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No. Unit Page no.

1. A. Marketing Environment

B. Strategic Marketing

2. A. Product Innovations

B. Product Line

3. A. Marketing Channel

B. Marketing Communication

4 A. International Marketing

B. International Marketing Decision

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Unit -1. A. Marketing

Definition :- marketing environment refers to the relevant forces that affect marketing
decisions. It mainly include external or uncontrollable forces, like political, legal, economical,
socio-cultural, technological, competition, and so forth, on which a manager has no control.

Marketing environment comprises of various factors within which marketing manager has to
decide. It offers both opportunities and threats.


Internal marketing environment is based on the idea that customers attitudes toward a company
are based on their entire experience with that company and not just their experience with the
companys products. Anytime a customer interacts with a employee and it affect their overall

There are two types of internal market environment

(1) Internal marketing of your business system
(2) Your internal guidance or initiative process
(1)Internal marketing of your business system:- Internal marketing environment of your
business system is what you know about your companies infrastructure. That your customers
may not know without knowing the ins and outs of your companys infrastructure. If it is
newly impossible to convey your strength to the market. The more you know the better you
can position your message.
(2) your internal guidance or initiative process:-Your internal guidance has to do with the
creative thought you have that you will either choose to act or not your success is determine by
your ability to as certain which thoughts one most beneficial to act on at any given time and
which should be tabled for later exploration.


External marketing is what the world sees or perceives it include your:

(1) Advertising
(2) Website
(3) Blog
(4) Social Media Marketing

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(5) Direct marketing
(6) Marketing Material Including Business Cards, Letterhead And Logo
(7) Product Development
(8) How You Present Yourself When Out in Public

There are mainly two types of external marketing environment:

(1) Micro environment factors and

(2) Macro environment factors


(1) THE SUPPLIERS: supplier can control the success of the business when they hold the
power. The suppliers hold the powers when they are the only or the largest supplier of
their goods the buyers is motivational to the supplier business; the suppliers products is
a core part of the buyers finished products.
(2) THE RESELLERS: If the products organization to market product is taken to market
by third party resellers or market intermediaries such as retailers, wholesalers etc..then
the marketing success is impacted those third party resellers.
(3) THE CUSTOMERS: who the customers are and their reasons for buying the product
will play a larger in how to approach the marketing of your product products and
services to them.
(4) THE COMPETITORS: Those who same or similar products and services as your
organization are your market competition and they way they sell needs to be taken into
account. How to does their price and product differentiation results and get ahead of
(5) THE GENERAL PUBLIC: Your organization has a duty to satisfy the public needs.
Any actions of your company must be considered from the angle of general public and
hoe they are affected. The public have the power to help you reach your goals just as
they can also prevent you from achieving them.


(1)DEMOGRAPHIC FACTORS: Different market segment are tipically impacted by
common demographic factors including country religion, age, education level, household
lifestyle, cultural characteristics, and movements.
(2) ECONOMIC FACTORS: The economic environment can market both the
organizations production and the consumers decision marketing process.
(3) NATURAL FACTORS: The earths renewal of its natural resources such as forest
and agricultural products and marine products etc must be taken into account there are
also the natural non-renewal resources such as oil, coal, minerals etc they may also
impact the organizations production.

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(4) POLITICAL AND LEGAL FACTORS: Sound marketing decision should always
take into account political and legal development relating to the organization and its
(5) TECHNOLOGICAL FACTORS: The skills and knowledge apply to the production
and technology and material needed for production of products and services can also
impact the smooth running of the business and must be considered.
(5) SOCIAL AND CULTURAL FACTORS: The impact the products and services your
organization. Brings to market or society must be considered. Any element of the
production process or any product or services that you harmful to society should be
eliminated to show your organization is taking social responsibility.

Unit -1. B. Strategic

Marketing strategy

Definition:-A marketing strategy that combines all of its marketing goals into one
comprehensive plan. A good marketing strategy should be drawn from market research and
focus on the right product mix in order to achieve the maximum profit potential and sustain
the business. The marketing strategy is the foundation of a marketing plan.
Significance or Importance of Marketing Strategy:
1. Streamlines Product Development

A marketing strategy helps you create products and services with the best chances for making a
profit. This is because marketing strategy starts with marketplace research, taking into
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consideration your optimal target customer, what your competition is doing and what trends
might be on the horizon. Using this information, you determine the benefit customers and clients
want, what theyre willing to pay and how you can differentiate your product or service from the

2. Helps Determine Optimal Prices

Part of a marketing strategy is setting the right price for your product or service based on what
you learned in your market research. If you learned that customers want a high-end product in
your category, your pricing strategy might require you to sell at prices that create a high-end
perceived value. If your target customer is bargain conscious and is willing to accept fewer bells
and whistles on your product in exchange for paying less, your pricing strategy will require you
to sell at or below the competitions price.

3. Establishes Effective Distribution

Once you know what product features youll offer, who your target customer is and what your
price points will be, you can select where you want to sell to maximize your marketing
effectiveness. Younger customers will be more likely to shop using a Smartphone or on a
website, paying with PayPal or a credit card. Older customers might prefer to shop at retail
outlets. If your market research shows you need to be in retail stores but you dont have a sales
force, you can use a wholesaler or distributor.

4. Assists with Marketing Communications

Your market research will help you create your brand, or image you want to establish about your
business. Without marketplace research and a strategic marketing plan, you might respond to
solicitations from advertising salespeople on an individual, reactionary basis, sending messages
that dont fit in with the brand identity youve created based on your product development
efforts. A marketing strategy lets you determine if a particular magazine, radio station or website
fits into your selling plans.

5. Organizational Impact

When you have a marketing strategy, your departments can better work with each other, because
they are all working from the same plan. For example, your advertising people will talk with
your product development people to determine what message you should send about your
benefit. Your sales people will talk with the people responsible for managing your image to
determine if they can offer discounts, coupons or rebates without damaging your brand

Process of strategic marketing

1. Mission

The first step in strategic marketing is to articulate the reason why the enterprise exists and how
it can benefit target consumers over the long term. In particular, this mission statement is
intended to anticipate the future and describe an ongoing role for the organization's product,
service or expertise. For example, the mission of an airline might be to provide continuing

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innovation in global transportation. A hospital could state a mission to take the lead in improving
public health and education.

