Marketing

Marketing may be defined as an economic process by which goods and

services are exchanged and the values is determined in terms of money
prices.

The American Marketing Association has defined Marketing As “ the

performance of business activities that direct the flow of goods and
services through producers to consumers or users.

Marketing is the business process by which products are match with the
markets and through which transfers of ownership are effected.

Marketing is a social and managerial process whereby individuals and

groups obtain what they need and want through creating and exchanging
products and value with others.
 Marketing concepts
The Marketing concepts may be defined as “ a management orientation
that holds that the key task of the organization is to determine the
needs, wants, and values of a Targeted market and to adapt the
organization to delivering the desired satisfactions more effectively and
efficiently than its competitors.

Marketing concept is a philosophy, an attitude, or a course of business

thinking. It holds that satisfaction of the wants of the consumer is the
economic and social justification of a company’s existence.

Marketing concepts is based upon three fundamental beliefs.

1.All company’s planning , policies, and operations should be

customer’s oriented.

2.Profitable sales volume should be the goal of the Company.

3.All Marketing activities should be organizationally integrated and co –

ordinated.
 Core Marketing concepts

NEEDS , WANTS,
AND DEMANDS

Marketing
Markets
offers
(product,
services,
experience)

Exchange,
Transactions, Value and
and satisfaction
relationships
 Needs, wants, Demands
Need :- Human needs are states of felt deprivation.

Want:- The form taken by a human needs as shaped by a culture

and individual personality.
for example a Man needs food but wants to have chicken
Mc grill burger with soft drink.

Demands:- Human wants that are backed by buying power . People

demand products with
benefits that add up to the most value and satisfaction.

Market offer:- Some combinations of product s , services, information

or experiences offered
to a market to satisfy a need or want.

Consumer value:- It is the difference between the values the

consumer gain from owning and
using a product and the cost of obtaining the
product.

Consumer satisfactions:- It is depends upon how well the purchase

 Maslow hierarchy of Human needs

Need for self-

actualization
(Personal growth &
fulfillment
Esteem Needs
Level of

(Achievement , status , dignity,

income

recognition)
Belongingness and Love Needs
( Family, Affection , Relationship
etc.)
Safety Needs
( Security, stability, protection, etc.)
Biological and physiological Needs
( Basic life needs, Air, Food, drink , shelter ,
sleep etc.)
 Elements of a modern marketing system

Company

(markete
r)
Marketing
Manufactu intermediar
rer ies End
Exporter (Whole- users
sellers ,
Retailers )

Rivals

Environment
 Marketing Managements

Marketing Management as the art and science of choosing target

markets and building profitable relationship with them. This involves
getting , keeping, and Growing customers through creating, delivering
and communicating superior customer value.

Marketing Management deals with planning, organizing, directing and

controlling the
Activities related to the marketing of goods and services to satisfy the
customer’s needs.
 Marketing functions

Functions
Function Functions of Miscellaneous
of
s of Physical treatment
Functions
exchange
R&
D 1. Standardization
1. Marketing 1. Buying and 1. Promotion
research , grading, &
Assembling. (advertise
2. Product branding.
2. Selling ment,
planning and 2. Packaging
publicity).
development 3. Storing
2. Pricing
4. Transportation
3. Financing
4. Risk-taking
 Starting PointExisting products Means Ends

Factory Existing products Selling and promotion

Profits through sale

The Selling Point

Market Customer needs Integrated Marketing Profits through

customer satisfaction

The Marketing Concept

Selling and Marketing

 Marketing Mix
Marketing Mix is the term used to describe the combination of the
four inputs which Constitute the core of a company’s marketing
system, the Product, Price- structure, promotional activities and the
distribution system.

Every business firm has to determine its Marketing Mix for the
satisfaction of needs of the customers. Marketing Mix represents a
blending of decisions in four areas-
1.Product
2.Price
3.Place
4.Promotion
These four elements of Marketing mix are inter-related in such a
way that decisions taken in one area usually affect actions in others.
It is a dynamic state of affairs of the marketing system of a business
firm. It concentrates on how to satisfy the needs of the customers, If
the needs of the consumers change, the Marketing Mix will also be
changed.
 Component of Marketing Mix

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Product :-
In the production of a product (or service) the marketing manager should
reckon the fact that his product indeed satisfies a need of the society.
Product component of Marketing Mix involves planning , developing, and
producing the right type of products and services to be marketed by the
business firm.

It should also emphasis on its proper Branding, packing, colors, and

other features. In other words production planning and development
involves decision about .
1.Quality of the product
2.Size of the product
3.Design of the product
4.Volume of the production
5.Product range
6.Branding
7.Packaging
8.Warranties and after sale services
9.Product testing etc.
Price:-
Another important component of Marketing Mix is the pricing of the
product . A marketing manager has to do a lot of exercise to determine
the price, he decide the price in such a way that the firm is able to sell
its products successfully.
Pricing also involves establishing policies regarding credit and Discount.
Below are other variables which considered while pricing a product ( or
Service)
1.Demand for the product.
2.Actual cost of the product
3.Potential competition
4.Government rules and regulations.

Pricing decisions and policies have direct influence on the sales volume
and the profit of the firm. Therefore right price can be determined
through pricing research and by adopting test marketing techniques.
Promotion:-
Promotion deals with informing and persuading the consumer regarding
the firm’s product
It involves decisions about advertising , procedure of giving free articles
for purchase of the particular commodities, conducting contest, role of
personal selling by the salesman, and other sales techniques.

Advertising is a tool marketing manager uses to communicate a message

to consumers through newspaper, magazines, televisions etc.

Personal selling is another means of communicating to the consumer ,

and consist of direct person to person interaction between salesman and
consumer.
Physical distribution:-

This aspect of Marketing Mix includes decisions about wholesale and

retail channels of distribution and the place at which the products
should be displayed and made available to the consumers.

It is management’s responsibility and to select and manage trade

channels through which the product will reach the right customer at
the right time and to develop a physical distribution system for
handling and transporting the products through these channels.
Marketing philosophies:-
As marketing management carrying out task to build profitable
relationship with target consumers, what philosophy should guide these
marketing efforts ? There are five alternative concepts under which
organizations conduct their marketing activities.
1. The production
2. The product
3. The selling
4. The marketing
5.The social marketing

The production concepts:-

The production concept holds that consumers will favor
products that are available and highly affordable. Thus the
management should focus on improving production and
distribution efficiency . It is useful philosophy in two type of
situations.
(a) when the demand of the product is higher than its
supply.
(b) when the products cost is too higher and improved
productivity is
needed to bring it down. (Henry Ford )
The product concept:-

The product concept holds that consumer will favor products that offer
the most in quality , performance and features that the organization
should therefore devote its energy to make continuous product
improvements.

Selling concepts:-

The selling concepts which hold that consumers will not buy
enough of the firm’s product unless it undertakes a large –scale
selling and promotion efforts. Most firms practice the selling
concept when they face over capacity , their aim is to sell what
they make rather than make what market wants. This concept
is typically practiced with unsought goods and services like
insurance etc.

The social Marketing concepts :-

The social marketing concepts holds that the organization

should determine the needs , wants, and interest of the target
market and deliver the desired satisfaction more effectively and
 Market segmentation
As a business firm can not appeal to all the buyers in the market, as
buyers are too numerous , too widely scattered , and too varied in
their buying and practices. Moreover , the companies themselves
vary widely in their abilities to serve different segment of the
market , rather try to compete in an entire market, sometimes
against superior competitors , each company must identify the
parts of the market that it can serve best and most profitably.

Market segmentation :-

Dividing a market into smaller groups of buyers with distinct needs

, characteristics , or behavior who might require separate products
or marketing mix. The company identifies different ways to segment
the market and develop profiles of the resulting marketing
segments.

Target Marketing :-
The process of evaluating each market segment’s attractiveness
and selecting one or more of the market segments to enter.

Market positioning :-
 Steps in market segmentation, Targeting, and positioning

Market
Market Target Marketing Positioning
segmentation 3.Develop measure of
1.Identify bases for
5. Develop
segment positioning for target
segmenting the attractiveness . segments.
market.
4. Select target 6. Develop a
2.Develop segment segments . marketing mix for
profiles.
each segment.
 Segmenting consumer market

Followings are the major variables that might be used in segmenting

consumer market.
1.Geographic segmentation.
2.Demographic segmentation.
3.Psychographic segmentation.
4.Behavioral segmentation.

