MGT301 Principles of Marketing

Lecture-45

Summary of Lecture-44

Review-1

Todays Topics

Review-2

Individual Product Decisions

Product Attributes Branding

Labeling

Packaging Product Support Services

New Product Development

Marketing Strategy Concept Development and Testing Business Analysis Product Development

Idea Screening

Test Marketing

Idea Generation

Commercializat ion

Product Life-Cycle (PLC)

Sales and Profits ($) Sales

Profits

Time

Product Introduction Development Stage

Growth

Maturity

Decline

Sales and Profits Over the Products Life From Inception to Demise

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

Factors Affecting Price Decisions

Internal Factors

Positioning Objectives

Pricing Decisions

Target Market

External Factors

Costs
Total Costs Sum of the Fixed and Variable Costs for a Given Level of Production

Variable Costs Fixed Costs (Overhead) Costs that dont vary with sales or production levels. Executive Salaries Rent Costs that do vary directly with the level of production.

Raw materials

Fixed Costs
Rent Depreciation Managers salaries Property taxes Insurance

Variable Costs
Raw materials Component parts Hourly wages Packaging & freight Sales commissions

Setting Pricing Policy

General Pricing Approaches

Cost-based Pricing
Value-based Pricing Competition-based Pricing

Break-evenfor Determining Target Return Price and Break-even Volume

Rupees (in thousands)

1200
1000 800 600 400 Break-even point

Total revenue Target profit Total cost

Fixed cost

200
0 10 20 30 40 50

Sales volume in units (thousands)

New Product Pricing Strategies

Market Skimming
Market Penetration

Price - Quality Strategies

Price
Higher
Higher Quality

Lower

Premium Strategy

Good-Value Strategy

Lower

Overcharging Strategy

Economy Strategy

Price-Adjustment Strategies
Discount and Allowance Pricing Segmented Pricing Psychological Pricing Promotional Pricing Geographical Pricing International Pricing

Price Changes

Responding to price changes

Has Competitor Cut Price?

No

Hold Current Price; Continue to Monitor Competitors Price.

Will Lower Price Negatively Affect Our Market Share & Profits?

No
Reduce Price

Can/ Should Effective Action be Taken?

No Yes

Raise Perceived Quality Improve Quality & Increase Price Launch Low-Price Fighting Brand

Place.Distribution Channel.Marketing Channel

Manufacturer

Customer Customer

Manufacturer
Manufacturer Customer Manufacturer Customer Manufacturer 20 Contacts

Manufacturer Customer

Manufacturer
Customer

Manufacturer
Manufacturer

Wholesaling Intermediary

Customer Customer

Manufacturer 9 Contacts

Producer

Consumer

Producer

Retailer

Consumer

Producer

Wholesaler

Retailer

Consumer

Producer

Agent/ Broker

Wholesaler

Retailer

Consumer

Channel Management Decisions Selecting Training Motivating Evaluating

FEEDBACK

Marketing Logistics and Supply Chain Management

Inventory

When to order? How much to order? Just-in-Time

Customer Service Concept

Right Cost Right Place

Right Product

Right Time

Right Condition

Push Versus Pull Strategy

Producer

Marketing activities

Intermediaries

Demand End users

Demand

Push Strategy

Marketing activities Demand Intermediaries Demand

Producer

End users

Pull Strategy

Retailing and Wholesaling

Compete on value (not just price.) Save customers time and energy. Make shopping fun.

Marketing Communications

Promotion and Its Goals

Informs

Builds Relationships

Reminds

Persuades

The Marketing Communications Mix

Advertising

Any Paid Form of Nonpersonal Presentation by an Identified Sponsor. Personal Presentations by a Firms Sales Force. Short-term Incentives to Encourage Sales. Building Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity. Direct Communications With Individuals to Obtain an Immediate Response.

Personal Selling

Sales Promotion

Public Relations

Direct Marketing

Setting the Promotion Mix

Advertising
A paid form of non-personal communication about an organization and/or its products to a target audience through a mass medium.

Personal selling
The direct presentation of a product to a prospective customer by a representative of the selling organization.

Sales promotion
Demand-stimulating activity designed to supplement advertising and facilitate personal selling.

Public relations
A planned communication effort by an organization to contribute to generally favorable attitudes and opinions toward an organization and its products.

Direct Marketing
Direct connections with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationship

Steps in the Selling Process

Step 1. Prospecting and Qualifying Step 2. Preapproach
Identifying and Screening For Qualified Potential Customers.

Learning As Much As Possible About a Prospective Customer Before Making a Sales Call.
Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start. Telling the Product Story to the Buyer, and Showing the Product Benefits.

Step 3. Approach Step 4. Presentation/ Demonstration

Step 5. Handling Objections

Seeking Out, Clarifying, and Overcoming Customer Objections to Buying. Asking the Customer for the Order. Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business.

Step 6. Closing

Step 7. Follow-Up

Managing the Sales force

Designing Sales force Strategy and Structure

Recruiting and Selecting Salespeople

Training Salespeople
Compensating Salespeople

Supervising Salespeople
Evaluating Salespeople

Competitive Strategies

Competitive Positions

Market Leader Market Challenger Market Follower Market Nicher

Global Village

Global Marketplace

Global Marketing

Think Globally Act Locally

e-Marketing

New Tool to Reach Consumer

Internet

Telephone

Postal Service

Radio

Television

Marketing and Society

Current Issues in Marketing

The current issues and marketing can be divided into two major subjects:
Social responsibility

Ethics

The two concepts are very closely related

Summary Marketing Management

DemographicEconomic Environment

Marketing Intermediaries

TechnologicalNatural Environment

Product Suppliers Place Target Price Consumers

Promotion

Publics

PoliticalLegal Environment

Competitors

SocialCultural Environment

Simple Marketing System

Communication Product/Service Producer/Seller Money Consumer

Feedback

Marketing Process

The process of :

Analyzing marketing opportunities

Selecting target markets Developing the market Mix Managing the marketing effort

Marketing in Theory and Practice

Enough for Marketing. . .

MGT301 Principles of Marketing

Lecture-45