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MARKETING MANAGEMENT
Marketing, as a discipline, has traveled a long distance in the last four decades. It is a craft of linking the producers of goods and services with the existing and potential customers. The changes in the consumer behavior, market place, channels of distribution, the merchandizing, display and almost anything have been tremendous in the past few decades. The speed of change is stupendous. Major shopping malls, the range of choices, the buying pattern from personal to internet buying, credit cards etc has taken long strides towards difference and has totally changed business outlook. The Marketing task is not only to deliver the product. In fact, it entails much more than just promotion and delivery. Marketing now is: Right product for the Right people at the Right time at the Right place at a Right price with Right services.

Marketing Management is the practical application of marketing techniques and the

management of a firm's marketing resources and activities, so as to manage & control the 4 Ps of Marketing.

The marketing challenges are to find what is Right?. Marketing task is to stimulate demand for companys product. Marketing task is to manage demand, just as production and logistics professional are responsible for supply management. For demand management., Marketing involves comprehensive understanding of product ( goods and services), experiences, events, the consumers, the places, information, Ideas, properties and even its own organization to be able to answer what is right, for whom, where, when and how? Marketers are said to be Managers of Demand. They have to know much more than just their own product as it used to be.To be able to answer questions more correctly, marketers must understand first the true import of some of these terms: CONSUMER This is a term, which has many facets. But in business field we use this term to mean that individual who derives direct utility of the product. Consumer has his or her budget, and he or she tends to derive maximum utility within that budget. That is why we are keen to study his or her preferences, choices, sensitivity and interests with a view to maximizing his utility. We need to study Consumer Behavior and to harness and educate consumer to make our product successful. CUSTOMER This term connotes that individual who actually makes a decision in selecting a certain product. He or she may and may not directly consume the product. But he or she takes a buying decision. A housewife for example buys cooking oil for her household- she is a customer. The entire family is a consumer.

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CONSUMER MARKETS Selling of mass consumer goods and services such as soft drinks, tooth pastes, TV sets etc. Great time is spent in establishing superior brand image to be successful in consumer product marketing. It requires clear understanding of target consumers, the product, which meets their needs, communicating brand positioning more forcefully and creatively etc. All this will help them establish number one or two positions.

BUSINESS MARKETS Selling goods and services to consumers who are skilled in evaluating competitive offerings. An effective sales force, prices and companies or brands reliability and quality is required to deal with such markets/products. NEED Needs can be described as human requirements. Need is there and its natural. We need food to satisfy our hunger, water to quench out thirst. Of course need can be more than just food, water and shelter. We need recreation, education, entertainment and lots of other things to sustain our living. WANT Need becomes Want, when they are directed towards a specific object. When hungry we need food; but we want say a burger. Want can vary from place to place and from people to people. A man in USA can want a burger to eat when hungry whereas a man in Pakistan needs a Nan. Want can be different at different income levels and in various times. DEMAND Want becomes a demand when backed up by an individuals ability to pay for it. A hungry person can want a burger, but does he have money to demand a burger. Or is there a burger available to him? MARKETING JOB is not to create Need. Need is there. Marketing function is to offer a specific product at a certain price and at a certain place (where need is) and at the time when Need is. If marketing function is performed properly, the product is sold. Or else it would not sell, no matter what? CUSTOMER LIFETIME VALUE (CLV) Marketers job is to build long-term association with Customer and his need. Since need is reoccurring, Marketers long-term principle is to look at the value of the customer to the Company over the whole time of his being a customer. This relationship IS BUILT WITH A CUSTOMER over a long period of time and for a long time. Whenever the need arises, the customer relate to that product to satisfy need. Whenever he feels hungry and wants to eat fast, he reverts to burgers and he decides in favor of a specific brand. Even if he tries other brands of burgers, he would revert back to that brand more strongly and shows his loyalty.

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The Scope of Marketing:

Goods Physical goods constitute the bulk of most countries production and marketing effort. The United States produces and markets billions of physical goods, from eggs to steel to hair dryers. In developing nations, goodsparticularly food, commodities, clothing, and housingare the mainstay of the economy. Services As economies advance, a growing proportion of their activities are focused on the production of services. The U.S. economy today consists of a 7030 services-to-goods mix. Services include airlines, hotels, and maintenance and repair people, as well as professionals such as accountants, lawyers, engineers, and doctors. Many market offerings consist of a variable mix of goods and services. Experiences By orchestrating several services and goods, one can create, stage, and market experiences. Walt Disney Worlds Magic Kingdom is an experience; so is the Hard Rock Cafe. Events Marketers promote time-based events, such as the Olympics, trade shows, sports events, and artistic performances. Persons Celebrity marketing has become a major business. Artists, musicians, CEOs, physicians, high-profile lawyers and financiers, and other professionals draw help from celebrity marketers. Places Cities, states, regions, and nations compete to attract tourists, factories, company headquarters, and new residents. Place marketers include economic development specialists, real estate agents, commercial banks, local business associations, and advertising and public relations agencies. Properties Properties are intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds). Properties are bought and sold, and this occasions a marketing effort by real estate agents (for real estate) and investment companies and banks (for securities). Organizations Organizations actively work to build a strong, favorable image in the mind of their publics. Philips, the Dutch electronics company, advertises with the tag line, Lets Make Things Better. The Body Shop and Ben & Jerrys also gain attention by promoting social causes.

