Marketing is the performance of business

activities that direct the flow of goods and

services from producers to the
consumers.
GOODS AND SERVICES

PRODUCERS

CONSUMERS
MONEY & INFORMATION

Marketing is a total system of interacting

business activities designed to plan,
promote and distribute need satisfying
products & services to existing & potential
consumers.
Marketing is human activity directed
towards satisfying the needs and wants of
consumers through exchange process.

EXCHANGE
CONCEPT

PRODUCTION
CONCEPT

PRODUCT
CONCEPT

SALES
CONCEPT

MARKETING
CONCEPT

Central idea of marketing is to exchange the

product between the seller & the buyer.
Exchange is a narrow concept of marketing.
More emphasized on distribution & price
mechanism.
Exchange less emphasize on:1. Concern for the customer.
2. Generation of value satisfactions.
3. Creative selling & Integrated action
for serving the customers.

The concept hold that consumers would

support those products that are produced
in great volume at a low unit cost.
All efforts are focused on production.
They achieve cost reduction through
maximization of output.
They assume that lower cost will
automatically attract the customers to their
doors.

Product concept is different from the production

concept.
The production concept seeks to achieve profits
via high volume of production & low unit cost.
Whereas, the product concept seeks to achieve
profits via product excellence, improved
products, new products & ideally designed &
engineered products.
Product concept also emphasis on quality
assurance.

Sales concept maintains that the company has

to aggressively promote and push its products, it
cannot expect its products to get picked up
automatically by the customers.
TOOLS USED IN SALES CONCEPT: Heavy advertising.
High power person of selling.
Large scale sales promotion.
Heavy price discounts.
Strong publicity & public relations.

This concept was born out of the

awareness that a business should start
with the determination of consumer wants
and ends with the satisfaction of those
wants.
According to this concept entire business
has to be seen from the point of view of
the customer.

STARTING
POINT

FACTORY

FOCUS

MEANS

PRODUCTS

SELLING & PRMOTING

ENDS

PROFITS THROUGH SALES VOLUME

THE SELLING CONCEPT

TARGET
MARKET

CUSTOMER
NEEDS

INTEGRATED MARKETING

PROFITS THROUGH CUSTOMER

SATISFACTION

THE MARKETING CONEPT

Selling starts with the

seller & is preoccupied
all the time with the
needs of the seller.
Seller is the centre of
the business universe.
Emphasize on
saleable surplus
available with the
corporation

Marketing starts with

the buyer & focuses
constantly on the
needs of the buyers.
Buyers is the centre of
the business universe.
Emphasizes on
identification of a
market opportunity.

Seeks to quickly
convert product into
cash.
View business as a
good producing
process.
Cost determines the
price.
Traditional concept.

Seeks to convert
customer needs into
products.
View business as a
customer satisfying
process.
Consumer determines
price.
Modern concept.

Consumer orientation.
Integrated management function.
Consumer satisfaction.
Realization of all organizational goals
(including profits).

COMMUNICATION

INDUSTRY
(A COLLECTION
OF SELLER)

GOODS/SERVICES

MONEY

INFORMATION

MARKET
(A COLLECTION
OF BUYERS)

n
io

Fin

ke
tin

o
Pr

an
ce

R
H

M
ar

t
uc
d
ro

1. Marketing as an equal function.

2. Marketing as an important function.
3. Marketing as the major function.

n
io
ct
u
d

4. The customer as the controlling function.

e
ark

g
tin

Finance

5. The customer as the controlling function

and marketing as the integrative function.

HR

Production

Production

Production

Marketing

HR

Customer

Fin
a
nc
e

ina
nc
e

HR

Customer

Finance

Marketing

HR

Marketing

STARTING FOCUS
POINT

INDIVIDUAL
CUSTOMER

CUSTOMER
NEEDS AND
VALUES

MEANS

ONE TO ONE
MARKET
INTEGRATION
& VALUE
CHAIN

ENDS

PROFITABLE
GROWTH THROUGH
CAPTURING
CUSTOMER SHARE,
LOYALTY &
STAISFACTION
VALUE

Marketing mix is a set of marketing tools

the firm uses to pursue its marketing
objectives in the target market.
The marketing mix is the sole vehicle for
creating & delivering customer value.

PRODUCT
PRICE
PLACE
PROMOTION

MARKETING MIX

PRODUCT

PRICE

PROMOTION

PLACE

PRODUCT VARIETY

LIST PRICE

SALES PROMOTIONS

CHANNELS

QUALITY

DISCOUNT PRICE

ADVERTISING

COVERAGE

DESIGN

ALLOWANCES

SALES FORCE

ASSORTMENTS

FEATURES

PAYMENT PERIOD

PUBLIC RELATIONS

LOCATIONS

BRAND NAME

CREDIT TERMS

DIRECT MARKETING

INVENTORY

PACKAGING
SIZES
SERVICES
WARRANTIES

TRANSPORT

Product line is the

number of brands or
related product in
each product type.

Product range each

product line has
various brands in it.

Eg: - Scooters,
motorcycles, mopeds,
three wheeler

Eg: - Bajaj super,

Bajaj cub, Chetak,
etc

PRODUCT

CUSTOMER SOLUTION

PRICE

CUSTOMER COST

PLACE

CONVIENCE

PROMOTION

COMMUNICATION

PRODUCT POLICY & PLANNING

Marketing research
* Identifying the consumer requirements.
* Collection of data.
* Analysis of data, &
* Finding / Conclusions.
Motivation research
It include motivating the consumers through advertising, keeping the
prices low, etc.
Test marketing
It includes testing the product in a similar area before it is launched in
a market. It gives the manufacturer of a new product a foretaste of the
consumers reactions to the product.

DISTRIBUTION: - Distribution can be

organized through various channels: I.
II.
III.

Channels of distribution
Transportation
Warehousing

SALES PLANNING: - Helps in

designing sales budget, etc..

SALES MANAGEMENTS: Recruitment of a sales force & sales staff.

Training & development of the sales staff.
Fixing sales targets for the sales staff.
Fixing incentives for the sales staff.
Feedback about sales staff , getting
confidential report, laying targets, goals &
incentives.

MISCELLANEOUS MARKETING ACTIVITIES: 4 Ps of marketing mix.

Product
Price
Place,
Promotion

Marketing Research.
Advertising, Sales Promotion & Publicity.
International Marketing.
Industrial Marketing.
Consumer Behavior
Marketing of Services.
Rural Marketing.

Marketing Environment Analysis is the

process of gathering, filtering and
analyzing information relating to the
marketing environment.
It involves the process of tasks of
monitoring the changes taking place in the
environment & future position in respect of
each of the factors.
The analysis spots the opportunities &
threats in the environment.

To know where the environment is heading; to

observe & size up the relevant events & trends in
the environment.
To discern which event & trends are favorable
from the standpoint of the firm & which are
favorable; to figure out the opportunities & threats
hidden in the environment events & trends.
To project how the environment will be at a future
point of time.

To assess the scope of various opportunities & shortlist

those that can favorably impact the business.
To help secure the scope of various opportunities &
shortlist those can favorably impact the business.
To help secure the right fit between the environment &
the business unit, which is the crux of marketing; to help
the business unit respond with matching product
market strategies; to facilitate formulation of a marketing
strategy in the right way in line with environment & the
opportunities emerging there in.

AUDIT OF ENVIRONMENTAL INFLUENCES

ASSESSMENT OF THE NATURE OF THE ENVIRONMENT

IDENTIFICATION OF THE KEY ENVIRONMENT FORCES

IDENTIFICATION OF THE PRINCIPAL OPPORTUNITIES & THREATS

STRATEGIC POSITION

DE
M

S
OR
T
C
FA

MARKETER

L
CIA
O
S

CONSUMER

POLIT
IC

AL FA
CTORS

FA
CT
O

TE

NO
H
C

G
LO

RS

LEG
A
L
F
ACTO
RS

COMPETITOR
S

SUPPLIERS

OG
RA
PH
IC

DISTRIBUTOR

CU
LT
UR
AL
FA
CT
OR
S

ECONOMICS FACTORS

IC

AL

TO
C
FA

RS

It creates an increased general awareness of

environmental changes on the part of management.
It guides with greater effectiveness in matters relating
the government.
It helps in marketing analysis.
It suggest improvements in diversification & resource
allocation.
It helps firms to identify & capitalize upon opportunities
rather than losing out to competitors.
It provides a base of objectives qualitative information
about the business environment that can subsequently
be of value in designing the strategies.
It provides a continuing broad-based education for
executives in general & the strategists in particular.

MACRO ENVIROMENT
1.
2.
3.
4.
5.
6.
7.
8.

DEMOGRAPHIC
ENVIRONMENT
SOCIO CULTURAL
ENVIRONMENT
ECONOMIC ENVIRONMENT
POLITICAL ENVIRONMENT
NATURAL ENVIRONMENT
TECHNOLOGICAL
ENVIRONMENT
LEGAL ENVIRONMENT
GOVERNMENT ENVIRONMENT

MICRO ENVIRONMENT
1.
2.
3.
4.
5.
6.

