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MARKETING PROCESS

1.Analysing marketing opportunities 2.Selecting target markets 3.Developing marketing mix 4.Managing the marketing effort

1.Analysing marketing opportunities

1.Marekting Information System 2.Marketing Research System 3.Marketing environment PEST

2.Selecting target markets

1.Segmentation 2.Target Marketing 3.Positioning

3.Developing marketing mix

1.Product

Line,mix,depth,consistency Branding, Brand Extension

Packaging New Product development process Product life cycle

2.Price 3.Place 4.Promotion mix- AD,SP,PS,PR,DR

4.Managing the marketing effort

1.Markeing Organisation 2.Marketing Control 1.Annual Plan control 2.Efficienty control 3.Profitability control 4.Strategic control

BRANDING

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A BRAND IS A NAME,TERM, SIGN, SYMBOL, DESIGN OR A COMBINATION OF THEM INTENDED TO IDENTIFY THE GOODS OR SERVICES OF ONE SELLER OR GROUP OF SELLERS AND TO DIFFERENTIATE THEM FROM THOSE OF COMPETITORS. WORLDS MOST 10 VALUABLE BRANDS COCO-COLA MARLBORO IBM GILLETTE BUDEWISER BRAND-IS MCDONALDSDISNEY SONY BRAND THAT CAN BE KODAK INTEL VOCALISED-

THAT PART OF THE BUSH,ANACIN,COLGATE,

A BRAND MARK IS THAT PART WHICH CAN (FEVICOL,CAMLIN,ASIAN PAINTS,BOMBAY DYEING)

BE

SEEN

BUT

IS

NOT

UTTERABLE.

A TRADE MARK IS A LEGALLY PROTECTED BRAND

CHARACTERISTICS OF GOOD BRAND NAME 1.IT SHOULD BE EASY TO PRONOUNCE, RECOGNISE AND REMEMBER

2.IT SHOULD BE ASSOCIATED WITH AN ATTRACTIVE PICTURE OR IMAGE, SO THAT IT GETS RECORDED IN THE HUMAN MIND AND WILL FACILITATE RECALL.

3.IT SHOULD SUGGEST SOMETHING ABOUT THE PRODUCT LIKE ACTION, COLOUR, TYPE , OR THE BENEFITS DERIVED IN USING THE PRODUCT. E.G., STOPACHE,QUICKFIX,DUROPLY,BAND-AID, GROMOR,SRINGAR ETC.,

4.IT SHOULD GIVE THE RIGHT CONNOTATION TO THE BUYER. (KOOLAIR , SUNFLAME)

5.IT SHOULD NOT CARRY POOR MEANINGS IN OTHER COUNTRIES AND LANGUAGES

SEARCHING FOR BRAND NAMES - METHODS 1.ASSOCIATION TESTS: WHAT IMAGES COME INTO MIND

2.MEMORY TESTS- HOW WELL IS THE NAME REMEMBERED 3.PREFERENCE TESTS-WHICH NAMES ARE PREFERRED

BRAND EXTENSION/LINE EXTENSION

BRAND EXTENSIONS- A COMPANY MAY USE ITS EXISTING BRAND NAME TO LAUNCH NEW PRODUCTS IN OTHER CATEGORIES. LINE EXTENSIONS - CONSIST OF INTRODUCING ADDITIONAL ITEMS IN THE SAME BRAND NAME SUCH AS NEW FLAVOURS, FORMS , COLOURS, ADDED INGREDIENTS, PACKAGE SIZES, ADVANTAGES OF THESE EXTENSIONS 1.ESTABLISHES THE PRODUCTS QUALITY

2.MUCH HIGHER CHANCE OF SURVIVAL THAN NEW BRAND LAUNCHES

3.SAVING HUGE NEW BRAND LAUNCHING EXPENSES

DISADVANTAGES OF THESE EXTENSIONS 1.BRAND NAME LOSING SPECIFIC MEANING

2.MIGHT DAMAGE RESPECT FOR ORIGINAL PRODUCT

3. MAY BE INAPPROPRIATE TO THE NEW PRODUCT 4.BRAND MAY LOSE ITS SPECIAL POSITIONING IN THE CONSUMERS MIND THROUGH OVEREXTENSION

5.BRAND CANNIBALISATION.

BRAND NAMES WHICH HAVE BECOME GENERIC NAMES EXAMPLES NYLON, VASELINE, FIBREGLASS, THERMOS, ASPIRIN,KEROSINE, LINOLEUM, CELLOPHANE, ESCALATOR, ZIPPER,JEEP ETC.,DECOLAM, DALDA.XEROX, CHOICES IN SELECTION OF A GOOD BRAND NAME 1.INITIALS/ACRONYMNS : 2.INDIVIDUAL NAMES WITH NUMBERS:VICKS ACTION-500, 3.PERSONAL/FAMILY OR FOUNDER NAME:JOHN BOYD DUNLOP 4.GEIOGRAPHICAL/HISTORICAL NAMES; 5.PART OF COMPANYS NAME6.COMBINATION OF TWO WORDS- FAIR & LOVELY TIPS&TOES, 7.ANIMALS- KINGFISHER,TORTOISE TOP INDIAN BRANDS TIK-20,

COLGATE

BATA

PONDS DETTOL

BRITANNIA

PHILIPS

VICKS IODEX RIN

GODREJ

TATA

LIFEBUOY

DALDA SURF

HORLICKS

AMUL

ARIEL LUX

NIRMA REYNOLDS

MRF

TITAN ANACIN

VIP

EVEREADY

J&J

BAJAJ PARLE BAND-AID

WHIRLPOOL

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COCA-COLA

BPL

VIM

GLAXO COMPLAN

DABUR

CINTHOL

ATLAS TOPAZ THUMS-UP

SONY

RASNA LIRIL

PEPSI

SUNLIGHT

HERO

TVS

CERELAC

MAGGI RED LABEL

DHARA

KWALITY

BATA

DETTOL

CADBURYS

HAWKINS

HORLICKS

DUNLOP

PONDSPAARACHUTE

USHA

MAGGI LAKME NESCAFE

THUMS-UP

ROBIN BLUE BURNOL

KORES HMT BRANDING

ANCHOR

A BRAND IS A NAME,TERM, SIGN, SYMBOL, DESIGN OR A COMBINATION OF THEM INTENDED TO IDENTIFY THE GOODS OR SERVICES OF ONE SELLER OR GROUP OF SELLERS AND TO DIFFERENTIATE THEM FROM THOSE OF COMPETITORS. WORLDS MOST 10 VALUABLE BRANDS COCO-COLA MARLBORO IBM KODAK INTEL GILLETTE MCDONALD SDISNEY BUDEWISER SONY

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TOP INDIAN BRANDS

COLGATE PHILIPS TATA AMUL MRF J&J COCA-COLA DABUR SONY HERO DHARA HAWKINS USHA ROBIN BLUE BPL

BATA PONDS DETTOL BRITANNIA VICKS IODEX RIN GODREJ LIFEBUOY ARIEL LUX DALDA SURF NIRMA REYNOLDS VIP EVEREADY WHIRLPOOL HORLICKS

TITAN ANACIN

BAJAJ PARLE BAND-AID VIM

GLAXO COMPLAN

CINTHOL

ATLAS TOPAZ THUMS-UP PEPSI CERELAC BATA SUNLIGHT MAGGI RED LABEL CADBURYS

RASNA LIRIL TVS KWALITY

DETTOL DUNLOP

HORLICKS

PONDSPAARACHUTE THUMS-UP ANCHOR

MAGGI LAKME NESCAFE BURNOL KORES HMT

BRAND-IS THAT PART OF THE BRAND THAT CAN BE VOCALISED-BUSH,ANACIN,COLGATE, A BRAND MARK IS THAT PART WHICH CAN BE SEEN BUT IS NOT UTTERABLE. (FEVICOL,CAMLIN,ASIAN PAINTS,BOMBAY DYEING)

A TRADE MARK IS A LEGALLY PROTECTED BRAND CHARACTERISTICS OF GOOD BRAND NAME 1.IT SHOULD BE EASY TO PRONOUNCE, RECOGNISE AND REMEMBER

2.IT SHOULD BE ASSOCIATED WITH AN ATTRACTIVE PICTURE OR IMAGE, SO THAT IT GETS RECORDED IN THE HUMAN MIND AND WILL FACILITATE RECALL.

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3.IT SHOULD SUGGEST SOMETHING ABOUT THE PRODUCT LIKE ACTION, COLOUR, TYPE , OR THE BENEFITS DERIVED IN USING THE PRODUCT. E.G., STOPACHE,QUICKFIX,DUROPLY,BAND-AID, GROMOR,SRINGAR ETC.,

4.IT SHOULD GIVE THE RIGHT CONNOTATION TO THE BUYER. (KOOLAIR , SUNFLAME)

5.IT SHOULD NOT CARRY POOR MEANINGS IN OTHER COUNTRIES AND LANGUAGES

BRAND EXTENSION/LINE EXTENSION

BRAND EXTENSIONS- A COMPANY MAY USE ITS EXISTING BRAND NAME TO LAUNCH NEW PRODUCTS IN OTHER CATEGORIES. LINE EXTENSIONS - CONSIST OF INTRODUCING ADDITIONAL ITEMS IN THE SAME BRAND NAME SUCH AS NEW FLAVOURS, FORMS , COLOURS, ADDED INGREDIENTS, PACKAGE SIZES, ADVANTAGES OF THESE EXTENSIONS 1.ESTABLISHES THE PRODUCTS QUALITY

2.MUCH HIGHER CHANCE OF SURVIVAL THAN NEW BRAND LAUNCHES

3.SAVING HUGE NEW BRAND LAUNCHING EXPENSES

DISADVANTAGES OF THESE EXTENSIONS 1.BRAND NAME LOSING SPECIFIC MEANING

2.MIGHT DAMAGE RESPECT FOR ORIGINAL PRODUCT

3. MAY BE INAPPROPRIATE TO THE NEW PRODUCT

4.BRAND MAY LOSE ITS SPECIAL POSITIONING IN THE CONSUMERS MIND THROUGH OVEREXTENSION

5.BRAND CANNIBALISATION.

BRAND NAMES WHICH HAVE BECOME GENERIC NAMES EXAMPLES NYLON, VASELINE, FIBREGLASS, THERMOS, ASPIRIN,KEROSINE, LINOLEUM, CELLOPHANE, ESCALATOR, ZIPPER,JEEP ETC.,DECOLAM, DALDA.XEROX, CHOICES IN SELECTION OF A GOOD BRAND NAME 1.INITIALS/ACRONYMNS : 2.INDIVIDUAL NAMES WITH NUMBERS:VICKS ACTION-500, TIK-20,

3.PERSONAL/FAMILY OR FOUNDER NAME:JOHN BOYD DUNLOP 4.GEIOGRAPHICAL/HISTORICAL NAMES; 5.PART OF COMPANYS NAME6.COMBINATION OF TWO WORDS- FAIR & LOVELY TIPS&TOES, 7.ANIMALS- KINGFISHER,TORTOISE Brand equity The value of a brand, based n the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations, and other asses such as patents, trademarks, and channel relationships.

COMMUNICATION & CONSUMER BEHAVIOUR

TYPES OF COMMUNICATION

INTERPERSONAL COMMUNICATION

COMMUNICATION THAT OCCURS ON A PERSONAL LEVEL BETWEEN TWO OR MORE PEOPLE.

FORMAL INTERPERSONAL COMMUNICATION IS THE KIND OF COMMUNICATION THAT TAKES PLACE BETWEEN A SALESPERSON AND A PROSPECT, IN WHICH THE SALESPERSON SERVES AS THE SENDER AND THE PROSPECT THE RECEIVER OF THE PRODUCT INFORMATION.

FACE TO FACE COMMUNICATION CAN BE BOTH VERBAL AND NONVERBAL.

SOME FACIAL MOVEMENTS

AND

BODILY

SIMPLE SMILE BROAD SMILE COMPRESSED SMILE GRIN UPPER LIP OUT LOWER LIP OUT BIT LIPS COMPRESSED LIPS OPEN MOUTH CHEW GRIND TEETH TONGUE BETWEEN LIPS

TONGUE OUT BLINK CLOSE EYES WINK STARE WIDEN EY4ES LOOK DOWN LOOK AROUND BLUSH SHRUG SCRATCH ADJUST CLOTHING COVER EYES FINGERS ON FACE STROKE CHIN STROKE MUSTACHE STROKE BEARD TWIST HAIRS CLAP HANDS CLASPED

HANDS FOLDED

IMPERSONAL COMMUNICATION MASS COMMUNICTION

OR

COMMUNICATION DIRECTED TO LARGE AND DIFFUSE AUDIENCE.

IMPERSONAL COMMUNICATION IS CARRIED BY SUCH MASS MEDIA CHANNELS AS TELEVISION, RADIO, NEWSPAPERS, MAGAZINES ETC., NOT ALL MASS COMMUNICATIONS HAVE COMMERCIAL OBJECTIVES

DEVELOPING EFFECTIVE COMMUNICATIONS STEPS

1.IDENTIFY THE TARGET AUDIENCEIMAGE ANALYSIS, FAMILIARITY, FAVOURABILTY ANALYSIS 2.DETERMINE THE COMMUNICATION OBJECTIVES COGNITIVE, AFFECTIVE OR BEHAVIORAL COGNITIVEPUT CONSUMERS MIND SOMETHING IN

AFFECTIVE CHANGE AN ATTITUDE BEHAVIORAL - GET THE CONSUMER TO ACT 3.DESIGN THE MESSAGE 4.SELECT CHANNELS 5.BUDGET 6.DECIDE ON THE COMMUNICATIONS MIX THE COMMUNICATION

7.MEAUSRE RESULTS 8.MANGE THE INTEGRATED COMMUNICATION PROCESS

BARRIERS TO COMMUNICATION AND CONSUMER BEHAVIOUR

SELECTIVE EXPOSURE AND SELECTIVE PERCEPTION

BALANCE THEORY - POSTULATES THAT INDIVIDUALS SEEK INFORMATION THAT IS CONSISTENT WITH THEIR NEEDS, INTERESTS, AND ATTITUDES AND AVOID INFORMATION THAT IS NOT.

PREPARED FOR MBA (DAY) IV SEMESTER 2001

PSYCHOLOGICAL NOISE- DISTRACTING THOUGHTS, ADCLUTTER, DAYDREAMING

REDUNDANCY IS CONSTANTLY PRACTICED BY MARKETERS WHO REPAT THE SAME ADVERTISEMENTS OVER AND OVER IN THE SAME MEDIUM.(DIFFERENT TYPES OF ADVERTISEMENTS)

REPEATED EXPOSURE TO AN ADVERTISING MESSAGE HELPS SURMOUNT PSYCHOLOIGICAL BARRIERS TO MESSAGE RECEPTION.

ROADBLOCKING VIEWING OF THEIR

TO ENSURE COMMERCIALS

DESPITE FREQUENT CHANNEL SWITCHING DURING COMMERCIALS , SOME ADVERTISERS BROADCAST THE SAME COMMERCIALS SIMULTANEOUSLY IN EACH NETWORK.

OVERLAPPING AUDIENCES - SINCE MANY MEDIA - ESPECIALLY THOSE WITH SIMILAR EDITORIAL FEATURES AND FORMATS HAVE OVERLAPPING AUDIENCES, ADVERTISERS USUALLY PLACE THEIR ADVERTING MESSAGES SIMULTANEOUSLY OR SEQUENTIAL IN A NUMBER OF MEDIA WITH SIMILAR AUDIENCE PROFILES.

COMMUNICATION TECHNIQUES MAKE A MESSAGE MEMORABLE

TO

1.GET THE AUDIENCE AROUSED

2.GIVE THE AUDIENCE A REASON FOR LISTENING 3.USE QUESTIONS INVOLVEMENT TO GENERATE

4.CAST THE MESSAGE IN TERMS FAMILIAR TO YOUR AUDIENCE 5.TIE MATERIAL BY A THEME AND PRESENT IN A LOGICAL MANNER 6.REPEAT KEY POINTS 7.USE RHYTHM AND RHYME 8.ASK YOUR CONCLUSION ONE SIDED MESSAGES AUDIENCE VERSUS TWO FOR A

SIDED

TELLING AUDIENCE ONLY THE GOOD POINTS ABOUT THEIR PRODUCTS TWO-SIDE TELLING THE AUDIENCE THE BAD POINTS ABOUT THEIR PRODUCTS

A PRACTICAL ILLUSTRATION OF TWOSIDED ADVERTING IS COMPARATIVE ADVERTISING. - ADVERTISING THAT EXPLICITLY NAMES OR IDENTIFIES ONE OR MORE COMPETITORS OF THE ADVERTISED BRAND FOR THE PURPOSE OF CLAIMING SUPERIORITY.

ORDER EFFECTS ON TV THE COMMERCIALS SHOWN FIRST ARE RECALLED BEST, THOSE IN THE MIDDLE THE LEAST AND ONES AT THE END SLIGHTLY BETTER THAN THOSE IN THE MIDDLE. THE MEDIA RECOGNIZE THE IMPACT OF ORDER EFFECTS BY ASSIGNING "PREFERRED POSITION" PLACEMENT TO FRONT, BACK, AND INSIDE COVERS OF MAGAZINES,

HUMOUR IN ADVERTISING

1.HUMOUR HEIGHTENS AWARENESS OF AND BRINGS ATTENTION THE COMMERCIAL. 2.HUMOROUS COMMERCIALS HAVE A SHORT LIFE SPAN. 3.HUMOUR SHOULD NOT BE USED FOR SENSITIVE GOODS AND SERVICES LIKE MONEY, SAFETY

SEX IN ADVERTISING THERE ARE FEW APPEALS IN ADVERTISING THAT EQUAL THE ATTENTION GETTING VALUE AS SEX .

SEXUALLY ORIENTED ADS COULD BE USED AS

1.ATTENTION GETTING DEVICE

2.TO DISPLAY THE FUNCTION OF THE PRODUCT 3.AS FANTASY IMAGES 4.SYMBOLICALLY -

MEN AND WOMEN RESPOND DIFFERENTLY TO SEX IN ADVERTISING. FOR EXAMPLE, PERCEPTIONS AMONG MEN OF AN AD'S SEXINESS DEPEND ON THE EXTENT OF NUDITY PORTRAYED. FOR WOMEN, ROMANTIC CONTENT IS THE PRIMARY DETERMINANT OF WHETHER AND AD IS "SEXY".

CULTURAL, SUBCULTURAL AND CROSSCULTURAL ASPECTS OF CONSUMER BEHAVIOUR


Culture is the sum total of learned beliefs, values and customs that serve to direct the consumer behaviour of members of a particular society.

Given the broad and pervasive nature of culture, its study generally requires a global examination of the character of the total society, including such factors as languages, knowledge laws, religions, food customs, music, art, technology, work patterns, products, and other artificats that give the society its distinctive flavour. In a sense, culture is a societys personality. For this reason, it is not easy to define its boundaries.

The belief and value components of our definition refer to the accumulated feelings and priorities that individuals have about things. More precisely, beliefs consist of the very large number of mental or verbal statements (i.e., I believe) that reflect a persons particular knowledge and assessment of something (another person, a store, product, a brand). Values are also beliefs. However, values differ from other beliefs in that they meet the following criteria:

1. 2. 3. 4. 5.

they are relatively few in number, they serve as a guide for culturally appropriate behaviour, they are enduring or difficult to change, they are not tied to specific objects or situations. they are widely accepted by the members of a society.

Therefore, in a broad sense, both values and beliefs are mental images that affect a wide range of specific attitudes, which in turn influence the way a person is likely to respond in a specific situation. In contrast to beliefs and values, customs and overt modes of behaviour that constitute culturally approved.or acceptable ways of behaving in specific situations. Customs consist of everyday or routine behaviour. Thus, while beliefs and values are guides for behaviour, customs are usual and acceptable ways of behaving.

The Invisible Hand of Culture:

The impact of culture is so natural and so automatic that its influence on behaviour is usually taken for granted. A true appreciation of the influence culture has on our daily life requires some knowledge of atleast one other society with difference cultural characteristics.

Culture Satisfies Needs:

Culture exists to satisfy the needs of the people within a society. It offers order, direction, and guidance in all phases of human problem solving by providing tried and true methods of satisfying physiological, personal, and social needs.

In a cultural context, a firms products and services can be viewed as offering appropriate or acceptable solutions for individual or societal needs. If a product is no longer acceptable because a value or custom that is related to its use does not

adequately satisfy human needs, then the firm producing it must be ready to revise its product offering. Marketers must also be alert to newly embraced customs and values.