Geographic segmentation :-
Dividing a market into different geographical units such as nations,
states , regions, cities, or neighborhoods. A company may decide to
operate in one or a few geographical areas, or to operate in all the areas
but pay attention to geographical differences in need and want.

Demographic segmentation :-
Dividing the market into groups based on demographic variables
such as
1. Age, …………………...under 6, 6-11, 12-19, 20-34, etc.
2.Gender, ……..........…...Male , Female.
3.Family size…………….1-2, 3-4, 5+
4.Family life cycle ……….young, single, young married, no child, married
with child.
7. Education :-…………… primary , secondary, sr. secondary, collage.
8. Religion :- ……………...catholic, protestant, Hindu, Muslim , Buddhist.
9. Generation:-…………….Gen x, gen y .
10. Nationality………………America, UK, Europe, Japan, Australia.

Psychographic segmentation:-
Dividing a market into different groups based on social class, Lifestyle, or personality
characteristics. People in the same demographic group can have very different
psychographic make-up.

1.Social class:-- lower-lower, lower-middle, middle-upper, lower –upper, upper -Upper.

2.Lifestyle:------ Achievers, strivers, strugglers.
3.Personality:--- compulsive, ambitious.

Behavioral segmentation:-
Dividing a market into groups based on consumer knowledge, attitude, use, or response to
A product.
1.Occasions ;---------Regular, special occasion.
2.User status:---------non-user, ex-user, potential user, regular user.
3.User rates:-----------light user, medium user, heavy user.
4.Loyalty status:------none, medium, strong, absolute.
5.Attitude towards product:- enthusiastic, positive, indifferent, negative.
Inter-market segmentation :-

Forming segments of consumers who have similar needs and buying

behavior even though they are located in different countries. For
example , Mercedes-Benz target the worlds well to do, MTV targets
the teenagers. Coke, Pepsi, UCB , Nike, Adidas are the few
companies that actively target world teens.
 Target Marketing

Market segmentation reveals the firm’s market segment opportunities.

Now firm has to evaluate the various segments and decide how many
and which ones to target.

Evaluating marketing segments- in evaluating different marketing

segments, a firm must look at three factors.
1.Segment size and growth.
2.Segment structural attractiveness.
3.Company’s objectives and resources.

Segment size and growth :-

The company must first collect and analyze data on current
segment sale , growth rates, and expected Profitability for various
segments. It will be interesting in segment that have the right size and
growth characteristics.

Segment structural attractiveness :-

The company also needs to examine major structural factors that
affect long run segment attractiveness. For example a segment is less
attractive if it is already contain many strong and
aggressive competitors. ( Rivals ). Existence of actual or potential
 Company’s objective and resources:-
Even if a segment has the right size and growth and structurally
attractive , the company’
Must consider its own objectives and resources in relation to
that segment.

Selecting target market segments:-

After evaluating different market segments , the company must now
decide which and how many segments it will target. A Target market
consist of a set of buyers who share common needs or characteristics
that company decide to serve.
Micro
Undifferentia Differentiate
Concentrated marketing
ted d
Target marketing strategies ( niche ) ( Local or
(Mass ( segmented
marketing individual
Marketing) market)
marketing)

Targeting broadly Targeting narrowly

Undifferentiated (Mass ) marketing:-
A market coverage strategy in which a firm decides to ignore market
segment differences and go after the whole market with one offer.
This mass marketing strategy focuses on what is common in the needs
of the consumers rather than on what is different. Company design a
product and a marketing program that will appeal to the large number
of buyers. It relies on mass distribution and mass advertising.

Differentiated marketing:-
A market coverage strategy in which a firm decide to target several
market segments and design separate offers for each. For example
Nike offers athletic shoes for a dozen or more different sports , from
running, fencing, golf, bicycling to baseball. And American express
offers not only its traditional green cards but also gold cards,
corporate cards, or even a black card called the centurion.

Concentrated ( niche) marketing :-

A marketing- coverage strategy in which a firm goes after a large

share of one or a few segments or niches. A niche marketing is
especially appealing when company resources are limited. For
example tetra sells 80% of the world’s tropical fish food, and steiner
In niche marketing segments are fairly large and normally
attracts several competitors, niches are smaller and may attract
only one or few competitors, company achieves a strong position
because of its greater knowledge of consumer needs in the
niches it serves and the special reputation it acquires.

Concentrated marketing can be highly profitable . It involves

higher than normal risk . Companies that rely on one or few
segments for all their business if that segments tuned sour.

Micro marketing :-
The practice of tailoring products and marketing programs to the
needs and wants of the specific individuals and local consumer
groups ---------include local marketing and individual marketing.
 Positioning for competitive advantage
After selecting and deciding which segments of the market it will
target , the company must decide what positions it wants to occupy
in those segments. A product ‘s position is the way the product
is defined by the consumers on important attributes----the place the
product occupies in the consumer’ s minds relative to competing
products.
Positioning involves implanting the brand’s unique benefits and
differentiation in customer’s mind.
For example TIDE is positioned as a powerful, all purpose family
detergent ; Ivory snow is positioned as the gentle detergent for
fine washable and baby clothes.

To simplify the buying process, consumer organize products,

services, and companies into categories and “position them in their
minds. A product’s position is the complex set of perceptions,
impression, and feelings that consumers have for the product
compared with competing products.
Choosing a positioning strategy:-

The positioning consist three steps:-

1.Identifying a set of possible competitive advantages upon
which to build a position.
2.Choosing the right competitive advantages.
3.Selecting an overall positioning strategy.

Competitive advantages:-
An advantage over competitors gained by offering
consumer greater value, either through lower prices or by
providing more benefits that justify higher prices.
Thus positioning begins with actually differentiating the
company ‘s marketing offer so that it will give more value that
competitor’s offers do.
Companies can differentiate their products on such
attributes as consistency, durability, reliability, or reparability.
Product differentiation with its services differentiation i.e.
speedy, convenient, or careful delivery, customer training,
consulting services, advising services etc.
1. How many differences to promote ? One or two or more.

2. Which differences to promote ? The company must carefully

select the ways in which it will distinguish itself from
competitors.

• Important :- the differences delivers a highly valued

benefit to target buyers.

• Distinctive:- competitors do not offer the difference, or the

company can offer it in a
more distinctive way.
• Superior: - the difference is superior to other ways that
consumer might obtain the
same benefit .
• Communicable :- the difference is communicable and
visible to the buyers.

• Preemptive:- competitors cannot easily copy the

difference.
Selecting an overall positioning strategy:-

Consumers typically choose products and services that give

them the greatest value. Thus marketers want to position their
brand on the key benefits that they offer relative to competing
brands. The full positioning of a brand is called the brand’s
value proposition---- the full mix of benefits upon which the
brand is positioned.
It is the answer to the consumer question “ why should I buy
your brand ?

Developing a positioning statement:-

A statement that summarizes company or brand positioning ---
it takes this form:

To ( target segment and need ) our ( brand) is (concept) that

( point of difference)
 Perceptual Mapping
Marketing research technique in which consumer‘s views about a product are traced or
plotted (mapped) on a chart. Respondents are asked questions about their experience with the
product in terms of Its performance packaging, price, size, etc. Theses qualitative answers are
transferred to a chart (called a perceptual map) using a suitable scale and the results
are employed in improving the product or in developing a new one.

A perceptual map is a means of displaying or graphing in two dimensions the location of

products or brands in the minds of consumers to enable a manager to see how consumers
perceive competing products or brands relative to its own and then take marketing actions.

HOW A Perceptual map is created ?

Choose a product or service and identify three companies who manufacture it. For example,
you might choose peanut butter as the product you will study. Then identify three peanut butter
manufacturers. Next create two questions about how the peanut butter product is positioned
compared to its competitors, the other two brands of peanut butter. Ask six people your
questions and plot their answers on your perceptual map. Analyze your results, draw
conclusions (such as, do you think the product or service is competing head-on or is avoiding
competition?), and if needed, make recommendations about the positioning of your chosen
product.

.
When plotting a perceptual map two dimensions are commonly used. Below is a
very basic perceptual map. If we plot the UK chocolate market we can identify
those brands which are high price and high quality. Belgium chocolates are
plotted as high quality and high price, and Twix is plotted one low quality low
price brand. Once completed the perceptual map could help identify where an
organization could launch a new brand perhaps at the medium price and quality
range.
We must remember that perceptual maps are plotted on the basis of some ones
perception and what maybe a quality product to one person, may not be
perceived as quality to another.
 Product
A product may be defined as anything that can be offered to a
market for attention, acquisition, use, or consumption that might
satisfy a want or need. Products includes more than just tangible
goods. Broadly defined, products include physical objects, services ,
events, persons places, ideas, organizations, or mix of these entities.