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Universities, museums, and performing arts organizations boost their public images to compete more successfully for audiences and funds. Information The production, packaging, and distribution of information is one of societys major industries. Among the marketers of information are schools and universities; publishers of encyclopedias, nonfiction books, and specialized magazines; makers of CDs; and Internet Web sites. Ideas Every market offering has a basic idea at its core. In essence, products and services are platforms for delivering some idea or benefit to satisfy a core need.

Marketers have to decide on what is called Marketing Mix and create an ideal situation. IT MEANS that the Right Product has to be determined, just as: Right Product The decisions regarding each of the following items give below: a. b. c. d. e. f. g. h. i. j. k. Product Variety and range Quality Designs Features Brands Packaging Sizes Models Services Warranties Returns Right Price a. List Price b. Discounts and conditions of discounts c. Allowances d. Payment Period Right Place a. b. c. d. e. Channel Coverage / Reach Location Inventory Transport

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Right Promotion a. Advertising b. Announcements c. Public Relation d. Direct Marketing Of course in addition to that Marketers have to take decisions on WHEN?? This is vital for product growth and offering.

MARKETING ORIENTATION There are five competing concepts to conduct marketing activities. a) b) c) d) e) The Production Concept The Product Concept The selling Concept The Marketing Concept The Societical Concept We will discuss each one of them a) THE PRODUCTION CONCEPT This philosophy approach is that consumers will prefer products that are widely available and are inexpensive. Managers of this concept concentrate on achieving high production efficiency, lower cost. They assume that consumers are only interested in product availability and low prices. Production concept does work for some products, but not for all kinds of products. b) THE PRODUCT CONCEPT This concept is that consumers will favor that product, which offers most quality performance and innovative features. The managers of this concept focus their attention towards making products more superior and keep improving it. They assume that consumers admire and prefer well-made products and appraise quality and performance. c) THE SELLING CONCEPT This concept emphasizes on aggressive selling and high promotional back up. Their aim is to sell what they can make rather that what the market needs. The customer still may not fully like the product and have what we calls bad-mouth . Bad mouth is when a customer talks not in favor of the product. Bad mouth travels fast.

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d) THE MARKETING CONCEPT This concept holds that the key to organizational goals consists of company being more effective than competitors in creating, delivering and communicating consumer value to the chosen target. e) THE SOCIETAL CONCEPT This concept further elaborates the marketing approach to include consumer and society well being overall. Environmental deterioration, resource shortage, explosive population growth, poverty, hunger etc are just a few things in our society now. Marketing will not only satisfy the needs, wants, demands of the customers but also keep in mind the well being of the society.

INFLUENCE OF MARKETING ENVIRONMENT ON MARKETING DECISIONS The marketers have to take several and important decisions to be able to bring right-product for the right people at the right price at the right time with right services .All this is happening in an environment. In other words, marketers decisions can be good and profitable only if they are in consonance with the environment. Marketers must understand the environment. MARKETING ENVIRONMENT Environment is a broad spectrum or sets of conditioned which prevail at a given time. For environmentalists, it is air, oxygen, dust, smoke etc .in atmosphere. But in marketing, we mean two things. We have studied it previously. A) The task environment Bs) The broad environment Task environment involves immediate actors, such as suppliers, distributors, dealers and consumers etc, involved in production, distribution and promotion. Broad environment consists of; demographic, natural, economic, technological, political-legal and sociocultural environment.

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MARKETING DECISIONS The Marketing decisions have to be taken by the marketers and that they must take into account environment in totality. The decisions have not only to be right, but they must be taken at the right time. We will discuss marketing decisions in mainly four categories Product Price Place (distribution) Promotion

Product - A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cell phone load and credits. Typical examples of a mass produced tangible object are the motor car and the disposable razor. Packaging also needs to be taken into consideration.

Price The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product.

Place Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.

Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, word of mouth and point of sale. Advertising includes cinema commercials, radio and Internet advertisement through print media and billboards. Public relations include press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and Public Relations.

