Marketing for Managers

Rubina DMello
Contents
Marketing an Its Applications
Marketing planning and Organisation
Understanding Consumers
Product Management
Pricing an Promotion Strategy
Distribution and Public Policy
 Block 1
Marketing and its Applications
 Chapter 1
Introduction to Marketing
 The Meaning of Marketing

Marketing is the performance of business

activities that directs the flow of goods and
services from producer to consumer or user

PRODUCER CONSUMER
Product Need

Marketing activities
The Marketing Mix

Product Promotion

Price Place
 Marketing Strategy
Needed to create and retain a satisfied
customers

Strategies
STDP Strategies

Marketing Mix Strategies

 STPD Strategies
Segmentation
Aggregating process A cluster of people with
similar needs.
A Homogeneous group of customer who will
respond to a marketing mix in a similar way.
Targeting
Once the market segment is defined, it has to
decide how many and which one to target.
 Differentiation
Product Differentiation
Service Differentiation
Channel Differentiation
Personnel differentiation

Positioning
Its a perception about your offering in the
minds of the consumer.
Product Mix Strategies
What is Product Mix
Set of all products offered by an
organisation to its customers
Consists of
Width
Length
Depth
Consistency
 Case Study
Product-Mix Width and Product-Line Length for PepsiCo India
Product-Mix Width

Beverages Juice Snacks

Pepsi Tropicana Lays
Mountain Dew Orange Cheetos
Aquafina Nature Sweet Lehar
Product-line
Length Mirinda Apple Numkeens
7-Up Grape Nutyumz
Dukes Soda Pineapple Kurkure
Dukes Mangola Tomato

Slice Mixed Fruit

Strategy of Product Mix
Expansion of product mix
Contraction of product mix
Altering existing products
Positioning the product
Place
Is concerned with all the decisions involved in the getting right product to
the target markets place.

Distribution Channels any series of firms that

participate in the flow of products from producer to its final
consumers.
Manufactures or producer
Toyota Raymond's Nestle

Wholesaler Wholesaler

Wholesaler

Retailer Retailer Retailer

Consumer
 Promotion Mix Strategy
Push Strategy
directing communications to channel members

Pull Strategy
directing communications to end users

Factors
type of product/market

buyer readiness stage

product life-cycle stage

 Chapter 2
Marketing in a Developing Economy
Marketing functions performed at
different levels of development
Relevance of Marketing in a
developing economy
Marketing and planned economic growth
How to view the marketing effort
Significance of macro and micro marketing
General role of marketing
Stimulates potential aggregate demand and thus
enlarge the size of the market
It helps in the discover of entrepreneurial talent
 Areas of Relevance
Marketing in agriculture, basic industries, mining
and plantation
Intermediate industrial goods
Semi-industrial products
Export trade & services like tourism and banking
The Relevance of Social Marketing
4 Ps
Social Marketing planning system
 Chapter 3
Marketing of services
The service sector
The services sector has been growing
at a rate of 8% per annum in recent
years
More than half of our GDP is accounted
for from the services sector
This sector dominates with the best
jobs, best talent and best incomes
 There are no such thing as
service industries.There are only
industries whose service
components are greater or less
than those of other industries.
Everybody is in service.

-Theodore Levitt-
What is services?

It is the part of the product or the

full product for which the customer
is willing to see value and pay for it.
 Growing Importance of
Services
Economic well being increases the
demand of services
Changing lifestyle
Complexity of the product
 Characteristics of Services
Intangibility
Perishability
Inseparability
Variability
Client relationships
Right of owner-ship
Intangibility
Hard to grasp, concept is abstract

Dramatization often necessary for

concept

Hard to separate the service

provider and the service
Perishability
Services cannot be stored or
held in inventory.

If not used when available,

they go to waste.
Inseparability
Outlet accessibility can limit the
area covered by the service.

Image is important: Image

affects the perception of the
service.
Variability
Service quality tends to
vary considerably.