A service may be defined as any activity or benefit that one party

can offer to another party that is essentially intangible and does not
result in the ownership of anything.

A product has three dimensions or layer, which must be

distinguished.

1.Core product ( Benefit )

2.Formal product ( Actual product)
3.Augmented product.

Core benefit ( product):-

It is the fundamental dimension of a product as it represents
bundle of benefits to its prospective customers ( buyers) .The core
product answer the question : “what is the buyer buying ??”
A person buying a washing machine is buying comfort and not a
mere collection of drum, heater, and nuts and bolts for his own sake.

The basic job of a marketer is to sell the core benefits.

Actual products - it is the larger packaging of a core product . It
is what the target market recognizes as the tangible offer
(product) . A product is a physical object have the following
attributes:
• Features
• Style or Design
• Level of quality
• A brand name
• Packaging
Augmented products:-
It is a broader conception of the product . It represents the
totality of the benefits that a consumer may receive or
experience in getting the actual product . The augmented
product of a TV distributor is not only the TV .. But also the
whole set of accompanying services like instructions, free
home delivery, free installations, warranty, and service and
maintenance. This dimension of the product is very important
for a firm operating in a competitive market. The firm that
 Augmented product

Actual products
Delivery After sale
and credit services
Brand
name Features
Core
benefits
Quality
level Design
warranty installation
Packaging

Three level of
 Product mix
A product mix consists of all the product lines and items that a
particular seller offer for sale . A company’s product mix has four
important dimensions .
1.Width
2.Length
3.Depth
4.Consistency

Product mix width:-

It refers to the number of different product lines the company
carries. P & G market a fairly wide range of the product mix consisting
of 250 brands organized into many product lines. These lines includes
homecare, baby care, beauty care, health care, and food and beverages
products.
Product mix length:-
It refers to the total no of items, one company carries within its
product lines. P & G typically carries many brands within each line. For
example it sales six laundry detergents, six hand soaps, five shampoos
etc.
Product line depth:-
It refers to the number of versions offered of each product in the
line. For example Hindustan unilever Ltd is offering bath soaps
Consistency of the product mix:-

It refers to how closely related the various products lines are in end
use, production requirement, distribution channels, or some other
way. P & G ‘s product lines are consistent insofar as they are
consumer products that go through the same distribution channels.
Lines are less consistent insofar as they perform different functions
for the buyer.
 Products offered by hindustan unilever Ltd.
The company has a distribution channel of 6.3 million outlets and owns
35 major Indian brands.[3] Some of its brands include
1.Kwality Wall's ice cream, 
2.Knorr soups & meal makers, 
3.Lifebuoy, Lux, Breeze, Liril, Rexona, amamand Moti
soaps, 
4.Pureit water purifier, 
5.Lipton tea, Brooke bond tea, Bru coffee, 
6.Pepsodent and Close Up toothpaste and brushes, and 
7.Surf, Rin and Wheel laundry detergents, 
8.Kissan squashes and jams,
9.Annapurna salt and atta, 
10.Pond's talcs and creams, Vaseline lotions, Fair and
Lovely creams, Lakmé beauty products,
11.Clinic Plus, Clinic All
Clear, Sunsilk and Dove shampoos, Vim dish wash, Ala
bleach, 
12.Domex disinfectant, Rexona 
13.Modern Bread, and 
14.Axe deosprays.
 Products mix of procter and gamble
1. Ariel is a brand of laundry detergent/liquid available in numerous
forms and scents.
2. Crest is a brand of toothpaste and teeth whitening products.
3. Dawn is a brand of dishwashing detergent
4. Downy/ Lenor is a brand of fabric softener.
5. Duracell is a brand of batteries and flashlights.
6. Fusion is a brand of men's wet shave razors.
7. Gain is a brand of laundry detergent and fabric softeners.
8. Gillette is a brand of safety razor and male grooming products.
9. Head & Shoulders is a brand of shampoo and conditioners.
10.Old Spice is a brand of aftershave Deodorants, Soaps and Body wash
11.Ivory is a soap.
12.Nice 'n Easy is a hair coloring product.
13.Olay is a brand of women's skin care products.
14.Oral-B is a brand of toothbrush, and oral care products.
15.Pampers is a brand of disposable diaper and other baby care
products.
16.Pantene is a brand of hair care products (conditioners/styling aids).
17.Puffs is a brand of facial tissue
18.Secret is a brand of antiperspirant and deodorant.
19.TAG is a deodorant and body spray.
20.Tide is a brand of laundry detergent.
21.Wella  is a brand name of hair care products (shampoo, conditioner,
styling, and hair color).
22.Whisper is a brand of panty liners sold primarily in Asian markets.
 Product classification
Product and services can be classified in to two categories :
(a)Consumer products
(b)Industrial products.
Consumer products:- consumer product and services bought by
final consumers for personal consumption. These products include
convenience products, shopping products, specialty products and
unsought products.

(a)Convenience products:- these are the items which the

consumer buy frequently, immediately and with minimum shopping
efforts. Cold drink, cigarettes, magazines and newspaper, drugs and
most grocery items are the examples of these products . These
products are non-durable and used and consumed rapidly.
(b)Shopping products:- these products include items which the
consumer select and buy after making comparison on such criteria
such as suitability, quality, price and style. Furniture items, dress,
shoes, TV , refrigerator , and other home appliances are the example
of shopping goods. These goods are durable and is used up slowly.
The consumer has to compare different store’s offerings and devote
considerable time and efforts to take the buying decision.
(c)Speciality products:- consumer products with unique features
or brand identification for which a significant group of buyers is
(d) Unsought products:-
consumer products that the consumer either does not know about
or knows about but does not normally think of buying. For example
blood donation to Red cross, Life insurance. By their very nature ,
unsought products require a lot of advertising, and other marketing
efforts.

Industrial products:- are those meant for use in making

other products or for rendering a service in the operation of
business firm. These can be further classified on the basis of use
into five categories.

Raw material : Fiber for making yarn, etc.

Fabricated material and parts: yarn for knitting / weaving etc.

Installations : Heavy machinery , diesel engine, trucks etc for

industrial use.

Accessories equipment : Buttons, zipper, labels, laces, etc.

Operating supply: these are the convenience goods for industrial

products, oil, pen, pencil, paper, pins, fuel. etc
 Product life cycle
The concept of product life cycle has gained importance as it
indicates that sooner or later all products die and if
management wishes to sustains its revenue , it must replace
the declining products with new ones. The product life cycle
concepts also indicates what can be expected in the market for
a new product at various stages.

The product life cycle concepts is also a useful framework for

describing the typical evolution of marketing strategy over the
product life cycle. This will help in taking sound marketing
decisions at different stages of the product life cycle.

The product moves through the four stages :

1.Introduction
2.Growth
3.Maturity
4.Decline

As the product moves through different stages of its life

 Product life cycle

Sales and
Profits ($)

Sales

Profits

TIME
Product Introduction Growth Maturity Decline
Develop-
ment

Losses/
Investments ($)
1. Introduction stage:-
The first stage of PLC is the introduction, under which competition
is slight or non-existent , price are relatively higher, market are
limited and rapid improvements are being made in its technology .
The growth in sales volume is at lower rate because of lack of
knowledge on the part of consumers and delays in making the
product available to the consumer. During this stage higher
expenditure are to be incurred on advertising and other promotional
techniques. Price are higher during this stage because of small scale
of production, technology problems, and heavy promotional
expenditure.
2. Growth stage :- as the product grows in popularity, it moves into
second phase of its life cycle i.e. growth stage in which demand
expands rapidly, price fall, competition increases, and distribution is
greatly broadened. The management focuses its attention on
improving the market share by deeper penetration into the existing
market or entry into the new markets. The promotional expenses
remain high although they tend to fall as a ratio to sales volumes. It
will increase the profit .
3. Maturity stage:- the product enters into maturity stage as
competition intensifies further and market grows saturated. Profits
come down because of stiff competition , and marketing expenditure
rise. The price are decreased because of competition and technology.
4. Decline stage:-
The stage is featured by either the product’s gradual
displacement by some new products or evolving change in
consumer buying behavior, the sales fall down sharply and
the expenditure on promotion has to be cut down drastically .
Many firm abandon the product in order to put their
resources to better use. The demand of the people change
and other innovations come to the market to take place of
the abandoned products.
 Style , Fashion , Fad

