SUBMITTED BY:

DELA CRUZ, JANELLA T.

MASTERS IN BUSINESS ADMINISTRATION
 I. Demand Analysis

Demand Analysis is a process whereby the management makes decisions with respect to the
production, cost allocation, advertising, inventory holding, pricing, etc.

The major concepts in demand measurement

Market

 Potential market
 Available market
 Target/ served market
 Penetrated market

Demand Measurement

Levels of Demand Measurement

 Market Demand
 Company Demand
Market Demand

Market demand is the total volume of product in a :

 Defined customer group

 Defined geographical area
 Defined time period
 Defined marketing environment
 Defined marketing programme

The components of modern marketing Information Systems

II. Market Segmentation and Targeting

 Identification of Market Segments

Through market segmentation, companies divide large, heterogeneous (different) markets into
smaller segments that can be reached more efficiently and effectively with products and services
that match their unique needs

Market segmentation is the process of subdividing a market into distinct subsets of customers
where any subset may be conceivably selected as a market target to be reached with a distinct
marketing mix.

Segment Marketing

Market segments can be defined in many different ways:

 Homogeneous preferences Where all

consumers have roughly the same preferences.
 Diffused preferences Where consumers vary
greatly in their preferences.
 Clustered preferences Where consumers enjoy
distinct preferences

Consumer and Institutionalized Corporate

Clientele
A consumer is someone who buys things for a non-commercial purpose, either for themselves or
for others. Companies use consumer marketing campaigns to sell to consumers. Campaign
messaging focuses on both acquiring potential customers and retaining current customers.

An institutional client is a large organization that gathers money from its members or
shareholders and invests it on their behalf. Major institutional clients are known as Wall Street’s
“smart money” because they tend to have more knowledge and resources to evaluate company
and market trends than your average mom-and-pop investor. That said, they may opt to invest
their assets indirectly through a more experienced asset manager, or, if they have the financial
expertise to do so, invest directly.

 Alternate name: institutional investor, institutional end investor

III. Product Management: Product Life Cycle Strategy

Product Life Cycle (PLC)
• Product Life Cycle – shows the stages that products go through from development
to withdrawal
from the market
– Each product may have a different life cycle
– PLC determines revenue earned
– Contributes to strategic marketing planning
– May help the firm to identify when
a product needs support, redesign, reinvigorating, withdrawal, etc.
– May help in new product development planning
–
–
– May help in forecasting and managing cash flow

• The Stages of the Product Life Cycle:

– Development
– Introduction/Launch
– Growth
– Maturity
– Saturation
– Decline
– Withdrawal

• Product Development: Stages

– New ideas/possible inventions
 – Market analysis – is it wanted? Can it be produced at a profit? Who is
it likely
to be aimed at?
– Product Development and refinement
– Test Marketing – possibly local/regional
– Analysis of test marketing results and amendment of
product/production process
– Preparations for launch – publicity, marketing campaign

• Introduction/Launch:
– Advertising and promotion campaigns
– Target campaign at specific audience?
– Monitor initial sales
– Maximise publicity
– High cost/low sales
– Length of time – type of product

• Growth:
– Increased consumer awareness
– Sales rise
– Revenues increase
– Costs - fixed costs/variable costs, profits may be made
– Monitor market – competitors reaction?

• Maturity:
– Sales reach peak
– Cost of supporting the product declines
– Ratio of revenue to cost high
– Sales growth likely to be low
– Market share may be high
– Competition likely to be greater
– Price elasticity of demand?
– Monitor market – changes/amendments/new strategies?

• Saturation:
• New entrants likely to mean market is ‘flooded’
• Necessity to develop new strategies becomes more pressing:
– Searching out new markets:
• Linking to changing fashions
• Seeking new or exploiting market segments
• Linking to joint ventures – media/music, etc.
– Developing new uses
– Focus on adapting the product
– Re-packaging or format
– Improving the standard or quality
– Developing the product range
 • Decline and Withdrawal:
– Product outlives/outgrows its usefulness/value
– Fashions change
– Technology changes
– Sales decline
– Cost of supporting starts to rise too far
– Decision to withdraw may be dependent on availability of new
products and whether fashions/trends will come around again?

Constituents of a product

 PRODUCT – anything that can be offered to a market to satisfy a need or want,

including physical goods, services, experiences, events, persons, places, properties,
organizations, information and ideas.

 CORE BENEFIT – the service or benefit the customer is really buying.

ex: a hotel guest is buying rest and sleep.

  BASIC PRODUCT – marketer must turn the core benefit into a basic product

Ex. Hotel room includes a bed, bathroom, towel, shampoo, soap, towels, tv, desk etc.