THE MARKET / DEMAND

THE CONSUMER
THE INDUSTRY
GOVERNMENT POLICIES
THE COMPETITION
SUPPLIERS RELATED
FACTORS

It include several factors related to population such

as: size
growth rate
age distribution
religious composition
literacy level.

Aspects such as: workforce

household patterns
religions characteristics
population shifts, etc.

It consist of : Culture: - religion, language & education

Traditions
Beliefs
Values
Lifestyles of the people
Social class include: - income, occupation,
location of residence, etc.

General economic conditions.

Economic conditions of different segment of the
population, their disposal income, purchasing power, etc.
Rate of growth of the economy.
Rate of growth of each sector of the economy: Agriculture
Industry
Consumer goods
Capital goods
Services
Infrastructure
Imports
Exports

Income, prices & consumption expenditure (size &

patterns).
Credit availability & interest rates.
Saving rate / capital formation.
Inflation rate.
Behavior of capital market.
Foreign exchange reserves.
Exchange rate.
Tax rate.
Prices of important materials.
Energy scene (cost availability, etc)
Labor scene (cost, skill availability, etc.)

Form of government.
Political stability.
Government rules & regulations.
Government policies & procedure.

Natural resources raw material, energy,

etc.
Ecology environmental pollution,
protection of wildlife & ocean wealth.
Climate.

Corporate affairs.
Consumer protection.
Employee protection.
Sectoral protection.
Corporate protection (protecting companies from each
other, preventing unfair competition).
Protection of society as a whole against undesired
business behavior.
Regulations on products, price & distribution.
Control on trade practices.
Protecting national firms against the competition of
foreign firms.

Nature of the demand.

Size of the demand, present & potential.
Changes taking place in demand.
Invasion of substitute products.
Changes taking place in consumption
pattern / buying habits.

According to the firm, what is the basic need the product serves to the
market?
According to the consumer, what is the need it serves?
What constitutes customer value in the business as per their
perception?
What benefits do the consumers look for in the product?
Of the many benefits they look for, what are their preferences /
priorities / ranking?
Who are the consumers (number, location, etc.)
Purchasing power of the consumers.
Buying behavior; buying motives, buying habits.
Personality traits / attitudes.
Lifestyles & needs, present position & trends.
Brand loyalty.
Reasons / motives for customers patronage of specific brands.
Brand switching; how loyalties are shifting.
Reactions of customers to the companys & competition products.
Who among the competitors remains closest to the customer & why?

Government plays roles which have a bearing on the

functioning of firms. For eg:Govt. are often large purchasers of goods & services.
Govt. subsidize select firms & industries.
Govt. protect home producers against foreign
competition.
Govt. ban fresh entry in selected industries.
Govt. off & on ban certain technologies & products.
In some cases govt. happens to be producers & then
therefore functions as competitors.

Bargaining power of suppliers.

Availability of suppliers.
Number of suppliers.
Note: - Environment analysis is not a one time
activity but a continuous process.

INDIVIDUAL
CONSUMER
Individual buy thing for

BUSINESS / INDUSTRIAL
BUYERS
He is commercial buyer who

his own personal & family

consumption.
Low quantity purchase.
Low investment.

Take less time for

decision making.

buy things for manufacturing

other products, or for reselling,
or for the use in the running of
his enterprise.
High quantity purchase.
High investment.
Take much time for decision
making.

What motivates the buyers?

What induces him to buy?
Why does he buy a specific brand?
Why does he buy from a particular shop?
Why does he shift from one shop to another or
from one brand to another?
How does he react to a new product introduced
in the market, or a piece of information
addressed to him?
What are the stages he travel through, before he
makes a decision to buy?

There is no unified, tested & universally

established theory of buyer behavior.
buyer is a riddle difficult to
understand an innumerable needs & desires.
Selective perception of buyers. i.e. he perceives
& retain only what he would normally like, etc.
Buyers are not bound by set rules in taking
buying decisions.

I.

THE ECONOMIC MODEL: - According to this model,

the buyer is a rational man & his buying decisions are
totally governed by the concept of utility. If he has
certain amount of purchasing power, a set of needs to
be met & a set of products to choose from, he will
allocate this amount over the set of products in very
rational manner with the intention of maximizing the
utility or benefits.

II.

THE LEARNING MODEL: - It is also called stimulus

response theory; according to which buyers behavior
can be influenced by manipulating the drives, stimuli
& response to the buyers.

III. THE PSYCHOANALYTICAL MODEL: -According to this

model, the individual consumer has a complex set of
deep-seated motives that drive him towards certain
buying decisions. The buyer has a private world with all
hidden fears, suppressed desires & totally subjective
longings his buying action cab be influenced by
appealing to those desires & longings.
IV. THE SOCIOLOGICAL MODEL : - According to this
model the individual buyer is influenced by society, by
intimate group as well as social classes.

INDIVIDUAL FACTORS

INFORMATION FROM
VARIOUS SOURCES

SOCIAL FACTORS

PERSONAL FACTOR

CULTURAL FACTOR

PSYCHOLOGICAL FACTOR

Age

Religion

Beliefs

Education

Language

Attitudes

Economic position
Status
Self concept

Motivation
Perception

Influence of intimate
groups

Family
Friends
Colleagues
Peer group
(with same group)

Influence of brand
social class

Social class is a larger group than

intimate group & is decided by
several variables like: - income,
occupation, place of residence, etc.
A social class develops its lifestyle
& behavior standards. In their
purchasing behavior, the class
members are guided by their norms

The buyer today is exposed to a veritable flood

of information unleaded on him from different
sources. These sources inform him about new
products & services, improved versions of
existing products, new uses for existing products
& so on.
The information sources that influence people to
try a product include: Advertising
Samples & trials
Displays in shops
Salesmens suggestions.

Market segmentation is the sub dividing of

market into homogenous sub sections of
customers, where any sub- section may
conceivably be selected as a market target to be
reached with a distinct marketing mix.
Market segmentation allows a marketer to take a
heterogeneous market, a market consisting of
customers with diverse characteristics needs,
wants & behavior & carve it up into one or more
homogeneous markets which are made up of
individuals or organization with similar needs,
wants & behavioral tendencies.

Efficient use of marketing resources.

Better understanding of the competitive
situation.
Accurate measurement of goals &
performance.

GEOGRAPHIC
SEGMENTATION
DEMOGRAPHIC
SEGMENTATION

BENEFIT
SEGMENTATION

BASES FOR
MARKET
SEGMENTATION

VOLUME
SEGMENTATION

ECONOMICS
SEGMENTATION

PSYCHOGRAPHIC
SEGMENTATION
BUYER
BEHAVIOR
SEGMENTATION

Here, a marketer divides the target market into different

geographical unit such as nations, states & regions.
He may decide to operate in one or more than one
geographical areas.
E.g. A particular brand may be popular only in North
India then the north Indian market can be divided on the
bases of zones, village, cities, etc.
A classic e.g. of geographic segmentation is Amul which
was initially marketed only in Gujarat.

In demographic segmentation, a marketer

divides the market on the bases of
demographic factor like age, gender,
family size, marital status, religion &
language.
For e.g. cosmetic manufacturers & food
manufactures particularly keep in mind the
age categories.

Market segmentation on the basis of income

levels is used by most of the marketers of
consumer goods.
Most of the marketing research activities &
studies of consumer behavior are also based on
the income level of the consumers.
E.g. P&G has launched a very high quality
detergent powder called Ariel Microsystems for
high income levels.

It involves developing sub group

identification on the basis of psychological
characteristics.
E.g. perceptions, attitudes, opinions,
interests or a combination of those.

In this, the market is divided on the basis

of purchase decisions made by various
groups.
E.g. Medical Hospitals

MOST MODERN
HOSPITALS
Escorts heart &
research centre,
Batra hospital &
research centre,
etc.
These hospitals are
constantly on the
look out for new
instrument to
became more
efficient.

AUTONOMOUS
HOSPITAL
E.g. AIIMS.
Here the most important
influence on purchase
decision is based on the
specialist doctors & heads
of respective departments.
Even if they go in for
tenders, the purchase
decision is influenced by
technical specification
rather than price alone.

GOVERNMENT
HOSPITALS
E.g. Ram Manohar
Lohia Hospital, G.B
Pant Hospital, etc.
Here the purchase
decision is influenced
by medical
superintendent &
financial controller.
They generally decide
in favor of the lowest
quote.

MEDIUM SIZE
PRIVATE HOSPITALS

NURSING HOMES

E.g. Maharaja Agarsen

Hospital, Shanti Mukund
Hospital, etc.

E.g. Kukreja Nursing

Home, Giriraj Hospital,
etc.

They use a blend of

quality & price
considerations.
Generally, the choice of
medical director in final.

They have got one

operation room in
which they use pulse
oximeter. They go for
quality, low price &
after sale service.

FREE LANCING
ANETHETIST
Doctor anesthetist
who are attached
with different nursing
homes have their
own pulse oximeter
so that they can use
where this facility is
not available in the
nursing homes.

