behaviour Variety seeking behaviour
Stages in the Buyer Decision Process
Identify the problem
recognition
Gather information about the product
and brands
Evaluate the
alternatives and
select the best
possible alternative
Purchase decision/
buying the product
Post purchase
Evaluation
• Post purchase use and disposal
Models of Buyer Behaviour Horward-Seth Model
Inputs Perceptual & learning constructs Outputs Exogenous or external variable
Engel-Kollat-Bloackwell Model Information processing Central control unit Decision process Environmental influences
Model of family decision making Influencers Gatekeepers Deciders Preparers Buyers users
Model of industrial buyer behaviour
Chapter 10Indian Consumer Environment
Demographic Characteristics Income and consumption characteristics Characteristics of organisational consumers Geographic characteristics Market potential Socio cultural characteristics
Block 4Product Management
Chapter 11Product decision and strategies
ProductProduct
Physical goods Services Experiences Events Persons Places Properties Organizations Information Ideas
Anything that can be offered to a market to satisfy a want or needAnything that can be offered to a market to satisfy a want or need
The fundamental service or product the customer is buyingIn a bank the customer is looking for In a bank the customer is looking for security of his moneysecurity of his money
Marketer has to turn core benefit into basic productBank accounts like savings account, current account
A set of attributes and conditions the buyers expect when they buy the product The bank customer would expect a cheque The bank customer would expect a cheque book, locker and other deposit products like book, locker and other deposit products like FD, RDFD, RD
A product that exceeds customer expectationsA bank can offer facilities like A bank can offer facilities like ATM/Debit cards, Telebanking, Internet ATM/Debit cards, Telebanking, Internet Banking and also other financial Banking and also other financial servicesservices
Encompasses all possible augmentation and transformations the product might undergo in futureAnywhere banking, ATM sharing, Anywhere banking, ATM sharing, CRM priority banking, portfolio CRM priority banking, portfolio managementmanagement
Product LevelsProduct Levels
Product MixProduct Mix
Product mix has a certain… Width
Length
Depth
Consistency
Case StudyCase Study
Product-line Length
Product-Mix Width
Beverages Juice Snacks
PepsiMountain DewAquafinaMirinda7-UpDukes SodaDukes MangolaSlice
Tropicana Orange Nature Sweet Apple Grape Pineapple Tomato Mixed Fruit
LaysCheetosLeharNumkeensNutyumzKurkure
Product-Mix Width and Product-Line Length for PepsiCo IndiaProduct-Mix Width and Product-Line Length for PepsiCo India
Case StudyCase Study
PrintPrint RetailRetailEntertainmentEntertainmentNetNet
The Times Group
The Times Group contd..The Times Group contd..
PrintPrint
GROUP SITES
The Times Group contd..The Times Group contd..
NetNet
The Times Group contd..The Times Group contd..
EntertainmentEntertainment
The Times Group contd..The Times Group contd..
RetailRetail
Product Line DecisionsProduct Line Decisions
B. Product line Length a. Objectives b. Cycle
1. Line Stretching a. Down market Stretch b. Up market Stretch c. Two way stretch
2. Line Filling Just-noticeable difference
3. Line Modernization, Featuring and Pruning
Chapter 12Product Life cycle and New Product
Development
The Product Life Cycle Concept
Marketing Mix at different stages
Strategy Introduction Growth Maturity Decline
1. Objective Aggressive Entry Maximize Share BoastProfits
MilkProducts
2. Focus Non- Users New Segments DefendShare
Cut Costs
3.Customer Targets
Innovators Early Adopters
Majority Laggards
4.Competitor Few Growing Number Many Declining
5.Differentiated Advantage
Product Performance
Brand Image Price & Service Price
Marketing MIX Introduction Growth Maturity Decline
1. Product Basic Extension & Enhancement
Differentiation& Variety
Rationalize Range
2. Price High Lower Lower Stabilizing
3.Promotion High High Falling Low
4. Advertisement Forms.
Awareness Brand Performance
Loyalty Selective
5.Distribution Selective Intensive Intensive Rationalize
New Product Development Strategy
Stages in new product development Ideas generation Screening of ideas Concept testing Product designing and evaluation Product testing Product launching
Chapter 13Branding and packaging decison
Branding
Definition: “A brand is a name, Term, Sign, Symbol, Definition: “A brand is a name, Term, Sign, Symbol, Brand or combination of them intended to identify Brand or combination of them intended to identify the goods or services of one seller or group of the goods or services of one seller or group of sellers and to differentiate them from those of sellers and to differentiate them from those of competitors.”competitors.”