2. Situation Analysis

Organizations conduct a situation analysis, also known as a SWOT, to evaluate and prioritize
their strengths, weaknesses, opportunities and threats. This second step in the strategic marketing
process helps managers understand the resources they can build on and the challenges they face.
Strengths and weaknesses are internal factors, under the firm's control. For example, a good
image in the fashion press would be a key strength for a dress manufacturer, while a poor
relationship with clothing retailers would be a weakness. Opportunities and threats arise from the
external environment, like a strong economy or new payroll tax.

3. Objectives

The third step in strategic marketing is to set marketing objectives. These are clear, measurable
goals that give decision makers a basis for making choices and assessing progress. Objectives are
typically expressed in terms of one or more quantitative targets like revenue, profit, sales or
market share. Importantly, each objective must be achievable within a fixed period of time. For
example, aiming for a five-percent increase in profits might be realistic within a year, but
probably not within one quarter.

4. Strategy and Evaluation

The fourth step in strategic marketing is strategy development. This involves selecting a target
market, a distinct group of consumers who are highly likely to buy the firm's product. Planners
must also choose implementation tactics, specifically, effective ways to use the marketing mix
tools of product, promotion, price and distribution to reach and influence prospective buyers. The
fifth step, evaluation, means specifying how, when and by whom these tactics are to be
monitored and assessed over time.

Managing the marketing efforts:

Managing the marketing process requires the four marketing management functions are as under





1.Marketing analysis :Managing the marketing function begins with a complete analysis of the
companies situation

The company must analyses its market &marketing environment to find attractive opportunities
and avoid international threats.

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The marketer should conduct a SWOT analysis, by which it evaluates the companys overall
strengths, weaknesses opportunities & threats.

2.Marketing planning :Involves deciding on marketing strategist that will help the complain
attain its overall strategic objectives.

A detailed a marketing plan is needed for each business ,product or brand.

Marketing strategy consists of specific strategies :target markets ,positioning ,the marketing
mix ,and marketing expenditure levels.

3. Market implementation : Marketing implantation the process that turns marketing plans into
marketing actions in order to accomplish strategic marketing objectives.

Implementation involves day to day ,month to month activities that effectively put the marketing
plan to work.

Implementation addresses the who, where, when, and how. In an increasingly connected world,
people at all levels of the marketing systems must work together to implement marketing
strategies and plans.

It is mostly depend on how well the company blends its people, organizational structure, decision
and reward systems, and company culture into a cohesive action program that supports its

The company must design a marketing organization that can carry out marketing strategies and
plans. The most common form of marketing organization is the functional organization.

A company that sales across the country or internationally often uses a geographic organization.

Companies with many very different products or brands often create a product management

4. Marketing control : Marketing control involves evaluating the results of marketing strategies
and plans and taking corrective action to ensure that objectives are attained.

Operating control involves checking ongoing performance against the annual plan and taking
corrective action when necessary. Its purpose is to ensure that the company achieves the sales,
profits, and other goals set out in its annual plan.

Strategic control involves looking at whether the companies basic strategies are will matched to
its opportunities a major tool for such strategic control is a marketing audit. This is a
comprehensive, systematic, independent and periodic examination of a companys environment,
objectives strategies, and activities to determine problem areas and opportunities.

Many companies now view marketing as an investment rather than an expanse. Marketers are
developing better measures of return on marketing investment the net return from a marketing
investment divided by the costs of the marketing environment.

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Increasingly marketers are using customer-centered measures of marketing impact, such as
customer acquisition, customer retention, and customer lifetime value.


Marketing mix is affected by a number of factors; some are internal factors while others are
external factors. While deciding on marketing mix, marketing manager has to take into account
all these internal and external factors.


These factors are internal to organisation. And hence, they are controllable. With reference to
internal factors, management has relatively more freedom to decide. Note that the internal factors
do not mean the company has complete control over them. They are also known as
organizational factors. Marketing mix must be adjusted with relevant internal factors.

List of internal factors:-

1. General and marketing objectives

2. Companys general policies, rules, and procedures

3. Management attitudes toward value, customer, social welfare, etc.

4. Availability and quality of raw materials

5. Resource ability of company

6. Organizational structure

7. Nature and types of employees

8. Personal factors related to management, etc.


They are uncontrollable factors. They have tremendous effect on success of marketing
programme. No company can deny the role of external factors in designing marketing
mix. They are also called the environmental factors.

List of external factors:-

1. Demand

2. Competition

3. Suppliers and middlemen

4. Availability of infrastructure facilities, like transportation, warehousing,

communication, insurance, banking, etc.

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5. Consumer behaviour (all social, cultural, economic, and other factors)

6. Economic conditions and business cycle

7. Government economic policies and restrictions

8. Innovations and inventions

9. Ethical consideration and social responsibilities

10. Global economic factors, etc.

Growth Strategy:-

Definition :- Strategy aimed at winning larger market share, even at the expense of short-term
earnings. Four broad growth strategies are diversification, product development, market
penetration, and market development.

Types of Growth Strategy:-

1. New Markets:-An effective idea for growth is entering new markets. If you have access to
more customers, you can sell more products. You can target new markets by opening additional
retail locations, adding an online presence, selling internationally or reaching new types of
customers. In each case, you have to define the segments of the new markets you intend to target,
identify the needs of the potential customers as they relate to what you are selling, promote your
products to them and make it convenient for them to buy your products.

2. New Products:-Another way to increase business volume is to focus on your products. If you
have many different products for sale, you can increase total sales. Sales growth is based on a
broadening of your product lines and on product diversification. Broadening a line means you
can offer related products to each customer. Product diversification lets you offer different
products to different customers, depending on customer preferences and characteristics.