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Product
1) 2) 3) 4) 5) 6) 7) Functions Appearance Quality Packaging Brand Service/support Warranty or Guarantee

Price
1) 2) 3) 4) List Price Discounts Allowances Financing

5) Pricing strategy (skim, penetration, etc.) 6) Seasonal pricing

Promotion
1) 2) 3) 4) 5) 6) Advertisement Personal Selling Public relations Message Media Budget

Place
1) Channel Members 2) Market coverage 3) Locations
4) Warehousing 5) Transportation

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MARKETING PLAN
For Product or Service It can cover ONE YEAR (referred to as an annual marketing plan), or cover up to 5 years. A marketing plan may be part of an overall Business Plan. In general terms, it must: Describe and Explain the Current Situation Specify the Expected Results (objectives) Identify the Resources that will be needed Describe the Actions that will need to be taken to achieve the objective(s) Devise a Method of Monitoring Results and Adjusting the Plan where necessary( Changes ) There are many formats for marketing plans and every company does it a little different, Many companies prefer format that would yield a 10 to 20-page plan. MARKETING PLAN DETAILS 1. Title page Title page is usually the details about the Plan, Information that enables us to identify the Plan. 2. Executive Summary The Plan should open with a brief summary of the plans, most important Goals and Recommendations. The summary can be expressed like in a brief statement, increase sales by
10% this year or reduce expenses by 5 % or say wil enter UK market this year etc.

3. a) Current Situation Macro-environment All situations regarding Economy, Government, Legal, Technology, Socio-cultural, and some other macro factors must be carefully studied. Relevant data from verified sources regarding these factors must be collected and analyzed. b) Current Situation - Market Analysis Indeed, market situation must be taken into account in all details and carefully studied. Market definition, Market size, Market Segmentation, Industry Structure, Competition and market share, Competitors' Strengths and Weaknesses must be carefully studied and analyzed. This will give us the exact position of our product in market, to enable us to plan for our future course of action. c) Current Situation - Consumer Analysis As we have seen before, consumer and customer knowledge is very essential. We must be aware of nature of the buying decision, participants, demographics, psychographics, buyer motivation and expectations, loyalty etc to be fully aware of consumer reactions and expectations. d) Current Situation Internal Environment The next step is obviously to ascertain the companys own resources in terms of financial, people, time and skills and to set objectives. Mission statement and vision statement, financial objective, marketing objectives, long term objectives, etc must be clearly established. 4. Summary of Situation Analysis External threats, external opportunities, internal strengths, internal weaknesses, key success factors in the industry, our sustainable competitive advantage, marketing research etc must be carefully understood and analyzed. Information requirements, research method and research results must be carefully ascertained at this stage and carried out.

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5. a) Marketing Strategy - Product Product mix, product strengths and weaknesses, product life cycle management and new product development, brand name, brand image should now be established. b) Marketing Strategy Pricing Pricing objectives, pricing method (eg.: cost plus, demand based, or competitor based), pricing strategy (eg.: skimming, or penetration), discounts and allowances, price --customer sensitivity, price zoning etc c) Marketing Strategy Promotion Promotional goals, advertising, media, sales force requirements,, sales promotion, publicity and public relations, electronic promotion (eg.: Web, or telephone) d) Marketing Strategy - Distribution Geographical coverage, distribution channels, distribution members etc 6. Implementation Personnel requirements, assigning responsibilities, give incentives, training on selling methods, financial requirements, management information systems requirements, month-by-month agenda, monitoring results, adjustment mechanism, and contingencies plans 7. Financial Summary Assumptions, pro-forma monthly income statement, financial analysis etc etc. This information must be very formally done at this stage 8. Appendix Pictures and specifications of the new product, results from research already completed.

STRATEGIC MARKETING PLANNING

MARKETING STRATEGIES

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Strategy is the crafting of plans to reach goals. Marketing strategies are those plans designed to reach marketing goals. A good marketing strategy should integrate an organizations marketing goals, policies, and actions (tactics) into a cohesive whole. The objective of a marketing strategy is to put the organization into a position to carry out its mission effectively and efficiently. They are partially planned and partially unplanned. MARKET DOMINANCE STRATEGIES Typically there are four types of market dominance strategies that a marketer will consider: There are Market leader, Market challenger, Market follower, Market nicher. Market Leader The market leader is dominant in its industry. It has substantial market share and often extensive distribution arrangements with retailers. It typically is the industry leader in developing innovative new products. The main options available to market leaders are: Expand the total market by finding o new users of the product o new uses of the product o more usage on each use occasion Protect your existing market share by: o developing new product ideas o improve customer service o improve distribution effectiveness o reduce costs Expand your market share: o by targeting one or more competitor Market Challenger A market challenger is a firm in a strong, but not dominant position that is following an aggressive strategy of trying to gain market share. It typically targets the industry leader (for example, Pepsi targets Coke), but it could also target smaller, more vulnerable competitors. The fundamental principles involved are: Assess the strength of the target competitor. Choose only one target at a time. Find a weakness in the target?? Position. Attack at this point. Launch the attack on as narrow a front as possible. Whereas a defender must defend all their borders, an attacker has the advantage of being able to concentrate their forces at one place. Launch the attack quickly Some of the options open to a market challenger are: price discounts or price cutting introduce new products increase product quality improve service

