Pricing decisions

Course Instructor
Dr. Mohit Jamwal
PRODUCT DECISIONS AND PRODUCT
LIFE CYCLE

Course Instructor
Dr.Mohit Jamwal
LEARNING OUTCOMES
 To understand the various types of product decisions
 To analyze the different phases of product life cycle

 To learn marketing strategies applicable in different

phases of PLC
Innovations and Environmental Impact
Analysis

Innovations make products relevant to the market. Many products

are futuristic in nature and as the markets evolve the demand for
such products emerge. When that happens, it is prime mover or
the innovator who has an edge.
PRODUCT DECISIONS
Product –Key Concepts
 Core
 Table stakes of business, or what is needed to play the game of market
participation
 Because of the standardization of technology, customers are never able to perceive
any significant differences among `core’ or `generic’ products of competing firms
in the industry.
 Formal Product and Augmented Product
 To differentiate its product from all others, the firm names it(branding), packs it,
put additional features
 Makes a `core’ products a `formal product’ or the expectant product
Product Mix
The number of products carried by a firm at a given point of time is called its
product mix

The product mix contains product lines and product items

Product Line
Refers to a group of products clubbed together by virtue of satisfying a
particular class of needs, being used together or distributed through the same
channels, or possessing common physical or technical characteristics
Product Mix Decisions
• Breadth in product line refers to the number of product lines marketed
by a firm;
• Depth the number of product items and variations; and
• Consistency the degree of similarity between product lines with respect
to end-use, technology, production techniques and distribution channels.
Product Line Addition/Deletion
Adding/stretching a product line upwards/downwards is done due to
structural changes in the marketplace – the most important being the customer
lifestyles and demographic characteristics like rising incomes and lower
proportion of consumer income being spent on food and other essential items.
Product Abandonment
• Involves discontinuing or deleting either an individual product or an entire
product line.

Product Modification
• Achieved by re-formulation, redesign, changing unit sizes, and adding/removing
features are dictated by a firm’s long-term goals, customer preferences and
competitive developments in the particular product market.
• Change, may be tangible or intangible and may be achieved by re-formulation,
redesign, changing unit sizes and adding or removing features.
PRODUCT LIFE CYCLE

 Each product goes through a life cycle

 Shows the introduction, growth, maturity and decline during its
period of existence
 Reflects sales and profits of a product, over a period of time

 Most products follow an established path, and when their sales

are plotted against time, one gets an S-shaped curve
PLC: CONDITIONS AND STRATEGIES IN
DIFFERENT PHASES
Introduction Phase
 Phase, where the product is launched, is organizationally characterized by
high operational costs
 Characterized by customers, who have low or no awareness of the product

 Those, who are aware and are willing to try the product, do so in small
quantities
 Competition either does not exists or is limited to a few firms
 Much of the competition is indirect or from substitutes
 Marketing task stimulate demand for the new product and also to reduce the
break even time
Growth Phase

• More strengthened and increased competition

• Competition, now offers greater choice to the customer in the form of different
product types, packaging and prices
• Market base expands, as more customers buy the product
• More trade channels are now willing to keep the product and one generally
observes softening of prices
• Pioneer firm now operates at economical levels
• Lesser production bottlenecks and hence costs are lower now
• To remain competitive over a period of time, the pioneer firm initiates a
product improvement or modification programme
• Sales and profit grow exponentially, but profits taper off at the end of this
phase.
• Marketing task cultivating selective demand
Maturity Phase

• Marked by slowing of growth rates in sales and profits and cut throat
competition
• Firm derives benefits of economies of scale in production and distribution
• Product modification programs is at a much higher level and the firms also
introduce a modified product during this phase

Decline Phase

Characterized by sales decline, since customer preferences have changed in

favour of more efficient and better products
THANK YOU
NEW PRODUCT
DEVELOPMENT
PROCESS

Course Instructor
Dr. Mohit Jamwal
 LEARNING OUTCOMES
1. Explain how companies find and develop new-
product ideas.
2. List and define the steps in the new-product
development process and the major considerations
in managing this process.

8 - 19
 Google: Innovation Excellence
Google’s Success
 Highly Innovative: Google
topped Fast Company’s list of the
world’s most innovative firms,
and regularly ranks within top 3
on other lists.
 Market Share: In a competitive
market, Google’s core business
(online search) market share of
63% is twice the combined share
of its two closest competitors.
 Ad Revenues: Google captures
70% of all U.S. search-related ad
revenues.
How They Did It
 Light Speed Innovation: New
product planning looks ahead only
four to five months; firm strives to
take the fastest path to new product
development.
 Idea Generation: Ideas come from
any source or employee. Engineers
spend 20% of time developing their
own new ideas.
 New Product Testing: New
applications are launched on Google
Labs; users test and provide
feedback. Product development is
iterative. 8 - 20
NEW-PRODUCT DEVELOPMENT
STRATEGY
 New product development:
The development of original products,
product improvements, product modifications,
and new brands through the firm’s own
product development efforts.
 New product innovation is very expensive
and very risky.
$20 - $30 billion is lost on failed food
products annually.
8 - 21
NEW-PRODUCT FAILURES
 Why do new products fail?
 Overestimation of market size.
 Product design problems.
 Incorrectly positioned, priced, or advertised.
 Pushed by high level executives despite poor marketing
research findings.
 Excessive development costs.
 Competitive reaction.