-American Marketing AssociationAmerican Marketing Association
•Trademarks – legal right to the exclusive use of that name or mark
Challenges in Branding and Challenges in Branding and decisionsdecisions
Branding to be or not to be..Branding to be or not to be..
Whether Produce Manufacturer Brands or Whether Produce Manufacturer Brands or Distributor / Private BrandsDistributor / Private Brands
Which Brand Name/s to useWhich Brand Name/s to use
Whether to use Line extensions, Brand Whether to use Line extensions, Brand Extensions, Multi Brands, New Brands or Extensions, Multi Brands, New Brands or CobrandsCobrands
Brand Name FeaturesBrand Name Features
suggest something about the product’s benefits
suggest the product or service category suggest concrete, “high imagery” qualities be easy to spell, pronounce, recognize, and
remember be distinctive not carry poor meanings in other countries and
languages
A Brand name shouldA Brand name should
Packaging What is packaging Packaging Industry
Used materials : Metals, plastics, wood, paper, glass, laminates, polysters, etc.
Functions of packaging Protection, Appeal Performance Offer convenience to the end-users Cost effective
Legal dimensions of packaging Statutory requirements
Net weight, when packed Date of manufacture Date of expiry Directions of storage MRP Directions for use
Block 5Pricing and Promotion Strategies
Chapter 14Pricing policies and practices
Price• Three variables that determine profit:
SalesVolumeSales
VolumePricePriceX CostCost ProfitProfit- =
Price
CustomerSeller
Benefit
Determinants of Price Demand
Competition
Setting the Price
Premium Strategy
(Mercedes,Evian)
Overcharging Strategy(Cielo)
Overcharging Strategy(Cielo)
Good-Value Strategy(Amul)
Good-Value Strategy(Amul)
Economy Strategy
(Akai,OK)
Economy Strategy
(Akai,OK)
Price
Higher Lower
Higher
Lower
Qu
ali t
yPricing StrategiesPrice-Quality Strategies
•Survival•Low Prices to Cover Variable Costs and Some Fixed Costs to Stay in Business.
•Current Profit Maximization•Choose the Price that Produces the Maximum Current Profit, Etc.
•Market Share Leadership•Low as Possible Prices to Become the Market Share Leader.
•Product Quali ty Leadership•High Prices to Cover Higher Performance Quality and R & D.
•Market Skimming•Initially setting up High Prices to Skim the market
Corporate Pricing Objectives
Survival(Mobile Operators) Survival
(Mobile Operators)
Maximum market skimming
(Nokia Handsets / Intel Micro Chips)
Maximum market skimming
(Nokia Handsets / Intel Micro Chips)
Product-quality leadership
(Maruti)
Product-quality leadership
(Maruti)
Maximum current profit
(Aiwa)
Maximum current profit
(Aiwa)
Maximum market share(Kodak KB)
Maximum market share(Kodak KB)
Selecting the Price Objective
Estimating Cost
Total CostsSum of the Fixed and Variable Costs for a Given
Level of Production
Total CostsSum of the Fixed and Variable Costs for a Given
Level of Production
Fixed Costs(Overhead)
Costs that don’tvary with sales or production levels.
Executive SalariesRent
Fixed Costs(Overhead)
Costs that don’tvary with sales or production levels.
Executive SalariesRent
Variable Costs
Costs that do varydirectly with the
level of production.
Raw materials
Variable Costs
Costs that do varydirectly with the
level of production.
Raw materials
Markup PricingTarget Return PricingPerceived Value PricingValue PricingGoing-Rate PricingSealed-Bid Pricing
Selecting a Pricing Method
Pricing Methods
Markup price = unit cost (1-desired return on sales) Where unit cost is variable cost + (fixed cost/unit sales)
Target return pricing (target ROI) =Unit cost + desired return X invested capital Unit sales Break even volume = fixed cost Price – variable cost
Value-based Pricing Pricing strategy reflects the beliefs and
attitudes of the customer. Perceived price/quality relationship. Price is based on an understanding of the
value of the product as perceived by the customer.
