MARKETING MANAGEMENT

Topics

• Introduction to Marketing concept, Evolution of Marketing

and Customer orientation
• Marketing Environment and Evaluation of Market
opportunities
• Market Research & Marketing Information Systems
• Demand forecasting and Market Potential analysis
• Consumer buying process & Organizational buying behavior
• Pillars of Marketing- Target market positioning &
Differentiation
• Marketing Mix
• Product Decisions- PLC
• New product development process
• Distribution decisions- Logistics & channel decisions
• Promotion Decisions-IMC concept, communication tools
• Personal selling & sales Management
• Pricing decisions
 Marketing Concept

• The Marketing concept arises out of the awareness that a

business should start with the determination of consumer
wants and end with the satisfaction of those wants. The
concept puts the consumer at both the beginning and end
of the business cycle. The marketing concept has 4 major
distinguishing features:
• Consumer orientation: Emphasizes on the consumer and his
need being the 1st distinguishing feature of the marketing
concept
• Integrated management, with Marketing as the fulcrum:
Integrated management means that all the different
functions of the business must be tightly integrated with
one another, keeping marketing as the pivot
• Consumer satisfaction:
• Realization of all organizational goals including profits
 Selling ad Marketing
Selling
• Selling starts with seller &
is preoccupied all the time
with the needs of the seller
• Emphasizes on saleable
surplus available with the
company
• Seeks to convert products
in to cash
• Views business as – goods
producing process
• Selling views the customer
as the last link in the
business
Marketing
• Marketing starts with the
buyer and focuses
constantly on the needs of
the buyer
• Emphasizes on
identification of market
opportunity
• Seeks to convert customer
needs in to products
• Views business as – a
customer satisfying
process
• Marketing views the
customer as the very
 Market environment

• Besides the marketing mix variables, one has to tackle

another set of variables that lie outside the control of the
firm. These relate to the environment. Environmental
variables are referred to as the non controllable variables of
marketing while the marketing mix are referred to as the
controllable variables of marketing.
• Factors covered under Environment analysis:(Macro
environment) a)Demographic envt b) Socio cultural envt
c)Economic envt d)Political envt e)Natural envt
f)Technology envt g)Legal envt h) Govt policies
• Environment that is specific to the business: The market/
the demand/ the consumer/ the industry/ the competition/
govt policies specific to the business concerned
 Market Research & Marketing Information Systems
(MIS)

• MIS benefits the company in the following ways:

• Provides valuable market intelligence
• Helps quick spotting of changing trends
• Helps tap opportunities and build defences against threats
• Helps implement all marketing action programmes
• Helps deliver customer oriented marketing offers- all ‘Ps’ of
marketing mix
• Helps product innovations
• Helps reduce product failure
• Supports channel management, channel choice, channel
motivation and multi channel marketing
• Supports sales promotion
Steps involved in designing and developing an MIS

• Defining information needs

• Classifying information appropriately and identifying
whether it is for planning, or implementation or control
purposes
• Evaluating the cost of collecting and processing the
information and comparing cost v/s benefits
• Identifying the sources of information
• Designing the mechanisms & procedures for gathering,
processing, storing and retrieval of information
• Deciding the frequency and timing of collection & supply of
information
• Processing, analyzing and interpreting the information and
disseminating it to the right persons at the right time
• Monitoring, maintaining, reviewing and improving the
system
 Marketing Research

• Marketing research is the systematic, objective and

exhaustive search for the study of the facts relating to any
problem in the field of marketing. It is the research on the
manifold problems of marketing. Its purpose is to aid
decision making in marketing. It is the systematic gathering
and analysis of information. Marketing research jobs can be
classified in different ways such as:
• Routine problem analysis and research on routine problems
• Research on short term and long term problems
• Classification based on the actual subject of the research
 Subjects of Research

• Research on consumer
• Research on Market and demand
• Research on product or brand
• Research on competition
• Research on distribution
• Research on price
• Research on advertising and promotion
• Research on sales methods
 Steps involved in the Marketing research process

