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MARKETING

To communicate that you are engaged in new and different activities To attract paying customers in sufficient numbers to support the activities

Markets: the place where buyers and sellers meet for exchange of goods and services. The markets for consumer goods is called consumer goods The markets for industrial goods are known as industrial goods. Marketing is a consumer-oriented activity.

The marketing concept holds that the main task of the company is to determine what a given set of customers needs, wants, and values are and to dedicate the organization to delivering the solution.

In other words, marketing is the process by

which products are matched with the markets.

A group of potential customers with a great

deal in common for which a specialized set of goods or services may be provided. Examples:
Lawyers Health Care Professionals Accountants

MARKETING ENVIRONMENT
It denotes all the external factors and forces that affect a firms ability to develop and maintain successful transactions and relationships with the target customers. Internal Factors: controllable - like product design, packaging, pricing, promotion, distribution policies etc. External Factors: uncontrollable - like suppliers, customers, technology, etc.

Marketing Environment (External Forces)

Micro Environment
1) 2) 3) 4) 5)

Macro Environment Demographic Economic Natural / Physical Technological Political/Legal

Suppliers Customers Intermediaries Competitors General Public

 Micro Environment:It consists of elements or forces that influences marketing and business directly. Macro Environment:It consists of elements or forces that Influences marketing and business indirectly
It is noted that both types/levels of external environment are uncontrollable environment. .

CONSUMER/BUYER BEHAVIOR
It is the study of how individuals make decisions to spend their available resources (time, money effort) on consumption-related items. It includes the study of what they buy, why they buy, when they buy, where they buy, how often they buy it, and how often they use it.

Buying motives of Consumers: A buying motive induces a buyer to buy a product. Types of buying motives: Product Motives Patronage Motives Rational Motives (Economic Considerations) Emotional Motives (Psychological Considerations)

Determinants of Consumer Behavior: Cultural Factors Social Factors Family Reference Groups Roles and Status Personal Factors Age and Life-Cycle Stage Occupation Economic Condition

Life-Style

Activities
Interests Opinions Demographics Personality

Psychological
Motivation Perception Learning Beliefs

Factors

and Attitudes

The Marketing Mix

The Marketing Mix

The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives 7Ps Price, Product, Promotion, Place, People, Process, Physical Environment Traditional 4Ps extended to encompass growth of service industry

Price

Profitability Objectives Maximize profits by reducing costs. Maintain price while reducing package size. Volume Objectives

Base pricing decisions on market share goals.

Pricing to Meet Competition Meeting competitors price. Competitors cannot legally work together to set prices. Competition can result in a price war.

Prestige Objectives Establishing a relatively high price to develop and maintain an image of quality and exclusiveness. Recognition of the role of price in communicating an overall image for the firm and its products.

Skimming Pricing Setting an intentionally high price relative to the prices of competing products. Helps marketers set a price that distinguishes a firms high-end product from those of competitors. Once this group (customer segment willing to pay a higher price than a larger group of the "mass market.) has filled their need to purchase, the business will then lower its price to the next customer segment, but again, not necessarily the entire "mass market." B2C skimming examples are found in new technology electronics, such as HDTV, iPhone, etc. B2B skimming examples include premium services (such as inventory management) to key customers that are willing to pay the premium for such services.

Penetration Pricing Setting a low price as a major marketing weapon. Often used with new products. A B2C example of penetration pricing is a low cost retailer (such as WalMart), who introduces new product categories to their customers, or enters a new geographic market. B2B examples of penetration pricing is a new lighting manufacturer who offers their products to hardware stores at competitive prices to gain immediate access to a customer base. Everyday Low Pricing and Discount Pricing Maintaining continuous low prices. Discount pricing - attracting customers by dropping prices for a set period of time. Competitive Pricing Reducing the emphasis on price competition by matching other firms prices. Concentrating marketing efforts on the product, distribution, and promotional elements of the marketing mix.

Product

Product

Methods used to improve/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g. Extension strategies Specialised versions New editions Improvements real or otherwise! Changed packaging Technology, etc.

