MARKETING MANGEMENT MBA (Executives)

The popular image of marketing manager is someone whose task is primarily to stimulate demand for the companys products. However, this is too limited a view of the diversity of marketing tasks performed by marketing managers. Marketing management has the task of influencing the level, timing; and composition of demand in a way that will help the organization achieve its objectives. The organization presumably forms an idea of desired level of transactions with target market. At times, the actual demand level may be below, equal to, or above the desired demand level. That is, there may be no demand, weak demand, and adequate demand, excessive demand, and so on, and marketing management has to cope with these different states. There are 8 different states of demand and the corresponding tasks facing marketing managers. )NEGATIVE DEMAND: A market is in a state of negative demand if a major part of the market dislikes the product and may even pay a price to avoid it.
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People have a negative demand for vaccinations, dental work, and gall bladder operations. Employers feel a negative demand for alcoholic employees. The marketing task is to analyze why the market dislikes the product and whether a marketing program consisting of product redesign, lower prices, and more positive promotion can change the markets belief and attitudes. For Example Polio drops and iodine salt. (2)NO DEMAND: Target consumers may be uninterested or indifferent to the product. Thus farmers may not be interested in a new farming method, and college students may not be interested in foreign language courses. The marketing task is to find out ways to connect the benefits of the product with the persons natural needs and interests.

(3)LATENT DEMAND: Many consumers may share a strong need that cannot be satisfied by any existing product. There is a strong latent demand for harmless cigarettes, safer neighborhoods, and more-fuel-efficient-cars. (Flash Drive and floppies)

The marketing task is to measure the size of the potential market and develop effective goods and services that would satisfy the demand.

(4)FALLING DEMAND: Every organization sooner or later faces falling demand for one or more of its products. Churches have seen their membership decline, and private colleges have seen their applications fall. The marketer must analyze the causes of market decline and determine whether demand can be re-stimulated through finding new target markets, changing the product features, or developing more effective communication. The marketing task is to reverse the declining demand through creative remarketing of the product. (5)IRREGULAR DEMAND: Many organizations face demand that varies on a seasonal, daily, or even hourly basis, causing problems of idle capacity or overworked capacity. Museums are under visited during weekdays and over crowded during weekends. The marketing task, called synchromarketing, is to find ways to alter the time pattern of demand through flexible pricing, promotion, and other incentives.

Organizations face full demand when they are pleased with their volume of business. The marketing task is to maintain the current level of demand in the face of changing consumer preferences and increasing competition. The organization must keep up or improve its quality and continually measure consumer satisfaction to make sure it is doing a good job.
(6)FULL DEMAND:

(7) OVERFULL DEMAND: Some organizations face a demand level that is higher than they can or want to handle. Thus the Golden Gate Bridge carries a higher amount of traffic than is safe. The marketing task, called Demarketing, requires finding ways to reduce the demand temporarily or permanently. General Demarketing requires finding ways to reduce the demand temporarily or permanently. General demarketing seeks to discourage overall demand and consists of such steps as raising prices and reducing promotion and service. Selective demarketing consists of trying to reduce the demand coming from those parts of the market that are less profitable or less in need of the service. Demarketing does not aim to destroy demand but only reduce its level, temporarily or permanently.
(8)UNWHOLESOME DEMAND:

Unwholesome products will attract organized efforts to discourage their consumption. Unselling campaigns have been conducted against cigarettes,

alcohol, hard drugs, handguns, X-rated movies, and large families. The marketing task is to get people who like something to give it up, using such tools as fear communications, price hikes, and reduced availability.

Demand can be measured and forecasted on many levels. The following figure shows 75 different types of demand measurement! For example, Motorola, the telecommunications and electronics products giant, might measure demand for five different product levels: for a specific model of pager (product item); for its entire line of pagers (product line); for all pagers made by Motorola and its competitors (product category); for its total sales from pagers (company sales); or the combined sales of Motorola, Intel, Panasonic, and all other competitors. (Industry sales). Diagramaitically

DEFINING THE MARKET:

Market demand measurement calls for a clear understanding of the market involved. The term market has acquired many meanings over the years. In its original meaning, a market is a physical place where buyers and sellers gather to exchange goods and services. In todays cities, buying and selling occurs in shopping areas rather than markets. To an economist, a market describes all the buyers and sellers who transact over some good or service. Thus the soft drink market consists of sellers such as Coca Cola and PepsiCo, and of all the consumers who buy soft drinks. To a marketer, a market is Set of all actual and potential buyers of the product or service . A market is the set of buyers, and an industry is the set of sellers. The size of market hinges on the number of buyers who might exist for a particular market offer. Potential buyers for a product or service have four characteristics: Interest, Income, Access and qualifications. Consider the consumer market for Honda motorcycles. To assess its market, Honda first must estimate the number of consumers who have a potential interest in owning a motorcycle. To do this, the company might contact a random sample of consumers and ask the following question: Do you have an interest in buying and owning a motorcycle?. If one person out of ten says yes, Honda might assume that 10 percent of the total number of consumers would constitute the potential market for motorcycles.

However, consumer interest alone is not enough to define the motorcycle market. Potential consumers have must have enough income to afford the product. They must be able to answer yes to the question: Can you afford to buy a motorcycle? The higher the price, the lower the number of people who can answer yes to this question. Thus market size depends on both interest and income. Other barriers further reduce motorcycle market size. For example, if Honda does not distribute its products in certain less developed countries, potential consumers might be restricted to certain groups. For example, some states or countries might ban the sale of motorcycles to anyone less than 18 years of age. In these areas, younger consumers would not qualify as Honda motorcycle customers. Thus, Hondss potential market consists of the set of consumers who have interest, income, and qualifications for motorcycles.

. COMPANY ORIENTATIONS TOWARD THE MARKETPLACE:

We have described marketing management as the conscious effort to achieve desired exchange outcomes with target markets. Now the question arises, What philosophy should guide these marketing efforts? What weights should be given to the interests of the organization, the customers, and society? Very often these interests conflict. Clearly, marketing activities should be carried out under some well-thought-out philosophy of effective and responsible marketing.

There are five alternative concepts under which organizations carry out marketing activities. These are as follows (1) THE PRODUCTION CONCEPT: The production concept holds that consumers will favor products that are available as well as highly affordable. Therefore management should focus on improving production and distribution efficiency. This is one of the oldest philosophies of marketing. The production concept is still a useful proposition in two types of situations. 1. When demand for a product exceeds supply 2. When product cost is too high improved productivity is needed the cost down.

(2)THE PRODUCT CONCEPT: The idea that consumers will favor products that offer most quality, performance, innovative features and that the organization should therefore devote its energy to making continuous product improvements. It is here worth mentioning that quality means fitness to purpose. For example some manufacturers believe that if they can build a better mousetrap, people will walk a mile to their door. But they are rudely shocked. Because buyers may well be looking a better solution to a mouse problem but not necessarily for a better mousetrap. The solution might be a chemical spray, an exterminating service or something that works better than a mousetrap. (3)THE SELLING CONCEPT: The selling concept is of the opinion that consumers will not buy enough of the organizations products unless the organization undertakes a large scale selling and promotion effort. This concept is typically practiced in unsought goods. Where unsought goods are those gods that the buyers do not normally think of buying. Such as Encyclopedias and insurance packages. Furthermore most firms practice selling concept when there is an overcapacity. Their aim is to sell what they make rather than what market wants. Such marketing carry high risks. Here the assumption is that customers will buy our products anyway or if they dont like it, they will possibly forget their disappointment and buy it again later. These are poor assumptions to make about buyers. Most studies show that dissatisfied customer does not buy again. Worse yet, while the average satisfied customer tells three other about good experiences, the average dissatisfied customer tells ten other about his or her bad experiences.