3. Acquisition:-Sometimes the fastest way to gain new markets or diversify your product range
is to buy a company that competes with you or is active in a related field. Company acquisition is
risky because it means making a large investment; the benefits depend on how well you can
integrate the new business into your own operations. It can be an effective growth strategy if
your acquisition target occupies the markets into which you want to diversify.

4. Merger:-An equally risky but less costly growth strategy is a merger with a related or
competing business. Ideally, the merger takes place between companies that bring equal value to
the table and results in a larger, more competitive business that has the potential for improved
performance. The lower financial cost of a merger comes with a corresponding loss of control:
You share ownership with others after a merger.

5. Partnership:-A growth strategy based on entering into partnerships with qualified companies
brings with It the advantages of a merger or acquisition without the high cost or loss of control.
You might partner with a foreign distributor to access the market where he is based or partner

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with a company making accessories for your own products. The partnership agreement specifies
the areas where you intend to cooperate, for example, in a promotional campaign or shared sales
channels. While the risks and costs are lower, partnership also means you have to share the

Unit -2 A. Product
Product Innovation:-

Product:- A product is anything that can be offered to a market that might satisfy a want or need.
[1] In retailing, products are called merchandise. In manufacturing, products are bought as raw
materials and sold as finished goods. A service is another common product type.

Types of Product Classification - Product Classification:-

Product refers to anything that can be offered to a marketer for attention, acquisition, use or
consumption that might satisfy a want or need. A product is a set of tangible and intangible
attributes, which may include packaging, color, price, quality, brand and sellers services and
Product Classifications and Types
1. Consumer product: Product bought by final consumer for personal consumption. There are
four types of consumer goods.
Convenience Product: Consumer product that the customer usually buys frequently, immediately,
& with a minimum of comparisons and buying effort. e.g. tooth paste Shopping Product:
Consumer good that the customer purchase after the process of selection. It requires
characteristically compares on such bases as suitability, quality, price, and style. e.g. clothing
Specialty product
Speciality Product: Consumer product with unique characteristics or brand identification for
which a significant group of buyers is willing to make a special purchase effort. Expensive and
fashionable shopping goods Ameer Adnan, Cotton & Cotton.
Unsought product: Consumer products that the consumer either does not know about or do not
want to think normally before buying. It has some emotional feelings. e.g. donations.

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2. Industrial Product: Product bought by individuals and organization for further processing or
for use in conducting a business.
Materials and parts: Raw materials are the basic materials that actually become part of the
product. They are provided form mines, forests, oceans, farms and recycled solid wastes.
Capital Items: Capital items consist of office accessories and operating materials.
Supplies: Supplies facilitate productions, but they do not become part of he finished product.
Paper, pencils, oils, cleaning agents and paints are examples.
Industrial Services: Industrial services include maintenance and repair services such as
machinery repair and business advisory services such as legal, management, consulting,
advertising, marketing research services. These services can be acquire internally as well as

Product Innovation:-

(A)Meaning: A Product and service offering is regarded as an innovation, if the product

changes in terms of form, attributes, features, and overall benefits; such changes have a twofold
connotation, one, in terms of technology, and two, in terms of consumption usage and behavioral

The product is innovative if it is new in terms of form, attributes and features.

There are changes in technology, as well as impact on consumer consumption behavior.

(B). Classification Of Product innovation

There are two sub approaches to classify innovative products as per the product oriented
definition; viz.

Approach 1: This approach classifies innovative products based on the degree to which the new
product and service offering would upset established consumer usage and behavioral patterns. As
per this approach, innovations can be classified into three categories, continues innovations,
dynamically continues innovations, and discontinues innovations.

(1) Continues innovations: A product is regarded as a continues innovations, if it is a

modification over an existing product; it is not essentially a product but an improvement over the
already existing one; they could also be line extensions, and as such continues innovations do not
disrupt established usage and behavior patterns; For example, improvement in laser jet printers,
digital TVs, saving razors, or change in call plans (airtel, cell one)

(2) Dynamically continuous innovations: An innovation is regarded as a dynamically

continuo us, if it exerts some influence on usage and behavior patterns, but this influence is not

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totally disruptive; it does not totally change behavior patterns; For example, The walkman giving
way to the portable CD players, or the pager giving way to the cell phone.

(3) Discontinuous innovations: Discontinuous innovations lead to disruption of usage and

consumption behavior patterns ; there is a change not only in the technology , but also requires
consumers to change to new behavioral patterns in terms of usage and consumption. For example
, the postal main giving way to email and internet ,the radio/record player giving way to portable
music and sound ,the telephone giving way to the mobile phone ,for the traditional glucose and
diabetes blood test giving way to the home kit .

Approach 2: According to another approach , innovative products can be classified on the basis
of how the newness in form ,features and attributes can impact consumer satisfaction ; the
greater the degree of satisfaction , higher it ranks on the scale of innovativeness . Innovations
can be classified as artificially new , marginally new , and genuinely new .

(1) Artificially new: Embody not much of a change , and do not much impact user satisfaction ;
For example , a new flavor of an ice cream .

(2) Marginally new : Here , there is some level of change in customer satisfaction, because the
product is new , differs a little over the existing products and provides greater benefits ; For
example , the laser printer replacing the dot-matrix printers .

(3) Genuinely new: This implies a totally new product that impacts user satisfaction completely ;
it differs from existing product and service offerings , and leads to customer satisfaction , as the
usage use greater benefit . For example, microwave Owens, cell phones, home medical tests and

Types of product innovations:-

The term Product innovation has been described with varying perspectives and orientations,
viz., firm-oriented, product-oriented, market-oriented, and consumer-oriented. Let us discuss
each one of these:

(A) Firm-oriented: As per this approach, a product or service offering is regarded as new, if
the company starts manufacturing or marketing it for the first time.

In other words, the firm orientation treats the newness in terms of the companys perspective.

- The product is innovative, if it is new to the company, it is regarded as an innovation.