 EXPECTED PRODUCT – marketer is preparing this; set of attributes and

conditions buyers normally expect when they purchase this product.

Ex. Hotel guest minimally expect a clean bed, fresh towels, working lamps

 AUGMENTED PRODUCT – marketer prepares this; it exceeds customer

expectations; this is were competition takes place.

Ex. Cable ready tv, wifi connection;free bfast

 POTENTIAL PRODUCT – it encompasses all the possible augmentations and

transformations the product or offering might undergo in the future. In this stage
companies search for new ways to satisfy customers and distinguish their offering

Product Mix

Product mix, also known as product assortment or product portfolio, refers to the complete set of
products and/or services offered by a firm. A product mix consists of product lines, which are
associated items that consumers tend to use together or think of as similar products or services.

Dimensions of a Product Mix

#1 Width

Width, also known as breadth, refers to the number of product lines offered by a company. For
example, Kellogg’s product lines consist of: (1) Ready-to-eat cereal, (2) Pastries and breakfast
snacks, (3) Crackers and cookies, and (4) Frozen/Organic/Natural goods.

#2 Length

Length refers to the total number of products in a firm’s product mix. For example, consider a
car company with two car product lines (3-series and 5-series). Within each product line series
are three types of cars. In this example, the product length of the company would be six.

#3 Depth

Depth refers to the number of variations within a product line. For example, continuing with the
car company example above, a 3-series product line may offer several variations such as coupe,
sedan, truck, and convertible. In such a case, the depth of the 3-series product line would be four.
#4 Consistency

Consistency refers to how closely related product lines are to each other. It is in reference to their
use, production, and distribution channels. The consistency of a product mix is advantageous for
firms attempting to position themselves as a niche producer or distributor. In addition,
consistency aids with ensuring a firm’s brand image is synonymous with the product or service
itself.

Product Development

New product development is essential for any company. Most products have a lifespan which
means companies need to keep developing new products to replace the products that have come
to their end of life as well as keep the company in business. There are six stages in the new
product development process. “These stages include idea generation, screening, concept
development and testing, business analysis, market testing, and commercialization” (Finch,
2012). At Dunkin’ Donuts the new product development process takes anywhere from nine
months to two years before the product is rolled out in their stores.

Idea Generation

Every product starts with numerous concepts or ideas. There are companies that have a dedicated
team that focuses on coming up with new ideas for the company. At Dunkin’ Donuts the team
responsible for these culinary creations is Executive chef Jeff Miller and his team. They get
inspiration from a wide range of areas, the black pepper bacon sandwich was inspired from
“cross-country visits to edgy restaurants and “mom and pop” diners to analysis of “macro trends”
such as the popularity of flavors like ginger” (Lambert, 2015). Miller wanted to turn bacon candy
which is a popular party food into a sandwich. His team also came up with their own personal
ideas for new products.

Idea Screening

In this stage of the process all the ideas are sorted through for the ones that are most feasible and
attractive revenue wise for the company. To judge whether an idea will succeed there are “three
primary questions dominate the screening process: Does the idea fit within the organization's
overall strategy? Does it build upon the resources and core competencies of the company? Does
it have sufficient market potential to warrant further inclusion in the process? (Urban et al.,
1998)” (Finch, 2012). Dunkin’ Donuts CEO Travis says, ““If any of these niche elements is too
far off, we’re not going pursue it,” he said the ideas and taste trials. “If we have to do a lot of
explaining to the consumer, it’s probably not the right time or the right fit.” (Lambert, 2015).
According to Lambert, Miller and his team pitch fifty to sixty food and drink ideas each year.
The idea of developing a bacon sandwich was approved for production.

Business Analysis

At this stage, Dunkin’ Donuts already knows the product it will be introducing to their
customers. Their business model allows the product to stay on the menu for a limited time.
Customer feedback and profits will decide whether the product will stay and become a fixture on
the menu.

Market Testing

“A market test is essentially an experimental market introduction, conducted on a limited basis,

within a carefully selected sample of the intended target market” (Finch, 2012). Market testing is
when you test your product in the market setting, allowing your customers to try the product and
provide feedback. Even though the black pepper bacon sandwich in the Dunkin’ Donuts kitchen
got favourable reviews in house they decided to do a testing in their Hartford.

IV. Pricing Strategy

 A business can use a variety of pricing strategies when selling a product or service.
The route/method taken by the firm in fixing the price is known as pricing strategy.
 The Price can be set to maximize profitability for each unit sold or from the market
overall.
 It can be used to defend an existing market from new entrants, to increase market
share within a market or to enter a new market.
 Businesses may benefit from lowering or raising prices, depending on the needs and
behaviors of customers and clients in the particular market.
 Finding the right pricing strategy is an important element in running a successful
business
Objectives of Pricing

Methods of Pricing
 Selecting the final price

In selecting the final price, the company must consider additional factors:
 Psychological pricing.
 The influence of other marketing-mix elements on price.
 Company pricing policies.
 The impact of price on other parties.