8 - 22
NEW-PRODUCT DEVELOPMENT PROCESS
 Idea generation
 Idea screening
 Concept development and testing
 Marketing strategy development
 Business analysis
 Product development
 Test marketing
 Commercialization

8 - 23
NEW-PRODUCT DEVELOPMENT PROCESS
 Idea generation:
 Internal sources:
 Company employees at all levels.
 External sources:
 Customers
 Competitors

 Distributors

 Suppliers

 Outsourcing (design firms, product consultancies, online collaborative

communities)

8 - 24
NEW-PRODUCT DEVELOPMENT PROCESS
 Idea screening:
 Process used to spot good ideas and drop poor ones.
 Executives provide a description of the product along with
estimates of market size, product price, development time
and costs, manufacturing costs, and rate of return.
 Evaluated against a set of company criteria for new products.

8 - 25
NEW-PRODUCT DEVELOPMENT PROCESS
 Concept development and testing:
Product idea:
 Idea for a possible product that the company can
see itself offering to the market.
Product concept:
 Detailed version of the new-product idea stated in
meaningful consumer terms.
Concept testing:
 Testing new-product concepts with groups of target
consumers to find out if the concepts have strong
consumer appeal.
8 - 26
New-Product Development Process

 Marketing strategy development:

Part One:
 Describes the target market, planned value proposition,
sales, market share, and profit goals.
Part Two:
 Outlines the product’s planned price, distribution, and
marketing budget.
Part Three:
 Describes the planned long-run sales and profit goals,
marketing mix strategy.
8 - 27
NEW-PRODUCT DEVELOPMENT PROCESS
 Business analysis:
 Involves a review of the sales, costs, and profit projections to
assess fit with company objectives.
 If results are positive, project moves to the product
development phase.

8 - 28
NEW-PRODUCT DEVELOPMENT PROCESS
 Product development:
Develops concept into a physical product.
Calls for a large jump in investment.
Prototypes are made.
Prototypes must have correct physical features
and convey psychological characteristics.
Prototypes are subjected to physical tests.

8 - 29
NEW-PRODUCT DEVELOPMENT PROCESS
 Testing marketing:
 Product and marketing program are introduced in a more
realistic market setting.
 Not needed for all products.
 Can be expensive and time consuming, but better than
making a major marketing mistake.

8 - 30
NEW-PRODUCT DEVELOPMENT PROCESS
 Commercialization:
 Must decide on timing (i.e., when to introduce the product).
 Must decide on where to introduce the product (e.g., single
location, state, region, nationally, internationally).
 Must develop a market rollout plan.

8 - 31
MANAGING NEW-PRODUCT
DEVELOPMENT
 Customer centered new-product development:
 Focuses on finding new ways to solve customer
problems and create more customer-satisfying
experiences.
 Team-based new-product development:
 Various company departments work closely together,
overlapping the steps in the product development
process to save time and increase effectiveness.
 Systematic new-product development:
 Innovation management systems collect, review,
evaluate, and manage new-product ideas.
8 - 32
THANK YOU

8-
33
 Distribution planning and
decisions

Course Instructor
Dr. Mohit Jamwal
What is a Distribution Channel?

• A set of interdependent organizations

(intermediaries) involved in the process of
making a product or service available for use
or consumption by the consumer or business
user.

• Channel decisions are among the most

important decisions that management faces
and will directly affect every other marketing
decision.
Why are Marketing Intermediaries
Used?

• Greater efficiency in making goods available

to target markets.
• Offer the firm more than it can achieve on
it’s own through the intermediaries:
– Contacts
– Experience
– Specialization
– Scale of operation
• Match supply and demand.
Distribution Channel Functions

• All Use Up Scarce Resources

• All May Often Be Performed Better Through Specialization
• All Can Often Be Shifted Among Channel Members

Risk Taking Information

Financing Promotion

Distribution Contact
Physical

Negotiation Matching
Consumer Marketing Channels & Levels
Channel Level - A Layer of Intermediaries that Perform Some Work in
Bringing the Product and it’s Ownership Closer to the Buyer.

Channel 1
M Direct C

Channel 2
Indirect

M R C

Channel 3
 
M W R C

Channel 4

   
M W J R C
Channel Behavior & Conflict

• The channel will be most effective when:

– each member is assigned tasks it can do best.
– all members cooperate to attain overall channel goals
and satisfy the target market.

• When this doesn’t happen, conflict occurs:

– Horizontal Conflict occurs among firms at the same
level of the channel.
– Vertical Conflict occurs between different levels of the
same channel.