Haircut from your hair

dresser vs. Javed Habib
Client Relationships
Relationships between service
organizations and customers
are often close

Potential for loyalty longterm

Right of owner-ship
It is not taken to the service,
we merely experience it.
e.g. Services of a doctor,
lawyer, teacher, mechanic,
etc..
Difference between physical
goods and services
Physical goods
tangible
homogeneous
Production and distribution are
separated from consumption
A thing
Core value processed in factory
Customers do not participate in
the production process
Can be kept in stock
Transfer of ownership
Services
intangible
heterogeneous
Production, distribution and
consumption are simultaneous
processes
An activity or process
Core value produced in the buyer-
seller interaction
Customers participate in
production
Cannot be kept in stock
No transfer of ownership
SERVICES MARKETING MIX
Product
Place
Prize
Promotion
People
Physical Evidence
Process
 In services, the last
experience remains
uppermost in your mind.
Therefore, it is not enough to
be good, you have to be
consistently good
Service quality is directly
proportional to employee
satisfaction
 Block 2
Marketing Planning and Organisation
 Chapter 4
Planning Marketing Mix
The Elements of Marketing Mix
Product activities
Quality, features, style, brand name, packaging, sizes,
services, warranties, returns
Pricing activities
Target customers, cost, competition, the law, social
responsibility
Promotional activities
Advertising, personal selling, sales promotion, publicity and
public relations
Place or Distribution related activities
Physical distribution
Transportation, warehosuing and storage, Order processing,
Inventory control, Location
Channels of distribution
The Place of the Marketing Mix in
Marketing planning
Current Marketing Situation
Identification of Problems and Opportunities
Defining Objectives
Designing the Marketing Strategy
Developing the marketing programme
 The Relationship between Marketing Mix
and Marketing Strategy
The concept of Optimum Marketing Mix
Marketing Mix and some specific Situation

New product development and

marketing mix
Product life cycle and marketing mix
Role of Advertising in marketing mix
Role of price in marketing mix
The
Product
Life Cycle
 Chapter 5
Market Segmentation
The Concept of Market
In respect of the network of institutions like
wholesalers and brokers dealing in a product

To refer to the nature of demand for the

product, as when we speak of the market for
soap
 The concept of segmentation
Relationship of a segment to a market
Market Segmentation versus product
development
Benefits and doubts about segmentation
What is grouped in forming segments
What, how, where, when, why, who
 Bases for Segmentation

Geographic
Region, City or Metro
Size, Density, Climate
Demographic
Age, Gender, Family size
and Life cycle, Race,
Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits,
Uses, or Attitudes
Segmenting Business MarketsContd.

Personal
Demographics
Characteristics

Bases
Bases
for
for Segmenting
Segmenting
Situational Business
Business Operating
Factors Markets
Markets Characteristics

Purchasing
Approaches
How is the basis for segmentation selected?

Methods that companies use

Logical division
Perceptual mapping technique
Considerations in using perceptual maps
Selection of Segments
General factors
Company trust
Size & growth potential
Investment needed
Profitability
Risk
Competition
Specific Segmentation factors
Segment durability
Mobility
Visibility
accessibility
 Chapter 6
Marketing Organisation
Principles of Designing an Organisation

Specialisation
Departmentalisation
Standardisation
Formalisation
Centralisation
Evaluation
Structure
 Marketing Organisation
The changing role of Marketing Organisation
Simple sales department
Sales department with some marketing function
Separate marketing department
Integrated marketing department
Marketing oriented organisation

Considerations involved in designing the marketing organisation

Statement of objective and goals of the firm
Nature of the product/Line of activity
Areas of operation
Nature of Industry
Computerisation & up-gradation of information system
External environment & Government intervention.
 Marketing Organisation
Methods of designing the Marketing Organisation
Functional Organisation
Product Management Organisation
Market Centered Organisation

Organisation of Corporate Marketing

No corporate marketing support
Minimal corporate marketing support
moderate corporate marketing
Strong corporate marketing
 Chapter 7
Marketing Research & Its Applications
 The Context of Marketing Decisions
Definition of Marketing Research
Purpose of Marketing Research
Scope of Marketing Research
Marketing Research Procedure
Problem Definition
Research design
Field Work
Data Analysis
Report presentation and implementation
Marketing Research in India
Problems of conducting marketing research
Application of Marketing Research
Sales & Market Analysis
Determination of market potential
Determination of market share
Sales forecasting
Design of market segmentation studies
Target market
Distribution channel studies
Determination of market characteristics
Determination of competitive information

Product Research
Evaluation of new product ideas
Testing for new product acceptance
Evaluating the need for change in product information
Testing package design
Testing of product positioning
Application of Marketing Research
Business Economics and corporate research
Studies of business trends
Pricing studies
Diversification studies
Product mix studies
Plant & warehouse location studies