Basic, Fashion, and Fad Products

Apparel and other consumer products can be classified by
the length of their life cycles. Basic products such as T-
shirts and blue jeans are sold for years with few style
changes. Businesses selling basic products can count on a
long product life cycle with the same customers buying
multiple units of the same product at once or over time.
.
Fashion product life cycles last a shorter time than basic product life
cycles. By definition, fashion is a style of the time. A large number of
people adopt a style at a particular time. When it is no longer adopted by
many, a fashion product life cycle ends. Fashion products have a steep
decline once they reach their highest sales.
The fad has the shortest life cycle. It is typically a style that is adopted
by a particular sub-culture or younger demographic group for a short
period of time.
The overall sales of basic products are the highest of the three types of
products, and their life cycles are generally the longest.
Apparel products often have a fashion dimension, even if it is just color.
As fashion features increase in a product, the life cycle will decrease.
Therefore, if you are designing a fashion product, you will want to have
multiple products
For example, withina line for introduction
sweater as each
line, a business mayfashion product's
have four styles cycle
that
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include
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silhouette, length, sales.
and collar changes based on the current fashion.
One or two short-cycle fashion or fad styles based on breaking trends
may be introduced once or twice a year. Styles that a popular celebrity
or sports hero is wearing are examples of fashion and fad styles.
 New product developments

A firm can obtain new products in two ways. One it is through –

acquisition ----by buying a whole company, a patent, or a license to
produce some one’s product. Or other through New product
development in company’s on research and development
department .

New product development:- means development of new original

product , product improvement, product modification, and new brand
that the firm develops through its own research and development
efforts.

Followings are the main stages in new product development.

1.Idea generation
2.Idea screening
3.Concept development and testing
4.Marketing strategy
5.Business analysis
6.Product development
7.Test marketing
8.Commercialization
 Marke
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Major stages in new product development

 New Product Development Process

Step 1. Idea Generation

The Systematic Search for New Product Ideas

Internal sources : From company’s own executives, scientists,

engineers, designers, manufacturing staff, marketing and sales
executives etc.

External sources :
1.Customers
2.Competitors
3.Distributors
4.Suppliers
 New Product
Development Process
Step 2. Idea Screening

Process to spot good ideas and drop poor

ones

Criteria :
• Market size

• Product price

• Development time & costs

• Manufacturing costs

• Rate of return
 New Product
Development Process

Step 3. Concept Development &

1. Testing
Develop
1. DevelopProduct
ProductIdeas
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into
Alternative
Alternative
Product
ProductConcepts
Concepts

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2. Concept
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Product Concepts with Groups
of
ofTarget
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Customers

3.
3. Choose
Choosethe
theBest
BestOne
One
 New Product Development Process

Step 4. Marketing Strategy Development

Marketing Strategy Statement Formulation

Part
Part One
One -- Overall:
Overall:
Target
Target Market
Market
Planned
Planned Product
Product
Positioning
Positioning
Sales
Sales && Profit
Profit Goals
Goals
Market Share
Market Share
Part
Part Two
Two -- Short-Term:
Short-Term:
Product’s
Product’s Planned
Planned Price
Price
Distribution
Distribution
Marketing
Marketing Budget
Budget

Part
Part Three
Three -- Long-Term:
Long-Term:
Sales
Sales &
& Profit
Profit Goals
Goals
Marketing Mix Strategy
Marketing Mix Strategy
 New
New Product
Product Development
Development Process
Process

Step
Step5.
5. Business
BusinessAnalysis
Analysis
Step
Step6.
6.Product
ProductDevelopment
Development

Business
BusinessAnalysis
Analysis

Review
Review of
of Product
Product Sales,
Sales, Costs,
Costs,
and
and Profits
Profits Projections
Projections to
to See
See ifif
They
They Meet
Meet Company
Company Objectives
Objectives

IfIfNo,
No,Eliminate
Eliminate
Product
ProductConcept
Concept IfIfYes,
Yes,Move
Moveto
to
Product
ProductDevelopment
Development
 New
New Product
Product Development
Development Process
Process

Step
Step7.
7. Test
TestMarketing
Marketing

Standard
Standard
Test
TestMarket
Market Controlled
Controlled
Test
TestMarket
Market
Full
Fullmarketing
marketingcampaign
campaign
in AAfew
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a small number of agreed to carry new
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Simulated
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shopping environment
shopping environment
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toaasample
sampleofof
consumers.
consumers.
New
New Product
Product Development
Development Process
Process

Step
Step7.
7. Commercialization
Commercialization

Introducing a new product into

the market
 Price
Price :- The amount of money charged for a product or service, or the
sum of values that consumers exchange for the benefits of having or
using the product or service.

Dynamic price:- charging different prices depending on individual

customers and situations.

Objectives:- as an element of marketing mix , price strategy should

be directed the accomplishment of specific marketing objectives
which lead to overall organizational objectives

The followings are the important objectives of pricing :-

1.To achieve target rate of return on investment or on net sale.

2.To achieve price stabilization.

3.To meet or prevent competition

4.To maintain or improve share of the market

1. To achieve target rate of return on investment or on net sale
:-
This is an important goal of pricing policy of many firms. A firm
following this goal tries to build a price structure to provide
sufficient return on capital employed . Generally , an estimate is
made of return expected over the long run, and the prices are fixed
to achieve the expected rate of return. This leads to cost plus
pricing .

2. To achieve price stabilization :-

Many firms have the objectives of price stabilization in the long-
run. The objective is often found in industries that have a price
leader. In oligopolistic situation where there are only a few
sellers in the market, and each seller will try to maintain stability in
his pricing . In such a situation , one seller acts as the price leader
and other follows him. Thus a relationship exists between the
leader’s price and those charged by other firms.

3. To meet or prevent competition :-

Some firms adopt the pricing policy to meet or prevent
competition. They are ready to fix their prices to meet competition
in the market . Sometimes they are prepared to follow “ below cost
pricing” in order to fight competition. They charge less price than
the cost because they feel that it will prevent the new firms to enter
4. To maintain or improve share of the market :-
This pricing objective is followed by the firm operating in the
expanding markets. When the market has a potential for growth,
market share is a better indicator of a firm’s effectiveness than the
target return on investment. A firm might be earning a reasonable
rate of return but its market share may be decreasing. Therefore a
worthwhile pricing objective in times of increasing market share
should be to maintain or to improve share of the market.

5. Maximize profit:-
There are many firms which do not care for social responsibilities,
and follow the pricing policy to maximize their profits.

Factors affecting price decisions:- External factors

Internal factors 1.Nature of the
1. Marketing market and
objectives demand
2. Marketing mix Pricing 2.Competition
strategy Decisions 3.Other
3. Cost environmental
4. Organizational factors (economy,
considerations reseller, govt.)
 Pricing policies
The major pricing policies which are followed by the business firms
are as :-
1.Competitive pricing
2.Skimming the cream pricing
3.Penetration pricing
4.Keep out pricing
5.Price lining
6.Psychological pricing
7.Captive –product pricing
8.By products pricing
9.Product bundle pricing
10.Follow the leader pricing
11.Discrimination pricing
Competitive pricing :-
This method is mostly used when the market is highly competitive
and the product is not differentiated significantly from the
competitive products. This resembles the perfect competition under
which prices are determined by the forces of demand and supply.
Product is homogeneous ( no differentiations) buyers and sellers are
well informed about market price and market conditions, and the
seller has no control over the market price. In this situation every firm
will follow the price which is in tune with the market conditions.
Skimming the cream pricing :-
under this pricing policy ,higher prices are charged during the
initial stage of the introduction of a new product. The manufacturer
fixes higher price of his product in order to recover his initial
investment quickly. This policy has been quite successful in many
cases due to :

1. Demand is more inelastic with respect to price in the early stage of

its introduction.

2. Introducing a new product with a high price is an efficient device for

dividing the market into segments that differ in price elasticity of
demand. the initial higher price serves to skim the cream of market
that is relatively insensitive to price. Price may be reduced
subsequently to attract successively more elastic segments of the
market.
3. A manufacturer may charge the higher prices in order to restrict the
demand to the level which he can meet easily. He may use the
strategy to avoid the loss resulting from competition when the entry
to that line is quite easy.
Penetration pricing:-
under this pricing policy, prices are fixed below the competitive
level to obtain a larger share of the market and to develop
Keep out pricing :-
As the name suggest , it is a pre emptive pricing policy, which aim at
discouraging the other firms in the market to offer substitutes. Keep out
price should be followed for only one product of a firm. It is very risky
venture, particularly , when the product is offered in the market at a
price which is less than the actual cost of the production and
distribution. This policy can be followed by big firms with huge resources
at their command. But once the lower price is fixed , it may not be
possible to increase it again as the new firms might introduce the new
substitutes in the market.