• For the channel to perform well, conflict must be

managed.
 Lesser
Administered
Leadership is Assumed by One or
a Few Dominant Members
Control
Direct
Contractual of
Contractual Agreement Among Degree
Channel Members
Corporate
Common Ownership at Different
Levels of the Channel
Greater
Types of Vertical Marketing Systems
Vertical Marketing Systems

Vertical
Marketing
Systems (VMS)

Corporate Contractual Administered

VMS VMS VMS

Wholesaler Franchise
Retailer
Sponsored Organizations
Cooperatives
Voluntary Chain

Manufacturer- Manufacturer-
Sponsored Service-Firm-
Sponsored
Retailer Sponsored
Wholesaler
Franchise System Franchise System
Franchise System
Innovations in Marketing Systems

Horizontal Marketing Hybrid Marketing

System System

Two or More Companies A Single Firm Sets Up

at One Channel Level Two or More Marketing
Join Together to Follow a Channels to Reach One
New Marketing or More Customer
Opportunity. Segments.
Example: Example:
Banks in Grocery Retailers, Catalogs, and
Stores Sales Force
 Evaluating the Major Alternatives
Exclusive Selective Intensive
Distribution Distribution Distribution
Identifying Major Alternatives
Setting Channel Objectives & Constraints
Analyzing Consumer Service Needs
Decisions
Channel Design
 Evaluating

K
Motivating

FEEDBAC
Selecting
Channel Management Decisions
Nature and Importance of Marketing
Logistics

• Involves getting the right product to the right

customers in the right place at the right time.
• Companies today place greater emphasis on logistics
because:
– effective logistics is becoming a key to winning and keeping
customers.
– logistics is a major cost element for most companies.
– the explosion in product variety has created a need for
improved logistics management.
– information technology has created opportunities for
major gains in distribution efficiency.
Goals of the Logistics System

• Provide a Targeted Level of Customer Service at

the Least Cost.
• Maximize Profits, Not Sales.

Higher Distribution Costs/

Higher Customer Service Levels

Lower Distribution Costs/

Lower Customer Service Levels
Logistics Systems

Costs Order Processing

Minimize Costs of Submitted
Attaining Logistics Processed
Objectives Shipped

Logistics
Functions
Transportation Warehousing
Water, Truck, Storage
Rail, Pipeline & Air Distribution

Inventory
When to order
How much to order
Just-in-time
Transportation Modes
Rail
Nation’s largest carrier, cost-effective
for shipping bulk products, piggyback

Truck
Flexible in routing & time schedules, efficient
for short-hauls of high value goods

Water
Low cost for shipping bulky, low-value
goods, slowest form

Pipeline
Ship petroleum, natural gas, and chemicals
from sources to markets

Air
High cost, ideal when speed is needed or to
ship high-value, low-bulk items
Choosing Transportation
Modes

Checklist for Choosing

Transportation Modes
1. Speed.
2. Dependability.
3. Capability.
4. Availability.
5. Cost.
Integrated Logistics Management

Concept Recognizes that Providing Better Customer

Service and Trimming Distribution Costs Requires
Teamwork, Both Inside the Company and Among All
the Marketing Channel Organizations.

the Company
Cross-Functional Teamwork inside

Building Channel Partnerships

Third-Party Logistics
Thanks
 Learning Outcomes
• To analyze the various methods and strategies
of fixing the prices for products
 To maximize profits

 To increase sales

 To increase the market share

 To satisfy customers, and

 To meet the competition

 The following are the different methods of pricing
1. Cost-based Pricing Methods
(a) Cost plus pricing
(b) Marginal cost pricing

2. Competition-oriented Pricing
(a) sealed bid pricing
(b) going rate pricing

3. Demand-oriented Pricing
(a) Price discrimination
(b) Perceived value pricing

4. Strategy-based Pricing
(a) Market skimming
(b) Market Penetration
(c) Two-part pricing
(d) Block Pricing
(e) Commodity bundling
(f) Peak load pricing
(g) Cross Subsidization
(h) Transfer Pricing
 Cost plus pricing:
Product unit’s total cost + percentage of profit.
Commonly followed in departmental stores.
Does not consider the competition factor.

 Marginal cost pricing:

Also called break-even pricing.
Selling price is fixed in such a way that it covers fully
the variable or marginal cost
 Sealed bid Pricing: This method is more
popular in tenders & contracts. Each contracting
firm quotes its price in a sealed cover called
‘tender’. All the tenders are opened on a
scheduled date and the person who quotes the
lowest price is awarded the contract.

 Going rate Pricing: Price is charged in tune

with the price in the industry as a whole. When
one wants to buy or sell gold, the prevailing
market rate at a given point of time is taken as
the basis to determine the price
 Price discrimination: Practice of charging
different prices to customers for the same good.
It is also called differential pricing. Prices are
discriminated on the basis of customer
requirements, nature of product itself,
geographical areas, income group etc..

 Perceived value pricing: price fixed on the

basis of the perception of the buyer of the value
of the product. For example: Mobile phones
without touch screens these days
 Market Skimming: When the product is introduced for the first
time in the market, the company follows this method. Under this
method, the company fixes a very high price for the product. The
idea is to charge the customer maximum possible. Mostly found in
technical products.

 Market Penetration: Opposite to the market skimming method.

Here the product is fixed so low that the company can increase its
market share.

 Two-part pricing: A firm charges a fixed fee for the right to

purchase its goods, plus a per unit charge for each unit
purchased. Organizations such as country clubs, golf courses
charge membership fee and offer their products & services cost-
to-cost.