Culture is Learned:

Unlike innate biological characteristics (eg., sex, skin, hair colour, intelligence), culture is learned. At an early age we begin to acquire from our social environment a set of beliefs, values and customs that constitute our culture.

How Culture is Learned Anthropologists have identified three distinct forms of cultural learning: formal learning, in which adults and older siblings teach a young family member how to behave, Informal learning, in which a child learns primarily by imitating the behaviour of selected others (family, friends, TV heroes), and technical learning, in which teachers instruct the child in an educational environment as to what should be done, how it should be done, and why it should be done.

Encujturation and Acculturation:

In discussing the acquisition of culture, anthropologists often distinguish between the learning of ones own, or native, culture and the learning of some other culture. The learning of ones own culture is known as Enculturation, the learning of a new or foreign culture is known as acculturation;

Culture is Shared:

To be considered a cultural characteristic, a particular belief, value or practice must be shared by a significant portion of the society. Accordingly, culture is frequently viewed as group customs that link together the members of a society.

Various social institutions within a society transmit the elements of culture and make the sharing of culture a reality. Chief among such institutions if the family, which serves as the primary agent for enculturation the passing along of basic cultural

beliefs, values, and customs to societys newest members. A vital part of the enculturation role of the family is the consumer socializations of the young.

In addition to the family, educational institutions also shares the responsibility for the transfer of selected aspects of culture. Educational institutions are specifically charged with imparting basic learning skills, history, patriotism, citizenship, and the technical training needed to prepare people for significant roles within society. Another social institution that plays a major role in the transfer of culture throughout society is the mass media.

Culture is Dynamic:

Many factors are likely to produce cultural changes within a given society (new technology, population shifts, resource shortages, wars, changing values, customs borrowed from other cultures). For this reason, the marketer must carefully monitor the socio cultural environment in order to market an existing product more effectively, or to develop promising new products.

THE MEASUREMENT OF CULTURE;

A wide range of measurement techniques are employed in the study of culture. For example, the projective tests used by psychologists to study motivation and personality and the attitude measurement techniques used by social psychologists and sociologists, are relatively popular tools in the study of culture.

In addition, content analysis, consumer field work, and value measurement instruments are three research approaches that are frequently associated with the examination of culture and the spotting of cultural insights and trends.

Content Analysis:

Conclusions about a society, or specific aspects of a society, can sometimes be drawn from an examination of the content of its messages. Content analysis, as the

name implies, focuses on the content of verbal, written, and pictorial communications (eg., the copy and art composition of an ad.)

Content analysis can be used as a relatively objective means for determing whether social and cultural changes have occurred in a specific society.

SUB CULTURE
A subculture can be thought of as a distinct cultural group that exists as an identifiable segement within a larger, more complex society. The members of a specific subculture tend to possess beliefs, values, and customs that set them apart from other members of the same society. In addition, they adhere to most of the dominant cultural beliefs, values and behavioural patterns of the larger society.

Thus the cultural profile of a society or nation can be viewed as a composite of two distinct elements: (1) the unique benefits, values and customs subscribed to by members of specific subcultures; and (2) the central or core cultural themes that are shared by most of the population, regardless of specific subcultural memberships.

Subcultural analysis enables the marketing manager to focus on rather large and natural market segments. In carrying out such analysis, however, the marketer must determine whether the beliefs, values and customs shared by members of a specific subgroup make them desirable candidates for special marketing attention. Subcultures are therefore relevant units of analysis for market research.

SUBCULTURAL CATEGORIES;

1. 2. 3. 4. 5.

Nationality subculture Religion subculture Regional subculture Age subculture Sex subculture

NATIONALITY SUBCULTURES;

While most Indian citizens, see themselves as Indian they frequently retain a sense of identification and pride in the language and customs of their ancestors.

When it comes to consumer behaviour, this ancestral pride is manifested most strongly in the consumption of ethnic foods, in travel to the homeland, and in the purchase of numerous cultural artifacts (ethnic clothing, art, music.

RELIGIOUS SUBCULTURES;

Difference religious groups flourish in any country. The members of all these religious groups are at times likely to make purchase decisions that are influenced by their religious identity. Nevertheless, consumer behaviour is directly affected by religion in terms of products that are symbolically and ritualistically associated with the celebration of various religious holidays. Though marketers are often reluctant to reach religious subcultures through

religious publications, advertising in religious media can be rewarding. Very little consumer research has been devoted to examining how religious affiliation and commitment influences consumer preferences and loyalties.
GEOGRAPHIC SUBCULTURES; India is a large country, one that enjoys a wide range of climatic and geographic conditions. Given the countrys size and physical diversity, it is only natural that the Indian people have a sense of regional identification and use this identification as a way of describing others. Such labels often assist us in developing a mental picture a stereotype of the person in question.

In India there are many regional differences in consumption behaviour. example, coffee drinking is more in the South.

For

AGE SUBCULTURES:

All major age subgroupings of the population might broadly be thought of as separate subcultures. Within the context of the family life cycle. Each stage of the life cycle (bachelorhood, honeymooners, parenthood, postparenthood, and dissolution) could be considered a separate subculture, since important shifts occur in the demand for specific types of products and services.

SEX SUBCULTURE;

All known societies assign certain traits and roles to males and others to females, for instance, aggressiveness,

competitiveness, independence, and self confidence were long considered to be traditional masculine traits, neatness, tactfulness, gentleness, and talkativeness wee considered to be traditional feminine traits. In terms of role differences, women have historically been cast as homemakers with responsibility for child care, and men as the providers or breadwinners. Many advertisers appeal to such sex-linked roles, and consumer tastes are frequently influenced by sexrole factors.
THE WORKING WOMAN:

Marketers and consumer researchers have been increasingly interested in the working women, especially the married working woman. They recognize that working wives are a large and growing market segment whose needs differ from those of women who do not work outside the homes.
CROSS CULTURE

To determine whether and how to enter a foreign market, marketers should conduct cross-cultural consumer analysis is defined as the effort to determine to what extent the consumer of two or more nations are similar or difference. Such an analysis can provide marketers with an understanding of the differences in psychological, social, cultural, and environmental characteristics so as to permit the design of effective marketing strategies for each of the specific countries involved.

Today many companies almost all major corporations sell their products throughout the world. Infact, the issue is generally not whether to sell a brand in other countries, but how to do it (i.e., one product, one global advertising campaign worldwide, or tailored products and localized ads for each country).

FACTORS:

1. 2. 3. 4. 5. 6. 7.

Language differences Differences in consumption patterns Differences in potential market segments Differences in the way that products or services are used Differences in the criteria for evaluating products and services Differences in economic and social conditions Differences in marketing research opportunities.

(OU Campus)-For private circulation only

DECISION AREAS IN ADVERTISING


Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor. STEPS IN DEVELOPING AN ADVERTISING PROGRAMME 1.Setting the advertising objectives 2.Deciding on the advertising budget 3.Choosing the advertising message 4.Decding on the Media 5.Evaluting advertising effectiveness I. SETTING THE ADVERTISING OBJECTIVES The advertising objectives must flow from prior decisions on target market, market positioning and marketing mix. Advertising objectives can be classified according to whether the aim is to inform, persuade or remind. Informative advertising figures heavily in the pioneering stage (to build a primary demand). Persuasive advertising becomes important in the competitive stage and Reminder advertising is important with mature products. II. DECIDING THE ADVERTISING BUDGET There are five specific factors to consider when setting the advertising budget. 1.Stage in the Product Life Cycle New Products require more advertising 2.Market Share High market share -less advertising 3.Competition and clutter More advertising 4.Advertising frequency High frequency requires more advertising

5.Product substitutability More advertising Methods of setting the advertising budget: 1.Affordable method 2.Percentage of sales method 3.Competitive parity method 4.Objective and task method III.CHOOSING THE ADVERTISING MESSAGE Ideally the message should gain attention, hold interest, arouse desire and elicit action (AIDA) Model. 1.What to say? MESSAGE CONTENT There are 3 types of appeals. Rational, emotional and moral. Rational appeals claim that the product has certain benefits. Emotional appeals attempt to stir up negative or positive emotions that will motivate purchase. Ego, Fear, guilt, shame: Humour, love, pride and joy. Moral appeals are directed to the audience sense of what is right and proper. 2.How to say it? MESSAGE FORMAT & EXECUTION In a print ad, the communicator has to decide the headline, copy, illustration and colour. If the message is over the radio the communicator has to choose words and voice qualities. If the message is be carried on TV all these elements plus body language have to be planned. Presenter has to pay attention to facial expression, gesture, dress and posture and hairstyle. Creativity is required in every aspect o message format and execution. Creative people must find a cohesive style, tone, words and format for executing the message. Memorable and attention-getting words must be found. Any message can be presented indifferent execution styles: 1. SLICE OF LIFE This style show one or more typical people suing the product in a normal setting. 2. LIFESTYLE: This style shows how a product fits in with a particular lifestyle. 3. FANTASY This style creates a fantasy around the product or its use. (Dream themes) 4. MOOD OR IMAGE - This style BUILDS A MOOD OR IMAGE AROUND THE PRODUCT, SUCH AS BEAUTY, LOVE OR SERINITY. No claim is mad about the product except through suggestion 5. MUSICAL this style shows on e or more people or cartoon characters singing a song about the product. 6. PERSONALITY - This style creates a character that represents the product. 7. TECHCHNICAL EXPERTISE - This style shows the companys expertise in making the product. 8. SCIENTIFIC EVIDENCE - This style presents survey or scientific evidence that the brand is better.

9. TESTIMONIAL EVIDENCE - This style features a highly believable or likable source endorsing the product. Creativity is especially required for headlines. There are six basic types of headline: 1.NEWS New boom and more inflation ahead 2.QUESTION Have you heard? 3.NARRATIVE They laughed at me. 4.COMMAND Dont buy 5.1-2-3 WAYS 12 ways to save income tax 6.HOW-WHAT-WHY Format elements such as ad size, colour and illustration will affect an ads impact. Larger and colour ads gain more attention. Picture, headline and Copy are important in that order. Even then a really outstanding ad will be noted by about 50% of the exposed audience. IV.DECIDING ON THE MEDIA Media selection involves finding the most t cost-effective media to deliver the desired number of exposures to the target audience. Choosing among the major media types: Newspapers Flexibility, timeliness, short life TV Combines sight, sound, motion; has clutter, costly Direct Mail Audience selectivity, Junk mail Radio Low cost, fleeting Magazines Long life, some waste circulation Outdoor Low cost, creative limitations Yellow Pages Wide reach, high competition Internet Interesting Low customers
Prof.V.Shekhar, Dept., of Business Management, Osmania University, Hyderabad-500 007

SELECTING SPECIFIC VEHICLES: The media planner must search for the most cost-effective media vehicles within the chosen media type. Media planners calculate the Cost Per Thousand Persons reached by a vehicle. The media planner ranks each media by a cost per thousand and favors media with the low cost per thousand. However, several factors have to be considered in applying the cost per thousand measure. These are audience quality, audience attention probability, magazine editorial quality and the magazines ad placement qualities and extra services like lead-time. DECIDING ON THE MEDIA TIMING In choosing media, the advertiser faces a macro scheduling problem and a micro scheduling problem. The macro-scheduling problem involves scheduling the advertising in relation to season and business cycle. The firm can vary its advertising expenditure to follow the seasonal pattern, oppose the seasonal pattern or to be constant throughout the year. Most firms pursue a seasonal policy.

The micro-scheduling problem calls for allocating expenditure within a short period to obtain maximum impact. Continuity is achieved by scheduling exposures evenly throughout the given period. Concentration calls for spending all the advertising money in a single period. Fighting calls for advertising for some period, followed by a hiatus with no advertising, followed by a second period of advertising activity. Pulsing is continuous advertising at low-weigh levels reinforced periodically by waves of higher activity. V. EVALUATING ADVERTISING EFFECTIVENESS A) COMMUNICATION EFFECT- RESEARCH seeks to determine whether an ad is communication effectively. Called copy testing, it can be done before an ad is put into media and after it is printed or broadcast. 1.DIRECT RATING METHOD asks consumers to rate alternate ads. These rating are used to evaluate the following:

How well does the ad catch the readers attention? How well does the ad lead the reader to read further? How clear is the message? How effective is the particular appeal? How well does the ad suggest follow-through action?

2.PORTFOLO TESTS ask consumers to view or listen to a portfolio of advertisements, taking as much time as they need. Consumers are then asked to recall all the ads and their content, aided or unaided y the interviewer. Recall level indicates an ads ability to stand out and to have its message understood and remembered.

3.LABORATORY TESTS use equipment to measure physiological reactions like heartbeat, blood pressure, pupil dilation and perspiration to an and. These tests measure attention getting poser but reveal nothing about the impact on beliefs, attitudes, or intensions.

SALES EFFECT RESEARCH Advertisings sales effect is generally harder to measure than its communication effect because sales are influenced by many factors as products features, price,

availability and competitors actions. One way to measure the sales effect of advertising is to compare past sales with past advertising expenditures (Historical approach). Another way is through experiments. i.e. to test the effects of different advertising spending levels in different markets and measure the differences in the resulting sales level. It could spend the normal amount in one market area, half the normal amount in another area, and twice the normal amount in a third area, If the three market areas are similar, and if all other marketing efforts are the same, the differences in sales in the three cities could be related to advertising levels.

FACTORS RESPONSIBLE FOR CONSUMER BEHAVIOUR


AS AN INDIVIDUAL

1.Personalilty

Personality is defined as those inner psychological characteristics that both determine and reflect how a person responds to his or her environment 1)It reflects individual differences 2)It is consistent and enduring3)it can change Sigmund Freuds psychoanalytic theory Id pleasure principle Ego Superego-

2.-MOTIVATION

can be described as the driving force within individuals that impels them to action Motivational research is research designed to uncover the consumers subconscious or hidden motivations.

LEARNING Is the process by which individuals acquire knowledge and experience.

STRUCTURE OF MEMORY SENSORY STORE- just for a second SHORT TERM STORE BRIEF PERIOD, Look at tel no and forget before dialing. If rehearsal takes place it goes to the long-term store LONG TERM STORE- relatively extended periods of time for days, weeks, and even years.

Pavlovian experiment

Skinners experiment

ATTITUDES Attitude is a learned predisposition to behave in a consistently favorable or unfavorable with with respect to a given object Object here means such as issues, actions, behavior persons or events

PERCEPTION Is the process by which an individual selects, organizes, and interprets stimuli into meaningful and coherent picture of the world.

SOCIAL AND CULTURAL SETTINGS Group May be defined as two or more people who interact to accomplish individual or mutual goals.

FAMILY Two or more persons related by blood, marriage or adoption that reside together. Husband-dominated; wife dominated, Joint

SOCIAL CLASS Division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same statues and members of all other classes have either more or less status

UU LU UM Lm Ul LL

CULTURE Is the sum total of learned beliefs, values, and customs that serve to direct the consume behaviour s of members of a particular society.

Sub culture is a distinct cultural group that exists as an identifiable segment within a larger more complex society.

INDUSTRIAL MARKETS/BUSINESS MARKETS THE BUSINESS MARKET COMPRISES AL ORGANISATIONS THAT BUY GODS AND SERVICES FOR USE IN THE PRODUCTION OF OTHER GOODS AND SERVICES FOR USE IN THE PRODUCTION OF OTHER PRODUCTS AND SERVICES OR FOR THE PURPOSE OF RESELLING OR RENTING THEM TO OTHERS AT PROFIT. CHARACTERISTICS OF AN INDUSTRIAL MARKET: 1.FEWER BUT LARGER BUYERS THE INDUSTRIAL MARKET NORMALLY DEALS WITH FAR FEWER BUT LARGER BUYERS AND THEY PURCHASE IN BULK. FOR EXAMPLE, A TYRE MANUFACTURER HAS MANY CUSTOMERS IN REPLACEMENT MARKET, BUT THE MAIN SALES

WOULD BE BULK PURCHASES FROM ONE OR TWO MAJOR AUTOMOBILE MANUFACTURERS. 2.GEOGRAPHICALLY CONCENTRATED MOST OF THE BUSINESS MARKETS ARE GEOGRAPHICALLY CONCENTRATED AT FEW PLACES. CONSIDER FOR EXAMPLE PITAMPUR NEAR INDORE, IN MADHYA PRADESH, WHERE ALL LEADING AUTOMOBILE FIRMS HAVE PUT UP THEIR MANUFACTURING UNITS THERE.(INDIAS DETROIT). 3.DEMAND IS DERIVED I.E., DEMAND IS DERIVED FROM DEMAND FOR CONSUMER GOODS. A CAR MANUFACTURES BUYS STEEL BECAUSE CONSUMERS BUY CARS. IF CONSUMERS DEMAND FOR CARS DROPS, SO WILL THE DEMAND FOR STEEL AND OTHER PRODUCTS USED TO MAKE CARS. FOR EXAMPLE, INTELS LONG RUNNING INTEL INSIDE ADVERTISING CAMPAIGN SELLS PERSONAL COMPUTER BUYERS ON THE VIRTUES OF INTEL MICROPROCESSORS. THE INCREASED DEMAND FOR INTEL CHIPS BOOS DEMAND FOR THE PCS

CONTAINING THEM, AND BOTH INTEL AND ITS BUSINESS PARTNERS WIN. 4.DEMAND CHANGES IS NOT EFFECTED BY PRICE

I.E., TOTAL DEMAND FOR MANY BUSINESS PRODUCTS IS NOT AFFECTED MUCH BY PRICE CHANGES, ESPECIALLY IN THE SHORT RUN. A DROP IN THE PRICE OF LEATHER WILL NOT CAUSE SHOE MANUFACTURES TO BUY MUCH MORE LEATHER. 5.FLUCTUATING DEMAND THE DEMAND FOR MANY BUSINESS GOODS AND SERVICES TENDS TO CHANGE MORE AND MORE QUICKLY- THAN THE DEMAND FOR CONSUMER GOODS AND SERVICES DOES. A SMALL PERCENTAGE INCREASE IN CONSUMER DEMAND CAN CAUSE LARGE INCREASES IN BUSINESS DEMAND. SOMETIMES A RISE OF ONLY 10% IN CONSUMER DEMAND CAN CAUSE AS MUCH AS A 200 % RISE IN THE DEMAND DURING THE NEXT PERIOD. 6.PROFESSIONAL PURCHASING

A BUSINESS PURCHASE USUALLY INVOLVES MORE BUYERS AND MORE PROFESSIONAL PURCHASING EFFORT. OFTEN, BUSINESS BUYING IS DONE BY TRAINED PURCHASING AGENTS WHO SPEND THEIR WORKING LIVES LEARNING HOW TO BUY BETTER, THE COMPLEX THE PURCHASE, THE MORE LIKELY THAT SEVERAL PEOPLE WILL PARTICIPATE IN THE BUYING DECISION PROCESS. BUYING COMMITTEES MADE UP OF TECHNICAL EXPERTS AND TOP MANAGEMENT ARE COMMON IN THE BUYING OF MAJOR GOODS. 7.COMPLEX BUYING DECISIONS BUSINESS BUYERS USUALLY FACE MORE COMPLEX BUYING DECISIONS THAN DO CONSUMER BUYERS. PURCHASES OFTEN INVOLVE LARGE SUMS OF MONEY, COMPLEX TECHNICAL AND ECONOMIC CONSIDERATIONS, AND INTERACTIONS AMONG MAY PEOPLE AT MANY LEVELS OF THE BUYERS ORGANISATION. BUSINESS BUYERS MAY TAKE LONGER TIME TO MAKE THEIR DECISIONS BECAUSE OF THE COMPLEXITY OF DECISIONS. FOR EXAMPLE THE PURCHASE OF A LARGE COMPUTER SYSTEM MAY

TAKE MANY MONTHS OR MORE THAN A YEAR TO COMPLETE AND COULD INVOLVE A FEW CRORES OF RUPEES, THOUSANDS OF TECHNICAL DETAILS, DOZENS OF PEOPLE RANGING FROM TOP MANAGEMENT TO LOWER-LEVEL USERS. 8.BUYING PROCESS IS MORE FORMALISED THE BUSINESS BUYING PROCESS TENDS TO BE MORE FORMALISED THAN THE CONSUMER BUYING PROCESS. LARGE BUSINESS PURCHASES USUALLY CALL FOR DETAILED PRODUCT SPECIFICATIONS, WRITTEN PURCHASE ORDERS, CAREFUL SUPPLIER SEARCHES, AND FORMAL APPROVAL. THE BUYING FIRM MIGHT EVEN PREPARE POLICY MANUALS THAT DETAIL THE PURCHASE PROCESS. 9. BUYING MOTIVES FINALLY, BUSINESS PURCHASE DECISIONS ARE PRIMARILY RATIONAL, WHILE CONSUMER BUYING BEHAVIOUR IS RATIONAL AS WELL AS EMOTIONAL. INDUSTRIAL MARKETS & CONSUMER MARKETSDIFFERENCES

INDUSTRIAL MARKETS MARKETS

CONSUMER

GEOGRAPHICALLY CONCENTRATED GEOGRAPHICALLY DISPERSED


RELATIVELY FEWER BUYERS MARKETS TECHNICAL COMPLEXITY STANDARDISATION SERVICE-V.IMP IMPORTANT TECHNICAL EXPERTISE TECHNICAL EXPERTISE RATIONAL MOTIVES PSYCHOLOGICAL MOTIVES INTERPERSONAL RELATIONSHIPS INTERPERSONAL RELATION FUNCTIONAL INVOLVEMENT INVOLVEMENT SHORTER CHANNELS PERSONAL SELLING ADVERTISING COMPETITIVE BIDDING &NEGOTIATION LIST PRICES NONFAMILY LONGER SOMEWHAT LESS MASS

INDUSTRIAL BUYER BEHAVIOUR

MAJOR TYPES OF BUYING DECISIONS 1.STRAIGHT REBUY IN A STRAIGHT REBUY , THE BUYER REORDERS SOMETHING WITHOUT ANY MODIFICATIONS. IT IS USUALLY HANDLED ON A ROUTINE BIAS BY THE PURCHASING DEPARTMENT. BASED ON PAST BUYING SATISFACTION, THE BUYER SIMPLY CHOOSES FROM THE VARIOUS SUPPLIERS ON ITS LIST. IT IS THE MOST COMMON BUYING SITUATION IN INDUSTRIAL PURCHASING. 2.MODIFIED REBUY IN A MODIFIED REBUY, THE BUYER WANTS TO MODIFY PRODUCT SPECIFICATIONS, PRICES, TERMS OR SUPPLIERS. THE MODIFIED REBUY USUALLY INVOLVED MORE DECISION PARTICIPANTS THAN THE STRAIGHT REBUY. THIS BUYING DECISION IS INVOLVED WHEN THEY FEEL THAT SIGNIFICANT BENEFITS SUCH AS QUALITY IMPROVEMENTS, REDUCTIONS MAY BE DERIVED FROM REDEFINING ALTERNATIVES.