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improve distribution cost reductions improve promotional activity

Market Follower A market follower is a firm in a strong, but not dominant position that is content to stay at that position. The advantages of this strategy are: No expensive R&D failures No risk of bad business Best practices? are already established Minimal risk of competitive attacks Dont waste money in a head-on battle with the market leader Market Nicher In this strategy the firm concentrates on a select few target markets. It is also called a focus strategy. It is hoped that by focusing ones marketing efforts on one or two narrow market segments and get your marketing mix to these specialized markets, you can better meet the needs of that target market. The nicher should be large enough to be profitable, but small enough to be ignored by the major industry players. Profit margins are emphasized rather than market share. The firm typically looks to gain a competitive advantage through effectiveness rather than efficiency. It is most suitable for relatively small firms and has much in common. The most successful nichers tend to have the following characteristics: They are able to obtain high margins. They tend to be highly focused on a specific market segment. They are able to use a premium pricing strategy. They tend to keep their operating expenses down by spending less on R&D, advertising, and personal selling. COST LEADERSHIP STRATEGY This strategy emphasizes efficiency. By producing high volumes of standardized products, the firm hopes to take advantage of economies of scale. Maintaining this strategy requires a continuous search for cost reductions in all aspects of the business. DIFFERENTIATION STRATEGY Differentiation involves creating a product that is perceived as unique. The unique features or benefits should provide superior value for the customer if this strategy is to be successful. Because customers see the product as unrivaled and unequaled, the customers tend to be more brand loyal. However there are usually additional costs associated with the differentiating product features and this could require a premium pricing strategy. To maintain this strategy the firm should have: strong research and development skills strong product engineering skills strong creativity skills good cooperation with distribution channels strong marketing skills

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Competitor Strategies
Any organization that wishes to succeed and survive in their market, needs to analyze their competitors strategies. Competitor analysis is a vital part of the marketing planning process.

Competitor analysis enables an organization to:

Collect information on competitors that will directly influence the firms strategy. Help the firm anticipate what the actions of their competitors will be, to their entry within the marketing. To exploit the competitors weaknesses so the firm can gain an overall competitive advantage. If you were to enter a market, some of the information you would need to know about your competitors is listed below.

Who are your competitors? What is the size and dominance within the market. Which customer base are they aimed at? What is their positioning within the market? What are their objectives? What are their strengths and weaknesses? Data from an array of sources can be collected on your competitors. Examples of data sources include:

Competitors websites. Annual reports. Observation. News articles on TV or press. Talking to customers or sales staff. A complete understanding of competitors will help the organization in preparing their overall marketing plan. As suggested, Porters Five Forces model is one model that helps the company identify competitors and potential competitor within their market and should be used in conjunction with a general competitor analysis. A competitor can easily slow down your companies progress, competitor analysis should allow you to anticipate and react effectively to their move.

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Market Segmentation
Market segmentation can be defined as the process of dividing a market into different homogeneous groups of consumers. Market consists of buyers and buyers vary from each other in different ways. Variation depends upon different factors like wants, resources, buying attitude, locations etc. By segmentation, large heterogeneous markets are divided into smaller segments that can be managed more efficiently and effectively with products and services that match to their unique needs. So, market segmentation is beneficial for the companies serving larger markets.

Market Segmentation: Finding a Base to Start

Bases for Market Segmentation

Demographic Segmentation Gender Age Family life cycle Race Education Income Occupation Family size Religion
Geographic Segmentation Country Region Urban/Suburban/Rural Climate

Descriptive

Behavioural
Psychographic Segmentation Lifestyles Personality

Potential Markets

Behavioral Segmentation Expected benefits from product use Usage Rate Heavy users Brand loyalty

Bases for Consumer Market Segmentation

There are number of variables involved in consumer market segmentation, alone and in combination. These variables are: Geographic variables Demographic variables Psychographic variables

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Behavioral variables Geographic Segmentation

1. Geographic variables: In geographical segmentation, market is divided into different geographical units like: .Regions (by country, nation, state, neighborhood) ..Population Density (Urban, suburban, rural) ..City size (Size of area, population size and growth rate) ..Climate (Regions having similar climate pattern) A company, either serving a few or all geographic segments, needs to put attention on variability of geographic needs and wants. After segmenting consumer market on geographic bases, companies localize their marketing efforts (product, advertising, promotion and sales efforts). 2. Demographic Segmentation: In demographic segmentation, market is divided into small segments based on demographic variables like: ..Age ..Gender ..Income ..Occupation ..Education ..Social Class ..Generation ..Family size ..Family life cycle ..Home Ownership ..Religion ..Ethnic group/Race Demographic factors are most important factors for segmenting the customers groups. Consumer needs, wants, usage rate these all depend upon demographic variables. So, considering demographic factors, while defining marketing strategy, is crucial.

