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INTRODUCTION TO MARKETING
BEFORE MARKETING, LET US UNDERSTAND MARKET FIRST.
MARKET - GROUP OF BUYERS & SELLERS WHO WANT TO
NEGOTIATE FOR PURCHASE / SALE OF GOODS / SERVICES

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Involves exchanges, Negotiations which can be:Face to Face

At certain place
Even on telephone
Internet

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Midllemen Also play role,

facilitate marketing function / exchange
Wholesalers
Retailers
Dealers
Agents
Franchises

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Sellers Buyers
Two parties and more

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Exchange may take place:With Money

or
Without Money (credit)
Money the most common medium of exchange

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Philip kotler, the famous marketing Guru and

Scientist
Defines- Market
As an area for potential exchanges.

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Marketing communication

Sellers
Flow of
Products

MARKETING
THE CIRCLE
OF EXCHANGE

Buyers

Flow of
Money

Feedback
-Information
-Satisfaction
-dissatisfaction

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As per American Marketing Association

The Marketing is performance of business
activities that direct the flow of goods and
services from producer to the consumer

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MODERN DEFINITION OF MARKETING

Marketing is an ongoing process of: Discovering and translating consumer wants

into appropriate products and services,
Creating demand for these products, under
keen competition and serving the demand with
the help of channels of distribution such as
wholesalers, Retailers, Agents.
Covers product planning, pricing, promotion
and physical distribution.

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MARKETING COVERS THREE BASIC ACTIVITIES:-

Discovery of consumer needs, desires, interests, choices

revealing the marketing opportunities which can be
exploited by the firms.
Matching the organizational Resources and limitations
(Competition, Govt. Regulation with the products.
Strengths & weaknesses of the firm to be matched with
the product demanded by the customers-Important
managerial function.
Formulating and implementing the marketing programme
called marketing mix, covering product, price, promotion
and distribution with the ultimate goals of profitability
for the firm & consumers satisfaction.

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IMPORTANCE OF MARKETING
For existence, we need clothes, shelter, comforts,
entertainment, education.
Marketing alone puts all above at our doorstep giving
satisfaction & we spend money.
Concept of exchange leads to the concept of marketing.
A market consists of all the potential customers sharing a
particular need or want who are willing and able to
engage in exchange to satisfy that need or want.

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Buyers Market: When supply of goods abundant and demand

is relatively limited, buyers decide and choose,
leads to tough competition, prices become
lower & buyer is the king.
Sellers market: When supply is limited, scarce and demand is
heavy like for essential goods, prices high
buyers dont have much choice.

Marketing

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Marketing, in simple words- selling of goods and services,

involves transfer of ownership of goods and also
possession of goods. Also involves human activities taking
place in relation to marketing.
BUT
Marketing is much more than that Has wider coverage
Marketing is a group of business activities to create and
promote consumer demand and to direct their flow of
goods, services from the original manufactures to final
consumers through the process of various levels of
distribution.

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Marketing work-carried out formally by:Sales Managers,

Salesmen,
Advertising,
Promotion Managers,
Marketing Managers,
Marketing Researchers,
Customer Service Managers,
Brand Managers,
Marketing Vice-President etc.

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MARKETING CONCEPT
To achieve organization goals, understand the
needs and wants of target market.
Deliver the desired satisfaction to target
customers more effectively than the competition.
Marketing concept starts with a well defined
market, customer needs and co-ordination of all
the marketing activities to make profit by creating
long term customer relationship.
The end gain is customer satisfaction through
profits.

Marketing Concepts

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The following Marketing concepts guide different companies: 1. PRODUCTION CONCEPT:- consumers will favour those
products and services that are readily affordable & available.
Co. adopting this concept focusses on improving production
and distribution efficiency.
This concept useful in two types of situations: i) When the demand for a product exceeds supply, the
management looks for different ways to increase the
production.
ii) When the product cost is too high, the improved
productivity is needed to bring the cost down.

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2. PRODUCT CONCEPT:- The consumers

favour products that offer best of quality,
performance and innovative features.
- Co. thinks of making continuous product
improvements. Competition also forces
companies to focus on product, service,
additional features in products etc.

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3. SELLING CONCEPT:- The Consumers

will not buy the companys products, unless the
company undertakes a large selling and sales
promotion efforts.
- Goods may be unsought goods and the buyers
do not think of buying such goods like
encyclopedia and fire extinguishers or vaccum
cleaners, when a firm has over-capacity, it is a
good concept.
- idea is to sell whatever has been made. More
sales transactions desired.