3.NEW TASK THE MOST COMPLEX BUYING SITUATION IS NEW TASK. A COMPANY BUYING A PRODUCT OR SERVICE FOR THE FIRST TIME FACES A NEW TASK SITUATION. IN SUCH CASES, THE GREATER THE COST OR RISK, THE LARGER THE NUMBER OF DECISION PARTICIPANTS AND THE GREATER EFFORTS TO COLLECT INFORMATION WILL BE. THE NEW TASK IS THE MARKETERS GREATEST OPPORTUNITY AND CHALLENGE. IN THE NEW TASK SITUATION, THE BUYER MUST DECIDE ON PRODUCT SPECIFICATION, SUPPLIERS, PRICE LIMITS, PAYMENT TERMS, ORDER QUANTITIES, DELIVERY TIMES AND SERVICE TERMS. PARTICIPANTS PROCESS IN THE BUSINESS BUYING

THE DECISION-MAKING UNIT OF BUSINESS MARKETS IS CALLED BUYING

CENTRE. I.E., ALL THE INDIVIDUALS AND UNITS THAT PARTICIPATE IN THE BUSINESS DECISION-MAKING PROCESS. THEY MAY PLAY ANY OF THE FIVE ROLES IN THE PURCHASE DECISION PROCESS:

1.USERS : ARE MEMBERS OF ORGANISATION WHO WILL USE PRODUCT OR SERVICE.

THE THE

2.INFLUENCERS: OFTEN HELP DEFINE SPECIFICATIONS AND ALSO PROVIDE INFORMATION FOR PROVIDING ALTERNATIVES. 3.BUYERS: HAVE FORMAL AUTHORITY TO SELECT THE SUPPLER AND ARRANGE TERMS OF PURCHASE. 4.DECIDERS: HAVE FORMAL INFORMAL POWER TO SELECT APPROVE THE FINAL SUPPLIERS. OR OR

5.GATEKEEPERS : CONTROL THE FLOW OF INFORMATION TO OTHERS. FOR EXAMPLE, PURCHASING OFFICERS OFTEN

HAVE AUTHORITY TO PREVENT SALESPERSONS FROM SEEING USERS OR DECIDERS. OTHER GATEKEEPERS INCLUDE TECHNICAL PERSONNEL AND EVEN PERSONAL SECRETARIES. MAJOR INFLUENCES ON INDUSTRIAL BUYERS 1.ENVIRONMENTAL FACTORS ECONOMIC, TECHNOLOGICAL, POLITICAL, COMPETITIVE & CULTURAL 2.ORGANISATIONAL FACTORS POLICIES, PROCEDURES ETC.,(CENTRALISED/JIT ETC) 3.INTERPERSONAL FACTORS GROUP DYNAMICS 4.INDIVIDUAL FACTORS AGE, EDUCATION, JOB POSITION, PERSONALITY, PERCEPTIONS ETC., ALSO, BUYERS HAVE DIFFERENT BUYING STYLES.
THE BUSINESS BUYING PROCESS 1.PROBLEM RECOGNITION 2.GENERAL NEED DESCRIPTION 3.PRODUCT SPECIFICATION 4.SUPPLIER SEARCH 5.PROPOSAL SOLICITATION 6.SUPPLIER

SELECTION 7.ORDER-ROUTINE 8.PERFORMANCE REVIEW. 1.PROBLEM RECONGITION

SPECIFICATION

LAUNCHING A NEW PRODUCT, BREAKDOWN OF A MACHINE, PURCHASING MANAGER IS UNHAPPY WITH THE CURRENT SUPPLIERS 2.GENERAL NEED DESCRIPTION THE BUYER NEXT PREPARES A GENERAL NEED DESCRIPTION THAT DESCRIBES THE CHARACTERISTICS AND QUANTITY OF THE NEEDED ITEM. 3.PRODUCT SPECIFICATION DEVELOPING THE ITEMS TECHNICAL PRODUCT SPECIFICATIONS. VALUE ANALYSIS IS AN APPROACH TO COST REDUCTION IN WHICH COMPONENTS ARE STUDIED CAREFULLY TO DETERMINE IF THEY CAN BE REDESIGNED OR MADE BY LESS COSTLY METHODS. 4.SUPPLER SEARCH CONDUCTING A SUPPLIER SEARCH TO FIND THE BEST VENDORS BY REVIEWING TRADE DIRECTORIES, COMPUTER SEARCH, PHONING OTHER COMPANIES ETC., THE NEWER THE BUYING TASK, AND, MORE COMPLEX AND COSTLY THE ITEM, THE GREATER THE

AMOUNT OF THEM THE BUYER SEARCHING F FOR SUPPLIERS. 5.PROPOSAL SOLICITATION

WILL

SPEND

INVITING THE QUALIFIED SUPPLIERS TO SUBMIT PROPOSALS, IN RESPONSE, SOME SUPPLIERS, WILL SEND CATALOGUES, SALES PERSON, OR DETAILED WRITTEN PROPOSALS. 6.SUPPLIER SELECTION DRAWING UP A LIST OF THE DESIRED SUPPLER ATTRIBUTES LIKE PRODUCT QUALITY, ON TIME DELIVERY, ETHICAL CORPORATE BEHAVIOUR, COMPETITIVE PRICES, PERFORMCE HISTORY, REPUTATION ETC., AND RANKING THEIR RELATIVE IMPORTANCE. BUYERS MAY NEGOTIATE WITH PREFERRED SUPPLIERS FOR BETTER PRICES AND TERMS BEFORE MAKING THE FINAL SELECTIONS. 7.ORDER ROUTINE SPECIFICATION PREPARING AN ORDER-ROUTINE SPECIFICATION WHICH INCLUDES THE FINAL ORDER WITH ITEMS SUCH AS TECHNICAL SPECIFICATION, QUANTITY NEED, EXPECTED TIME OF DELIVERY, RETURN POLICIES, AND WARRANTIES. 8.PERFORMANCE REVIEW

REVIEWING THE PERFORMANCE FORM USERS. THE PERFORMANCE REVIEW MY LEAD THE BUYER TO CONTINUE, MODIFY OR DROP THE ARRANGEMENT. THE ACTUAL PROCESS IN THE ABOVE STAGES IS MUCH MORE COMPLEX THAN DISCUSSED ABOVE. ALSO SOME OF THESE STAGES MAY BE COMPRESSED OR BYPASSED. Professor V.SHEKAHR

MARKETING

Marketing is typically seen as the task of creating, promoting and delivering goods (physical) services (airlines, hotels, barbers, lawyers,) Many market offerings consist of a variable mix of goods and services. Events (Olympics, sports) persons (Celebrity marketing) places (cities, nations) properties (physical /financial), organisations (Corporate image), information(educational institutions, magazines) and ideas(Products and services are platforms for delivering some idea or benefit) to consumers and businesses. Definition- Marketing is the process of planning and executing the conception, pricing promotion distribution of idea goods, services to create exchanges that satisfy individual and organisational goals. Exchange is the core concept of marketing: For exchange potential to

exist, some satisfied like-

conditions

must

be

1.There are atleast 2 parties 2.Each party has something that might be of value to the other party. 3.Each party is capable of communication and delivery 4.Each party is free to accept or reject the exchange offer

LEVELS OF COMPETITION: 1.BRAND COMPETITION Matiz vs Santro 2.INDUSTRY COMPETITION All car manufacturers 3.FORM COMPETITION All automobile manufacturers 3.GENERIC COMPETITION- All companies that compete at the same rupee value like major consumer durables, apartments.

MARKETING MIX Marketing mix is the set of marketing tools that the firm use s to pursue its marketing objectives in the target market. McCarthy classified these tools into four broad major groups that he called as 4 Ps. PRODUCT - solution Product variety, Quality, Design, Features, brand name, packaging, services warranties, PRICE - cost List price, discounts, allowances, payment period, credit terms etc PROMOTION - communication Sales promotion, advertisements, sales force, public relations, direct marketing PLACE - convenience

Channels, Locations, Inventory, Transport MARKETING PHILOSOPHIES PRODUCTION CONCEPT holds that consumers will prefer products that are widely available and inexpensive. PRODUT CONCEPT- holds that consumers will favour those products that offer the most quality, performance or innovative features. SELLING CONCEPT holds that consumers and businesses, if left alone, will ordinary not buy enough of the organisations products and hence organistaions should undertake aggressive selling and promotion effort. MARKETING CONCEPT- holds that the key to achieving its organisations goals consists of the company being more effective than competition in creating ,

delivering and communicating customer value to its chosen target markets. Find wants and fill them Putting people first British Airways Love the customer , not the product RELATIONSHIP MARKETING Building long term relationships. MANAGING PRODUCT LINES AND BRANDS PRODUCT CLASSIFICATIONS1. Non- Durable goods- tangible goods normally consumed in one or few usesmany locations, heavy advertising, build brand loyalty 2.Durable goods tangible goods that normally survive many uses personal selling and service, 3.Services intangible, inseparable, variable and perishable- Quality control supplier credibility etc. CATEGORIS OF SERVICE MIX

1.Pure tangible good toothpaste 2.Tangible good with accompanying service car services 3.Hybrid Hotel/Restaurant 4.Major service accompanying minor goods & services Airlines- food, drinks, 5.Pure service massage, EQUIPMENT BASED OR PEOPLE BASED Automatic car washing Vs manual window washing CLIENTS PRESENCE OR NOT Brain surgery, haircut Vs scooter repair or TV repair PRODUCT MIX Also called as product assortment is the set of all products and items that a particular seller offers for sale. INSEPARABILLITY In the case of entertainment and professional services buyers are very interest in the specific provider. MS VARIABILLITY

Because it depends on who performs PERISHAILITY Differential pricing Nonpeak demand

PRODUCT LINE A product mix consists of various product lines, e.g. Detergents, toothpaste, bar soap, paper tissue

PRODUCT WIDTH Width of a product mix refers to how may different product lines the company carries. DEPTH refers to how may variants are offered of each product line.

CONSISTENCY refers to how closely related the various product lines are in end use like production requirements, distribution channels. PACKAGING Includes the activities of designing and producing the container for the product. Primary package old spice after shave lotion bottle Secondary package cardboard box Shipping package corrugated boxes for holding secondary package. FUNCTIONS1.Attracts attention 2.Describes the products features 3.Constant advertisement

SEGMENTATION

Segmentation is an approach midway between mass marketing and individual marketing. BASES FOR SEGMENTATION GEOGRAPHIC - Region, city, DEMOGRAPHIC - Age, Family size, Family life cycle, Gender, Income, Occupation, Education OTHERS Personality, Occasions Regular, occasion, special occasion; Usage rate Light , medium, heavy PRODUCT LIFE CYCLE It is assumed that Products have life cycles. Product live cycle stages are divided into 4 stages1.Introduction A period of slwo sales growth as the product is introducted in the market 2.Growth A period of rapid market acceptance and substantial profit improvement

3.Maturityu A period of slwodown in sales growth because the product has achieved acceptance by most potentail buyers. 4.Declilne sales show downward drift. PLC concept is used to analyse Branded Products have shoter life cyckles. Products may have a shorter or longer life cylcle P roduct forms manual typewriters to electric to electronic to -----follow the standard PLC faithfully Product categories have the longest life cycles- newspates, tvs, telephones etc.,
MARKETING STRATEGIES DURING DIFFERENT STAGES OF PLC

Markting Research is the systematic design collection, anaysius and reproting of data nd findings relevant ta specifc marketing situation facing hthe company. Markeing Research Process-

1.Define the Problem and Research Objectives-

2.Develop the Researcvh Plan Primary data and secondary data Researchg approcahes Observationbal reserch Focus group research Survey research Experimental research cause & effect

Research Insturments Questionnaries- Closed End Dichotomour tweo possible answers Multiple choice many answers Scales Rating, Importance, Intention to buy, semantic differential

Likert agreement and disagrmeent OPEN END QUESTIONS Completely unsturctured Word assocition, Sentence completion, Story completion, Picture completing, TAT Mechanical instrumetnsEye cameras Galvanometers measure the interest or emotions aroused to a specific picture or ad. Audimeter is attached to televison sets

Sampling Plan Sampling Unit Who is to be surveyed Sample size- How many Sampling poricedure How respondents should be chosenm Random, Judgement etc., 3.Collect the information

4.Analyse the information 5.Present the findings

METHODS OF ESTIMATING THE FUTURE DEMAND OF THE PRODUCT 1.Survey of Buyers intentions 2.Composite sales force opinions 3.Expert opinion 4.Past sales analysis 5.Test marketing

Elements in the Communication Process

SenderEncoding-Message Decoding-Receiver Response, feedback and noise

Developing effective Communications Steps

1.Identify the target audience-image analysis, familiarity, favourabilty analysis 2.Determine the communication objectives Cognitive, affective or behavioral CognitivePut consumers mind something in

Affective change an attitude Behavioral ;- get the consumer to act 3.Design the message 4.Select the communication channels

5.Budget 6.Decide on the communications mix 7.Meausre results 8.Mange the communication process integrated

Marketing Communication Mix

Advertising Print and Broadcast ads, Packaging, Brochures, Booklets, Posters, leaflets, Directories, Billboards, Reprints of ads, POP, Audiovisual material , Display signs

Sales Promotion Contests, games, premiums, gifts, sampling, Fairs and trades shows, Demonstrations, Rebates, Low interest financing. Tieins

Public Relations Press kits, Seminars, Charitable donations, Community relations, lobbying, events,

Personal selling presentations, sales meetings,

Sales

Direct Marketing telemarketing,

Mailings,

Nonpublic- the message is normally addressed to a specific person, can be prepared very quickly, can be changed.

ADVERTISING Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Classification of advertising objectives:

1.Informative advertising-pioneering stage 2.Persuasive advertisingcompetitive stage uses comparative 3.Reminder advertising mature products DAGMAR Defining Advertising Goals for Measuring Advertising Results ADVERTISING BUDGET Factors considered - stage in the PLC, market share and consumer base, competition and clutter, ad frequency, METHODS OF ADVERTISING BUDGET Percent of sales, Affordability, Competitive parity, Objectives and task method David Ogilvy- brand image Confessions of an Advertising man and oglivy on Advertising use celebrities

ROSSER REEVES USP Balsara clove oil relates only to advertising whereas positioning is a basic decision. Leo Burnett advocated the use of common man ADVERTISING MESSAGE 1.Message Content What to say 2.Message Structure How to say it logically 3.Message Format- How to say it symbolically 4.Message Source Who should say it MESSAGE CONTENT Rationalquality, economy, value, performance Emotional negative, love, pride, joy vicks Moral-aids Humour fevicol,amul, Fear- bad smell,licceasefire MESSAGE STRUCTURE

One sided and two sided M ESSAGE FORMAT Headline, copy, illustration, colour in TV body language MESSAGE SOURCE Celebrities, doctors, opinion leaders Message generation benefit Desirability, Exclusiveness, believability Message Execution Messages impact depends not only on what is said but how it is said- style, tone, words, format Execution Styles Slice of life, lifestyle, fantasy, mood, personality symbol, technical expertise, scientific evidence, and testimonial. HEADLINES News New Boom and inflation ahead Question - Have you heard about Narrative They laughed when I sat on the piano but when Command Dont buy unless

1-2-3 Ways 12 Ways to save your income tax How-What Why- How to increase the PICTURE ,headline, copy - Reader notices the picture first MEDIA SELECTION Reach The number of different persons or households exposed to a particular media schedule atleast once during a specified time period. while launching new products, undefined target market, Frequency The number of time within the specified time period that an average person or household is exposed to the message when there are strong competitors, frequent purchase cycle. Impact The qualitative value of an exposure through a give medium ( Children ad in chandamama than Womans World)

COST PER THOUSAND If a full-page colour ad in Times of India is 4lakhs and the estimated readership is 9 lakhs, the cost of exposing the ad to 1000 persons is approximately Cost 4,00,000 Readers 9,00,000 Media scheduling Burst Continuous Intermittent Evaluating advertising effectiveness Communication effect research seeks to determine whether ad is communicating effectively CALLED COPY TESTING Direct rating, Portfolio, lab tests 3 Methods of ad pre-testing Direct Rating Method asks consumers to rate alternative ads, Portfolio tests ask consumers to view or listen to a portfolio of advertisements, taking as much time as they need.

Consumers are asked to recall all the ads and their content aided or unaided by the interviewer. Laboratory test use equipment to measure physiological reactions Heart beats, blood pressure, pupil dilation, perspiration, The parameters on which an ad copy has to be evaluated or tested are desirability , exclusiveness and believability RECONGITION TESTS-ADS ARE NOT SHOWN NOTED number of respondents who remember having seen the ad SEEN ASSOCIATED is the number of reader showing who have seen the ad and the brand or company READ MOST no of respondents who have read the copy. RECALL AIDED OR UNAIDED Sales Effect research Historical approach

SALES PROMOTION consists of a diverse collection of incentive tools mostly short term PUBLIC RELATIONS involves a variety of programs designed to promote or protect a companys image or its individual products

SALES FORCE MANAGEMENT


The term sales representative can cover Deliverer, order taker, Missionary, Technician, Demand creator, solution vendor, FUNCTIONS OF SALES PERSON Prospecting, targeting, communicating, selling, servicing, information gathering, etc., Time and duty analysis Perpetration Planning call strategy Travel means of transportation Food , Waiting, Selling,

Administration Writing reports, billing, sales meeting, etc, PRINCIPLES OF PERSONAL SELLING PROSPECTING Examining data sources ,putting a booth in trade show, current customer, cultivating, cold canvassing dropping in unannounced offices places. PREAPPROACH phone, visit, time, letter, APPROCAH Greeting, PRESENTTAION AND DEMONSTRATION AIDA Gaining attention, holding interest, arousing desire, and obtaining action. Features, advantages, benefits and value STYLES OF PRESENTATION CANNED memorises sales talk NEED SATISFACTION APPROACH OVERCOMING OBJECTIONS CLOSING

FOLLOW UP AND MAINTENANCE SPIN Situation, Problem, Implication, Need Payoff RELATIONSHIP MARKETING is based on the premise that important accounts need focussed and continuous attention. VERTICAL MARKETING SYSTEM Corporate VMS Bata, Administered VMS Maruti Contractual VMS Thumps up HORIZONTAL MARKETING SYSTEM TVS-WHIRLPOOL ONIDA Two or more non related companies working together. (Symbiotic marketing)
Marketing process

1.Analysing marketing opportunities

2.Researching & selecting target markets 3.Developing marketing strategies 4.Planning marketing programmes 5.Managing the marketing effort

ANALYSING MARKETING OPPORTUNITIES

*Marketing Information System Internal Records System, Marketing Intelligence System , Marketing Research, Marketing DSS Marketing Research PROCESS- Definining the problem and research objective, developing the research plan, collecting the information, analyzing the information, presenting the findings.