(4)MARKETING CONEPT: The marketing concept holds that achieving organizational goals depend on determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than do competitors. The marketing concept has been stated in colorful ways such as, We make it happen for you by Marriot. We are not satisfied until you are by General Electric. Efficiency is getting more done in lesser time provided better and faster are the underlying assumptions, whereas effectiveness means how well you align yourself to organizational goals. (5)SOCIETAL MARKETING CONCEPT: The societal marketing holds that the organizations should determine the needs, wants and interest of target market and deliver the desired satisfaction more effectively and efficiently than do competitors in a manner that maintains or improves consumer and society well being. It is the newest of the five marketing concepts. It asks if the firm senses, serves and satisfies individual wants is always doing what is best for consumer and society in the long run. According to societal marketing concept pure marketing concept overlooks possible conflicts between consumer short term wants and their long term welfare. For example fast food, burger and French fries are higher in fat and salt. Though conveniently packed but still creates pollution. Henry Ford once said that we sell cars in all colors as long as the color is black

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BOSTON CONSULTING GROUP APPROACH:

The Boston Consulting Group (BCG), a leading management consulting firm, developed and popularized an approach known as the growth share matrix as shown in the figure above. The growth-share matrix is divided into four cells, each indicating a different type of business: QUESTION MARKS:

Most businesses start off as question mark in that the company tries to enter a high-growth market in which there is already a market leader.

A question mark require a lot of cash, since the company has to keep adding plant, equipment, and personnel to keep up with the fast-growing market, and additionally, it wants to overtake the leader. The term question mark is well chosen because the company has to think hard about whether to keep pouring money into this business or get out.

STARS: If the question-mark business is successful, it becomes a star. A star is the market leader in a high-growth market. This does not necessarily mean that the star produces a positive cash flow for the company. The company must spend substantial funds to keep up with the high market growth and fight off competitors attacks. Stars are usually profitable and become the companys future cash cows. CASH COWS: when a markets annual growth rate falls to less than 10 percent, the star becomes a cash cow if it still has the largest relative market share. A cash cow produces a lot of cash for the company. The company does not have to finance a lot of capacity expansion because the markets growth rate has slowed down. And since business is the market leader, it enjoys economies of scale and higher profit margins. The company uses its cash cow businesses to pay it bills and support the stars, question marks, and dogs, which tend to be cash hungry DOGS Dogs describe company businesses that have weak market shares in lowgrowth markets. They typically generate low profits or losses, although they may throw off some cash. Having plotted its various businesses in the growth-share matrix, the company then determines whether its business portfolio is healthy. An unbalanced portfolio would have too many dogs or question marks and/ or too few stars and cash cows. The companys next task is to determine what objective, strategy, and budget to assign to each SBU. Four alternative objectives can be pursued: (1) BUILD: Here the objective is to increase SBUs market share, even forgoing shortterm earnings to achieve this objective. Building is appropriate for question marks whose shares have to grow if they are to become stars. (2) HOLD:

 Here the objective is to preserve the SBUs market share. This objective is appropriate for strong cash cows if they are to continue to yield a large positive cash flow. (3) HARVEST: Here the objective is to increase the SBUs short-term cash flow regardless of the long-term effect. This strategy is appropriate for weak cash cows whose future is dim and from whom more cash flow is needed. Harvesting can also be used with question marks and dogs. (4) DIVEST: Here the objective is to sell or liquidate the business because resources can be better used elsewhere. That is appropriate for dogs and question marks that are acting as a drag on the companys profits.

FORMULATING SALES STRATEGIES:

Sales Managers next have to chose the avenues that will lead to success. Sales strategies are blueprints for action that marshal and reconcile the sales function's resources with environmental constraints. Strategies answer the question " How do we get there"? It is unlikely that sales managers, except those in small companies, will be involved in developing corporate marketing strategies.All sales managers, however, must understand these strategies and how they are formulated. Further, they must understand the implications of these strategies for the sales organizations. Michael Porter has suggested three generic approaches that can serve as good starting point for strategic thinking:

(1) OVERALL COST LEADERSHIP:

A firm strives to achieve the lowest production and distribution costs so that it can price its products lower than those of competitors and capture a large share of the market.

To do this, a firm must be efficient at engineering, purchasing, manufacturing, and physical distribution. Sales and marketing skills are less important. Hence, sales managers will be most concerned with cost-cutting strategies that result in the fewest resources being allocated to sales development activities. (2) DIFFERENTIATION :

In this case, a firm tries to achieve superior performance in an important customer benefit area that is valued by the market. For example, the company can strive to be quality leader, the style leader, the technology leader and so forth. To do this, a Firm must use its strengths to create a competitive advantage in the chosen customer benefit area. A differentiation policy will have significant implications for sales strategy, especially if customer service is identified as the criterion for differentiation. (3)FOCUS: Here a firm concentrates on one or more specific market segments rather than going after the entire market. It identifies the needs of the chosen segment or segments and develops a targeted marketing strategy.

As a result, the sales strategy must also focus on the target market, and salespeople must become sales specialists rather than generalists.
IDENTIFYIG MARKET SEGMENTS, SELECTING MARKET TARGETS, AND DEVELOPING MARKET POSITIONS: A company that decide to operate in some broad market----whether consumer, industrial, reseller, or Governmentrecognize that it normally cannot serve all the customers in that market. The customers are too numerous, widely scattered and vary in their buying requirements. Some competitors will be in a better position to serve particular customer segments of that market. The firm instead of competing everywhere, often against superior odds, needs to identify the most attractive market segment that it can serve effectively.

The heart of modern strategic marketing can be described as STP marketing--Namely, Segmenting, Targeting, and Positioning. This does no obviate (to make unnecessary) the importance of LGD marketing Lunch, Golf, and Dinner.---- but rather provide a broader framework for strategic success in the marketplace. Sellers have not always held this view of market strategy. Their thinking passed through three stages.

(1) MASS MARKETING: Here the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers. This market strategy was proposed by Henry Ford, who offered the Model T Ford to all Buyers. They could have the car in any color as long as it is black. The traditional argument for mass marketing is that it will lead to the lowest cost and price and the create the largest potential market.

(2) PRODUCT VARIETY MARKETING: Here the seller produces several products that exhibit different features, styles, qualities, size and so on. They are designed to offer variety to buyers rather than to appeal to different market segments. General Motors practice this market strategy in that many of its cars go under different namesPontiac, Buick, Oldsmobile, etc.--- and exhibit only slight difference in features and styles. The traditional argument for product variety marketing is that customers have different tastes and their taste change over time. Customers also seek variety. (3) TARGET MARKETING: Here the seller distinguish the major market segments, target one or more of these segments and develops product and marketing program tailored to each selected segment. Volkswagen, Mercedes and Porsche represent automobile companies that have targeted clear customer segments.