In this quantity purchased is the basis for

segmentation.
For E.g.
Bulk buyers
Small scale buyers
Regular buyers
One time buyer

It classify buyers according to the benefits

they get from the product.
E.g. MEDICINES: - Old age people, child
& teenagers
CHOCLATES: - Child & teenagers

P1

P1

P2

P2

P3

P3
P1

M1
M2
M3
SINGLE SEGMENT CONCENTRATION

M1
M2
M3
SELECTIVE SPECIALISATION

P2

P3
P1

P1

M1
M2
M3
FULL MARKET COVERAGE
P2

P2

P3

P3
M1
M2
M3
PRODUCT SPECIALISATION

M1
M2
M3
MARKET SPECIALISATION

ANALYSE THE NEEDS OF THE CUSTOMER

ANALYSE THE CHARACTERISTIC OF CONSUMER
DISAGGREGATE THE CONSUMER INTO SUITABLE SEGMENTS
FORMULATE DIFFERENT MARKETING MIX FOR DIFFERENT SEGMENTS

FEEDBACK OF VARIOUS SEGMENTS

SELECT THE HIGHER POTENTIAL SEGMENTS

Understand the potential consumers;

Pay proper attention to particular areas;
Formulate marketing programmes;
Select channel of distribution.
Understand competition.
Use marketing resource efficiently.
Advertise the products & launch sales promotion
programmes &
Design marketing mix product, price, place &
promotion.

On the basis of geographical area.

On the basis of product related factors.
On the basis of size of the customers.
On the basis of the type of the buying
situation.

Services market.
Agriculture, Forestry & Fishing.
Manufacturing Industries.
Transportation, Communication & Other public utility.
Constructing.
Mining & Quarrying.

Customer size.
King of organization.
Geographical location, etc.

Market targeting helps in sub dividing

the market into many segments & then
deciding to offer a suitable product to
some selected segments.
Market targeting is the act of evaluating &
comparing the identified groups & then
selecting one or more of them as the
prospects with the highest potential.

DIFFERENTIATED
MARKETING

UNDIFFERENTIATED
MARKETING

CONCENTRATED
MARKETING

It is a marketing strategy created by the same

marketing mix product, price, place &
promotion for all markets.
The firm consider the target market as one &
same.
It requires extensive distribution in the maximum
number of retail outlets.
For e.g. Revlon, Pepsi & Sony

It involves devising a marketing mix on

one product, one segment principle.
This strategy can be used by small
companies also because small companies
can create niches in one product, one
segment.
For e.g. Cosmetics (Lakme).

It involves devising multiple marketing mix

offerings.
For e.g. Unilever and P&G
Note:- NICHE MARKETING
The customers in the niche have a distinct
set of needs, they will pay a premium to the
firm that best satisfies their needs.

Positioning is the act of designing the companys

offering & image to occupy a distinctive place in
mind of the target market.
The goal is to locate the brand in the minds of
consumers to maximize the potential benefits of
the firm.
A good brand positioning helps to guide marketing
strategy by clarifying the brands essence, what
goals it helps the consumer achieve & how it does
so in a unique way.

The result of positioning is the successful creation of a

consumer focused value proposition, a cogent reason
why the target market should buy the product.
E.g. Dominos ( PIZZA)967
- A Good hot Pizza, delivered to your door within 30
minutes of ordering at a moderate price.
- Target customers: - convince minded pizza lovers.
- Benefits: - good quality & speedy delivery.
- Price: - 15% premium.

Consumer behavior consists of the human behavior that

go in making the purchase decision.
Consumer behavior is the process whereby individuals
decide whether, what, when, where, how & from whom
to purchase goods & services.
Buyer behavior is also psychological, social & physical
behavior of potential customer as they become aware of,
evaluate, purchase, consume & tell other people about
products & services.

Consumer behavior is a decision process adopted by the

consumer.
What types of products & services are to be bought?
When the product & services are to be obtained.
From where the products & services are to be obtained.
From whom the product / services are to be obtained.

DECISION MAKING
PROCESS

INPUT
STIMULI

OUTPUT
BEHAVIOR

PSCHOLOGICAL FRAME
PERSONALITY

MOTIVATION

SOCIAL
ENVIRONMENT

NEED
RECOGNIZATION

PRODUCT
AWARENESS

INTENTION

INTEREST

INTEREST
BREAK

EVALUATION

PURCHASE

PERCEPTION

FIRMS
MARKETING
EFFORTS

POST
PURCHASE
BEHAVIOR

REPEAT
PURCHASE

ATTITUDE

DISCONTINUATION

NEED AROUSAL
INFORMATION SEARCH
EVALUATION BEHAVIOR
PURCHASE DECISION
POST - PURCHASE BEHAVIOR

INITIATOR: - The initiator is a person who first suggest or thinks

of the idea of buying the particular product.
INFLUENCER: - Influencer is a person who explicitly or implicitly
has some influence on the final buying decision of others.
DECIDER: - The decider is a person who ultimately determines
any part or whole of the buying decision, i.e. whether to buy, what
to buy, how to buy, when to buy or where to buy.
BUYER: - The buyer is the person who actually purchases the
goods or services.
USER: - User is the person who actually uses or consumes the
goods or services.

Organizational buying is the decision

making process by which formal
organization establish the need for
purchased products & services & identify,
evaluate, & choose among alternative
brands & supplies.

STRAIGHT
REBUY

NEW TASK

MODIFIED
REBUY

Straight rebuy is a buying situation in

which the purchasing department re
orders on a routine basis.
E.g. Office supplies, Bulk chemicals

The modified rebuy is a situation in which

the buyers want to modify product
specifications, prices, delivery
requirements, or other terms.
The modified rebuy usually involves
additional decision participant on both the
buyer & seller side.

The new task is a buying situation in which

a purchaser buys a product or services for
the first time.
E.g. Office building new security system.
New task buying passes through several
stages awareness, interest, evaluation,
trial & adoption.

INITIATOR: - Those who request that something be purchased. They may be

users or other in the organization.
USERS: - Those who will use the product or service. In many cases the users
initiate the buying proposal & help define the product requirement.
INFLUENCERS: - People who influence the buying decision.
DECIDERS: - People who decide on product requirements or in suppliers.
APPROVERS: - People who authorize the proposed action of deciders or
buyers.
BUYERS: - People who have formal authority to select the suppliers &
arrange the purchase terms.
GATEKEEPERS: - People who have the power to prevent sellers or
information from reaching members of the buying centre.

PROBLEM RECOGNIZATION
GENERAL NEED DESCRIPTION
PRODUCT SPECIFICATION
SUPPLIER SEARCH
PROPOSAL SOLICITATION / SUPPLIER SELECTION
ORDER ROUTINE SPECIFICATION & PERFORMANCE REVIEW

MIS consist of people, equipment & procedures

data to gather, sort, analyze, evaluate &
distribute needed, timely & accurate information
to marketing decision makers.
A MIS is developed from: Internal company records.
Marketing intelligence activities.
Marketing research.
Marketing decision support analysis.

The companys MIS should be cross

between what managers think they need,
what managers really need, & what is
economically feasible.
An internal MIS committee can interview a
cross section of marketing managers to
discover their information needs.

What decision do you regularly make?

What information do you need to make these decisions?
What information do you regularly get?
What special studies do you periodically request?
What information would you want that you are not getting
now?

What information would you want Daily? Weekly?

Monthly? Yearly?
What magazines & trade reports would you like to see
on a regular basis?
What topics would you like to be kept informed of?
What data analysis programs would you want?
What are the for most helpful improvements that could
be made in the present MIS?

Today companies organize their information in databases

customer databases, product database, sales person
database & then combine data from the different
databases.
For E.g. the customer database will contain every
customers name, address, past transaction & even
demographics & psychographics (activities, interests &
opinions) in some instances.
Instead of a company sending a mass : Carpet bombing
mailing of a new offer to every customer in its database, it
will score the different customers according to purchase
recently, frequency & monetary value.

It will send the offer only to the highest

scoring customers.
Beside saving on mailing expenses, this will
often achieve a double digit response rate.
Companies warehouse these data & make
them easily accessible to decision makers.

Furthermore, by hiring analysts skilled in sophisticated

statistical methods, they can Mine the data & garner
fresh insights into neglected customer segments, recent
customer trends, & other useful information.
The customer information can be cross tabbed with
product & salesperson information to yield still deeper
insights.
To manage all different databases efficiently & effectively,
more firms are using business integration software.

A marketing intelligence system is a set of

procedures & sources managers use to
obtain everyday information about
developments in the marketing
environment.

A companies can train & motivates the sales force to spot & report new
development.
A company can motivate distributors, retailers & other intermediaries to pass
along important intelligence.
A company can network externally.
A company can set up a customer advisory panel.
A company can take advantage of government data resources.
A company can purchase information from outside suppliers.
A company can use online customer feedback system to collect competitive
intelligence.

The marketing research is the systematic &

objective research for analysis of information
relevant to the identification & solution of any
problem in the field of marketing.
Marketing research has to do with gathering,
processing, analysis, storage & dissemination of
information to facilitate & improve decision
making.

Diagnosis the current situation or problem based

on detailed information.
Clearly identifying competitive strengths &
weakness.
Constantly analyzing what is happening in
market place ( opportunity / threats).
Monitoring the progress of strategy
implementation.