Adapting price

Adapting pricing models to include product discounts is a marketing strategy used to attract
bargain hunting consumers and to fend off new competitors attempting to enter target market
areas. Product discounts allow marketing management to create short advertising campaigns to
stimulate excitement over a company's brands and individual product offerings. Business
marketers can also use discounts to create consumer interest in market areas with traditionally
lower median incomes. This allows those consumers to try products they might not otherwise be
able to afford on a regular basis.

Initiating price cuts

Several circumstances might lead a firm to cut prices.

Excess plant capacity: If the firm needs additional business but cannot generate it through
increased sales effort or other measures, it may initiate a price cut. In doing so company risks
triggering a price war.

Declining market share: prompt the firm to cut prices as a way of regaining share.

Drive to dominate the market through lower costs Either the company starts with lower costs
than those of its competitors or it initiates price cuts in the hope of gaining market share and
lower costs.

• 4 possible traps when marketers consider price-cutting:

(1) Low-quality trap: Customers assume that lower-priced products have lower quality;

(2) Fragile market-share trap: a low price buys market share but not market loyalty
because the same customers will shift to any lower- price firm

(3) Shallow-pocket trap higher-priced competitors may cut their prices and still have
longer staying power because of deeper cash reserves.
 (4) Price-war trap competitor respond by lowering their prices even more triggering a price
war

Responding to competitor's price

• If competitor cut its price in a homogeneous product market

• Search for ways to enhance its augmented product, or

• will have to meet the price reduction.

• If competitor raises its price in a homogeneous product market,

• Other firms might not match it, unless the price increase will benefit the industry
as a whole.

By not matching it, the leader will have to cancel the increase.

• Market leaders often face aggressive price cutting by smaller competitors trying to build
market share

• Fuji has attacked Kodak

• AMD has attacked Intel

Brand leaders face lower-priced private-label store brands

V. Sales and Distribution Management

Evolution of Sales Management

• Situation before industrial revolution in U.K. (1760AD)

• Situation after industrial revolutions in U.K., and U.S.A.
• Marketing function splits into sales and other functions like
marketresearch, advertising, physical distribution

What is Sales Management?

• One definition: “The management of the personal selling part of a

company’s marketing function.”
Another definition: “The process of planning, directing, and controlling of
personal selling, including recruiting, selecting, equipping, assigning, supervising,
paying, and motivating the personal sales force.

Nature of Sales Management

• Its integration with marketing management

• Relationship Selling

Transactional Relationship / Value – added Collaborative / Partnering

Selling Relationship / Selling Relationship / Selling
 Importance of Personal Selling and Sales Management

 The only function/department in a company that generates revenue / income

 The financial results of a firm depend on the performance of the sales department
or management
 Many salespeople are among the best paid people in businesses
 It is one of the fastest and surest routes to the top management

Some of the important roles of the modern sales manager are:

• A member of the strategic management team

• A member of the corporate team to achieve objectives

• A team leader, working with salespeople

• Managing multiple sales / marketing channels

 • Using latest technologies (like CRM) to build superior buyer-seller relationships

• Continually updating information on changes in marketing

environment

Skills of a Successful Sales Manager

 People skills include abilities to motivate, lead, communicate, coordinate, team-oriented

relationship, and mentoring
 Managing skills consist of planning, organizing, controlling and decision making
 Technical Skills include training , selling, negotiating , problem solving and use of
computers

Sales Objectives, Strategies and Tactics

The main components of planning in a company are objectives, strategies
and tactics. Their relationship is shown below
 E.G. A company wants to increase sales of electric motors by 15 percent, as
one of the sales objectives.

Emerging Trends in Sales Management

• Global perspective
• Revolution in technology
• Customer relationship management (CRM)
• Salesforce diversity
• Team selling approach
• Managing multi-channels
• Ethical and social issues

Linking Sales and Distribution Management

 Either sales management or distribution management cannot exist, operate perform

without each other.
 To achieve the sales goals of sales revenue and growth, the sales management plans the
strategy and action plans (tactics), and the distribution management has the role to
execute these plans
  This will be illustrated by considering some sales management actions and
corresponding role of distribution management (in the next slide), as well as by
discussing a few integrated cases given at the end of the book.

VI. Marketing Communication and Communication Process

What is Marketing Communication?

