Marketing Concept

Marketing is a process through which the marketer tries to identify the needs and wants of the consumers or society at large and then convert them into tangible products or services in order to deliver them back to the consumers against some consideration in a socially responsible manner.

 Want: Specification of Need. Need is more Generic Want is Specific Marketing

involves Transactions, Exchange and building Relationships (Customer-Marketer/Brand)

Societal Marketing
Marketing with Long term social objective and mission.
Time Dimension: Refers to Environmental aspects of product usage. Breadth Dimension: Refer towards ensuring protection of interest of the non-user of the product.

Social Marketing Marketing Ideas towards removing social evils and taboos

Nature, Scope and Importance

Marketing is Flexible, Soft and Matching concept Marketing is what business is all about Marketing is about ONE BIG IDEA Creativity regarding Product Development Creativity regarding Technology Development Creativity regarding Marketing Strategies Scope of Marketing beyond common understandings

regarding Marketer, Product and Market

Building Customer Relationships and Equity

Developing Tie-ups: Co-branded cards Creating Loyalty Programs Delighting your consumer Retaining your customer Identifying High-Value/Return segment and serve Product Merchandising

Emerging Dimensions of Marketing

Rural Marketing (Fortune lies at the Bottom of the

Pyramid) India specific Digital Age Global Market Place Social Responsibility Services

Consumerism
Consumerism in short refers to the social movement that seeks to increase the rights and powers of consumers. Introduction of Bill of Rights by President Kennedy in 1962 towards seeking: Right to Choice Right to Information Right to Safety Right to be Heard

Traditional Rights of Sellers: Right to introduce any product Right to ask any price Right to use any message accompanying the product Right to use any buying incentive scheme Right to spend any amount to promote the product
Traditional Rights of Buyers: Right not to buy any product offered for sale Right to expect the product to be safe Right to expect the product to perform as claimed

Marketing Environment
Macro: Demographic Economic Natural Political Technological Cultural

Micro:
Company

Suppliers
Intermediaries Customer Markets

Competitors
Public

Basic SWOT Analysis

EXPLOIT Strength COUNTER/ CHALLENGE

OVERCOME WEAKNESS Weakness

AVOID

Opportunities

Threats

Designing Business Portfolio BCG Matrix/SBU Analysis

High Market Growth Rate Low Market Growth Rate STARS (Invest) ? / PROBLEM CHILDS (Adopt Remedial Measures/Rectify)

CASH COWS (Harvest)

DOGS (Divest)

High Relative Market Share

Low Relative Market Share

Adopting Competitive Strategies Igor Ansoffs Product Market Expansion Grid

Market Penetration Product Development

Existing Markets

New Markets

Market Development

Diversification

Existing Products

New Products

Market Segmentation

Market segmentation refers to the process of classifying or segmenting a market into certain uniformity or homogeneity with respect to the consumers in that segment. The consumer may on the basis of various behavioural characteristics (buying patterns) that are common to that zone or on account of some inherent features possess such uniformity or homogeneity.

Market segmentation methods may be of following types:

Geographical segmentation Demographic segmentation

Geo-Demographic segmentation
Buyer behaviour segmentation Benefit segmentation or USP

Psychographic or lifestyle segmentation

Product Differentiation:

Product differentiation is on the other hand a process of making a product different on some small account in order to carve in niche in a highly competitive market segment.

Adoption Process of New Product

PostPurchase Behavior

Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

COGNITIVE

AFFECTIVE

CONNATIVE

Awareness

Interest

Evaluation

Trial

Adoption

Consumer Behaviour

Refers to the process of studying how various stimuli affect the decision making process of consumers in choosing a particular brand.

Marketing and other Stimuli

Buyer choice and decision process

Buyer Response

Factors influencing Individual Buying Behaviour

Cultural
Culture Sub-Culture Social Class

Personal

Age and Family Life Cycle Stage Occupation Economic Situation Lifestyle Personality and Self-concept

Social
Reference Groups Family Roles and Status

Psychological

Motivation Perception Learning Beliefs and Attitudes

Marketing Mix
Marketing Mix as a concept refers to the various ingredients and components that give shape to the package or the product portfolio offered by the marketer to its target audience. These ingredients, which form the package is also popularly known as 4 P in marketing management. In other words, Product, Price, Place and Promotion form the package of the marketer.

Components of Marketing Mix

Product Product portfolio Design, Shape, Size Packaging Branding Product Merchandise Price Resale Price maintenance Pricing strategies Channel margin Place Channel design and structure Logistics management Physical transportation
Promotion Advertisement Personal selling Sales Promotion Publicity

Service Reasons for Growth of Service Industry Growing complexity of products Changing social order Urge for more leisure and pastime Women joining workforce Increasing work related stress Features of a Service Intangibility Heterogeneity Inseparability Perishability Non-ownership

Measures for overcoming such drawbacks associated with Service

Make Service look more tangible
Use Automation where mechanisation can replace the

human component associated with the service Use Database, Training and Policy guidelines in cases where human component is indispensable Ensure better matching of demand and supply to arrest perishability Make use of staggered payment plans to manage the issue of non-ownership

Marketing mix of a Service (7 P)