Marketing research provide the right information at the right time in

the right place & to the right person which is vital in decision
making.
It facilitates decision making regarding the various marketing
mix elements, viz., product, price, place & promotion.
For any organization whether it is a larger firm, small & medium firm,
non profit institution, or a government organization, systematic
study of their market would be very useful in decision making.
Marketing research is used to measure market potential,
characteristic of the market & share of market for a particular brand
or company.

IDENTIFYING THE MARKETING PROBLEM &

SETTING OBJECTIVES FOR MARKET RESERACH
DEVELOPING A MARKETING PLAN OR
STUDYING THE OLD RESEARCH FINDING
DESIGNING THE MARKET RESEARCH STRATEGY

COLLECTING DATA

ANALYZING THE COLLECTED DATA

PREPARING THE RESEARCH REPORT

RESEARCH ON MARKET
Analyzing market potential for the existing
product & estimating the demand for the
new ones.
Sales forecasting.
Analyzing the sales potential.
Studying the market trends, etc.

RESEARCH ON PRODUCT & SERVICES: Test marketing for new products.

Comparative study of competitive product.
Determine new uses of the present product.
Studying the extent of customer satisfaction /
dissatisfaction with the companys product or
services.
Product line research.
Packaging & design research.

RESEARCH ON PROMOTION: Evaluating advertising effectiveness.

Analyzing advertising & selling practices.
Selecting of advertising media.
Motivational research.
Establishing sales territories.
Evaluating the present & the proposed sale
methods.
Studying competitive pricing (Discount & offer)
Analyzing the salesmans effectiveness.

RESEARCH ON DISTRIBUTION: Location & design of distribution centers.

Cost analysis of transportation.
Cost analysis of warehousing.
RESEARCH ON PRICING: Demand & supply
Demand elasticity's, etc.

PRIMARY METHODS

SECONDARY METHODS

When the data are

directly collected by a
researcher.

When data is collected for use

of some other person or from
some other pre-existing projects
( E.g. -Books, newspaper,
magazines, journals, internet,
etc.)

QUESTIONNAIRE
METHOD

INTERVIEW
METHOD
DELPHI
TECHNIQUES
PROJECTIVE
TECHNIQUES

FOCUS
GROUP
INTERVIEW

Information
need

Methods of
data collection

Construction of questionnaire & its design

Types of questions
Wordings of the questions
Sequences of the questions
Layouts of the questions
Pretest of the questionnaire
Final revised questionnaire

Sample size

Marketing involves satisfying consumers

needs & wants.
The task of any business is to deliver
customer value at a profit.
In hyper competitive economy, a
company can win only by fine tuning the
value delivery process & choosing,
providing & communicating a superior
value.

A. TRADITIONAL PHYSICAL PROCESS SEQUENCE

MAKE THE PRODUCT
DESIGN
PRODUCT

PROCURE

SELL THE PRODUCT

MAKE

PRICE

ADVERTISE
SELL

/ PROMOTE

DISTRIBUTE

SERVICE

B. VALUE CREATION & DELIVERY SEQUENCE

CHOOSE THE VALUE

CUSTOMER
SEGMENTA
TION

MARKET

PROVIDE THE VALUE

VALUE

PRODUCT

SELECTION POSITIONI DEVELOP

NG
MENT
FOCUS

STRATEGIC MARKETING

COMMUNICATE THE VALUE

SERVICE
DEVELOP
MENT

SALES
PRICING

SALES

DISTRIBU
TION
FORCE

TACTICAL MARKETING

PROMO
TION

ADVERTIS
ING

VALUE CHAIN proposed by Michael Porter of

Harvard

Value chain is a tool for identifying ways to create more

customer value.
According to this model, every firm is synthesis of
activities performed to design, produce, market, deliver &
support its product.
The value chain identifies nine strategically relevant
activities that create value & cost in a specific business.
These nine value creating activities consist of 5
primary activities & 4 support activities.

VALUE CHAIN proposed by Michael Porter

of Harvard

FIRM INFRASTRUCTURE
HUMAN RESOURCE MANAGEMENT
TECHNOLOGY DEVELOPMENT
PROCUREMENT
INBOUND
LOGISTIC

OPERATIONS OUTBOUND MARKETING

LOGISTIC

&
SERVICES

PRIMARY ACTIVITIES

SERVICES

MA
RG
IN

ACTIVITIES

IN
RG
MA

SUPPORT

VALUE CHAIN proposed by Michael Porter

of Harvard

The firms task is to examine its costs &

performance in each value creating activity &
to look for ways to improve it.
The firm should estimate its competitors cost &
performances as benchmark against which to
compare its own costs & performance.
The firms success depends not only on how
well each departmental activities are co-ordinate
to conduct core business process.

It is source of competitive advantage in that it makes a

significant contribution to perceived customer benefits.
It has application in a wide variety of markets.
It is difficult for competitors to estimate.
E.g. Nike It does not manufacture its own shoe, because
certain Asian manufacturers are more competent in this
task. Nike nurtures its superiority in shoe design.

CUSTOMER VALUE = BENEFITS / COST

BENEFITS: - product benefit, service
benefit, personal benefits, etc.
COST : - monetary cost, time cost, energy
cost, psychic cost, etc.

Satisfaction is a persons feelings of pleasure or

disappointment resulting from comparing a
products perceived performance (or outcome) in
relation to his or her expectation.
If the performance falls short of expectations the
customer is dissatisfied. If the performance
matches the expectations, the customer is
satisfied. If performance exceeds expectations,
the customer is highly satisfied or delighted.

TQM is a wide approach to continuously improving the quality of all

the organizations processes, product & services.
Marketers play several roles in helping their companies define &
deliver high quality goods & services to target customers.

These are: They bear the major responsibility for correctly identifying the
customers needs & requirements.
They communicate customer expectations properly to product
designers.
They must make sure that customers order are filled correctly & on
time.
They must check that customers have received proper instructions,
training & technical assistance in the use of the product.
They must stay in touch with customers after the sale to ensure that
they are satisfied & remain satisfied.
They must gather customer ideas for product & service
improvements & convey them to the appropriate departments.

Customer relationship management is the

process of managing detailed information
about individual customers & carefully
managing all customer to maximize
customer loyalty.

Identifying your prospects & customers

(do not go after . Build, maintain, & mine a
rich customer database with information
derived from all the channels & customer)
Differentiate customer in terms of: Their needs.
Their value to the company.

Interact with individual customer to improve your knowledge about

their individual needs & to build stronger relationships.
Customize products, services & message to each customer.
Reducing the rate of customer direction.
Increasing the longevity of the customer relationship.
Enhancing the growth potential of each customer.
Making low profit customer more profitable.
Focusing efforts on high value customers.

Customer retaining is a process to produce delighted & loyal

customers & to restrict the customer churn.
Some interesting facts related to customer retention: Acquiring new customer can cost 5 times more than the

costs involved in satisfying & retaining current customers. It

requires a great deal of effort to induce satisfied customers
to switch away from their current suppliers.

The average company loses 10% of its customer each year.

A 5% reduction in the customer defection rate can increase

profits by 25% - 85%, depending on the industry.

 New product development is the act of

making out & supervising the search,
screening, development &
commercialization of new products; the
modification of existing lines, the
discontinuance of marginal or unprofitable
items.

Improving the existing product lines &

services.
Weeding out unprofitable items in the
product line.
Expansion of the current product line.
New product development for the present
customers, &
New product development for new
customers.

Ensuring that the product mix matches

changing environmental conditions & that
product obsolescence is avoided.
Enabling the marketer to compete in new
& developing segments of the market.
Reducing the marketers dependence
upon particular elements of product range.
Achieving long term growth & profit.

IDEA GENERATION
SCREENING THE IDEAS
BUSINESS ANALYSIS
DEVELOPING THE PRODUCT
TESTING THE PRODUCT
COMMERCIALISATION OF PRODUCT

SALES & PROFITS

INTRODUCTION

GROWTH

MATURITY

TIME

DECLINE

INTRODUCTION: - A period of slow sales growth as the product is

introduced in the market. Profits are non existence because of the
heavy expenses of product introduction.
GROWTH: - A period of rapid market acceptance & substantial profit
improvement.
MATURITY: - A slowdown in sales growth because the product has
achieved acceptance by most potential buyers. Profit stabilize or
decline because of increased competition.
DECLINE: - Sales show a downward drift & profit too decline.

CHARACTERISTICS

INTRODUCTION

GROWTH

MATURITY

DECLINE

SALES

Low sales

Rapidly rising sales

Peak sales

Declining sales

COSTS

High cost per

customer

Average cost per

customer

Low cost per

customer

Low cost per

customer

PROFITS

Negative

Rising profits

High profits

Declining profits

COMPETITORS

Few

Growing numbers

Stable number &

beginning to
decline

Declining number

CUSTOMERS

Innovators

Early adopters

Middle majority

Laggards

MARKETING
OBJECTIVES

Create product
awareness & trial

Maximize market
share

Maximize profits
while defending
market share

Reduce
expenditure & milk
the brand.