Price lining:-
This policy is used by the retailers, the retailers usually offer a good,
better, and best assortment of merchandise at different price levels. For
example , a retailers of T-Shirts may sell T-shirts at three prices: Rs.100,
Rs125, Rs150 the first price stands for the economy choice, the second
for medium quality choice and the third for super fine quality.

Psychological pricing:-
Under this policy, prices are fixed in such a way that they have
some kind of psychological influence on the buyers, customary
pricing and price lining are the example of psychological
pricing , another example of the psychological pricing are the
Captive –product pricing:-
Setting a price for the product that must be used along with a main
product . Such as blades for razor and film for a camera. Producers of
the main product s ( Razor, camera, video games, printers etc. ) often
price them low and set high marks ups on the supplies. Thus Gillete
sells low priced razors but makes money on the replacement
cartridges.

By product pricing:-
A by-product is a secondary or incidental product deriving
from a manufacturing process, a chemical reaction or a
biochemical pathway, and is not the primary product or service
being produced. A by-product can be useful and marketable or
it can be considered waste. Setting a price for by products in
order to make the main product’s price more competitive.

Product bundle pricing:-

Combining several products and offering the bundle at a lower
pricing.

Follow the leader pricing:-

 Discrimination pricing:-
some business firms follow the policy of charging different prices
from different customers according to their ability to pay. This is
also called segment pricing, market is segmented on the basis of
various variable, such as geographic, demographic, psychographic,
etc.
 Channels distribution
Channel of distribution is a path traced in the direct or indirect transfer
of ownership to a product as it moves from the a producer to ultimate
consumers or industrial user. Marketing channels are the distribution
net work through which producer’s products flows to market.
A set of interdependent organizations (intermediaries) involved in
the process of making a product or service available for use or
consumption.
Marketing channels : Intermediaries

1. Zero stage: Produc Consumer

er

Produc Retail
2. One stage : Consumer
er er

3. Two stage: Produc Wholes Retail Consum

er aler er er

4. Three stage: Produce Wholes Jobbe Retail Consum

r aler r er er
 Distribution channels functions
• Information:- Gathering and distribution marketing research and
intelligence information about actors and forces in the marketing
environment needed for planning and aiding exchange.

• Promotion: Developing and spreading persuasive communications

about an offer (product).

• Contact : Finding and communicating with prospective buyers.

• Matching : Shaping and fitting the offer to buyer’s needs, including

activities such as manufacturing grading, assembling, and packaging.
• Negotiation : Reaching an agreement on price and other terms of
the offer so that ownership or possession can be transferred.
• Physical Distribution :-Transporting and storing the products.
• Financing : Acquiring and using funds to cover the costs of the
channel work.
• Risk taking : Assuming the risks of carrying out the channel work.
 Channel Levels

Channels level:- A layer of intermediaries that performs some

work in bringing the product and its ownership closer to the final
buyer.
The channel of distributions can be divided into the following
categories:
1. Manufacturer and consumer
2. Manufacturer, retailer and consumer
3. Manufacturer wholesaler Retailer and consumer
4. Manufacturer, Agent, retailer and consumer
5. Manufacturer , Agent, wholesaler, retailer, consumer.
Conventional marketing channel
A channel consisting
Manufacturer of or more
independent
producers, wholesaler,
retailers, each a
separate business
seeking to maximize
Wholesaler its profits for the
system as a whole.

Retailer

Consumer
Vertical marketing
system

A channels structure
Manufacture in which producers,
r wholesaler, retailer
act as unified system.
One channel member
owns the other, has

Wholesaler
contacts with them, or
has so much power
that they all
cooperate.

Retailer

consumer
 Multi-Channel distribution system
internet Consumer
segment 1
Catalogs , Telephone,

Retailers Consumer
Producer segment 2

Dealers Business
Distributors
segment 1

Sales forces Business

segment 2
 Choice of Channels distribution
Choice of the appropriate channels of distribution is very important function of a
marketing manager , while taking a decision in this regard , management
should care fully consider the following factors:-

• Market consideration:-

1. Consumer or industrial market

2. Number of potential customers
3. size of order
4. buying habits of the customers

• Product considerations :-

1. Unit value of the product

2. number of product lines
3. Bulk and weight
4. Perishability ( nature of the product)
• Company consideration:-

1. Volume of production
2. Financial resources
3. Desire for controls of channels

•Middlemen considerations:-

1.Availability of desired middlemen

2.Financial ability
3.Sale potential
4.Competition and legal constraints.
 Promotion
Promotion is defined as the coordination of all seller-initiated efforts to set up
channels of information and persuasion to sell goods and services or promote an
idea. Promotion is best viewed as the communication function of marketing.

Purpose of Promotion:-

1.To spread information

2.To stimulate demand

3.To differentiate the product

4.To highlight the utility of the product

5.To stabilize sales

Promotion is all about companies communicating with customers.

A business' total marketing communications programme is called the "promotional

mix" and consists of a blend of advertising, personal selling, sales promotion and
public relations tools.
Promotion Mix
(1) Advertising:-

Any paid form of non-personal communication of ideas or products in the "prime

media": i.e. television, newspapers, magazines, billboard posters, radio, cinema
etc. Advertising is intended to persuade and to inform. The two basic aspects of
advertising are the message (what you want your communication to say) and
the medium (how you get your message across)

Advertising can have a number of objectives, these usually are

a.To promote
b.To remind
c.To support
d.To compete
e.To persuade

(2) Personal Selling:-

Oral communication with potential buyers of a product with the intention of

making a sale. The personal selling may focus initially on developing a
relationship with the potential buyer, but will always ultimately end with an
attempt to "close the sale".
3) Sales Promotion:-

Sales promotion includes those activities , other than personal selling ,

Advertising , and publicity that stimulate consumer purchasing and dealer
effectiveness such as display, shows and expositions , demonstrations and
various non-recurrent selling efforts not in the ordinary routine” It also include
the distribution of free samples, premium on sale, sales and dealer incentives ,
contesting fair and exhibitions etc.

Objectives of sales promotion techniques:-

1.Introduction of new product
2.Winning of new customers
3.Increasing sales during slack season
4.Increasing the public image of the brand or company.

(4) Public Relation ( P R):-

Public relation activities strive for creating a good image of the

company in the eyes of the customers and society . These activities
are not aimed at immediate demand creation. It is very common that
big companies convey their greeting and thanks to the people
through newspapers and other published media.
Sponsorship ( Public relations) :-

Sponsorship is about providing money to an event, in turn the product or

company is acknowledged for doing so. For example the Bejing Olympics
in 2008 will partly be sponsored by Panasonic. Sponsorship helps the
company improve its image and public relations within the market and
usually the company attempts to sponsor a person or event that mirrors the
image they are trying to aim for. Nike for example have successfully
sponsored the golfer Tiger Woods for many years.

6. Viral Marketing:-

Viral marketing occurs when consumers pass on or recommend your

product/company/website to others. This could be via email, or bulletin
boards or word of mouth. There have been many well known online viral
marketing campaigns
 Advantages and Disadvantages of Each Element
of the Promotional Mix
Mix Element Advantages Disadvantages

• Good for building awareness • Impersonal - cannot answer

Advertising all a customer's questions
• Effective at reaching a wide
Audience

• Repetition of main brand and • Not good at getting customers

product positioning helps build to make a final purchasing
customer trust decision

Personal •Highly interactive - lots of • Costly - employing a sales

Selling communication between the buyer force has many hidden costs in
and seller addition to wages

•Excellent for communicating

complex / detailed product • Not suitable if there are
information and features thousands of important buyers

•Relationships can be built up -

important if closing the sale make
 • Can stimulate quick increases in • If used over the long-term,
Sales Promotion sales by targeting promotional customers may get used to the
incentives on particular products. effect.