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4. MARKETING CONCEPT:- Understanding

needs, wants of the consumers are more
important. It is required to achieve the
organizational goals .
- Focus on delivering customer satisfaction more
effectively than the competitors.
- Concept starts with a well defined market,
customer needs and coordinating all the marketing
activities to make profit by creating long term
customers relationship. The end gain is customer,
satisfaction through profits.

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5. THE SOCIETAL MARKETING CONCEPT:- Society has a concern for environment, overall health
of the people .
- Cos. also need to take care of the society and its
concerns.
- Fast food items have high fat content, causing
damage to consumers health.
- Consumers prefer soft drinks in tetrapack, as plastic
bottles which later create environmental hazards.
- Societal Marketing concept holds that the firms task
is to determine and to deliver desired satisfaction in
such a way that preserves or enhances the consumers
and the societys will being.
- Take care of social and ethical consideration while
dev. Marketing strategies.

DIFFERENCE BETWEEN SELLING AND MARKETING

Selling
1. Selling is part of Marketing
2. Selling is an act of Persuading / Influencing a
customer to buy the product - simple activity.
3. Selling becomes one-way activity. Aim is to quickly
complete a transaction No time is spent to learn what
consumers want more.
4. Oriented towards current products, marketing,
customers,
5. Short term view
6. Selling Today
7. Individual customers given more importance than
marketing segments. Very low interest in developing /
strengthen marketing segments.
8. More field work. Takes more time, No interest in
developing plans, strategies / sales targets etc.
9. Feedback not obtained No effort to learn about cust .
needs.
10. Sell the products as early as possible to fullfill sales
targets and earn profits.
11. Selling takes an inside- out angle. Products madepushed to market whatever made given to dist.
Channels must be sold-sell

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Marketing
1. Marketing is an enire process
2. Marketing activities include sales promotion,
advertising, publicity, packaging, support
sales, efforts
3. Two-way activity where more listening takes
place and thus products can also be improvedtime spent to understand changing needs of
consumers.
4. Long term view-encash opportunities &
Understand threats-Make changes, launch new
products. Search new mkts/needs.
5. Different marketing segments given special
emphasis. Develop methods to offer best value
to most profitable segments. (Flying returnA.I)
6. Develop plans, strategies, marketing analysis,
planning and control. Marketing managers
want to know results of marketing plans.
7. Feedback sought for future planning and also
changes in his needs.
8. First understand customers wants / needs as it
is thought that if needs are fulfilled by the cos
products, profits will be made.
9. Marketing takes outside-in angle. First have
well defined marketing study, customer-his
needs, make products, makes profits from
customer satisfaction. Co. makes what
customers. Want.

MODERN COMPLEX MARKETING SYSTEM

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Before Indl. revolution, goods produced for nearby

customers, knows buyers.
With Indl. revolution-larger Quantities produced at cheaper
costs.
Factory made better quality products
Various forms of business organizations- Sole Trader,
Partnership, Companies, J.Vs developed-separate deptts
created for marketing also.
Retailers, wholesalers, dealers created to perform marketing
functions.
Competition came in big way.
Marketing research, advertising, personal selling, sales
promotion inevitable function of marketing.
Improved Technology, innovation have brought in emarketing, tele-marketing, CRM, shopping malls, franchisee,
Direct marketing & so on.

MARKETING MIX
(4 Ps of marketing)

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Marketing mix is the set of marketing tools that the firm uses to achieve its marketing objectives in the target market

Marketing Mix-4 Ps.

Marketing
Mix

Place

Product
Target Market
Price

Promotion

Product

Price

Place

Promotion

Brand

Pricing Strategy

Channels

Personal-Selling

Quality

List Price

Coverage

Sales Promotion

Design

Discounts

Locations

Advertising

Product Line

Credit-Terms

Transport

Publicity

Packaging

Payment Periods

Inventory

Sales force

Sizes

Distributors

Public Relations

Service

Wholesalers

Direct Marketing

Warranty

Retailers

Style

Agents

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1. PRODUCT:- Most Basic Marketing Mix Tool

- Tangible offer by the firm
- Products Possess utility
-Refers to goods and services, combination the
Company offers

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2. PRICE:- The valuation placed on the product by

the co.
-Covers pricing, Discounts, Allowances & Terms of
Credit
-Also Deals in Price competition
-Price is Amout of Money customers are willing to
pay.
-A critical marketing mix tool.

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3. PLACE:- Also Termed as distribution

Delivery of goods by various channels.
-Make goods available at target market and
customers.