 Block Pricing: Block pricing is another way a firm with market

power can enhance its profits. We see block pricing in our day-to-
day life. Six lux soaps in a single pack or Maggi noodles in a single
pack illustrate this pricing methods. By selling certain number of
units of a product as one package, the firm earns more than by
selling unit wise.
 Commodity bundling: Commodity bundling
refers to the practice of bundling two or more
different products together and selling them at
a single ‘bundle price’. For example: The
package deals offered by the tourist
companies, airlines etc.

 Peak load Pricing: During seasonal period

when demand is likely to be higher, a firm may
enhance profits by peak load pricing. The
firm’s philosophy is to charge a higher price
during peak times than is charged during off-
peak times
 Cross subsidization: In cases where demand for
two products produced by a firm is interrelated
through demand or costs, the firm may enhance
the profitability of its operation through cross
subsidization. Using the profits generated by
established products, a firm may expand its
activities by financing new product development
and diversification into new product market.
For example, A computer selling both hardware
& Software..

 Transfer Pricing: Transfer pricing is an

internal pricing technique. It refers to a price
at which inputs of one department are
transferred to another, in order to maximize
the overall profits of the company.
 Price Matching: A firm promises to match a lower
price offered by any competitor, while
announcing its own price. It is necessary that one
should be confident, before adopting this
strategy.

 Promoting Brand Loyalty: This is an advertising

strategy where the customers are frequently
reminded by the brand value of a given product or
service. Conviction is to retain the brand loyalty,
so that customers will not slip away when the
competitors come up with lower prices. For
example: Pepsi and Coke spend huge amounts on
advertising campaigns to draw the attention of
consumers.
 Time-to-time Pricing: This is also called
randomized pricing strategy where the firm
varies its price from time-to-time, say hour-to-
hour or day-to-day. Customers cannot learn from
experience which firm charges the lowest price
in the market. For ex: Markets of bullion,
currency and bank deposits.

 Promotional Pricing: Promoting the product by

intentionally charging lower price to attract
the customer

 Target Pricing: This is a strategy where

company fixes a price keeping in view a targeted
profit in mind.
Retail Formats

By: Dr. Mohit Jamwal

Giant retailers called _____ concentrate
on one product category such as toys or
home improvement

a.Category killers
b.Variety stores
c.Supercentres
d.box stores
Retailers such as Benetton, The Body Shop,
and Marks and Spencer carry mostly own-
brand merchandise. These are called _____
brands

a. creative label
b.private label
c. house
d.retail label
A traditional format that sell 20-80 percent of
groceries and other consumable product at
discounted prices

A.Dollar Store
B.Discounted stores
C.Chain store
D.off price store
Which of the following represents a
supermarket?

A. Metro
B. More
C.Mcdonalds
D. Easy day
Which of the following is an example of
departmental store?

A. Westside
B. Titan
C.Croma
D. DMart
KFC is an example of?

A. Cash and carry store

B. Specialty store
C.QSR
D. Category killer
Easyday is an example of?

A. Cash and carry store

B. Specialty store
C. Convenience store
D. Category killer
Reliance market is an example of?

A. Cash and carry store

B. Specialty store
C. Convenience store
D. Category killer
 Non-Store Retailing:

A direct relationship of the retailer with his customer is on the

basis of non-store Retailing. In India around twenty percent of
retail sale is from non-store. The proportion of non store is
growing steadily. It is classified as :
• Direct selling
• Mail order
• Tele marketing
• Automatic vending
• Electronic retailing
Integrated Marketing
Communication

Course Instructor
Dr. Mohit Jamwal
 Learning Objectives
1. Explain integrated marketing communications
and its revolution over a period of time
2. Develop models that explain how integrated
marketing communication works
3. Explain the integrated marketing planning
communication process
 Integrated Marketing Communications

Integrated marketing communication (IMC) is an approach to brand

communications where the different modes work together to create a seamless
experience for the customer and are presented with a similar tone and style that
reinforces the brand’s core message.

Its goal is to make all aspects of marketing communication such as advertising,

sales promotion, public relations, direct marketing, personal selling, online
communications and social media work together as a unified force, rather than
permitting each to work in isolation, which in turn maximizes their cost
effectiveness
 Brand Communications

• is an initiative taken by organizations to make their products and services

popular among the end-users.

• Brand communication goes a long way in promoting products and services

among target consumers. The process involves identifying individuals who are best
suited to the purchase of products or services (also called target consumers) and
promoting the brand among them through any one of the following means

Advertising
Sales Promotion
Public Relation
Direct Marketing
Personal Selling
Social media
Components of Integrated
Marketing Communication:
1. Organizational culture
2. Elements of marketing
mix :product, price and place
3. Advertising
4. Direct marketing
5. Public relations
6. Online/internet marketing/mobile marketing
7. Marketing using social media tools like
Facebook, Twitter, LinkedIn, Google Plus, You
Tube
8. Sales promotions
9.Personal selling
10.Events management
11.Cause marketing
Integrated Marketing Communication Process
Overview of Eight Steps to Effective Communication
 Identify target audience
 Determine objectives
 Design the message
 Select communication channels
 Establish communications budget
 Develop communications mix
 Measure results
 Effectively manage the process
 Marketing
Communications
Course Instructor
Dr. Mohit Jamwal

1-82
 After studying this chapter
you should be able to:
 Discuss the objectives of marketing
communications.

