05-05-2020

Syllabus content 01 Concept of Marketing

Concept of Marketing, Selling Vs Marketing,
Need in Business, Non – Profit & Government Sectors
Marketing Environment – Segmentation, Requirements for Effective Segmentation

02 Product Mix & Line

Product – Hierarchy, Classification, Mix & Line Decisions, Attribute Decisions
Branding – Package & Label Decisions,
Product Life Cycle – Marketing Strategies for Different Stage in PLC

03 Pricing
Pricing – Setting Process & Methods
Adapting Price – Geographical, Discounts, Allowances
Promotional & Discriminatory Pricing – Product Mix Pricing

04 Marketing Channels
Marketing Channels – Imp, Channel Design Decisions
Channel Management Decisions
05 Advertisement Mgt Channel Conflict – Types of Conflicts, Causes & Methods to Manage

Promotion Mix Advertisements – Objectives & Types of Media

Sales Promotion – Objectives & Tools
Public Relations – Objectives & Tools , Personal Selling Process
Each Unit 3 Concepts

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concept of
marketing

MARKETING
• Marketing is the process of planning and executing the conception,
pricing, promotion and distribution of ideas, goods and services to
create exchanges that satisfy individual and organizational
objectives.

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SCOPE OF MARKETING
• Marketing is about
identifying and meeting
Human & Social needs.

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IDEAS GOODS SERVICES

EVENTS
INFORMATION

WHAT IS
MARKETED?
EXPERIENCES
ORGANIZATIONS

PERSONS
PROPERTIES
PLACES

WHO MARKETS?
• MARKETER: someone who seeks a response – attention, a purchase, a
vote, a donation from another party called the prospect.
• If both parties are seeking to sell something each other then both
are called marketers.

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MARKETING SALES

DETERMINE FUTURE NEEDS and has a MAKES CUSTOMER

APPROACH strategy in place to meet those needs DEMAND MATCH THE
FOR THE LONG TERM RELATIONSHIP. PRODUCTS THE COMPANY
CURRENTLY OFFERS.

PROCESS One to many Usually one to one

Fulfil customer's wants and needs

FOCUS through products and/or services the Fulfil sales volume objectives
company can offer.

HORIZON Longer term Short term

STRATEGY pull push

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Marketing Environment
The marketing environment consists of actors
and forces outside the organization that affect
management’s ability to build and maintain
relationships with target customers.

• Environment offers both opportunities and threats.

• Marketing intelligence and research used to collect
information about the environment.

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The Company’s environment

• Company’s Internal Environment:
– Structure of company
– Culture
– Resources

• Companies External Environment

– Microenvironment: actors close to the company that affect its
ability to serve its customers.

– Macro environment: larger societal forces that affect the

microenvironment.
• Considered to be beyond the control of the organization.

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Marketing Environment
Micro
Demographic Environment

Company
Cultural Economic

Publics Suppliers
Company
Customers
Political Competitors Natural

Intermediaries

Macro Technological
Environment 3-24

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Actors in the Microenvironment

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The Company (Internal Marketing)

– Marketing must consider other parts of the

organization including
• Finance
• R&D
• Purchasing
• Operations and
• Accounting
– Marketing decisions must relate to broader
company goals and strategies

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The Company’s Microenvironment

• SUPPLIERS:
– Provide resources needed
to produce goods and
services.
– Marketers must watch
supply availability and
pricing
– Important link in the “value
delivery system.”
– Most marketers treat
suppliers like partners.

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The Company’s Microenvironment

• MARKETING INTERMEDIARIES:
– Help the company to promote, sell, and distribute
its goods to final buyers
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries

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Partnering With Intermediaries

Coca-Cola provides
Wendy’s with much
more than just soft
drinks. It also pledges
powerful marketing
support.

