module 1 part2

7/27/2019 module 1 part2

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Amity Business School

Marketing Management

Module 1 Part bSunetra Saha

MBA (E&L)Sem 1


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Amity Business SchoolMarketing Environment

Environmental scanning

Environmental forces

Social Economic

Technological

Competitive Regulatory


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Amity Business SchoolThe MarketingEnvironment

The importance of theenvironment

Some forces and theirimplications

e.g., truth in lendinglaws; antitrust laws,

economic cycles;changingdemographics


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Amity Business SchoolElements of

The Environment Social

Economic

Technological Competitive

Regulatory


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Social Forces Demographicsmore

Older citizens

Unmarried singles

Immigrants

Ethnic diversity

Family changes Blended families

Non-traditionalhouseholds

Cultural changes Roles of women

Values E.g., fitness

Longer work hours forsome; yet also morepeople working part time

Changing culturalstandards (e.g., wereBeatle members haircutsthatoffensive?)


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Economic

Forces Consumer Income

Nominal vs. inflation

adjusted Impact of inflation

Disposable vs. pre-taxincome

Discretionary income

Regional influences

Economic cyclesTeach a parrot to say supplyand demand and you have alearned economist! PaulSamuelson.


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Amity Business SchoolEconomic Cycles

State of Cycle Good Aspects Bad Aspects

Prosperity Affluence; highemployment

Danger of inflation;

high interest rates

SoftLanding

Dangers of inflation

reduced

Layoffs

Recession Lower interest rates;low levels of

inflation

Low growth (vicious

cycle); job loss

Depression May be able to getbargains

Vicious cycle; severejob loss

Recovery Economic growth;job growth

Rising interest rates;

inflation


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Technological Forces

Changes in technology maymake business obsolete; e.g., buggy whips (automobile)

airport at Gander, Newfoundland

(longer range aircraft) Federal Express (fax machine;

Internet)

New opportunitiese.g.,

specialty online retailers, masscustomization


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Amity Business SchoolCompetition

Levels Discretionary income

Product competition

Brand competition

Market structures Monopoly (e.g., electric power) Oligopoly (e.g., cars, OPEC) Monopolistic competition (e.g.,

supermarkets) Pure competition (commodities; e.g.,

Competition benefits the consumer is increasingly global


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Amity Business SchoolIssues in Competition

Barriers to entry Financial

Technological

Intellectual property Brand recognition

Running businesses

Distribution channels

Other asset (e.g.,landing rights)

Power of Buyers

Substitutes available Direct

Indirect

Suppliers

Existing competitorsand substitutes

PotentialcompetitionDONOT underestimate!


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Amity Business SchoolPolitical Forces

Lobbying by

business groups(e.g., honey lobby)

consumer/politicalgroups (e.g., laborunions; senior lobby)

foreign interests


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Amity Business SchoolLegal and Regulatory

Environment Laws and Regulations

for safety

for consumer protection

to protect special interests

Dangers of litigation--anyone cansue, and juries often buy it!

Examples: Antitrust

Fair competition

Pricing

Truth in Lending--have to tell peoplereal costs of financing; car leases nowregulated


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Amity Business SchoolAntitrust Law

Provisions

Must compete fairly; no

collusion

predation

Must not abuse market power; no excessive market share

tying--requiring people to buy a lessdesired item to get a desired one; e.g.,

must buy service to get Xerox copier

Ford only drilled a slot if you bought a radio

No, now that

you mentionit, I dont

trust you!


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MARKETING MIXThe marketing mix principles(also known as the 4 ps.) are

used by business as tools toassist them in pursuing theirobjectives


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The marketing mix principles are controllablevariables, which have to be carefully managedand must meet the needs of the defined targetgroup.

marketing mix is apart of the organizationsplanning process and consists of analyzing thefollowing- How will you design, package and add value to the

product. Product strategies.

What pricing strategy is appropriate to use Pricestrategies. Where will the firm locate? Place strategies. How will the firm promote its product Promotion

strategies.
http://www.learnmarketing.co.uk/product.htmhttp://www.learnmarketing.co.uk/Price.htmhttp://www.learnmarketing.co.uk/Price.htmhttp://www.learnmarketing.co.uk/Place.htmhttp://www.learnmarketing.co.uk/promotion.htmhttp://www.learnmarketing.co.uk/promotion.htmhttp://www.learnmarketing.co.uk/promotion.htmhttp://www.learnmarketing.co.uk/promotion.htmhttp://www.learnmarketing.co.uk/promotion.htmhttp://www.learnmarketing.co.uk/Place.htmhttp://www.learnmarketing.co.uk/Price.htmhttp://www.learnmarketing.co.uk/Price.htmhttp://www.learnmarketing.co.uk/product.htm


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When an organization introduces aproduct into a market they must askthemselves a number of questions.