Methods of sales forecasting Survey of buyers intentions, composite sales force opinion, expert opinion, market testing. Scanning the Marketing Environment Macro and Micro -

Analysing Consumer Markets and Buyer Behaviour & Analysing Business Markets and Business Buying Behaviour & Cultural, subcultural, social, groups, family, age , life cycle, income, perception, motivation, learning, attitudes Buying Roles Initiators, deciders, buyers, users influencers,

Low involvement and high involvement Buying stages Problem recognition, information search, evaluation of alternatives, purchase decision, post-

purchase behavior. ( Satisfaction Dissatisfaction Dissonance)

BUSINESS Markets have fewer and larger buyers, closer customer supplier relationship, more geographically concetrated, demand is derived from consumer markets,. Professional purchasers, Stages in the Business Buying process CALLED BUY PHASES 1.Problem recognition 2.General need description 3.Product specification 4.Supplier search 5.Proposal solicitation 6.Suppllier selection 7.Order-routinue specification 8.performance review. *DEALING WITH COMPETITION Competitors analuyis attack or avoid Competitive intelligence Customer Value analysis Market leader larget share Challenger attacjs narket leader 5 types Frontal

Flank Encirclement Bypass Guerilla Follower runner up imitator, adaptor Nicher- serves small market segments *Market segmentation and marketing Bases of market segmentation target

COMPANY ORIENTATIONS TOWARD THE MARKETPLACE


PRODUCTION CONCEPT

(OU Campus)-For private circulation only

The production concept holds that the consumers will prefer products that are widely available and inexpensive.Managers of Production-oriented business concentrate on achieving high production efficiency, low costs and mass distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than its features. It is also used when a company wants to expand the market.

PRODUCT CONCEPT
The product concept holds that consumers will favour those products that offer the most quality, performance, or innovative features. Managers in these organisations focus on making superior products and improving them over time. They assume that buyers admire well-made products and can appraise quality and performance. Management might commit the better mouse-trap fallacy. Product oriented companies often design their products with little or no customer input. Very often they will not examine their competitors products. The product concept can lead to marketing myopia. (Theodore Levitt Marketing Myopia Harvard Business ReviewAugust,1960).These organisations are often looking into a mirror when they should be looking out of the window.

SELLING CONCEPT

The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organisationals products. The

organisation must, therefore, undertake an aggressive selling and promotion effort.The concept assumes that consumers typically show buying inertia or resistance and must coaxed into buying.It also assumes that the company has a whole battery of effective selling and promotion tools to stimulate more buying.The selling concept is practised most aggressively with unsought goods, goods that buyers normally do not think of buying , such as insurance, encyclopedias etc.The selling concept is also practiced in the nonprofit area such as fund-raisers, political parties etc. A political party vigorously sells its candidates to votes. But marketing based on hard selling carries high risks.
MARKETING CONCEPT

The marketing concept holds that the key to achieving its organisational goals consists of the company being more effective than competitors in creating ,delivering, and communicating customer

value to its chosen target markets. The marketing concept has been expressed in many colourful ways.
*Find wants and fill them the product *Putting people first the king *Love the customer, not *The customer is

The selling concept takes an inside-out perspective.It starts with the factory, focuses on existing products, and calls for heavy selling and promoting to produce profitable sales. The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates all the activities that will affect customers, and produces profits by satisfying customers.

SOCIETAL MARKETING CONCEPT

The societal marketing concept holds that the organisations task is to determine the needs, wants,and interests of target markets and to deliver the desired satisfactions more effectively efficiently than competitors. In a way that preserves or enhances the customers and societys well being.The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices, They must balance

and juggle the often conflicting criteria of companys profits, consumer want satisfaction, and public interest. They believe that customers will increasingly look for demonstrations of good corporate citizenship.
Professor V.Shekhar, Department of Business Management, Osmania University, Hyd-7

MARKETING CONTROL
1.Annual Plan Control 2.Profitabilty control 3. Efficiency control 4. Strategic control

ANNUAL PLAN CONTROL


The purpose of annual plan control is to ensure the company achieves sales profits, and other goals established in the annual plan. The heart of annual plan control is management by objectives.

Tools of Annual Plan Control

1. Sales Analysis Consists of measuring and evaluating actual sallies in relation to sales goals. Sales variance analysis measure the relative contribution of different factors to a gap in sales performance Microsales analysis looks at specific products, territories, and so forth that failed to produce expected sales. 2. Market Share Analysis It can be done in three ways: a) Overall market share is the companys sales expressed as a percentage of total market sales.

b) Served market share is its sales expressed as a percentage of the total sales to its served market (Served market share is always larger than the total market share). c) Relative market share can be expressed as market share in relation to its largest competitor. 3. Marketing Expense-to-Sales Analysis: It is the key to watch that the company is not overspending to achieve sales goals. 4. Financial Analysis: Here the Expense to Sales ratios are analysed in an overall financial framework to determines how and where the company is making its money. 5. Market Based Scorecard Analysis Here two types of scorecards are Prepared :

a) Customer performance scorecard b) Stakeholder performance scorecard

PROFITABILITY CONTROL
Seeks to measure and control the profitability of various products, territories, customer groups, trade channels and order sizes.

Marketing Profitability Analysis

For example a lawnmower company wants to determine the profitability of selling its lawnmower through three types of retail channels: hardware stores, garden supply shops, and departmental stores. The following activities are carried out for conducting the marketing profitability analysis -

1.Identifying functional expenses 2.Assigning functional expenses to marketing entities 3.Preparing a profit and loss statement for each marketing entity.

Based on the analysis of this exercise the company determines corrective action.

Activity Based Accounting


Companies are showing a growing interest in using marketing profitability analysis or its broader version, activity based cost accounting (ABC) to quantity the true profitability of different activities. ABC can give managers a clear picture of how products, brand, customers, facilities, regions, or distribution channels both generate revenues and consumer resources. To improve profitability, manager can then examine ways to reduce the resources required to perform various activities, or make the resources more productive to acquire them at a lower cost. Alternatively, management may raise prices on products that consume

heavy amount of support resources. The contribution of ABC is to refocus managements attention away from using only labour or material standard costs to allocate full cost, and toward capturing the actual costs of supporting individual products, customers and other entities.

EFFICIENCY CONTROL

Focuses on finding ways to increase the efficiency of the sales force, advertising, sales promotion and distribution.
1.Sales Force Efficiency key indicators are average number of calls per salesperson per day, average sales call time per contact, average revenue per sales call, average cost per sales call, entertainment cost per sales call etc.,

2. Advertising Efficiency Advertising cost per thousand target buyers reached by media vehicle, percentage audience who noted, saw or associated, and read most of each print ad. Consumers opinion on the ads content and effectiveness, before and after measures of attitude toward the product, number of inquiries stimulated by the ad and cost per Inquiry.

3. Sales Promotion Efficiency Percentage sold on deal, percentage of coupons redeemed, number of inquiries resulting from demonstration.

4. Distribution Efficiency Management needs to search for distribution efficiency in inventory control, warehouse locations and transportation models.

STRATEGIC CONTROL From time to time, companies need to undertake a critical review of overall marketing goals and effectiveness. Each company should periodically assess its strategic approaches to the market place with marketing effectiveness review, marketing audit and Ethical and Social Responsibility Review Marketing Effectiveness Review
A companys marketing effectiveness is reflected in the degree to which it exhibits the following five major attributes of a marketing orientation.

1. Customer Philosophy Whether the management recognises the importance of delivering the needs and wants of chosen markets 2. Integrated Marketing Organisation To check if there is a high-level marketing integration and control of the major marketing functions. 3. Adequate Marketing Information Whether marketing research studies are being conducted on a regular basis. 4. Strategic Orientation i. ii. iii. What is the extent of formal marketing planning ? How impressive is the current marketing strategy ? What is the extent of contingency thinking and planning ?

2. Operational efficiency How well is the marketing strategy communicated and implemented ?

Marketing Audit

A marketing audit is a comprehensive, systematic, independent and periodic examination of a companys or business units marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the companys marketing performance. The components of a marketing audit are marketing environment,

marketing strategy, marketing organisation, marketing system, marketing productivity and marketing function.

Ethical and Social Responsibility Review

There are ethical and moral issues like bribery, stealing trade secrets, false and deceptive advertising, quality and safety of products, price fixing, barriers to entry etc., Companies need to evaluate whether they are truly practicing ethical and socially responsible marketing.
SUMMARY OF MARKETING CONTROL

ANNUAL CONTROL

1.Sales Analysis

2.Market Share Analysis

3.Marketing Expense-to-Sales Analysis

4.Financial Analysis
5.Market Based Scorecard Analysis

PROFITABILITY CONTROL

Marketing Profitability Analysis

Activity Based Accounting


EFFICIENCY CONTROL

1. Sales Force Efficiency

2. Advertising Efficiency 3. Sales Promotion Efficiency 4. Distribution Efficiency


STRATEGIC CONTROL

Marketing Effectiveness Review


Marketing Audit Ethical and Social Responsibility Review

(OU Campus)- For Private Circulation Only

MARKETING ENVIRONMENT
Companies must constantly watch and adapt to the marketing environment in order to seek opportunities and ward off threats. The marketing environment comprises of all the actors and forces influencing the companys ability to transact business effectively with its target customers.

MICROENVIRONMENT
The microenvironment consists of forces close to the company that affects its ability to serve its customers the company, suppliers, marketing channel firms, customer markets, competitors and public.

1.The company Top management, and other departments 2.Suppliers Value delivery system 3.Marketing intermediaries Resellers, physical distribution firms 4.Customers Five types

a) Consumer markets personal consumption b) Business markets further processing or for use in production process c) Reseller markets to resell for a profit d) Government markets Government and government agencies e) International markets Buyers in other countries Any of the above markets

5) Competitors for their strategies 6) Publics Banks, financial institutions, investment houses, newspapers, magazines, television, consumer groups, environmental groups, minority groups, neighborhood residents, general public and companys internal public.

MACRO ENVIRONMENT
1.Demographic 2.Economic 3.Natural 4.Technological 5.Political 6.Cultural

DEMOGRAPHIC ENVIRONMENT
Demography is the study of human population in terms of size, density, location, age, gender, race, occupation, and other statistics. Demography refers to the vital and measurable statistics of the population. Marketers have to keep a close track of demographic trends and developments in their markets. They should track changing:

Population Growth: The world population is showing explosive growth.


Age structure How many young people, old or middle aged

Family structure Late marriages, number of working women, divorce rates, single parent households, live in companionships etc., Geographical shifts in population Rural to urban to suburban
Educated population and white-collar population Ethnic Markets: Countries also vary in ethnic and racial make-up. At one extreme is Japan where almost every one is Japanese; at the other is United States where people from virtually all nations can be seen.

ECONOMIC

Markets require purchasing power as well as people. The economic environment consists of factors that affect consumer purchasing power and spending patterns. Changes in income, income distribution, spending patterns (i.e. percentage spent of food, housing, utilities, clothing, transportation, health care, entertainment, insurance etc. Marketers must pay careful attention to major a changes in incomes, cost of living, interest rates, savings, and borrowing patterns because they can have high impact on business especially for companies whose products have high income and price sensitivity. NATURAL
The deterioration of natural environment is a major global concern. In many world cities air and water pollution have reached dangerous levels. Greenhouse effect: i.e.- dangerous warming of the earth. Marketers need to be aware of the threats

and opportunities associated with trends in natural environment. These are :

1. Shortages of raw material Air, water, forests, oil, coal, minerals 2. Pollution disposal of chemical and nuclear waste, littering of earth with plastic 3. Increased government intervention

TECHNOLOGICAL
One of the most dramatic forces shaping people lives is technology. Technology has released such wonders as penicillin, open- heart surgery, birth control pill, antibiotics, organ transplantation, computers and Internet. It has released such horrors such as hydrogen bomb, nerve gas, nuclear missiles, chemical and biological weapons and the machine gun. It has also released such mixed blessings as the automobile, Credit cards and the TV. Every new technology is a force for creative destruction of old things. The economys growth rate is affected by how many major new technologies are discovered. Unfortunately technological discoveries do not arise evenly through time.

Many of the todays common products were not available 50 years ago. E.g personal computers, video recorders, fax machines, cell phones. Scientists are working on AIDS cures, happiness pills, robots for fire fighting, under water exploration, home nursing, flying cars, space colonies etc., New technologies create new markets and opportunities as well as threats. Marketers should watch the technological changes closely.

POLITICAL
Marketing decisions are strongly affected by developments in political and legal environment. The political environment consists of laws, government agencies and pressure groups that influence and limit various organisations and individuals in a given society. Companies Act 1956; Trade and merchandise Act 1958;Essential commodities Act; Prevention of Food Adulteration Act;

CULTURAL
Society shapes our beliefs, values and norms. People absorb almost unconsciously a worldview that defines their relationship to themselves, to others, to organisations to society, to nature and to the universe. They must market products that correspond to societys core and secondary values, and address the needs of different subcultures.

Professor. V.SHEKHAR, Head, Dept. of Business Management, Osmania University

MARKETING MARKETING IS TYPICALLY SEEN AS THE TASK OF CREATING, PROMOTING AND DELIVERING GOODS (PHYSICAL) SERVICES (AIRLINES, HOTELS, BARBERS, LAWYERS,) MANY MARKET OFFERINGS CONSIST OF A VARIABLE MIX OF GOODS AND SERVICES. EVENTS (OLYMPICS,SPORTS) PERSONS (CELEBRITY MARKETING) PLACES (CITIES,NATIONS) PROPERTIES (PHYSICAL /FINANCIAL), ORGANISATIONS (CORPORATE IMAGE), INFORMATION(EDUCATIONAL INSTITUTIONS,MAGAZINES) AND IDEAS(PRODUCTS AND SERVICES ARE PLATFORMS FOR DELIVERING SOME IDEA OR BENEFIT) TO CONSUMERS AND BUSINESSES.

DEFINITIONMARKETING IS THE PROCESS OF PLANNING AND EXECUTING THE CONCEPTION, PRICING PROMOTION DISTRIBUTION OF IDEA GOODS, SERVICES TO CREATE EXCHANGES THAT SATISFY INDIVIDUAL AND ORGANISATIONAL GOALS. EXCHANGE IS THE CORE CONCEPT OF MARKETING: FOR EXCHANGE POTENTIAL TO EXIST, SOME CONDITIONS MUST BE SATISFIED LIKE1.THERE ARE ATLEAST 2 PARTIES
2.EACH PARTY HAS SOMETHING THAT MIGHT BE OF VALUE TO THE OTHER PARTY.

3.EACH PARTY IS CAPABLE OF COMMUNICATION AND DELIVERY 4.EACH PARTY IS FREE TO ACCEPT OR REJECT THE EXCHANGE OFFER LEVELS OF COMPETITION: 1.BRAND SANTRO COMPETITION MATIZ VS

2.INDUSTRY COMPETITION ALL CAR MANUFACTURERS 3.FORM COMPETITION ALL AUTOMOBILE MANUFACTURERS 3.GENERIC COMPETITIONALL COMPANIES THAT COMPETE AT THE SAME RUPEE VALUE LIKE MAJOR CONSUMER DURABLES, APARTMENTS. MARKETING MIX MARKETING MIX IS THE SET OF MARKETING TOOLS THAT THE FIRM USE S TO PURSUE ITS MARKETING OBJECTIVES IN THE TARGET MARKET. MCCARTHY CLASSIFIED THESE TOOLS INTO FOUR BROAD MAJOR GROUPS THAT HE CALLED AS 4 PS. PRODUCT - SOLUTION PRODUCT VARIETY, QUALITY, DESIGN, FEATURES, BRAND NAME, PACKAGING, SERVICES WARRANTIES, PRICE - COST

LIST PRICE, DISCOUNTS, ALLOWANCES, PAYMENT PERIOD, CREDIT TERMS ETC PROMOTION - COMMUNICATION SALES PROMOTION, ADVERTISEMENTS, SALES FORCE, PUBLIC RELATIONS, DIRECT MARKETING PLACE - CONVENIENCE CHANNELS, LOCATIONS, INVENTORY, TRANSPORT MARKETING PHILOSOPHIES PRODUCTION CONCEPT HOLDS THAT CONSUMERS WILL PREFER PRODUCTS THAT ARE WIDELY AVAILABLE AND INEXPENSIVE. PRODUCT CONCEPT- HOLDS THAT CONSUMERS WILL FAVOUR THOSE PRODUCTS THAT OFFER THE MOST QUALITY, PERFORMANCE OR INNOVATIVE FEATURES.

SELLING CONCEPT HOLDS THAT CONSUMERS AND BUSINESSES, IF LEFT ALONE, WILL ORDINARY NOT BUY ENOUGH OF THE ORGANISATIONS PRODUCTS AND HENCE ORGANISTAIONS SHOULD UNDERTAKE AGGRESSIVE SELLING AND PROMOTION EFFORT. MARKETING CONCEPT- HOLDS THAT THE KEY TO ACHIEVING ITS ORGANISATIONS GOALS CONSISTS OF THE COMPANY BEING MORE EFFECTIVE THAN COMPETITION IN CREATING , DELIVERING AND COMMUNICATING CUSTOMER VALUE TO ITS CHOSEN TARGET MARKETS. FIND WANTS AND FILL THEM PUTTING PEOPLE FIRST BRITISH AIRWAYS LOVE THE CUSTOMER , NOT THE PRODUCT

RELATIONSHIP BUILDING RELATIONSHIPS. MANAGING BRANDS

MARKETING LONG TERM LINES AND

PRODUCT

PRODUCT CLASSIFICATIONS1. NON- DURABLE GOODS- TANGIBLE GOODS NORMALLY CONSUMED IN ONE OR FEW USESMANY LOCATIONS, HEAVY ADVERTISING, BUILD BRAND LOYALTY

2.DURABLE GOODS TANGIBLE GOODS THAT NORMALLY SURVIVE MANY USES PERSONAL SELLING AND SERVICE, 3.SERVICES INTANGIBLE, INSEPARABLE, VARIABLE AND PERISHABLEQUALITY CONTROL SUPPLIER CREDIBILITY ETC. CATEGORIS OF SERVICE MIX

1.PURE TANGIBLE GOOD TOOTHPASTE 2.TANGIBLE GOOD WITH ACCOMPANYING SERVICE CAR SERVICES 3.HYBRID HOTEL/RESTAURANT 4.MAJOR SERVICE ACCOMPANYING MINOR GOODS & SERVICES AIRLINES- FOOD, DRINKS, 5.PURE SERVICE MASSAGE, EQUIPMENT BASED OR PEOPLE BASED AUTOMATIC CAR WASHING VS MANUAL WINDOW WASHING CLIENTS PRESENCE OR NOT BRAIN SURGERY, HAIRCUT VS SCOOTER REPAIR OR TV REPAIR PRODUCT MIX ALSO CALLED AS PRODUCT ASSORTMENT IS THE SET OF ALL PRODUCTS AND ITEMS THAT A PARTICULAR SELLER OFFERS FOR SALE. INSEPARABILLITY

IN THE CASE OF ENTERTAINMENT AND PROFESSIONAL SERVICES BUYERS ARE VERY INTERESTED IN THE SPECIFIC PROVIDER. MS, SOMRAJ RAM VARIABILLITY BECAUSE IT PERFORMS

DEPENDS

ON

WHO

PERISHAILITY DIFFERENTIAL PRICING NONPEAK DEMAND PRODUCT LINE A PRODUCT MIX CONSISTS VARIOUS PRODUCT LINES, OF

E.G.DETERGENTS, TOOTHPASTE, BAR SOAP, PAPER TISSUE PRODUCT WIDTH

WIDTH OF A PRODUCT MIX REFERS TO HOW MAY DIFFERENT PRODUCT LINES THE COMPANY CARRIES. DEPTH REFERS TO HOW MAY VARIANTS ARE OFFERED OF EACH PRODUCT LINE. CONSISTENCY REFERS TO HOW CLOSELY RELATED THE VARIOUS PRODUCT LINES ARE IN END USE LIKE PRODUCTION REQUIREMENTS, DISTRIBUTION CHANNELS. PACKAGING INCLUDES THE ACTIVITIES OF DESIGNING AND PRODUCING THE CONTAINER FOR THE PRODUCT. PRIMARY PACKAGE OLD SPICE AFTER SHAVE LOTION BOTTLE SECONDARY PACKAGE CARDBOARD BOX SHIPPING PACKAGE CORRUGATED BOXES FOR HOLDING SECONDARY PACKAGE.