 Understand the marketing communications

mix and its role.

 Explain the key elements of the marketing

communications process.

1-83
 The Role of Marketing
Communications

Reminding

Informing

Persuading

1-84
 The Marketing Communications Mix

1-85
 Integrated Marketing Communications

 Integrated Marketing
Communications (IMC):
 The strategic integration of
multiple means of
communicating with target
markets to form a
comprehensive, consistent
message.

1-86
 The Marketing Communications Process

1-87
 Marketing Communications Planning

Marketing Monitoring,
Plan Evaluating,
Review Controlling

Integration
Situation
&
Analysis
Implementation

Communications
Budget Program
Process
Development Development
Analysis

1-88
 Marketing Communications Environments

The The
Competitive Economic
Environment Environment

The Marketing
Social Mix
Environment Considerations

1-89
 Communications Process Analysis

 Set Marketing Communications

Objectives

 Apply the Basic Communication Model.

1-90
 Budget Development
 Influences on Budgeting:
 Size of the company
 Its financial resources
 The type of business
 The market dispersion
 The industry growth rate
 The firm’s position in the
marketplace

1-91
 Budgeting Methods

 Percentage of Sales
 Competitive Parity
 All-You-Can-Afford
 Objective-Task

1-92
 Marketing Communications
Program Development

 Explicit Communications:
 Convey a distinct, clearly stated message
through personal selling, advertising, public
relations, sales promotion, direct marketing,
or some combination of these methods.

 Implicit Communications:
 What the message connotes about the
product itself, its price, or the places it is sold.
1-93
 Push, Pull, and Combination
Strategies

 Push Strategy:
 Involves convincing intermediary channel
members to “push” the product through the
cannel to the ultimate consumer.

 Pull Strategy:
 Attempts to get consumers to “pull” the
product from the manufacturing company
through the marketing channel.
1-94
The Marketing Research
Process

By: Dr. Mohit Jamwal

95
 Learning Outcomes

• To understand the various steps in

marketing research process
• To analyze a firm problem through visiting
various steps in marketing research
process

96
97
 The Marketing Research
Process: 10 Steps
• Step One: Defining the Problem
• Step Two:Establishing Research
Objectives
• Step Three: Determining Research
Design
• Step Four: Identifying Information
Types and Sources
• Step Five: Determining Methods of
Accessing Data
• Step Six: Designing Data
Collection Forms
98
 The Marketing Research
Process: 10 Steps
• Step Seven: Determining Sample
Plan and Size
• Step Eight: Collecting Data
• Step Nine: Analyzing Data
• Step Ten: Preparing and
Presenting the Final Report

99
 The Marketing Research
Process
• An 10-step process: there is nothing
magic about 10 steps
• Not all studies use all 10 steps
• Few studies follow the steps in order

100
 Step 1: Define the Problem
• This is the most important of the all
steps.
• If the problem is incorrectly defined, all
else is wasted effort.
• Problems may be either specific or
general.

101
 Step 1: Define the Problem
• Problems stem from gaps between
what is supposed to happen and what
did happen and gaps between what
did happen and what could be
happening.

102
 Step 2: Establish Objectives
• Research objectives, when achieved,
provide the information necessary to
solve the problem identified in step 2.
• Research objectives state what the
researchers must do.

103
 Step 3: Determine Research
Design
• Exploratory Research: collecting
information in an unstructured and
informal manner.
• Descriptive Research refers to a set
of methods and procedures
describing marketing variables.
• Causal Research (experiments):
allows isolation of causes and
effects.
104
 Step 4: Identify Information
Types and Sources
• Primary information: information
collected specifically for the problem at
hand
• Secondary information: information
already collected

105
Step 5: Determine Methods of
Accessing Data
• Secondary data is relatively easy to
access; primary data is more complex.
• Three main choices for primary data:
– Have a person ask questions
– Use computer assisted or direct
questioning
– Allow respondents to answer
questions themselves without
computer assistance 106
Step 6: Design Data Collection
Forms
• Questionnaire must be worded
objectively, clearly, and without bias
in order to communicate with
respondents.
• Software programs are available to
assist marketing researchers in
preparing forms.

107
Rural Marketing

Course Instructor
Dr. Mohit Jamwal
 Rural Markets
• Rural marketing is a process of developing,
pricing, promoting, and distributing rural
specific goods and services leading to desired
exchange with rural customers to satisfy their
needs and wants, and also to achieve
organizational objectives.
 Importance of Rural Markets
 Increasing Competition in Urban Markets: Rural
markets today offer growth opportunities to firms
caught in intensive inter-firm rivalry in urban and metro
markets

 Socio-economic Changes in Rural India: Changes can be

attributed to increase in farm productivity

 Information Technology

 Income Generation through Self-Help Groups

 Access More Important Than Ownership: Access of

services is more important than ownership
Rural marketing in Indian economy 
• i. The market for consumer goods that
comprise of both durable and non-durable
goods
• ii. The market for agricultural inputs that
include fertilizers, pesticides, seeds, and so on
 Precisely, It Covers
• i. Selling of agricultural products in the urban
areas
• ii. Selling of manufactured products in the
rural regions
 characteristics and classification of rural
consumers.
• The Affluent Group
• The Middle Class
• The Poor
 Changing Profile of Rural Consumers

• Change in Purchase patterns

• More Aware
• Educated class is the new customer base
Size of Rural Market
Income Distribution In Rural India
Myths About Rural Market

 All villages are equally populated

 Rural Consumers are a homogenous lot
 Being illiterate, rural consumer is not able to
discriminate between products and brands
 Only low priced products will sell
 Rural markets are not the consumer durables market
 Lecture 16

MKT503
Marketing
Management
What it’s all
about?
Learning
Outcomes
 To discuss about ethics in marketing.