Todays companies are finding it increasingly unrewarding to practice mass marketing or product variety marketing. Nowadays companies are following hundreds of mini-markets characterized by different lifestyle, groups pursuing different products in different distribution channels and attending to different communication channels. Companies are increasingly embracing target marketing. Target marketing helps sellers identify marketing opportunities better. The seller can develop the right offer for each target market. They can adjust their price, distribution channel, and advertising to reach the target market efficiently. Instead of scattering their marketing efforts (Short Gun Approach, they can focus it on the buyers with whom they have the greatest chance of satisfying,(rifle approach)

STEPS IN MARKETING SEGMENTATION, TARGETING, AND POSITIONING: Target marketing calls for three major steps. The first is marketing segmentation, the act of dividing a market into distinct groups of buyers who might require separate product and/or marketing mixes. The company identifies different ways to segment the market and develop profiles of the resulting market segments. The second step is market targeting, the act of developing measures of segment attractiveness and selecting one or more market segments to enter. The third step is product positioning. The act of establishing viable competitive positioning of the firm and its offer in each target market. MARKET SEGMENTATION: Markets consist of buyers, and buyers and buyers differ in one or more respects. They may differ in their wants, resources, geographical locations, buying attitudes, and buying practices. Any of these variables can be used to segment a market. CUSTOMIZED MARKETING: In early markets, many sellers made their goods for specific customers. Tailors made a different for each woman; and shoemakers made a special pair for shoes for each pair of feet. These craftsmen did not produce for inventory but for order because they did not know what size or materials their customers would want. Even today some people will order customized suits, shirts and shoes to fit their

individual requirements. Generally the advent of mass production led procedure to produce standard-size goods inventory, and this spelled the end of many job shops Today customized marketing is coming back in a form that Stanley Davis calls mass customization. This is a strange oxymoron, like laborious idleness and Permanent change and so on. (Oxymoron is a combination of contradictory words like cruel kindness) But it well describes new marketing possibilities opened up by advance manufacturing technology. Mass customization is the ability to prepare on a mass basis individual design products to meet each customers requirements. Here are some examples: As a result of General Motors Saturn project American car buyers will e able to walk into GM dealership, sit down at a computer terminal, and select the car colors, engine, seat materials, and radio and so on. Their order will be transmitted to the auto plant, which will then produce the desired car. In Japan home buyers can sit down with a sales representative at a computer terminal and design their home. They can chose from twenty thousand different standardized parts, make the room as large or small as they want, and design their over all layout. The information is sent electronically to the factory where the parts are put together on an assembly line stretching one-third of mile long. The prefabricated modules are delivered to the site within thirty days, and the family can then move into its customized home. There are some mens clothing stores in Japan that can custom-tailor suits without any tailors! The customer is measured electronically, and the information travels to a cutting shop where laser equipment directs the cutting and sewing of the cloth. The customer comes back the next day to pick up his custom-tailored suit. Another development is an electronic mirror that superimposes images of various suits on the customer body in different colors, styles and materials, after the customer find a pleasing combination, the information is sent electronically to the factory to cut that suit. Customization permits people to participate in producing exactly what they want. That people enjoy this is demonstrated in a number of situations. Salad bars are becoming increasingly popular in restaurants because they permit people to compose their own salads. Similarly certain ice-cream parlors allow people to make their own sundaes. In general, as the cost of customization falls and approaches the cost of segmentation, more companies will return to customized marketing.

ORGANIZATIONAL BUYING DECISIONS: An individual or buying centre can make an organizational buying decision. When product purchases are relatively simple, individual buyers are responsible for the decision. When products are complex or involve large expenditures, a buying centre will be responsible. Individual buyers are more likely to make decisions known as Straight Rebuy, buying centers decide on new buys, and either individual individual buyers or buying canters make decisions for modified rebuys. The Straight rebuy is a recurring purchase that can be handled on a routine basis, such as when an institution buys office supplies or manufacturer buys metal fasteners. These purchases involve standardized products with routine usages. Little information search is required. Usually a straight rebuy will be triggered by a low inventory level. It is similar to habitual purchasing in Consumer Behavior. Vendors are often selected from an approved list. An Approved vendor List is a list of sellers that have been approved by the company based on factors such as product quality, delivery and service reliability, and past performance. A MODIFIED REBUY Is a recurring purchase that requires some information on product specifications and vendor capabilities? A modified rebuy might involve reevaluating a straight rebuy because of a new product or change in technology--- For example, the introduction of a bonded adhesive in place of a metal screw. Buying centers makes more complex modified-rebuy decisions. A NEW BUY: Is a decision that has not occurred before and requires extensive information search on product specifications and vendor capabilities since there is little experience and precedent to go on. Organizational decisions also require selection of a product and a vendor. Selection of the product should determine selection of the vendor. But frequently, it is the other way around---- the vendor is selected based on past loyalties or plain inertia on the part of the manager and the product is selected as a result of vendor selection. One study found that many organizational buyers are reluctant to change to new stores because of an inability to cope with any complications resulting from such a change. THE ORGANIZATIONAL BUYING DECISION PROCESS: There are mainly three types of organizational buying decisions namely,

complex decision making, limited decision-making and habitual decisionmaking. (1)COMPLEX DECISION MAKING: The characteristics of complex decision-making are High Risk. Extensive information search. Detailed evaluation of alternative vendors. Complex buying decisions (New buys) are usually made by a group because of the financial and performance risks involved in buying a new product. An approved vendor list is rarely used. (Information alert One Bottle of Nestle Waters cost company 11 rupees. Cost of water used therein is only 3 bucks. Because it would be too risky to limit choice only to firms from which the company already buys. Once the decision is made, post purchase evaluation is also extensive, because product performance is monitored carefully. In a new buy situation, the people with the most influence are usually engineers, because they have the best capability to set and evaluate specifications for complex products. Complex decision-making processes in organizational buying have the same steps as in consumer behavior model of Need Arousal, Information search, Product and vendor evaluation,, purchase, and post purchase evaluation. Cognitive dissonance is anxiety after purchase. F M A M J J A S _ _ _ S M T W T__

(2) LIMITED DECISION MAKING:

The characteristics of limited decision-making are Limited information search and vendor evaluation. Occasional use of an approved vendor list, and limited post-purchase evaluation. Production and purchasing executives are the most influential parties for production is to initiate a request, and the purchasing department filling it. The expertise of an engineer is less important since the product or service is not new.

Limited decision is analogous to modified rebuy. If a company decides to buy an existing product with some modifications, buying group may not be required. One or two individuals might instead make the decision, with a more limited search for information and fewer vendors under consideration. (3) HABITUAL BUYING BEHAVIOR:

Straight rebuy are similar to habitual purchasing behavior. Straight rebuys are usually initiated when a products inventory reaches a reorder point. Purchase is then automatic. A purchase order is issued to an approved vendor, who fills it based on prearranged terms for price and delivery. A vendor is on the approved list because past performance has been satisfactory. If its prices become higher than those of competitors, or product quality deteriorates, or delivery slows down, the vendor will probably taken of the approved list.

