Marketing

The Domain of Marketing

 What is Marketing?
Marketing is the social process by which
individuals and groups obtain what they need
and want through creating and exchanging
products and value with others. Kotler
The right product, in the right place, at the
right time, at the right price .
 What is Marketing?
American Marketing Association :
Marketing is an organizational function & a set
of processes for creating ,communicating &
delivering value to customers and managing
customer relationships in ways that benefit the
organization & its stakeholders.
The 4 Ps of Marketing
What is Marketing Management?

Marketing management is the

art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value.

1-5
 MARKETING MANAGEMENT

The Marketing Management Process consists of

analyzing market opportunities, researching and
selecting target markets, developing marketing
strategies, planning marketing tactics, and
implementing and controlling the marketing
effort
 What gets Marketed ?
The P of product
Goods- Physical goods like , cars , trucks , TV,
watches etc
Services Air line , hotels , car rentals etc
Events Olympics, world cup ect
Experiences water parks , amusements etc
Celebrity marketing
Places cities , regions , countries etc tourism ,
factories , residences , head quarters etc
 What gets Marketed ?
The P of product
Properties real estate & investments like
stocks , marketed by estate agents &
banks(investment companies ) respectively
Organizations purposes of Corporate
building
 Key Customer Markets
Consumer Markets establish brand image
Business Markets establish corporate image
& identity
Global Markets Need to be careful how to
enter , how to adapt products & services ,
how to adapt communication
Non- profit & governmental markets
universities , churches , Ngos etc
Marketing Mix and the Customer

Four Ps Four Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication

1-10
 Core Concepts

Needs, wants, and Marketing channels

demands Supply chain
Target markets, Competition
positioning, Marketing
segmentation environment
Offerings and brands Marketing planning
Value and satisfaction

1-11
 Internal marketing

Performance Holistic Integrated

marketing Marketing- marketing
concept

Relationship marketing
 MARKETING MANAGEMENT

The Marketing Management Process consists of

analyzing market opportunities, researching and
selecting target markets, developing marketing
strategies, planning marketing tactics, and
implementing and controlling the marketing
effort
 What is a Product?

Anything that can be offered to a market for

attention, acquisition, use or consumption
that might satisfy a -want or need. It includes
physical objects, services, persons, places,
organizations
 What is a Product?

A bundle of Satisfaction
Anything that meets the functional needs of
customers
GOOD BUSINESS DEPENDS ON GOOD
PRODUCTS
 What is a Product? cond
In marketing, a product is anything that can be
offered to a market that might satisfy a want
or need.
In retailing, products are called merchandise.
In manufacturing, products are purchased as
raw materials and sold as finished goods.
 Types( categories ) of offers.
GOODS : Tangibility eg. Cars , apparel etc

SERVICES : Intangibility eg. Lawyers, doctors,

banking, hotels etc

IDEAS: Concept eg. An attempt to change a

perception , attitude etc , usually adopted for
societal/ social change
Levels of Products
Levels of Product
 5 Levels of Product
Core benefit : It is the fundamental level eg. A
hotel guest is buying rest & comfort- adrill buyer
is buying holes.
Basic product : The marketer turns the core
product into a basic product a hotel room
includes bath , bed , towel , closet etc
Expected product : Here a marketer prepares an
expected product , a set of attributes &
conditions a customer would usually expect- a
clean towel, clean bed , working lamps etc
 Cond5 Levels of Product
Augmented Product : A marketer prepares an
augmented product which exceeds the
expectations of consumers In developed
countries , brand poisoning & competition takes
place here. In developing countries competition
tales place at the expected level.
Potential product : all possible augmentations &
transformations to the offering possible in the
future .- new ways to satisfy customers &
distinguish offerings
 Important points in augmentation
The users consumption system has to be seen
way the user performs the task of getting &
using products.
Each augmentation adds cost
Augmented benefits soon become expected
benefits
 Product Classification Schemes
Durability
Tangibility
Consumer Goods
Use
Industrial Goods

12-23
 Durability and Tangibility
Nondurable goods :
1) normally consumed in one or a few users like soft drinks , soaps.
2) as they are frequently consumed available in many locations
3) Advertised heavily to induce trial and build preference

Durable goods:
1)Tangible goods that normally survive many users eg. Refrigerators , Clothing
etc
2) Require more personal selling and service & more guarantees
3) Command higher margins

Services :
1) Intangible , inseparable & variable therefore requires more quality control,
credibility & adaptability eg haircuts , legal service etc

12-24
 Use : Consumer Goods Classification
Convenience: purchased frequently & easily eg soaps,
soft drinks etc. They could be staples::Impulse goods ::
Emergency goods
Shopping: where consumers compare on bases of
quality , price style etc. eg. refrigerators , TV, Cars etc.
Specialty: Unique characteristics or brand identification
eg car stereos etc.
Unsought: What consumers may not think of buying
usually or does not know eg. Smoke detectors ,
encyclopedias, reference books etc . This requires ,
advertising , personal selling/ marketing

12-25
Use: Industrial Goods Classification
Materials and parts- the enter the manufacturing
completely. A) Raw materials & b) Manufactured materials
& parts
Raw materials: Farm products (etc weat cotton,
lifestock , vegs. etc) & Natural products ( fish, oil , petrol, iron
ore etc )
Capital items: Long lasting goods that facilitate developing
or managing the finished product.eg. BHEL , L&T etc
Supplies/business services: short term goods & srvises that
facilitate development & managing the finished product.
MRO goods(maintenance , repair & operating supplies) eg
paints , nails / lubricants , coal

12-26
 Product/Service Differentiation
Product form Style
Features Design
Performance Ordering ease
Customization Delivery
Conformance Installation
Durability Customer training
Reliability Customer consulting
Reparability Maintenance

12-27
 Product Differentiation
Product form- size, shape, color etc
Features- supplement the basic function- grades in cars VXI-LXI etc. Here
customer value is weighed against company cost for each feature
Performance-low, average , high , superior. Companies adopt a value
model high performance , low price
Customization ability to mass customize
Conformance- match the standards prescribed eg porche is designated to
accelerate from0 to 60 in 10 secs. / eno fruit salt etc
Durability- expected operational like in natural or stressful conditions
Duracel/nokia
Reliability-is the probability that a product will not malfunction or fail
within a specified time period
Reparability- the ease of fixing the product cost & time eg tech support
for computers over phone
 Product Differentiation
Reparability- the ease of fixing the product cost & time
eg tech support for computers over phone
Style- look & feel. Here aesthetics play an important role.
Jaguars look commands a premium. Egs. Apple computers
, liquor bottles, Harley Davidson motorbikes.
Design- it is a totality of features that affect how a product
looks feels & functions in terms of consumer requirement.
Eg. Designing electrical products for high voltage
fluctuation in rural areas, Hidesign- tag line years behind
its time & leather crafted the forgotten way ( read
marketing memo pg. ). Apple is also an eg.
Cond..
 Product differentiation
Cond.
Note:
Strong style does not necessarily mean high
performance. Whereas a good design usually results in
good performance , appropriate performance easy to
repair , replace , install etc
A designer must know how much to invest in form ,
durability , reparability , style , performance , reliability
and conformity
Asian Paints Utsav is considered to have achieved a
marketing breakthrough in Rural India ( pg.318)
 Services Differentiation
When physical products cannot easily be differentiated the
key to success lies in adding valued services.
Ordering ease- eg. Through online sites