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4. PROMOTION:- Persuasive communication tools

-Merits/features explained
-Decision on above four to be properly co-ordinated
& balanced. Additional 3Ps of marketing Mix

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5. PEOPLE:- Firms Personnel & customers

6. PHYSICAL EVIDENCE:- Environment where
service is delivered & where firms & customers
interact.
7. PROCESS:- Actual procedure / mechanism / flow
of activities by which service / goods delivered

MARKETING ENVIRONMENT

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Every company needs to understand the marketing Environment

Good cos. take an outside-inside view of their business.

Opportunities and threats always exist in the market
Cos. must continuously monitor and adapt to the changing
environment
Two methods- Marketing intelligence and Marketing research
used to collect information about marketing environment.
Cos. operate in a larger macro environment of forces and trends
that provide opportunities/ threats.
These forces are non controllable which the cos. must monitor
and respond.
Marketing environment comprises external factors on which the
organization and management has little control.
Environment is the physical and biological world where we live
in.
Marketing environment is the conditions, factors, phases in which
marketing gets done by the cos.

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Goods & services provided by the organizations

must be acceptable to the environment Society, who
will provide feedback
Organization must respond positively to the
dynamic environment
A business enterprise and the environment are
mutually interdependent, as it will provide
opportunities and resources.
The marketing system is the set of institutions;
activities and flows with help exchange, operations
bet. Firms & customers.
Marketing environment constitute the framework of
the uncontrollable elements, of the marketing.

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Marketing strategies / mix / plans are made within these

variables called marketing parameters.
These environmental factors are:1. Demography:- is study of Population. People make markets
and with Money and will to spend their money, buy products
to satisfy their demands.
For effective marketing, cos. are interested in demographyscientific study of human pop, and its distribution structure.
Growing pop. indicates growing marketing. Pop. changes
will affect the formulation of marketing plans and policies.
In demographic Analysis, cos. Study/ analyse elements like
/age/ sex/ education / occupation/ income / geographic
concentration / urban-rural population etc.
Attitudes / behaviour / perceptions of customers also studied.
Study of demographic elements helps cos.s marketing people
to segment/target the proper markets.
Pop. movements also affect cos marketing policies.

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2. Economic environment: What is purchasing power of the customers & willingness to

spend?
Economic conditions of customers play important role in
creating demand.
High economic growth of a economy leads to higher
employment- Higher income higher & sales for many industries.
Interest Rates / consumer credit / also affect cos marketing
plans & strategies.
Poor economic conditions and low purchasing power of rural
people, affect cos marketing policies to offer smaller size goods
to them.
Cos make marketing policies based on the personal disposable
incomes
Marketers must pay close attention to major trends in income
and the consumer spending patterns, cost of living, borrowing
patterns etc.

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3. Social & cultural environment
Social and cultural forces also influence the marketing
policies.
Ever changing society give rise to new demands and
cos. try fulfilling them.
Changes in lifestyles and social values-changing role of
women, demand for quality goods, greater emphais on
recreational activities.
Society more aware about pollution ill effects. Cos.
bring socially responsible products and marketing
policies.
Growing consumerism in society influence cos. to make
marketing policies.
Cultural changes also influence cos marketing policies.
New offerings

4. Political & legal forces:MM 35

Political power and legal rules of a country also
influence the marketing activities of a Co.
Public sector companies
Some sectors opened to Pvt-sector also
Marketing policies of cos. affected by Govts importexport policies, custom duties, legislation reg. saving
physical environment.
Consumer legislation, protecting consumer interests
affect cos to offer better goods & services.
Govt. Policies and legislation affect marketing
policies of cos. all over the world.
Legislation to curb false advertising, unfair practices,
opening up local marketing for foreign goods. Rules /
punishment for adulteration

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5. Technology:- Rapid changes in science and technology over the

last few years have changed the lifestyle and the consumption patterns.
Technology changing very fast and keeping Cos. on their toes all over
the globe.
Technology A driving force behind many new product innovations
and development of new markets.
Cos. to take note and include new technology in their products.
Advances in electronics, telecom, computers, Biology and plastics
have very wide impact on all business and marketing activities all over
the world.
Cos. must adopt technology changes and offer products accordingly
Cos. must understand how new technology can serve changing human
needs- fax, computers, amusement parks.
Cos. create R & D wings and spend money on obtaining new
technologies.
As products become more complex public needs to be assured of their
safety.

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6. Competition: Cos. must make management policies/strategies only
after assessing the competition in a free economy.
No control possible over the action of competitors. Co.
can anticipate / study the actions of the competitors and
take action accordingly.
Presence of competitors greatly influence the cos
choice of marketing strategies, target marketing,
marketing channels, product mix, price mix and
promotion mix.
Cos. make various policies to win over the competitors.
Competitors moves can be judged by marketing
intelligence
Competitive conditions in an industry are everchanging.