Pricing Methods
Value-Based Pricing
Product
Cost
Price
Value
Customers
Customer
Value
Price
Cost
Product
Cost-Based Pricing Value-Based Pricing
START
Going-Rate
Company Sets Prices Based On What Competitors Are Charging.
Sealed-Bid
Company Sets Prices Based On What They Think Competitors Will Charge.
Pricing Methods
Selecting the Final Price Psychological pricing
Sometimes price is equated to quality Reference Price
Influencing of other marketing-mix elements The final price must be take in to account the brands quality
and advertising relative to competition
Company pricing policies The Price must be consistent with company pricing policies
Impact of price on other parties such as dealers and distributors
Marketing Management – Philip Kotler
Harry Potter – J. K. Rowling
Adjusting prices to account for the Geographical Location of Customers
US Price $124.67India Price Rs. 310
US Price $17.99India Price Rs. 636
Geographical Pricing
Discount & AllowanceReducing Prices to Reward
Customer Responses such asPaying Early or Promoting
the Product.
Discount & AllowanceReducing Prices to Reward
Customer Responses such asPaying Early or Promoting
the Product.
Cash DiscountCash Discount
Quantity DiscountQuantity Discount
Functional DiscountFunctional Discount
Seasonal Discount Seasonal Discount
Trade-In AllowanceTrade-In Allowance Promotional AllowancePromotional Allowance
• Reducing Prices to Increase Short-Run Sales
• Reducing Prices to Reward Customer Responses such as Paying Early or Promoting the Product.
Promotional Pricing
Product mix
Product-Mix Pricing Tactics:
Product-line Pricing
Optional-feature pricing
Captive-product pricing
Two-Part Pricing
By-Product Pricing
Product-Bundle Pricing
Optional-Product PricingOptional-Product PricingPricing Optional or Accessory Products
Sold With The Main Producti.e. Car Options such as a CD player
Optional-Product PricingOptional-Product PricingPricing Optional or Accessory Products
Sold With The Main Producti.e. Car Options such as a CD player
Captive-Product PricingCaptive-Product PricingPricing Products That Must Be
Used Along With The Main Producte.g. Printer cartridges
Captive-Product PricingCaptive-Product PricingPricing Products That Must Be
Used Along With The Main Producte.g. Printer cartridges
By-Product PricingBy-Product PricingPricing Low-Value By-Products To
Get Rid of Theme.g. Sugarcane
By-Product PricingBy-Product PricingPricing Low-Value By-Products To
Get Rid of Theme.g. Sugarcane
Product-Bundle PricingProduct-Bundle PricingBundles Of Products Sold
Together at a Reduced Pricee.g. Gillete razor blades & foam
Product-Bundle PricingProduct-Bundle PricingBundles Of Products Sold
Together at a Reduced Pricee.g. Gillete razor blades & foam
ProductMix
PricingStrategies
ProductMix
PricingStrategies
Product Mix Pricing StrategiesProduct Mix Pricing Strategies
Setting Price Steps Between Product Line Items
Product Line Pricing
Analyzing Competitors ’Cost ,Prices and Offers
The company needs to benchmark its costs against its competitors’cost to learn whether it is operating at a cost advantage or disadvantage.
The company also needs to learn the price and quality of competitors’ offers
Hold Current Price;Continue to MonitorCompetitor’s Price.
Hold Current Price;Continue to MonitorCompetitor’s Price.
Reduce PriceReduce Price
Raise PerceivedQuality
Raise PerceivedQuality
Improve Quality& Increase PriceImprove Quality& Increase Price
Launch Low-Price“Fighting Brand”
Launch Low-Price“Fighting Brand”
Has Competitor CutPrice?
Has Competitor CutPrice?
Will Lower Price Negatively Affect Our
Market Share & Profits?
Will Lower Price Negatively Affect Our
Market Share & Profits?
Can/ Should EffectiveAction be Taken?
Can/ Should EffectiveAction be Taken?