Advertising Research
Audience Measurement
Determining the most cost effective media plan
Copy Testing
Determining advertising effectiveness
Consumer behaviour research
 Block 3
Understanding Consumers
 Chapter 8
Determinants of Consumer Behaviour
 Importance of consumer behaviour for
marketers
Types of consumers
Buyers v/s Users
 Figure 16.2 A Simple Model of Consumer Decision Making
External Influences
Sociocultural Environment
Firms Marketing Efforts
1. Family
Input 1. Product
2. Informal sources
2. Promotion
3. Other noncommercial sources
3. Price
4. Social class
4. Channels of distribution
5. Subculture and culture
Consumer Decision Making
Psychological Field
1. Motivation
Need Recognition 2. Perception
3. Learning
Process Prepurchase Search 4. Personality
5. Attitudes
Evaluation of Alternatives
Experience

Postdecision Behavior
Purchase
Output
1. Trial Postpurchase Evaluation
2. Repeat purchase
 Factors influencing consumer behaviour
External Environment

Individual Determinants

culture Problem
Recognition others

Information
search
learning perception
Purchasing
decision
family subculture
Postpurchase
behaviour motivation
personality

attitudes

social group social class

 Chapter 9
Models of Consumer Behaviour
 What is a decision?

Process of decision making

Involvement
Alternative differentiation
Time pressure
Types of Consumer Decision
Making
What to buy
How much to buy
Where to buy
When to buy
How to buy
Levels of Consumer Decision
Making
Buying Roles
Buying Behaviour
Extensive problem solving
Routinized buying behaviour
Variety seeking behaviour
Stages in the Buyer Decision Process
Gather Evaluate
Identify the informatio the
problem n about alternative
recognition the s and
product select the
and best
brands possible
alternative
Purchase
Post
decision/
purchase
buying the
Evaluation
product

Post purchase use

and disposal
Models of Buyer Behaviour
Horward-Seth Model
Inputs
Perceptual & learning constructs
Outputs
Exogenous or external variable
Engel-Kollat-Bloackwell Model
Information processing
Central control unit
Decision process
Environmental influences
Model of family decision making
Influencers
Gatekeepers
Deciders
Preparers
Buyers
users
Model of industrial buyer behaviour
 Chapter 10
Indian Consumer Environment

Demographic Characteristics
Income and consumption characteristics
Characteristics of organisational consumers
Geographic characteristics
Market potential
Socio cultural characteristics
 Block 4
Product Management
 Chapter 11
Product decision and strategies
 Product

Anything that can be offered to a market to satisfy a want or need

Physical goods
Services
Experiences
Events
Persons
Places
Properties
Organizations
Information
Ideas
 Product Levels
Marketer has to turn core benefit Encompasses all possible
into basic product augmentation and transformations
Bank accounts like savings account, Thethefundamental service
product might or
undergo in future
current account product the customer
Anywhere is buying
banking, ATM sharing, CRM
In a priority
bank thebanking,
customerportfolio
is looking for
security of his money
management

A product that exceeds customer

expectations
A bank can offer facilities like
ATM/Debit cards, Telebanking, Internet
Banking and also other financial
services
A set of attributes and conditions the
buyers expect when they buy the product
The bank customer would expect a cheque
book, locker and other deposit products like
FD, RD
Product Mix
Product mix has a certain
Width
Length
Depth
Consistency
 Case Study
Product-Mix Width and Product-Line Length for PepsiCo India
Product-Mix Width

Beverages Juice Snacks

Pepsi Tropicana Lays
Mountain Dew Orange Cheetos
Aquafina Nature Sweet Lehar
Product-line
Length Mirinda Apple Numkeens
7-Up Grape Nutyumz
Dukes Soda Pineapple Kurkure
Dukes Mangola Tomato

Slice Mixed Fruit

 Case Study
The Times Group

Print Net Entertainment Retail

The Times Group contd..
Print
 The Times Group contd..

Net

GROUP SITES
The Times Group contd..

Entertainment
The Times Group contd..

Retail
 Product Line Decisions

B. Product line Length

a. Objectives
b. Cycle

1. Line Stretching
a. Down market Stretch
b. Up market Stretch
c. Two way stretch

2. Line Filling
Just-noticeable difference

3. Line Modernization, Featuring and Pruning

 Chapter 12
Product Life cycle and New Product
Development

The Product Life Cycle Concept

Marketing Mix at different stages

Strategy Introduction Growth Maturity Decline

1. Objective Aggressive Entry Maximize Share Boast Milk

Profits Products
2. Focus Non- Users New Segments Defend Cut Costs
Share
3.Customer Innovators Early Majority Laggards
Targets Adopters

4.Competitor Few Growing Number Many Declining

5.Differentiated Product Brand Image Price & Service Price

Advantage Performance

Marketing MIX Introduction Growth Maturity Decline

1. Product Basic Extension & Differentiation Rationalize

Enhancement & Variety Range

2. Price High Lower Lower Stabilizing

3.Promotion High High Falling Low

4. Advertisement Awareness Brand Loyalty Selective

Forms. Performance

5.Distribution Selective Intensive Intensive Rationalize

New Product Development Strategy
Stages in new product development
Ideas generation

Screening of ideas

Concept testing

Product designing and evaluation

Product testing

Product launching
 Chapter 13
Branding and packaging decison
 Branding
Definition: A brand is a name, Term, Sign, Symbol,
Brand or 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.