• Defining the marketing problem and identifying the MR

problem involved
• Specifying the information required
• Developing the research design and research procedure
• Gathering the data/ information
• Analyzing the information and interpreting it in terms of the
problems being tackled
• Summarizing the findings
• Preparing the research reports
 Demand forecasting and Market Potential analysis

• Commonly used terms:

• Market potential or industry potential
• Company potential or sales potential
• Market demand or Industry demand
• Company demand or company sales possibilities
• Market forecast or Industry forecast
• Company forecast or sales forecast
 Consumer buying behavior

• Factors influencing buyer behavior:

• Personal factors: Age, Education, Economic position, status
and self esteem
• Cultural factors: Religion, language, up bringing etc
• Psychological factors: Beliefs, attitudes, motivation,
perception
 The Buying process

• Problem or need recognition

• Awareness
• Evaluation or comprehension
• Attitude or feelings towards the product
• Legitimate the course of action
• Trial
• Adoption of the product
• Post purchase behavior
 STP

• Benefits of segmentation to the marketer:

• Facilitates proper choice of target market
• Facilitates tapping of the market, adapting the product offer
to the target
• Makes the marketing effort more efficient and economic
• Helps to identify less satisfied segments and concentrate
on them
• Benefits the customer as well
 Major bases for segmentation

• Geographics
• Demographics
• Psychographics
• Buyer behavior
• Benefits
• Volume of purchase
 Marketing Mix

• 4 P’s of marketing: extension of the same

• Environmental variables are referred to as the non
controllable variables of marketing while the marketing mix
variables are referred to as the controllable variables of
marketing
 PLC

• Stages of PLC
• Introduction or pioneering stage
• Growth stage
• Maturity stage
• Decline stage
 BCG matrix: market growth rate / relative market share

High Low

High stars ?marks

Low Cash cows Dogs

 GE model: market attractiveness/ business strength
Strong bus. strength medium Weak bus. strength

High market Strong: Invest to grow/ Medium: Challenge Weak: specialize

attractiveness concentrate efforts on for leadership/ around limited
maintaining strengths reinforce strengths
vulnerable areas

medium Build selectively: Invest Manage for Limited expansion

heavily in attractive earnings: protect or harvest: Look for
segments/ build ability existing program/ ways to expand
to counter competition concentrate with out risk.
investments where Minimize
profitability is good investment

Low market Protect and refocus: Manage for Divest: Sell all time
attractiveness manage for current earnings: protect that will maximize
earnings/ concentrate position in most cash value/ cut
on attractive segments profitable fixed costs and
segments/ avoid investment
minimize
investment
 Product Decisions

• New products are classified in to two groups:

• New products arising out of technological innovations
• New products arising out of market – oriented modifications
 Stages in new product development

• Generating new product ideas

• Idea screening
• Concept testing
• Business/ market analysis
• Actual product development
• Market test
• Commercialization
 Factors responsible for success and failure of
products

• Success rate in new products is correlated to the presence

of 3 critical factors:
• A unique and superior product idea that yields a real benefit
to the customer
• Strong technical and production expertise
• A strong market orientation on the part of the company.
 Distribution decisions- Logistics and channel
decisions

• Physical distribution is the process of delivering the product

to the marketing channels and consumers. It encompasses
the various activities involved in the physical flow of the
product from the product to the consumer.
• The importance of physical distribution are:
• Ensures the physical flow of the product from the producer
to the consumer. Without this flow, marketing cannot take
place.
• Confers place and time utility on products
• Helps build clientele
• Where production locations and markets are distanced,
physical distribution becomes all the more crucial
• A promising area of cost of reduction
 Component functions of physical distribution

• Planning the overall physical distribution system

• In plant warehousing
• Transportation
• Receiving handling
• Secondary transportation, secondary handling and sub
distribution
• Inventory management at each level in the chain
• Order processing and execution
• Accounting and record keeping
• communication
 Steps involved in designing a physical distribution
system

• Articulating distribution objectives and specifying the

minimum service level desired in product delivery
• Finding out what the customers want in product delivery
• Finding out what the competitors do
• Keeping the cost of the system as low as possible, without
sacrificing the guaranteed minimum service level
• Keeping the system sufficiently flexible
 Managing the Distribution Function

• Marketers realize that if they were to make the

brands available in the right size, at the right time
and at the right price, the Indian consumer can be
motivated to buy it and consume it…..
 Role of Middlemen or Intermediaries

• a) Provide information about the market to the

manufacturer

• b) Maintain price stability in the market

• c) Promotion of the products in his territory

• d) Financing by providing the necessary working capital

in the form of advance payments for goods and services

• e) Middlemen also take the title of the goods and

services and trade in their own name
 Channel Level

• Decisions that a firm must take regarding the number of

channel levels appropriate to serve a given market
• From zero-directly from the manufacturer to the customer-
to as high as 4 to 5 levels involved in distribution.