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7. Customer demand:Customer demands are ever-changing, unpredictable and

cant be measured with accuracy.
Consumer behaviour complex and ever changing.
Customers demands are the central focus point around
which all marketing policies made
Customer satisfaction and services become the basis on
which marketing policies will be made
Enterprises can earn profits only by serving customers
needs. Marketing begins and ends with customers.

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PRODUCT POSITIONING
The way the manufacturer would like their products / brands to
be perceived by the consumers.
Positioning is the act of fixing the exact focus of the product
offer in the chosen market.
Decides how and what distinctive features have to be
communicated to the consumers.
While positioning the product, the company analyses the
competitors positions, its competitive advantages and finally
identifies the best position for its product.
Philip Kotler says Positioning is the act of communicating
companys offer so that it occupies a distinct and valued place in
customers mind/
e.g. Camplan:- Complete health Drink, Superior to milk.
Aaj Tak:- Sabse Tej.
Rasna:- So simple to make that even a child can make it.

AFTER SALES
SERVICE

STYLING

COLOR

ATTRIBUTES

CORE
CORE

PRODUCT
PRODUCT

INSTRUCTI
ONS
MANUAL

T
PAYMEN
OPTION

BRAND
NAME

N
TIO
LL A
TA
INS

REP
L
NT P ACEME
OLIC
Y

ES
E
NT
S
A
IE
R
T
&
A
AN
GU
R
AR
W

DE
LIV
& ERY
SY
ST POI
EM NT
S S

CUSTOMERS
EDUCATION
& TRAINING

QUALITY

PACKAGING

FORMAL PRODUCT
AUGMENTED
PRODUCT

ER
M
O
T
T
CUS PLAIN T
N
M
CO GEME
NA
MA

FUTURE PRODUCT
THE TOTAL PRODUCT CONCEPT

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PRODUCT LINE & PRODUCT MIX

Godrej has many product lines: Soaps line
Storewell line
Refrigerators line
Cosmetics line

-Many companies started as single product line. Companies like

Nirma (Detergent) T-Series (Audio Cassettes) emerged as
winners, earned huge profits and then added other product lines.

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A product line is a group of products that are closely

related because they perform a similar function, are
sold to the same customer group, are marketed through
the same channels.
Tooth Paste by Colgate
Cars by Hyundai
-Colgate Plain
- Santro
- Gel
- i10
-Blue
- i20
-Herbal
-Salt
A Product line Manager needs to know the sales /
profits of each item in the line.

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Product Mix
-The product mix is the full list of all the products offered for
sale by the Company.
- Consists of all product lines.
L.G. / Samsung product mix:TV/ Washing Machine / Music system/ Mobiles/ Fridge /A.CS
etc.
-Firms deal with multi-products
-Helps a firm to diffuse its risks across different product
groups
-Enables the firm to appeal to a much larger group of
customers or to different needs of the dame customer groups
- The number of products carried by a firm at a given time is
called the product mix.
- Bajaj Electricals has about 100 products in its portfolio.

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TARGETTING
(Target Market)
Target market is a group of customers (People or
organization) for whom a seller designs a particular
marketing Mix, intended to meet the needs of that group
resulting is mutually beneficial and satisfying exchanges.
For targeting the market, the requirements &
characteristics of customers are understood. Marketing,
Research helps.
Customers grouped as per their requirements & targeted.
One or more markets chosen for targeting & Marketing
mix developed by keeping in mind what customers value

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TARGETTING STRATEGIES
OR
APPROACHES TO TARGET MARKET
While selecting the target markets, companies have to make a
choice of whether they are going to be focused on one or few
segments OR they are going to cater to the mass market.
1. Undifferentiated targeting:A company essentially adopts a mass-market philosophy.
Views the market as one big market with no individual
segments.
Co. uses one marketing mix for the entire market, assuming
that individual customers have similar needs.
e.g. Co. selling sugar, salt etc.

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2. Concentrated Targetting
- a company selects one segment to serve.
- Understands the needs & and motives of the segments
customers and design a specialized marketing mix.
- Here a company discovers that concentrating resources
and meeting the needs of a narrowly defined market
segment is more profitable than spreading resources over
several different segments.
e.g. Mercedees offers premium cars for the upper segment
of the market only. Does not offer cars for middle class
segments.