- The existence of the product in the market (as competitors offering, or even as consumers
awareness) is disregarded; as long as it is new to the company, it is regarded as an innovation.

(B)Product-Oriented: Based on varying perspective and orientations, new products have been
variously classified. The most commonly used classification has been propose by Thomas S.
Robertson. Based on two dimensions, technological and behavioral, Robertson has classified the
new products and innovation, and discontinuous innovations.

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(a) Continuous innovations: A continuous innovation is one that entails modification over an
existing product, It is illustrative of little technological change, but requires no behavioral change
on the part of the consumer for product usage, consumption and resultant experiences.

The technology used to manufacture the new product is not different from the one that
produced the original or already existing product, and the consumer does not have to
adopt a new purchase, usage and consumption pattern to use it.

Example: all line extension, or product variant (new form, size, flavor etc) For example, various
flavor of Amul Chocolate are line extension, of the original Amul Milk Chocolate Other
examples: Laser printers replacing earlier versions a change from VCDs to DVDs was
illustrative of better technology, better picture quality.

(b) Dynamically continuous innovations:

An innovation is regarded as dynamically continuous, when it includes some technology

change in the product, but requires no behavioral change on the part of the consumer for
product usage, consumption and result change experiences.
The technological change is brought either to increase efficiency, or provide greater valve
to the consumer.

Example: the walkman giving way to the portable CD player, or the semi-automatic washing
machine giving way to the fully automatic one.

(c) Discontinuous Innovations:

On a continuum, they fall as most radical,they are truly innovative in the sense that
they are technologically superior, and also require considerable behavioral change within
consumers with respect purchase and usage patterns.
The technology used to manufacture the new product is different from the one that
produced the original or already existing product, and the consumer has to adopt a new
purchase, usage and consumption pattern to use it.

Example:- The telephone giving way to the mobile phone, or the 3G and GPRS providing email
access while on move as against email access on the computer/laptop.

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Unit -2 B. Product Line

Definition:- Product line is a group of products that are closely related because they functions
in a similar way, are, sold to


In offering product line ,companies normally develop a basic platform and modules that can be
added to meet different customer manufacturers build their cars around a basic
platform. Homebuilders show a model home to which additional features can be added. This
modular approach enables the company to offer variety while lowering production costs.

Product-line managers need to know the sales and profits of each item in their line in order to
determine which items to build,

Product Mix Width

Persona Oral
Home & Personal Care Food
l Care Deodoran Color Tea Coffe Ice
Laundry Skin Hair Food
Wash Pepsoden ts Cosmeti e Crea
Care Care
Lux t cs Brook m
Surf Excel Fair & Sunsilk
Lifebuoy Close-up Axe Lakme e Bru
Product- Rin lovely Natural Kissan
Line Liril Rexona Bond Kwality
Wheel Pons Clinic Knorr
Hamam Lipton Walls
Length Annap
1.1. Table Product Line Analysis

Maintain, harvest, or divest. They also need to understand each product lines market profile.

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Company objectives influence product line length. one objective is to create a product line to
induce up selling :Thus Maruti would like to move customers up from Maruti 800 to alto or Zen.
A different objective is to create a product line that facilitates cross- selling : Hewlett packard
sells printers as well as computers. Still another objective is to create a product line that protects
against economic ups and downs; Videocon offers white goods such as refrigerators, washing
machines, televisions, microwave ovens, and air conditioners under different brand names to
cater to the entry-level,and premium segments. Companies seeking high market share and market
growth will generally carry longer product lines. Companies that emphasize high profitability
will carry shorter lines consisting of carefully chosen items.

Product lines tend to lengthen over time. Excess manufacturing capacity puts pressure on the
product line manager to develop new item. The sales force and distributors also pressure the
company for a more complete product line to satisfy customers. But as item are added, costs rice:
design and engineering costs, inventory carrying costs , manufacturing- changeover costs,
order-processing costs , transportation costs, and new- item promotional costs. Eventually,
someone calls a halt: Top management may stop development because of insufficient funds or
manufacturing capacity. The controller may call for a study of money losing items . A pattern
of product line growth followed by massive pruning may repeat itself many times.

A company lengthens its product line in two ways: by line stretching and line filling.


Every companys product line covers a certain part of the total possible range .for example ,
BMW automobile are located in the upper price rang of the automobile market. Line stretching
occurs when company lengthens its product line beyond its current range. The company can
stretch its-line down-market, up-market, or both ways.

Down-Market stretch A company positioned in the middle market may want to introduce a
lower-priced line for any of three reasons:

(1) The company may notice strong growth opportunities as mass retailers , and others
attract a growing number of shoppers who want value- price goods.
(2) The company may wish to tie to tie up lower end competitors who might otherwise try
to move up market. If the company has been attacked by a lower end competitor, it
often decides to counterattack by entering the low end of the market.
(3) The company may find that the middle market is stagnating or declining.

A company faces a number of naming choices in deciding to move down- market.

Sony, for example , faced three choices;

(1) Use the name Sony on all of its offering. (sony did this.)

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(2) Introduce lower priced offerings usings a sub brand name, Such as Sony Value Line.
Tzhe risks are that the Sony name loss. some of its quality image and that some sony
buyers might switch to the lower priced offerings.

(3)introduce the lower priced offerings under a different name, without mentioning sony;but
sony would have to spend a lot of money to build up the new brand name, and the mass
merchants may not even accept a brand that lacks the sony name.

UP-MARKET STRETCH companies may wish to enter the high end of the market for more
growth, higher margins, or simply to position themselves as full-line manufacturers.
Mony markets have spawned surprising upscale segments: starbucks in coffee, haagen
dazs in ice cream, and evian in bottled water.