Yes
No
No
No
Yes
Yes
Assessing & Responding to Competitor Price Changes
Chapter 15Marketing Communication
The Communication Process
S e n d e r E n c o d i n g
F e e d b a c k R e s p o n s e
N o i s e
M e s s a g eM e d i a D e c o d i n g R e c e i v e r
Marketing Communication Mix
Advertising
MarketingCommunication
Sales Promotion
Public Relation
sPersonal Sell ing
Direct Marketing
The Promotion Mix
Ad
ve rtisi ng
Ad
v ertisi n
g
Sales PromotionSpecial Offer
Public Relations
Perso
nal S
elling
Pe
r son
al Se
ll ing
Direct Marketing
Advertising
Mass Media Newspapers TV Radio Magazines Billboards
Eg : Johnson & Johnson
A paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media
Types of sales promotions Coupon
Point-of-Purchase
Premium: free/ reduced-price
Trade Show
Contests & More
Sales Promotion
Britannia Khao World Cup Jao
Consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade
Public Relations & Publicity
Promotional tool Identify, establish, and maintain beneficial relationships between a company and its stakeholders
Benefits Corporate visibility
Image Building
Product Information
Patni Computers i-flex solutions
Personal Selling Promotional tool in which a salesperson communicates one-on-one with potential customers
JCI Franco Indian Pharma
Advantages Immediate response
Tailored message
Ability to measure effectiveness
Disadvantages Relies on ability of sales rep. Expensive per contact
Direct Communications with Carefully Targeted Individual Consumers to Obtain an Immediate Response
Direct Marketing & Others
CatalogMarketing
CatalogMarketing
KioskMarketing
KioskMarketing
OnlineMarketing
OnlineMarketing
Direct-MailMarketing
Direct-MailMarketing
Direct-ResponseTV Marketing
Direct-ResponseTV Marketing TelemarketingTelemarketing
Face-to-Face Selling
Face-to-Face Selling
Tracmail Rohini International
Push & Pull Strategy
Push Policy Promoting a product only to the next institution down the
marketing channel
Pull Policy Promoting a product directly to consumers to develop stronger
consumer demand that pulls products through the marketing channel
Determinants of promotion mix
Type of product
Determinants
Target Audience
Company Policy
Budget
Stage in the PLC
Nature of market
Establish the Communication Budget
Aff ordab le
Bas ed on What t he
Com
p any Can Affo rd
Ob jectiv e-an d-T
a sk Bas ed on D
etermining
Objec tives & Tasks , The n
Esti matin g C
osts
Obje ctiv e-and -T
a sk Based on D
etermin ing
Obje ctive s & Tas ks, The n
Esti matin g C
osts
Pe rcen tage of S
alesBas ed on a C
erta in Perc entag eof C
urrent o r For ecasted Sale s
Pe rcenta ge of S
a lesBas ed on a C
erta in Perc entag eof C
ur rent o r Forec asted Sales
Co m
peti tive -Parit y
Bas ed on th e Co m
petito r’sProm
o tion B udget
Com
peti tive-Parit y
Based on th e Com
petito r’sProm
otion Budge t
After Determining Its Objectives, the Marketer Must Set the Communications Budget for Each
Product and Market.
Factors in designing promotion mix strategies
Chapter 16Advertising and Publicity
How advertising works? Types of advertising Role of advertising Advertising expenditure Advertising management Setting advertising objective Developing advtg. Copy and message Selecting and scheduling media Measuring advertising effectiveness Coordinating with ad agency Publicity
Use of publicity Measuring effectiveness of publicity
Chapter 17Personal Selling and Sales
Promotion
Personal Selling Role of personal Selling Types of selling jobs
Merchandise deliveries Inside order-taker Outside order-taker Missionary salesperson Sales engineer Tangible product seller Intangible product seller
The selling process Preparation Prospecting Preapproach Approach Sales presentation Handling objectives Closing the sale Post-sale follow-up
What is sales promotion?
Sales promotion consists of a diverse collection of incentive tools, mostly short
term, designed to stimulate quicker and or greater purchase of particular
products/services by consumers or trade-Kotler
“Below the line”
Non personal promotional effort that are designed to have immediate impact on sales
Employed for a pre-determined limited period to increase consumer demand or stimulate market demand
What is sales promotion?
What is sales promotion? Sales promotion offers an incentive to buy Encompasses everything that is outside of
advertising, PR and DM Uses advertising, PR and DM to deliver the
sales promotion Can be planned to increase sales over a long
period and not necessarily about immediate results (privilege / mileage points)
Why has SP grown so much? Results ! - immediate / quick boost to
sales Results over finite period of time - v/s
advertising or PR Results are measurable Easy and inexpensive to implement Costs & efficiency of mass media /
advertising has risen considerably
…. Product managers face pressure to
increase sales Companies face more competition Consumers have become more deal
oriented
Sales Promotions work!