Promotion

Promotion

Strategies to make the consumer aware of the existence of a product or service NOT just advertising

Place

Place

The means by which products and services get from producer to consumer and where they can be accessed by the consumer

The more places to buy the product and the easier it is made to buy it, the better for the business (and the consumer?)

People

People

People represent the business

The image they present can be important First contact often human what is the lasting image they provide to the customer? Extent of training and knowledge of the product/service concerned Mission statement how relevant? Do staff represent the desired culture of the business?

Process

How do people consume services? What processes do they have to go through to acquire the services? Where do they find the availability of the service?
Contact Reminders Registration Subscription Form filling

Physical Environment

Physical Environment

The ambience, mood or physical presentation of the environment

Smart/shabby? Trendy/retro/modern/old fashioned? Light/dark/bright/subdued? Romantic/chic/loud? Clean/dirty/ messy /neat? Music? Smell?

The Marketing Mix

Blend of the mix depends upon: Marketing objectives Type of product Target market Market structure Rivals behaviour Global issues culture/religion, etc. Marketing position Product portfolio

MARKETING MIX

PRODUCT MIX

PROMOTION MIX

PRICE M IX

PLACE MIX

BRAND COLOUR DESIGN PACKAGE WARRANTY SERVICE

PERSONAL SELLING ADVERTISEMENT PUBLICITY DEALERS CONSUMER AID

PRICING STRATEGY BASIC PRICE TERMS OF CREDIT DISCOUNT

Distributio n Channels
Whole salers Retailers Agents

Physical Distributio n
Transport Ware housing

ADVERTISING AND SALES PROMOTION

Advertising Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Used for communicating some business information to the present and prospective customers through some paid media. Message which is presented is known as advertisement

Setting objectives Setting the budget Developing the advertising strategy Evaluating advertising campaigns

Advertising objectives can be classified by primary purpose: Inform Introducing new products Persuade Becomes more important as competition increases Comparative advertising Remind Most important for mature products

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Advertising

Major Media Types

Newspapers Television Direct Mail Film Advertising

Radio Magazines Outdoor posters Window Internet Display

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Sales Promotion
Sales

Promotions are shortterm incentives to encourage the purchase or sale of a product or service.

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Sales Promotions Can be targeted at final buyers, retailers and wholesalers, business customers, and members of the sales force. The use of sales promotions has been growing rapidly.

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Sales Promotion

Objectives -- Consumer Market-Directed Promotions:

Increase short-term sales Generate product trial

Objectives -- Trade Market-Directed Promotions:

Obtaining distribution and shelf space Encouraging retailers to advertise the brand

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Consumer Promotion Tools

Free Samples Cash Refunds (Rebates) cents-off deals Lucky draw, instant draw and assured gift Loyal Reward Program Price-pack deal Coupons

Container Premiums Contests, Games, fairs and exhibitions Free-standing insert (FSI) Exchange schemes

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Trade Promotion Tools Trade Discounts / Functional Discounts (also called price-off, off-list, and offinvoice) Allowances Advertising allowances Display allowances Training Programs Free goods Push money Specialty advertising items
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Key Decisions When Developing the Sales Promotion Program: Size of the incentive Conditions for participation Promotion and distribution of the actual sales promotion program Length of the promotional program Evaluation
Surveys and experiments can be used
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Channel of Distribution
CHANNELS OF DISTRIBUTION IS THE PATH TAKEN BY THE GOODS FOR ITS MOVEMENT FROM THE PRODUCER TO THE CONSUMER.
WHO ARE THE CHANNELS OF DISTRIBUTION?

CHANNELS OF DISTRIBUTIONS ARE THE FIRMS AND INDIVIDUALS WHO HELPS IN TRANSFERRING THE GOODS FROM PLACE OF MANUFACTURING TO THE PLACE OF CONSUMPTION.

THE COMMON TYPE OF CHANNELS OF DISTRIBUTION FOR CONSUMER PRODUCTS ARE WHOLESALER AND RETAILER.