CHOOSING BRAND ELEMENTS TO BUILD BRAND EQUITY: Brand elements are devices which serves to identify and differentiate a brand from other brands and include, name, sign, symbol, term, character, slogans, jingles, and package design. Before you chose any brand element it should meet certain criteria. (I)

MEANINGFULNNESS:

Te word itself suggests that brand elements should have some meaning associated with the product and it should assist in the formation of brand associations. For Example PIA .Green color and Mobilink Platinum and Indigo colors embedded in the globe are meant for top of the end high quality service and by marrying them in a globe shows their aspiration for global coverage of highest class . (2) MEMORABILIY : A good brand element should be easily recognized For example Colonel Sanders of KFC, DING DONG of Hilal confectionaries. Majority of the people can understand and remember the meaning of a good brand element.
(3) TRANSFERABILITY:

 A brand element should be transferable across product line extensions and across geographical boundaries e.g. Duracell (Durable) meaning durable (4) ADAPTABILITY : A good brand element change or adopt to changing conditions. For example Win XP 2004. 2004 changes with time. (5) PROTECTABILITY: A brand element should be protectable legally as well as competitively. For example Mecca Cola French Company forced Mecca Cola by law to shift to thunder cola. BRAND NAME: Should be easy to pronounce or spell. Should be meaningful or familiar. It can be fictitious eg Compaq (comp pack).Often we relate a brand or a company under the founders name. eg Edwards College. But the major problem with this is that it is not communicating certain benefits of the product. Eg Head & Shoulder---dandruff. Duracell--- more useful life. LOGO AND SYMBOLS Logos and symbols are more visual than brand name. A brand name given a visual effect or represented in a certain manner, then it is known as a logo. eg Ufone and Imsciences. Symbols are non word in nature eg Nestle Nest and birds BENEFITS OF LOGOS : (1) Easily recognized As they are in the form of symbols therefore easily recognized. Even if they are words they are distinguished. (2) Versatile: Since logos are non verbal in nature. It is easier to up date them over time and transfer them across other cultures.

(3) Short form of long brand name: Serve as useful replacements and provide convenience. (4) Useful for representing service: As they are intangible therefore difficult to distinguish. CHARACTER : Characters are special type of symbols that take on human or real life characteristics. For example Gold Leaf John Player. BENEFITS OF CHARACTERS: (1) May replace cost of celebrity (2) They are quick attention grabbers as they create interest. (3) a character could be used to communicate a key product benefit to the consumers. eg Maytag Company are using a lonely repairperson to convey the reliability of the product. (4) A character is easy to transfer across product categories. POTENTIAL PROBLEMS WITH CHARACTERS: (1) Sometimes a character may get so strong and generate so much interest that it can overtake other brand elements and adversely affects brand awareness. (2) If some characters are being used by the company for a long period of time, they need to be updated at regular intervals.

SLOGANS:

Short phrases that communicate descriptive or persuasive information about the brand. For example Just Do It. Let your fingers do the walking for you, Figure and ground in the ad For a good slogan it should be simple, precise and short. They communicate positioning strategy of the product. JINGLES: Jingles are defined as musical messages written and performed around a brand. They are descriptive in nature. Jingles are extended musical slogans. For example DING DONG, Yehi Tu hai apna pan, Walls Music.

PACKAGING: Design of the package is a brand element. For example Pepsi and Coca Cola Bottling. Remember that physical design of the package is not a form of brand elements until it differentiates from others. PRINCIPLES OF PERSONAL SELLING:

Personal selling is an ancient art that has spawned (generated) a large body of literature (written works produced in a language) and many principles. Effective salespeople operate on more than just instinctmean a natural aptitude. They are highly trained in methods of territory analysis and customer management. THE PERSONAL SELLING PROCESS Companies spend hundreds of millions of dollars on seminars, books, cassettes, and other materials to teach salespeople the art of selling. Some of the well-known books are: 1. How to sell anything to anybody 2. How I raised myself from failure to success in selling 3. The four-minute sell Most companies take a customer oriented approach to personal selling. They train salespeople to identify customer needs and find solutions. This approach assumes that customer needs provide sales opportunities that customers appreciate good suggestions, and that customers will be loyal to salespeople who have their long-term interests at heart. Problem-solver salesperson fits better with the marketing concept than does hard sell salespersons. Buyers today want solutions, not smiles. They want salesperson that could listen to their concerns, understand their needs and respond with right products and services. The qualities that purchasing agents dislike most in salesperson

include, being pushy, late, unprepared or disorganized. The qualities they value most include empathy, honesty, dependability, thoroughness and follow-throughs. STEPS IN SELLING PROCESS:

(1) Prospecting and qualifying----- (2 Preapproach---3) Approach(4)Presentations and demonstration---(5)Handling objections----(6)Closing-----(7)Follow Up.
Steps focus on the goal of getting new customers and obtaining orders from them. However, most salespeople spend much of their time maintaining existing accounts and building long-term customer relationships. Steps are prospecting and qualifying, preapproach, handling objections, closing and follow up. (1) PROSPECTING AND QUALIFYING:

The first step in selling process is prospecting. i.e. Identifying qualified potential customers. The salesperson must approach many prospects to get just a few sales. But we should always keep the general rule of thumb for such situation as 80 percent of your business comes from 20 percent of your customers

Sales person can ask current customers for the names of prospects. Other sources can be Cold Calling, Yellow pages, and Telephone Directories etc. Cold calling means to drop unannounced on various offices and try to find out an account. Salesperson also needs to qualify accounts ie how to identify the good ones and screen out the poor ones. MAN other than this the following variables should also be taken into consideration such as financial ability, volume, special needs, location and possibilities for growth. (2)PRE APPROACH: The step in selling process in which the salesperson learns as much as possible about a prospective customer before making a sales call. Call objectives are determined Personal visit, phone call or a letter Best time scheduling

(3)APPROACH: The step in selling process in which the salesperson meets and greets the buyer to get the relationship off to a good start. This step involves the salespersons appearance, opening lines, and the follow up remarks. The opening lines should be positive such as, Mr Zaheer, I am Tariq Yousafzai from ABC company and I appreciate your willingness to see me. I will do my best to make this visit profitable and worthwhile for you and your company. This opening might be followed by some key questions to learn more about the customer needs or by showing displays or sample for checking. (4)PRESENTATION AND DEMONSTRATION:

The step in selling process in which the salesperson tells the product story, to show the buyer how the product will make or save money for the buyer. Demonstrations can be done through booklets, flipcharts, slides, videodiscs, and product samples. If buyers can see or handle the product they will better remember its features and benefits. (5)HANDLING OBJECTIONS:

Customer almost always have objections during the presentation or when asked to place an order. The problem can be either logical or psychological and objectives are often unspoken. In handling objections salesperson should use a positive approach, seek out hidden objections, ask buyer to clarify any objections, take objections as opportunity to provide more information and to return the objections into reasons for buying. (6)CLOSING: The step in selling process in which the salesperson asks the customer for an order or to place an order. Physical actions, comments and questions. For example the customer might sit forward and nod approvingly or ask about prices and credit terms.

(6) FOLLOW UP: Last step in selling process in which the salesperson follows up after the sale to ensure customer satisfaction and repeated business. Details on delivery time. Purchase terms. Installation etc.

STRATEGIC BRAND MANAGEMENT:

History of Branding

Branding in one form or another has been around for centuries1.The word brand comes from the Old Norse brand, meaning to burn, and from these origins made its way into Anglo-Saxon and adopted the meaning of to be hot2. It was by burning that early man stamped ownership on his livestock, and with the development of trade buyers would use brands as a means of distinguishing between the cattle of one farmer and another. A farmer with a particularly good reputation for the quality of his animals would find his brand much sought after, while the brands of farmers with a lesser reputation were to be avoided or treated with caution. Thus the utility of brands as a guide to choice was established, a role that has remained unchanged to the present day3. Livestock branding was also used by the ancient Egyptians as early as 2700 BC as a theft deterrent, as stolen animals could then be readily identifiable4.