Delivery-speed , accuracy & care throughout the delivery

process is critical. Pizza hut, reliance petro etc

Installation- to make the product operational in the

planned location. Ease of installation especially when the
target market is technological novices or first time buyers
(eg. Washing machines in S.E.Asia)
cond.
 Services Differentiation
Cond
Customer training- required to train the
customers employees in case of technically
complex products. MacDonalds trains their
franchisees. New franchisees attend the
Hamburger University in Oak Brook , Illanois
Customer consulting- Data , information &
advisory services
Maintenance- eg. HP offers on line tech support
E-support
 Services Differentiation
NOTE:
Rolls-Royce PLC has ensured its aircraft engines
are in high demand by continuously monitoring
of its 3000 engines for 45 airline through live
satellite feeds.

Under this Total Care Program airlines pay RR

for every hour an engine is in flight
 The Product Hierarchy
Need family- the core need eg. Security for insurance
Product family- All product classes that can satisfy a
core need with reasonable effectiveness. Eg. Savings
and income
Product class/ category- a group of products within a
family that has functional coherence eg financial
instruments
Product line- A group of products within a product
class that are closely related , perform similar functions
, cater to the needs of the same consumer groups , or
are of a similar price range. They could be under one
brand or different brands eg. Life insurance

12-34
 The Product Hierarchy cond.
Product type- further defined forms within a
group eg. Term life insurance
Item or (SKU)- distinct unit within a brand or
product line- size , price etc eg. ICICI
Prudential Renewable term Life insurance
policy
 Product Systems and Mixes
Product system- A group of diverse but related items
that function in a compatible manner eg. A smrt
phone product line could come with headsets ,
cameras, keyboards, presentation projectors etc.
Product mix or Product assortment- is the set of all
products or items that a seller offers for sale. It
can have various product lines. Eg.HULs product
lines like skin care , hair care, oral care etc all
collectively form the product mix. Cond..

12-36
 Product Systems and Mixes
Width( product lines)- Refers to how many product lines the
company carries.eg. HUL has a product-mix width of 12 product
lines
Depth( variance) - refers to how many variants are offered in each
product in a line.eg. Product line personal wash: Product- Lux. Lux
is offered in 4 variants sandal, milk, cream , almond - & each in 2
sizes so depth is 4*2 = 8
Length- refers to the total no. of items in the mix across all product
lines- 28 across 12 lines

Consistency-how closely related the product lines are in end use.

HUL products are consistent insofar as they are they are consumer
goods that go through the same channel & not so consistent insofar
as they perform different functions for the buyer
Product line-stretching decision
 Down Market Stretch

When they see an opportunity in the value-

priced goods segment

The brand name to be used is an important

decision.
 Up- Market stretch
To Realize higher margins a growth opportunity

To position themselves better as a full-line

manufacturers

Brand name decisions critical as consumers

have to give permission for an upward stretch
Egs: Toyota Lexus: Maruti:Starbucks:MacD
 Two-way Stretch
Companies serving the middle market may
want adopt this product strategy
This can help gain market dominance
Brand extensions can be adopted more easily
as compared to other forms of stretches.
Eg: Titan up stretch to Titan Edge ;Nebula
;Xylus
 Market Potential & Market share
Market Potential: the economic opportunity available to you
in any geographic market
Market Share: Market share is the percentage of a market
(defined in terms of either units or revenue) accounted for by
a specific entity.

Marketers need to be able to translate sales targets into

market share because this will demonstrate whether forecasts
are to be attained by growing with the market or by capturing
share from competitors. The latter will almost always be more
difficult to achieve. Market share is closely monitored for signs
of change in the competitive landscape, and it frequently
drives strategic or tactical action.
 Product management?
Product management is an organizational
lifecycle function within a company dealing
with the planning or forecasting or marketing
of a product or products at all stages of the
product lifecycle.
Product management includes..
What does a Product Manager Do?
A product manager investigates, selects, and
develops products for an organization.
A product manager considers numerous
factors such as intended demographic, the
products offered by the competition, and how
well the product fits with the company's
business model.
 Product Development
Product development is an endeavor dealing
with the design, creation, and marketing of
new products.
Sometimes referred to as new product
development (NPD), -is focused on developing
systematic methods for guiding all the
processes involved in getting a new product to
market.
Product Development
 What Changes can affect Product
Management?
Product Attributes:
Quality
Features
Style & design
Color

Product Branding
Product Packaging
Product Labelling
Product Warranty
Factors affecting Product Management
Decision?
Resources : finacial & manpower
Competition
Capital Investment
Risk product faliure
Size of Markets
Customer resistance changes in trends ,
economic issues, choices , inflation etc.
Other Factors : govt. Regulations , etc
 PRODUCT LIFE CYCLES
&
PRODUCT LIFE CYCLE MANAGEMENT
PLC
PLC
PLC for an Industry
 Importance of PLC

Modify , alter , adjust ,change - Strategies

Time of entry of Fresh ( new ) product
launches
Need to extend stretch life cycle
Extend at which particular stage
 Product Strategies through Life cycle
stages
Introduction stage
Rapid skimming strategy the big-push method.
High price , high promotional spends largely
when customer awareness is low & firm requires
quick profits & potential competition is high
Slow skimming High price , low promotion
largely when potential customers are aware &
willing to pay . Also when potential competition
is limited
 Product Strategies through Life cycle
stages
Growth stage
Maintain the price balance with competitors
Expand network
Increase product usage multiple facilities
Entry in newer pastures ( markets)
Advertising aimed at product preference
 Product Strategies through Life cycle
stages
Maturity Stage
High levels of product modification
Carving niches
Pruning product lines
Repostioning
 Product Strategies through Life cycle
stages
Decline Stage

Dropping products if they do not make

economic sense
Diverting business attention on profitable
areas
Optimize investments
Analyze ..thenfinalize Analyze
The two main aspects that need attention &
study are :

1. CUSTOMERS

2. COMPETITORS
 Customer Analysis
The customer analysis and marketing process
allows your organization to identify and target
the most profitable customers with marketing
campaigns directed at various distribution
channels.
Integrating these channels allows for targeted
sales force management and the tracking and
monitoring of campaign results.
 Customer Analysis
Collection and evaluation of data associated
with customer needs and market trends,
through customer focus groups, customer
satisfaction measurement, field testing, etc.
 Elements of Customer Analysis
Market segmentation
Motivators
Need gaps
Forecasting changes in tastes
Technology of tomorrow
Introducing New Market Offerings