3. Psychographic Segmentation: In Psychographic Segmentation, segments are defined on the basis of social class, lifestyle and personality characteristics..

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4. Behavioral Segmentation: In this segmentation market is divided into segments based on consumer knowledge, attitude, use or response to product. Behavioral variables include: ..Usage Rate ..Benefits Desired ..Occasions (holidays like mothers day, New Year and Eid) ..User Status (First Time, Regular or Potential) Behavioral segmentation is considered most favorable segmentation tool as it uses those variables that are closely related to the product itself.

CONSUMER BEHAVIOUR
Definition of Consumer Behavior: The activities of individuals in obtaining, using, and disposing of goods and services, including the decision processes that precede and follow these actions.

Or
Consumer behavior is the study of when, why, how, and where people do or do not buy product.

Factors That Affect Consumer Buying Behavior

. Culture: The complex of values, ideas, attitudes, institutions, and other meaningful symbols created by people that shape human behavior, and the artifacts of that behavior, transmitted from one generation to the next. 2. Reference Group: A group whose value structures and standards influence a persons behavior. Like friends, neighbors etc 3. Social Class: The relatively permanent divisions in a society into which individuals or families are categorized based on prestige and community status. 4. Personal People buy different goods and services over a life time. Taste in food, cloths, furniture, entertainment is often age based, like Young people purchase things for different reasons than older people.

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5. Family Influences: Family is the most basic group a person belongs to. Marketers must understand: That many family decisions are made by the family unit Consumer behavior starts in the family unit Family roles and preferences are the model for children's future family Family buying decisions are a mixture of family interactions and individual decision making Family acts an interpreter of social and cultural values for the individual.

PACKAGING AND LABELING

Packaging is the enclosing of a physical object, typically a product that will be offered for sale. Labeling refers to any written or graphic communications on the packaging or on a separate label. Packaging and labeling have five objectives Physical protection of the object - The objects enclosed in the package can be protected from damage caused by physical force, rain, heat, sunlight, cold, pressure, airborne contamination, and automated handling devices. Agglomeration - Small objects are typically grouped together in one package for reasons of efficiency. For example, a single box of 1000 pencils requires less physical handling than 1000 single pencils. Alternatively, bulk commodities (such as salt) can be divided into packages that are a more suitable size for individual households. Information transmission - Information on how to use, transport, or dispose of the product is often contained on the package or label. An example is pharmaceutical products, where some types of information are required by governments. Marketing - The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package design has been an important and constantly evolving phenomenon for dozens of years.

PACKAGING FORMS Boxes Bags

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Bottles Cans Cartons Wrappers Etc etc

SWOT Analysis
A tool used by organizations to help the firm establish its Strengths, Weaknesses, Opportunities and Threats (SWOT). A SWOT analysis is used as a framework to help the firm develop its overall corporate, marketing, or product strategies. Note: Strengths and Weaknesses are internal factors which are controllable by the organization. Opportunities & threats are external factors which are uncontrollable by the organization.

Strength examples could include

A strong brand name. Market share. Good reputation. Expertise and skill.

Weaknesses could include

Low or no market share. No brand loyalty. Lack of experience.

Opportunities could include

A growing market. Increased consumer spending. Selling internationally. Changes in society beneficial to your company.

Threats could include

Competitors Government policy eg taxation, laws.

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Changes in society not beneficial to your company.

A SWOT analysis is an excellent tool to use if the organization wants to take a step back and assess the situation they are in. Issues raised from the analysis are then used to assist the organization in developing their marketing mix strategy. A SWOT analysis must form the part of any prudent marketing strategy.

BRAND MANAGEMENT
Brand Management is the application of marketing techniques to a specific products, product line. It seeks to increase the product's perceived value to the customer and thereby increase brand Value. The value of the brand is determined by the amount of profit it generates for the manufacturer. A good brand name should: Be legally protectable Be easy to Pronounce Be easy to Remember Be easy to Recognize Attract Attention Distinguish the product's Positioning relative to the competition. A Premium Brand typically costs more than other products in the category. An Economy brand is a brand targeted to a high price elasticity market segment. A fighting brand is a brand created specifically to counter a competitive threat. Corporate branding: When a company's name is used as a product brand name. Family branding: When one brand name is used for several related products. Individual branding: When all a company's products are given different brand names, this is referred to as When a company uses the Brand equity associated with an existing brand name to introduce a new product, this is referred to as Brand leveraging. Private Branding, store brand, or private label: When large Retailers buy products in bulk from manufacturers and put their own brand name on them.