Branding originally focused on trademark and differentiating5. Brick makers in ancient Egypt put symbols on their bricks to identify their products capabilities6. Some of the earliest

manufactured goods in mass production were clay pots, the remains of which can be found in great abundance around the Mediterranean region, particularly in the ancient civilizations of Etruria, Greece and Rome. There is considerable evidence among these remains of the use of brands, which in their earliest form were the potters mark. A potter would identify his pots by putting his thumbprint into the wet clay on the bottom of the pot or by making his mark: a fish, a star or cross, for example. From this we can safely say that symbols (rather than initials or names) were the earliest visual form of brands4. Marks have been found on early Chinese porcelain (China wear), on pottery jars

from ancient Greece and Rome and on goods from India dating back to about 1300 B.C7.

In Ancient Rome, principles of commercial law developed that acknowledged the origin and title of potters marks, but this did not deter makers of inferior pots from imitating the marks of well known makers in order to dupe (fool) the public. In the British Museum there are even examples of imitation Roman pottery bearing imitation Roman marks, which were made in Belgium and exported to Britain in the first century AD. Thus as trade followed the flag or Roman Eagle so the practice of unlawful imitation lurked close behind, a practice that remains commonplace despite the strict rules of our modern, highly developed legal systems8. An English law was passed in 1266 required bakers to put their mark on every loaf of bread to be sold. To the end that if any bread be faultie in weight, it may be knowne in whom the fault is9. Goldsmiths and Silversmiths were also required to mark their goods, both with their signature or personal symbol and a sign of quality of the metal. The first recorded brands in the Western Hemisphere were the Three Latin Crosses of Hernn Cortz, who landed in Mexico in 1519. Additionally, brands are easily recognized patterns that are used for identification purposes. Livestock being driven across an open range necessitate an easy method of identification to prevent ownership disputes when the animals were commingled with other stock. Brands were subsequently used in the American west as a promise on part of a seller to make good on defective livestock sold to buyers10. In the US tobacco manufacturers had been exporting their crop since the early 1600s. By the end of early 1800s manufacturers had packed hales of tobacco under labels such as Smiths Plug and Brown and Blacks Twists. In 1850s tobacco manufacturers realized more creative names such as Cantaloupe, Rock Candy Wedding Cake and Lone Jack11. In the 17th and 18th centuries, when the volume manufacture of fine porcelain, furniture and tapestries began in France and Belgium largely because of royal patronage factories increasingly used brands to indicate quality and origin. At the same time, laws relating to the hallmarking of gold and silver objects were enforced more rigidly to give the purchaser confidence in the product12.

However, the wide scale use of brands is essentially a phenomenon of the late 19th and early 20th centuries. The industrial revolution, with its improvements in manufacturing and communications, opened up the Western world and allowed the mass marketing of consumer products. Many of today's best-known consumer brands date from this period: Singer sewing-machines in the USA (1850's), McCormick reapers in the USA (1850's) Pear's Soap in UK (1860's) Sapolio cleanser in the USA (1869), Henkel's Bleich Soda in Germany (1876) and Prudential Insurance in the UK (1890's) are just some examples13.

Brands in the field of marketing originated in the 19th century with the advent of packaged goods. Industrialization moved the production of many household items, such as soap, from local communities to centralized factories. These factories, generating mass-produced goods, needed to sell their products in a wider market, to a customer base familiar only with local goods. It quickly became apparent that a generic package of soap had difficulty competing with familiar, local products. The packaged goods manufacturers needed to convince the market that the public could place just as much trust in the non-local product. Around 1900, James Walter Thompson published a house ad explaining trademark advertising. This was an early commercial explanation of what we now know as branding14. According to Keller (1998) Branding passed thorough three distinct phases in the twentieth century i.e. Dominance of Mass Marketed Brands (1915 to 1929), Challenges to Manufacturers Brands (1930 to 1945) and Establishment of Brand Management Standards (1946 to 1985)15. Definition of Branding: A distinguishing characteristic of modern marketing has been its focus upon the creation of differentiated brandsthe idea has been to move beyond commodities to branded products to reduce the primacy of price upon the purchase decision, and accentuate the bases of differentiation (Aaker, 1991, pp. 7-8)16. However, Goodyear (1996)17 and de Chernatony,(2001)18 showed that there is no such thing as a brand per se, rather a spectrum of interpretations, often coloured by the business and societal environment in which they exist. This spectrum is a continuum of consumerisation, starting from the primitive selling focus of a commodity market, developing into the concept of brands as competition increases. With further intensification of competition, classic branding emerges as brands develop a personality, and then post-modern marketing brings with it socially constructed brand meanings and increasingly cynical consumers who construct their own brand identities. A more developed level is suggested where brands can be seen as icons and self-segmentation in a saturated marketplace is accomplished entirely by usage. Although McKenna (2000) suggests that marketing and branding are losing their meaning in the dot-com world, there is considerable evidence that, ontologically speaking, brands exist whatever definition of the brand is developed or chosen, and regardless of whether it is in a physical or virtual environment. De Chernatony and Dall'Olmo Riley (1997) quote consultants describing the brand as a variety of shorthands, including a bundle of meanings, trust, or assurance of conformance to standards19. De Chernatony and DallOlmo Riley (1998) found twelve main themes in their definition of branding drawn from a content analysis of over 100 articles from trade and academic journals and in interviews with leading practitioners in the area20. These were the brand

as legal instrument, as logo, as company, as shorthand, as risk reducer, as identity system, as image in consumers minds, as value system, as personality, as relationship, as adding value, and as evolving entity. Clearly the operational definitions of a brand vary. De Chernatony and DallOlmo Riley (1999) also developed a simple taxonomy of themes from 21 definitions of a brand from the literature that classified the definitions along a continuum from input-based (brands as suppliers creations), to output-based (brands as existing in consumers minds), and stressed that the pure input-based concept of the brand, such as a logo, is obsolete, or at least incomplete, in todays complex environment21. Brands are clearly complex entities linking suppliers activities (input) with perceptions in consumers minds (output). Given the numerous interpretations of the concept of the brand we adhere to the definition A successful brand is an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant unique added values which match their needs most closely.22 (de Chernatony and McDonald, 1998). Others worthy of mentioning are as follows: The Oxford American Dictionary (1980) contains the following definition: Brand (noun): a trade mark, goods of a particular make: a mark of identification made with a hot iron, the iron used for this: a piece of burning or charred wood, (verb): to mark with a hot iron, or to label with a trademark. Similarly, The Pocket Oxford Dictionary of Current English (1934) says: Brand. 1. n. Piece of burning or smouldering wood, torch, (literary); sword (poet.); iron stamp used red-hot to leave an indelible mark, mark left by it, stigma, trade-mark, particular kind of goods (all of the best bb.). 2. v.t. Stamp (mark, object, skin), with b., impress indelibly (is branded on my memory) According to Kotler 'Brand is an offering from a known source'23. According to Keller ' A brand is a product, but one that adds other dimensions that differentiate them from those of competitors.'24 Doyle argues that brand is merely anything which identify and distinguish and offering from its rival's product. The emphasis is put on an successful or positive brand which is defined as,' A successful brand is a name, symbol, design, or some combination, which identifies the 'product' of a particular organization as having a sustainable differential advantage.'25 Hislop of Dynamic Logic puts it like, 'Branding is the process of creating an association between a symbol/object/emotion/perception and a product/company with the goal of driving loyalty and creating differentiation.'26 American Marketing Association has defined a brand as' A name, term, sign, symbol, or design, or a 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.'27