-American Marketing Association

Trademarks legal right to the exclusive use of that name or mark

 Challenges in Branding and
decisions
Branding to be or not to be..
Whether Produce Manufacturer Brands or
Distributor / Private Brands
Which Brand Name/s to use
Whether to use Line extensions, Brand
Extensions, Multi Brands, New Brands or
Cobrands
Brand Name Features
A Brand name should

suggest something about the products

benefits
suggest the product or service category
suggest concrete, high imagery qualities
be easy to spell, pronounce, recognize, and
remember
be distinctive
not carry poor meanings in other countries and
languages
 Packaging
What is packaging
Packaging Industry
Used materials : Metals, plastics, wood, paper, glass, laminates, polysters,
etc.
Functions of packaging
Protection,
Appeal
Performance
Offer convenience to the end-users
Cost effective
Legal dimensions of packaging
Statutory requirements
Net weight, when packed
Date of manufacture
Date of expiry
Directions of storage
MRP
Directions for use
 Block 5
Pricing and Promotion Strategies
 Chapter 14
Pricing policies and practices
 Price
Three variables that determine profit:

Sales
Sales X Price
Price - Cost
Cost = Profit
Profit
Volume
Volume

Benefit

Seller Customer

Price
Determinants of Price
Demand

Competition
Setting the Price
 Pricing Strategies
Price-Quality Strategies
Price
Higher Lower
Premium
Higher Good-Value
Good-Value
Strategy
Strategy
Strategy
(Mercedes,Evian)
Quality

(Amul)
(Amul)
Overcharging
Overcharging Economy
Economy
Strategy
Strategy Strategy
Strategy
Lower (Cielo)
(Cielo) (Akai,OK)
(Akai,OK)
Corporate Pricing Objectives
Survival
Low Prices to Cover Variable Costs and Some Fixed Costs to Stay
in Business.

Current Profit Maximization

Choose the Price that Produces the Maximum Current Profit, Etc.

Market Share Leadership

Low as Possible Prices to Become the Market Share Leader.

Product Quality Leadership

High Prices to Cover Higher Performance Quality and R & D.

Market Skimming
Initially setting up High Prices to Skim the market
 Selecting the Price Objective

Survival
Survival Maximum
Maximum current
current
(Mobile
(MobileOperators)
Operators)
profit
profit
(Aiwa)
(Aiwa)

Maximum
Maximum market
market
share
share
(Kodak KB)
(Kodak KB)

Maximum
Maximum market market Product-quality
Product-quality
skimming
skimming leadership
leadership
(Nokia Handsets / Intel Micro Chips)
(Nokia Handsets / Intel Micro Chips) (Maruti)
(Maruti)
 Estimating Cost

Fixed
FixedCosts
Costs Variable
VariableCosts
Costs
(Overhead)
(Overhead)
Costs
Coststhat
thatdont
dont Costs
Coststhat
thatdo
dovary
vary
vary
varywith
withsales
salesoror directly with the
directly with the
production levels.
production levels. level
levelof
ofproduction.
production.
Executive
ExecutiveSalaries
Salaries Raw
Rawmaterials
materials
Rent
Rent

Total
Total Costs
Costs
Sum
Sumof
ofthe
theFixed
Fixedand
andVariable
VariableCosts
Costsfor
foraaGiven
Given
Level
Levelof
ofProduction
Production
Selecting a Pricing Method

Markup Pricing
Target Return Pricing
Perceived Value Pricing
Value Pricing
Going-Rate Pricing
Sealed-Bid Pricing
 Pricing Methods

Markup price = unit cost

(1-desired return on sales)
Where unit cost is variable cost + (fixed cost/unit sales)

Target return pricing (target ROI) =

Unit cost + desired return X invested capital
Unit sales
Break even volume = fixed cost
Price variable cost
Pricing Methods
Value-based Pricing
Pricing strategy reflects the beliefs and
attitudes of the customer.
Perceived price/quality relationship.
Price is based on an understanding of the
value of the product as perceived by the
customer.
 Value-Based Pricing
Cost-Based Pricing Value-Based Pricing
Product START Customer

Cost Value

Price Price

Value Cost

Customers Product
 Pricing Methods
Going-Rate
Company Sets Prices Based On What Competitors Are
Charging.