FUNCTIONS1.ATTRACTS ATTENTION 2.DESCRIBES THE PRODUCTS FEATURES 3.CONSTANT ADVERTISEMENT

SEGMENTATION SEGMENTATION IS AN APPROACH MIDWAY BETWEEN MASS MARKETING AND INDIVIDUAL MARKETING. BASES FOR SEGMENTATION GEOGRAPHIC - REGION, CITY, DEMOGRAPHIC - AGE, FAMILY SIZE, FAMILY LIFE CYCLE, GENDER, INCOME, OCCUPATION, EDUCATION OTHERS PERSONALITY, OCCASIONS REGULAR, OCCASION, SPECIAL OCCASION; USAGE RATE LIGHT , MEDIUM, HEAVY PRODUCT LIFE CYCLE

IT IS ASSUMED THAT PRODUCTS HAVE LIFE CYCLES. THE CONCEPT CYCLE OF PRODUCT LIFE

TO SAY THAT A PRODUCT HAS LIFE CYCLE IS TO ASSERT 4 THINGS: 1.PRODUCTS HAVE A LIMITED LIFE. 2.PRODUCT SALES PASS THROUGH DISTINCT STAGES, EACH POSING DIFFERENT CHALLENGES, OPPORTUNITIES AND PROBLEMS TO THE SELLER. 3.PROFITS RISE AND FALL AT DIFFERENT STAGE OF PLC. 4.PRODUCTS REQUIRE DIFFERENT MARKETING, FINANCIAL, MANUFACTURING, PURCHASING AND HUMAN RESOURCES STRATEGIES IN EACH SAGE OF THEIR LIFE CYCLE.

PRODUCT LIFE CYCLE STAGES ARE DIVIDED INTO 4 STAGES1.INTRODUCTION A PERIOD OF SLOW SALES GROWTH AS THE PRODUCT IS INTRODUCED IN THE MARKET 2.GROWTH A PERIOD OF RAPID MARKET ACCEPTANCE AND SUBSTANTIAL PROFIT IMPROVEMENT 3.MATURITY A PERIOD OF SLOWDOWN IN SALES GROWTH BECAUSE THE PRODUCT HAS ACHIEVED ACCEPTANCE BY MOST POTENTIAL BUYERS. 4.DECLILNE SALES SHOW DOWNWARD DRIFT. PLC CONCEPT IS USED TO ANALYSE BRANDED PRODUCTS HAVE SHORTER LIFE CYCLES. PRODUCTS MAY HAVE A SHORTER OR LONGER LIFE CYCLE PRODUCT FORMS MANUAL TYPEWRITERS TO ELECTRIC TO ELECTRONIC TO -----FOLLOW THE STANDARD PLC FAITHFULLY

PRODUCT CATEGORIES HAVE THE LONGEST LIFE CYCLES- NEWSPAPERS, TVS, TELEPHONES ETC.,

MARKETING STRATEGIES DURING DIFFERENT STAGES OF PLC

EACH STAGE OF THE PLC CALLS FOR DIFFERENT MARKETING STRATEGIES,. THE INTRODUCTION STAGE IS MARKED BY SLOW GROWTH AS THE PRODUCT IS PUSHED INTO DISTRIBUTION. THE COMPANY HAS TO DECIDE AMONG STRATEGIES OF PENETRATION OR SKIMMING PRICING. IT MUST ALSO DECIDE WHEN TO ENTER THE MARKET. IF SUCCESSFUL THE PRODUCT ENTERS A GROWTH STAGE MARKED BY RAPID SALES GROWTH AND INCREASE IN PROFITS. THE COMPANY ATTEMPTS TO IMPROVE THE PRODUCT, ENTER NEW MARKET SEGMENTS AND DISTRIBUTION CHANNELS AND

REDUCE ITS PRICES SLIGHTLY. THERE FOLLOWS A MATURITY STAGE IN WHICH SALES GROWTH SLOWS AND PROFITS STABILISE. THE COMPANY SEEKS INNOVATIVE STRATEGIES TO RENEW SALES GROWTH INCLUDING MARKET PRODUCT AND MARKETING MIX MODIFICATION. FINALLY THE PRODUCTS ENTERS A DECLINE STAGE. THE COMPANY'S TASK IS TO IDENTIFY THE TRULY WEEK PRODUCTS DEVELOPED FOR EACH ONE A STRATEGY OF CONTINUATION, FOCUSING OR MILKING AND FINALLY PHASE OUT WEAK PRODUCTS IN A WAY THAT MINIMISES THE HARDSHIP TO COMPANY PROFITS, EMPLOYEES AND CUSTOMERS.

MARKETING PROCESS

1.Analysing marketing opportunities 2.Researching markets & selecting target

3.Developing marketing strategies 4.Planning marketing programmes 5.Managing the marketing effort

I.ANALYSING OPPORTUNITIES

MARKETING

*Marketing Information System Internal Records System, Marketing Intelligence System , Marketing Research, Marketing DSS Marketing Research PROCESS- Defining the problem and research objective, developing the research plan, collecting the information, analyzing the information, presenting the findings.

Methods of sales forecasting Survey of buyers intentions, composite sales force opinion, expert opinion, market testing. Scanning the Marketing Environment - Macro and Micro Demographic, economic, natural, technological, political-legal, social cultural Marketing managers should be trend trackers and opportunity seekers. Analysing Consumer Markets and Buyer Behaviour & Analysing Business Markets and Business Buying Behaviour & Cultural, sub-cultural, social, groups, family, age , life cycle, income, perception, motivation, learning, attitudes Buying Roles Initiators, deciders, buyers, users influencers,

Low involvement and high involvement

Buying stages Problem recognition, information search, evaluation of alternatives, purchase decision, postpurchase behavior. ( Satisfaction Dissatisfaction Dissonance) BUSINESS MARKETS have fewer and larger buyers, closer customer supplier relationship, more geographically concentrated, demand is derived from consumer markets,. Professional purchasers, Stages in the Business Buying process CALLED BUY PHASES 1.Problem recognition 2.General need description 3.Product specification 4.Supplier search 5.Proposal solicitation 6.Suppllier selection 7.Order-routinue specification 8.performance review. STRAIGHT RE BUY - reorders on a routine basis MODIFIED RE BUY Modify product specifications, prices, others NEW TASK -First time buying Systems buying and selling

*DEALING WITH COMPETITION Competitors analysis attack or avoid Competitive intelligence - Customer Value analysis Market leader largest share Challenger attack market leader 5 types Frontal Flank Encirclement Bypass Guerilla Follower runner up imitator, adapter Nicher- serves small market segments *Market segmentation and marketing Bases of market segmentation target

II.DEVELOPING STRATEGIES

MARKETING

*Positioning & PLC. A market offering can be differentiated along five dimensions: PRODUCT - (form, features, performance, quality, durability etc,) SERVICES order ease, ,installation, maintenance PERSONNEL,CHANNEL,IMAGE media, and events delivery symbols,

A difference is worth establishing to the extent that it is important, distinctive, superior, affordable and profitable. Like products markets evolve through four stages 1.Emergence 4.decline 2.Growth 3.Maturity

DEVELOPING NEW OFFERINGS

Idea generation, screening, Concept development and testing, marketing strategy development. Business analysis, Product development, market testing and commercialization. THE CONSUMER ADOPTION PROCESS How do potential consumer learn about new products, try them and adopt or reject them ? Roger defines Innovation - Diffusion process as the spread of a new idea from its source of invention or creation to its ultimate users or adopters, Stages in the adoption process Awareness Interest Evaluation Trial Adoption

Adopter categorization on the basis of relative time of Adoption of Innovations Innovators, Early adopters, Early majority, Late majority, Laggards *DESIGNING OFFERINGS GLOBAL MARKET

In general candidate countries should be rated on 3 criteria Marketing attractiveness, competitive advantage Risk,

Mode of entry - Indirect exporting, direct exporting, licensing, joint ventures and direct investment.

III.PLANNING PROGRAMMES

MARKETING

*MANAGING BRANDS

PRODUCT

LINES

AND

Core benefit is the fundamental benefit Augmented product Durable, non-durable, services Convenience goods, specialty goods shopping goods,

industrial Raw materials, capital items and supplies A product mix can classified GROW, MAINTAIN, HARVEST , DIVEST BRANDING

*DESIGNING SERVICES

AND

MANAGING

A service is any act or performance that one party can offer to another that is essentially tangible

*DESIGNING PRICING STRATEGIES & PROGRAMS Selecting a Pricing objective -( Survival, Maximum current profit, maximum current share, or product-quality leadership) PRICING STRATEGIES 1.Geographical pricing, 2.price discounts, 3.promotional pricing, 4.discriminatory pricing, 5.product mix pricing

There are several alternative to increasing price, including shrinking the amount of product ,substituting less expensive materials or ingredients or reducing or removing product features.,

*MANAGING MARKETING CHANNELS & MANAGING RETAILING, WHOLESALING AND MARKET LOGISTICS

Functions performed by intermediaries are information, promotion, negotiation , ordering, financing, risk taking, physical possession, payment and title One-two -three levels Exclusive , Selective, Intensive Vertical Marketing Marketing system System, Horizontal

The major types of retail stores are specialty stores , departmental stores, supermarkets convenience stores, discount stores, off price retailer ( factory outlets) superstores and catalog showrooms. Corporate retailers are chain stores, voluntary chains, retailer cooperatives, consumer cooperatives, Franchise organizations etc.,

There are 4 types of wholesalers

1.Merchant wholesalers- full service 2.Brokers and agents 3.Manufacturers branches and retailers sales

4.Miscellaneous wholesalers

*MANAGING COMMUNICATIONS

INTEGRATED

communication process- sender, receiver, message, media ,encoding ,decoding, response, feedback, and noise DEVELOPING EFFECTIVE COMMUNICATION- Identify the target audience, determine the communication objectives , design the message , select the communication channels, establish he total communication budget, decide on the communications mix, measure, and integrated communication.

*MANAGING ADVERTISING SALES PROMOTION PUBLIC RELATIONS & SALES FORCE MANGEMENT Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor. Developing an advertising program is 5 step process: 1.Set advertising objectives 2.Establish ad. Budget that takes into account. PLC, market share and consumer base, competition and clutter, ad frequency 3.Choose the advertising message, ,determine how the message will be generated, evaluate alternative messages, for desirability,. Exclusiveness and believability and execute message with the most appropriate style tone, words, and format

4. decide he media with the desired reach ,frequency and impact, 5.evaluate advertising effectiveness.

SALES PROMOTION consists of diverse collection of incentive tools, mostly short tem, designed to stimulate quicker or greater purchase of particular products. Consumer promotion ( samples, coupons,cash refund offers, price offs, premiums, free trials, warranties, tie in promotions, cross promotions, POPs, demonstrations) and trade promotions ( display allowances, free goods) Business and sales force promotion ( trade shows, contests for sales force, specialty advertising)

PUBLIC RELATIONS involves a variety of programs designed to promote or protect a company's image or its individual products.

1.Press relations 2.Product publicity3.Corporate communications 4.Lobbying 5.Counselling - in case of product failure,

SALES FORCE MANAGEMENT The term sales representative can cover Deliverer, order taker, Missionary, Technician, Demand creator, solution vendor, FUNCTIONS OF SALES PERSON Prospecting, targeting, communicating, selling, servicing, information gathering, etc., Time and duty analysis Perpetration Planning call strategy Travel means of transportation Food , Waiting, Selling, Administration Writing reports, billing, sales meeting, etc,

PRINCIPLES OF PERSONAL SELLING PROSPECTING Examining data sources ,putting a booth in trade show, current customer, cultivating, cold canvassing dropping in unannounced offices places. PREAPPROACH phone, visit, time, letter, APPROACH Greeting, PRESENTTAION AND DEMONSTRATION AIDA Gaining attention, holding interest, arousing desire, and obtaining action. Features, advantages, benefits and value STYLES OF PRESENTATION CANNED memorises sales talk NEED SATISFACTION APPROACH OVERCOMING OBJECTIONS CLOSING FOLLOW UP AND MAINTENANCE SPIN Situation, Problem, Implication, Need Payoff RELATIONSHIP MARKETING is based on the premise that important accounts need focussed and continuous attention.

5 steps involved in managing the sales force

1.Recruiting and selecting sales representatives 2.Training 3.Supervising 4.Motivating 5.Evaluting *DIRECT AND ONLINE MARKETING

Direct marketing is an interactive marketing system that uses one or two ad media to effect a measurable response or transaction at any location. Channels used - sales call, direct mail, catalog marketing, telemarketing, infomercials, home shopping channels, magazines, radio, newspapers also used. Direct marketing has its benefits., Home shopping is fun, convenient and hassle free. Saves time . Sellers also benefit. They can have information on anything - overweight people, left handed, millionaires, A customer database is an organized collection of comprehensive data about individuals customers or prospects that is

current, accessible and actionable for such marketing purposes as lead generation Marketing through internet.

V.MANAGING THE MARKETING EFFORT

TOTAL

Evolution of the marketing department 1.Sales department 2.Ancillary functions 3.Separate marketing department 4.Sales and marketing reporting to Marketing V.P. 5.Marketing and 6.Cross disciplinary customer centered

ORGANISATION DEPARTMENTS 1.Functional Management

OF 2.Geographic

MARKETING 3.Brand

4.Matrix organization Corporate managers

-Product mgrs. &

5.Strong corporate marketing vs limited corporate marketing

EVALUATION AND CONTROL - 4 types of marketing control

1.ANNUAL PLAN CONTROL- to ensure that the company achieves its goals of annual plan. Sales analysis, market share analysis, marketing expense to sales analysis,

2.PROFITABILITY CONTROL - profitability of various products, territories, customer groups, trade channels and order sizes.

3.EFFICIENCY CONTROL to increase efficiency of sales force, advertising, sales promotion and distribution

4.STRATEGIC CONTROL periodic reassessment of the company and its strategic approach to the market place using the tools of marketing effectiveness review and marketing audit .

MARKETING RESEARCH MARKETING RESEARCH IS THE SYSTEMATIC DESIGN COLLECTION, ANALYSIS AND REPORTING OF DATA AND FINDINGS RELEVANT TO SPECIFIC MARKETING SITUATION FACING THE COMPANY.

MARKEING RESEARCH PROCESS-

1.DEFINE THE PROBLEM AND RESEARCH OBJECTIVES2.DEVELOP THE RESEARCH PLAN

PRIMARY DATA AND SECONDARY DATA RESEARCH APPROACHES OBSERVATIONAL RESEARCH FOCUS GROUP RESEARCH SURVEY RESEARCH EXPERIMENTAL RESEARCH CAUSE & EFFECT

RESEARCH INSTRUMENTS QUESTIONNAIRES- CLOSED END DICHOTOMOUS TWO POSSIBLE ANSWERS MULTIPLE CHOICE MANY ANSWERS SCALES RATING, IMPORTANCE, INTENTION TO BUY, SEMANTIC DIFFERENTIAL LIKERT AGREEMENT AND DISAGREEMENT OPEN END QUESTIONS COMPLETELY UNSTRUCTURED WORD ASSOCIATION, SENTENCE COMPLETION, STORY COMPLETION, PICTURE COMPLETION, TAT MECHANICAL INSTRUMENTSEYE CAMERAS GALVANOMETERS MEASURE THE INTEREST OR EMOTIONS AROUSED TO A SPECIFIC PICTURE OR AD. AUDIOMETER IS ATTACHED TO TELEVISION SETS

SAMPLING PLAN SAMPLING UNIT WHO IS TO BE SURVEYED SAMPLE SIZE- HOW MANY SAMPLING PROCEDURE HOW RESPONDENTS SHOULD BE CHOSEN RANDOM, JUDGEMENT ETC., 3.COLLECT THE INFORMATION 4.ANALYSE THE INFORMATION 5.PRESENT THE FINDINGS

METHODS OF ESTIMATING THE FUTURE DEMAND OF THE PRODUCT

1.SURVEY OF BUYERS INTENTIONS 2.COMPOSITE SALES FORCE OPINIONS 3.EXPERT OPINION 4.PAST SALES ANALYSIS 5.TEST MARKETING

NEW PRODUCT DEVELOPMENT

New products can be classified as 1. 2. 3. New to the world New to the market New to the company

New Product Development Process

1. Idea Generation 2. Screening 3. Concept development & testing 4. Marketing strategy development 5. Business analysis 6. Product development 7. Test marketing 8. Commercialization

IDEA GENERATION:

Sources of New - Product Ideas:

. x ie e

(1)

CUSTOMERS: Companies can identify customer's needs and wants through customer surveys, projective tests, focused group discussion and suggestions and complaints from customers. Many of the best ideas come from asking customers to describe their problems with current products.

(2)

SCIENTISTS: Companies also rely on their scientists, engineers, designers and other employees for new-product ideas. Successful companies have established a company culture that encourages every employee to seek new ideas for improving the company's production, products and services. Some companies give monetary and recognition awards to their employees who submit the best ideas during the year.

(3)

SALESPERSONS & MIDDLEMEN: Company salespersons and middlemen are a particularly good source of new-product ideas. They have a firsthand exposure to customers needs and complaints. They often learn first of competitive developments.

(4)

TOP MANAGEMENT: Top management can be another major source of new-product ideas. However, a major problem with regard to ideas from top management is that there will be little resistance from employees even though the idea may be bad.

FN: PRODUCT(TN-3) (Prepared for MBA(evening),Osmania University Campus. )

(5)OTHERS: New-product ideas can come from other sources as well, including inventors, patent holders, university and commercial laboratories, industrial consultants, advertising agencies, marketing research firms and industrial publications.

IDEA GENERATING TECHNIQUES (1) ATTRIBUTE LISTING: This technique calls for listing the major attributes of an existing product and than modifying each attribute is search for an improved product. Useful ideas can be found by addressing the following questions to an object bits attributes: put to other uses? Adapt? Magnify? Minify? Substitute? Rearrange? Reverse? Combine?

(2)

BRAINSTORMING: This technique was developed by Alex Osborn. The usual brainstorming group consists of 6 to 10 people. The problems should be specific. The ideas generated should not be criticized. The wilder the idea, the better. Quantity is encouraged. i.e. The greater number of ideas, the more the likelihood of useful ideas.

IDEA SCREENING The purpose of idea generation is to create a large number of ideas. The purpose of the succeeding stages is to reduce the number of ideas to an attractive, practicable few. In screening ideas, the company must avoid two types of errors. A DROP ERROR occurs when the company dismisses an otherwise good idea. A GO ERROR occurs when the company permits a poor idea to move further.

In product-idea rating many factors of product success requirements have to be considered like company personality & goodwill, Marketing , Research & Development, Personnel, Finance, Production, Location, Facilities, Purchasing & Supplies etc. CONCEPT DEVELOPMENT & TESTING Attractive ideas must by refined into testable product concepts. A product idea is a possible product that the company might offer to the market. A product concept is an elaborated version of the idea expressed in meaningful consumer terms. Any product idea can be turned into several product concepts. For example let us assume that a company gets the idea of producing a powder to add to milk to increase its nutritional value and taste. First the question, who is to use this product? The powder can be aimed at infants, children, teenagers, or adults. Second, What primary benefit should be built into this product? Taste, nutrition, refreshment, energy? Third, what is the primary occasions for this drink? Breakfast, lunch, afternoon, or dinner, By asking these questions, a company can form several concepts.

CONCEPT TESTING:

Concept testing calls for testing the competing concepts with an appropriate group of target consumers. The concepts can be presented symbolically or physically.

Consumers are asked to respond to questions with regard to clarity of the concept, believability, products currently meeting this need, price factor, whether the consumer would buy the product. Who would use the product and how often etc.

Concept development and testing methodology applies to any product, service or idea, such as a car, a soup, a towel, a banking service etc.