INTRODUCING NEW MARKET

OFFERINGS
 Categories of New Products
New-to-the-world- only 10-15% are truly
innovative & new to the world
New product lines- eg Nike started with sports
shoes , then went into apparel etc.
Additions to product lines- eg. New version of
Maruti swift or diesel version
Improvements to products- eg. Estilo / SPEED by
BPCL endorsed by Narain Karthikeyan
Repositionings Nano trying to reposition itself
Cost reductions-

20-65
 Factors That Limit New Product
Development
Shortage of ideas- few ways of improving some basic
products like steel & cement
Fragmented markets- new products aimed at smaller
market segments which means lower sales & profits from
each product
Social and governmental constraints- to keep in view
consumer safety & environment concerns
Cost of development- high r&d, research & test marketing
cost
Capital shortages less funding for risky products
Faster required development time
Shorter product life cycles- Sony takes 3 yrs. Lead on new
products & Matsushita copies in 6 months
20-66
 Venture Team

Cross-functional group charged with

developing a specific product or business;
Intrapreneurs are relieved of other duties
and provided a budget and time frame.

20-67
Criteria for Staffing Venture Teams
Desired team leadership style
Desired level of leader expertise
Team member skills and expertise
Level of interest in concept
Potential for personal reward
Diversity of team members

20-68
 Broad Steps in NPD
Idea to Strategy

Commerciali
zation
Market
testing
Product
development
Business
Analysis
Marketing
strategy
Concept development
development
Idea & testing
screening-
Idea compatibility
generation with
company
objectives &
strategy
 Broad Steps in NPD
Idea to Strategy
Idea Generation- egs. Of great ideas , You Tube , Wikipedia,
Google, milk in powder form etc
Concept Development- consumers dont buy ideas , they
bye concepts milk powder a good idea but quick &
healthy breakfast is a concept. Each concept defines the
product competition
Concept Testing- presenting the concept symbolically or
physically to get customer feedback- rapid prototyping
required . .( Read conjoint analysis)
Marketing strategy- can we find a cost effective &
affordable strategy ?
Business Projections will this product meet our profit
goals
 Broad Steps in NPD
Development to commercialization
Product development- Quality Function Development:
convert customer attributes(CA) to Engineering
attributes(EA) eg fast pick up . Higher bhp Have we got
a technically & commercially sound product ?
Market testing by making people use the actual product-
have product sales met expectations ? If not go back to
previous stage.
Commercialization :: Are product sales meeting
expectations? If NoT modify product or marketing
programs . a) When: Timing of Market entry
b)Where: Choosing the roll-out markets c)To whom: target
within the geography d)How ( introductory market strategy)
 Test Marketing or Market testing

After the management is satisfied with

functional & psychological performance the
product is ready to be dressed up in a BRAND
NAME & Packaging in put in the market for
testing
This is the stage of new product development
where the product and marketing programme
are tested in more realistic market settings
 Why Test Marketing ?
This gives the marketer experience with marketing the
product before going to the great expense of full
introduction.
It lets the company test the product and its entire
marketing programme - positioning strategy,
advertising, distribution, pricing, branding and
packaging, - in real market situations.
The company uses test marketing to learn how
consumers and dealer will react to handling, using and
repurchasing the product.
The results can be used to make better sales and profit
forecasts
What to Consider while Test Marketing
The Main Issues to be considered :
How Much Market testing?
What kind (s) ?

How much depends on

Investment cost & risk
Time pressure & research cost
 Approaches to Test Marketing
Standard Test Markets-the company finds a small number
of representative test cities, conducts a full marketing
campaign in these cities and uses store audits, consumer
and distributor surveys, and other measures to gauge
product performance.
Controlled Test Markets-research firms keep controlled
panels of stores which have agreed to carry new products
for a fee. The company with the new product specifies the
number of stores and geographical locations it wants
Simulated Test Markets- test new products in a simulated
shopping environment. This simulation provides a measure
of trial and the commercial's effectiveness against
competing commercials.
 Consumer Goods Market Testing
Sales-Wave
Simulated Test Marketing-
Controlled Test Marketing
Test Markets

20-76
 Sales wave
The consumers who initially tried the product at no
cost are reoffered along with competitors products .
This could be done up to 5 time ( wave).
How many select the product again( repeat purchase)
response is taken on their level of satisfaction.
Consumers can also be exposed to one or more
advertising concepts to measure the impact of
advertising to repeat purchase
It is quick: does not reflect brand power to gain
distribution & favorable shelf position : least costly :
carried out without final packaging & advertising
 Simulated Test Marketing

30-40 qualified shoppers are questioned on brand

familiarity and preferences within a category
A few ads are shown, along with the ad of the new
product, without singling it out
A small amount of money is given to them. It is
observed how many buy the new & the competing
products.
Ones buying competing products are given free
samples & called later to get feedback on product
performance & attributes .
Fairly accurate results on ad effectiveness and repeat
buys ( if process is repeated ):: low cost::
 Controlled Test Marketing

Few geographical locations selected & A panel of

stores selected
POP promotions
Shelf positions are controlled
Sales are measured at check-outs ( through
electronic scanners)
This can measure the impact of in-store factors &
limited advertising on buying behavior.
The features are exposed to competition
No information on how to sell to trade
 Test Marketing of Business Goods
Alpha(within the company) & Beta ( outside
customers) testing

Introduce new products at trade shows

 Test Market Decisions
The ultimate way to test a new consumer
product is to put it into a full-blown test market
How many test cities?
Which cities?
Length of test?
What information to collect ?
What action to take?

20-81
 Commercialization:
Timing of Market Entry
First entry- First Movers Advantage
with consumers & with trade
Parallel entry- coincide with competitors
entry. This could gain mover overall
market attention
Late entry- Make the competitors bear
the cost of educating the market & also
learn from their mistakes

20-82
 Commercialization:
Criteria for Choosing Rollout Markets
Market potential
Companys local reputation
Cost of filling pipeline
Cost of communication media

20-83
 PORTFOLIO ANALYSIS
Product portfolio analysis a strategic planning
tool that takes a product's market growth rate
and its relative market share into consideration in
determining a marketing strategy
Market share plays a central role in the portfolio
planning. The Portfolio Analysis an exposition of
the underlying relationship between market
share, market size, market growth rate, product
sales volume and product sales growth rate.
 PORTFOLIO ANALYSIS
There are three constructs-the market share,
the physical volume, and the Rupee volume -
which aid in the strategic analysis of the
product portfolio
 PORTFOLIO ANALYSIS
The Market Share deals with the actual market share of the
product. In simple words, how much market the product has
captured if it is compared with the competitors market share of the
same product.