STRATEGIES

INTRODUCTION

GROWTH

MATURITY

DECLINE

PRODUCT

Offer a basic
product

Offer product
extensions,
service , warranty

Diversify brands &

items models

Phase out weak

PRICE

Charge cost plus

Price to penetrate
market

Price to match best

competitors

Cut price

DISTRIBUTION

Build selective
distribution

Build intensive
distribution

Build more
intensive
distribution

Go selective phase
out of unprofitable
outlets

ADVERTISING

Build product
awareness
among early
adopters &
dealers.

Build awareness & Stress brand

interest in the
differences &
mass market
benefits.

Reduce to level
needed to retain
hard core loyal.

SALES PROMOTION

Use heavy sales

promotion to
entice trial

Reduce to take
advantage of
heavy consumer
demand

Reduce to minimal
level.

Increase to
encourage brand
switching

Product is a bundle of utilities

consisting of various product
features & accompanying
services.

POTENTIAL PRODUCT
AUGMENTED PRODUCT
EXPECTED PRODUCT
BASIC PRODUCT
CORE BENEFIT
BASIC PRODUCT
EXPECTED PRODUCT
AUGMENTED PRODUCT
POTENTIAL PRODUCT

What does the product mean to the

customers?

For E.g. a car offers the generic

benefits of convince in traveling.

A hotel guest is buying REST &

SLEEP.

The marketer has to turn the core

benefit into a basic product. Thus a

hotel room includes a bed,
bathroom, towels, desk, dresser,
etc.

A set of attributes & conditions buyers

normally expect when they purchase fresh

towels, working lamps, & a relative degree
of quite.
Because most hotels can meet this

minimum expectation, the traveler

normally will settle for whichever hotel is
most convenient or least expensive.

It exceeds customer expectations.

In developed countries, brand positioning & competition take
place at this level.
In developing countries & emerging markets such as China
& India.
However competition takes place mostly at expected
product level.
Differentiation arises on the basis of product augmentation.

It encompasses all the possible augmentations

& transformations the product offering might
undergo in the future.
Here is where companies search for new ways
to satisfy customer & distinguish their offers.
For E.g. customer are demanding ever faster
internet & wireless connections.

CONSUMER GOODS

INDUSTRIAL GOODS

SERVICES
Hospitality
services

ON THE BASIS OF
DURABILITY

Durable goods
(cars, scooter,
furniture)

ON THE BASIS OF
SHOPPING
NATURE

Raw material Accessory& Facilitating

Parts
Goods

Convince goods
(breads & biscuits)
Shopping goods

Non durable
goods

(suiting, shoes &

watches)

(soaps,
toothpaste, etc)

Specialty goods
(painting, jewellery,
carpet)

Distributive
trades
Business
professiona
l services
Transport

Installation

Fixed
Equipments

Communica
tion
Insurance,
banking &
financing
Defence &
administrati
ve services,
etc

Technological advances: - higher complexity of products requiring skilled specialists.

Globalization: - more business internationalism.
Deregulation policies: - Privatization of regulated sectors.
Competition & need for higher productivity.
Cost effectiveness drives: - Sub contracting & outsourcing.
Computer explosion.
Overall increase in affluence: - increased spending power & wish for comfort.
More leisure time.
Increased complexity of life
Urbanization.

TRANSPORTATION: - Railways, airlines, road

transportation, water transportation, etc.
PUBLIC UTILITIES: - Water supply, gas supply,
electricity supply, etc.
COMMUNICATION: - Telephone, postal &
courier, radio, TV, telecommunication,
teleconferencing, etc.
TRADING SERVICES: - Wholesaling & retailing.

FINANCIAL & INSURANCE SERVICES: - Banking,

leasing, investment banking, credit reporting, etc.
MARKETING RELATED SERVICES: - Advertising,
telemarketing, sale promotions, market research, etc.
GOVERNMENT PROVIDED SERVICES: Infrastructural, defense, police, education, medical, etc.
ENGINEERING SERVICES: - Equipment inspection,
designing, construct designing, architectural, techniqual
research.

ENTERTAINMENT SERVICES: - Video, games,

party, event management, Discos, etc.
HOSPITALITY SERVICES: - Hotels &
restaurants, catering & home delivery.
OTHER SERVICES: - Security, printing, training,
health & hospital, fax, warehousing, interior
designing, etc.

FEATURES

MARKETING
PROBLEM

MARKETING
STRATEGY

INTANGIBILITY

Cannot be easily displayed

Provide tangible clues.

Cannot be patented

Stimulate word of mouth.

Use personal sources.
Use post purchase

communication.

INCONSISTENCY

Standardization hard to

achieve
Hard to set up quality control.
Can only predict quality or
determine it after service is
performed.

Stress standardization &

performance.
Focus on employees training
programmes, performance
evaluation.
Consider licensing & other form of
credential requirements.

FEATURES

MARKETING MARKETING
PROBLEM
STRATEGY

INSEPERABILITY

Harder to mass produce

Need strong training programmes

incentives.
Focus on personal attention.

INVENTORY

Customer must be

Focus on convince saving time,

fast service.
Extended hours.
Focus on competence &
expertise.
Predict fluctuation in demand.
Manage capacity to balance
supply & demand.

product.
Less efficient than goods
production.
Customer must be
present.

present.
Value can be short lived.
Capacity is finite.
Time period may be
limited.
Cannot be inventoried.

Price is all around us. You pay rent for

your apartment, tuition fee for your
education, & a fee to your dentist.
The airline, railway, taxi, bus companies
charge you a fare, the local utilities call
their price a rate, & the local bank charges
you interest for the money you borrow.

In small companies, prices are often set

by the boss. In large companies, pricing is
handled by division & product line
managers.
Even here, top management sets general
pricing objectives & policies & often
approves the prices proposed by lower
levels of management.

In industries where pricing is a key factor { E.g.

Oil Companies}, companies will often establish a
pricing department to set or assist others in
determining appropriate prices.
Effectively designing & implementing pricing
strategies requires a thorough understanding of
consumer pricing psychology & a systematic
approach to setting, adapting, & changing
prices.

SELECTING THE PRICING OBJECTIVE

DETERMING DEMAND
ESTIMATING COSTS
ANALYZING COMPETITORS COSTS, PRICES & OFFER

SELECTING A PRICING METHOD

SELECTING THE FINAL PRICE

SURVIVAL: - Companies pursue survival

as their major objective if they are plagued
with over capacity, intense competition, or
changing consumer wants. As long as
prices are cover variable costs & some
fixed costs, the company stays in
business. Survival is a short run
objective; in the long run, the firm must
learn how to add value.

MAXIMUM CURRENT PROFIT: - Many companies

try to set a price that will maximize current profit.
They estimate the demand & costs associated with
alternative price & choose the price that produce
maximum current profit, cash flow, or rate of return
on investment. This strategy assumes that the firm
has knowledge of its demand & cost functions; in
reality, these are difficult to estimate. In
emphasizing current performance, the company
may sacrifice long run performance by ignoring
the effects of other marketing mix variable,
competitors reaction & legal restraints on price.

MAXIMUM MARKET SHARE: - Some

companies want to maximize their market
share. They believe that a higher sales
volume will lead to lower unit costs &
higher long run profits. They set the
lowest price, assuming the market is price
sensitive. Texas Instruments has practiced
this Market penetration pricing. Market
share, experience falling costs & cut its
price further as costs fall.

MAXIMUM MARKET SKIMMING: - Companies

unveiling a new technology favor setting high prices to
maximize market skimming. Sony is a frequent
practitioner of market skimming pricing, where starts
high & are slowly lowered over time. When Sony
introduced the worlds first high definition (HDTV) to
the Japanese market in 1990, it was priced at $43,000.
So that Sony could skim the maximum amount of
revenue from the various segments of the market, the
price dropped steadily through the years a 28inch
HDTV cost just over $6,000 in 1993 & a 42-inch HDTV
cost about $1200 in 2004.

PRODUCT QUALITY LEADERSHIP: - A

company might aim to be the product quality
leader in the market. Many brands strive to be
affordable luxuries product or services
characterized by high levels of perceived quality,
taste & status with a price just high enough not
be out of consumers reach. Brand such as
starbuck coffee, aveda shampoo, etc have
been able to position themselves as quality
leaders in their categories, combining quality,
luxury & premium prices with an intensely loyal
customer base.

Each price lead to a different level of demand & therefore have a

different impact on a companys marketing objectives. The relation
between alternative prices & the resulting current demand is captured in
a demand curve.
In normal case, demand & price are inversely related. The higher the
price, the lower the demand. In the case of prestige goods, the demand
curve sometimes slopes upward.
Some consumers take the higher price to signify a better product.
However, if the price is too high, the level of demand may fall.
Companies need to understand the price sensitivity of their customers &
prospects & the trade offs people are willing to make between price &
product characteristics.

The company wants to charge a price that

covers its cost of producing, disturbing, &
selling the products including a fair return
for its effort & risk.
TYPES OF COST:FIXED COST
VARIABLE COST

MARKUP PRICING
TARGET RETURN PRICING
PERCEIVED VALUE PRICING
VALUE PRICING
GOING RATE PRICING

The most elementary method is to add a standard markup to the products cost.
For E.g. Construction companies submit job bids by estimating the total project cost
& adding a standard markup for profit.
Lawyers & accountants typically price by adding a standard markup on their time &
costs.
Suppose a toaster manufacturer has the following costs & sales expectations: variable cost per unit
= $10
fixed cost
= $300,000
expected unit sales
=50,000units
The manufacturers unit cost is

= VC + FC / unit sales.
= $10 + $300,000/50,000
= $16

Now assume the manufacturer wants to earn a 20% markup on sales.