• The marketing activities that can be seen

• Focus on customer behaviour

• Impact on how people process the information they get and has an input at every stage of the
decision process

• Aims to remind people about a need, inform and persuade them so that the brand can be
considered

the process of effectively communicating product information or ideas to target audiences.

• Marketing communication is the element of the marketing mix used to showcase important
features of the other three to increase the odds the consumer will buy a product.

Marketing Communication Objective

In setting a marketing communications plan it is vital to have clearly defined objectives because:

1. They are the keystone of the plan as they will set the boundaries and direction for strategic
decisions;

2. They determine the measurement and control procedures; and, to some extent, suggest budget
requirements.

3. They give shared vision of the plan to all those who will have a part to play in (Company
employees, ad agency, etc), from its development to implementation

The concept of exchange transactions is seen by many commentators as underpinning the

marketing concept. Of the different types of exchange, market and relational are the two that can
be observed most often in industrial societies. Marketing communications have various roles to
play in the context of both these types of exchange, but – as will be seen later in this text – there
is a strong movement away from the reliance on market exchanges to the longer-term perspective
that relational exchanges enjoy, and to the development of partnerships. This approach is
referred to as ‘relationship marketing’, and it is here that changes in the use and deployment of
marketing communications can be best observed. Marketing communications is an audience-
centred activity and uses five traditional elements of the promotional mix: advertising, sales
promotion, public relations, direct marketing, and personal selling. Each has its strengths and
weaknesses, and these tools are now beginning to be used in different ways to develop
relationships with customers, whether they be consumers or organisational buyers. An example
of these changes is the use of the Internet, a communication medium that has grown rapidly since
the mid-1990s and is threatening to reconfigure the way both marketing and marketing
communications are practised. Marketing communications have an important role to play in
communicating and promoting products and services not only to consumers but also to the
business-to-business sector and to other organisations representing differing stakeholders. The
development of partnerships between brands and consumers, and between organisations within
distribution channels or networks, is an important perspective of marketing communications.
Communications in this context will be an important part of this text. Finally, marketing
communications can be seen as a series of episodes that occur within a particular set of
circumstances or contexts. Marketing managers need to be able to identify principal
characteristics of the context they are faced with and contribute to the context with a suitable
promotional programme.

VII. Marketing Organization and Control

Organization is defined as a group of people working together to achieve common goals and
objectives of the business. Marketing organization provides a vehicle for making decisions on
products, marketing channels, physical distributions, promotions and prices.

Marketing Organization

Marketing organization is the framework for planning and making marketing decision that are
essential to marketing success. It is the vehicle for making decision on all marketing areas such
as product, price, place and promotion. Marketing organization is a group of marketing persons
working together towards the attainment of certain common objectives. Marketing organization
provides a system of relationships among various marketing functions to be performed by
coordinating among marketing people. Need for the organization To be competitive in the
market where consumer is the king we need to satisfy the consumer. So a good marketing
organization is required to satisfy the customers.

Marketing organization is the pillar for success for many organizations and provides a
framework for the following:

 Divide and fix authority among the sub ordinates

 To locate responsibility

 To establish sales routines

 To enforce proper supervision of sales force

 To avoid repetitive duties

 To enable the top executives to devote more time for planning policy matters

Evolution of marketing department

The stages of marketing evolution are:

The stages of marketing evolution are:

➢ Bartering – simple trade era
➢ production era,
➢ sales era,
➢ marketing concept era,
➢ Marketing orientation era.

i. Simple Trade Era - people produced what they needed andsold the little
surplus they had to local middlemen.
ii. Production Era - where focus of the company and society ison production.
Produce it so that you can sell it. From Industrial Revolution to 1920’s.
iii. Sales Era - Companies emphasize selling because ofincreased
competition. 1930-1950s.
iv. Marketing Concept Era - the company is making marketing decisions that
include long-run planning. The whole company’s effort is guided by the
marketing concept wherethe customer becomes the focus of the marketing
effort.
v. Market Orientation Era – Companies take a Market driven approach to
planning – collecting information on customers,sharing it with all
departments and using it to maximize value for the customers The Market
Orientation has led to Customer Relationship Management (CRM)
Concept
References:

https://corporatefinanceinstitute.com/resources/knowledge/other/product-mix/

Finch, J. (2012). Managerial marketing. San Diego, CA: Bridgepoint Education, Inc.

Lambert, Lane. (2015). How Dunkin’ Donuts develops its new products. The Patriot
Ledger. Retrieved

from http://www.wcvb.com/article/how-dunkin-donuts-develops-its-new-products/8229349

https://smallbusiness.chron.com/price-adaptation-strategies-marketing-management-
37396.html