The strategic triangle

In the construction of any business strategy, three main players must be taken into account: the corporation itself, the customer and the competition. Each of these "strategic three C's" is a living entity with its own interests and objectives. Ohmae calls them, collectively, the "strategic triangle". Seen in the context of the strategic triangle, the job of the strategist is to achieve superior performance relative to competition, in the key factors of the business. At the same time the strategist must be sure that his strategy properly matches the strengths of the corporation with the needs of a clearly defined market. Positive matches of the needs and objectives of the two parties involved are required for a lasting good relationship; without it the corporation's long-term viability may be at stake. In terms of these three key players, strategy is defined as the way in which a corporation endeavours to differentiate itself positively from its competitors, using its relative corporate strengths to better satisfy customer needs.

Customer

Value

Value

Corporation

Cost

Competitors

Figure 2.1: The Strategic Triangle

Source: Ohmae, K. (1982) the Mind of the Strategist, McGraw Hill, London

High brand equity has a number of advantages for a company:

1. The company enjoys low marketing costs. Because awareness and loyalty already exist and minimum spending is required for sales in the form of advertisements and other awareness creating activates. 2. Despite high bargaining power of retailers and other members of distribution channels, high brand equity gives trade leverage during bargaining to companies as customers expect retailers to carry the products. 3. Companies can charge higher prices and/or attract higher sales volumes because of their brands. Resulting in higher profits either way. 4. Almost eighty percent of all new products lunched are brand extensions29. And in consumer products this percentage goes upto ninety-five percent30. Companies can launch brand extensions more easily, if their parent brand has a good reputation31. 5. Brands offer companies some level of protection against price competition. 6. Ward (1999) has mentioned ten entry barriers namely, Scale of Economies, Technologies, Patents, Economies of Scales, License, Learning Curve, Legal Constraints, Channel of Distribution, Low per Unit Costs and Branding. Out of these only branding can provide sustainable competitive advantage, at a cost in long term as the remaining tend to parish over time32. 7. Higher brand equity results in greater book value for companies during mergers and acquisitions. Here is a list of Companies sold for values much above their book value: Company Value Gillette 28 Billion US $ RJR Nabisco 30 Billion US $ Kraft 12.9 Billion US $ Pullsbury 5.5 Billion US $ Rowntree 4.5 Billion US $ Source: Variuos

The value of Brands is even higher for FMCG companies. According to Keller (1998) for these companies net tangible assets may value only up to ten percent. And out of the remaining ninety percent up to seventy percent is contributed by brands33. Brands - building a brand34:

Professor David Jobber identifies seven main factors in building successful brands, as illustrated in the diagram below: Quality: Quality is a vital ingredient of a good brand. Remember the core benefits the things consumers expect. These must be delivered well, consistently. The branded washing machine that leaks, or the training shoe that often falls apart when wet will never develop brand equity. Research confirms that, statistically, higher quality brands achieve a higher market share and higher profitability that their inferior competitors. Positioning: Positioning is about the position a brand occupies in a market in the minds of consumers. Strong brands have a clear, often unique position in the target market. Positioning can be achieved through several means, including brand name, image, service standards, product guarantees, packaging and the way in which it is delivered. In fact, successful positioning usually requires a combination of these things. Repositioning: Repositioning occurs when a brand tries to change its market position to reflect a change in consumers tastes. This is often required when a brand has become tired, perhaps because its original market has matured or has gone into decline. Communications: Communications also play a key role in building a successful brand. We suggested that brand positioning is essentially about customer perceptions with the objective to build a clearly defined position in the minds of the target audience. All elements of the promotional mix need to be used to develop and sustain customer perceptions. Initially, the challenge is to build awareness, then to develop the brand personality and reinforce the perception. First-mover advantage: Business strategists often talk about first-mover advantage. In terms of brand development, by first-mover they mean that it is possible for the first successful brand in a market to create a clear positioning in the minds of target customers before the competition enters the market. There is plenty of evidence to support this. Think of some leading consumer product brands like Gillette, Coca Cola and Sellotape that, in many ways, defined the markets they operate in and continue to lead. However, being first into a market does not necessarily guarantee long-term success. Competitors drawn to the high growth and profit potential demonstrated by the market-mover will enter the market and copy the best elements of the leaders brand (a good example is the way that Body Shop developed the ethical personal care market but were soon facing stiff competition from the major high street cosmetics retailers. 6. Long-term perspective: This leads onto another important factor in brand-building: the need to invest in the brand over the long-term. Building customer awareness, communicating the brands message and creating customer loyalty takes time. This means that management must invest in a brand, perhaps at the expense of short-term profitability.

Internal marketing: Finally, management should ensure that the brand is marketed internally as well as externally. By this we mean that the whole business should understand the brand values and positioning. This is particularly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives. Think of the brands that you value in the restaurant, hotel and retail sectors. It is likely that your favorite brands invest heavily in staff training so that the face-to-face contact that you have with the brand helps secure your loyalty. Classification systems of FMCG:

Over the time there have been several primary classification systems for classification of Goods, the first of which was developed by Charles Parlin in 191235. His system consisted of three categories: Convenience goods articles of daily purchase, such as groceries; Emergency goods articles of an immediate necessity, such as medicines; Shopping lines articles of significant importance, such as suits or dresses. These purchases required more thought and deliberation than either convenience or emergency goods36 (Sheth et al. 1988). The next prominent classification system developed was by Melvin Copeland in 192337. His system also consisted of three categories: Convenience goods articles customarily purchased at easily accessible stores; Shopping goods articles for which the consumer desires to compare prices; Specialty goods articles that have some particular attraction for the consumer, other than price, requiring special effort on the part of the consumer to obtain. A third prominent classification system, worthy of mention, was developed by Leo Aspinwall in 195838. His colour system also consisted of three categories. However, his system also used five characteristics to differentiate the three types of goods: Replacement rate the rate at which a good is purchased and consumed by users; Gross margin the money sum that is the difference between the cost and final realized sales price; Adjustment the services applied to goods in order to meet the exact needs of the Consumer; Time of consumption the measured time of consumption during which the good gives up the desired utility; Searching time the measure of average time and distance from the retail store.