 To understand about the concept of

services marketing.

 To learn about the marketing research process.

 includes all the activities involved in selling products or services directly to
final consumers for their personal, nonbusiness use.

a. Brokerage

b. Retailing Revision

c. Franchising

d. Wholesaling
 carry narrow product lines with deep assortments within those
lines.

a. Specialty
stores

b. Convenience Revision
stores

c. Discount
stores

d. Chain stores
Ethics in
Marketin
g
Nestlé
boycott

Mother’s milk substitutes (infant formula-Nan) in

particularly less economically developed

countries
Ethics related to
‘PRODUCT’
The
the
most common ethical concerns in this area pertain to

1. Safety of
products (45% high as per
2. European
Coke- Economic Commission norms*) ,
Pesticides of ground water of in
Depletion
villages across radius of around 1
km of factory.
3. New/improved products not
actually new
* As per Center for Science and
Environment
“Downsizing” or “Package
Shorting”
Reducing the content but

keeping price same, without

proper intimation to

consumer
Ethics related to
‘PRICING’
Price gouging
A company may raise prices of items that are temporarily in high demand.

Predatory pricing
Pricing a product low enough to dampen demand FOR COMPETITOR
PRODUCTS
SURROGATE
ADVERTISIN
G
PUFFER
Y
Women
STEREOTYPING
Children in
Advertisement
s
Services
Marketing
Goods Services

Tangible Intangible

PRODUCTS
A service is any act or performance one party can
offer

to another that is essentially intangible and does

not

result in ownership of anything.

Categories
of Service
Mix
Services component being a major or a minor part of
the total offering
No
accompanying
service

Pure
Tangibl
e
goods
A tangible
good with
accompanyin
g services

Need of high-
quality support
services
A
Hybrid

Equal parts of a
good and service
A major
service with
accompanyin
g minor
goods

Supporting
goods
A pure

servic
e

Babysitting or

psychotherap
y
Service Continuum
Customer
Coproductio
n
Gupta Ji Ka Dhaba
Customer play an active role in
service
Managing
Customer
Expectation
s
GAP
G
1 ap Between Better
customer Foods Vs

expectations Responsive
staff
and
management
perceptions
GAP
Gap between
2
Management Give fast
service but
perception how fast?????
and service
quality
specifications
MKT511
Marketing Manangement -II
Understanding Digital Marketing
Learning Outcomes
•Explain emerging trends in digital marketing and critically
assess the use of digital marketing tools.
•Interpret the traditional marketing mix within the context of
a changing and extended range of digital strategies and
tactics.
•Comprehend the importance of conversion and working
with digital marketing.
What are Social Media?
Social media are the online means of
communication, conveyance, collaboration,
and cultivation among interconnected and
interdependent networks of people,
communities, and organizations enhanced by
technological capabilities and mobility.
Mind-boggling Social Media Stats
Time to reach 50 million users:
◦ Radio = 38 years
◦ TV = 13 years
◦ Internet =4 years
◦ Facebook = 100 million users in under 9 months.
Social media is the #1 online activity worldwide.
If you were paid $1 for every time an article was posted on Wikipedia, you would
earn $156.23 per hour.
94% of companies use LinkedIn as their primary recruiting tool.
1 out of 6 couples married in 2013 met on a social media site.
4 billion pieces of content shared daily on Facebook.
Figure 1.1 Fun Facts of Social Sites
It’s About Participation
How do people participate?
◦ Post a status update
◦ Create a blog
◦ Use a group deal
◦ Share a micro-post with your network
◦ Make a video and share it
◦ Play social games …

How do YOU participate?

Bytes to Bucks: Chipotle
Chipotle’s “The Scarecrow
Campaign” is an example
of a brand leveraging
social media across paid,
earned, and owned media.