•Good short term tactical tool • Too much promotion may

damage the brand image

Public Relations •Often seen as more "credible" - • Risk of losing control - cannot
since the message seems to be always control what other people
coming from a third party (e.g. write or say about your product
magazine, newspaper)

•Cheap way of reaching many

customers - if the publicity is
achieved through the right media
 Marketing Environment

A marketing environment consist of actors and forces outside marketing that

affect Marketing Management’s ability to build and maintain successful
relationships with target customers.

There are two types marketing environments:

1.Micro environment
2.Macro environment

Micro environment :-

The actors close to the company that affect its ability to serve its customers-
the company, suppliers, marketing intermediaries, customer markets, competitors,
and public.

Macro environment:-

The larger societal forces that affect the micro-environment- Demographic ,

economic, natural , technological, political and cultural forces.
Actors in the micro environment
Major forces in the company’s macro-environment
 Product portfolio strategy
The business portfolio is the collection of businesses and products that make up the
company. The best business portfolio is one that fits the company's strengths and helps
exploit the most attractive opportunities.

The company must:

(1)Analyze its current business portfolio and decide which businesses should receive
more or less investment, and

(2) Develop growth strategies for adding new products and businesses to the portfolio,
whilst at the same time deciding when products and businesses should no longer be
retained.

Methods of Portfolio Planning:-

The two best-known portfolio planning methods are from the Boston Consulting Group
and by General Electric/Shell.

In each method, the first step is to identify the various Strategic Business Units ("SBU's")
in a company portfolio. An SBU is a unit of the company that has a separate mission and
objectives and that can be planned independently from the other businesses. An SBU can
be a company division, a product line or even individual brands - it all depends on how the
company is organized.
 BOSTON CONSULTING GROUP
MATRIX
The BCG matrix or also called BCG model relates to marketing. The BCG
model is a well-known portfolio management tool used in product life cycle
theory. BCG matrix is often used to prioritize which products within company
product mix get more funding and attention.

This helps the company allocate resources and is used as an analytical tool
in brand marketing, product management, strategic management,
and portfolio analysis.

The BCG matrix model is a portfolio planning model developed by Bruce

Henderson of the Boston Consulting Group in the early 1970's.

According to this technique, business or products are classified as low or

high performers depending upon their market growth rate and relative
market share.
 MARKET SHARE
• Market share :-
MS is the percentage of the total market that is being serviced by your
company, measured either in revenue terms or unit volume terms.

• RELATIVE MARKET SHARE

• RMS = Business unit sales this year

Leading rival sales this year

• The higher your market share, the higher proportion of the market you control.
 MARKET GROWTH RATE

Market growth is used as a measure of a market’s attractiveness.

MGR = Individual sales - individual sales

this year last year
Individual sales last year

Markets experiencing high growth are ones where the total market
share available is expanding, and there’s plenty of opportunity for
everyone to make money.
 THE BCG GROWTH-SHARE MATRIX

It is a portfolio planning model which is based on the observation that

a company’s business units can be classified in to four categories:
 Stars
 Question marks
 Cash cows
 Dogs

It is based on the combination of market growth and market share

relative to the next best competitor.
BOSTON CONSULTING GROUP MATRIX
STARS
High growth, High market share

 Stars are leaders in business.

 They also require heavy investment, to maintain its large market share.

 It leads to large amount of cash consumption and cash generation.

 Attempts should be made to hold the market share otherwise the star will
become a CASH COW.
CASH COWS
Low growth , High market share
 They are foundation of the company and often the stars of yesterday.

 They generate more cash than required.

 They extract the profits by investing as little cash as possible

 They are located in an industry that is mature, not growing or declining

DOGS
Low growth, Low market share

 Dogs are the cash traps.

Dogs do not have potential to bring in much cash.

 Number of dogs in the company should be minimized.

 Business is situated at a declining stage.

QUESTION MARKS

High growth , Low market share

 Most businesses start of as question marks.

 They will absorb great amounts of cash if the market share remains
unchanged, (low).

 Why question marks?

 Question marks have potential to become star and eventually cash cow
but can also become a dog.

 Investments should be high for question marks.

 Main Steps Of BCG Matrix
 Identifying and dividing a company into SBU.

 Assessing and comparing the prospects of each SBU according to two

criteria :
1. SBU’S relative market share.
2. Growth rate OF SBU’S industry.

 Classifying the SBU’S on the basis of BCG matrix.

 Developing strategic objectives for each SBU.

Strategic business unit ( SBU):-

A unit of the company that has a separate mission and

objectives and that can be planned independently from other
company businesses.
BENEFITS:-

 BCG MATRIX is simple and easy to understand.

 It helps you to quickly and simply screen the opportunities open to you, and
helps you think about how you can make the most of them.

 It is used to identify how corporate cash resources can best be used to

maximize a company’s future growth and profitability.

LIMITATIONS:-

 BCG MATRIX uses only two dimensions, Relative market share and market
Growth rate.

 Problems of getting data on market share and market growth.

 High market share does not mean profits all the time.

 Business with low market share can be profitable too.

 Example of BCG Matrix

High Relative market share

Business growth rate

scorpio

Jeep
balero
Low

High Low
 GE(General Electric)/McKinsey Multi-Factor Matrix

The GE model is more sophisticated than the BCG Matrix in three aspects.

1.The market (Industry ) attractiveness replaces the market growth as the dimension of
market attractiveness . It includes a broader range of factors other than just market growth
rate that can determine the attractiveness of the market / Industry.

2.Competitive strength replaces market share as the dimension by which the competitive
position of each SBU is assessed. It also include the broader range of the factors other than
just market share that can determine the competitive strength of a SBU.

3.Finally GE Model works with a 3X 3 Grid while the BCG Matrix works with 2X2 Grid this
also allows more sophistication.

Typical ( External ) factors that affect the market attractiveness.

1.Market size
2.Market growth rate
3.Market profitability
4.Pricing trends
5.Competitive intensity/ rivalry
6.Overall risk of returns in the industry.
7.Entry barriers
8.Demand variability
 9. Segmentation
10. Distribution structure
11. Technology development.

Typical (internal) factors that affects Competitive strength of a SBU.

1.Relative brand strength

2.Market share
3.Market share growth
4.Customer Loyalty
5.Quality
6.Relative cost position ( cost structure compared to rivals )
7.Relative profit margin ( as compared to competitors)
8.Distribution strength and production capacity
 Steps In Developing GE Matrix

1. Select Factors & Indicators.

2. Assign each indicator a weight (total = 1) based on its
importance.
3. Rate the industry on industry indicators and company
on business indicators on scale of 1(weak) – 5
(strong).
4. Multiply weight times rating and total for summary
measures.
 GE Multifactor Portfolio Matrix
Industry Attractiveness

High Medium Low

Protect Invest to Build

High Position Build selectively
Business Strengths

Selectively Limited
Build manage for expansion or
Medium selectively earnings harvest

Protect & Manage for

Low refocus earnings
Divest
 GE Multifactor Portfolio Matrix (Cont’d)
High Medium Low • SBU units are portrayed as
circle.

• The size of the circle

High represents the market size.

• Size of the pies represents

the market share of the SBU.
Business Strengths

• The arrow represents the

direction and the movement of
Medium SBU in future.

Low

Industry Attractiveness
 Competitive Position
Market Strong Medium Weak
Attractiveness
Maintain Leadership Challenge Leader Overcome
High • Invest to Grow •Invest to Build Weakness, Find
•Concentrate on Selectively Niche or Quit
Maintaining Strength •Reinforce Strengths •Build Selectively
Challenge Manage for Harvest (Gradual
Medium Leader/Build Earnings Withdrawal) or
Selectively •Protect existing Limited Expansion
•In most attractive programs •Look ways to expand
markets •Concentrate on without high risk
•Or counter competition profitable, less risky •Or Minimize
•Emphasize profitability segments investment
by raising productivity

Generate Cash Harvest Divest

Low •Manage for current •Minimize Investment •Sell at time that will
earnings •Protect positions in maximize cash value
•Concentrate on most profitable •Cut fixed costs and
attractive Segments segments avoid investment
•Defend Strengths
 Brand
Brand is a name, sign, symbol, slogan or anything that is used to identify and
distinguish a specific product, service, or business.

An identifying symbol, words, or mark that distinguishes a product or company

from its competitors. Usually brands are registered (trademarked) with
a regulatory authority and so cannot be used freely by other parties. For many
products and companies, branding is an essential part of marketing.

Brand Equity:-
Brand equity is the positive differential effect that knowing the brand name has
on customers response to the product or service. A measure of a brand’s equity
is the extent to which the customer are willing to pay more for the brand .