Sealed-Bid
Company Sets Prices Based On What They Think
Competitors Will Charge.
Selecting the Final Price
Psychological pricing
Sometimes price is equated to quality
Reference Price

Influencing of other marketing-mix elements

The final price must be take in to account the brands quality and
advertising relative to competition

Company pricing policies

The Price must be consistent with company pricing policies

Impact of price on other parties

such as dealers and distributors
Geographical Pricing
Adjusting prices to account for the Geographical Location
of Customers

Marketing Management
Philip Kotler
US Price $124.67
India Price Rs. 310

Harry Potter J. K. Rowling

US Price $17.99
India Price Rs. 636
 Discount
Discount &&Allowance
Allowance
Reducing
ReducingPrices
Pricesto
toReward
Reward
Customer
CustomerResponses
Responsessuch
suchasas
Paying
PayingEarly
Earlyor
orPromoting
Promoting
the
theProduct.
Product.

Cash
CashDiscount
Discount

Quantity
QuantityDiscount
Discount

Functional
FunctionalDiscount
Discount

Seasonal
SeasonalDiscount
Discount

Trade-In
Trade-InAllowance
Allowance Promotional
Promotional Allowance
Allowance
Promotional Pricing
Reducing Prices to Increase Short-Run Sales

Reducing Prices to Reward Customer Responses such

as Paying Early or Promoting the Product.
Product mix

Product-Mix Pricing Tactics:

Product-line Pricing Two-Part Pricing

Optional-feature pricing By-Product Pricing

Captive-product pricing Product-Bundle Pricing

Product Mix Pricing Strategies
Optional-Product
Optional-Product Pricing
Pricing
Pricing
PricingOptional
Optionalor
orAccessory
AccessoryProducts
Products
Sold
SoldWith
WithThe
TheMain
MainProduct
Product
i.e.
i.e.Car
CarOptions
Optionssuch
suchas
asaaCD
CDplayer
player
Captive-Product
Captive-Product Pricing
Pricing
Product
Product Pricing
PricingProducts
ProductsThat
ThatMust
MustBe
Be
Used
UsedAlong
AlongWith
WithThe
TheMain
MainProduct
Mix
Mix e.g.
Product
e.g.Printer
Printercartridges
cartridges
Pricing
Pricing By-Product
By-Product Pricing
Pricing
Strategies
Strategies Pricing
PricingLow-Value
Low-ValueBy-Products
By-ProductsTo
To
Get
GetRid
Ridof
ofThem
Them
e.g.
e.g. Sugarcane
Sugarcane
Product-Bundle
Product-Bundle Pricing
Pricing
Bundles
BundlesOfOfProducts
ProductsSold
Sold
Together
TogetheratataaReduced
ReducedPrice
Price
e.g.
e.g.Gillete
Gilleterazor
razorblades
blades&&foam
foam
Product Line Pricing
Setting Price Steps Between Product Line Items
Analyzing Competitors Cost ,Prices and Offers

The company needs to benchmark its

costs against its competitorscost to
learn whether it is operating at a cost
advantage or disadvantage.
The company also needs to learn the
price and quality of competitors offers
 Assessing & Responding to
Competitor Price Changes
Has
HasCompetitor
CompetitorCut
Cut Hold
Price?
No HoldCurrent
CurrentPrice;
Price;
Price? Continue to Monitor
Continue to Monitor
Competitors
CompetitorsPrice.
Price.
Yes

Will
WillLower
LowerPrice
Price
Negatively
NegativelyAffect
AffectOur
Our No
Market
MarketShare
Share&&Profits?
Profits?
Reduce
ReducePrice
Price
Yes
Raise
RaisePerceived
Perceived
Can/ No Quality
Quality
Can/Should
ShouldEffective
Effective
Action
Actionbe
beTaken?
Taken? Improve
ImproveQuality
Quality
&&Increase
IncreasePrice
Price
Yes
Launch
LaunchLow-Price
Low-Price
Fighting
FightingBrand
Brand
 Chapter 15
Marketing Communication
 The Communication Process
M essage
Sender E n c o d in g M e d ia D e c o d in g R e c e iv e r

N o is e

Feedback R esponse
 Marketing Communication
Mix

Advertising
Sales
Promotion

Marketing Direct
Communication Marketing
Public
Relations
Personal
Selling
The Promotion Mix