Eg. If we take the example of GSM Mobile services following

companies are having this kind of position in terms of Market Share
- Bharti Airtel 35%
- Vodafone 24%
- BSNL 16%
- IDEA 15%
- Aircel 6%
- Reliance Telecom 4%
 PORTFOLIO ANALYSIS
The Physical Volume deals with no. of units of the product sold in the
market
If we continue with the same example, the number of customers the
mobile companies have will be products physical volume in terms of
GSM
- Bharti Airtel has 155382758 customers
- Vodafone has 86340024 customers
- BSNL has 42673357 customers
- IDEA has 40016153 customers
- Aircel has 16761397 customers
- Reliance Telecom has 10853841 customers
The Rupee Volume/Value deals with the profit earned by the product.
There are several models for the Product Portfolio Analysis. But the
most used and reliable model is BCG Matrix
 BCG
The BCG matrix (aka B.C.G. analysis, BCG-matrix,
Boston Box, Boston Matrix, Boston Consulting
Group analysis, portfolio diagram) is a chart that
had been created by Bruce Henderson for the
Boston Consulting Group in 1968 to help
corporations with analysing their business units
or product lines/Product Portfolios
This helps the company allocate resources and is
used as an analytical tool in brand marketing,
product management, strategic management,
and portfolio analysis.
BCG Matrix
 BCG
Cash cows are units with high market share in a slow-
growing industry. These units typically generate cash in
excess of the amount of cash needed to maintain the
business. They are regarded as staid and boring, in a
"mature" market, and every corporation would be
thrilled to own as many as possible.
Dogs, or more charitably called pets, are units with low
market share in a mature, slow-growing industry. These
units typically "break even", generating barely enough
cash to maintain the business's market share.. They
depress a profitable company's return on assets ratio,
used by many investors to judge how well a company is
being managed. Dogs, it is thought, should be sold off.
 BCG
Question marks (also known as problem child) are growing
rapidly and thus consume large amounts of cash, but
because they have low market shares they do not generate
much cash. The result is a large net cash consumption. A
question mark has the potential to gain market share and
become a star, and eventually a cash cow when the market
growth slows. If the question mark does not succeed in
becoming the market leader, then after perhaps years of
cash consumption it will degenerate into a dog when the
market growth declines. Question marks must be analyzed
carefully in order to determine whether they are worth the
investment required to grow market share.
 BCG
Stars are units with a high market share in a
fast-growing industry. The hope is that stars
become the next cash cows. Sustaining the
business unit's market leadership may require
extra cash, but this is worthwhile if that's what
it takes for the unit to remain a leader. When
growth slows, stars become cash cows if they
have been able to maintain their category
leadership, or they move from brief stardom
to dogdom
GE - Matrix
GE 9 Cell Matrix
High
Competitive Strengths Low

High
Invest
Grow
Attractiveness

Hold

Harvest
Divest

Low
 Marketing Planning
Marketing Planning refers to a forecasting &
providing a means to examining the future &
drawing a plan of action Henry Fayol

In a sales-oriented organization, the marketing

planning function designs incentive pay plans
to not only motivate and reward frontline staff
fairly but also to align marketing activities with
corporate mission.
 Marketing Strategy
Marketing strategy encompasses the design ,
implementation & management over time of
the total marketing efforts as it relates to
products , channels , price , sales force ,
promotions etc.
They are the broad principles by which the
marketing department expects to achieve its
business objectives .
BRAND & BRANDING
 What is a brand ?
A Brand is a name , term , sign ,symbol or
design or a combination of them , intended to
identify the goods or services of one seller or
a group of sellers and to differentiate then
from those of competitors.
Therefore a Brand is essentially a sellers
promise to consistently deliver a set of
features , benefits and services to the buyers.
 Difference between Product & Brand
In marketing, product is anything that can be offered to the market
that may satisfy the need, want, and demand of a certain individual
or market. It is also called as goods or service. Product is more than
just a material object.

On the other hand, brand is a symbolic manifestation of all the

information connected with a company, product, or service.

Note : A brand name can be used across several products product

lines product categories
 Branding

Endowing products and services

with the power of a brand.

9-100
 What is a brand?-What does it
convey?
A brand can convey up-to 6 levels of meaning:
1. Attributes -A brand first brings to mind certain product
attributes(advantages)
2. Benefits- Customers do not buy attributes, they buy
benefits.(benefits)
3. Values -A brand also says something about the producers
& buyers' values.
4. Culture-The brand may represent a certain culture. The
Mercedes represents German culture: organized, efficient,
high quality.
5. Personality -A brand also projects a personality
6. User (association ) -The brand suggests the kind of
consumer who buys or uses the product.
Note :

Perhaps the most distinctive skill of professional

marketers is their ability to :
create , maintain, Enhance & protect

brands !!!
 Why Brand .. ?
The purpose & significance
Helps Buyers.
Brand names tell the buyer something about
product quality.
Brand names also increase the shopper's
efficiency.
Brand names help call consumers' attention to
new products that might benefit them. A story
can be built around a brand.
 Why Brand .. ?
The purpose & significance
Helps Suppliers:
Systematize -The brand name makes it easier for
the supplier to process orders and track down
problems.
Protection-The supplier's brand name and
trademark provide legal protection for unique
production features that otherwise might be
copied by competitors.
Build Loyalty-Branding enables the supplier to
attract a loyal and profitable set of customers.
 Why Brand .. ?
The purpose & significance
Helps consumers and society:
Consistency in Quality- as a brand is a promise
to consistently deliver quality.
Increases innovation- for protection from
competition which leads to a larger choice
More & precise information -Branding helps
shoppers because it provides much more
information about products and where to find
them.
Why Brand? .
Why Not Brand..?
Benefits of product branding
Image is everything
Andre Agassi
 Brand Image
The term "brand image" gained popularity as evidence
began to grow that the feelings and images associated
with a brand were powerful purchase influencers,
though brand recognition, recall and brand identity.
It is based on the proposition that consumers buy not
only a product (commodity), but also the image
associations of the product, such as power, wealth,
sophistication, and most importantly identification and
association with other users of the brand.
Brand images are usually evoked by asking consumers
the first words/images that come to their mind when a
certain brand is mentioned
 Brand Equity

The differential effect that brand

knowledge has on consumer
response to the
marketing of that brand.

