Marketing Management

From 2nd SEM BBM , D Section , Group F

From
Karthik P.
Rajesh
Rakshith
Ankith
Vikram D.
Marketing is defined as the process of determining
the needs and wants of consumers and being able to
deliver products that satisfy those needs and wants.
 Functions of marketing
Clark and Clark have divided the marketing functions, into
the following 3 divisions . They are -

• Functions of Exchange
• Functions of physical Supply
• Facilitating functions
 Functions of exchange

•Buying -
People have the opportunity to buy
products that they want.
• Selling - producers function within a free market to sell
products to consumers.

Functions of physical supply

• Storage - Products must be stored and protected until
they are needed. This function is especially important for
perishable products such as fruits and vegetables.
•Transportation

Products must be physically relocated to the locations

where consumers can buy them. This is a very
important function. Transportation includes
rail road, ship, airplane, truck, and telecommunications
for non-tangible products such as market information.
 Facilitating functions
Financing - banks and other financial institutions
provide money for the production and marketing of
products.

Processing - Processing involves turning a raw

product, like wheat, into something the consumer can
use . for example, bread.
Market Information

• Information from around the world about market

conditions , weather, price movements, and political
changes, can affect the marketing process.
• Market information is provided by all forms of
telecommunication, such as television,
the internet, and phone.
Grading and Standardizing

• Many products are graded in order to conform to

previously determined standards of quality.
For example, when you purchase US No. 1 Potatoes, you
know you are buying the best potatoes on the market.
 Marketing Mix
The term "marketing mix" was coined in 1953 by
Neil Borden in his American marketing
Association presidential address.
The marketing mix was suggested by professor E.
Jerome McCarthy in the 1960s. The marketing mix
consists of four basic elements called the four P’s
Marketing mix

The marketing mix principles

(also known as the 4p’s) are
used by business as tools to
assist them in pursuing their
objectives.
 Marketing Mix

• A marketing mix is the combination of product offerings

used to reach a target market for the organization .
• In other words it is a mix of controllable marketing
variables-product price , promotion and place(distribution)
that best meet the needs of targeted customers.
Essential features of an effective marketing mix

•It should match customer needs.

•It should give competitive advantage to the company.
•It should match corporate resources.
•All the elements of marketing mix should reinforce
each other to support positioning of the product.
The 4 P’s of marketing
MARKETING MANAGEMENT
Marketing mix focused on target market

PRODUCT MIX
PRICE MIX PROMOTION MIX PLACE MIX
Brand Pricing strategy Personal selling Distribution channels
Color Pricing policy Advertising 1)Wholesalers 2)Retailers
Product line Basic price Publicity 3)Mercantile agents
Package Terms of credit Sales promotion PHYSICAL DISTRIBUTION
Discounts a) Dealers aids 1)Transport
Warranty
Allowances b) Consumer aids 2)warehousing
Service
Product mix : Product is the thing possessing utility.
It has 4 components :

• Product range
• Service after sale
• Brand
• Package
 Product Strategies

When an organization introduces a product into a market

they must ask themselves a number of questions.
•To whom the product is aimed at?
•What benefit will they expect?
•How do they plan to position the product within the market?
•What differential advantage will the product offer over their
competitors?
 Augmented
products

Guarantee
Total
After sales
Branding Product
features
core
Core product
Price mix – The price is the amount a customer
pays for the product. The business may increase or
decrease the price of product if other stores have the
same product.
 Pricing Strategies
Pricing should take into account the following factors
•Fixed and variable costs.
•Competition
•Company objectives
•Proposed positioning strategies
•Target group and willingness to pay.
 Pricing strategy
•Penetration pricing: Where the organization sets a
low price to increase sales and market shares.
•Skimming pricing : The organization sets an initial
high price and slowly lowers the price to make the
product available to a wider market. The objective is
to skim profits of the market layer by layer.
•Competition pricing : Setting a price in comparison
with the competitors
Place Mix – Place represents the location where a
product can be purchased. It is often referred to as
the distribution channel. It can include any physical
store as well as virtual stores on the Internet.
 Place strategy
 Refers to how an organization will distribute the products
or services they are offering to the end user,
Two types of channel of distribution methods are
available.
•Indirect distribution involves distributing your product by
the use of an intermediary.
•Direct distribution involves distributing direct from a
manufacturer to the consumer e.g. Dell computers
 Indirect distribution

manufact
wholesale
retailer
consumer
urer r

Direct distribution

Manufacturer …….. Consumer

Promotion mix
Promotion represents all of the communications
that a marketer may use in the marketplace.
Promotion has four distinct elements:
advertising , public relations, personal selling
and sales promotion.
 Promotion strategy
•An organizations promotional strategy involves
•Advertising: IS any non personal paid form of communication
using any form of mass media
•Public relations: Involves developing positive relationships with
the organization media public.
•Sales promotion: Commonly used to obtain an increase in sales
short term. Could involve using money off coupons or special
offers.
•Personal selling: Selling a product service one to one.
•Direct mail: Sending e-mails.
Advertising
 Advertising
•The word advertising is derived from two Latin words
ad and verto.
•Ad means towards
•Verto means turn
•Literally it means to turn the people attention to a
specific thing.  
ADVERTISING

Advertising is a form of communication intended to

persuade an audience (viewers, readers or listeners) to
purchase or take some action upon products, ideas, or
services.
•Internationally, the largest ("big four")
advertising conglomerates are Interpublic,
Omnicom, Publicis, and WPP.