In 1977, Holbrook and Howard proposed the addition of a fourth category to Copelands theory: preference goods39. These are goods the customer perceives as having greater risk, yet expects to exert little shopping effort. In 1980, Enis and Roering set out to improve upon Holbrook and Howards work by addressing the question of consumer perspectives versus marketer perspectives. In doing so, they developed new definitions for the four categories now labelled specialty products, shopping products, convenience products and preference products40. Later, in 1986, Murphy and Enis further refined the category definitions, resulting in the following: Convenience products lowest in terms of both effort and risk. The consumer will not spend much money or time in purchasing these products, nor does he or she perceive significant levels of risk in making a selection. Preference products slightly higher on the effort dimension and much higher on risk. The distinction between convenience and preference products is primarily one of buyer perceived risk. The reason the consumer perceives this higher level of risk is often through the efforts of the marketer, particularly branding and advertising. Shopping products buyers are willing to spend a particular amount of time and money in searching for and evaluating these products. Consumers for these high involvement products also perceive increased levels of risk. Specialty products highest on both risk and effort dimensions. Major distinction between shopping and specialty products is on the basis of effort, not risk. The monetary price is usually higher, as is the time. At the limit, the buyer will accept no substitutes. One Classical definition of FMCG is A low-priced item which is used rapidly with a single or limited number of consumptions (as opposed to consumer durable or consumer service).41* (Baron et al., 1991, p.83) Criticism on Branding and their implication on Brand Development Models: Modern business literature and empirical studies has evoke many question marks regarding the present branding and marketing practices those have profound impact on the way brands are articulated, developed and modelled. Here some criticism is discussed and then their implication on the modern day branding practices

The deep-seated criticism also stems from several new examinations of the brand-consumer relationship. Mitchell (2003) for example suggests that instead of brands fulfilling their role as the consumers friend, as trusted beacons of superior value41, brand manipulation or obfuscation manifests as a systemic disorder or brand narcissism, a disorder that reaches right back into the heart of the way we create, distribute and exchange value.

The narcissistic tendencies of brands arises, Mitchell argues, from a combination of the structural, operational, motivational and methodological causes that inherently define modern branding and our commercial system42. Willmott (2003) in his book Citizen Brands also focuses on a relationship disorder43. He suggests that many commercial organizations have forgotten the importance of mutual relationships that must exist between themselves and other key stakeholders. He argues that this neglect is becoming more serious and that without change, most corporate and brand strategies will be increasingly dysfunctional in the long term44. Ind (2003) again adopts a similar theme. He suggests that brands have reached a watershed in terms of their relevance, which they are for and the methods by which they are executed. Echoing Mitchell, he suggests that many commercial brands, in their primary pursuit of sales, growth and profitability can be meretricious and they can try to limit our freedom of choice. These are seller-centric brands that operate from the perspective of the brand builder they undermine the very reason we pay for the reassurance of brands: trust45.

Kitchin (2003) also discusses issues of trust, relationships and branding. He places the three in the wider context of the socio-economic trust vacuum that now exists between individuals and commercial and public institutions46. Yet another form of criticism is concerned with the relevance of modern day marketing practices to individual consumer needs and lifestyles. Despite the fact that over the last decade, there has been widespread awareness and acceptance of how an authentic relational market orientation can create superior customer and brand value, relationship marketing has been described as being by Varey, (2002) undermined (even lost) by an unreflective and narrow instrumental adoption.47 Zuboff and Maxmin (2003) in The Support Economy argue that the widespread adoption of relationship marketing is now having a growing, negative impact on customer perception and experience of brands, even though it claims to resolve many of the limitations of transactional, mass marketing.48 They suggest that despite the valid discovery of the individual in relational marketing thinking and brand values, in practice many organizations use the approach to pursue transaction cost-efficiencies rather than fundamentally reinvent the means to create and deliver customer value. Kitchin (2003) makes the same point more dramatically, The offer remains the same; delivery is not improved. What happens instead is that the transaction is wrapped in a layer of humanity, while the corporation struggles to force its corporate or parental behaviour to catch up. Such criticisms are grounded by empirical research into contemporary marketing

practice. A study by Coviello (2002) and his colleagues for example, found that most marketing within individual firms is characterized by a hybrid approach, partly transactional and partly relationship building.49 Although Coviello et. al. were able to conceptualize the pluralistic nature of modern marketing, they acknowledge that their research does not explain why marketing managers choose to implement a hybrid or even a predominantly transactional approach. I regard this pluralistic pattern of marketing practice as illuminating in its own right for three reasons. 1. First, it suggests that many marketers are engaged in a sophisticated form of competitive leapfrogging, where the focus is on the incremental, trial and error improvement of 4Ps marketing mix practice rather than the achievement of a fundamental breakthrough in the role and value of marketing and branding itself. 2. Second, it confirms that marketers use the relationship marketing philosophy, language, techniques and managerial practices to pursue tactical, promotion-intensive, selling goals. 3. Third, the findings demonstrate that marketing and brand management has an identity problem, which underlines why the above writers continue to question and critique its content, emphasis, boundaries and even its very essence. Without doubt, marketing and brand managers are under growing pressure to adapt to the changing values and behaviour of all stakeholders whether individual customers, consumers, employees, business partners, institutions or people and society in general. As Firat, Dholakia and Venkatesh (1995) suggest, there is a pressing need for them to find new ways to close the growing gap between marketing and branding practice on the one hand and stakeholder relevance, values and value on the other.50 Of course, buyercentricity argues that one means for businesses to address this value gap is, first and foremost, to respond to the changing needs, lifestyles and values of people in their role as consumers or buyers. I now explore these changes and new demands in more detail. Mitchell (2001) evaluates issues of product proliferation and consumer confusion from a whole systems perspective, a view of marketing and brand practice that extends beyond the traditional boundaries of an individual enterprise and which regards marketing and branding practice from a more sociological and ecological angle.51 Through this lens, Mitchell identifies a negative whole-system effect of marketing practice, where the sum of many individual rational corporate marketing and brand management decisions creates collective irrationality and diminishing returns for consumers and society in general. Once again, we have empirical sources to support these arguments. Fournier, Dobscha and Mick (1999) for example, researched the connection between the confused

consumer and relationship marketing and contemporary brand practice. They were concerned that in many instances, the very techniques used to create relationships are often the ones that are destroying those relationships.

Willmott (2003) summarizes the Societal Value brand attribute succinctly: It means understanding society and the problems and issues that are engaging people be they customers, employees, shareholders or whoever around the world.52 It is about being outward looking, not inward looking; it is about actively participating in society rather than passively ignoring it. It is about putting society at the heart of the company.53

A CASE IN VIEW: DELL BUILT TO ORDER STRATEGY.

Michael Dell was just 20 when he started the company that would top the industry. The computer whiz had just $1000 and a novel idea: To eliminate the retailer and sell directly to the consumer. At the time, IBM personal computers sold in stores for about $ 3000. After taking them apart and rebuilding them, Dell realized the components could be purchased for a third of the price. I would enhance a PC the way another guy would soup up a car, and then I would sell t for a profit and do it again. Dell says in his autobiography, Direct from Dell. Soon he was buying components in bulk to further reduce the cost. My mother complained that my room looked like a mechanics shop. It was his parents, though, who fostered his curiosity. With his mother, a successful stockbroker, and his orthodontist father, dinner conversation frequently turned from what Michael and his two brothers were doing in school to the state of the economy, commercial opportunities and analyses of business and industries. I was quite excited about the possibilities for personal computers and how they could change society. Meanwhile, as a customer, I was disappointed that when I went to a computer store, the salespeople didnt really know about computers. I had this idea to sell the products directly to the user over the phone. The internet, he added, was an unimaginable gift from heaven that came ten years later. Universitys plans and his parents expectations intervened. But Dell was determined. He drover off to the University of Texas at Austin in a August 1983in the white BMW hed bought with earnings from selling newspaper subscriptions. In the backseat were three computers. My mother should have been very suspicious. By November, rumours reached his parents that he wasnt attending.