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The Company’s Microenvironment

• Customers:
– Five types of customer
markets that purchase a
company’s goods and
services
• Consumer - ULTIMATE
• Business - INDUSTRIAL
• Reseller - INTERMEDIATE
• Government
• International - GLOBAL

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The Company’s Microenvironment

• COMPETITORS:
– Those who serve a target market with products
and services that are viewed by consumers as
being reasonable substitutes
– Company must gain strategic advantage against
these organizations
– Conducting competitor analysis is critical for
success of the firm
– A marketer must monitor its competitors’ offerings
to create strategic advantage
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Publics
Group that has an interest in or impact on an
organization's ability to achieve its objectives

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The Macroenvironment

• The company and all of the other actors operate in a larger

macroenvironment of forces that shape opportunities and
pose threats to the company.

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The Company’s Macroenvironment

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Economic Environment
Consists of factors that affect consumer purchasing
power and spending patterns. it includes
• Income
• Savings
• Gifts
• Debt
• Credit availability

• Changes in Income level

• Income Distribution
– Upper class
– Middle class
– Working class
– Underclass

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Income Distribution

Walt Disney markets two distinct Pooh bears to match its two-
tiered market.
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Natural Environment

• Involves the natural

resources that are needed as
inputs by marketers or that
are affected by marketing
activities.
• Types of Resources
– Infinite resources (air and water)
– Finite renewable resources
(forest and food)
– Fininte nonrenueable resources
(Oil and minerals)

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Factors Impacting the Natural

Environment

Shortages of Raw Materials

Increased Pollution

Increased Government Intervention

Environmentally Sustainable Strategies

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Environmental Responsibility

McDonald’s has made a substantial commitment to the so-called

“green movement.”
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Technological Environment

• Most
dramatic
force now
shaping our
destiny.

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Technological Environment
• Changes rapidly.
• Creates new markets
and opportunities.
• Challenge is to make
practical, affordable
products.
• Safety regulations result
in higher research costs
and longer time between
conceptualization and
introduction of product.

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Political Environment

Includes Laws,
Increasing Legislation
Government
Agencies, and
Pressure Groups
Changing Government
that Influence or Agency Enforcement
Limit Various
Organizations and
Individuals In a Increased Emphasis on Ethics
Given Society. & Socially Responsible Actions

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Cultural Environment
• The institutions and other
forces that affect a society’s
basic values, Beliefs, Norms,
perceptions, preference,
and behaviors.
• Types of beliefs
– Core beliefs
– Secondary beliefs

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Cultural Environment
Themselves Society’s Major
Cultural Views Are
Others Expressed in
People’s Views of:

Organizations

Society

Nature

The Universe
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Responding to the Marketing Environment

• Environmental Management Perspective
• Taking a proactive approach to managing the
environment by taking aggressive (rather than
reactive) actions to affect the publics and forces
in the marketing environment.
• This can be done by:
– Hiring lobbyists
– Running “advertorials”
– Pressing lawsuits
– Filing complaints
– Forming agreements to control channels

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How to scan the environment

• Value chain
• Porters five forces model
• SWOT analysis
• PEST analysis
• TOWS analysis

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Market
Segmentation

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What is Market Segmentation?

THE BREAKING DOWN OR BUILDING UP OF
POTENTIAL BUYERS INTO GROUPS CALLED
MARKET SEGMENTS

Benefits of
Market Segmentation

Identifies opportunities for new product development

Helps design marketing programs most effective for

reaching homogenous groups of buyers

Improves allocation of marketing resources

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The need for marketing

segmentation
 The marketing concept calls for understanding customer
and satisfying there needs better than the competition.

 Different customers have different needs, and its rarely

possible to satisfy all the customers by treating them
alike.

Bases for segmentation in

consumer markets
Geographic

Demographic

Psychographic

Behavioralistic

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Geographic segmentation

Geographic segmentation tries to divide

markets into different geographical units:
 Regions
 Size of the area
 Population density
 Climate

Geographic segmentation

 Regions: by continent, country, state or

even neighborhood

 Size of the area: segmented according

to size of population

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Geographic segmentation

 Population density: often classified as

urban, suburban, or rural

 Climate: according to weather patterns

common to certain geographic regions

Demographic segmentation
Demographic segmentation consists of dividing the market into groups
based on variables such as:

• Age • Social class

• Gender • Life style
• Income

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Demographic segmentation

 Age : Marketers design, package and promote products differently

to meet the wants of different age groups.

