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8/2/2019 Marketing SXC Second Semester
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Marketing Concept
Marketing is a process through which themarketer tries to identify the needs and wants of
the consumers or society at large and thenconvert them into tangible products orservices in order to deliver them back to theconsumers against some consideration in asocially responsible manner.
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Want: Specification of Need.
Need is more Generic
Want is Specific Marketing involves Transactions, Exchange and
building Relationships (Customer-Marketer/Brand)
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Societal Marketing
Marketing with Long term social objective andmission.
Time Dimension: Refers to Environmental aspectsof product usage.
Breadth Dimension: Refer towards ensuringprotection of interest of the non-user of the
product.
Social Marketing Marketing Ideas towardsremoving social evils and taboos
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Nature, Scope and Importance
Marketing is Flexible, Soft and Matching concept
Marketing is what business is all about
Marketing is about ONE BIG IDEA
Creativity regarding Product Development
Creativity regarding Technology Development
Creativity regarding Marketing Strategies
Scope of Marketing beyond common understandingsregarding Marketer, Product and Market
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Building Customer Relationships and Equity
Developing Tie-ups: Co-branded cards
Creating Loyalty Programs
Delighting your consumer Retaining your customer
Identifying High-Value/Return segment and serve
Product Merchandising
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Emerging Dimensions of Marketing
Rural Marketing (Fortune lies at the Bottom of thePyramid) India specific
Digital Age
Global Market Place Social Responsibility
Services
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Consumerism
Consumerism in short refers to the socialmovement that seeks to increase the rights andpowers of consumers.
Introduction of Bill of Rights by PresidentKennedy in 1962 towards seeking:
Right to Choice
Right to Information Right to Safety
Right to be Heard
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Traditional Rights of Sellers:
Right to introduce any product
Right to ask any price
Right to use any message accompanying the product
Right to use any buying incentive scheme
Right to spend any amount to promote the product
Traditional Rights of Buyers:
Right not to buy any product offered for sale
Right to expect the product to be safe
Right to expect the product to perform as claimed
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Marketing Environment
Macro:
Demographic
Economic
Natural Political
Technological
Cultural
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Micro:
Company
Suppliers
Intermediaries
Customer Markets Competitors
Public
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Basic SWOT Analysis
EXPLOIT COUNTER/CHALLENGE
OVERCOMEWEAKNESS
AVOID
Strength
Weakness
Opportunities Threats
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Designing Business Portfolio
BCG Matrix/SBU Analysis
STARS (Invest) ? / PROBLEM CHILDS(Adopt RemedialMeasures/Rectify)
CASH COWS (Harvest) DOGS (Divest)
HighMarketGrowthRate
LowMarketGrowthRate
High Relative Market Share Low Relative Market Share
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Adopting Competitive Strategies
IgorAnsoffs Product Market Expansion Grid
MarketPenetration
ProductDevelopment
MarketDevelopment
Diversification
ExistingMarkets
New Markets
Existing Products New Products
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Market Segmentation
Market segmentation refers to the process ofclassifying or segmenting a market into certainuniformity or homogeneity with respect to theconsumers in that segment. The consumer may on thebasis of various behavioural characteristics (buyingpatterns) that are common to that zone or on accountof some inherent features possess such uniformity orhomogeneity.
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Market segmentation methods may be of followingtypes:
Geographical segmentation
Demographic segmentation
Geo-Demographic segmentation Buyer behaviour segmentation
Benefit segmentation or USP
Psychographic or lifestyle segmentation
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Product Differentiation:
Product differentiation is on the other hand a processof making a product different on some small accountin order to carve in niche in a highly competitivemarket segment.
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Adoption Process of New Product
Awareness Interest Evaluation Trial Adoption
Need RecognitionInformation
SearchEvaluation ofAlternatives
PurchaseDecision
Post-PurchaseBehavior
COGNITIVE AFFECTIVE CONNATIVE
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Consumer Behaviour
Refers to the process of studying how various stimuliaffect the decision making process of consumers inchoosing a particular brand.
Marketing and
other Stimuli
Buyer choiceand decision
process
Buyer
Response
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Factors influencing Individual Buying Behaviour
Cultural Culture Sub-Culture Social Class
Social Reference Groups Family Roles and Status
Personal Age and Family Life Cycle Stage Occupation Economic Situation Lifestyle Personality and Self-concept
Psychological Motivation Perception
Learning Beliefs and Attitudes
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Marketing Mix
Marketing Mix as a concept refers to the variousingredients and components that give shape to thepackage or the product portfolio offered by themarketer to its target audience. These ingredients,
which form the package is also popularly known as 4 Pin marketing management. In other words, Product,Price, Place and Promotion form the package of themarketer.