•In 2010, spending on advertising was estimated

at more than $300 billion in the United States
and $500 billion worldwide
 Functions of advertising
•To differentiate the product from their competitors
•To communicate product information
•To urge product used
•To expand the product distribution
•To increase brand preference and loyalty
•To reduce overall sales cost
•Creates new demand
Advertising flyer from 1806 for
a traditional medicine called
Kinseitan.
Types of advertising
Advantage

• Increase and stabilizes the sales turn over.

• Maintains the existing markets and explores the
new.
• Control product prices.
 Types of advertising
Print Media

The print media have always been a popular

advertising medium. Advertising products via
newspapers or magazines is a common practice.
In addition to this, the print media also offers
options like promotional brochures and fliers for
advertising purposes.
Print advertising
Outdoor advertising

Outdoor advertising is also a very popular form of

advertising, which makes use of several tools and
techniques to attract the customers outdoors. The most
common examples of outdoor advertising are billboards,
kiosks, and also several events and tradeshows
organized by the company.
Outdoor advertisement
Broadcast advertising

Broadcast advertising is a very popular advertising

medium that constitutes of several branches like
television, radio or the Internet.
Covert advertising

Covert advertising is a unique kind of advertising in

which a product or a particular brand is
incorporated in some entertainment and media
channels like movies, television shows or even
sports.
Public service advertising

Public service advertising is a technique that makes use

of advertising as an effective communication medium to
convey socially relevant messaged about important
matters and social welfare causes like AIDS, energy
conservation, political integrity, deforestation, illiteracy,
poverty and so on.
Celebrity advertising

Although the audience is getting smarter and smarter

and the modern day consumer getting immune to the
exaggerated claims made in a majority of
advertisements, there exist a section of advertisers that
still bank upon celebrities and their popularity for
advertising their products
Celebrity advertisement
Product Life cycle
 Product life cycle-PLC
The purpose of having a diagram is to help you
understand the changes, in the revenue that is made,
as you go through the different stages of selling a
product, from the beginning, to the end.
Stages in the product life cycle
Introduction
• The seller tries to stimulate demand
• Promotion campaigns to get increase public awareness
• Explain how the product is used,
• Features advantages benefits
Cont’d
•You will lose money, but you expect to make profits in the
future.
•Sales are low, and profits are below the line because your costs
are greater than the amount of money you make.
•you have “negative” profit.
•Need to spend a lot of money on promotion.
•Growth
•A lot is sold - The seller tries to sell as much as
possible
•Other competitor companies watch, and decide about
joining in with a competitor product
• Growth will continue until too many competitors in
the market - and the market is saturated
Cont’d
•At the end of the growth stage, profits start to decline
when competition means you have to spend more money
on promotion to keep sales going.
•“success breeds imitation”
•Spending money on promotion cuts into your profit
Maturity

•Many competitors have joined - the market is saturated

•The only way to sell is to begin to lower the price - and
profits decrease
•It is difficult to tell the difference between products since
most have the same F.A.B. - Features, Advantages & Benefits
•Competition can get “Nasty” and commercials are intense
Cont’d

•“Persuasive Promotion” becomes more important during this

stage
• That is to say, you have commercials almost begging the
customer to still buy your product because you still make it just
as good.
Decline

•Newer products are now more attractive - even a low

price does not make consumers want to buy.
•Profit margin declines - and so the only way to make money
is to sell a high volume
 Extending product life cycle
Market
1. Increase frequency of use by present
Modification customers
2. Add new users
3. Find new uses
4. Change product quality or
Product Modification
packaging
Price determination
Demand
Demand is the key determinant for market oriented
company. Demand is the starting point for all activities.
Simply, the average customer will be demanding different
product quantities, depending on price. Law of the market
says that demand and price are counter proportional ( price
increase leads to demand decrease and vice versa ).
 Competition
•Competition has a significant influence to price
determination of market oriented companies.
• Prices need to be adjusted in order to address the
competition.
• Every company should research market and
competition, prior to launch of the new product.
 Cont’d
•Survey should include direct competitors but also the
substitutes.
•Based on market survey and the strength of the
company the prices can be the same, lower or higher.
Costs –
While demand and competition are
external factor, the costs are internal. The costs
must be embedded in every stage of price
determination process.
Sales Channels have the different shopping occasion.
Consequently the pricing is adjusted to sales channel.
For example, the same products is cheaper in
hypermarket than on petrol station.
Government is usually do not interfere into price
determination. Exceptionally it may limit maximal prices
for a certain products. Still, government is influencing
pricing, since the taxes & custom duties are the part of the
price.