9-110
Branding strategy
 Devising Branding strategy
How to brand a new product is essentially
critical . There are 3 main choices :
1. It can use new brand elements for the new
product
2. It can apply existing brand elements
3. Combination of new & existing elements
 Brand extension- one of the most
common
Brand extension when a firm uses an
established brand for the new product
When the marketer combines a new brand
with an existing brand , this sort of a brand
extension can also be called as sub-brand
 Brand extension-

Brand
extension

Line Category
extension extension
 Brand extension
They fall in 2 general categories :
Line extension- the parent brand covers a new
product within a product category, It currently
serves , such as with new flavors , colors , sizes ,
ingredients etc. eg: HULs lifebuoy has lifebuoy
care , lifebuoy total / deofresh etc
Category extension the parent brand is used to
enter a different category from the one it
currently serves. Eg: Honda has used its name in
cars , motorbikes, marine engines etc. their ad
you can fix six Hondas in 2 car garages Tata.
 Individual Names

Blanket family name

Branding (strategy )
decisions
Separate family names

Corporate name
combined with
individual product
name
 Branding ( Strategy) Decisions
1. Individual Names : P&G has several individual brands
in different product categories . Like Vicks(health
care), Whisper( hygiene), Arial & tide ( Fabric care)
Head & Shoulders & Pantene( hair care).
The companys reputation is not tied to the product if
the product fails , it does not hurt the company image
or brand.
Can be done for different products in different quality
lines eg: Kingfisher acquired air Deccan & rebranded it
as Simplify Deccan & retained Kingfishers brand
equity
Also called as House of Brands
 Branding ( Strategy) Decisions
Blanket family name : the blanket family name is
used across product categories.eg; Tata Salt , Tata
Nano , Tata Tea etc
The development cost is low no expenditure on
recognition building
Corporate image associations of innovativeness ,
trustworthiness, expertise can positively
influence customer evaluation/decision
Also called as Branded House
 Branding ( Strategy) Decisions
Separate family names for all products ; The
Aditya Birla group uses the name Hindalco
for aluminum: Ultratech for cement Grasim
& Graviera for suiting. Also Vedanta group
sesa goa etc
Each is building its own identity ( as against
image ) to establish itself in their respective
industries
 Branding ( Strategy) Decisions
Corporate name combined with individual
product name: eg: Kelloggs Rice Krispies :
Kelloggs corn flakes etc , also Sony & HP

Here although it is not a family brand it has

high Brand identity that it can case-in on
 Packaging

The activities of designing and producing the

container or wrapper for a product.

Most marketers, however, treat packaging as an

element of product strategy.
 Packaging: The 5th P

All the activities of designing and producing

the container for a product.

12-122
 Levels of Packaging
Primary : a cool water cologne come in a
bottle

Secondary : it is put in a cardboard box

Shipping : put in a corrugated box

 Packaging has been influenced by:
Self-service- on an average 15000 products are displayed in an
average supermarket & a customer passes through abt.300
items a minute . In US 50-75 % purchases happen in stores
Consumer affluence- affluent consumers are willing to spend
a little more for convenience ,appearance ,dependability and
a favorable impression
Company and brand image- packages contribute to instant
recognition of the company or brand . It is called a in-store ,
MiNi- billboard.
Innovation opportunity- innovative packaging benefit
consumers keeping in view , usage , convenience , aesthetics .
Eg.inverted bottles ,reusable containers , attractive bottles etc
12-124
 Packaging Objectives
Identify the BRAND

Convey descriptive & persuasive information

Facilitate product transportation & protection

Assist- at home storage

Aid product consumption

 Functions of Labels
Identifies
Grades
Describes
Promotes

12-126
 Back to Ps of Marketing
We are aware of the 4 ps product , price ,place &
promotion .
The Traditional Marketing Mix or The 4 P's of Marketing
The marketing mix was designed as a simple way to focus
attention on the main elements of marketing for a business
and to create a marketing strategy either at business,
product or campaign level.
One thought is that it is too product focused and doesn't
translate well into the growing service based economy we live
in
As service has become an almost invincible part of any offer
the 4 ps are now extended to 7 ps
 7 Ps
There are special characteristics of a service which make is marketing
different from selling products. Perhaps most of all, you can pick up a
product and see, feel and touch it. You can't do that with services because
they are intangible.

The 7 P's of Marketing pick up the traditional marketing mix of Product,

Price, Promotion and Place and added:
People - services are performed by people whose performance influences
the quality of the service delivered and perceived to be delivered.

Process - it's not just the attitudes of the person that matters but the
process they use to provide the service.

Physical evidence - services are intangible so the customer looks for

physical clues about the quality.
7 Ps
7 ps
PLACE

Customers
 Distribution ( PLACE)
Most Companies do not sell directly to the
final users; between them stands a set of
intermediaries.
These intermediaries constitute marketing
channels ( trade channel or distribution
channel )
Marketing Channel system(MCS) is a set of
marketing channels. Decisions about MCS are
among the most critical ones

Customers
 Marketing Channels & Value
Networks- Importance
Marketing Channels dont just SERVE markets
; they must also CREATE markets
Channel decisions affect all other marketing
decisions
Channel choices depend on the companys
marketing strategies on segmentation ,
targeting and positioning

Customers
 Push & Pull strategies
A Push Strategy uses the manufacturers sales
force , trade promotion money or other means to
induce the intermediaries to carry , promote &
sell the product to the end user
In a Pull strategy the company uses advertising ,
promotion & other forms of communication to
persuade the consumers to demand the product
from the intermediaries ; thus inducing the
intermediaries to order it
Many marketing companies like Nike , Coca Cola ,
Intel etc. use dual strategies

Customers
 Channel development
Channels are developed , treated & nurtured
in different markets differently by different
companies.
International markets pose distinct
challenges
Different distribution formats and strategies
are adopted to tailor their image to local
needs & wants

Customers
 Channel development
Therefore Channel system evolves as a
function of local opportunities and conditions
, emerging threats & opportunities , company
recourses & capabilities and other factors

Customers
 Customer expectation
Customers expect Channel Integration,
characterized by features like:
the ability to order a product on-line & pick it
up at a conveniently located store
The ability to return an on-line ordered
product , to a store .
The right to receive discounts & other
promotional offers based on total on-line &
off-line purchases
Customers
 Role Of Channels
--Bridging the Gap---
Company
Time

Place

Possession

Customers
 Channel Member Functions
Gather information
Develop and disseminate persuasive
communications
Reach agreements on price and terms
Acquire funds to finance inventories
Assume risks
Provide for storage
Provide for buyers payment of their bills
Oversee actual transfer of ownership

15-139
 Types or Design - Of Channels

Distribution

Direct Indirect

Direct Direct Multi

Single Level
Marketing Selling level

Customers
 Indirect Distribution

Multi Level Single level

Manufacture
Manufacturer

Distributor

Retailer/
Wholesaler franchisee/ Key
Account

Retailer

Customer
Customer

Customers
 Types or Design - Of Channels
channels
There are 3 major types of distribution
depending on the intensity of coverage:

A. Intensive Distribution

B. Selective Distribution

C. Exclusive Distribution
 Types or Design - Of Channels
Intensive Selective Exclusive

All possible Only a few Exclusive Image

options possible options High profits
Good image & Loyalty
High volumes profits E.g. Specialized
Moderate training
Wide market coverage
coverage Reasonable
E.g. courier Channel control .
service E.g. White goods
 Marketing focus / methods

Intensive Selective Exclusive

Mass Advertising Promotion mix Personal selling &

good service
Channel Partners Channel partners to be
involvement relatively involved Continuous
lower to influence communication
decision making Continuous
communication
Continuous
communication
 Channel Management decisions
Selecting Channel Members

Training & Motivating Channel Member

Evaluating Channel Members

Modifying Channel design & arrangements

Customers
 Types of Intermediaries
Distributors/ Wholesalers
Retailers
Franchisees

Customers
 Distributors/ Wholesalers

A distributor is someone who distributes for a

factory and carries large stock.