TWO WAY STRETCH companies serving the middle market might deside to stretch their
line in both direction. Texas instrument (TI) introduced its first calculators in the
medium- quality end of the market. Gradually ,it added calculators at the lower end,
taking market share away frome bowmar, and at the higher end to compete with Hewlett-
Packard. This two way stretch won TI early market leadership in the hand calculator


A product line can also be lengthened by adding more items within the present range.
There are several motives for line filing reaching for incremental profits, trying to satisfy
dealers who complain about lost sales because of missing items in the line ,trying to
utilize excess capacity, trying to be the leading full- line company, and trying to plug
holes to keep out competitors.
Line filling is overdone if it results in self- cannibalization and customer confusion. The
company need to differentiate each item in the consumers mind. Each item should
possess a just noticeable difference. According to webers law, customers are more
attuned to relative then to absolute difference. The infamous edsel automobile, on which
ford lost $350 million in the late 1950s, met fords internal positioning needs for a car
between its ford and Lincoln lines but not the markets needs.


Product lines need to be modernized. A companys machine tools might have a 1970s
look and lose out to newer styled competitors lines. The issue is whether to overhaul
the line piecemeal or all at once. A piecemeal approach allows the company to see how
customers and dealers take to the new style.
In rapidly changing product markets, modernization is continuous. Companies pian
improvements to encourage customer migration to higher valued, higher priced
items. Microprocessor companies such as intel and AMD, and software companies such
as Microsoft and oracle, continually introduce more advanced versions of their

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The product line manager typically selects one or a few items in the line to feature. A
white goods company will announce a special low priced television to attract
customers. At other times, managers will feature a high- end item to land prestige to the
product line. Sometimes a company finds one end of its line selling well and the other
end selling poorly.
Product- line managers must periodically review the line for deadwood that is
depressing profits. marketing insight: rationalizing brand portfolios for growth
describes some development with that strategy. A chemical company cut down its line
from 217 to the 93 products with the largest volume, the largest contribution to profits,
and the greatest long term potential.

Product Mix Strategies

1. Expansion of product Mix:

Expansion of product mix implies increasing the number of product lines. New lines may be
related or unrelated to the present products. For example, Bajaj Company add

Car in its product mix or may add new varieties in two wheelers and three wheelers. When
company finds it difficult to stand in market with existing product lines, it may decide
to expand its product mix.

For Example, Hindustan Unclear limited has various products in its product mix such as:

(1) Toilet soaps, detergent cakes, washing powers, etc.

(2) Cosmetic products,
(3) Edible items,
(4) Shaving creams and blades,
(5) Pesticides, etc.
2. Contraction of Product Mix:

Sometimes, a company contracts its product mix. Contraction consists of dropping or

eliminating one or more product lines or product items. Here, fat product lines are made
thin. Some models or varieties, Which are not profitable, are eliminated. This strategy
results into more profits from fewer products. If Hindustan Unilever Limited decides to
eliminate particular brand of toilet shop from the toilet shop lines, it is example of

3. Deepening product mix depth:

Here, a company will not add new product line, but expands one or more
excising product lines. Here , some product lines become fat from thin. For
example, Hindustan Unilever limited offering ten varieties in its editable items
decides to add four more varieties.

4. Alteration or charges in existing products:

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Instead of developing completely a new product, marketer may improve one or more
establish products. Improvement or alteration can be more profitable and less risky
compared to completely a new product. For example, Maruti udyog limited decide to
improve full efficiency of existing model. Modification in forms of improvement of
qualities all features or both.

5. Developing new users of existing products:

This products mix strategy concerns with finding communicating new users of products.
No attempts are made to disturb products lines and products items. It is possible in terms
of more occasions, more quantity at a time, or more varied uses of existing product. For
example , coca cola may convince to use its soft drink along with lunch.

6. Trading up:

Trading up consists of adding the high-price-prestige products in its existing products

line. The new products is the instead to strengthen the prestige and goodwill of the
company. New prestigious products increases popularity of company and improves image
in the mind of customers. By trading up products mix strategy, demand of its cheap and
ordinary products can be encouraged.

7. Trading down:

The trading down product mix strategy is quite opposite to trading up strategy. A
company producing and selling costly, prestigious, and premium quality products decide
to add lower-price items in its costly and prestigious products lines.
Those who cannot afford the original high priced products can buy less expensive
products of the same company. Trading down strategy leads to attract price-sensitive
customers. Consumers can buy the high status products of famous company at a low

8. Products differentiation:

this is a unique product with strategy. This strategy involves no change in price,
qualities, features, or varieties. In short, products are not undergone any change. Product
differentiation involves superiority of products over the competitors .
By using rigorous advertising, effective salesmanship, strong sales promotion
techniques, and /or publicity, the company tries to convince consumers that its products
can offer more benefits, services, and superior performance. Company can communicate
the people the distinct benefits of its products

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Unit -3 A. Marketing Channel

Usefulness of market intermediaries:

Member of the marketing channel and perform many key functions. Some help to complete
(1).information: Gathering and distributing marketing research and intelligence information
about actors and forces in the marketing environment needed for planning and wading exchange

(2).Promotion: developing and spreading persuasive communication about an offer.

(3).Contact: finding and communicating with prospective buyers.

(4).Matching : shaping and fitting the offer to the buyers needs, including activities such as
manufacturing, grading , assembling and packaging .

(5).Negotiation: reaching an agreement on price and other terms of the offer so that ownership
or possession can be transferred.

(6). Physical Distribution: transporting and storing goods

(7).Financing: acquiring and using funds to cover the cost of the channel work.

(8).Risk taking: Assuming the risks of carrying out the channel work.

Types of channel distribution:

Types of channel of distribution are as follows.

Manufacturing and customers are two major components of the market. Intermediaries perform
the duty of eliminating the distance between the two. There is no standardized level which
proves that the distance between the two is eliminated. Their description is as follows.

(A). Direct channel or zero level channels : when the manufacturer instead of selling the
goods to the Intermediaries sell is directly to the consumer then this is known as zero level
channel. Retail outlets, mail order selling, internet selling and selling.

(B).Indirect channels: when a manufacturer gets the help of one or more middleman to move
goods from the production place to the place consumption the distribution channels is called
indirect channel.

Following types are the main types of it.