MARKETING STRATEGY DEVELOPMENT The marketing strategy describes the size, structure, and behaviour of the target market, the planned product positioning, and the sales, market share, and profit goals sought in the first few years, the products planned price, distribution strategy, marketing budget for the first year, long-run sales or profit goals and marketing-mix strategy over time. BUSINESS ANALYSIS After management develops the product concept and marketing strategy. It can evaluate the business proposals attractiveness. Estimating Sales: Management needs to estimate whether sales will be high enough to yield a satisfactory profit. Sales-estimation methods depend on whether the product is a one-time-purchase product, an infrequently purchased product, or a frequently purchased product. Establishing Costs and Profits: After preparing the sales forecast, management can estimate the expected costs and profits of this venture. The costs are estimated by the R & D, manufacturing, and finance departments. PRODUCT DEVELOPMENT In the product concept passes the business test, it moves to R&D and/or increasing to be developed into a physical product. Up to now it has existed early as a word description, a drawing, or a crude mockup. This step calls for a large jump in an investment. The R&D department will develop one or more physical versions of the product concept. It hopes to find a prototype that the consumers see as embodying the key attributes described in the product-concept statement, performs safely under normal use and conditions, and which can be produced within the budgeted manufacturing costs. Designing a successful prototype can take days, weeks, months, or every years. Designing a new commercial aircraft will take several years of development work. The lab scientists must not only design the required functional characteristics but also know how to communicate the psychological aspects through physical cues such as colours, sizes and shapes. When the prototypes are ready, they must be put through rigorous functional and consumer tests. TEST MARKETING

After management is satisfied with the product functional and psychological performance, the product is ready to be dressed up with a brand name, packaging and preliminary marketing programme to test it in more authentic consumer settings. The purpose of test marketing is to learn how consumers and dealers react to handling, using and repurchasing the actual product. High investment products deserve to be market tested so as not to make a mistake. High risk products those that create new-product categories warrant more market testing. Some questions like how many test cities? Which cities, length of the test? What information to be collected etc should be answered. COMMERCIALISATION Commercialization is the decision to go ahead by launching the product in the market. In commercialization the points to be noted are market-entry timing, whether to launch the new product in a single locality, a region, several regions or the national market.

ORGANISING THE MARKETING DEPARTMENT


(Methods of organising the marketing department)
1)Functional Organisation 2)Geographic organisation 3) Product or Brand Management organisation 4)Market Management Organisation 5) Product Mgt / Market Mgt Organisation 6)Corporate Divisional organisation

FUNCTIONAL ORGANISATION
In functional marketing organisation, function specialists report to marketing Vice-President, who coordinates their activities.

V.P (Marketing)

___________ ___________ ___________ ___________ ___________ Marketing New Administration Product Advertising & Sales Promotion Mgr Sales Manager Marketing Research Manager

Manager Manager

___________ ___________ ___________ ___________ ___________

The main advantage of a functional department is its administrative simplicity. However, this form loses effectiveness as products and markets increase.

GEOGRAPHIC ORGANISATION
In Geographic marketing organisation a company organises its sales force along geographic lines. The national sales manager may supervise four regional sales managers each who supervises six zonal managers, who in turn supervise district manager, who in turn supervise sales officers, who in turn supervise salespeople.

PRODUCT OR MANAGEMENT ORGANISATION

BRAND

Companies producing a variety of products and brands often establish a product or brand management organisation. The product-management organisation does not replace the functional management organisation, butter sever as another layer of management. A product manager supervises product category manager, who in turn supervise specific product and brand manager. A product-management organisation makes sense if the companys products are quite different, or if the sheer number of products is beyond the ability of a functional department organisation to handle. Product and brand managers have these tasks:

1.Developing a long-rang and competitive strategy for the product. 2.Preparing an annual marketing plan and sales forecast. 3.Working with advertising and merchandising agencies to develop copy, programmes and campaigns. 4.Stimulating support of the product among the sales force and distribution. 5.Gathering continuous intelligence on the products performance, customer and dealer attitudes, and new problems and opportunities. 6. Initiating product improvement to meet changing market needs.

The product-management organisation has several advantages. The product manager can concentrate on developing a cost-effective marketing mix for the product and can react more quickly to the problems in the marketplace. The disadvantage of product manager organisation is that it creates some conflict and frustration, because product managers are not given enough authority. Moreover it is costly to maintain this type of organisation.

MARKET ORGANISATION

MANAGEMENT

Many companies sell their products to a diverse set of markets. For example photocopying machines are sold to consumers, business, government and educational institutions markets. When customers fall into different user groups with distinct buying preference and practices, a market management organisation is desirable. A Markets Manager supervises several Market Managers( also called market-development managers, market specialist or industry specialists) Market managers are staff ( not line) people, with duties similar to those of product managers. Market managers develop long range and annual plans for their markets. They must analyse where their market is going and what new products their company should offer to this market. The strongest advantage of Market-management organisation is that the marketing activity is organised to meet the needs of distinct customer groups rather than focused on marketing function, regions or products per se.

PRODUCT MANAGEMENT/ MARKET MANAGEMENT ORGANISATION


Companies that produce many products flowing into many markets tend to adopt matrix Organisation Example of Matrix Organisation

MARKET MANAGERS Mens Wear Indl markets Womens Wear Home furnishings

A matrix organisation would seem desirable in a multiproduct , multimarket company. The rub is that this system is costly and often creates conflict. There are also questions about where authority and responsibility should reside. Other problems are with regards to organisation of sales force (according to products or markets ) and with regard to setting up the prices for a particular product or market.

CORPORATE DIVISIONAL ORGANISATION As multiproduct-multimarket companies grow, they often convert their large product or market groups into separate divisions. The divisions set up their own departments and services. How much of corporate marketing should be retained at corporate headquarters is the question ? It can be done in many ways like : 1. No Corporate marketing Each division has its marketing department 2. Moderate Corporate marketing Preferring few functions especially promoting the marketing concept throughout the company. 3. Strong Corporate marketing i.e. Most of the marketing activities are centralised.

MARKETING CONTROL
SUMMARY OF MARKETING CONTROL
ANNUAL CONTROL 1.Sales Analysis 2.Market Share Analysis

3.Marketing Expense-to-Sales Analysis 4.Financial Analysis 5.Market Based Scorecard Analysis

PROFITABILITY CONTROL

Marketing Profitability Analysis Activity Based Accounting EFFICIENCY CONTROL 1. Sales Force Efficiency 2. Advertising Efficiency 3. Sales Promotion Efficiency 4. Distribution Efficiency

STRATEGIC CONTROL Marketing Effectiveness Review Marketing Audit Ethical and Social Responsibility Review

MARKETING CONTROL
ANNUAL PLAN CONTROL
The purpose of annual plan control is to ensure the company achieves sales profits, and other goals established in the annual plan. The heart of annual plan control is management by objectives.

Tools of Annual Plan Control

2. Sales Analysis Consists of measuring and evaluating actual sales in relation to sales goals. Sales variance analysis measure the relative contribution of different factors to a gap in sales performance Microsales analysis looks at specific products, territories, and so forth that failed to produce expected sales.

3. Market Share Analysis It can be done in three ways: a) Overall market share is the companys sales expressed as a percentage of total market sales. b) Served market share is its sales expressed as a percentage of the total sales to its served market (Served market share is always larger than the total market share). c) Relative market share can be expressed as market share in relation to its largest competitor. 3. Marketing Expense-to-Sales Analysis : It is the key to watch that the company is not overspending to achieve sales goals. 4. Financial Analysis : Here the Expense to Sales ratios are analysed in an overall financial framework to determines how and where the company is making its money. 5.Market Based Scorecard Analysis Here two types of scorecards are prepared :

c) Customer performance scorecard d) Stakeholder performance scorecard

PROFITABILITY CONTROL
Seeks to measure and control the profitability of various products, territories, customer groups, trade channels and order sizes.

Marketing Profitability Analysis

For example a lawnmower company wants to determine the profitability of selling its lawnmower through three types of retail channels: hardware stores, garden

supply shops, and departmental stores. The following activities are carried out for conducting the marketing profitability analysis -

1.Identifying functional expenses 2.Assigning functional expenses to marketing entities 3.Preparing a profit and loss statement for each marketing entity.

Based on the analysis of this exercise the company determines corrective action.

Activity Based Accounting Companies are showing a growing interest in using marketing profitability analysis or its broader version, activitybased cost accounting (ABC) to quantify the true profitability of different activities. ABC can give managers a clear picture of how products, brand, customers, facilities, regions, or distribution channels both generate revenues and consumer resources. To improve profitability, manager can then examine ways to reduce the resources required to perform various activities, or make the resources more productive to acquire them at a lower cost. Alternatively, management may raise prices on products that consume heavy amount of support resources. The contribution of ABC is to refocus managements attention away from using only labour or material standard costs to allocate full cost, and toward capturing the actual costs of supporting individual products, customers and other entities.

EFFICIENCY CONTROL

Focuses on finding ways to increase the efficiency of the sales force, advertising, sales promotion and distribution. 1.Sales Force Efficiency key indicators are average number of calls per salesperson per day, average sales call time per contact, average revenue per sales call, average cost per sales call, entertainment cost per sales call etc.,

2. Advertising Efficiency Advertising cost per thousand target buyers reached by media vehicle, percentage audience who noted, saw or associated, and read most of each print ad. Consumers opinion on the ads content and effectiveness, before and after measures of attitude toward the product, number of inquiries stimulated by the ad and cost per Inquiry.

3. Sales Promotion Efficiency Percentage sold on deal, percentage of coupons redeemed, number of inquiries resulting from demonstration.

4.Distribution Efficiency Management needs to search for distribution efficiency in inventory control, warehouse locations and transportation models.

STRATEGIC CONTROL

From time to time, companies need to undertake a critical review of overall marketing goals and effectiveness. Each company should periodically assess its strategic approaches to the market place with marketing effectiveness review, marketing audit and Ethical and Social Responsibility Review Marketing Effectiveness Review A companys marketing effectiveness is reflected in the degree to which it exhibits the following five major attributes of a marketing orientation.

3. 4. 5. 6.

Customer Philosophy Whether the management recognises the importance of delivering the needs and wants of chosen markets Integrated Marketing Organisation To check if there is a high-level marketing integration and control of the major marketing functions. Adequate Marketing Information Whether marketing research studies are being conducted on a regular basis. Strategic Orientation i. What is the extent of formal marketing planning ? ii. How impressive is the current marketing strategy ? iii. What is the extent of contingency thinking and planning ? O[operational efficiency How well is the marketing strategy communicated and implemented ?

7.

Marketing Audit

A marketing audit is a comprehensive, systematic, independent and periodic examination of a companys or business units marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the companys marketing performance. The components of a marketing audit are marketing environment, marketing strategy, marketing organisation, marketing system, marketing productivity and marketing function.

Ethical and Social Responsibility Review There are ethical and moral issues like bribery, stealing trade secrets, false and deceptive advertising, quality and safety of products, price fixing, barriers to entry etc., Companies need to evaluate whether they are truly practicing ethical and socially responsible marketing.

DECISION AREAS IN ADVERTISING


Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor. STEPS IN DEVELOPING AN ADVERTISING PROGRAMME 1.Setting the advertising objectives 2.Deciding on the advertising budget

3.Choosing the advertising message 4.Decding on the Media 5.Evaluting advertising effectiveness I. SETTING THE ADVERTISING OBJECTIVES The advertising objectives must flow from prior decisions on target market, market positioning and marketing mix. Advertising objectives can be classified according to whether the aim is to inform, persuade or remind. Informative advertising figures heavily in the pioneering stage (to build a primary demand). Persuasive advertising becomes important in the competitive stage and Reminder advertising is important with mature products. II. DECIDING THE ADVERTISING BUDGET There are five specific factors to consider when setting the advertising budget. 1.Stage in the Product Life Cycle New Products require more advertising 2.Market Share High market share -less advertising 3.Competition and clutter More advertising 4.Advertising frequency High frequency requires more advertising 5.Product substitutability More advertising Methods of setting the advertising budget: 1.Affordable method 2.Percentage of sales method 3.Competitive parity method 4.Objective and task method III.CHOOSING THE ADVERTISING MESSAGE Ideally the message should gain attention, hold interest, arouse desire and elicit action (AIDA) Model. 1.What to say? MESSAGE CONTENT There are 3 types of appeals. Rational, emotional and moral. Rational appeals claim that the product has certain benefits. Emotional appeals attempt to stir up negative or positive emotions that will motivate purchase. Ego, Fear, guilt, shame: Humour, love, pride and joy. Moral appeals are directed to the audience sense of what is right and proper.

2.How to say it? MESSAGE FORMAT & EXECUTION In a print ad, the communicator has to decide the headline, copy, illustration and colour. If the message is over the radio the communicator has to choose words and voice qualities. If the message is be carried on TV all these elements plus body language have to be planned. Presenter has to

pay attention to facial expression, gesture, dress and posture and hairstyle. Creativity is required in every aspect o message format and execution. Creative people must find a cohesive style, tone, words and format for executing the message. Memorable and attention-getting words must be found. Any message can be presented indifferent execution styles: 1. SLICE OF LIFE This style show one or more typical people suing the product in a normal setting. 2. LIFESTYLE: This style shows how a product fits in with a particular lifestyle. 3. FANTASY This style creates a fantasy around the product or its use. (Dream themes) 4. MOOD OR IMAGE - This style BUILDS A MOOD OR IMAGE AROUND THE PRODUCT, SUCH AS BEAUTY, LOVE OR SERINITY. No claim is mad about the product except through suggestion 5. MUSICAL this style shows on e or more people or cartoon characters singing a song about the product. 6. PERSONALITY - This style creates a character that represents the product. 7. TECHCHNICAL EXPERTISE - This style shows the companys expertise in making the product. 8. SCIENTIFIC EVIDENCE - This style presents survey or scientific evidence that the brand is better. 9. TESTIMONIAL EVIDENCE - This style features a highly believable or likable source endorsing the product. Creativity is especially required for headlines. There are six basic types of headline: 1.NEWS New boom and more inflation ahead 2.QUESTION Have you heard? 3.NARRATIVE They laughed at me. 4.COMMAND Dont buy 5.1-2-3 WAYS 12 ways to save income tax 6.HOW-WHAT-WHY Format elements such as ad size, colour and illustration will affect an ads impact. Larger and colour ads gain more attention. Picture, headline and Copy are important in that order. Even then a really outstanding ad will be noted by about 50% of the exposed audience. IV.DECIDING ON THE MEDIA Media selection involves finding the most t cost-effective media to deliver the desired number of exposures to the target audience. Choosing among the major media types: Newspapers Flexibility, timeliness, short life TV Combines sight, sound, motion; has clutter, costly

Direct Mail Audience selectivity, Junk mail Radio Low cost, fleeting Magazines Long life, some waste circulation Outdoor Low cost, creative limitations Yellow Pages Wide reach, high competition Internet Interesting Low customers SELECTING SPECIFIC VEHICLES: The media planner must search for the most cost-effective media vehicles within the chosen media type. Media planners calculate the Cost Per Thousand Persons reached by a vehicle. The media planner ranks each media by a cost per thousand and favors media with the low cost per thousand. However, several factors have to be considered in applying the cost per thousand measure. These are audience quality, audience attention probability, magazine editorial quality and the magazines ad placement qualities and extra services like lead-time. DECIDING ON THE MEDIA TIMING In choosing media, the advertiser faces a macro scheduling problem and a micro scheduling problem. The macro-scheduling problem involves scheduling the advertising in relation to season and business cycle. The firm can vary its advertising expenditure to follow the seasonal pattern, oppose the seasonal pattern or to be constant throughout the year. Most firms pursue a seasonal policy. The micro-scheduling problem calls for allocating expenditure within a short period to obtain maximum impact. Continuity is achieved by scheduling exposures evenly throughout the given period. Concentration calls for spending all the advertising money in a single period. Fighting calls for advertising for some period, followed by a hiatus with no advertising, followed by a second period of advertising activity. Pulsing is continuous advertising at low-weigh levels reinforced periodically by waves of higher activity. V- EVALUATING ADVERTISING EFFECTIVENSS

A) COMMUNICATION EFFECT- RESEARCH


seeks to determine whether an ad is communication effectively. Called copy testing, it can be done before an ad is put into media and after it is printed or broadcast.

1.DIRECT RATING METHOD asks consumers to rate alternate ads. These rating are used to evaluate the following:

How well does the ad catch the readers attention? How well does the ad lead the reader to read further?

How clear is the message? How effective is the particular appeal? How well does the ad suggest follow-through action?

2.PORTFOLO TESTS ask consumers to view or listen to a portfolio of advertisements, taking as much time as they need. Consumers are then asked to recall all the ads and their content, aided or unaided y the interviewer. Recall level indicates an ads ability to stand out and to have its message understood and remembered.

3.LABORATORY TESTS use equipment to measure physiological reactions like heartbeat, blood pressure, pupil dilation and perspiration to an and. These tests measure attention getting power but reveal nothing about the impact on beliefs, attitudes, or intensions.

SALES EFFECT RESEARCH


Advertisings sales effect is generally harder to measure than its communication effect because sales are influenced by many factors as products features, price, availability and competitors actions. One way to measure the sales effect of advertising is to compare past sales with past advertising expenditures (Historical approach) . Another way is through experiments. i.e. to test the effects of different advertising spending levels in different markets and measure the differences in the resulting sales level. It could spend the normal amount in one market are, half the normal amount in another area, and twice the normal amount in a third area, If the three market areas are similar, and if all other marketing efforts are the same, the differences in sales in the three cities could be related to advertising levels.

ORGANISING THE MARKETING DEPARTMENT


(Methods of organising the marketing department)

1.Functional Organisation 2.Geographic area 3) Products or Customer markets

FUNCTIONAL ORGANISATION

In functional marketing organisation function specialists report to marketing VicePresident, who coordinates their activities.

V.P (Marketing)

___________ ___________ ___________ ___________ ___________ Marketing New Administration Product Advertising & Sales Promotion Mgr Sales Manager Marketing Research Manager

Manager Manager

___________ ___________ ___________ ___________ ___________

The main advantage of a functional department is its administrative simplicity. However, this form loses effectives as products and markets increase.

GEOGRAPHIC ORGANISATION

In Geographic marketing organisation a company organizes its sales force along geographic lines. The national sales manager may supervise four regional sales managers each supervises six zonal managers, who in turn supervise district manager, who in turn supervise sales officers, who in turn supervise salespeople.

PRODUCT OR BRAND MANAGEMENT ORGANISATION

Companies producing a variety of products and brands often establish a product or brand management organisation. The product-management organisation does not replace the functional management organisation, butter sever as another layer of management. A product manager supervises product category manager, who in turn supervise specific product and brand manager. A product-management organisation makes sense if the companys products are quite different, or if the sheer number of products is beyond the ability of a functional department organisation to handle. Product and brand managers have these tasks:

1.Developing a long-rang and competitive strategy for the product. 2.Preaparing an annual marketing plan and sales forecast. 3.Working with advertising and merchandising agencies to develop copy, programmes and campaigns. 4.Stimulating support of the product among the sales force and distribution.

5.Gathering continuous intelligence on the products performance, customer and

dealer attitudes, and new problems and opportunities.


6. Initiating product improvement to meet changing market needs. The product-management organisation has several advantages. The product manager can concentrate on developing a cost-effective marketing mix for the product and can react more quickly to the problems in the marketplace. The disadvantages of product manager organisation are

It creates some conflict and frustration, because they are not given enough authority. Moreover it is costly to maintain this type of organisation. MARKET ORGANISATION MANAGEMENT

Many companies sell their priducts to a diverseset of markets. For example photocopying machines are sold to consumers, business, government and euducational institutins markets. When customers fall into different user grrous with distint buiying preference and practices, a market management organiatin is desirable. A Markets Manager suprvises several Market Managers( also

called market-development managers, market specialist or industy specialista) Market managers re staff ( not line) people, with duties similar to those of produ ct managers. Market managers develop long range and annual plans for their markets. They must analyse where ther market is going and what new products their company should offer to this market. The strongest advantage of Marketmanagement organisation is that the marketing activityis organized to mmeet the needs of distinct customer groups rather than focused on marketing function, regions or products per se. PRODUCT MGT/ ORGANISATION MARKET MGT

Cp,[nies tht produce many prodcucts flowing into many markets tend to adopt matrix organsation

Example of Matrix Organisation MARKET MANAGERS Mens Wear Home furnishings

Womens Wear Indl.market

A matrix organisation would seem desirable in a multiproduct

Product Life Cycle (PLC)


After launching the new product, management wants the product to enjoy a long and happy life. Although it does not expect the product to sell forever, the company wants to earn a decent profit to cover all the effort and risk that went into launching it. Management is aware that each product will have a life cycle, although the exact shape and length is not known in advance. To say that a product has life cycle is to assert 4 things:

1.Products have a limited life. 2.Product sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller. 3.Profits rise and fall at different stages of PLC. 4.Products require different marketing, financial, manufacturing, purchasing and human resources strategies in each sage of their life cycle.