A distributor is the sole selling agent for a

company's products in a designated area.

Customers
 Wholesaling Functions
Selling and promoting
Buying and assortment
building- build assortments
that customers need ,
saving them work
Bulk breaking- buying large
cartloads & breaking them
into smaller units sold to
retailers
Warehousing- holding
inventories , reduces
inventory cost to suppliers
& customers
16-148
Transportation
Financing
Risk bearing - loss by
theft , spoilage ,
obsolescence etc
Market information
Management services
and counseling-
counseling to retailers &
industrial customers
 Retailing

Includes all the activities involved in

selling goods or services directly
to final consumers for personal,
nonbusiness use.

16-149
 Major Retailer Types
Specialty store Narrow
Product Line eg. Body shop
Department store- several
product lines
Supermarket- large , low
cost , low margin , a self
serve store design for food
& house hold products
Convenience store small
stores with limited options
in residential areas. Eg.
Kirana stores
16-150
Discount store- low price ,
low margin , high volume
store like Wal-Mart
Off-price retailer/ Factory
outlets
Superstore/ Hyper market
Hugh selling space routinely
purchased food , household
items & services like
laundry , dry cleaning etc.
Reliance Mart , Carrefour
 Nonstore Retailing
Direct selling also called as network
marketing e.g.. Amway
Direct marketing- include telemarketing &
internet selling . E.g. Flipkart.com &
Amazon.com
Automatic vending- used to sell soft drinks ,
magazines, chocolates , also money through
dispensing machines / ATMs

16-151
 Retailers Marketing Decisions
Target market
Product assortment / mix
Service/store atmosphere
Price
Communication
Location

16-152
 Retailer Services Mix
The service mix is a key tool for differentiating one
store from another
Prepurchase services shopping hours , orders
over phone , fashion shows , window & interior
display
Postpurchase services- shipping & delivery , gift
wrapping , returns , alterations etc
Ancillary services- baby attendant service , child
play station , credit , rest rooms , parking ,
restaurants etc .
16-153
Franchising
 What is franchising?
Franchising is a business strategy for getting and
keeping customers.
It is a method for distributing products and services
that satisfy customer needs.
Franchising is a network of interdependent business
relationships that allows a number of people to
share:
A brand identification
A successful method of doing business
A proven marketing and distribution system
 What is franchising?
Franchising may be defined as a business
arrangement which allows for the reputation,
(goodwill) innovation, technical know-how
and expertise of the innovator (franchisor) to
be combined with the energy, industry and
investment of another party (franchisee) to
conduct the business of providing and selling
of goods and services.
 What is a franchise?
A franchise is a right granted to an individual or
group to market a company's goods or services
within a certain territory or location. Some
examples of today's popular franchises are
McDonald's, Subway, Domino's Pizza, and the
UPS Store.
 What is a franchise?
There are many different types of franchises.
Many people associate only fast food
businesses with franchising. In fact, there are
over 120 different types of franchise
businesses available today, including
automotive, cleaning & maintenance, health
& fitness, financial services, and pet-related
franchises, just to name a few.
 How significant is Franchising
Franchising is a system of business that has
grown steadily in the last 50-55 years and is
estimated to account for more than one-third of
the worlds retail sales.
 Types of franchising

1) Product or Trade Name Franchising

2) Business Format Franchising

 Types of franchising

Product or Trade Business Format

Name Franchising Franchising
------------------------- -------------------------
Eg. Brand stores , Dealership Eg. Kfc, McDonalds
of products
 --Types of franchising
Product or Trade Name Franchising:

It is a distribution contract under which a

franchisor authorizes the franchisee to Sell a
product line using the franchisors Trade Name.
The key element is WHAT IS SOLD
Eg. Dealers , distributors , exclusive franchise
stores etc
 --Types of franchising
Business Format Franchising:
This form of an agreement covers the Entire
Method of Business . A franchisor sells Right to
Operate the same business in different
geographical locations.
A franchisee receives from the parent company , a
proven method of operating business including
policies , procedures , standards etc.
The focus is on How to Do Business
Eg. McDonalds
 Rules- Expectations
Sr. Expectations of Franchisee Expectations of Franchisor
No.
1 Transfer of know-how Exclusivity
2 Promotion support for the Optimum standards of sales &
services. Logos , trade names etc services

3 Uninterrupted supplies Inventory levels to be maintained

4 Advisory services financial & Pricing as agreed . Financial

managerial commitments and info. On
financial operations
5 Identification with Logo Display of Franchisor information

6 Exclusive geographical rights Right to purchase the franchisee

business
7 Recruitment & training standards Maintaining of service delivery
standards through right people &
right training
 Advantages for the Franchisor
1. Investors Tapping into the aggregate resources of a
number of franchisees
2. Quick expansion & geographical coverage
3. Owners work harder than employees
4. Local knowledge- Regional differences within India
had huge. In case of overseas expansion it plays a
very important role.
5. Keeping a grip as franchisees sell only a particular
product or brand , unlike a distributor
6. But not too tight a grip either- as the day-to-day
responsibilities lie in the hands of the franchisee
 Disadvantages for the Franchisor
1. Everything is not under the control of the company-
salaried employees can be fired & controlled better
2. Tricky balance as there could be franchisees with
varying levels of diligence
3. Relations could get sour grievances should not
fester & grow worse
4. Lesser Margins
5. Ingratitude & treachery learning the business , then
becoming a competitor
6. Fudging figures
7. Brand sanctity
 Advantages for the Franchisee
1. A proven business concept & corporate identity
2. Reduced risk- no learning lessons & remedying
required
3. Combined strength
4. Easier financing
5. Can be good for beginners also
6. Exclusivity
7. Independence
 Disadvantages for the Franchisee
1. Inflexibility- in case the market is in a state of
flux , not adequately flexible to adapt
2. Unable to use innovation & creativity as the
method of doing business is dictated
3. Does not have the privilege of building his
own brand.
PRICING
 Define
In the narrowest sense, price is the amount of
money charged for a product or service. More
broadly, price is the sum of all the values that
consumers exchange for the benefits of having
or using the product or service.
 Steps
Select the price objectives
Determining Demand- Price Sensitivity-
Estimating Demand Curves
Estimating Costs
Analysing Competitors Costs, Prices, and
Offers
Selecting a Pricing Method
Selecting the Final Price
Factors Affecting Pricing Decisions
 Factors Affecting Pricing Decisions
Internal
Marketing objectives
Marketing & marketing
mix strategies
Cost to cover cost & mark
profits
Organization for pricing
who will decide on the
prices in the organization
External
Elasticity of Demand
Customer Expectations
Competitive & other
products
Government regulations
 Internal Factors - PRICE /POSITIONING
High price Medium price Low price