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3. Multi-segment Targetting
- a company servers two or more well - defined segments and
develops a distinct marketing mix for each one of them.
-separate brands developed to serve each of the segments.
-most sought after target market strategy because it has the
potential:- to generate sales volume.
- higher profits
- larger market share and
- economies of scale in manufacturing and marketing
- the strategy involves greater product design, promotion,
inventory, marketing researches
e.g. Car companies like, General motors, Suzuki, Hyundai
follow this strategy and offer small cars, luxury cars, sports
utility vehicles, vans etc.

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PRODUCT INNOVATION & DIFFUSION

A Companys success will increasingly depend on
bringing new Products to the market.
Changing customer needs, technological advances and
competitive pressure mean that companies cant rely on
past product successes.
Most new products may not be successful.
Real test for a company is the number of successful
products that the company is able to launch.
Invention is the discovery of new ideas and methods.
Innovation occurs when an invention is commercialized
by bringing it to the market.
Cos. have to be active on both these fronts.

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COMPANYS PERSPECTIVE IN PRODUCT

INNOVATION
-A company may define an innovation differently based on
what the co. tries to achieve from the new products.
1. Product Replacement:- Include revisions and adjustments of existing products,
repositioning and cost reduction.
e.g. Tata Motors- improved its first offering Indica and
relaunched it a after receiving customer complaints.

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2. Addition to existing lines:- Additions of new technologies, new brands (Pentium IV

over III, Mach III over Mach II from Gillette)
(ice cream, colgate toothpaste now in 50 and 100 gms
alongwith 250 gms.
-product forms (liquid soaps in addition to bars) (Daburs
pudin hara now in tablet alongwith liquid one)

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3. New product lines:- the co. moves to a new product lines that hitherto did not
exist in its portfolio.
-Cos product mix widens.
LG-Koreas Electronics Co. is now manufacturing soaps and
shampoos in the Indian market, besides being a major player
in the consumers electronics market.
T-series Launching their cell phones
Reliance entering the organised retail business with Reliance
Fresh

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PRODUCT DIFFUSION
(Diffusion of Innovation)
- In the process of new product development, a large number
of factors are examined to know the reaction of consumers
regarding adoption of new product.
The process of accepting new product idea is known as
Diffusion process.
- the process by which the acceptance of an innovation (a
new product / a new service, new ideas or new practice) is
spread by communication (Mass Media, sales people or
informal conversation ) to the members of the social systems.
- A new product spreads throughout a market, overtime .
- Different customers have varying degree of willingness to
try new products.

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STAGES IN THE ADOPTION PROCESS:Awareness:- Consumers explained and information

given about a new product / service
Interest:- When consumers develop an interest they
search for more information, which may benefit them.
Evaluation:- Involves mental trail of the product
innovation. If evaluation is satisfactory, product tried
otherwise rejected.
Trial:- Product used on a limited basis. Their
expressions with the product provide them with
critical information, that they need for adopting or
rejecting the product.

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PRODUCT DECISION
Basis of any marketing activity is Product
Is the key element and preceeds
Price
Promotion
Place
Good products are keys to marketing success
Customer satisfaction provided through products.
Products represent expectation of the consumers &
society and the capabilities of the manufacturers.
Product more than a bundle of physical attributes- is
a total concept
Bundle of satisfactions that a consumer buys.

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Product combination of physical and psychological

benefits.
Philip Kotler says A product is anything that can be
offered to a market for attention, acquisition, use or
consumption that might satisfy a want /need.
R.S. Davar A product may be regarded of benefits which
are being offered to the consumer.

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Concept of Product
Product - a bundle of satisfaction that a consumer buys.
Represents a solution to a customers problem
A combination of tangible and intangible benefits eg. a
water filter in not only some plastic, steal, candle , pipes,
wire, brand etc but also involves after-sale service,
delivery and installation, dealer network.
(Show round Diagram-the Total product concept )

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Core Product:The problem solving service or the basic benefit which

is sought while buying the product.
TV for Entertainment , News, Sports, Visuals.
Formal product:Product packed, branded, additional features added,
safety of the product taken care-differentiated from other
products.

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Augmented Product:- When different branded products give

same technology, price and promotion wars are on, Marketers
look for intangibles.
After sale service, delivery & Installation, offering low
cost financing options. One can be creative and offer
more.
This intangible component of the product alongwith
formal and core components is called Augmented
Product.
Marketer can keep on expanding this concept to add value
to product. Not applicable to all the products and all the
customers. All customers may not be able to use such
service.
Future product:-Consists of those things required to enhance
utility to keep holding existing customer and attract new ones.
Thus product is a total concept being bought.