Product life cycle stages are divided into 4 stages1.Introduction a period of slow sales growth as the product is introduced in the market 2.Growth a period of rapid market acceptance and substantial profit

improvement 3.Maturity a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. 4.Declilne sales show downward drift.

Branded products have shorter life cycles. Products - may have a shorter or longer life cycle ; product forms manual typewriters to electric to electronic to -----follow the standard PLC faithfully; product categories have the longest life cycles- newspapers, TVs, telephones etc.,

INTRODUCTION
This is the first stage of PLC and hence called as Introduction. It is the stage of launching of the product. The introduction stage is marked by slow growth as the product is pushed into distribution. There is a general unwillingness on the part o the trade to deal with the product and marketing intermediaries demand for very high margins or tough credit terms. One of the crucial decisions to be taken in the market pioneering stage is the pricing strategy to be adopted. There are generally four pricing strategies that can be adopted during this stage.

Rapid Skimming - High Price + High Promotion - This strategy works well when the customer awareness about the product is very low and among those who are aware , willingness to pay any price to buy is high. Most consumer electronics could be classified under this group. When products like music systems and video games are introduced, they are priced high and then gradually reduced to maintain market share. This will reduce the firms break-even time. (Short term objectives)

Slow Skimming - High Price + Low promotion This strategy is based on the assumption that the firm has sufficient time to recover its pre launch expenses. This happens when either the technology being used by the firm is highly sophisticated and

competition have to invest substantial resources to get this technology.

Prof.V.Shekhar, Head, Department of Business Management, OU

Rapid Penetration - Low Price + High promotion - This strategy of rapid penetration is based on the same assumptions as mentioned under the rapid skimming strategy. The only difference being here is the firm has long term objectives. This is very good strategy to acquire market share. Japanese firms adopted this strategy to launch their products in North America and Europe. Later, in 1980s South Koreans, Taiwanese and Hong Kong firms used the same strategy to uproot the Japanese companies.

Slow Penetration Low Price + Low Promotion - This strategy delivers results when the threat form competition is minimal, market size is large and the majority of the product is familiar with the product.

GROWTH
This is the second stage of PLC. Many products are stuck in the introduction stage itself. Entering this stage means that the product has overcome the hurdles of the Introduction stage. The competitors also enter the scene with similar or slightly improved versions of the product. The market base expands and more customers are willing to buy the product. Profits increase during the growth stage as promotion costs are spread over a large volume and unit manufacturing costs fall faster. More trade channels are now willing to accept the product.

The growth stage involves the strategies of product modification, enlarging distribution and service network and maintaining competitive price level. The strategy also involves extending the product to different use situations and considering newer packaging alternatives to attract more and more new customers.

MATURITY
Products that survive the growth stage enter the third stage i.e., Maturity stage. During this stage , competition becomes more intense. The stage is characterised by slow growth rates of sales and profits. This stage is also marked by a cutthroat competition, which often narrows down to price and promotion wars. Product modification programme is at a much higher level and the firm also introduces a modified product during this stage. Strengthening of the Brand through repositioning or making changes in the channels of distribution now become imperative.

DECLINE
This is the stage when the sales decline because customer preferences have changed in favour of more efficient and better products. The number of competing firms also get reduced and the industry now has limited product versions available to the customer. The marketing task is to sustain the product at reasonable profit levels or abandon the product in a way that minimises the hardship to company profits, employees and customers.

CONCLUSION
PLC thus remains one of the most useful concepts of marketing management. Its usefulness varies in different marketing situations. It can be used as a planning tool to analyse characteristics of each stage of product and plan the relevant response or activity for each stage. It can be used as a control tool to monitor the companys performance. It can be used as a forecasting tool, where the company will project its sales and profit, depending upon the stage of the product in its life cycle.

(OU Campus)-For private circulation only

POSITIONING
products position is the way the product is defined by consumer on important attributes the place the product occupies in a consumers mind relative to competing products. Consumers are overloaded with information about products and services and hence to simplify the buying process they Position products and services in their minds.

Positioning is concerned with differentiation. Al Ries and Jack Trout through their book Positioning The battle for Your Mind popularised the concept of positioning. They view Positioning as a creative undertaking whereby an existing brand in an overcrowded market place of similar brands can be given distinctive position in the minds of targeted prospects. While their concept was concerned with an existing brand, it is equally applicable for new brands. Each of the marketing mix elements is capable of contributing to the positioning of a product.

Physical products vary in their potential for differentiation. At one extreme, we find products that allow little variation: steel, salt, cement. At the other extreme are products capable of high differentiation, such as automobiles, commercial buildings and furniture. Here the seller faces an abundance of design parameters, including form, features, performance quality, conformance quality, durability, reliability, style and design. The main service differentiators are ordering ease, delivery, installation, customer training, maintenance and repair. Similarly companies can gain a strong competitive advantage through having better trained people. Better-trained personnel possess the required skill and knowledge; They are friendly, respectful and considerate; They are trustworthy; They perform the service consistently and accurately; They respond quickly to customers requests and problems and communicate clearly. Companies can also achieve competitive

advantage through the way they design their distribution channels coverage, expertise and performance. Competitive advantage can also be gained by Image differentiation by using strong symbols, through media coverage, physical space occupied by the company and the events it sponsors.

PHYSICAL VS PERCEPTUAL PRODUCT POSITIONING

One way to assess the current position of a product offering relative to competitors is on the basis of how the various offerings compare on some set of objective physical characteristics. For example the physical characteristics of automobile could be seating capacity, engine, mileage, size, price etc., In many cases a physical product positioning analysis can provide useful information to a marketing manager, particularly in the early stages of identifying and designing new product offerings. By determining key physical product characteristics, it helps to define the structure of competition by revealing the degree to which the various brands compete with one another; and may indicate the presence of meaningful product gaps, which in turn, may reveal opportunities for new product.

Limitations of Physical Positioning A simple comparison of only the physical dimensions of alternative offerings usually done not provide a complete picture of relative positions, because positioning ultimately takes place in consumers minds. Consumers attitudes toward a product are often based on social or psychological attributes not amenable to objective comparison, such as perception of the products aesthetic appeal, sportiness or status. Consequently, perceptual positioning analysis- whether aimed at discovering opportunities for new product entries or evaluating and adjusting the position of a current offering are critically important.

PERCEPTUAL PRODUCT POSITIONING Consumers often know very little about the essential physical attributes of many products, especially household products. Many customers do not want to be bothered about a products physical characteristics because they are not buying these physical properties but rather the benefits they provide. Thus, for example, a headache remedy is judged on how quickly it brings relief, just as a vehicle on how comfortably it rides. The evaluation of many products is subjective because it is influenced by factors other than physical properties, including the way the products are present, our experiences with them, and the

opinion of others. Thus, physically similar products may be perceived as different because of different histories, names, and advertising campaigns. For example, people are willing to pay considerably more for Vicks Vaporub than for an unadvertised private brand even though they are essentially the same product. Whereas, Physical positioning is technical oriented with physical characteristics perceptual positioning is consumer oriented with perceptual attributes.

DEFINITIONS OF POSITIONING
Positioning is the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition.

Product Positioning refers to the place an offering occupies in the consumers mind on important attributes relative to competitive offerings.

Positioning is your product as the consumer thinks of it. Since the consumer is the ultimate user of the product, the consumers perception of your product is what your product really is.

A competitor has three strategic alternatives with regard to Positioning. The first is to strengthen its own current position in the consumers mind. The second strategy is to gain an unoccupied position(gap). The third strategy is to deposition or reposition the competition. (i.e. attacking the competitors claims)

HOW MANY DIFFERENCES TO PROMOTE

Each company must decide how many differences (features, benefits) to promote to its target market. Many marketers advocate promoting only one central benefit. Rosser Reeves said a company should develop a UNIQUE SELLING PROPOSITION (USP) for each brand and stick to it. Ries and Trout also favour one consistent positioning image. Each brand should select an

attribute and tout itself as number one on that attribute. Number one positioning include best quality, best service, best value, lowest price, safest, fastest etc.,

Not everyone agrees that single-benefit position is always best. Double- benefit positioning maybe necessary if two or more firms claim to best on the same attribute. There are even cases of successful triple-benefit positioning. However, the challenge to the marketer is to deliver all the three benefits.

In general, a company must avoid four major positioning errors:

1. UNDERPOSITIONING Buyers have a vague idea of the brand. 2. OVERPOSITIONING -- Buyers may have too narrow an image of the brand. 3. CONFUSED POSITIONING Buyers might have a confused image of the brand. 4. DOUBTFUL POSITIONING Buyers may find it hard to believe the brand claims in view of the products features, price or manufacturer.

Solving the positioning problem enables the company to solve the marketing-mix problem. Thus, seizing the high-quality position requires the firm to produce high-quality products, charge a high price, distribute through high-class dealers, and advertise in high quality magazines.

PERCEPTUAL MAPPING

To Position a brand, a technique called Perceptual mapping is commonly used. This technique involves studying the consumers perception of the product and competitors brands and based on identifying vacant slots. This involves the following steps:

1. Selection of the product-market to be examined; 2. Determination of the brands in the product-market; 3. Collection of data on consumer perceptions regarding brands (and an ideal brand) obtained from a sample of people. The perceptions pertain to various product attributes (cost, features, trade-in value etc.,). The ideal brand would possess the proper amount of each attribute for each buyer; 4. Analysis of the data to form one, two or more composite attribute dimensions, each independent of others.; 5. Preparation of a two dimensional map (X and Y grid) of attributes on which consumer perception of competing brands are positioned; 6. Plotting of consumers with similar ideal preferences to see whether subgroups will form; 7. Interpretation of the results in terms of target market and product positioning strategies.

CHOOSING A POSITIONING STRATEGY:

1. ATTRIBUTE POSITIONING: A company positions itself on an attribute, such as size of number of years in existence. 2. BENEFIT POSITIONING: A product is positioned as the leader in a certain benefit. 3. USE OR APPLICATION POSITIONING: Positioning the product as best for some use or application. 4. USER POSITIONING: Positioning the product as best for some user group. 5. COMPETITIVE POSITIONING: The product claims to be better in some way than a named competitor. 6. PRODUCT CATEGORY POSITIONING: The product is positioned as the leader in a certain product category. 7. QUALITY OR PRICE POSITIONING: The product is positioned as offering the best value

Marketers often use a combination of these positioning strategies. Thus, the Positioning task consists of three steps: 1. Identifying a set of possible competitive advantages on which to build a position 2. Selecting the right competitive advantage 3. Effectively communicating and delivery of the chosen position to the market.

CONCLUSION

To sum up the concept of positioning is useful in stimulating producers to think in terms of meeting particular needs and wants of consumers. But as Beavin Ennis points out Positioning should not be viewed as a fancy catch-all-phrase to describe any kind of a selling idea. It is a specific, many faceted marketing concept in which the selection of a given facet is directly related to the brands marketing environment and the products degree of marketable differentiation.
Professor V.Shekhar, Head, Department of Business Management, Osmania University

NEW PRODUCT DEVELOPMENT

New products can be classified as

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4. New to the world 5. New to the market 6. New to the company New Product Development Process

1. Idea Generation 2. Screening 3. Concept development & testing 4. Marketing strategy development 5. Business analysis 6. Product development 7. Test marketing 8. Commercialization

IDEA GENERATION:

Sources of New - Product Ideas:

(3) CUSTOMERS:

Companies can identify customer's needs and wants through customer surveys, projective tests, focused group discussion and suggestions and complaints from customers. Many of the best ideas come from asking customers to describe their problems with current products.

(4) SCIENTISTS: Companies also rely on their scientists, engineers, designers and other employees for newproduct ideas. Successful companies have established a company culture that encourages every employee to seek new ideas for improving the company's production, products and services. Some companies give monetary and recognition awards to their

employees who submit the best ideas during the year.

(6)

SALESPERSONS & MIDDLEMEN: Company salespersons and middlemen are a particularly good source of new-product ideas. They have a firsthand exposure to customers needs and complaints. They often learn first of competitive developments.

(7)

TOP MANAGEMENT: Top management can be another major source of new-product ideas. However, a major problem with regard to ideas from top management is that there will be little resistance from employees even though the idea may be bad.

FN: PRODUCT(TN-3) (Prepared for MBA(evening),Osmania University Campus. )

(8) OTHERS: New-product ideas can come from other sources as well, including inventors, patent holders, university and commercial laboratories, industrial consultants, advertising agencies, marketing research firms and industrial publications.

IDEA GENERATING TECHNIQUES (3) ATTRIBUTE LISTING: This technique calls for listing the major attributes of an existing product and than modifying each

attribute is search for an improved product. Useful ideas can be found by addressing the following questions to an object bits attributes: put to other uses? Adapt? Magnify? Minify? Substitute? Rearrange? Reverse? Combine?

(4) BRAINSTORMING: This technique was developed by Alex Osborn. The usual brainstorming group consists of 6 to 10 people. The problems should be specific. The ideas generated should not be criticized. The wilder the idea, the better. Quantity is encouraged. i.e. The greater number of ideas, the more the likelihood of useful ideas.

IDEA SCREENING The purpose of idea generation is to create a large number of ideas. The purpose of the succeeding stages is to reduce the number of ideas to an attractive, practicable few. In screening ideas, the company must avoid two types of errors. A DROP ERROR occurs when the company dismisses an otherwise good idea. A GO ERROR occurs when the company permits a poor idea to move further.

In product-idea rating many factors of product success requirements have to be considered like company personality & goodwill, Marketing , Research & Development, Personnel, Finance, Production, Location, Facilities, Purchasing & Supplies etc. CONCEPT DEVELOPMENT & TESTING

Attractive ideas must by refined into testable product concepts. A product idea is a possible product that the company might offer to the market. A product concept is an elaborated version of the idea expressed in meaningful consumer terms.

Any product idea can be turned into several product concepts. For example let us assume that a company gets the idea of producing a powder to add to milk to increase its nutritional value and taste. First the question, who is to use this product? The powder can be aimed at infants, children, teenagers, or adults. Second, What primary benefit should be built into this product? Taste, nutrition, refreshment, energy? Third, what is the primary occasions for this drink? Breakfast, lunch, afternoon, or dinner, By asking these questions, a company can form several concepts.

CONCEPT TESTING:

Concept testing calls for testing the competing concepts with an

appropriate group of target consumers. The concepts can be presented symbolically or physically.

Consumers are asked to respond to questions with regard to clarity of the concept, believability, products currently meeting this need, price factor, whether the consumer would buy the product. Who would use the product and how often etc.

Concept development and testing methodology applies to any product, service or idea, such as a car, a soup, a towel, a banking service etc.

MARKETING DEVELOPMENT

STRATEGY

The marketing strategy describes the size, structure, and

behaviour of the target market, the planned product positioning, and the sales, market share, and profit goals sought in the first few years, the products planned price, distribution strategy, marketing budget for the first year, long-run sales or profit goals and marketing-mix strategy over time. BUSINESS ANALYSIS After management develops the product concept and marketing strategy. It can evaluate the business proposals attractiveness. Estimating Sales: Management needs to estimate whether sales will be high enough to yield a satisfactory profit. Salesestimation methods depend on whether the product is a one-timepurchase product, an infrequently purchased product, or a frequently purchased product.

Establishing Costs and Profits: After preparing the sales forecast, management can estimate the expected costs and profits of this venture. The costs are estimated by the R & D, manufacturing, and finance departments. PRODUCT DEVELOPMENT In the product concept passes the business test, it moves to R&D and/or increasing to be developed into a physical product. Up to now it has existed early as a word description, a drawing, or a crude mockup. This step calls for a large jump in an investment. The R&D department will develop one or more physical versions of the product concept. It hopes to find a prototype that the consumers see as embodying the key attributes described in the product-concept

statement, performs safely under normal use and conditions, and which can be produced within the budgeted manufacturing costs. Designing a successful prototype can take days, weeks, months, or every years. Designing a new commercial aircraft will take several years of development work. The lab scientists must not only design the required functional characteristics but also know how to communicate the psychological aspects through physical cues such as colours, sizes and shapes. When the prototypes are ready, they must be put through rigorous functional and consumer tests. TEST MARKETING After management is satisfied with the product functional and psychological performance, the product is ready to be dressed up with a brand name, packaging and preliminary marketing programme to

test it in more authentic consumer settings. The purpose of test marketing is to learn how consumers and dealers react to handling, using and repurchasing the actual product. High investment products deserve to be market tested so as not to make a mistake. High risk products those that create new-product categories warrant more market testing. Some questions like how many test cities? Which cities, length of the test? What information to be collected etc should be answered. COMMERCIALISATION Commercialization is the decision to go ahead by launching the product in the market. In commercialization the points to be noted are market-entry timing, whether to launch the new product in a single locality, a region, several regions or the national market.

MARKETING COMMUNICATION SenderEncoding-Message Decoding-Receiver Response, feedback and noise

Developing effective Communications Steps

1.Identify the target audience-image analysis, familiarity, favourabilty analysis 2.Determine the communication objectives Cognitive, affective or behavioral CognitivePut consumers mind something in

Affective change an attitude Behavioral - get the consumer to act 3.Design the message 4.Select the communication channels 5.Budget 6.Decide on the communications mix 7.Meausre results 8.Mange the communication process integrated

Marketing Communication Mix

Advertising Print and Broadcast ads, Packaging, Brochures, Booklets, Posters, leaflets, Directories, Billboards, Reprints of ads, POP, Audiovisual material , Display signs

Sales Promotion Contests, games, premiums, gifts, sampling, Fairs and trades shows, Demonstrations, Rebates, Low interest financing. Tieins

Public Relations Press kits, Seminars, Charitable donations, Community relations, lobbying, events,

Personal selling presentations, sales meetings,

Sales

Direct Marketing telemarketing,

Mailings,

Nonpublic- the message is normally addressed to a specific person, can be prepared very quickly, can be changed.

ADVERTISING Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Classification of advertising objectives: 1.Informative advertising-pioneering stage 2.Persuasive advertisingcompetitive stage 3.Reminder advertising mature products DAGMAR Defining Advertising Goals for Measuring Advertising Results-Kolley ADVERTISING BUDGET Factors considered - Stage in the PLC, Market share, consumer base, competition , clutter, ad frequency, METHODS OF ADVERTISING BUDGET Percent of sales, Affordability, Competitive parity, Objectives and task method

David Ogilvy- brand image Confessions of an Advertising man and oglivy on Advertising use celebrities ROSSER REEVES USP Balsara clove oil relates only to advertising whereas positioning is a basic decision. Leo Burnett advocated the use of common man ADVERTISING MESSAGE 1.Message Content What to say 2.Message Structure How to say it logically 3.Message Format- How to say it symbolically 4.Message Source Who should say it MESSAGE CONTENT Rationalquality, economy, value, performance Emotional negative, love, pride, joy vicks Moral- AIDS

Humour fevicol,amul, Fear- bad smell, LIC,Ceasefire MESSAGE STRUCTURE One sided and two sided M ESSAGE FORMAT Headline, copy, illustration, colour in TV body language MESSAGE SOURCE Celebrities, doctors, opinion leaders Message generation benefit Desirability, Exclusiveness, believability Message Execution Messages impact depends not only on what is said but how it is said- style, tone, words, format Execution Styles Slice of life, lifestyle, fantasy, mood, personality symbol, technical expertise, scientific evidence, and testimonial. HEADLINES News New Boom and inflation ahead

Question - Have you heard about Narrative They laughed when I sat on the piano but when Command Dont buy unless 1-2-3 Ways 12 Ways to save your income tax How-What Why- How to increase the PICTURE ,headline, copy - Reader notices the picture first MEDIA SELECTION Reach The number of different persons or households exposed to a particular media schedule atleast once during a specified time period. while launching new products, undefined target market, Frequency The number of time within the specified time period that an average person or household is exposed to the message when there are strong competitors, frequent purchase cycle. Impact The qualitative value of an exposure through a give medium

( Children ad Womans World) Media scheduling Burst Continuous Intermittent

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EVALUATING ADVERTISING EFFECTIVENESS Communication effect research seeks to determine whether ad is communicating effectively CALLED COPY TESTING Direct rating, Portfolio, lab tests 3 Methods of ad pre-testing Direct Rating Method asks consumers to rate alternative ads, Portfolio tests ask consumers to view or listen to a portfolio of advertisements, taking as much time as they need. Consumers are asked to recall all the ads and their content aided or unaided by the interviewer.