PRODUCER

WHOLESA LER

RETAILER

CONSUME R

FUNCTION OF DISTRIBUTION CHANNELS

SORTING:- Middlemen receives the products from a variety of sources ,which is not often of the same quality, nature and size. So he then sorts the products into homogenous groups on the basis of size and quality. ACCUMULATION:- This function involves accumulation of goods into larger homogeneous stocks ,which help in maintaining the continuous flow of supply.

 ASSORTMENT:-

Middlemen build a assortment of products for resale. There is usually a difference between the product lines made by manufacturers and the assortment or combination desired by the user. For example a cricket player may need a bat ,a ball, a wicket,gloves,helmet,a T-shirt and a pair of shoes. Perhaps no one manufacturer produces these products in desired combination.

 Middlemen receives the variety of goods from different sources and deliver them in combination desired by customers. PACKAGING :-Generally middlemen by the goods in bulk and then they repack them in small lots . PROMOTION :- Although promotion techniques are generally used by the producers but middlemen also make use some sales promotion al tools to attract the customer.

 NEGOTIATION :- During the dealing process the middlemen has to satisfy both the parties which is an another important function of middlemen . They negotiate the price , quality , guarantee and other related matter s.

TYPES OF CHANNELS
There are two types of channels for distribution: DIRECT CHANNEL INDIRECT CHANNEL

DIRECT CHANNEL OF MARKETTING In this channel the goods are made directly available by the manufacturer to the consumer without involving any intermediary . This is also called zero level channel . Examples are selling through manufacturers own retail outlets (e.g., Bata ). Similarly door to door selling (e.g. Eureka forbes).

 Mail order selling and the internet selling are the examples of direct selling.

MANUFACTURER

CUSTOMER

DIRECT CHANNEL ( ZERO LEVEL )

MERITS OF DIRECT SELLING :

It is simple and fast. It is economical. The producer has full control over distribution. Satisfies the desire to reduce dependence on middlemen.

Disadvantages
Large investment is required. Unsuitable for small producer.

INDIRECT CHANNELS OF MARKETING

When there is one or more than one middlemen are involved in the channel it is called indirect channel.

ONE LEVEL CHANNEL TWO LEVEL CHANNEL THREE LEVEL CHANNEL

MANUFACTURER

CUSTOMER

MANUFACTURER

RETAILER

CUSTOMER

MANUFACTURER

WHOLESALER

RETAILER

CUSTOMER

MANUFACTURER

AGENT

WHOLESALER

RETAILER

CUSTOMER

One level channel :- Cars are sold through dealers , expensive watches through watch showrooms. Two level channel :- Generally convenient goods such as soaps , salts etc. Comes under this channel . Three level channel :- In this case , manufacturers uses their own selling agent or brokers (DALAL) who connect them with wholesaler and then retailers .It is done particularly when the manufacturer carries a limited product line and has to cover a wide market

FACTORS DETERMINING CHOICE OF CHANNELS

The choice of channels depends upon various factors , which are follows : Product related factor Company related factor Competitive factor Market related factor Intermediary related factor

PRODUCT RELATED FACTOR 1. 2. 3. 4. Nature of product Specification of product Unit value Technical nature of product

COMPANY RELATED FACTOR It is based upon following factors 1. 2. 3. 4. Image of the firms Size of the firm Managerial efficiency Financial position

COMPETITIVE FACTORS

The choice of channel is affected by channels selected by the competitors.

MARKET RELATED FACTOR 1. 2. 3. 4. Nature of market Size of the market Geographical concentration Quantity purchased

INTERMEDIARY RELATED FACTORS

The nature , type , and capability of the middlemen also decides the channel of distribution.
1. Availability of the middlemen 2. Financial standing of the middlemen 3. Cost of the channel

PHYSICAL DITRIBUTION

It involves all the activities required to physically move goods from manufacturer to the consumer .

COMPONENTS 1. 2. 3. 4. Order processing Transportation Warehousing Inventory