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CLASSIFICATION OF PRODUCTS / GOODS

Consumer products:Used by final consumers or users, can be used without
further commercial processing.

Convenience
Goods

Shopping
Goods

Speciality
Goods

Unsought
Goods

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1. Convenience Goods: Purchased with minimum of effort, as buyer has prior knowledge
No more information required
Marketer does intensive distribution, advertising, store displays,
easy availability etc.
Pulses, pens, cosmetics, etc.
Three types:a) Staple goods: - Majority of convenience shopping for these
goods.
Purchased routinely with little planning
Not much effort put by consumers
Items must be available near the house.
b) Impulse Goods:- Not planned to buy the product while going to
the shop.
- Not purchased on regular basis.
- Exposure creates the need, Normally not costly goods.
c) Emergency Goods:- Result of urgent and compelling needs.
e.g refill for a pen, pre-paid card for cell phone etc.

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II Shopping Goods: Goods purchased after going around shops and

comparing the different alternatives offered by different
manufacturers and retailers.
Price, Quality, fashion, style play a very important
role.
Market studied before final selection.
e.g furniture, A.Cs, Watches, Garments etc.
Manufacturers make attempts to get their products
properly displayed at the retail outlets.

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Types of Shopping Goods

(i) Homogeneous Goods:- Products have same features
- Brands are different and consumers view these brands as
insurance of Quality.
Fridge, TV, washing machines
-Usually price based shopping products.

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(ii) Heterogeneous Products: Non-Standardised Products

Stylish products.
Consumers get information about the products first and
then the consumers evaluate the information with respect
to features warranty, performance etc.
Goods with best attributes are bought.
e.g. furniture, Jewellery, Readymade garments etc.

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III Speciality Goods
Consumers make special efforts to buy these products.
Extensive search made for such items and customers are extremely
reluctant to accept any substitutes.
Specialty goods are particular brands, stores and persons to which /
whom the consumers are loyal.
Attributes of these goods are maintained / enhanced so that
products become unique for loyal consumers. E.g. Rayban Goggles,
Perfumes etc.
IV Unsought Goods:- Those which potential buyers are not aware of or dont want to
buy.
a) Regularly unsought:- Existing products which consumers do
not want to buy now although may be bought eventually. E.g. LIC
policy, shares purchase, medical check-up etc.
b) New Unsought products:- Totally new and unfamiliar to
consumers. Marketers inform target customers about the products.

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NEW PRODUCT DEVELOPMENT
Due to rapid changes in consumer behaviour, technology,
competition, a company cannot solely roly on its existing products.
Consumers expect the new and improved products, which are
provided by the competing companies.
Companies need to have new products development Programme,
because new products are the future of any business.
In India, Many new products have been offered in the market in the
last about 20 years.
Indian consumers were exposed to many such new products for the
first time.
Examples of such product are
Pagers, Washing machines, Home Theatres, frost-free Refrigerators
etc.
The major reason for all these new products is opening up of the
economy-Market environment becoming more liberal and open.
Customers getting more aware / conscious

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STAGES / PROCESS OF NEW PRODUCT

DEVELOPMENT
i) Generation of new product ideas:-Must visualize new product ideas
- Come from scientists / sales force, Dealers,
competitors, brain storming sessions of management ,
R&D, Trade Journals, Employees, consumer complaints
etc.

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ii) Detailed study of New Product Ideas:- All ideas examined and best and feasible ones
shortlisted.
- Important as new ideas costs money / time
- Find out which ideas need further study.
- Good possibilities to be examined carefully.
- Parameters could be profit possibilities, the risk and
the cost of capital involved.

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iii) Commercial feasibility:- Evaluate new ideas in the light of co. capability for
scientific knowledge, technological skills and financial
Resources
-Most feasible and profitable ideas picked up for further
investigation
-Marketing Res. here will help in customer behaviour
competitors strategies, sales etc.
iv) Product Development:Actual Development of the product
Decision for branding, labeling, packaging taken

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v) Test Marketing:- Tried in selected markets and consumers before large

distribution.
-Feedback, Reaction noted and product improved, if
necessary.
vi) Commercialization:Test marketing successful, leads to finalising all features
of the product, promotion campaign, distribution
channels decided and product is made available.

MM 71

BRANDING
PACKAGING
LABELING
BRANDING
Provides distinguished identity to products.
Name, Logo, trade mark that separates the products /
services from others.
Branding a major issue in product.
Brand provides market power

MM 72

American marketing association

A Brand is a name, sign, symbol, or design or a
combination of them, intended to identify the goods and
services of one seller or group of sellers and to
differentiate them from those of competitors.
-Brand identifies a seller / maker
- A sellers promise to constantly deliver a specific set of
features, benefits, and services to the buyers.
-Best brands convey warranty of quality.