Direct Marketing

Public Relations
Personal
Personal Selling
Selling
Special Offer Sales Promotion

Advertising
Advertising
 Advertising
A paid nonpersonal communication
about an organization and its
products transmitted to a
target audience through mass media

Mass Media
Newspapers
TV
Radio
Magazines
Billboards
Eg : Johnson & Johnson
 Sales Promotion
Consists of a diverse collection of
incentive tools, mostly short term,
designed to stimulate quicker or greater
purchase of particular products or
services by consumers or the trade

Types of sales promotions

Coupon
Point-of-Purchase
Premium: free/ reduced-price
Trade Show
Contests & More

Britannia Khao World Cup Jao

 Public Relations & Publicity
Promotional tool Identify, establish, and
maintain beneficial relationships between
a company and its stakeholders

Benefits
Corporate visibility
Image Building
Product Information

Patni Computers
i-flex solutions
 Personal Selling
Promotional tool in which a
salesperson communicates
one-on-one with potential customers

Advantages
Immediate response
Tailored message
Ability to measure effectiveness

Disadvantages
Relies on ability of sales rep.
Expensive per contact

JCI
Franco Indian Pharma
 Direct Marketing & Others
Direct Communications with Carefully
Targeted Individual Consumers to
Obtain an Immediate Response

Face-to-Face
Face-to-Face
Online
Online Selling
Selling
Marketing
Marketing
Direct-Mail
Direct-Mail
Marketing
Marketing
Kiosk
Kiosk
Marketing
Marketing Catalog
Catalog
Marketing
Marketing

Direct-Response
Direct-Response Telemarketing
Telemarketing
TV
TVMarketing
Marketing
Tracmail
Rohini International
 Push & Pull Strategy

Push Policy
Promoting a product only to the next institution down the
marketing channel
Pull Policy
Promoting a product directly to consumers to develop stronger
consumer demand that pulls products through the marketing
channel
Determinants of promotion mix

Type of
product
Target Nature of
Audience market

Determinants
Company Stage in
Policy the PLC

Budget
 Establish the Communication
Budget
After Determining Its Objectives, the Marketer
Must Set the Communications Budget for Each
Product and Market.

Affordable Percentage
Percentage of
of Sales
Sales
Based on What the Based
Basedon
onaaCertain
CertainPercentage
Percentage
Company Can Afford of
ofCurrent
Currentor
orForecasted
ForecastedSales
Sales

Objective-and-Task
Objective-and-Task Competitive-Parity
Competitive-Parity
Based
BasedononDetermining
Determining Based
Basedon
onthe
theCompetitors
Competitors
Objectives
Objectives&&Tasks,
Tasks,Then
Then Promotion
PromotionBudget
Budget
Estimating
EstimatingCosts
Costs
Factors in designing promotion
mix strategies
 Chapter 16
Advertising and Publicity
How advertising works?
Types of advertising
Role of advertising
Advertising expenditure
Advertising management
Setting advertising objective
Developing advtg. Copy and message
Selecting and scheduling media
Measuring advertising effectiveness
Coordinating with ad agency
Publicity
Use of publicity
Measuring effectiveness of publicity
 Chapter 17
Personal Selling and Sales Promotion
 Personal Selling
Role of personal Selling
Types of selling jobs
Merchandise deliveries
Inside order-taker
Outside order-taker
Missionary salesperson
Sales engineer
Tangible product seller
Intangible product seller
The selling process
Preparation
Prospecting
Preapproach
Approach
Sales presentation
Handling objectives
Closing the sale
Post-sale follow-up
What is sales promotion?
Sales promotion consists of a diverse
collection of incentive tools, mostly short
term, designed to stimulate quicker and or
greater purchase of particular
products/services by consumers or trade
-Kotler

Below the line

What is sales promotion?

Non personal promotional effort that

are designed to have immediate impact
on sales
Employed for a pre-determined limited
period to increase consumer demand or
stimulate market demand
What is sales promotion?
Sales promotion offers an incentive to buy
Encompasses everything that is outside of
advertising, PR and DM
Uses advertising, PR and DM to deliver the
sales promotion
Can be planned to increase sales over a long
period and not necessarily about immediate
results (privilege / mileage points)
Why has SP grown so much?
Results ! - immediate / quick boost to sales
Results over finite period of time - v/s
advertising or PR
Results are measurable
Easy and inexpensive to implement
Costs & efficiency of mass media /
advertising has risen considerably
.
Product managers face pressure to
increase sales
Companies face more competition
Consumers have become more deal
oriented

Sales Promotions work!