How does SP work?Consumer decision making process (except for low cost, low involvement impulse pur.)- Awareness - Information gathering - Pre purchase evaluation - decision - PURCHASE - Post purchase evaluation
- Awareness - Information gathering - Pre purchase evaluation - Decision - PURCHASE - Post purchase evaluation
Advt / PR
Per Sell
SP
SP works because ... It alters the price / value relationship
that the product offers the buyerLowers price - use of coupons, discountsAdd value - value packs, extra free Everybody loves freebies Consumers have a reason to purchase
the product NOW Justifies post purchase evaluation
Advantages Sales promotions help shape buying patterns
- Annual sales Attract new audiences - trials for new
products Increase sales - freebies, buy 1 get 1 free Increases profits Helps move stock / liquidate inventory Increases awareness - reach new buyers
Advantages Encourages the consumer to buy more than
usual on a single shopping visit Reminder of product, especially when a new
product / competitor is about to launch Improving TOM recall of the brand if promo is
advertised in mass media Demoralise newly launched brands
Disadvantages Can seem like last minute panic measures
and that can signal failure Can give an impression of hard sell Greed for sales - promos are often not related
to the strategic elements of the brands mktg. mix
Often viewed as simple reactionary techniques to increase sales and profits
Dilutes brand value - discount brands
Sales promotion techniques Price deals Discounts Price pack deals Samples Rebates Sweepstakes/contests Frequency rewards Demos POP
Trade allowances Dealer loader Trade contests POP Displays Training programs Push money / Spiffs Exhibitions
‘Samsung pinning toh winning’ All India promo Aggressive use of mass media Consumer gets an assured gift on
purchase of any Samsung product 100 cr worth of prizes on offer Sms 16 digit pin and the gift u get wl b
sms’d 2 u.Cash in on Diwali purchases
‘Phod ke dekho’ offer Consumer promotion scheme Packaged as a coconut which cons
picks on purchase of a Samsung product
Breaking the coconut reveals a chance to win a gift
Strong consumer acceptance helped co to achieve a growth of 35% in sales over last year - same period
Test drive and win Tata Motors celebrated 50 years Offer to test drive any Tata car - fill a
form - and lucky winners could win Prize Indica V2 Petrol Buzz / Hype / Awareness Mass media - TV / Press / DM Helped build / gather data base
Buzz around Petrol
Some historic cases
Developing a Sales Promotion and Merchandising Plan
Set sales promotion and merchandising objectives.What is your target audience?Establish a tentative sales promotion and merchandising budget.Select sales promotion and merchandising techniques.
Select media for distributing promotions.Decide on timing of sales promotions and merchandising.Pretest sales promotions and merchandising.Prepare final sales promotion and merchandising plan and budget. Measure and evaluate sales promotion and merchandising success.
Developing a Sales Promotion and Merchandising Plan
10 commandments of sales promos
Creativity
Know your target
Specific objectives
Know Basic
techniques
Simplicity
Attn grabbing visualsBe clear
Reinforce advertising
Support brand image
Coordinate with mktg
Know when to break
Block 6Distribution and Public Policy
Chapter 18Sales Forecasting
What is a sales forecast? How to prepare a sales forecast? Product sales determinants
Consumer non-durable goods Consumer durable goods Industrial goods
Approach to sales forecasting Breakdown approach Market build-up approach
Methods of forecasting Executive Judgement Surveys Time series analysis Corelation and regression methods Market tests Combining forecast and using judgement
Status of forecasting method usage The evaluation of forecasts Computerised sales forecasting Relating the sales forecast to the sales budget an profit
planning
Chapter 19 Distribution Strategy
Importance of channel of distribution Alternative channels of distribution
Direct selling Mercantile Agents
Brokers Commission agent
Merchant Middlemen Wholesalers Retailers
Functions performed by retailers Services rendered by the retailers Effective coordination between wholesaler and retailers Types of retailers
Department stores Co-operative stores Multiple shops or chain stores
Role of middlemen in Indian Economy Selecting an appropriate channel
The type of product Nature and extent of the marker Existing channels for comparable products Buying habits of consumers Cost involved in distribution
Physical distribution tasks Location of manufacturing facilities Location of warehouses Mode and method of transportation Inventory decisions Using external distribution agency
Location of fixed facilities Specific issues relating to maintenance of stocks
Chapter 20 Managing Sales personnel
Selling and sales management Recruitment and selection of salesmen Training of sales personnel Motivating the sales personnel Controlling the sales personnel
Chapter 21Marketing and Public Policy
Regulatory role of the government Role of government in marketing in developing
economy Government control and marketing decision making
process Impact of government control on product decision Impact of government control on pricing decision Impact of government control on promotion decision Impact of government control on channel and
distribution decision
Chapter 22Cyber Marketing
What is cyber marketing Cyber marketing and conventional marketing
Interconnectivity Interactivity Involvement Information Individualisation integrity
Cyber marketing model The nature of cyber marketing
Customer profiling, segmentation and targeting Product planning Branding Pricing decision Advertising and sales promotion Distribution Marketing research
Limitations of cyber marketing Limits of digitisation Shopping experience Security issues Internet access density Customers used to freebies Dot.com bust
Attracting traffic to the internet site
What is internet ?? Global network of interconnected networks.