Good examples include the marketing of toothpaste (contrast the

branding of toothpaste for children and adults) and toys (with many
age-based segments).

Demographic segmentation

 Gender: Gender segmentation is widely used in consumer

marketing.

The best examples include clothing, hairdressing, magazines and

toiletries and cosmetics.

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Demographic segmentation

 Income: Many companies target affluent consumers with luxury

goods and convenience services.

Good examples include Coutts bank; Moet & Chandon champagne

and Elegant Resorts - an up-market travel company.

Demographic segmentation

 Social class: Consumers "perceived" social class

influences their preferences for cars, clothes, home
furnishings, leisure activities and other products &
services.

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Demographic segmentation

 Lifestyle: Marketers are increasingly interested in the effect of

consumer "lifestyles" on demand. Unfortunately, there are many
different lifestyle categorization systems, many of them designed by
advertising and marketing agencies as a way of winning new
marketing clients and campaigns.

Psychographic segmentation

Psychographic segmentation groups customers according

to their lifestyle. Activities, interest, and opinions (AIO)
surveys are one tool for measuring lifestyle.
 Activities
 Interest
 Opinion
 Values

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Behavioralistic segmentation

Behavioralistic segmentation is based on actual customer

behavior towards products. Some behavioralistic variable
include:
 Opinions, interests and hobbies
 Degree of loyalty
 Occasions

 Benefits sought
 Usage

Behavioralistic segmentation

 Opinions, interests and hobbies – this covers a huge area

and includes consumers’ political opinions, views on the
environment, sporting and recreational activities and
arts and cultural issues.

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Behavioralistic segmentation

 Degree of loyalty – customers who buy one

brand either all or most of the time are
valuable to firms.

Behavioralistic segmentation

 Occasions – this segments on the basis

of when a product is purchased or
consumed.

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Behavioralistic segmentation

 Benefits sought – this requires marketers to identify and

understand the main benefits consumers look for in a
product.
 Usage – some markets can be segmented into light,
medium and heavy user groups.

Requirements of market segments

 Indefinable: the differentiating attributes of the segments

must be measurable so they can be identified.

 Accessible: the segments must be reachable through

communication and distribution channels.

IDENTIFY DIFFERENCE BETWEEN MASS MARKET AND TARGET MARKET

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Requirements of market segments

 Unique needs: to justify separate offerings, the segments

must respond differently to different marketing mixes.

 Substantial: the segments should be sufficiently large to

justify the resources required to target them.

Requirements of market segments

 Durable: the segments should be relatively stable to

minimize the cost of frequent changes.

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PRODUCT LEVELS
product that It’s the extra
full fill the add on
need want ,value or
and basic service one
demand of gets out
the Product. purchasing
a product.

CORE ACTUAL/
POTENTIAL
EXPECTED

BASIC / AUGMENTED
GENERIC It’s the tangible This includes all
It’s the and physical the augmentations
intangible benefit of a and
benefit product. transformations a
provided by Quality level, product might
a product. Product and service undergo in the
Features, future
Styling,
Branding and
Packaging

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Product Classification

 CONSUMER-GOODS CLASSIFICATION
◦ Classified on the basis of shopping habits

 DURABILITY AND TANGIBILITY

 INDUSTRIAL-GOODS CLASSIFICATION
◦ Classified in terms of their relative cost and
how they enter the production process.

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Consumer Product Classification

 CONVENIENCE GOODS
◦ Inexpensive, frequently purchased.
◦ Little effort needed to purchase them.
◦ Staples, Impulse and emergency goods.