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(1).One level channel: In this method an intermediary is used. Here a manufacturer sells the
goods directly to the retailer instead of selling it to agents or wholesalers. This method is issued
for expensive watches and other like products. This method is also useful for selling FMCG.

(2). Two level channel: In this method a manufacturer sells the material to a wholesaler. The
wholesalers to the retailer and then the retailer to the consumer here, the wholesalers after
purchasing the material in large quantity from the manufacturer sells it in small quantity to the

Then the retailers make the products available to the consumers. This medium is mainly used to
sell soap.

(3). three level channel: Under this one more level is added to two level channel in the form of
agent. An agent facilitates to reduce the distance between the manufacturer and the wholesalers
something big companies who cannot directly contact the wholesalers, they take up the help of
agents. Such companies appoint their agents in every region and sell the material to them.

Then the agents sell the material to the wholesalers, the wholesalers to the retailers and in the
end the retailers sells the material to the consumers.

Selection of Marketing Channel:

Marketing managers face two sets of decisions when considering marketing channels. The first
set leads to a selection of one or more channels. The second set deals with the selection criteria
and examines the three levels of distribution. The final step is plan finalization.

Channel selection criteria:-

Selecting marketing channel can be a complicated process, particularly if part of the channel is
outside the producers direct control. In addition, there is no endless supply of available
intermediates sitting around waiting for producers to give them a call. The elements that
managers examine as they define channel strategy can be grouped into market factors and
product factors.

Market factors:-

Analyzing and understanding the target market is the first step selecting marketing channels.
There are several factors that an analysis of the market should explore, ranging from customers
to the types of competitors.

Customer preference: - The channel which is most preferred by customers.

Organizational customers: - organizational customers frequently have buying habits
that are different from those of other customers.
Geography: - customer location is another important factor determining the type of
channel to be used.


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Often a good channel choice is one of that has been overlooked or avoided by competitors. In
some cases, the market may try to duplicate his competitors channel in order to have his
products replace that of competitors.

Nature and availability of intermediaries:-

A question that arises very often in the channel decision is Are there enough of the right
kinds of intermediaries to build the desired channel? we need to find intermediaries that can
handle the products capably and provide adequate service to final customers. For new entrants, it
is better to find the best available intermediaries in the market.

Product factors:-

Even products that end up at the same retail location may need different intermediaries earlier
in the channel.

Life cycle: A product categorys stage in the life cycle can be an important factor in
selecting a channel and channels may have to be adjusted over time. Customers require
less support once the product has established itself.
Complexity: Some products are so complicated and require so much support that
producers need to stay closely involved. This indicates either a direct sales force or a
limited number of highly qualified intermediaries. Scientific equipments, jet aircrafts,
nuclear reactors, pharmaceuticals and computers are products whose complexity affects
the way in which they are marketed.
Value: The value of the products also affects its distribution channel choices. Items with
law cost and high volume are usually distributed through large, well-established
distribution networks such as grocery wholesalers.
Size and weight: A product with significant size and weight can face restricted
distribution channel options, particularly if it is also of low value.
Customer perceptions: The perceptions customers have of producers also play role in
channel decision making.
Other product factors: Depending on the product in question, other factors may enter
into the decision as well. Some of these include whether a product is fragile or perishable
and whether not it requires significant customer satisfaction.

Unit -3 B. Marketing
Significance (importance) of marketing:
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A business may have developed terrific products and put together a supremely talented
management team growing a business comes down to the ability to sell. Importance are as
1. Developing strategic vision: one of marketing functions is to constantly look for new ways of
growing the companys revenues. A strategic vision means being on the lookout for new
opportunities and creating strategies for the company to take advantage of them. The company
could discover existing, emerging markets that it could supply products or services. To dividing
ways of selling additional services or products to the customers that a company already has is
another way to accelerate growth.

2 .Creating brand awareness: for consumers to buy from the company, they first need to know
the company exists and what it is selling. Advertising and promotion strategies are formulated.
To reach as many potential customers as possible and tell them what the company has to offer. To
be successful, the company must have a good understanding of what demographic groups are
most likely to become customers, and apply marketing expenditure to the media that serve these
groups. Repetition is a part if creating brand awareness. If the customer sees the communication
from the company a number of times, there is a higher chance of making the sale.

3. Expressing competitive advantage: marketing & communication strategies are design to

position of the company is being superior to its competitors. The marketing message must show
specific reasons the customer should purchase its products or services. many times the message
presents the benefits of these products or services. How they can solve a customer problem or
meet a customer need highlighting the shortcomings of competitors is another popular tactic.

4. Fostering goodwill: companys use communication strategic to build on image of being a

good corporate citizen. Publishing the companys charitable activities is one way this is
accomplished. The marketing department in a company also tries to find community, regional or
national event the company could participate in to generate publicity. Company purchase
sponsorships to sporting events that receive national TV exposure for examples. But sponsoring
smaller events, such as kids local sports leagues, can also be effective

5.Attracting talents: As companies grow, they need to continually attract the best talent
available. Communication strategies are used to show potential employees that the company is
good place to work. Many companies have a large section of their website devoted presenting the
reasons individuals should be interested in working there. Business publication has annual
awards or lists of the best companies to work for. Marketing and Communications role is making
sure the company is under consideration for these awards.

6.Informing investment community: companies send news releases out about milestones
reached, such as a sale or profits reaching certain there should. They also announce major event,
such as joint venture, acquisition or introduction of new product. Beside, creating general
awareness about the company the news releases alert the investment community to wheat. The
company is accomplishing. This can result in increased interest in the companys stock. If it is a
public company or make it easier for potential equity Partners to find the company if the
company is private.

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1. Process of marketing communication :

Sender Encodin Message Decoding Receiver

g Media

Feedbac Respons
k e

1. Sender : the party sending the message to another party

2. Encoding: the purpose of putting thought into symbolic form. Example: McDonalds
advertising agency assembles words, sounds, and illustrations into an advertisement the will
convey the intended message.