On a surprise visit to Austin, they caught their son red handed. Dells father read him the riot act, then asked him what he wanted to do with his life. I want to compete with IBM. Although he and his father came to an agreement that he would focus on his studies, the business possibilities were too compelling to ignore, and the timing couldnt have been better. I saw people becoming more interested and more knowledgeable about computers and seeking more sophisticated version of IBM PCs. But IBM wasnt producing them Dell recounts in his book. In early May, just before taking his freshman year final exams. Dell dropped out of university and started Dell Computer Corporation with $1000. Three years later, we did a private placement. By that time, the company had already achieved annual sales of about $150 million. I was 23 years old. Dell found out soon enough that necessity is the mother of invention. I learned by doing and by making mistakes. And I got smart people to help, he said. Today Dell is a $57 billion company, with the leading market share. In March 2004 Dell stepped down as CEO (he remained chairman) to focus on research and technology. But soon there were signs of trouble. Dell is facing more aggressive and stronger rivals, such as Hewlett Packard. The company has been criticized for poor customer service and missing the shift to laptops and away from desktops, and it is also facing the powerful US Securities and Exchange Commission and US Attorney General investigations into its accountancy practices. In January the struggles forced Dell, now 41, to return to the company he founded, to face the issues head on. N 48 hours, he put in a new management team. Of his marketing brain childselling directly to the customer-Dell said, The direct Model has been a revolution, but it is not a religion. He intends to improve it and look for new manufacturing and distribution models. The goal is to give our customers what they need and make the technology

simpler and easier to use. As a technology leader Dell wants to use his position to solve societys bigger problems, like healthcare. If you go to your grocery store there is more technology than at your doctors office.

Imagine the last time you went to the doctors, you see all those files. What is all that about? That is nonsense. Try to take your medical information from one doctor to another. It is a system that can be dramatically improved. Your industry has a big role to play.

 Dell is also looking overseas specially at the needs of next billion PC users. we have a number of few things going on in emerging markets in India, Poland, brazil, The former soviet republic and China. Most importantly Dell will ensure that we deliver the kind of support our customers expects, in tools and technologies. One new tool called DellConnect, enable the tech staff to connect to the customer computer and fix the problem on the spot or show the customer how to do it. In February Dell rolled out ideastorm, a forum for user to brainstorm what works, what doesnt and what new features they would like to see introduced. We take the customers input and design the products and services says Dell. As for how long the reorganization will take. Dell says, It took us some time to get into these challenges, and it will take us some time to get out of them. I think 18 months. If Dell needs any reminders that he can take the company to new heights, he can think back nearly twenty years earlier. No-one told me, that we couldnt do it, or if they did, I wasnt listening. I didnt ask for permission or approval. I just went ahead and did it, because I thought it was a good idea and it worked.

Major Decisions in Advertising:

Marketing management must make important decisions when developing an advertising program.

Setting Objectives:

The first step in developing advertising program is to set advertising objective. These objectives should be based on past decisions (precedence) about the target market, positioning and marketing mix, which define the job that advertising must do in the total marketing program.

An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time.

Advertising objectives can be classified by primary purpose- whether the aim Is to inform, persuade, or remind. Table 15-2 lists examples of each of these objectives.

Informative advertising is used heavily when a new product category is being introduced. In this case, the objective is to build primary demand.

Thus, producers of compact disc players first inform consumers of the sound and convenience benefits of CDs.

Persuasive advertising becomes more important as competition increases. Here the companys objective is to build selective demand. For example, once compact disc players were established, SONY began trying to persuade consumers that its brand offered the best quality for their money.

Some persuasive advertising has become Comparison advertising, in which a company directly or indirectly compares its brand with one or more other brands. For example, in its classic comparison campaign, Avis positioned itself against market-leading Hertz by claiming, We are

number two, so we try harder. More recently, VISA advertised, American Express is offering you a new credit card, but you dont have to accept it, Heck, 700 million merchants dont. American Express responded with ads bashing VISA, noting that Amexs Green Card offers benefits not available with visas regular card, such as rapid replacement of lost cards and higher credit limits. As often happens with comparison advertising, both sides complain that the others ads are misleading. Comparison advertising has also been used for products such as soft drinks, computers, deodorants, toothpaste, automobiles, pain relievers, and long distance telephone service.

Reminder advertising is important for mature products- it keeps consumers thinking about the product. Expensive Coca-Cola ads on television are designed primary to remind people about Coca-Cola, not to inform or persuade them.

SETTIN THE ADVERTISING BUDGET

After determining its advertising objectives, the company next sets its advertising budget for each product. Four commonly used methods for setting promotion budgets are discussed in coming text.

 Here are some specific factors that should be considered when setting the advertising budget:

Stage in the product life cycle: New products typically need large

advertising budgets to build awareness and to gain consumer trial. Mature brands usually require lower as a ratio to sales.
Market share: High market share brands usually need more

advertising spending as a percent of sales than do low market share brands. Building the market or taking share from competitors requires larger advertising spending than does simply maintaining current share.
Competition and clutter: In the market with many competitors and

high advertising spending, a brand must be advertised more heavily to be noticed above the noise in the market.
Advertising Frequency: When many repetitions are needed to

present the brands message to consumers, the advertising budget must be larger.
Product differentiation: A brand that closely resembles other brands

in its product class (Beer, Soft drinks, Laundry Detergents) requires heavy advertising to set it apart. When the product differs greatly

from competitors, advertising can be used to point out the differences to consumers. Setting the advertising budget is no easy task. How does a company know if it is spending the right amount? Some critics charge that large consumer packaged goods firms tend to spend too much on advertising and business to business marketers generally under spend on advertising. Critics claim that, on the one hand, the large consumer companies use lots of imge advertsing without really

knowing its effects. The overspend as form of insurance against not spending enough. On the other hand, business advertisers tend to rely heavily on their salesforces to bring in orders. They underestimate the power of company and product image in preselling industrial customers. Thus, hey do not spend enough on advertising to build consumer awareness and knowledge.

MAJOR MEDIA TYPES:

Newspaper: Its advantages are its flexibility, timeliness, good local

market coverage, broad acceptability; high believability.

Its limitations are short life, poor reproduction quality, and small pass along audience.

Television: Advantages includes Good mass-market coverage; low cost per

exposure; combines sight, sound and motion; appealing to senses.

High absolute costs; high clutter; less audience selectivity and its limitations.

Direct Mail: High audience selectivity; flexibility; no ad competition within the

same medium; allows personalization. Whereas, its limitations include a relateively high cost er exposure; junk mail image.

Radio: It enjoys good local acceptance, high geographic and demographic selectivity and low cost. Whereas its limitations include Audio only, low attention ( The half heard medium); fragmented audiences.

Magazines: Advantages include high geographic and demographic selectivity; credibility and prestige; high quality reproduction; long life and good pass along readership.

Whereas, its limitations include but is not limited to no guarantee of position and high cost.

Outdoor: Flexibility, high repeat exposure, low cost, low message competition; good positional selectivity.

Whereas, its limitations are little audience selectivity; creative limitations Online: High selectivity; low cost, immediacy; interactive capabilities.

Whereas, its limitations include small, demographically titled audience; relatively low impact, audience controls exposure.