MARKUP PRICE

= UNIT COST / (1 DESIRED RETURN ON SALE)

= $16 / 1 0.2
= $20.

In target return pricing, the firm determines the

price that would yield its target rate of return on
investment (ROI).
Target pricing is used by General Motors which
prices its automobiles to achieve a 15% 20%
ROI.
Suppose the toaster manufacturer has invested $1
million in the business & wants to set a price to
earn a 20% ROI, specifically $200,000. The target
return price is given by the following formula: Target return price

= unit cost + Desired return * Invested capital/ unit sales

= $16 + .20 * $1,000,000 / 50,000
= $20

An increasing number of companies now

base their price on the customer
perceived value. They must deliver the
value promised by their value proposition,
& the customer must perceived this value.
They use the other marketing mix
elements, such as advertising & sales
force, to communicate & enhance
perceived value in buyers minds.

In recent year, several companies have adopted

value pricing. They win loyal customers by
charging a fairly low price for a high quality
offering.
Value pricing is not a matter of simply setting
lower prices; it is a matter of reengineering the
companys operations to become a low cost
producer without sacrificing quality, & lowering
prices significantly to attract a large number of
value conscious customers.

In going rate pricing the firm bases its

price largely on competitor's prices.
The firm might charge the same,
more or less than major competitors.

Pricing methods narrow the range from

which the company must select its final
price. In selecting that price, the company
must consider additional factors, including
the impact of other marketing activities,
company pricing policies, gain and risk
sharing pricing & the impact of price on
other parties.

CASH DISCOUNT: - A price reduction to

buyer who pay bills promptly.
QUANTITY DISCOUNT: - A price
reduction to those who buy large volumes.
SEASONAL DISCOUNT
ALLOWANCES

ADVERTISING
SALES PROMOTION
PUBLIC RELATION
PERSONAL SELLING

Advertising is any paid form of nonpersonal presentation & promotion of ideas,

goods or services by the identified sponsor.
Organization handle advertising in different
ways. In small companies, advertising is
handled by someone in the sales or
marketing department who works with an
advertising agency.

A large company will often set up its own

department.
The advertising department job is to: Propose a budget.
Develop advertisement strategy.
Approve advertisement.
Campaigns.
Handle direct mail advertising, dealer display
and other form of advertising.

MISSION

MEDIA
MESSAGE

MONEY

MEASUREMENT

MESSAGE
MONEY
MISSION
STAGE IN PLC
SALES GOALS
ADVERTISING
OBJECTIVES

MARKET SHARE
& CONSUMER
BASE
COMPETITION
ADVERTISING
FREQUENCY
PRODUCT
SUBSTITUABILITY

MESSAGE GENERATION
MESSAGE EVALUATION &
SELECTION
MESSAGE EXECUTION
SOCIAL
RESPONSIBILITY
REVIEW

MEDIA
REACH, FREQUENCY
& IMPACT
MAJOR MEDIA TYPES
SPECIFIC MEDIA
VEHICLES
MEDIA TIMING
GEOGRAPHICAL
MEDIA ALLOCATION

MEASUREMENT

COMMUNICATION
IMPACT
SALES IMPACT

D
A
G
M
A
R

-------------------

DEFINING
ADVERTISING
GOALS
FOR MEASURED
ADVERTISING
RESULTS

INFORMATIVE ADVERTISING: - When the product is

first time introduced.
PERSUASSIVE ADVERTISING: - Creates liking,
preference, conviction & purchase of a product.
REMINDER ADVERTISING: - Aims to stimulate repeat
purchase.
REINFORCEMENT ADVERTISING: - Aims to convince
current purchasers that they had made the right choice.

Stage in the PLC.

Market share & consumer base.
Competition & clutters.
Advertising frequency.
Product substitutability: - Brands in a commodity class
(soft drinks) require heavy advertisement to establish a
differential image.

MESSAGE GENERATION
MESSAGE EVALUATION & SELECTION
MESSAGE EXECUTION

Media selection is finding the most cost effective media

to deliver the desired number & type of exposure to the
target audience.
REACH: - The number of different persons exposed to a
particular media schedule at least once during a
specific time period.
FREQUENCY: - The number of times within the
specified time period that an advertisement is exposed
to the target audience.
IMPACT: - The qualitative value of an exposure through
a given medium.

Target market media habits.

Product characteristics.
Message characteristics: - timeliness &
information content media choice.
Cost.

Audience size has several possible measures.

Circulation: - Number of physical unit carrying the advertisement.
Effective Audience: - The number of people with target audience
characteristics exposed to the vehicle.
Audience: - The number of people exposed to vehicle.
Effective advertising exposed audience : - the number of people
with target audience characteristics who actually saw the
advertisement.
Deciding on media timing.
Deciding on geographical allocation.

Communication effect research

whether an advertisement is
communicating effectively.
Copy testing:- It can be done before an
advertising is put into media and after it is
printed or broadcasted.

PRETESTING
PORTFOLIO TEST
LABORATORY TEST

Consumer feedback ask the consumer for their

reactions to the proposed advertisement.
Some questions : What is the main message you get from the

advertisement?

How does the advertisement make you feel?,

etc.

Consumer view or listen to the portfolio

of advertisement, then asked to recall all
the advertisements & their content by
interviewer.
Recall level indicates understand &
remember the advertisement.

Use equipment to measure physiological

reaction: - heartbeat,
- blood pressure,
- pupil dilation to an advertisement

A key ingredient in marketing company consists of

a diverse collection of incentive tools mostly short
term designed to stimulate quicker or greater
purchase.
Advertisement offers a reason to buy, sales
promotion offers an incentive to buy.
Sales promotion yield faster & more measurable
responses in sales than advertisement does.

Sales promotion do not tend to yield new, long

term buyers.
Loyal brand buyers tend not to change their
buying patterns.
Advertising appears to be capable of defining
brand loyalty.
It attracts new tries, rewards loyal customer.

SAMPLES: - Offer of free amount of product or

services.
COUPONS: - Certificate entitling the bearer to a
stated saving on purchase of specific items.
CASH REFUND OFFER: - Provide a price
reduction after purchase, proof of purchase.

PRICE PACKS
PREMIUMS
PRIZES
FREE TRIALS
PRODUCT WARRENTIES

PRICE OFF: - A straight discount off.

ALLOWANCE
FREE GOODS

TRADE SHOWS
SALES CONTESTS
SPECIALITY ADVERTISING

Public relation involves a variety of

programs designed to promote or
protect companys image or its
individual products.

PRESS RELATION: - Presenting news &

information about the organization in the most
positive light.
Product publicity sponsoring efforts to
publicize specific products.
CORPORATE COMMUNICATION: - Promoting
understanding of the organization through
internal or external communication.

LOBBYING: - Dealing with legislators &

government officials to promote.
COUNSELING: - Management about
public issues & company position & image
during good times & crises.

PUBLICATIONS: - Company rely on published material to reach &

influence their target markets.
EVENTS: - New product launch, trade shows, exhibits, contests.
SPONSORSHIP.
NEWS: - Press conferences.
SPEECHES: - Trade associations, sales meetings.
IDENTITY MEDIA: - Logos, stationery signs, business forms,
business cards uniform, dress code.

Direct marketing is the use of consumer

direct channel to reach & deliver goods &
services to the customer without any
middlemen.

FACE TO FACE SELLING.

DIRECT MAIL LETTERS, E-MAILS
TELEMARKETING
E-MARKETING.

The distribution channel consist of a set of

people & firms involved in the transfer of title to
a product as the product rules from producer to
ultimate consumer or business uses.
Distribution channel is the entity consisting of
marketing institutions & their interrelationship
responsible for the physical & entitled flow of
goods & service from producer to consumer or
industrial user.

Match assortments & quantities of goods

desired by customers with those available from
the channel members.
Promote the product they carry through
catalogues, trade shows & advertising.
Conduct research on markets to locate &
determine the requirements of potential
customers.
Finance the producer indirectly by reducing
inventory requirements, & finance the customer
directly by extending credit when required.

Sell the product through personal presentation

or by telephone.
Standardize and grade when required specially
in case of agricultural products.
Assume risks associated with owing, storing,
selling, financing, transporting & servicing of
products.
Physically distribute the product through storing
and transporting it.
Service products & provide advice on their use
as required.

PRODUCT OR MARKET
CHARACTERISTICS FACTORS: (A)
(B)
(C)
(D)
(E)
(F)

Number of customer & frequency of purchase.

Cost of the product.
Level of service required.
Technical nature of the product.
Geographical concentration of the market.
Type of the product.

COMPANY CHARACTERISTICS
FACTORS: (A) Degree of channel control desire.
(B) Financial position of the company.
(C) Propensity of assumed risk.
(D) Ability of management.

MIDDLEMEN CONSIDERATION: (A) Services provided by middlemen.