How does SP work?
Consumer decision making process (except for
low cost, low involvement impulse pur.)
- Awareness
- Information gathering
- Pre purchase evaluation
- decision
- PURCHASE
- Post purchase evaluation
- Awareness
Advt / PR
- Information gathering
- Pre purchase evaluation Per Sell
- Decision
SP
- PURCHASE
- Post purchase evaluation
SP works because ...
It alters the price / value relationship that
the product offers the buyer
Lowers price - use of coupons, discounts
Add value - value packs, extra free
Everybody loves freebies

Consumers have a reason to purchase the

product NOW
Justifies post purchase evaluation
Advantages
Sales promotions help shape buying patterns
- Annual sales
Attract new audiences - trials for new
products
Increase sales - freebies, buy 1 get 1 free
Increases profits
Helps move stock / liquidate inventory
Increases awareness - reach new buyers
Advantages
Encourages the consumer to buy more than
usual on a single shopping visit
Reminder of product, especially when a new
product / competitor is about to launch
Improving TOM recall of the brand if promo is
advertised in mass media
Demoralise newly launched brands
 Disadvantages
Can seem like last minute panic measures and
that can signal failure
Can give an impression of hard sell
Greed for sales - promos are often not related
to the strategic elements of the brands mktg.
mix
Often viewed as simple reactionary techniques
to increase sales and profits
Dilutes brand value - discount brands
Sales promotion techniques
Price deals Trade allowances
Discounts Dealer loader
Price pack deals Trade contests
Samples POP Displays
Rebates Training programs
Sweepstakes/contests Push money / Spiffs
Frequency rewards Exhibitions
Demos
POP
Samsung pinning toh winning
All India promo
Aggressive use of mass media
Consumer gets an assured gift on
purchase of any Samsung product
100 cr worth of prizes on offer
Sms 16 digit pin and the gift u get wl b
smsd 2 u.
Cash in on Diwali purchases
Phod ke dekho offer
Consumer promotion scheme
Packaged as a coconut which cons picks
on purchase of a Samsung product
Breaking the coconut reveals a chance to
win a gift
Strong consumer acceptance helped co to
achieve a growth of 35% in sales over
last year - same period
 Test drive and win
Tata Motors celebrated 50 years
Offer to test drive any Tata car - fill a
form - and lucky winners could win
Prize Indica V2 Petrol
Buzz / Hype / Awareness
Mass media - TV / Press / DM
Helped build / gather data base
Buzz around Petrol
Some historic cases
Developing a Sales Promotion and
Merchandising Plan

Set sales promotion and merchandising

objectives.
What is your target audience?

Establish a tentative sales promotion and

merchandising budget.
Select sales promotion and merchandising

techniques.
Developing a Sales Promotion and
Merchandising Plan

Select media for distributing promotions.

Decide on timing of sales promotions and

merchandising.
Pretest sales promotions and merchandising.

Prepare final sales promotion and merchandising

plan and budget.

Measure and evaluate sales promotion and

merchandising success.
10 commandments of sales
promos
Know Specific
Coordinate when to objectives
with mktg break
Know
Basic
Support techniques
brand
image Creativity
Simplicity
Reinforce
Know Attn
advertising
your grabbing
Be clear target visuals
 Block 6
Distribution and Public Policy
 Chapter 18
Sales Forecasting
What is a sales forecast?
How to prepare a sales forecast?
Product sales determinants
Consumer non-durable goods
Consumer durable goods
Industrial goods
Approach to sales forecasting
Breakdown approach
Market build-up approach
 Methods of forecasting
Executive Judgement
Surveys
Time series analysis
Corelation and regression methods
Market tests
Combining forecast and using judgement
Status of forecasting method usage
The evaluation of forecasts
Computerised sales forecasting
Relating the sales forecast to the sales budget an profit
planning
 Chapter 19
Distribution Strategy
Importance of channel of distribution
Alternative channels of distribution
Direct selling
Mercantile Agents
Brokers
Commission agent
Merchant Middlemen
Wholesalers
Retailers
Functions performed by retailers
Services rendered by the retailers
Effective coordination between wholesaler and retailers
Types of retailers
Department stores
Co-operative stores
Multiple shops or chain stores
 Role of middlemen in Indian Economy
Selecting an appropriate channel
The type of product
Nature and extent of the marker
Existing channels for comparable products
Buying habits of consumers
Cost involved in distribution
Physical distribution tasks
Location of manufacturing facilities
Location of warehouses
Mode and method of transportation
Inventory decisions
Using external distribution agency
Location of fixed facilities
Specific issues relating to maintenance of stocks
 Chapter 20
Managing Sales personnel