3.Message: the set of symbols that she sender transmits

4. Media: the Communication Channels through which the message moves from sender to
receiver. In this case, television and the specific television programs that McDonalds sleets.

5. Decoding: the process by which the receiver assigns meaning the symbols encoded by the
sender a consumer watches the McDonalds ad.

6. Response: the reaction of the receiver after being exposed to the message- any of hundreds of
possible response, such as the consumer likes McDonalds next time,

7.Feedback: the part of the receivers response communicated back to the sender- McDonalds
research shows that consumer are truck by and remember the ad, or consumer write or call
McDonalds praising or criticizing the ad or products.

8. Noise: the upland static an distortion during the communication process which result in the
receivers getting a different message then the one the sender sent- the consumer is distracted
while watching the commercial misses its key points.

Decision of marketing Communication:

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Unit -4 A. International Marketing

Introduction: Availability of the advanced communication and transportation facilities has

reduced the physical distance among the nations of the world, and has made the world global

Countries of the world nearing to participate in the global market opportunities.

Customers needs and want are not limited to the product and marketed within the
boundary of country.


1.The American Marketing association defines the term: International marketing is

multinational process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchange that satisfy individual and
organizational objective.

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2. We can define the term as: International marketing means to produce product ( goods and
services ) for Promotion
the foreign customer and to make Place
necessary arrangement to supply them.

3. International marketing concerns with marketing products in foreign countries. In this

reference, we can define it as: Marketing activities across the border can be said as
international marketing. Marketing Activities among the counties of the world can be
turned as international marketing.

4. Finally, it can be said: International marketing is the marketing for the customer of other
countries. It involved designing marketing programme ( 4Ps) to arrive at desired
exchange with foreign customer that satisfies their needs and wants.

International Marketing Environment:

Environment Consist of forces. Environment is made of such controllable and uncontrollable

forces. It is the environment that determines favorable or unfavorable conditions, and hence,
extent, depends on effect of marketing environment and ability of the firm to respond effectively.


We can define the Word International marketing environment as under.

1. International marketing environment is a set of controllable (internal) and uncontrollable

(external) forces or factor that affects international marketing mix is prepared in light of
this environment.

2. International marketing environment consists of global forces, such as economic, social,

cultural, legal, and geometrical and ecological forces, that affect international marketing

3. International marketing environment for any marketer consists of internal, domestic, and
global marketing forces affecting international marketing mix.

(a)Global Factors
International Uncontrollable
(b) Domestic Factors
Domestic Uncontrollable Environment

(C) Organizational Factors

Internal Marketing
Product Price

International marketing

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Figure 1: Three-level International Marketing Environment

Factors of International Marketing Environment:

Factor of forces involved in the International Marketing Environment can be classified into three
categories as stated in the figure 1.

1. Global Factors:

Such factors are related to the world economy. Broader picture of global phenomenon affects
every decisions of international marketing. Main global factors include.

1. Customer-related factors

2. Political and legal factors

3. Social factors

4. Culture factors

5. Competition

6. Global relation among nations and degree of the worldwide peace.

7. Geographic/ecological/climate-related factors

8. Functioning of international organizations like UNO, World, WTO, etc.

9. Availability of Marketing Facilities and functioning of the international agencies, etc.

2. Domestic Factors:

Domestic factors are related to the economy of the nation. Overall economic, social and cultural,
demographic, political and legal, and other domestic aspects constitute domestic environment for
international marketing. This environment affects international marketing mix in several ways.

Important domestic factors include:

1.Political climate/stability/philosophy

2. Government approach and attitudes toward international trade

3. Legal system and business ethics

4. Availability and quality of infrastructural facilities

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5. Availability and quality of raw-materials

6. Functioning of institutions and availability of facilities

7. Technological factors

8. Ecological factors, etc.

3. Internal or organizational factors:

These are internal and controllable factors. They are related to internal situation of company
dealing with international trade.

These factors include:

1. Objectives of company

2. Managerial philosophy of company

3. Personal factors related to management

4. Managerial attitudes toward other nations, customers, social welfare, etc.

5. Companys policies and rules

6. Resource ability of company and marketing mix

7. Form of organization and organizational structure.

8. Nature and types of employees

9. Internal relations with other departments

10. Companys relations with other stakeholders and service providers.

Economic environment:

In the recent global economy has been in the midst of a substantial transformation. While
America, Europe and Japan have become slow growth economies, Asia China , and India in
particular and Russia, have become surging forward in economic growth. According to the
world Economic situation and prospects 2006 published for and on behalf of the UN, the US
the main engine of world economy , is facing a deceleration in economic growth on account of
low household savings and a large and growing external deficit. On the contrary, Russia China
and India have been doing quite well in recent years.

Social-Culture Environment

Purchasing power is directed toward certain goods and services and away from others according
to peoples tastes and preferences. Society shapes the beliefs, values, and norms that largely

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define these and preference. People absorb, almost unconsciously, a worldview that define
relationships to themselves, to others, to organizations, to society, to nature, and to the universe.

With 30 different languages, over 200 mother tongues and around 2000 dialects, Indian is a
complex nation of culture and sub-cultures. Regional differences in language, customs, social
systems, values, habits, religions, and caste systems make the socio-cultural environment of
India very complex. There are elements of the culture that are common to all; but many elements
that shape the consumption behavior of people very in nature. Dress codes, for example, vary
from region to region.

Values, attitudes and aspirations of people vary significantly across different customer groups
and regions. There are some interesting insights that come from a variety of studies.

Political-legal environment

Marketing decisions are strongly affected by developments in the political and legal
environment. The environment is composed of laws, government agencies, and pressure groups
that influence and limit various organization and individuals. Somatimes these laws also create
new opportunities for business. Two major trendsdeals with the increase in business legislation
and the growth of special interest groups.

INCREASE INBUSINESS LEGISLATION : Business legislation has three main purposes: to

protect companies from unfair competition, to protect consumers from unfair business practices,
and to protect the interests of society from unbridled business behavior. A major purpose of
business legislation and enforcement is to charge businesses with the social costs created by their
products or production processes. A central concern is this: At what point do the costs of
regulation and enforces may be lax or overzealous. Although each new law may have a
legitimate rationale, it may have the unintended effect of sapping initiative and retarding
economic growth.