(B) Financial position of the company.
(C) Attitude of middlemen towards

manufacturer policies.

ENVIRONMENT CHARACTERISTIC
FACTORS

MANUFACTURER / PRODUCER OF CONSUMER GOODS

Z
E
R
O
L
E
V
E
L

O
N
E
L
E
V
E
L

RETAILERS

T
W
O

T
W
O

L
E
V
E
L

L
E
V
E
L

MERCHANT
WHOLESALER

AGENTS

RETAILERS

RETAILERS

ULTIMATE CONSUMERS

T
H
R
E
E

AGENTS

MERCHANT

L WHOLESALER
E
V
E
L
RETAILERS

MANUFACTURER / PRODUCER

ULTIMATE CONSUMER

ZERO LEVEL
This method is suitable in the following situation:
I.
II.
III.
IV.
V.
VI.
VII.
VIII.

When goods produced are in small quantity.

When the middlemen are not prepared to undertake the sale in a new
market & introduce the new product in the market.
When the channel cost are higher than that of direct selling system.
When there are few potential buyers such as industrial buyers.
When the producer or the manufacturer decides to eliminate
middlemen.
When market for the product is concentrated in a particular
geographical area only.
When the product is of perishable nature, such as vegetable eggs.
When the product requires demonstration, tests, lengthy negotiations
before sale & there is need to provide after sale service, such as
machinery, automobiles, etc.

MANUFACTURER / PRODUCER
CONSUMER

RETAILERS

ULTIMATE

This method is suitable in the following

situation: I.
II.
III.
IV.
V.

When the manufacturer / producer may desire to have closer

contact so as to understand buyers preferences & for product
planning.
When the retailers are financially sound to finance the
producers towards the supplies made to them.
When the product is perishable either physically or due to
changes in fashion ; thus requiring speedy distribution.
When the wholesalers are unwillingly to undertake promotional
efforts needed by the producer manufacturer.
When the demand for the product is constant.

MANUFACTURER / PRODUCER
WHOLESALER
ULTIMATE CONSUMER

RETAILERS

This method is suitable in the following

situation: I.
II.
III.
IV.
V.

The financial resources of producer / manufacturer are limited.

When the retail outlets are more & widely spread.
When the wholesaler are specialized & can provide strong
promotional support.
When the manufacturer has narrow product range.
When the product are durable & subject to physical
deterioration or quick fashion changes.

MANUFACTURER / PRODUCER
AGENTS
WHOLESALER
RETAILERS
ULTIMATE CONSUMER

This is the longest channel of distribution.

In this channel, the producer uses the services of an
agent who has greater outlets coverage & contacts. The
agents; in turn may distribute the goods to wholesalers,
when then sell to retailers. The retailer sell the goods to
the ultimate consumers.
The agents have a wide distribution system on national
level. The agent acts as a sole selling agent of the
producers such as Voltas.
This type of channel of distribution is suitable for
marketing agricultural & large scale manufactured
products, such as cotton textiles, cements, etc.

MANUFACTURER / PRODUCER
WHOLESALER
ULTIMATE CONSUMER

In this type of channel of distribution,

producers sell the goods to wholesaler;
who may bypass retailers, only when there
are large institutional buyers, such as
industrial buyers, government &
educational institutions, hospitals,
consumer co-operative stores & large
business houses.

PRODUCT VARIETY: - If the customers shop for product

assortment, it is advisable that the ensures the
availability of its product range at all outlets selling
complimentary & substitute products. Hence, this pushes
the demand for a wider channel of distribution.
SERVICE REQUIREMENT: - If the product and the
market requires a high level of service & it is a major
factor in buying decisions, it is advisable that the firm
keep a shorter channel like zero or one level only.

SIZE OF THE MARKET: - Larger the market

size, more economical it is to indirectly serve the
market & hence the longer channel. But smaller
the market, smaller the channel.
ORDER LOT SIZE: - If the average order lot
size is small, it is better to have a longer channel
than when the average order is a bulk or a
container load is bought.

IDENTIFY TARGET CONSUMER

DETERMING CONSUMER BUYING HABITS

LOCATE POTENTIAL CONSUMER LOCALLY

PINPOINT CHANNEL ALTERNATIVES

EVALUATE CHANNEL ALTERNATIVES

SELECT CHANNEL MEMBERS

INTENSITY OF DISTRIBUTION
INTENSIVE

Distribution
through
every
reasonable
outlet in
market.

SELECTIVE

Distribution
through multiple,
but not all,
reasonable outlet
in the market.

EXCLUSIVE

Distribution
through single
wholesaling
middlemen in a
market.

Characteristic

Exclusive
distribution

Selective
distribution

Intensive
distribution

Objective

Prestige image,
channel control &
loyalty, price
stability & high
profit margin.

Moderate market
coverage, solid
image, some
channel control &
loyalty, good sales
& profits.

Widespread
market coverage,
channel
acceptance,
volume sales &
profits.

Middlemen

Few in numbers,
well established,
reputable firms
(outlets).

Moderate in
number, well
established, better
firms (outlets).

Many in numbers
all types of firms
(outlets).

Examples

Automobiles,
Furniture,
designer clothes, clothing,
capital equipment. mechanics tools.

Household
products, office
supplies, etc.

Characteristic

Exclusive
distribution

Selective
distribution

Intensive
distribution

Customers

Final consumers:
fewer in number,
trends setters,
willing to travel to
store, brand loyal.
Organizational
consumers: focus
on major accounts,
service expected
from manufacturer.

Final consumers:
moderate in
number, brand
conscious, some
what willing to
travel to store.
Organizational
consumers: focus
on many types of
accounts, service
expected from
manufacturer or
middlemen.

Final consumers:
many in number,
convince oriented.
Organizational
consumers: focus
on all types of
accounts, service
expected from
manufacturer or
middlemen.

Characteristic

Exclusive
distribution

Selective
distribution

Intensive
distribution

Marketing
emphasis

Final consumers:
personnel selling,
pleasant shopping
conditions, good
service.
Organizational
consumers:
availability, regular
communications,
superior service.

Final consumers:
promotional mix,
pleasant shopping
conditions, good
service.
Organizational
consumers:
availability, regular
communications,
superior services.

Final consumers:
mass advertising,
nearby location,
items in stock.
Organizational
consumers:
availability,
periodic
communications,
good service.

Major
disadvantages

Limited sales
potential

May be hard to
carve a niche.

Limited channel
control.

The relationship between types of product, level of

shopping effort, & intensity of distribution
of
y
it tion
s
e n i bu
t
In istr
d

TYPES OF PRODUCT

Specialty
goods

e
iv on
s
u ti
cl bu
x
E tri
s
di

Shopping

ve
ti ion
c
t
le u
Se trib
s
di

goods

e
iv on
s
n ti
te ibu
n
I tr
s
di

Convince
goods

of
y
i t ti o n
s
e n i bu
t
In istr
d

Little or no effort

Some effort

Much effort

LEVELS OF SHOPPING EFFORTS

Channels of distribution for

following consumer products.
FOR INSURANCE: INSURANCE COMPANY

AGENTS

CUSTOMERS

FOR SHOES: MANUFACTURER

MANUFACTURER

WHOLESALER

CHAIN STORES
AGENTS

CUSTOMERS
RETAILERS

CUSTOMERS

FOR MEDICINES: MANUFACTURER

WHOLESALER

AGENTS

MEDICAL STORES

CUSTOMERS

Channels of distribution for

following consumer products.
FOR TOOTHPASTE, SOAP, DETERGENT, POWDER, BULBS,
COSMETICS, GHEE, OIL, ETC. : MANUFACTURER

AUTHORISED WHOLESALER

AGENTS

RETAILERS

CUSTOMERS

FOR TEXTILE: MANUFACTURER

AGENTS

MANUFACTURER

WHOLESALER

MANUFACTURER

AUTHORISED SHOWROOM

MANUFACTURER

WHOLESALER

CUSTOMERS

RETAILERS

RETAILERS

CUSTOMERS

CUSTOMERS

CUSTOMERS

Channels of distribution for

following consumer products.
FOR FURNITURE: MANUFACTURER

RETAILERS

CUSTOMERS

FOR RADIO, TV, COOLER, REFRIGERATOR,

SCOOTER, ETC. : MANUFACTURER

AUTHORISED WHOLESALER

AUTHORISED RETAILER

CUSTOMERS

Brand Building

identity

promise

name

image

differentiato
r
symbol

face

American Marketing Association

A brand is a name, term, sign, symbol, or
design, or a group or combination of them,
intended to identify the goods and services of
one seller or group of sellers and to
differentiate them from those of competition

CUSTOMERS

EMPLOYEES

BRAND

MANAGEMEN
T

STAKEHOLDER
S

Trademarks
Brands
Trustmarks

Awareness
Attraction
Loyalty and Relationship

EMOTIONAL CONNECT

Advertisin
g

Channel
Communication

Public Relations

Direct Marketing

Front
End

Consumer
Promotions

Back
End

Employee
Communication

Management
Philosophy

People
Passion
Positioning
Programmes
Philosophy

Potential
Product
Augmented
Product
Expected
Product
Generic
Product
Core
Benefit