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Components of Marketing Mix
Product
Product portfolio
Design, Shape, Size
Packaging
Branding Product Merchandise
Price
Resale Pricemaintenance
Pricing strategies
Channel margin
Place
Channel design andstructure
Logistics management
Physical transportation
Promotion
Advertisement
Personal selling
Sales Promotion
Publicity
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Service
Reasons for Growth of Service Industry
Growing complexity of products
Changing social order
Urge for more leisure and pastime
Women joining workforce
Increasing work related stress
Features of a Service
Intangibility
Heterogeneity
Inseparability
Perishability
Non-ownership
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Measures for overcoming such drawbacks associatedwith Service
Make Service look more tangible
Use Automation where mechanisation can replace thehuman component associated with the service
Use Database, Training and Policy guidelines in caseswhere human component is indispensable
Ensure better matching of demand and supply toarrest perishability
Make use of staggered payment plans to manage theissue of non-ownership
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Marketing mix of a Service (7 P)
Product Price (Differential pricing place, time and customer
differential, Diversionary, Guaranteed, Discount orHappy hour pricing)
Place
Promotion
People
Process (Delivery system)
Physical evidence (Essential and Peripheral)
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Product Mix Decisions
Width of the Portfolio: Number of Product lines
Length of the Portfolio: Number of Product items perline
Depth of the Portfolio: Number of Product variationsper item
Strategies:
Line Stretching: Upwards and Downwards
Line Filling
Line Pruning
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New Product Development process
Reasons for development of New Product
Changing taste and preferences
Technological advancement
Government policies
Various forms of New Product
Re-launched Product
Re-formulated Product
Product in new package New to the market
New usage
Totally new product
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Steps in New Product Development Process
Idea generation Concept development
Initial feasibility study
Concept testing Product development
Product testing
Market testing
Commercialisation
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New Product formations
Re-launchedProduct
Re-formulatedProduct
ProductReplacement
Re-Merchandising ProductAugmentation
RelatedDiversification
New Usage ExtensiveDifferentiation
ExtensiveDiversification
ExistingMarket
Strengthened
Market
New Market
Existing Technology Improved Technology New Technology
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Product Life Cycle
Product life cycle refers to the various stages in thelife of a successful product. A successful productusually passes through five distinct stages in its life,from product planning and development,
introduction, growth, maturity to decline. Thesestages through which a successful product usuallytravels in course of its entire life span is known as thelife cycle of a product.
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A successful product usually passes through fivedistinct stage in its life.
Product planning and development
Introduction / Market pioneering stage
Market growth stage
Market maturity stage
Market decline stage
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Strategies adopted by Marketers
Core Product Skimming /Penetration Selective Heavy
Extend Line Competitive Extensive Scaled down
Renovate Discount New/VirginMarkets
Heavy
Phase Out Flexible Selective Minimal
Introduction
Growth
Maturity
Decline
Product Price Place Promotion
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Limitations of Product Life Cycle Theory
Considers Universality of Market
Considers Universality of Brand
Price
Any product in the market, whether tangible or intangible,signifies some kind of utility being attached to it and isusually marketed with an objective to provide this utility tothe target consumer. This utility, when translated in
monetary terms become a price. However Utility maycreate some ambiguity in understating pricing variations.Therefore Value may provide a better replacement andunderstanding of the price structure of products.
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Factors influencing Pricing Decisions
Internal Factors
Objective of the Firm
Product elastic to price
Manufacturing policy(Scale and Technology)
External Factors
Demography of themarket
Consumer buying pattern Existence of Price Cartel
Competitors Price
Government restrictions ifany
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Pricing Strategies
Cost Based:
Cost plus/Mark-up
Marginal Cost
Demand Based
Skimming
Penetration
What the traffic can bear
Monopolistic price competition
Competition Based
Going rate
Discount
Premium
Perceived Value Pricing
Psychological Pricing/Odd Value Pricing
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Resale Price Maintenance
Resale price maintenance refers to the practice
adopted by the marketer towards specifying the finalprice at which the product should be sold to the finalconsumer. The basic objective of the manufacturer isto implement control over the prices at which the
retailer resell their products. Apart from control, thepractice of resale price maintenance also instil somesense of confidence among the consumers andimprove the image of the brand because huge
disparity among the prices of the same product is notexperienced by the consumer when buying fromdifferent retailer.
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Resale price maintenance may be implemented in anyof the three forms:
A suggestive maximum price.
A suggestive minimum price.
A suggestive fixed price.
In Indian context the practice of suggesting minimumprice is not allowed, especially in life saving drugs. This
is in view of the theory that under monopolisticsituation suggesting minimum price would amount togiving absolute freedom to the retailer in effectingconsumer exploitation.
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Marketing Channels
Functions rendered by channel members:
Information
Promotion
Contact
Matching
Negotiation
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Factors to be considered while designing an effectivechannel
Objective of Distribution (Reach)
Nature and Characteristic of the product
Competitors channel policy
Availability of funds
Extent of control the firm intend to impose ondistribution network
Legal parameters
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Retailing
Role of large format retailing
Adds to the brand image
Brings greater sense of trust and confidence
Gives better exposure and visibility
Builds better brand awareness
Helps in providing better schemes and bundled offers
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Logistics and Supply chain management
Warehousing Inventory management
Transportation
Logistics information system
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Marketing Communication Mix
The priorities and combination of the components ofPromotion mix is determined by the following issues:
Availability of funds (Plenty or Scarce)
Extent of dispersion of customers (Wide orconcentrated)
Nature of Product (Complex, High Unit Price or
simple standardised and Low unit price) Stage of Product Life Cycle
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Advertisement may be defined as any form of paid,non-personal presentation of products in any mediumhaving an identified sponsor
Publicityon the other hand refers to any form of non-paid, non-personal presentation of products in anynews item or editorial comment having unidentified
sponsor
Public Relation refers to the management functionthat determines the attitudes and opinions of
organisations publics, identifies its policies with theinterest of its publics and then formulates andexecutes a program of action to earn theunderstanding and goodwill of its publics
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Steps in Developing effective marketing communication
Identifying the Target audience Determining communication objective
Designing the message (AIDA) appeals, structure,format
Choosing the right media reach, frequency, coverage,budget and competition
Selecting the message source brand endorsers
Collecting feedback
S l P i
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Sales Promotion
Pull(Consumer Promotion) and Push(TradePromotion) Strategy.
.
Consumer Promotion Tools
DiscountsCouponsSamplesCash refund offersDemonstrationsPremium offersSelf liquidating offersBundled offers
ContestsGiftsPrice-offs
Trade Promotion Tools
MerchandisingSponsoring major Nationaland International eventsParticipation in Trade fairsand ExhibitionsDealer level contests