High quality PREMIUM HIGH VALUE SUPER VALUE

STRATEGY STRATEGY STRATEGY

Medium quality OVERCHARGING MEDIUM VALUE GOOD VALUE

STRATEGY STRATEGY STRATEGY

Low quality RIP-OFF STRATEGY FALSE ECONOMY ECONOMY

STRATEGY STRATEGY
 Internal Factors - Selecting Pricing
objectives
Survival- Here survival is more important than
profit.
Maximum Current Profits increase
immediate profits , cash flows or ROI on
investment . Demand & cost associated with
prices
Maximum Current Revenues(value growth)
Only demand to be determined . Many believe
its the best way to maximize market share
 Internal Factors - Selecting Pricing
objectives
Maximum sales growth(volume growth)
market penetration pricing eg Ikea
Product Quality leadership- higher priced than
competition to establish its leadership on quality
Maximum Market skimming policy- To skim the
market , offer high price & gradually either lower
the price or introduce lower priced products to
capture the next level customers
Others an NGO etc. pricing just to cover costs
etc.
 Internal Factors - Price & Marketing
Mix
Price is only one of the marketing-mix tools
that a company uses to achieve its marketing
objectives.
Price decisions must be co-ordinated with
product design, distribution and promotion
decisions to form a consistent and effective
marketing programme.
Elasticity of Demand
 External Factors price elasticity
consumer perceptions - company must consider
consumer perceptions of price and how these
perceptions affect consumers' buying decisions.
Pricing decisions, like other marketing mix decisions,
must be buyer-oriented. When consumers buy a
product, they exchange something of value (the price)
to get something of value (the benefits of having or
using the product), Effective, buyer-oriented pricing
involves understanding how much value consumers
place on the benefits they receive from the product
and setting a price that fits this value.
Cond
These benefits can be actual or perceived. For
example, calculating the cost of ingredients in
a meal at a fancy restaurant is relatively easy.
But assigning a value to other satisfactions
such as taste, environment, relaxation,
conversation and status is very hard.
And these values will vary both for different
consumers and for different situations.
 External factors affecting pricing
decisions type of competition
Under pure competition, the market consists of many
buyers and sellers trading in a uniform commodity such
as wheat, copper or financial securities. No single
buyer or seller has much effect on the going market
price
Under monopolistic competition, the market consists
of many buyers and sellers that trade over a range of
prices rather than a single market price. Within a
product category differentiation is done through price
& non-price factors and customers choose . Tea
premium by one seller low priced by another seller
etc .
 External factors affecting pricing
decisions- type of competition
Under oligopolistic competition, the market
consists of a few sellers that are highly sensitive
to each other's pricing and marketing strategies.
There are few sellers because it is difficult for
new sellers to enter the market. Each seller is
alert to competitors' strategies and moves
In a pure monopoly, the market consists of one
seller. The seller may be a government monopoly
(a Postal Service), a private regulated monopoly
(a power company) or a private non-regulated
monopoly
 External factors affecting pricing
decisions-
Other External Factors :
Price / demand sensitivity & how price elastic
is the demand .
Competitors' Costs, Prices and Offers: Another
external factor affecting the company's pricing
decisions is competitors costs and prices, and
possible competitor reactions to the
company's own pricing moves.
Break-even analysis
 General Considerations for
Pricing Approaches
Three considerations Have to be made :

1. Cost
2. Consumer perceptions
3. Competitors prices
 General Approaches
The company can select one or a combination
of three general pricing approaches:
the cost-based approach (cost-plus pricing,
break-even analysis and target profit pricing);
the value-based approach (value-based
pricing); and
the competition -based approach (going-rate).
 cost-based approach
The simplest pricing method is cost-plus
pricing - adding a standard mark-up to the
cost of the product
Break even analysis
 Value Based Approach
Setting price based on buyers 'perceptions of
product values rather than on cost.
The targeted value and price then drive
decisions about product design and what
costs can be incurred.
As a result, pricing begins with analysing
consumer needs and value perceptions and a
price is set to match consumers perceived
value
Cost v/s Value
 Steps / Setting the price
Select the price objectives as in slides 7 & 8
Determining Demand- Price Sensitivity-
Estimating Demand Curves
Estimating Costs
Analysing Competitors Costs, Prices, and
Offers
Selecting a Pricing Method
Selecting the Final Price
 Steps / Setting the price
Most markets have 3 to 5 price points or tiers.
They depend on their positioning strategies .
Eg. Marriott Hotels have developed different brands
for different price points
Marriott Vacation club villas ( highest price )
Marriott Marquis High price
Renaissance medium high price
Courtyard medium
Towne Place Suites- medium low
Fairfield inn medium low
 Determining Demand- Price
Sensitivity-Estimating Demand Curves

Price sensitivity The demand curve shows

markets probable purchase quantity at
alternative prices
A company adopts different methods to measure
their demand curves through 1. Surveys , 2. Price
experiments selectively change price to check
response . 3. Statistical analysis through past
experience ..extrapolation
Price elasticity How responsive or elastic is the
demand to a change in price ( slide 10)
 Estimating Costs

Levels of production Short Run average cost (

SRAC) & LRAC curves . as total cost = Fixed cost
+ Variable cost
Accumulated Production the decline in the
average cost(per-piece) through accumulated
production experience.- experience curve
learning curve.
Target costing cost can change by a
concentrated effort by designers , engineers &
purchase agents
Analysing Competitors Costs, Prices,
and Offers
Need to consider competitors :
Cost
Price
Possible price reactions competitors are most
likely to react when , sellers are few , buyers are
well informed & the product is homogeous
 Selecting a Pricing Method

Mark Up pricing This is a cost based approach - see

slide 19&20
Target return pricing - This based on a pre-determined
ROI. Eg GM prices its automobile to get a 15-20% ROI .
This is derived after doing a break even analysis ( see
slide 16 for Target profit
Value pricing To gain loyal customers value pricing is
adopted. A high quality offering for a fairly low price
eg. Ikea & Nano .. Also EDLP( every-day-low price ) in
retail stores
Going rate like steel , fertilizers , vegetables
 Selecting the Final Price

Impact of other marketing activities consider

relative price & relative advertising before
selecting the final price

Companies pricing policies disc policies ,

cancellation policies , cash disc etc

Impact on other parties like intermediaries ,

sales force etc
PROMOTION
Managing mass communication
advertising , sales promotion ,
events.
 Advertising

Any paid form of nonpersonal presentation

and promotion of ideas, goods, or
services by an identified sponsor.

18-200
 The Five Ms of Advertising
Mission
Money
Message
Media
Measurement

18-201
 Advertising Objectives
M-Mission
Informative advertising
Persuasive advertising
Reminder advertising
Reinforcement advertising

18-202
 Factors to Consider in Setting an
Advertising Budget; M=money
Stage in the product life cycle
Market share and consumer base
Competition and clutter
Advertising frequency
Product substitutability

18-203
Developing the Advertising Campaign-
M-Message
Message generation and evaluation
Creative development and execution
Social responsibility review (pg 492)

18-204
 Message generation and evaluation

A good advertiser normally focuses on one or

two core selling propositions.
As apart of refining brand positioning, the
advertiser has to decide which appeal works
best with the target audience.