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Co-branding. When two or more brands work together to market their products, this is referred to as

The Process or Stages of Developing a New Product:

A new product is best developed through a series of six stages given below: 1) Generating New-product ideas: The objective of idea generation research is to come up with completely new ideas for products, or new attributes for current products, or new use for current products. Ideas may come from different sources through various company personnel, for example salespersons, dealers, maintenance people and customer service personnel. All of these have direct contact with the customers who are good source of ideas about the new products. The market researcher can rely on the opinions of such personnel or may plan to accompany these people and listen to their ideas and subsequently refine them.

2) Screening Ideas: At this stage, new-product ideas are evaluated to determine which ones warrant further study. Typically, a management team screens the pool of ideas. 3) Business Analysis: A surviving idea is expanded into a concrete business proposal. That means management a) identifies product features, b) estimates market demand, c) establishes a program to develop the product, and d) further study of the products feasibility. 4) Prototype Development: This stage means to develop a prototype or sample. In the case of goods, a small quantity of the trial model is manufactured to designated specifications. Laboratory tests and other technical evaluations are carried out to determine whether it is practical to produce the product.

5) Market Tests:

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Unlike the internal tests conducted during prototype development, these tests involve actual consumers. A new tangible product may be given to a sample of people for use in their households. 6) Commercialization: In this stage, full-scale production and marketing programs are planned and finally, implemented. Up to this point in development, management has virtually complete control over the product.

Product Life Cycle:

The Product Life Cycle consists of four stages, they are discussed below: 1) Introduction Stage: During this stage a product is launched into the market in a full-scale marketing program. It has gone through product development, including idea screening, prototype and market tests, the entire product may be new or it may be well known but have a significant new feature that in effect, creates a new product category. 2) Growth Stage: It is also called market acceptance stage, sales and profits rise, often at a rapid rate. 3) Maturity Stage: During the first part of maturity stage, sales continue to increase, but at a decreasing rate. 4) Decline Stage: When the sales volume of the product for a company is decreased or the profit rate is decreased of a company due to some factors is called declining stage.

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MANAGING NEW PRODUCT DEVELOPMENT (NPD)

New Product Development is a business and engineering term which describes the complete process of bringing a new product to market. There are two parallel aspects to this process; One involves product engineering; the other marketing analysis. Marketers see new product development as the first stage in Product Life Cycle Management. Types of New Products: There are several types of new products. Some are new to the market Some are new to the firm, Some are new to both. Some are minor modifications of existing products While some are completely innovative. THE PROCESS There are several stages in the new product development process: Idea Generation o Ideas for new products obtained from customers, R&D department, competitors, focus groups, employees, or trade shows o Formal idea generating techniques include attribute listing, sales force relationships, brainstorming, problem analysis etc Idea Screening o eliminate unsound concepts o must ask three questions: will the target market benefit from the product is it technically feasible to manufacture the product will the product be profitable Concept Development and Testing o develop the marketing and engineering details who is the target market what benefits will the product provide how will consumers react to the product how will the product be produced what will it cost to produce it o test the concept by asking a sample of prospective customers what they think of the idea Business Analysis o estimate likely selling price o estimate sales volume o estimate profitability and breakeven point Beta Testing and Market Testing o produce a physical prototype or mock-up o test the product in typical usage situations o make adjustments where necessary o produce an initial run of the product and sell it in a test market area to determine customer acceptance

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o o o o o o o o o o o

Technical Implementation New program initiation Resource estimation Engineering operations planning . Department scheduling Supplier collaboration Resource plan Program review and monitoring Contingencies - what-if planning Commercialization launch the product produce and place advertisements and other promotions fill the distribution pipeline with product

MANAGEMENT OF THE PRODUCT LIFE CYCLE

The progression of a product through these stages is by no means certain. Some products seem to stay in the mature stage forever (e.g., milk). Marketers have various techniques designed to prevent the process of falling into the decline stage. In most cases however, one can estimate the life expectancy of a product category. Marketers' marketing mix strategies change as their products goes through their life cycles.

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Advertising, for example, should be informative in the introduction stage, persuasive in the growth and maturity stages, and be reminder-oriented in the decline stage. Promotional budgets tend to be highest in the early stages, and gradually taper off as the product matures and declines. Pricing, distribution, and product characteristics also tend to change. Customers respond to new products in different ways. The first two stages, introduction and growth, are often seen as offensive in nature. The second two stages, mature and decline stage, are often seen as defensive in nature. The defensive stage is sometimes called the armadillo phase because of that animal's defensive technique of hiding in its shell.

PRICE
In economics and business, the price is the assigned numerical monetary value of a good, service or asset.