Several countries have strong consumer protection legislation . Norway bans several forms
of sales promotion trading stamps, contests, premiums-as inappropriate or unfair
instruments for promoting products. Thailand requires food processors selling national brands
to market low-price brands also, so that low-income consumer can find economy brands.

International (Global) Marketing Decisions:

International marketing decisions are same as domestic marketing; only difference is that
all marketing decisions are taken with reference to foreign or international markets(or
More clearly, product, price, promotion, and distribution decisions are made for
international buyers.

Those firms planning to enter the global markets have to decide on following key decisions:

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1. International markets decision: Whether to go for international market?

2. Market selection decision: To whom of which country to sell?

3. Market entry decision: How to enter the international market?

4. Marketing mix decision: Which type of marketing mix should a firm prepare?

5. Organization decision: What type of organization should a firm adopt to manage international

When international markets seem to more attractive and the company is capable to
exploit these markets, the company decides to enter the international markets.

In short, a company prefers to enter the international market in following situations:

1. When companys has excess production capacity and there exists attractive opportunities
outside, and/or

2. When, compared to domestic markets, foreign markets seem more attractive or profitable,

3. When company has enough capabilities to deal with international markets, and/or

4. When domestic governments insist, force, and/or encourage businessmen for international

Market Entry Decision:

A firm has selected international markets to operate in. Now, the next imperative
marketing decision is market entry, i.e., how to enter the market ; which of the options to
be used for foreign market entry. There are several options to choose an appropriate entry

1. Exporting:

Exporting involves selling domestic products in foreign markets. It is easier and common
entry option. Exporting consists of producing the products in home country and selling or
exporting the same in the international market. There are two options in exporting, the
first, company itself exports products in foreign markets, and, the second, company
export through intermediate agency or agent. Some entry options in exporting, as
suggested by Philip kotler, include:

A. export department: A company maintains full-fledged export department to sell its products
in foreign markets.

B. opening branch in foreign market: some companies open their branches or shops in foreign
markets to serve consumers.

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C. appointing traveling salesmen: some companies appoint salesmen to search customers in
foreign market and serve them.

D. appointing distributors: in this entry option, a firm appoints agents, representatives or

middlemen in foreign markets.

2. Direct foreign investment:

A company sets up its own factory in other countries. Its carries out all production and marketing
activities in foreign land. But, the option depends on a lot of factors such as market stability,
costs of production and marketing, competition, government policies, and other factors
determining favorableness of situation. Company should select this strategy carefully as there is
considerable risk and uncertainties in some countries.

3. Joint venture:

The joint venture is jointly owned and managed by host and foreign companies, by two
companies of two nations. A foreign company holds necessary equity to get voice in
management not enough to completely dominate the venture. Structure of joint venture depends
on government policies and approach of host country. For example, HMT represent joint venture
with Swiss Machines and Tools, Proctor and Gamble has joint venture with Godrej, Suzuki of
Japan has with Maruti Udyog, etc.

Direct Investment In international market:-

The ultimate form of foreign involvement is direct ownership of foreign-based assembly or

manufacturing facilities. The foreign company can buy part or full interest in a local company or
build its own facilities. General Motors has invested billions of dollars in auto manufactures
around the word, such as shangai GM. Fiat Auto Holdings, Isuzu, Daewoo, Suzuki, Saab, Fuji
Heavy Industries, jinbei GM Automotive Co., and AvtoVAZ.

If the market appears large enough, foreign production facilities offer distinct advantages.
First, the firm Secures cost economies in the form of cheaper labor or raw material, foreign-
government investment incentives, and freight saving. Second, the firm strengthens its image in
the host country because it creates jobs. Third the firm develops a deeper relationship with
government, customers, local suppliers, and distributors, enabling it to better adapt its products
to local environment. Fourth, the firm retains full control over its investment and therefore can
develop manufacturing and marketing policies that serve its long- term international objectives.
Fifth, the firm assures itself asscess to the market in case the host country insists locally
purchased goods have domestic content.

The main disadvantage of direct investment is that the firm exposes s large investment to
risks such blocked or devalved currencies, worsening marketing , or expropriation. It can be

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expensive to as reduce or close down operations, beause the host country might require
substantial severance pay to employees.

Marketing Mix Decision:

Marketing mix decision involves preparing marketing mix (strategies) for international
market. Marketing mix consists of 4Ps product decisions, pricing decisions, promotion
decision, and place or distribution decisions.
Marketing mix decisions remain same as domestic market except the target
market. Here, all marketing mix decisions are taken with reference to foreign
customers and global marketing environment.

1. Product

The first of the Four Ps of marketing is product. A product can be either a tangible good or
an intangible service that fulfills a need or want of consumers. Whether you sell custom
pallets and wood products or provide luxury accommodations, its imperative that you have a
clear grasp of exactly what your product is and what makes it unique before you can
successfully market it

2. Price

Once a concrete understanding of the product offering is established we can start making
some pricing decisions. Price determinations will impact profit margins, supply, demand and
marketing strategy. Similar (in concept) products and brands may need to be positioned
differently based on varying price points, while price elasticity considerations may influence
our next two Ps

3. Promotion

Weve got a product and a price now its time to promote it. Promotion looks at the many
ways marketing agencies disseminate relevant product information to consumers and
differentiate a particular product or service. Promotion includes elements like: advertising,
public relations, social media marketing, email marketing, search engine marketing, video
marketing and more. Each touch point must be supported by a well positioned brand to truly
maximize return on investment.

4. Place

Often you will hear marketers saying that marketing is about putting the right product, at the
right price, at the right place, at the right time. Its critical then, to evaluate what the ideal
locations are to convert potential clients into actual clients. Today, even in situations where
the actual transaction doesnt happen on the web, the initial place potential clients are
engaged and converted is online.

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