Then a Creative Brief is prepared

 Creative Brief

Positioning statement- Brand promise

it is the phrase that Evidence of promise
follows the brand name Media
Key message Background/backdrop
Target market
Objectives- mission
Key brand benefits

18-206
Creative development and execution
Advantages
::Television
Disadvantages
Reaches broad Brief
spectrum of consumers
Clutter
Low cost per exposure-
due to its high reach High cost of production
Ability to demonstrate High cost of placement
product use Lack of attention by
Ability to portray image viewers
and brand personality

18-207
 Print Ads
Advantages Disadvantages
Detailed product Passive medium
information
Ability to communicate Clutter
user imagery Unable to demonstrate
Flexibility- as it also costs product use too well
less than TV
Ability to segment- as the
distribution & readership
is segmented

18-208
 Print Ad Evaluation Criteria
Is the message clear at a glance?
Is the benefit in the headline?
Des the illustration support the headline?
Does the first line of the copy support or
explain the headline and illustration?
Is the ad easy to read and follow?
Is the product easily identified?
Is the brand or sponsor clearly identified?

18-209
 Media Selection-
M-Media
Reach
Frequency
Impact- qualitative value of an exposure
Exposure= R*F

18-210
 Choosing Among Major Media Types
The media planners choice is based on the following
variables:
Target audience and media habits- radio & tv are most
effective media for reaching teenagers
Product characteristics- depend son their potential for
demonstration, visualization , explanation etc. eg.
Ladies dresses in colored mags. & High-tech products
on TV
Message characteristics- timeliness & content will
influence media choice eg. Sale could be announced
on radio
Cost

18-211
 Major Media Types
Newspapers Outdoor
Television Yellow pages
Direct mail Newsletters
Radio Brochures
Magazines Telephone
Internet

18-212
 Marketing Communication
Expenditures (2001)
Media $ % of Total
TV 52.7 22
Radio 19.4 8
Internet 3.4 1
Magazines 12.3 5
Newspapers 49.4 21

18-213
 Place Advertising

Billboards/ hoardings
Public spaces
Product placement
Point-of-purchase

18-214
 Selecting Specific Media Vehicles-
Possible Measures of Audience Size
Circulation the no. of physical units carrying the ad.
( in case of print media )
Audience- the no. of people exposed to the vehicle .
In case of pass on readership , then the audience is
larger than readership
Effective audience- the no. of people with the target
audience characteristics exposed to the vehicle.
Effective ad-exposed audience- the no. of people with
the target audience characteristics who actually saw
the ad.
The media planner must search for the most cost-
effective vehicles within each chosen media type 18-215
 Factors Affecting Timing Patterns

Buyer turnover- the higher the

turnover the more continuous
advertising required
Purchase frequency
Forgetting rate

18-216
 Media Schedule Patterns
Continuity- exposure appear evenly throughout
the period. Usually done in expanding market
situations , with frequently purchased items &
tightly defined buyer catagories
Concentration- entire ad budget spent in a single
period seasons etc
Flighting- advertising , followed by a period of no
advertising , again advertising etc inn case of
staggered funding
Pulsing- continuous advertising at low-weight
levels reinforced periodically by waves of heavier
advertising
18-217
Evaluating Advertising Effectiveness-
M =measurement
Communication Effect Research
Consumer feedback method
Portfolio tests
Laboratory tests
Sales-Effect Research
The sales impact is easiest to measure in
direct marketing situations and hardest in
brand or corporate image building
advertising
18-218
Measurement - Communication effect
A customer feedback method asks consumers questions
like :
What is the main message you get from this ad ?
What do you think they want you to know , believe or
do ?
How likely is it that this ad will influence you to
undertake action ?
What works well in the ad & what works poorly
How does the ad make you feel ?
Where is the best place to reach you with this message
?
Measurement - Communication effect
Portfolio Tests ask consumer to view or listen to a
portfolio of advertisements. They are then asked
to recall the ads , their contents etc. Recall levels
indicate an ads ability to stand out
Laboratory tests use equipment to measure
physiological reactions like perspiration , pupil
dilation , blood pressure , heart beats etc. It
indicates attention getting power of the ads but
nothing on impact on beliefs attitudes etc
Measuring Sales Impact of advertising

Share of
expenditure

Share of
voice

Share of mind
& heart

Share of
Market
 Sales Promotion

Collection of incentive tools, mostly

short term, designed to stimulate
quicker or greater purchase
of particular products or services
by consumers or the trade.

18-222
 Sales Promotion Tactics
Consumer-directed Trade-directed
Samples Price offs
Coupons
Allowances
Cash refund offers
Price offs Free goods
Premiums Sales contests
Prizes Spiffs
Patronage rewards Trade shows
Free trials
Specialty advertising
Tie-in promotions

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Using Sales Promotions
Establish objectives

Select tools

Develop program

Pretest

Implement and control

Evaluate results
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 Events and Experiences
$11.14 billion spent on sponsorship in 2004
69% sports
10% tours
7% festivals, fairs
5% arts
9% causes

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 Why Sponsor Events?
To identify with a particular target market or life style
To increase brand awareness
To create or reinforce consumer perceptions of key brand
image associations- eg. MRF participating in a car rally
To enhance corporate image- goodwill , likability ,
prestige and awareness
To create experiences and evoke feelings
To express commitment to community- cause- related
sponsorship
To entertain key clients or reward employees- lavish
hospitality etc the employee would feel involved &
could build participation
To permit merchandising or promotional opportunities

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Using Sponsored Events
Establish objectives

Choose event opportunities

Design program

Implement and control

Measure effectiveness

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 Ideal Events
Audience closely matches target market

Event generates media attention

Event is unique with few sponsors

Event lends itself to ancillary activities

Event enhances brand image of sponsor

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 Public Relations Functions
The folling could be the different functions of a PR
department
Press relations
Product publicity sponsorship to publicize any specific
product
Corporate communications promoting understanding of the
organization through internal & external advertising
Lobbying- to promote or defeat legislations or regulation .
Done with legislators & government
Counseling advising management of other issues , pubilc
issues , companys position during good & bad times

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 Marketing Public Relations(MPR)
Functions
Assist in product launches
Assist in repositioning mature products
Build interest in a product category
Influence specific target groups
Defend products
Build corporate image

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 Major Tools in Marketing PR
Publications
Events
Sponsorships
News
Speeches
Public Service Activities
Identity Media

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Steps in Marketing PR
Establish objectives

Choose messages

Choose vehicles

Implement and control

Measure effectiveness

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 Promotion Mix

Events & Public Relations

Advertising Sales Promotion
Experiences