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MARKETING MANAGERS MUST ADDRESS TO THE FOLLOWING FACTS: How much to charge for a product or service? What are the pricing objectives? How to set the price? (Cost-plus pricing, demand based or value- based pricing or competitor indexing) Should there be a single price or multiple pricing? Should prices change in various geographical areas?

PRICING OBJECTIVES
Some of the more common Pricing Objectives are: Increase sales volume (quantity) Increase market share Stabilize market or stabilize market price: an objective to stabilize price means that the marketing manager attempts to keep prices stable in the marketplace and to compete on non price considerations. Company growth Maintain price leadership Discourage new entrants into the industry Match competitors prices Survival Avoid government investigation or intervention Obtain or maintain the loyalty and enthusiasm of distributors and other sales personnel Enhance the image of the firm, brand, or product Be perceived as fair by customers and potential customers Discourage competitors from cutting prices Use price to make the product visible" Social, ethical, or ideological objectives Get competitive advantage

Types of Pricing Strategies

An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve.

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Penetration pricing: Where the organization sets a low price to increase sales and
market share.

Skimming pricing: The organization sets an initial high price and then slowly lowers
the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.

Competition pricing: Setting a price in comparison with competitors. Product Line Pricing: Pricing different products within the same product range at
different price points. An example would be a video manufacturer offering different video recorders with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.

Bundle Pricing: The organization bundles a group of products at a reduced price. Psychological pricing: The seller here will consider the psychology of price and the
positioning of price within the market place. The seller will therefore charge 99p instead 1 or $199 instead of $200

Premium pricing: The price set is high to reflect the exclusiveness of the product. An
example of products using this strategy would be Harrods, first class airline services, Porsche etc.

Optional pricing: The organization sells optional extras along with the product to
maximize its turnover. This strategy is used commonly within the car industry.

Marketing information system

A set of procedures and methods for the regular, planned collection, analysis, and

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presentation of information for use in making marketing decisions. Management information system OR Marketing information system: an organizational section or entity whose purpose is to gather, organise, store, retrieve and analyse data relevant to a firm's past OR Marketing Information system Any information used or required to support marketing decisions - often drawn from a computerised 'Marketing Information System' OR Set of procedures and practices employed in gathering, analyzing, and assessing information about a firm's market environment comprised of competitors, customers, suppliers, distribution intermediaries, and sales personnel. Timely market information provides basis for monitoring and estimating emerging market trends. Also called market intelligence system. IMPORTANCE OF INFORMATION TO THE COMPANY Ideally, a marketing information system is valuable for the information tools it provides about. The marketing environment

Information on each aspect of the environment is crucial to effective market planning. Information gathering can be serendipitous or planned. While not all environmental information needs can be identified in advance, it is possible to approach research and information systems planning with an eye to setting up ways of collecting information in an on-going fashion. Customer needs and wants

If environmental forces cause the company to seek information in a larger context, customer needs and wants focus the attention on the target market. Without information, identifying need and wants is guesswork. Competitors

Innovative organizations not only identify competitive actions and offerings, they also consume competitors' products -- in small quantities, of course. For example, to understand the value of a competitor's automobile, it makes sense to drive it for awhile as a customer would and evaluate it in that fashion.

Marketing Intelligence System

A set of procedures and sources used by managers to obtain everyday information about developments in the marketing environment.

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Marketing managers collect marketing intelligence by reading books, newspapers, and trade publications; talking to customers, suppliers, and distributors; monitoring "Social Media" on the internet via online discussion groups; e-mailing lists and blogs and meeting with other company managers.

Several steps to improve the quality of marketing intelligence:

1. Train and motivate the sales force to spot and report new developments 2. Motivate distributors, retailers, and other intermediates 3. External networking 4. Set up a company advisory panel 5. Take advantage of government data resources 6. Purchase information from outside suppliers 7. Use online customer feedback systems to collect competitive intelligence

Marketing Research System

Marketing research can be seen as the systematic and objective search for and analysis of (data and) Information relevant to the identification and solution of any problem in the field of marketing: Note the use of the wound "systematic" which stress the need for careful planning of the research in all its stage. This requires a clear and concise statement of the exercise, the techniques to be used, the information that is required and the analytical technique that will be employed. The word "objective" stresses the need for impartiality that is, seeking the fact without coloring due to already held views and options. Marketing research is fundamentally about the acquisition and analysis of information required for the making of marketing decision.

Managing and Developing an Advertisement Program

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In order to develop and manage an advertisement program, a phenomenon names as the five Ms of Advertisement is used, which is discussed as below:

Five Ms of Advertising
An advertiser has to take decisions on the following aspects:

Mission :
This refers to the purpose/objective behind advertising. The objectives behind advertising are varied in character. They include sales promotion, information and guidance to consumers, developing brand loyalty, market goodwill, facing market competition effectively, making the products popular/successful and introduction of a new product. Decision in regard to mission is a basic one as other decisions are to be adjusted as per the mission or objective or purpose of advertising decided. For consumer products like chocolate, tooth paste, soap, the mission/objective include facing market competition, sales promotion and making the product popular in the market.