Brand is a product, but one that adds other

dimensions that differentiate it in some way from
other products designed to satisfy the same
need
Santro v/s Indica v/s Zen

Brands are derived by providing an ideal

combination of attributes- tangible v/s intangible,
practical v/s symbolic, visible v/s invisible

Brands segment the market

Brands are built by persistent difference
over the long run
Brands are living memories
Brands give products their meaning and
direction

BRAND = PRODUCT + IMAGE

Brands constitute a number of

associations by understanding the right
consumer motivations and desires and
creating relevant and appealing images
surrounding their products

Brand
Organisation
al
Associations
Country of
origin

Product
Scope

Brand
Personality

Attributes
Uses
Emotional
Benefits

Quality
Functional
Benefits
Self
Expressive
Benefits

Brand
customer
relationships

Consumers
Identification of source or
product
Assignment of responsibility
to product maker
Risk reducer
Search cost reducer
Promise, bond

Manufacturers
Means of identification
Means of legally protecting
unique features
Signal of quality level to
satisfied customers
Means of endowing products
with unique associations

Symbolic device

Source of competitive
advantage

Signal of quality

Source of financial advantage

Brand is something that resides in the

customers mind
Provides meaning to the customer
Consumer perceives differences among
brands, and therefore chooses one over
the other

Physical Goods
Services
Retailers
Organizations
Arts & Entertainment
Geographic Locations
Ideas & Causes
People

Brand identity
Brand image
Brand positioning
Brand personality
Brand equity
Brand values
Brand philosophy
Brand proposition
Brand mantra
Brand culture
Brand architecture
Brand charter
Brand hierarchy
Brand family
Brand audit

Set of associations that the brand strategist

aspires to create or maintain
Represents what the brand stands for
Implies a promise for the consumer
Essence of brand identity

Individuality
Long term goals and ambitions
Values
Recognition signs

Brand Awareness
Brand Recognition: relates to the consumers ability to
confirm prior exposure to the brand when given the
brand as a cue
Brand Recall: relates to the consumers ability to
retrieve the brand from memory when given the
product category, needs fulfilled by the category or
purchase or usage situation as a cue

 Advantages of Brand Awareness

Learning Advantage
Consideration Advantage
Choice Advantage

Establishing Brand Awareness

Increase consumer experiences or touchpoints with the
brand

Brand Image
Decoding of the signals emitted by the
brand through its communication,
products and services
How the brand is perceived

Brand
Identity

Signals
Transmitte
d

Brand
Image

Competition and Noise

Brand Image
Marketer controlled associations: advertising,
packaging, service etc.
Uncontrolled associations: direct experience,
wom, assumptions and inferences, press etc.
STRONG, FAVOURABLE AND UNIQUE

Brand Personality
Set of human characteristics associated with a
brand
Includes characteristics such as demographics
(age, gender), lifestyle (activities, interests,
opinions) or human personality traits etc.

Brand Positioning
Brand positioning is the act of designing a
companys offering and image so that it is
distinct from the competition and it
occupies a place in the consumers mind

Positioning is defined as the act of

designing the companys offer and image
so that it occupies a distinct and valued
place in the target customers mind
Finding the right location in the mind

Determining a positioning requires the

determining of a frame of reference
Target consumer
Competitors
How the brand is similar to competitors
How the brand is different from competitors

Brand Positioning

Why

When

Brand Positioning

For
whom

Against whom?

Brand Positioning
To satisfy in
between meals
hunger

Young, 20-30
years, M/F

Cadbury Perk
Any time- any
where

Kitkat and other

Snacks

Medicinal

Gelusil
Digene

Eno

Low Efficacy

High Efficacy

Pudin Hara

Hajmola
Natural

Taste

High

Postman
Sundrop

Dalda

Low

Hi
Health

Saffola

Low

Competitive Positioning
Defining and Communicating the
Competitive Frame of Reference
Choosing Points of Parity and Points of
Difference
Establishing Points of Parity and Points of
Difference
Updating Positioning

1. Choosing the Competitive Frame

of Reference
Establish category membership for the
brand
Communicate category benefits
Compare with a leader

2. Choosing Points of Parity and

Points of Difference
Desirability of POD
Relevance, Distinctiveness and Believability

Deliverability
Feasibility, Communicability and Sustainability

3. Establishing Points of Parity

and Points of Difference
Separate the attributes
Leverage equity of another entity
Redefine the relationship

4. Updating Positioning over

Time
Shifts in positioning strategy over time
Laddering
Reacting

Yellow

Food

Sundrop

Fitness
Healthy
Little Kid

Refined
Oil

Saffola

Heart Attack

Brand Equity
Brand equity refers to the set of associations and
behaviours on the part of the brands customers, channel
members and parent organisation, that allow it to earn
greater volumes, and that which gives the brand a
strong, sustainable and differentiated advantage over
competitors
A brands assets and liabilities

Brand Awareness
Perceived Quality
Brand Associations
Brand Loyalty

Brand knowledge- the key to

creating equity
Associative Network Memory Model
Bathing
Clean

Lime

LIRIL

Green
and
Yellow

Fresh
Waterfall

Brand
Awareness

Brand
Image

Strategic Brand Management

Process
Identify and Establish
Brand Positioning and
Values
Plan and Implement Brand
Marketing Programs
Measure and Interpret
Brand Performance
Grow and Sustain
Brand Equity

Who are you?

Brand Identity

What are you?

Brand Meaning

What about you? What do I think or feel about you?

Brand Response

What about you and me? What kind of an

association and how much of a connection would I
like to have with you?
Brand Relationship

Resonance

Judgments

Feelings

Performance

Salience

Imagery

Core Brand Values

Core brand values are a set of abstract

associations (attributes and benefits) that
characterise the 5-10 most important
aspects of the brand
Further synthesized into a core brand
promise/brand mantra/core essence which
reflects the heart and soul of the brand

Brand Mantra is an articulation of the heart

and soul of the brand. Short, three to five
word phrases that capture the irrefutable
essence or spirit of the positioning and
brand values
Brand functions
Descriptive modifier
Emotional modifier

David Aakers
Brand Identity Planning
Model

Extende
d
Core

Essence

Brand as
Product

Brand as
Organisation

Product Scope

Organisation
Attributes

Product Attributes
Quality/Value

Brand as Person
Personality

Brand as
Symbol
Visual imagery
and metaphors

Local v/s Global

Uses/Users
Country of origin

Functional

Emotional

Self
Expressive
Brand-Customer Relationship

Credibility

arch
Consistent
Quality

burgers

Value for
money

Ronald

Convenient,
Family Fun

For
everyone

Fast
friendly
service
colors

Emotional

Functional
Good tasting,
consistent
food

entertainme
nt

Relationship
Warm friend to share good times with

Warmth,
happiness, fun

Hinglish
Cool

America
n

Boisterou
s

Cola

Fun side of
todays youth
15-18 year
old

Fun
SRK, Saif,
Kareena

Young at
heart

blue

Functional
Thirst
quencher
Good taste

Emotional
Happy,
Energetic
Relationship

Self
Expressive
Young at
heart, cool

Porter's Five Forces

Porter's Five Forces

Porter explains that in any industry there are five forces that

influence what happens within the industry:

1. Existing companies,
2. potential new companies,
3. substitutes for products offered,
4. the suppliers, and
5. the customers.

These five forces combine to make up the business

environment. By studying the structure of and dynamics

between these forces, you can discover opportunities for
improving upon your marketing strategies.

IDENTIFY THE FORCES

Competitors: Those sites that offer the same product, service, or
information as your site.
Potential new entrants: Your site-less off-line competitors as well as new
companies entering the industry via a Website.
Customers: Visitors and potential visitors to your Website and your
competitors sites.
Suppliers: Those companies that supply you with the products (or parts
if you are a manufacturer) and/or services offered on your site. Other
suppliers are the Web hosting, software, and other vendors that supply
Web-enabling technology.
Substitutes: Other means and sources for the same products, services,
or information as your Website provides.

STRATEGIC
MANAGEMENT

STRATEGIC MANAGEMENT
Strategic management is the process of setting
long term direction for the organization.
The central thrust of strategic management is
achieving a sustainable competitive advantage.
The term advantage refers to superior benefit, or
superior position or condition resulting from a
course of action taken by the firm.
Competitive refers to a position in relation to an
actual or potential rival.
Finally sustain means to keep up a position over a
long period of time.

STRATEGIC MANAGEMENT
A sustainable competitive advantage is therefore
the prolonged benefit gained from developing
and implementing some unique value adding
strategy that is not simultaneously being imitated
by current or potential rivals.
Strategic management suggest that strategic
management is the process of strategic decision
making.
A process is a systematic way of carrying out
inter related activities in order to obtain desired
goals & objectives.

STRATEGIC MANAGEMENT
Strategic making process involves key decision made
for & on behalf of the entire organization. For firms
operating in several countries, the strategy process
consist of the analysis, development & implementation
steps taken by firms in order to manage the global
network of subsidiaries in different parts of the world.

STRATEGIC
ANALYSIS

STRATEGY
DEVELOPMENT

STRATEGY
IMPLEMENTATION