Laboratory test use equipment to measure physiological reactions Heart beats, blood pressure, pupil dilation, perspiration, The parameters on which an ad copy has to be evaluated or tested are desirability , exclusiveness and believability RECONGITION TESTS-ADS ARE NOT SHOWN NOTED number of respondents who remember having seen the ad SEEN ASSOCIATED is the number of reader showing who have seen the ad and the brand or company READ MOST no of respondents who have read the copy. RECALL AIDED OR UNAIDED Sales Effect research Historical approach SALES PROMOTION consists of a diverse collection of incentive tools mostly short term

PUBLIC RELATIONS involves a variety of programs designed to promote or protect a companys image or its individual products SALES FORCE MANAGEMENT The term sales representative can cover Deliverer, order taker, Missionary, Technician, Demand creator, solution vendor, FUNCTIONS OF SALES PERSON Prospecting, targeting, communicating, selling, servicing, information gathering, etc., Time and duty analysis Perpetration Planning call strategy Travel means of transportation Food , Waiting, Selling, Administration Writing reports, billing, sales meeting, etc, PRINCIPLES OF PERSONAL SELLING

PROSPECTING Examining data sources ,putting a booth in trade show, current customer, cultivating, cold canvassing dropping in unannounced offices places. PREAPPROACH phone, visit, time, letter, APPROCAH Greeting, PRESENTTAION AND DEMONSTRATION AIDA Gaining attention, holding interest, arousing desire, and obtaining action. Features, advantages, benefits and value STYLES OF PRESENTATION CANNED memorises sales talk NEED SATISFACTION APPROACH OVERCOMING OBJECTIONS CLOSING :FOLLOW MAINTENANCE UP AND

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METHODS OF SALES FORECASTING Def: Sales forecasting may be defined as the amount of a product that the company actually expects to sell during a specific period at a specified level of marketing activities.
1.SURVERY OF BUYERS INTENTIONS

This method involves surveying the buyers to assess their intentions to buy the product. This method is alternatively known as user expectation method or End use method. This is useful method if there are few buyers. This method is more suited for forecasting the sales of industrial goods. The industrial customers are generally clustered in the industrial belts unlike the general consumers who spread is very wide. Even if the buyers are not clustered, they can be easily contacted. The main disadvantages of this method is that respondents may not themselves be quite clear about their buying plans or the consumption pattern may change due to circumstances. 2.COMPOSITE OF SALES FORCE OPINION In this method, the company asks individual sales personnel to estimate sales of the given product in his or her territory. The territory wise forecasts are consolidated and the final figure is arrived

at. In fact, this is a grass roots method. People who are closest to the market place form the basis for the forecast. However, the disadvantage of this method is that sales personnel may quote either optimistic or pessimistic figures. 3.EXPERT OPINION Companies can also obtain forecasts from experts. These experts are usually economists, management consultants, dealers, distributors, trade associations, advertising executives, university professors or other persons who have experience in a specific subject. These forecasting specialists may be able to prepare better forecasts than the company, because they have more data available with them and expertise. 4.DELPHI METHOD The Delphi method is a form of the expert opinion method. Whereas in the expert opinion method individual experts

are approached for forecasts, in the Delphi method a panel of experts are involved. The panels of experts are asked to prepare the sales forecast. The experts may be asked to exchange views and come up with a group estimate through group discussion method or they may be asked to supply their estimates individually with the company analyst combining them into a single estimate.

Professor V.Shekhar, Head, Department of Business Management, Osmania University

5. EXECUTIVE OPINION Under the Executive opinion method, one or more executives are asked to prepare the sales forecast. Under the Top Jury method, the participants are limited to the top executives and under the Percolated Jury method, a large number of marketing executives are involved.

6. MARKET TEST METHOD MARKETING)

(TEST

Under this method, a firm markets a new product in a limited geographic area or areas and measures the sales and based on this sample the sales forecast is prepared. A market test method is an effective tool for forecasting the sales of new products. A market test also gives a marketer an opportunity to test various elements of the marketing mix. However, the major problem with the market test method is with regard to the selection of test centres and number of centres to be selected. 7. MARKET SHARE METHOD Under this method, the company first works out the industry forecast. Based on this the company applies the market share factor and deduces the companys sales forecast. The conversion of industry forecast into company sales forecast requires considerable expertise. By a detailed marketing audit, the firm must correctly appraise its market standing,

brand image, market share, strengths, and weaknesses as compared with the competitors in the industry. It must correctly assess through reliable marketing intelligence, its competitors plans, policies, and strategies. Only then, the forecast arrived at by this method will have good degree of reliability. 8. MARKET SURVEY METHOD Under this method, data is collected from the field through market surveys. This method is more useful when a new product is launched because the company does not have any data of past sales or past demand patterns to rely upon. The main draw back is that it is time consuming and expensive. Moreover, the reliability of the information generated depends upon the statistical accuracy of the survey procedures adopted. 9. TIME SERIES ANALYSIS

One of the most widely and extensively used forecasting techniques is time series analysis, which is based on the assumption that the past can be used to predict the future. This method is projection method. In this method, statistical procedures are used to analyse historical data. This method is simple, inexpensive and easy to apply. For a company operating in a stable market, where its market share has remained constant over years, past sales can be used to predict future sales. 10. OTHER METHODS In practice, many other methods other than mentioned above are also used for sales forecasting. Some of them are Correlation analysis, Regression analysis, Extrapolation method, Exponential smoothing, Econometric models, moving averages etc.,

PRINCIPLES OF PERSONAL SELLING

1) 2) 3) 4) 5) 6) 7)

Pre-approach Approach Presentation & Demonstration Overcoming objections Prospecting Closing Follow-up and Maintenance

PROSPECTING :

The first step in the selling process is to identify prospects. For this leads (references) should be developed by some of the following ways :
1. 2. 3. 4. 5. asking eminent customers for the names of prospects suppliers, dealers, bankers, trade associations news papers, magazines, trade directories, telephone directories old files cold canvassing (dropping to various offices )

The leads can be categorised into hot leads, warm leads and cool leads.

PRE-APPROACH :

The sales person needs to learn as much as possible about the prospect (company or individual). Now the sales person has to formulate a overall sales strategy consisting of how to call (personal, telephone, mail), time of calling and other decisions.

APPROACH :

The sales person should know how to greet the buyer to get the relationship off to a good start. This involves the salespersons appearance, the opening lines and the follow-up remarks. The first 30 seconds are critical in the first introduction. It will be at this point that the customer will form some type of opinion about you. Make your greeting warm and sincere.

PRESENTATION AND DEMONSTRATION :

The salesperson now tells the product story to the buyer following AIDA formula (model). Gain ATTENTION : hold INTEREST : arouse DESIRE and elicit ACTION. Gaining attention is necessary to make consumers aware of the companys offering. Holding interest gives the communication a chance to build the consume'r interest in the product. Arousing desire effects the evaluation process-perhaps building preference. And obtaining action leads to purchase decision.

Sales presentation can be improved with demonstration aids such as booklets, charts, slides, movies, audios, video cassettes and actual product samples.

OVERCOMING OBJECTIONS :

Customers almost always pose objections during the presentation or when asked for order. The salesperson needs training in the broader skills of negotiation of which handling objections is a part.
CLOSING :

Now the salesperson attempts to close the sale. Salesperson has to recognise the right psychological moment to close the sale. They need to know the right closing signals from the buyer including physical actions, statement or comments and questions.
FOLLOW-UP AND MAINTENANCE :

This last step is necessary if the salesperson wants to ensure customer satisfication and repeat business. An automobile company uses the schedule given below for follow-up and maintenance.

1.

Calling customer 48 hours after delivery. If everything is alright the names of friends, relatives and business associates are asked while seeking permission to use the customers name.

2.

After a week, the customer is mailed a Thank you note.

3.

A greeting card is posted to the wife of the customer on the first birthday after the sale has been made. #####

SOCIAL CLASS

Social stratification the division of members of a society into a hierarchy of distinct social classes exists in all societies and cultures social class is defined as the division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same status and members of all other classes have either more or less status.

When considering consumer behaviour status is often defined in terms of one or more of the following convenient, demographic variables family income, occupational status, and educational attainment. These socio-economic variables, as expressions of status, are used by marketing practitioners to measure social class.

SOCIAL-CLASS CATEGORIES:

Little agreement exists among sociologists as how many distinct class divisions are necessary to adequately describe the class structure of a country.

SIX CATEGORY SOCIAL CLASS:

Upper Lower Upper Lower Upper Lower Lower

Upper Upper Middle Middle

Lower

Marketers are interested in the social class structures of communities that are potential markets for their products and in

the specific social class level of their potential customers.


MEASUREMENT OF SOCIAL CLASS:

1.Subjective Measures 2.Reputational Measures 3.Objective Measures

SUBJECTIVE MEASURES :

In the subjective approach to measuring social class, individuals are asked to estimate their own social class positions, eg., which of the following social class do you belong ? Lower Class, Middle Class, Upper Class.

Subjective measures of social class membership tend to produce an overabundance of people who classify themselves as middle class.
REPUTATIONAL MEASURES :

The reputational approach for measuring social class requires selected community informants to make initial judgements concerning the social - class membership of others within the community, rather than themselves. The final task of assigning community members to social-class positions however belongs to the trained researcher.

OBJECTIVE MEASURES :

Categories:

1. Single Variable Indexes 2. Composite Variable Indexes SINGLE VARIABLE INDEX :

A singe variable index uses just one socio economic variable to evaluate social class membership, eg.,
1. 2. 3. 4. 5. Occupation Education Income Quality of neighbourhood Possessions

COMPOSITE VARIABLE INDEXES:

Composite indexes systematically combine a number of socio economic factors to form one overall measure of social class standing, eg., INDEX OF STATUS CHARACTERISTICS (ISC): ISC is a weighted measure of the following socio economic variables.
VARIABLES WEIGHT

Occupation Source of Income (not amount of income) House type Dwelling area .1 .3

.4

.2

Another method of composite variable index is socio economic status score (SES) which combines three basic socio economic variables which are :
Occupation Family Income Education

CONSUMER BEHAVIOUR APPLICATIONS OF SOCIAL CLASS :

1. CLOTHING :
A Greek philosopher once said, know, first, who you are; and then adorn yourself accordingly. This bit of wisdom is relevant to clothing marketers today, because most people dress to fit their self images, which include perceptions of their own social class membership.

2. PASSION : Members of specific social class differ in fashionable or in good taste.

terms of what one consider

3. SHOPPING :
Social class is also an important variable in determining where a consumer shops. People tend to avoid stores that have the image of appealing to a social class very different from their own.

4. PURSUIT OF LEISURE : Social class membership is also closely related to the choice of recreational and leisure time activities.

5. SAVING, SPENDING & CREDIT:


Saving, spending, and credit card usage all seem to be related to social class standing.

6. COMMUNICATION: Social - class groupings differ in terms of their media habits and how they transmit and receive communications. Knowledge of these differences is invaluable to marketers who segment their markets on the basis of social class.

***

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MARKET SEGMENTATION
LEVELS OF MARKET SEGMENTATION BASES FOR SEGMENTATION

Def- Market segmentation is dividing the market into distinct groups of buyers with different needs, characteristic, or behaviours who might require separate products or marketing mixes. Levels of Market Segmentation: 1) Mass Marketing mass producing, mass distributing, and mass promoting the same product in the same way to all consumers. 2) Segment Marketing isolating broad segments that make up a market and adopts its offer to a more closely match the needs of one or more segments. 3) Niche Marketing focuses on subgroups within segment. Niche is a more narrowly defined group, usually identified by dividing a segment into sub segments. 4) Micro Marketing Segment and niche marketers tailor their offers and marketing programmes to meet the needs of various segments, however, they do not customize their offer to individual customer. Micro marketing is the practice of tailoring produces and marketing programmes to suit the taste of specific individuals and location . ( Individual marketing is called one to-one marketing) Steps in Target marketing are 1) market segmentation, 2) market targeting and 3) market positioning BASES FOR SEGMENTATION Two broad groups of variables are employed to segment consumer markets. a) Consumer characteristics such as demographic variables etc., b) Consumer responses such as benefits sought etc., Combining both of these the following are the segmentation variables/bases: 1.GEOGRAPHIC In this method, the total market is divided in to different geographic areas. a) Density urban, semi urban, rural. b) Region NEWS c) Climate Hot, moderate, cold 2.DEMOGRAPHIC These are the most popular bases for segmentation. SANIFRESH FOR a) b) c) d) Sex Male , Female Age 6 and below, 7-12, 13-19,20-30,31-35,36-46,47-60,61 and above Nationality Chinese, American, Japanese Income Below 2000, 2000-5000,5001-10,000,10,001-20,000,20,00140,000,40,000-75,000, 75,001-1,00,000, Above Rs.1, 00,000 (Per month) e) Family Size Below 2 members, 3-4, 5-8, 9 and above f) Religion Hindu, Muslim, Christian

g) Education Illiterate, Below SSC, SSC, Intermediate, Graduate, PosGraduate etc., h) Family Life Cycle Young single, Young Married, no children, Young married, children, Young married, older children,etc., i) Occupation Professional, Technical , Govt servant, Business man, farmer, housewife, unemployed, Retired etc., 3.PSYCHOGRAPHIC The use of psychological, sociological, anthropological factors, self-esteem and life style to determine how the market is segmented by the prosperity of groups within the market and their reasons is psychographics. i) Life Style - Lifestyle is a persons pattern of living. Lifestyle classifications are by no means universal. Life style variables are defined by how people spend their time (activities) what they consider important in their environment (Interests) and what they think about themselves and the world around them. (Opinions). Changing life styles are relevant to marketers. They vary significantly from country to country. Lifestyle captures something more than the persons social class or personality. It profiles a persons whole pattern of acting and interacting in the world. ii) Personality The marketers try to adjust the brand personality to the personality traits of buyers for whom it is meant. Personality characteristics especially the self-image is the basis of advertising appeals . 4.BEHAVIOURSITC behaviour Segmentation based on purchase

i) User Status Markets can be segmented into non-users, exusers, potential users, first-time users, and regular users of the product. Contacting each group will require different marketing strategies. ii) Occasions Buyers can be grouped according to occasions when they get the idea to buy, actually make their purchase, or use the purchased item. Occasion segmentation can help firms build up product usage. Beauty parlours, hotels, museums, travel resorts, iii) Benefits sought In this segmentation the marketer identifies the benefits that a customer looks for when buying a product. Benefit segmentation requires finding the major benefits people look for in the product class, the kinds of people who look for each benefit and the major brands that delver each benefit. A benefit segmentation of toothpastes revealed that there are four benefit segments Economic (Heavy users),

medicinal (smokers), cosmetic (brightness)(Teens) and taste (Children). Each benefit group had different characteristic. Forhans for healthy gums, close-up for breath, etc., iv) Loyalty Status A market can be segmented by consumer loyalty. Buyers can be divided into groups according to their degree of loyalty. Hard core loyals are completely loyal they buy one brand all the time. Soft Core loyals are somewhat loyal they are loyal to two or three brands of a given product. Switchers show no loyalty to any brand. They either want something different each time they buy. They never stick to a brand. E.G., (for a particular individual) Hard Core Old Cinthol, Gillette blades Soft Core Pillsbury atta, Annapurna atta Custard powder Weikfield or Brown & Polson Switcher Matchbox v) Usage Rate Markets can also be segmented into light, medium a and heavy product users. (Volume segmentation). Heavy users are often a small percentage of the market but account for a high percentage of total consumption. Marketers usually prefer to attract one heavy user to their product or service rather than several light users. vi) Buyer Readiness Stage A market consists of people indifferent stages of readiness to buy a product. They can be classified as: UNAWARE AWARE- INFORMED INTERESTEDDESIRE-INTEND TO BUY. The relative numbers make a big difference in designing the marketing programme. Advertising messages can be directed accordingly.
Professor. V.SHEKHAR, Department of Business Management, Osmania University

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MARKETING DEFINITIONS
PHILIP KOTLER

Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others. WILLIAN J.STANTON

Marketing is a total system of business activities designed to plan, price, promote and distribute want satisfying goods and services to present and potential customers. PETER DRUCKER

Marketing is so basic that it can not be considered a separate function. If the whole business seen from the point of view of its final result, hat is, from the customers point of view Business success is not determined by the producer but by the customer. JEROME Mc CARTHY Marketing is the response of business men to the need to adjust production capabilities to the requirements of consumer demands. CUNDIFF Marketing is the business process by which products are matched with markets and through which transfer of ownership effected.

DEFINITION OF MARKET
The concepts of exchange and relationships lead to the concept of market. A market is a set of actual and potential buyers of a product or service. These buyers share a particular need or want that can be satisfied thorough exchanges and relationships. Originally the term market stood for the place where buyers and sellers gathered to exchange their goods, such as a village square. Economists use the term market to refer to a collection of buyers and sellers who transact in a particular product, class as in the housing market or the grain market. Marketers, however, see the sellers as constituting an industry and the buyers as constituting a market.

MARKETING MIX
PHILIP KOTLER The set of controllable tactical marketing tools product, price, place and promotion- that the firm blends to produce the response it wants in the target market. William J. Stanton Marketing mix is the term that is used to describe the combination of four inputs that constitute the core of a companys marketing system: the product, the price structure, the promotional activities and the distribution system. Prof.Neil H.Borden The marketing mix refers to the apportionment of effort, the combination, the designing and the integration of the elements of marketing in to a programme of mix which on the basis of an appraisal of the market forces, will best achieve the objectives of an enterprise at a given time.
Originally, this classification was popularised by Jerome E. McCarthy.

4Ps
PRODUCT means the goods and services combination the company offers the target market. PRICE is the amount of money customers have to pay to obtain the product. PLACE includes company activities that make the product available to target consumers. PROMOTION means activities that communicate the merits of the product and persuade target customers to buy it.

MARKETING MIX VARIABLES


PRODUCT VARIABLES Variety Quality Design Features

Branding Packaging Services

PRICE VARIABLES List price Discounts Allowances Payment period Credit terms

PLACE VARIABLES Channels Coverage Location of outlets Inventory Transportation Logistics

PROMOTION VARIABLES Advertising Personal selling Sales promotion Public relations

The 4 Ps concept takes the sellers view of the market, not the buyers view. From the buyers viewpoint, 4Ps might be better described as:

Product Price Place -

Customer solution Customer cost Convenience

Promotion Communication

MARKETING PROGRAMME
Marketing programme is the blending of all the elements of marketing mix into a coordinated programme designed to achieve the companys marketing objectives by delivering value to customers.

MARKETING STRATEGY
Marketing strategy is the marketing logic whereby the company hopes to achieve its marketing objectives. It consists of specific strategies for target markets, positioning, the marketing mix, and the marketing expenditure levels.

All this is done with inputs from other organisational areas such as purchasing, manufacturing, sales, finance and human resources.

MARKETING SYSTEM
Marketing system is the relationship between the industry and the market. Sellers and buyers are connected by four flows:

a) The seller sends goods and services and communications (ads, direct mail etc.,) to the market.

b) In return they receive money and information (attitudes, sales data etc.,) The four flows therefore are-

1. 2. 3. 4.

Goods and services Communications Money Information

The inner loop shows an exchange of money for goods and services. The outer loop shows the exchange of information.

MARKETING ENVIRONMENT
A companys marketing environment consists of the actors and forces outside the marketing that affect marketing managements ability to develop and maintain successful relationships with its target customers. The marketing environment is made up of: 1. Micro environment 2. Macro environment

The micro environment consists of the forces close to the company that affect its ability to serve its customers the company, suppliers, marketing channel firms, customer markets, competitors and publics.

The macro environment consists of the larger societal forces that affect the micro environment demographic, economic, natural, technological, political, and cultural forces.

MARKETING MANAGEMENT
PHILIP KOTLER

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. PHILIP KOTLER & GARY ARMSTRONG Marketing management is the analysis, planning, implementation, and control of programmes designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organisational goals.

Professor V.Shekhar, Head, Department of Business Management, Osmania University, Hyd-7- For Private circulation only

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