MM 73

BRAND - SIX LEVELS OF MEANING

Attributes:- Brings to mind certain attributes. Tata brings to mind good
quality, durable, high prestige products.
Benefits:- customers buy benefits attributes translated into functional and
psychological benefits.
Durable I dont have to buy a new product every years as it will last.
Expensive- Feel important and admired e.g. expensive cars.
Values:- says something about the manufacturers values. Ford or Mercedes
stands for safety, prestige, high performance, style, speed etc. The producers
look for customers who are looking for such values.
Culture:- A brand may also represent a certain culture. HONDA, SONY,
SUZUKI show Japanese culture- efficient, innovative, high quality, accurate etc.
Personality:- Brand can also represent a certain personality.
- Can be person, an animal or an object-what comes to mind is the personality
factor. Tiger brand biscuit MDH shows an old man (owner) as part of the
brand.
User:- Brand also suggest the kind of consumers who buys or uses the product.
- User should be aware of the values, culture of the products. Disney, Pogo
childrens channels.

MM 74

FUNCTIONS OF BRANDING: Differentiation of the product

Better quality of goods/ services
Advertisement Good brands advertise their products,
more
Protection of goods branded products generally
packed appropriately and thus the goods remain
protected.
Bridge between buyer and seller-Desired products flow
to user.
Consumer protection:- Prices fixed and printed on
package. Retailers cannot charge more-customers
Interests protected.

MM 75

PACKAGING
Packing- Wrapping and crating of goods before
storing or transporting.
Packaging Group of activities concentrating on
formulating the design of a package
producing appropriate / attractive container or
wrapper.
Philip Kotler Packaging is an activity concerned
with protection, economy convenience &
promotional considerations.

MM 76

Functions of Packaging
Protection- From Mfrer to consumers.
Appeal as a marketing tool, products develop selfselling
Packaging and sales promotion:- short term special
measures to boost sales. (New, Rs. 10/- off;, 30%
Extra free)
Performance- Packaging must improve the use of the
product etc.
Convenience- Makes goods convenient to use, easy to
handle, store for consumers, wholesalers, Retailers
etc.

MM 77

LABELLING
- Govt. Regulations want manufacturer to provide basic
information in the package itself on the product.
- Commonly knows as
Labelling requirements
Label is defined as a display of written, printed or
graphic matter on the package of the containers.
Need not be only a legal requirement. Good label can
be an important sales tool.
Provides crucial informations.

MM 77

General statutory Requirements for labeling

Net weight, when packed
Date of manufacture and expiry.
MRP including or excluding local taxes.
Directions for use, dosage, storage etc.
= apart from above, manufacturer may give many more
details in labeling.
A good label helps a potential buyer to make purchase
decision. Also it helps promotion of a product, labeling
can also make the products distinctive

MM 89

PRODUCT LIFE CYCLE (PLC)

Understand each stage of the PLC and the consequences for
price, product, place and promotion.
Every product passes through a life cycle- fact of existence.
Five phases cycle-length / duration of each phase varies from
product to product.
Concept is that a product is born or introduced, grows, attains
maturity, sooner or later enters its declining stage sales come
down.
The Product life cycle (PLC) portrays distinct stages in the sales
history of a product.
by identifying the stage the product is in or going to be in one,
the companies can make better marketing plans.
Profit rise and fall at different stages of PLC.

MM 90

STAGES OF PLC
1. Introduction:- Stage starts, when a new product launched.
- Sales revenue begins to grow but the rate of growth is
very slow.
- Profit low due to low sales volume, large production and
distribution costs.
-Product cautiously on a trial basis .
- Heavy advertising and sales promotion required.
- Weaknesses if any, to be promptly removed.
-Cost of market development crucial and will be
considerable.

MM 91

2. GROWTH: Rate of increase of sales is very rapid.

Profits increase at a good rate.
Inspite of competition, may have rising sales and
profits
Top priority given to sales volume.
Manufacturing and distribution efficiency vital factors.
Distribution and advertising to be effective.
Demand of product increases rapidly .
New competitors enter
Firm improves product quality, features
Enter new market segments
Lowers price, to attract new layer of price sensitive
buyers.

MM 92

3. MATURITY: Keen competition brings pressure on prices

Profits reduce in the battle for marketing share, due
to falling prices and increasing marketing
expenditure.
More expenditure in product modifications
More measures required to stimulate demand
Face competition through additional advertising
and sales promotion.
Stage normally lasts longer.
More R & D for bringing improvements.