A brand with strong brand equity is a very valuable asset .

Brand valuation is the process of estimating the total financial value of a brand.
Brand valuation of some reputed companies:

1.Coca cola -----------------$ 69 bn.

2.Microsoft -----------------$ 65 bn.
3.IBM -----------------$ 53 bn.
4.GE ------------------$ 50 bn.
5.Nokia -------------------$ 48 bn.
6.Disney --------------------$ 45 bn.
7.Mc Donald’s ----------------$ 40 bn.

(Based on a study)
 Brand Positioning
Brand positioning refers to “target consumer’s” reason to buy your
brand in preference to others. It is ensures that all brand activity has a
common aim; is guided, directed and delivered by the brand’s
benefits/reasons to buy; and it focuses at all points of contact with the
consumer.

Brand positioning must make sure that:

1.Is it unique/distinctive vs. competitors ?

2.Is it significant and encouraging to the niche market ?

3.Is it appropriate to all major geographic markets and businesses ?

4.Is the proposition validated with unique, appropriate and original products ?

5.Is it sustainable - can it be delivered constantly across all points of contact with the
consumer ?

6.Is it helpful for organization to achieve its financial goals ?

7.Is it able to support and boost up the organization ?

Brand Positioning Strategies

A product can be positioned based on 2 main platforms: The Consumer

and The Competitor. When the positioning is on the basis of CONSUMER,
the campaigns and messages are always targeted to the consumer himself
(the user of the product)

Peter England always campaigns their product concentrating on the

consumer, the user of its product.

Louis Philip also concentrates on this kind of campaigns.

The other kind of positioning is on basis of COMPETITION. These

campaigns are targeted towards competing with other players in the market.

Dettol television commercials always concentrate on advertisements, which

show that this product would give you more protection, then the others.
Global Brand:-

A global brand is one which is perceived to reflect the same set of values
around the world . Global brands transcend their origins and creates strong,
enduring relationships with consumers across countries and cultures.

Global Brands are brands which sold to international markets. Examples of

Global Brands include Coca-Cola, McDonald's, Marlboro, Levi's etc.. These
brands are used to sell the same product across multiple markets, and could
be considered successful to the extent that the associated products are easily
recognizable by the diverse set of consumers.

Co –Branding:-
The practice of using the established brand names of two different
companies on the same product. For example Ford and Eddie Bauer
co branded a sports utility vehicle ---the ford explorer, Eddie Bauer
edition. Mattel teamed with coca-cola to market soda fountain
sweetheart barbie.
 Brand Name selection
A good name can add greatly to a product’s success . However finding the best
brand name is a difficult task. It begins with a careful review of the product and its
benefit, target market, and the proposed marketing strategies .

Desirable qualities for a brand name include the followings.

1.It should suggest something about the product’s benefits and qualities. For
example beautyrest , craftsman, Bug spray etc.

2.It should be easy to pronounce , Recognize, remember. TIDE , RIN, VIM, etc.

3.The brand name should be distinctive . Kodak, Nirma etc.

4.It should be extendible ……….Amazone.com etc.

5.It should be capable of registration and legal protection

 Brand Extension
Brand extension is a marketing strategy in which a firm that markets a product
with a well-developed image uses the same brand name but in a different
product category.

Product extensions, on the other hand, are versions of the same parent product
that serve a segment of the target market and increase the variety of an
offering. An example of a product extension is Coke vs. Diet Coke.

Using an existing brand name to promote a product in a different category is

called brand extension.
For Example :

PONDS----Cold cream, shampoo, toilet soap, tooth paste, moisturizing lotion,

talc and face wash.
LG---------TV, Refrigerators, computer monitor, washing machine, microwave ,
mobile phone, air conditioners.
Park avenue -----Shaving cream, Shirts , Jeans, Belt, Perfumes , Soaps, Razar.
 Brand image and Brand experience
Brand is the image of the product in the market. Some people
distinguish the psychological aspect of a brand from the experiential
aspect. The experiential aspect consists of the sum of all points of
contact with the brand and is known as the brand experience. The
psychological aspect, sometimes referred to as the brand image, is
a symbolic construct created within the minds of people and consists
of all the information and expectations associated with a product or
service.
 Brand Develpoment
A company has four choices when it comes to developing brands. It can
introduce line extension , Brand extensions, multi brands or new brands.

Product category

Exiting New

Existing Line Brand

extension Extension
Brand Name

Multi New
New
Brands Brands
Line Extension:-
Using a successful brand name to introduce additional items in a given
product category under the same brand name , such as new flavors ,colors,
forms, added ingredients, or packaging sizes.

Brand extension:-

using a successful brand name to launch a new or modified product in a

new category.

Multi brands:-
Companies often introduce additional brands in the same categories. Like
Procter and gamble introduced to detergent brands TIDE , ARIEL.

New Brand:-
A company may create a new brand name when it enters a new product
category for which none of the company’s current brand name is appropriate.
For example Honda created the lexus brand to differentiate its luxury car
from established HONDA line.
 Marketing Research

Marketing research is a systematic and objective study of problem pertaining to

the marketing of goods and services . It is not restricted to any particular area of
marketing but is applicable to all its phases and aspects.

The traditional definition of marketing research by American marketing

association ( AMA) “ the systematic gathering , recording and analyzing of data
about problems relating to the marketing of goods and services.

Also defined as the function which links the consumer , customer and public to
the marketer through information used to identify and define marketing
opportunities and problems. It involve the use of surveys, test and statistical
studies to analyze consumer trend and to forecast the size and location of the
market for specific product and services.
 Market research vs. Marketing research

Market research is simply research into a specific market. Market research is

the gathering, recording and analyzing, of market data to identify the present
and potential buyers and their motives and buying habits. It is the discovery of
the capacity of the market to absorb the products of a firm. It is the part of
marketing research. Whereas marketing research is a wider term as it not only
includes market research but also areas such as research into new products ,
mode of distributions ( Such as internet ) new locations, sales and profit
analysis, new promotional techniques ( media of advertisement) . Nature of
the market etc.
 Marketing information system

MIS may be defined as a structured interacting complex of persons , machines

and procedures designed to generate an orderly flow of pertinent information,
collected from both intra-and extra-firm sources for use as the base for decision
making in specified responsibility areas of marketing management.

MIS includes a set of procedure and methods for the continuous planned
analysis and presentation of information for decision making in marketing
function of business. MIS does not operate in an isolation , it is closely
integrated with the other management information systems in the area of
production, finance, personnel etc.
 Marketing research process

Defining the problem

Developing the Collecting the
and research
research plans information
objectives

Analyzing the
Present the findings
information
Marketing research procedure:-

( 1) Identification of area or kind of research.

• Research on product ( needs and demands of the customer for development of product)
• Research on market ( Size, character of market, economic factors operating on market.)
• Research on promotional activities.
• Research on marketing policies ( pricing, distribution channel, credit etc.)

(2) Collecting necessary information

• Primary data : primary or first hand data refer to the data collected by the investigations
through observations , interview,, questionnaire and field survey. The information may be
directly collected from the customer, dealers salesman etc.
. Secondary data includes facts and figures which are already collected by other
individuals and institutions. The source of secondary data includes publications of the
government , private institutions like trade associations, chamber of commerce, financial
institutions like IMF, W.B. ETC.

(3) Analyzing information

The information collected by the marketing research department is compiled and tabulated
for the purpose of analysis of the problem. The data are studied minutely to discover the
fundamental issues and answers to them. Analysis of data is the process of determining
what the data mean. The generalizations derived from the analysis of data are helpful in
taking the right course of action.
 ( 4). Marketing recommendations-
• Conclusion are drawn after the analysis of the data and recommendations
are made to the management for taking steps in various areas of marketing.
The findings and recommendations should take the form of a report and
they should be presented separately in the report. The report should be
written in unambiguous language so that it may be understood properly.
Objectives of Marketing research:-

(a)To know about the persons who buy the firm’s products.

 No. Of person who buy ?

 the frequency of their buying
 Source of their buying
 Social and regional location of the customer.

(b) To find out the impact of promotional efforts.

© To know the customer response to new product.

Opinion of the customers about new product.

Helps in knowing the desired improvement in quality, design , size, packaging distribution
methods etc.

(D) To forecast sales.

Helps in forecasting sales, and market planning, researchers makes sales forecast on the
basis of response from the customers and distribution media.

(E) To study the Goodwill of the firm in comparison with the competing firms.