• Zero level in industrial product marketing, project

marketing
• Firm adopts a one channel level when:
• a) Number of customers is high
• b) Customers in specific geographical area
• c) Order lot size not uniform
• d) Firm sells goods to wholesaler or a large dealer

• 2, 3 or even 4 levels in case of:

• a) Consumer products
• b) Customers spread across the country
• c) Market is large
 Factors Influencing Distribution Decisions

• Market Characteristics

• Company Characteristics

• Product Characteristics

• Middlemen Characteristics

• Intensity of Competition

• Environmental Characteristics
 Terms and Responsibilities of Intermediaries

• a) Price policy-the middlemen have to ensure that everyone

involved gets a fair and equitable deal

• b) Payment terms-the manufacturing firm stipulates the

mode and terms of payment

• c) Returns policy-this indicates the warranty that the

manufacturer extends to the intermediary

• d) Territorial rights-the territorial jurisdiction should be spelt

spelt out to avoid territory jumping

• e) Mutual services and responsibilities-should be spelt

out,particularly in case of franchised and exclusive agency
channels
 Sales Promotion

Importance of sales promotion to a marketer is

attributed to the following reasons:

• Fast growing market

• Increasing competition among brands

• The maturing and standardization of products

Factors Contributing to Growth of Sales Promotions:

• (a) Growing consumerism in India and an upwardly

mobile Indian market
• (b) Heightened inter-firm rivalry within the industry
• (c) Trade’s resistance to invest additional resources in the
product mix of different companies
• (d) Fragmentation of viewers and readers arising
out of multiple television channels, newspapers and
magazines
• (e) The mass media cost has been on the rise and
most companies find sales promotion as a more cost
effective alternative
• (f) With technologies and products getting standardized,
differentiation between firms has got blunted and price
wars have now become a reality in most consumer goods
 Sales Promotion Helps

Helps in securing trial and defending shelf space against

competition;
(ii) Smoothens out the manufacturing capacities of firms in
such a way that the peaks and the valleys are
minimized;
(iii) Provides opportunities to manufacturers to reach out to
market segments with differing price sensitivity;
(iv) Adds excitement to the in-store merchandizing of
consumer goods;
(v) Motivates trade to keep more and push more of those
brands that are on promotion
 Personal selling and Sales Management

• Personal Selling
• In today's world marked by complex technologies, and
multiple choices, the customer is increasingly becoming
dependent on the salesperson

• The customer wants to be sure that he/she is getting value

for his or her money

• The salesperson provides competitive product information

to the customer, and also reassure the customer regarding
price and service
 Personality and Motivation Profile of an
Effective Salesperson

The personality traits required by a good salesperson are:

• Dominance-assures assertiveness
• Achievers- Effective salesperson are high achievers
• Affiliation-Effective salesperson show moderate affiliation
• Creativity-Effective salespeople are creative people
• Exhibitionism-Involves taking legitimate pride in
achievements and sharing experiences with others
• Problem solving-Effective salespeople have been found
high on problem solving
 Role of Salesperson

• Diagnostic-salesperson finds cause of a problem

• Analyst-analyze customer needs and market trends
• Information provider-Role of an intelligence agent
• Strategist- Evolve a strategy to emerge as a market
leader
• Tactician-Evolves tactics to win over the customer or
enhance dealer satisfaction
• Change agent-Introduces new product ideas and
influences the life styles and consumption patterns
 Selling Theories

• Stimulus Response Theory: some of the stimuli the

salesperson has control over are:

• Self-physical appearance, mannerism, voice modulation,

interpersonal skills

• Price concessions

• Announcement of price changes

• Preferential treatment to important buyers

 Product Oriented Selling:

• It is the responsibility of the salesperson to make the

prospect aware of:

• (a) technological / scientific developments

• (b) how these can be useful to him/her

• (c) make the prospect aware of his/her needs

 Salesperson and Customer Perceptions in a
Typical Sales Situation

Salesperson Objective & Role Customer Objectives & Concern

• Objective • Solution to ‘my’ problem

• Hook the customer
• Process • Do you understand my needs ?
• Romanticize the customer • Do you understand my budget
• Create high expectations constraints ?
• Over promise • Can I trust you ?
• Bulldoze objections if need be • Will you deliver in time ?
• Throw weight, if required • Will you stay with me in my hour of
• Quit, if going gets tough need ?
• Pusher • Evaluate
• Result
• Sales order not necessarily with the • Waiting for order to be delivered
• desired profit margin • Expectant
• Post Sales • Follow up with salesperson
• Keep assuring customer • Tension builds up
• Indifferent/ ‘I don’t care’
• Justify delays • Frustration
• ‘Given a choice I will never buy from
you’
 Relationship Intensifier

• Initiate contact with the customer

• Know his business and background
• Listen empathetically
• Show appreciation
• Involve customer in presentation
• Understand customer’s objection
• respond immediately to service requests
• Follow up on customer’s service needs with other
concerned individuals and departments in your company
• Avoid throwing ‘weight’ and ‘jargons’ in your presentation
• Accept responsibility for failure
• Plan for future
 Selling Process and Skills Required

The selling process is a five stage process:

1. Opening of a call-effective salesperson is sensitive to
verbal and non-verbal message which the prospect gives
2. Need exploration-this requires the use of probing and
sensitivity skills
3. Presentation-should be meaningful and convincing
4. Managing objections-these should be perceived as
opportunities for creative thinking to nail competition
5. Closing the call-provide the prospect sufficient reason to
buy the product. The skills used here are explanatory and
probing
 Role of Integrated Marketing Communications

• Marketing communications …
– are the “voice” of the brand and are a
means by which it can establish a
dialogue and build relationships with
consumers.
– allow marketers to inform, persuade,
incent, and remind consumers directly
or indirectly
– can contribute to brand equity by
establishing the brand in memory and
linking strong, favorable, and unique
Role of Integrated Marketing Communications
(Cont.)

– Consumers can be told or shown how and why a

product is used, by what kind of person, and where
and when;
– Consumers can learn about who makes the product
and what the company and brand stand for
– Consumers be given an incentive or reward for trial
or usage
– Brands can be linked to other …
• People
• Places
• Events
• Brands
• Experiences
• Feelings
• Things
 Pricing decisions

• Factors influencing pricing: (Internal factors)

• Corporate and marketing objectives of the firm
• The image sought by the firm thru pricing
• The characteristics of the product
• Price elasticity of demand of the product
• The stage of the product in the PLC
• Use pattern and turnaround rate of the product
• Costs of manufacturing and marketing
• Extent of distinctiveness of the product and extent of
differentiation practiced
• Composition of the product line of the firm
• External factors:
• Market characteristics( demand, customer and competition)
• Buyer behavior in respect of the product
• Bargaining power of major customers
• Bargaining power of major suppliers
• Competitors’ pricing policy
• Govt controls and regulations on pricing
• Other relevant legal aspects
 Objectives which Firms seek in pricing

• Profit maximization in short term

• Profit optimization in long term
• A minimum ROI
• A minimum return on sales turn over
• achieving particular sales volume
• Achieving a particular market share
• Deeper market penetration
• Enter new markets
• Keeping competition out or under check
• Parity with competition
• Providing commodities affordable by weaker sections
 Categories of pricing methods

• Cost based pricing: under which one can have :a)Mark up

pricing or cost plus pricing b)Target Rate of Return pricing
• Demand based pricing: under which one can have: a) what
the traffic can bear pricing b)Skimming pricing c)
Penetration pricing
• Competition oriented pricing
• Value pricing
• Tender pricing
• Affordability based pricing
• Differentiated pricing