4. DECLINE STAGE:MM 93
After reaching the peak point, product inevitably enters the
Decline stage.
New Innovations may delay or displace this stage.
Sales drop severely and it becomes difficult for the product
to stand in the market.
Other innovative products may even phase out the product
Price becomes primary weapon of competition.
Co. has to reduce expenses on Advertising and sales
promotion.
Cost control key to generate profits

Reasons for the stage can be:Technological advances

Shifts in consumer tastes
Increased domestic/foreign competition.
Sales profits decline, some cos withdraw
Withdraw from smaller weaker segments cut the
promotion and prices.

MM 94

Some products may not follow above stages.

Time interval for each stage vary from product
to product.
- Salt remains at maturity stage for ever

MM-187

MARKET SEGMENTATION
Market place is highly diverse with consumers having
different backgrounds interests, needs etc.
These differences are enough reason to segment the
markets by the marketer.
Segmenting markets A Global phenomenon.
With so many diversities on the part of consumers,
markets needs to be segmented on the basis of
demographic, psychological and other variables.
When marketers provide wide range of products /
services to meet diverse consumer needs, consumers feel
satisfied, get value for money. Becomes more happy.

What is market segmentation?

MM-188

Market segmentation is the process of dividing a potential market

into distinct sub-sets of consumers with common needs or
characteristics and selecting one or more segments to target with a
distinct marketing mix.
Earlier times concept was of mass marketing offering same
product and marketing mix to all consumers.
Because of divers consumer behaviour based on differing
perceptions, interests, wants, income sizes, direct experience,
market segmentation becomes very important.
E.g. Small car v/s big car by same co.
Or
165 litre fridge v/s 440 ltr fridge or DDA offering flats with
different no. of rooms.

MM-189

Segmentation helps manufactures to fight competition

in marketplace by differentiating their products.
These can be on the basis of differentiated price,
packaging, promotional appeal and distribution style.
Helps marketers to have increased sales and
wider base of consumers.
It also helps in targeting and positioning the
markets.

MM-189

Who uses market segmentation?

Today almost every product category in the
consumer market is segmented. Segmentation
provides the opportunity to expand the markets by
better satisfying the specific needs of the
consumers.
Industrial manufacturers, Retailers, service
promoters, media, use the concept of market
segmentation.

MM-190

Bases for Segmentation

Consumers have diverse needs, preferences , Likings,
personality, motivations and Motivations and
accordingly these get reflected in his behaviour when
he makes actual buying decisions. These get noticed
and marketers have to segment their markets on the
following parameters:-

MM-191

1. Geographic segmentation: Divided by location divergent consumer purchasing

patterns exist among urban, semiurban and rural
consumers
Easy to find geographically based differences for
many products
Different geographic segments can be easily reached
through local media, newspapers, magazines, Radio
and regional magazines
Segmentation could be on the basis of region (North,
South), City (Metro, Town) Climate (Hot Cold),

MM-192

2. Demographic Segmentation: More often segmentation Based age, sex, income,

education etc, Helps to locate target segments.
Demographic information Cost- effective way to
identify a target market.
Demographic variables are easier to measure.
Demographic variables reveal ongoing trends of
consumer behaviour due to change in age, Income
distribution etc. these variable always keep the
marketers active and watchful
Here seg. is done on basis of age (Under 19, minors,
Old people) martial status (Single, Married etc.)
education (High school, college students) occupation
(Blue- White collared)

3. Psychological / Psychographic segmentation:-

MM-193

Refers to inner, intrinsic qualities of the individual

consumer
Specific psychological variables of consumers help for
consumer segmentation.
Psychological segment done on the basis of needs
motivation (shelter, safety) Personality (Aggressive,
Extroverts etc.) Learning involvement (Low or high
involvement) attitudes (Positive or negative)
Psychographic is lifestyle analysis of consumers.
(Straights, conservatives, status seekers etc) Here
consumers asked to reveal their personal or their familys
reactions to variety of offers which can be general or
product specific.

MM-194

4. Socio-cultural segmentation: Social or cultural variables also provide basis for

segmentation
Consumer markets are segmented on the basis of stage
in family life cycle, social class, core cultural values, subcultural groups etc.
Family lifecycle includes, - single, married and old age
and different things requ. at diff. stages
Consumers in diff. social class vary in-terms of values,
product preferences and buying habits.
Banks give diff. services to diff. clients from various
social classes. Domestic and international clients and
products modified accordingly.