• Visit www.scarecrowgame.com to see the film and

game.
Figure 1.2: Zones of Social Media
Figure 1.3 Exemplar Vehicles in the Zones

Social Media Marketing, 2e © Tracy L. Tuten and Michael R. Solomon 2015

Display Ads
Ad Rank
Ad Rank is calculated using your bid amount, your auction-time ad

quality (including expected clickthrough rate, ad relevance, and landing

page experience), the Ad Rank thresholds, the competitiveness of an

auction,the context of the person’s search (for example, the person’s

location, device, time of search, the nature of the search terms, the

other ads and search results that show on the page, and other user

signals and attributes), and the expected impact of extensions and

other ad formats.
Ad Rank
GAP
G
3 ap between Untrained
service Staff
quality
specifications
and service
delivery
GAP
G
4 ap between
service quality
and external
communicatio
n
GAP
Gap between Doctors
5 visiting
perceived frequentl
service and y
expected
service
 Reliabilit
5
Determinan y
t s of
service
quality Responsivenes
s Assurance
Empathy
Tangibles
Marketin
g
Reserach
Market research is the process of determining the viability of a new
service

or product through research conducted directly with potential

customers.
Proces
sDefine the problem

Develop Research

Plan Collect

Information Analyze

Information Present

Findings

M ake Decisions
Types of Research
Design

EXPLORATOR DESC RIPTIV C AUSAL RESEARCH

Y E
RESEARCH RESEARCH
 M KTM 511- M A RKETIN G M A N A G EM EN T-
II
Dr. Rahul
Sharma

Descriptive
Research
To describe the business or market
characteristics

Online Shoppers’

Preferences for e-
Retailer
 Cross
Sectional
Types of
Descriptiv
e
Longitudinal
Research
One-time research-
confined to a single
time- period
Longitudinal
Study
Examine the effects of Vaccine on randomly selected people of
different age groups on ‘x’ different time intervals…..or repeat the
observations
Causal
Research
Cause and effect relation ship between two or more business
variables

Increase in Leads to
Increase in sales or
Promotional
not?
spending
Imagine you are recruited as sales trainees in NRF Tyre Limited. You found that in one sales territory,
the

sales are very low from the last 6 months. You conducted a one time survey and got feedback from

retailers and distributors to find and to lower down the reasons of low sales. You are doing which

type of research in this case-

a) Cross Sectional

b) Longitudinal

c) Experimental

d) None of
these
D r. Rahul
Sharma
rahul.12234@lpu.co.in
www.therahul.in
www.linkedin.com/in/therahuldms
Thank
You
The Rahul A cad emy
Education Profile

 A large segment of rural India still remains illiterate

 Women form a majority of the illiterate population

 Maximum education is up to the primary or high school

level
 Mass audio visual media, and van mounted audio visual
promotions have a major role in shaping consumer
attitudes
 Demonstration on product usage becomes integral to the
marketer’s promotion strategy
Low Income Level of Rural
Consumers
 Income of average rural consumer much lower
than their urban counterpart.
 A large part of the income goes to provide basic
necessities
 A small part of income is spent on other consumer
goods
 Rural consumer much more price sensitive and
value seeker than the urban consumer
Other Features of Rural
Consumers
 Media Habits: Television, radio and video are
important forms of media; replaced traditional forms
of entertainment

 Brand Conscious Customer: Many national and

regional brands are today building a strong rural base
without much advertising support

 Value for Money: Buy products and brands which

promise to deliver higher value. Functionality, rather
than esthetics alone, is more important to rural
buyers.
Marketing Mix For Rural Markets

 Product Decisions: Products should be simple and easy to

use, service, and maintain. Strategic option are:
o Extension
o Adaptation
o Innovation
 Pricing Decision: Marketers should focus on making
products more affordable

 Promotion Decisions: Film personalities, jingles, folklore,

and music can make message and brand name memorable

 Distribution: Mobile distribution strategy essential to

reach out to consumers

 Relationship Management: More consideration for

evolving a relationship management programme
Thanks
Step 7: Determine Sample Plan
and Size
• Sample plan refers to the process
used to select units from the
population to be included in the
sample.
• Sample size refers to determining
how many elements of the population
should be included in the sample.

216
 Step 8: Collect Data
• Data collection is very important
because, regardless of the data
analysis methods used, data analysis
cannot fix bad data.
• Nonsampling errors may occur during
data collection.

217
 Step 8: Collect Data
• Data collection errors may be
attributed to field workers or
respondents.
• Researchers must know the sources
of these errors and the controls to
minimize them.

218
 Step 9: Analyze Data
• Data analysis involves entering data
into computer files, inspecting data
for errors, and running tabulations
and various statistical tests.
• Data cleaning is a process by which
raw data are checked to verify that
the data have been correctly inputted
from the data collection form to the
computer software program.

219
 Step 10: Prepare and Present
the Final Research Report
• The last step is one of the most
important phases of marketing
research.
• Its importance cannot be overstated
because it is the report, or its
presentation, that properly
communicates the results to the
client.

220
Thank you

221
 Push, Pull, and Combination
Strategies
 Combination Strategy:
 Aiming marketing communications
at both resellers and ultimate
consumers.

1-
 Integration and Implementation
 Implementation:
 Setting the marketing communications
plan into action.

The key aspect of implementation

is coordination !!!

1-
 Monitoring, Evaluating, and
Controlling
 Examples:
 Monitor sales promotion by the number of
coupons redeemed.

 Measure the effectiveness of a new personal

selling strategy by looking at the number of new
accounts opened.

 A firm might run tests to see it consumers

noticed the ad.