Money :
This refers to the finance provided for advertising purpose (advertising budget). It means the budget allocation made by the company for advertising. Money provided is a limiting factor as effectiveness of advertising, media used, coverage of advertising, etc. are related to the funds provided for advertising purpose. Advertising is costly and companies have to spend crores of rupees for this purpose. Advertising should be always within the limits of funds provided. Naturally, decisions on advertising package should be adjusted as per the budget allocation for advertising. It may be noted that consumer products like tooth paste or chocolate are highly competitive with many substitutes easily available in the market. Naturally, extensive advertising on TV, newspapers, radio, etc. is required. These media are costly. Naturally, the manufacturing/marketing company will have to provide huge money for advertising purpose.

Message :
Message is provided through the text of advertisement. The message is given through written words, pictures, slogans and so on. The message is for the information, guidance and motivation of prospective buyers. Attractive and meaningful messages give positive results and the advertising becomes result-oriented. The services of creative writers, artists, etc. are used for giving attractive message to the consumers. Here, the advertiser has to decide the message to be given, the media to be used for communicating the message, the extent of creativity, the specific customer group selected for giving the message and so on. The message is also related to the decisions taken as regards mission and money provided for advertising.

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For advertising consumer product like chocolate, the message is important. The buyers are mainly children and others of lower age groups or for the benefit (pleasure and satisfaction) of younger generation. The advertising message should be simple and easily understandable with the help of picture or slogan. It should be also attractive and agreeable to younger generation. The pictures or slogans used should be short and impressive.

Media :
Media of advertising are already noted previously. The advertiser has to take decision about the media to be used for advertising purpose. Media differ as regards cost, coverage, effectiveness and so on. The selection of media depends on the budget provided, products to be advertised, and features of prospective buyers and so on. Wrong decision on media may make advertising ineffective and money spent will be wasted. This suggests that media should be selected properly and decision in this regard is important and critical. For advertising popular and extensively used consumer items like chocolate, the media should be selected properly. TV advertising particularly a cartoon channel, advertising in children books or newspaper supplements for children, advertising on radio programmes for children, etc.

Measure :
Measure relates to the effectiveness of advertising. An advertiser will like to make evaluation of advertisement in order to judge its effectiveness. If an advertisement is not effective /purposeful, it will be modified or withdrawn. This is necessary for avoiding expenditure on the advertisement which is not effective or is not likely to give positive results. An advertiser has to measure the effectiveness of his advertisement programme/ campaign and take suitable decisions. This decision-making as regards effectiveness of advertising is equally important and essential. Such testing facilitates introduction of suitable remedial measures, if required. For measuring effectiveness of chocolate advertising, the post advertising sale is one major consideration. Demand creation in new market segments or in new age groups is another consideration for the measurement of advertising effectiveness. Even success of sales promotion programme is useful for measuring advertising effectiveness. In brief, like other areas of marketing management, decision-making is necessary in advertising. This relates to Five Ms - mission, money, message, media and measurement.

Why to advertise?
The following are the reasons why a business is advertising:

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To create awareness, customer interest or desire To boost sales (moving the demand curve to the right) To build brand loyalty (or to maintain it at the existing level) To launch a new product To change customer attitudes perhaps trying to move a product more upmarket or to dispel some widely held perceptions about the product To support the activities of the distribution channel (e.g. supporting a pull strategy) To build the company or brand image To reminds and reassure customers

Push and Pull Promotional strategies

Push Promotional Strategy
A push promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product. The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia for example offering subsidies on the handsets to encourage retailers to sell higher volumes. A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools.

Pull Promotional Strategy

A pull selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product.

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If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. A good example of a pull is the heavy advertising and promotion of children's toys mainly on television. Consider the recent BBC promotional campaign for its new preschool programme the Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have been made and are featured everyday on digital children's channel CBeebies and BBC2. As part of the promotional campaign, the BBC has agreed a deal with toy maker FisherPrice to market products based on the show, which it hopes will emulate the popularity of the Tweenies. Under the terms of the deal, Fisher-Price will develop, manufacture and distribute a range of Fimbles products including soft, plastic and electronic learning toys for the UK and Ireland. In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of 90m from its children's brands and properties last year. The demand created from broadcasting of the Fimbles and a major advertising campaign is likely to pull demand from children and encourage retailers to stock Fimbles toys in the stores for Christmas 2002.

Promotion - Sponsorship
It is an increasingly common form of promotional activity is sponsorship. Sponsorship can be defined as follows: Supporting an event, activity or organization by providing money or other resources that is of value to the sponsored event. This is usually in return for advertising space at the event or as part of the publicity for the event.