Selling and sales management

Recruitment and selection of salesmen
Training of sales personnel
Motivating the sales personnel
Controlling the sales personnel
 Chapter 21
Marketing and Public Policy

Regulatory role of the government

Role of government in marketing in developing
economy
Government control and marketing decision making
process
Impact of government control on product decision
Impact of government control on pricing decision
Impact of government control on promotion decision
Impact of government control on channel and
distribution decision
 Chapter 22
Cyber Marketing
What is cyber marketing
Cyber marketing and conventional marketing
Interconnectivity
Interactivity
Involvement
Information
Individualisation
integrity
Cyber marketing model
The nature of cyber marketing
Customer profiling, segmentation and targeting
Product planning
Branding
Pricing decision
Advertising and sales promotion
Distribution
Marketing research
 Limitations of cyber marketing
Limits of digitisation
Shopping experience
Security issues
Internet access density
Customers used to freebies
Dot.com bust
Attracting traffic to the internet site
What is internet ??
Global network of interconnected networks.

Includes millions of corporate, government,

organizational and private networks.

Types of network forming internet

Intranet
Extranet
Web
What is E- Marketing

Process of growing & promoting an organization

using online media

Ties creative and technical aspects of internet.

Creating, communicating and delivering value to

customers.

Managing customer relationship.

Objectives of Internet
Marketing
Create Awareness.
Generate Interest.
Disseminate Information.
Create an Image.
Create a Strong Brand.
Characteristics of Internet
marketing
Relatively Inexpensive.
Wide reach.
Allows research, purchase of
products and services on convenience.
Quick Response.
Differentiators from offline
Marketing
One-to-one vs. one-to-many approach
Demographics targeting vs. behavioral
targeting.
Measurability .
Response and immediate results.
Limitations of E- Marketing
Dependant on technology.
Rigid mindset.
Virtual aspect.
Security Concern.
Maintenance Cost.
Global competition.
SWOT Analysis
Strength
Your specialist marketing expertise.
A new, innovative product or service.
Location of your business.
Quality processes and procedures.
Any other aspect of your business that
adds value to your product or service.
Weakness
Lack of marketing expertise.
Undifferentiated products or services.
Location of your business.
Poor quality goods or services.
Damaged reputation.
Opportunity
A developing market such as the Internet.
Mergers, joint ventures or strategic
alliances.
Moving into new market segments that
offer improved profits.
A new international market.
A market vacated by an ineffective
competitor
Threat
A new competitor in your home market.
Price wars with competitors.
A competitor has a new, innovative
product or service.
Competitors have superior access to
channels of distribution.
Taxation is introduced on your product
or service.
Hidden Benefits
Tax Breaks.
Low Start up Costs.
Low Operating Costs.
High Profit Margin.
Market for little or no money.
You do not need your own Product.
Time Freedom.
Open 24 Hours in every country.
4Ps of Internet Marketing
Product
Make sure that your product is something
that is useful to your intended customers.
Make sure that the product does what it says.
Ensure Quality.
Packaging.
Brand Consistency.
Good After Sales Service.
Price
Competitive Pricing.
Customers willingness to pay.
Experimentation with price.
Place
Placement on Major Search Engines.
Placement of vertical search engines/
guides and local search.
Placement through affiliates.
Promotion
Promotion through display advertising.
Promotion though search marketing.
Promotion through socal media.
Promotion through Public Relations.
Strategies of E -Marketing
7 Dimensions to Consider
Personalization.
Privacy.
Customer Service.
Community.
Site.
Security.
Sales Promotion.
Classification of E-Marketing
Methods of Internet
Marketing
Search engine marketing.
Display Marketing
E-mail Marketing,
Affiliate Marketing
Interactive Marketing
Blog Marketing.
Viral Marketing
Segmentation and Targeting
Segmentation
Geographic
Demographic (Age, Income, Gender,
Education, Ethnicity)
Psycographic (Activities, Interests,
Opinions, Personality, Values.)
Behaviour (Benefits sort, Usage level,
Brand Loyalty, User Status.)
Behavioral Segmentation
Simplifiers
Surfers
Connectors
Bargainers
Routiners
Targetting
Four different approaches
1) Mass Marketing.
2) Multi segment Marketing.
3) Niche Marketing.
4) Micro Marketing.
Differentiation and Positioning
Strategies
Differentiation
Product.
Service.
Personnel.
Channel.
Image.
Positioning
Technology.
Benefit.
User Category.
Competitor.
Integrator.