Who is the product aimed at? What benefi twill they expect?

How do they plan to posi t ionthe product

within the market? What dif feren t ial advantagewill the

product offer over their competitors?

Product Strategies


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Kotler suggested that a product should be viewed in three

levels. Level 1: Core Prod uc t. What is the core benefit your

product offers?. Customers who purchase a camera arebuying more then just a camera they are purchasingmemories.

Level 2 Ac tual Product: All cameras capture memories.The aim is to ensure that your potential customerspurchase your one. The strategy at this level involvesorganizations branding,adding features and benefits toensure that their product offers a differential advantagefrom their competitors.

Level 3: Augmented p roduc t :What additional non-tangible benefits can you offer? Competition at this level isbased around after sales service, warranties, delivery andso on.


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Product design Will the design be the selling point for theorganisation as we have seen with the iMAC, the new VW Beetle orthe Dyson vacuum cleaner.

Product qual ity :Quality has to consistent with other elements of

the marketing mix. A premium based pricing strategy has to reflectthe quality a product offers. Product features: What features will you add that may increase the

benefit offered to your target market? Will the organisation use adiscriminatory pricing policy for offering these additional benefits?

Branding: One of the most important decisions a marketing

manager can make is about branding. The value of brands intodays environment is phenomenal. Brands have the power ofinstant sales, they convey a message of confidence, quality andreliability to their target market.

Product Decisions


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Pricing should take into account thefollowing factors:

Fixed and variable costs.

Competition

Company objectives

Proposed positioning strategies.

Target group and willingness to pay.

Pricing Strategies


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Penetration pricing: Where the organisationsets a low price to increase sales and market

share. Skimming pricing: The organisation sets an

initial high price and then slowly lowers the priceto make the product available to a wider market.

The objective is to skim profits of the marketlayer by layer.

Competition pricing: Setting a price incomparison with competitors.

Pricing Strategies


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Product Line Pricing: Pricing differentproducts within the same product range atdifferent price points. An example would be avideo manufacturer offering different video

recorders with different features at differentprices. Bundle Pricing: The organisation bundles a

group of products at a reduced price.

Psychological pricing: The seller here willconsider the psychology of price and thepositioning of price within the market place.The seller will therefore charge 99p instead1 or $199 instead of $200


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Premium pricing: The price set is high to reflectthe exclusiveness of the product. An example of

products using this strategy would be Harrods,first class airline services,

Optional pricing: The organisation sellsoptional extras along with the product tomaximise its turnover. This strategy is usedcommonly within the car industry.


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Refers to how an organisation will distribute theproduct or service they are offering to the enduser.

What channel of distribution will they use?

Two types of channel of distribution methods areavailable.

Indirect distribution involves distributing your productby the use of an intermediary.

Direct distribution involves distributing direct from amanufacturer to the consumer e.g. For example DellComputers

Place strategies


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INDIRECT

DISTRIBUTION

DIRECT

DISTRIBUTION


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Depending on the type of product being distributed there are three commondistribution strategies available:

1. Intensive d istr ibu t ion: Used commonly to distribute low priced orimpulse purchase products eg chocolates, soft drinks.

2. Exclusive distr ibu t ion :Involves limiting distribution to a single outlet.The product is usually highly priced, and requires the intermediary to placemuch detail in its sell. An example of would be the sale of vehicles through

exclusive dealers. 3. Selective Distr ibu tion:A small number of retail outlets are chosen todistribute the product. Selective distribution is common with products suchas computers, televisions household appliances, where consumers arewilling to shop around and where manufacturers want a large geographicalspread.

If a manufacturer decides to adopt an exclusive or selective strategy they

should select a intermediary which has experience of handling similarproducts, credible and is known by the target audience.

Dis tr ibu t ion Strateg ies


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A successful product or service means nothing unless the benefit ofsuch a service can be communicated clearly to the target market. Anorganisations promotional strategy can consist of:

Advertising: Is any non personal paid form of communication usingany form of mass media.

Public relations: Involves developing positive relationships with theorganisation media public. The art of good public relations is notonly to obtain favorable publicity within the media, but it is alsoinvolves being able to handle successfully negative attention.

Sales promotion: Commonly used to obtain an increase in salesshort term. Could involve using money off coupons or special offers.

Personal selling: Selling a product service one to one. Direct Mail: Is the sending of publicity material to a named personwithin an organisation. There has been a massive growth in directmail campaigns over the last 5 years.

PromotionStrategy

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module 1 part2