Includes millions of corporate, government, organizational and private networks.
Types of network forming internet Intranet Extranet Web
What is E- Marketing
Process of growing & promoting an organization using online media
Ties creative and technical aspects of internet.
Creating, communicating and delivering value to customers.
Managing customer relationship.
Objectives of Internet Marketing Create Awareness. Generate Interest. Disseminate Information. Create an Image. Create a Strong Brand.
Characteristics of Internet marketing
Relatively Inexpensive. Wide reach. Allows research, purchase of
products and services on convenience. Quick Response.
Differentiators from offline Marketing
One-to-one vs. one-to-many approach Demographics targeting vs. behavioral
targeting. Measurability . Response and immediate results.
Limitations of E- Marketing Dependant on technology. Rigid mindset. Virtual aspect. Security Concern. Maintenance Cost. Global competition.
SWOT Analysis
Strength Your specialist marketing expertise. A new, innovative product or service. Location of your business. Quality processes and procedures. Any other aspect of your business that
adds value to your product or service.
Weakness Lack of marketing expertise. Undifferentiated products or services. Location of your business. Poor quality goods or services. Damaged reputation.
Opportunity A developing market such as the
Internet. Mergers, joint ventures or strategic
alliances. Moving into new market segments that
offer improved profits. A new international market. A market vacated by an ineffective
competitor
Threat A new competitor in your home market. Price wars with competitors. A competitor has a new, innovative
product or service. Competitors have superior access to
channels of distribution. Taxation is introduced on your product
or service.
Hidden Benefits Tax Breaks. Low Start up Costs. Low Operating Costs. High Profit Margin. Market for little or no money. You do not need your own Product. Time Freedom. Open 24 Hours in every country.
4Ps of Internet Marketing
Product Make sure that your product is something that
is useful to your intended customers. Make sure that the product does what it says. Ensure Quality. Packaging. Brand Consistency. Good After Sales Service.
Price Competitive Pricing. Customers willingness to pay. Experimentation with price.
Place Placement on Major Search Engines. Placement of vertical search engines/
guides and local search. Placement through affiliates.
Promotion Promotion through display advertising. Promotion though search marketing. Promotion through socal media. Promotion through Public Relations.
Strategies of E -Marketing
7 Dimensions to Consider Personalization. Privacy. Customer Service. Community. Site. Security. Sales Promotion.
Classification of E-Marketing
Methods of Internet Marketing
Search engine marketing. Display Marketing E-mail Marketing, Affiliate Marketing Interactive Marketing Blog Marketing. Viral Marketing
Segmentation and Targeting
Segmentation Geographic Demographic (Age, Income, Gender,
Education, Ethnicity) Psycographic (Activities, Interests,
Opinions, Personality, Values.) Behaviour (Benefits sort, Usage level,
Brand Loyalty, User Status.)
Behavioral Segmentation Simplifiers Surfers Connectors Bargainers Routiners
Targetting Four different approaches 1) Mass Marketing. 2) Multi segment Marketing. 3) Niche Marketing. 4) Micro Marketing.
Differentiation and Positioning Strategies
Differentiation Product. Service. Personnel. Channel. Image.
Positioning Technology. Benefit. User Category. Competitor. Integrator.