Product Price (Differential pricing place, time and customer

differential, Diversionary, Guaranteed, Discount or Happy hour pricing) Place Promotion People Process (Delivery system) Physical evidence (Essential and Peripheral)

Product Mix Decisions Width of the Portfolio: Number of Product lines Length of the Portfolio: Number of Product items per line Depth of the Portfolio: Number of Product variations per item Strategies: Line Stretching: Upwards and Downwards Line Filling Line Pruning

New Product Development process Reasons for development of New Product Changing taste and preferences Technological advancement Government policies Various forms of New Product Re-launched Product Re-formulated Product Product in new package New to the market New usage Totally new product

Steps in New Product Development Process

Idea generation Concept development Initial feasibility study Concept testing Product development Product testing Market testing Commercialisation

New Product formations

Existing Market Re-launched Product Re-formulated Product Product Replacement

Re-Merchandising

Strengthened Market New Usage New Market

Product Augmentation

Related Diversification

Extensive Differentiation

Extensive Diversification

Existing Technology Improved Technology New Technology

Product Life Cycle Product life cycle refers to the various stages in the life of a successful product. A successful product usually passes through five distinct stages in its life, from product planning and development, introduction, growth, maturity to decline. These stages through which a successful product usually travels in course of its entire life span is known as the life cycle of a product.

A successful product usually passes through five distinct stage in its life.
Product planning and development

Introduction / Market pioneering stage

Market growth stage Market maturity stage

Market decline stage

Strategies adopted by Marketers

Core Product Introduction Extend Line Skimming / Penetration Competitive Selective Heavy

Growth

Extensive

Scaled down

Renovate Maturity Phase Out Decline

Discount

New/Virgin Markets Selective

Heavy

Flexible

Minimal

Product

Price

Place

Promotion

Limitations of Product Life Cycle Theory

Considers Universality of Market Considers Universality of Brand

Price

Any product in the market, whether tangible or intangible, signifies some kind of utility being attached to it and is usually marketed with an objective to provide this utility to the target consumer. This utility, when translated in monetary terms become a price. However Utility may create some ambiguity in understating pricing variations. Therefore Value may provide a better replacement and understanding of the price structure of products.

Factors influencing Pricing Decisions

Internal Factors
Objective of the Firm Product elastic to price

External Factors
Demography

of

the

market Manufacturing policy Consumer buying pattern (Scale and Technology) Existence of Price Cartel Competitors Price Government restrictions if any

Pricing Strategies Cost Based: Cost plus/Mark-up Marginal Cost Demand Based Skimming Penetration What the traffic can bear Monopolistic price competition Competition Based Going rate Discount Premium Perceived Value Pricing Psychological Pricing/Odd Value Pricing

Resale Price Maintenance Resale price maintenance refers to the practice adopted by the marketer towards specifying the final price at which the product should be sold to the final consumer. The basic objective of the manufacturer is to implement control over the prices at which the retailer resell their products. Apart from control, the practice of resale price maintenance also instil some sense of confidence among the consumers and improve the image of the brand because huge disparity among the prices of the same product is not experienced by the consumer when buying from different retailer.

Resale price maintenance may be implemented in any of the three forms:

A suggestive maximum price.
A suggestive minimum price. A suggestive fixed price.

In Indian context the practice of suggesting minimum price is not allowed, especially in life saving drugs. This is in view of the theory that under monopolistic situation suggesting minimum price would amount to giving absolute freedom to the retailer in effecting consumer exploitation.

Marketing Channels Functions rendered by channel members:

Information Promotion Contact Matching Negotiation

Factors to be considered while designing an effective channel

Objective of Distribution (Reach)
Nature and Characteristic of the product Competitors channel policy

Availability of funds
Extent of control the firm intend to impose on

distribution network Legal parameters

Retailing Role of large format retailing

Adds to the brand image Brings greater sense of trust and confidence Gives better exposure and visibility Builds better brand awareness Helps in providing better schemes and bundled offers

Logistics and Supply chain management

Warehousing Inventory management Transportation Logistics information system

Marketing Communication Mix The priorities and combination of the components of Promotion mix is determined by the following issues:
Availability of funds (Plenty or Scarce)

Extent

of dispersion of customers (Wide or concentrated) Nature of Product (Complex, High Unit Price or simple standardised and Low unit price) Stage of Product Life Cycle

Advertisement may be defined as any form of paid, non-personal presentation of products in any medium having an identified sponsor Publicity on the other hand refers to any form of nonpaid, non-personal presentation of products in any news item or editorial comment having unidentified sponsor Public Relation refers to the management function that determines the attitudes and opinions of organisations publics, identifies its policies with the interest of its publics and then formulates and executes a program of action to earn the understanding and goodwill of its publics

Steps in Developing effective marketing communication

Identifying the Target audience Determining communication objective Designing the message (AIDA) appeals, structure,

format Choosing the right media reach, frequency, coverage, budget and competition Selecting the message source brand endorsers Collecting feedback

Sales Promotion Pull(Consumer Promotion) and Promotion) Strategy.

Consumer Promotion Tools

Push(Trade

Trade Promotion Tools Merchandising Sponsoring major National and International events Participation in Trade fairs and Exhibitions Dealer level contests

Discounts Coupons Samples Cash refund offers Demonstrations Premium offers Self liquidating offers Bundled offers Contests Gifts Price-offs