 Review sales results and attribute fluctuations in

1-
sales volume to MC.
 Ethical and Legal Considerations
M C Element Legal / Ethical Concerns

Advertising Deceptive advertising

Unfavorable stereotypes

Public Relations Lack of sincerity

Using economic power unfairly

Sales Promotion Misleading consumer promotions

Paying slotting allowances for shelf space

Personal Selling High-pressure selling

Misrepresenting product benefits

Direct Marketing Telemarketing privacy invasion

Misuse of consumer database information

1-
 Legal -- but Ethical?
 Some marketing communications may be
technically legal but raise significant ethical
questions:
 Liquor industry now advertises on cable and local
television stations.

 Extensive promotion of higher-cost drugs when

health care costs are spiraling out of control.

 Heavy promotional allowances to pharmacies for

agreement to push proprietary instead of generic
drugs.

 Promotion of legalized gambling.

1-
 Deception in Marketing
Communications

 Deceptive  Examples:
Advertising:  False pricing
 Communicatio offers
ns intended to
mislead
 Misleading or
consumers by
overstating
making false
product benefits
claims or
failing to
disclose  Non-
important substantiation of
information. claims made in
1- marketing
 Additional Regulatory Concerns

Comparative advertising requires that

comparative claims be supported.

Product endorsers must be qualified to

make judgments and must actually
use the product being endorsed.

Packaging and labeling practices of food

and drug marketers are heavily scrutinized
by consumers and regulatory agencies.

1-
 Determining Communication Objectives

Models of consumer-response stages are

– AIDA model
– Hierarchy-of-effects model
– Innovation-adoption model
– Communications model
The models assume that buyers pass through these
stages:
– Cognitive stage
– Affective stage
– Behavior stage
Designing the Message (AIDA)
Hierarchy-of-effects model
Integrated Marketing Planning
Communication Process
The Role of IMC in Marketing (Integrated Marketing
Communication Process)
Thank you
 RETAIL FORMATS IN INDIA
Mono/exclusive  Exclusive showrooms owned or franchised  Complete range available for a given
branded retail shops out by a manufacturer. brand, certified product quality.

Multi-branded  Focus on particular product categories and  Customers have more choices as many
retail shops carry most of the brands available. brands are on display.

 Display most of convergence as well as

Convergence retail  One-stop shop for customers; many
consumer/electronic products,
outlets product lines of different brands on display.
including communication and IT group.

 It is an online shopping facility for buying

 Highly convenient as it provides 24X7
and selling products and services; the
E-retailers access, saves time and ensures
facility is widely used for electronics, health
secure transaction.
and wellness.

Note: IT - Information Technology

Source: Aranca Research

2
 COMPETITIVE LANDSCAPE IN INDIAN RETAIL SECTOR

Retail

Supermarkets/ Cash and carry

Departmental stores Hypermarkets Specialty stores
convenience stores stores

 Pantaloon has 209  Pantaloon Retail is  Aditya Birla Retail-  Titan Industries is a  Metro started the
stores. the leader in this More large player, with cash and carry
 Westside operates format, with 259 Big Supermarket (523 438 World of Titan, model in India; the
126 stores as of Bazaar stores and stores). 200 Tanishq and company
May 2018. online franchisees. 470 Titan Eye+ operates 24
 Spencer’s Daily
shops. stores across
 Shoppers Stop has  Aditya Birla Retail (120 stores).
Mumbai, Kolkata,
(More  Vijay Sales, Croma
83 stores in India,  Reliance Fresh (502 Delhi, Punjab,
Hypermarket)- 20 and E-Zone are into
as of 2018. stores). Hyderabad and
stores. consumer
 As of FY18,  REI 6Ten (350 Bengaluru.
electronics.
Reliance Retail  HyperCITY (19
stores).  As of FY18,
launched ‘Trends’ in stores), Trent,  Landmark and
 Big Bazaar (259 Reliance Retail
Spencer’s (Spencer Crossword focus on
this format and operates 43 cash
Hyper), and stores). books and gifts.
currently has more and carry stores
than 3,300 stores Reliance are other
called ‘Reliance
across India. players.
Market’.

Source: Company websites, Press Release

Convenience Store: Is generally a well situated, food oriented store
with long operating house and a limited number of items.
Consumers use a convenience store; for fill in items such as bread,
milk, eggs, chocolates and candy etc. Super markets: Is a diversified
store which sells a broad range of food and non food items.
A supermarket typically carries small house hold appliances, some
apparel items, bakery, film developing, jams, pickles, books,
audio/video CD's etc. Reliance fresh and big bazaar are good
examples of a super market.
Department Stores: A department store usually sells a general line of
apparel for the family, household linens, home furnishings and appliances.
Large format apparel department stores include Pantaloon, Ebony and
Pyramid. Others in this category are: Shoppers Stop and Westside.
Specialty Store: Concentrates on the sale of a single line of products or
services, such as Audio equipment, Jewellery, Beauty and Health Care, etc.
Consumers are not confronted with racks of unrelated merchandise.
Successful specialty stores in India include, Music World for audio needs,
Tanishq for jewellery and McDonalds, Pizza Hut and Nirula's for food
services.
Hyper Markets: Is a special kind of combination store which
integrates an economy super market with a discount department
store. A hyper market generally has an ambience which attracts the
family as whole. Pantaloon Retail India Ltd. (PRIL) through its
hypermarket "Big Bazar", offers products at prices which are 25% -
30% lower than the market price.