Moves of the rivals, new products and substitutes entering the market and their impact over
the firm’s products.
 Marketing Research Data

Primary Secondary

Observational
Experimental
Survey Data and other
Data
Data
Primary Data:-
The primary data refer to the first hand data original data collected by the investigator
through interview , mail survey, field survey, or any other survey . It is collected for specific
objective. It is not a published source of data , but has to be collected by the researcher.

The sources of primary data include

 Salesman
 Dealer
 Consumer

Secondary data:-
secondary data consist of data which have already been collected by some other persons
and have passed through the statistical machines at least once. Secondary data are
usually in the shape of finished products as it has already been treated statistically. The
significance of secondary data lies in the fact it is available at a very low cost. It can be
collected within a short period of time.

The source of secondary data

 Press
 Publication of trade associations
 Government publications
 Publication of private individuals companies, and research institutions
 Publication of RBI, and other financial institutions
 Foreign governments and international agencies.
Survey data:-
A survey is a detail enquiry and examination in order to collect information from the
respondents . A survey can be conducted either of the entire universe or part of it. When
the all units of information connected with the problem are taken into account it is known
as census enquiry or survey data.

Experimental data:-
Experimentation is the process of noting reaction of a phenomenon under controlled
condition. It refers to the act of doing something to test a theory. An experiment is
conducted and observations are recorded. Such observations are properly classified
tabulated and analyzed with a view to use them for preparing the report.

Observation data:-
Observation is the process of recognizing and noting facts or occurrences. Under this the
researcher arranges to observe the behavior of the consumer rather than asking them to
describe the various aspects of their behavior . The observer takes notes of things as they
happen and does not ask any question from the people observed by him.
 Consumer Behavior
Consumer behavior is “ The study of individuals, groups, or organizations
and the processes they use to select, secure, use, and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these
processes have on the consumer and society."

Consumer behavior is the study of when, why, how, and where people do
or do not buy products or services . It blends elements from
psychology , sociology , social anthropology and economics. It attempts to
understand the buyer decision making process, both individually and in
groups. It studies characteristics of individual consumers such
as demographics and behavioral variables in an attempt to understand
people's wants. It also tries to assess influences on the consumer from
groups such as family, friends, reference groups, and society in general.
 STAGES OF THE CONSUMER BUYING PROCESS

Consumer buying decision process includes six stages. They are :

 Problem Recognition

 Information Search

 Evaluation of alternatives

 Purchase Decision

 Purchase

 Post-Purchase Evaluation
 1. PROBLEM RECOGNITION
• Difference between the desired state and the actual condition.

Example:
 By seeing a commercial for a new pair of shoes, stimulates
your recognition that you need a new pair of shoes.

 Hunger stimulates your need to eat.

 2. INFORMATION SEARCH
• Internal Search:
--- Memory
• External Search:
--- Friends and Relatives

A successful information search leaves a buyer with possible

alternatives.

Example:
Hungry, want to go out and eat, evoked set is
 Chinese food
 Indian food
 Burger king
 The Buyer Decision Process
Step 2. Information Search

•Family, friends, neighbors

Personal
Personal Sources
Sources •Most influential source of
information

•Advertising, salespeople
Commercial
Commercial Sources
Sources •Receives most information
from these sources

•Mass Media
Public
Public Sources
Sources •Consumer-rating groups

•Handling the product

Experiential
Experiential Sources
Sources •Examining the product
•Using the product
 The
TheBuyer
BuyerDecision
DecisionProcess
Process
Step
Step3.
3. Evaluation
Evaluationof
ofAlternatives
Alternatives

Product
ProductAttributes
Attributes
Evaluation
Evaluationof
ofQuality,
Quality,Price,
Price,&&Features
Features

Degree
Degreeof
ofImportance
Importance
Which
Whichattributes
attributesmatter
mattermost
mostto
tome?
me?

Brand
BrandBeliefs
Beliefs
What
Whatdo
doyou
youbelieve
believeabout
abouteach
eachavailable
availablebrand?
brand?

Total
TotalProduct
ProductSatisfaction
Satisfaction
Based
Basedon
onwhat
whatI’m
I’mlooking
lookingfor,
for,how
howsatisfied
satisfied
would
wouldIIbe
bewith
witheach
eachproduct?
product?
Evaluation
EvaluationProcedures
Procedures
Choosing
Choosingaaproduct
product(and
(andbrand)
brand)based
basedon
onone
one
or more attributes.
or more attributes.
 The Buyer Decision Process
Step 4. Purchase Decision

Purchase
PurchaseIntention
Intention
Desire
Desireto
tobuy
buythe
themost
mostpreferred
preferredbrand
brand

Attitudes Unexpected
of others situational
factors

Purchase
Purchase Decision
Decision
 The
TheBuyer
BuyerDecision
DecisionProcess
Process
Step
Step5.
5. Post
Post purchase
purchase Behavior
Behavior

Consumer’s
Consumer’s Expectations
Expectations of
of
Product’s
Product’s Performance
Performance
Product’s Perceived
Performance

Satisfied
Satisfied Dissatisfied
Dissatisfied
Customer!
Customer! Customer
Customer
 Factors Affecting Consumer Behavior
Personal

Personal
Personal Influences
Influences

Age
Ageand
andFamily
FamilyLife
LifeCycle
Cycle Occupation
Occupation
Stage
Stage

Economic
EconomicSituation
Situation Personality
Personality&&Self-Concept
Self-Concept

Lifestyle
Lifestyle Identification
Identification

Activities
Activities Opinions
Opinions

Interests
Interests
 Factors
Factors Affecting
AffectingConsumer
Consumer Behavior
Behavior
Psychological
Psychological

Motivation
Motivation

Beliefs
Beliefs and
and Psychological
Factors PPerception
erception
Attitudes
Attitudes

Learning
Learning
 Factors Affecting Consumer Behavior
Social

Groups
Groups
••Membership
Membership
••Reference
Reference

Family
Family
••Husband,
Husband,wife,
wife,kids
••Influencer,
Influencer,buyer,
kids
buyer,user
user
Social
Social Factors
Factors

Roles
Rolesand
andStatus
Status
 Factors Affecting Consumer Behavior
Culture
•• Most
Most basic
basiccause
cause of
of aa person's
person'swants
wantsand
andbehavior.
behavior.
•• Values
Values
•• Perceptions
Perceptions

Subculture
Subculture Social
SocialClass
Class
••Groups
Groupsof
ofpeople
peoplewith
withshared
sharedvalue
value ••People
Peoplewithin
withinaasocial
socialclass
class
systems based on common life
systems based on common life tend
tendto
toexhibit
exhibitsimilar
similarbuying
buying
experiences.
experiences. behavior.
behavior.
••Occupation
Occupation
••Income
Income
••Education
Education
••Wealth
Wealth
 Factors affecting consumer Behavior

Marketing Mix
 Product
 Price
 Place
 Promotion
 Factors affecting consumer Behavior

Buyer’s Decision
• Product Choice
• Brand Choice
• Dealer Choice
• Purchase Timing
• Purchase Amount
 Types of Buying Decisions

High Low
Involvement Involvement
Significant
differences Complex Variety-
between Buying Seeking
brands Behavior Behavior
Few
differences Dissonance- Habitual
between Reducing Buying Buying
brands Behavior Behavior
 TYPES OF CONSUMER BUYING BEHAVIOR

There are four types of consumer buying behavior, they are :

• Routine Response/Programmed Behavior

• Limited Decision Making

• Extensive Decision Making

• Impulse buying
1. ROUTINE RESPONSE/PROGRAMMED BEHAVIOR

Buying low involvement, frequently purchased, low cost

items.

Examples :
Soft drinks, snack foods, milk etc.
 2. LIMITED DECISION MAKING

• Buying product occasionally.

• That is when you need to obtain
information about unfamiliar brand in
a familiar product category.

Example:
Clothes--know product class but not
the brand.
 3.EXTENSIVE DECISION MAKING

Complex high involvement, unfamiliar, expensive and

infrequently bought products. Spend a lot of time
seeking information and deciding. High degree of risk.

Example:
Cars, homes, computers, education.
 4. IMPULSE BUYING
No conscious planning.
The purchase of the same product does not always
elicit the same Buying Behavior. Product can shift
from one category to the next.

For example:
Going out for dinner for one person may be extensive
decision making (for someone that does not go out
often at all), but limited decision making for someone
else. The reason for the dinner, whether it is an
anniversary celebration, or a meal with a couple of
friends will also determine the extent of the decision
making.