 SHOPPING GOODS
◦ Not as frequently as convenience products
◦ Costly
◦ Consumer does research before purchase.

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Specialty Goods
◦ Unique features
◦ Consumer is prepared to pay a premium price.

 Unsought Goods
◦ Those good that consumers do not know
or
◦ Doesn’t think of buying.

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Durability and Tangibility

 Nondurable Goods
◦ Tangible goods consumed in one or few
uses
◦ Purchased frequently
◦ Strategy : availability , low priced , heav ily
advertised

 Durable Goods
◦ Tangible goods that survive many uses
◦ Require more personal selling and service
◦ Higher margins and requires seller
guarantee

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 Services
◦ Intangible product
◦ Requires more quality control and credibility

Industrial-Goods
Classification
 Materials and Parts

Farm
Raw Materials
Products
Manufactured
materials and Natural
parts Products

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 Materials and Parts

Farm
Raw Materials
Products
Manufactured
materials and Natural
parts Products

 Materials and Parts

Raw Materials Component

materials
Manufactured
materials and Component
parts Parts

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 Materials and Parts

Raw Materials Component

materials
Manufactured
materials and Component
parts Parts

 Capital Items
◦ Installations
◦ Equipment

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 Supplies
◦ Maintenance and repair items
◦ Operating supplies

 Business Services
◦ Maintenance and repair services
◦ Business advisory services

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Product
Branding
Attributes

Packaging

Product
Support Labeling
Services

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PRODUCT & SERVICE

ATTRIBUTES
• Product quality
– Performance quality
– Conformance quality
• Features
– Value to consumer
– Cost to company
• Style and design
– Influences
experience

BRANDING

• A brand is a name,
term, sign, symbol,
or design, or a
combination of
these, that
identifies the
maker or seller of a
product or service.

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PACKAGING

• Designing and
producing the
container or
wrapper for a
product.

LABELING

• Printed
information
appearing
on or with
the
package.

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PRODUCT SUPPORT SERVICES

• Assess the value of

current services and
obtain ideas for new
services.
• Assess the cost of
providing the services.
• Put together a package of
services that delights the
customers and yields Scion website

profits for the company.

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PRODUCT LINE
A group of products that are
closely related because they
function in a similar manner,
are sold to the same
customer groups, are
marketed through the same
types of outlets, or fall
within given price ranges

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Product Mix (or Product

Portfolio) consists of all product
lines and items that a particular
seller that offers for sale.
Example P & G’s product mix
consists of three major product
lines: Detergent, Soaps,
Shampoos………

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PRODUCT MIX DECISION

P&G
Width
Detergent Soap Shampoo
Length

Depth

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PRODUCT MIX DECISION

PRODUCT WIDTH refers to the number of different

product lines the company carries. For example : P&G’s
Width – Detergents, Soaps, Shampoos.
PRODUCT LENGTH refers to the total number of
items the company carries within its product
lines. For Example: P&G’s Detergent product length –
Tide, Ivory, Cheer, Bold.
PRODUCT DEPTH refers to the number of versions
offered of each product in the line. For example: P&G’s
Tide product depth – Febreze, Cold water, Downy.
PRODUCT CONSISTENCY refers to how closely related to
various products lines are in end use, production
requirements, distribution channels or some other way.

ATTRIBUTES OF A
PRODUCT

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Product Quality
• Performance

• Features

• Reliability

• Conformance

• Durability

• Serviceability

• Aesthetics

• Perceived Quality

Physical characteristics
It includes qualities such as
• Size
• Color
• Weight
• Durability
• Maintainability
• Product features
• Product benefits

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Price
Price matters in sale of product.

• People compare products price with its utility.

• Price we pay is fulfilling our need.

• People are always in search of a reasonable price.

• Reasonable price attract a market.

• More price decreases sales

Brand

• Determining market place

• Term ‘brand’ is associated unique

and consistent product.

• We associate brand with its quality ,

durability price.

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Packaging
A package is the physical container or wrapping
for a product.

Functions of Packaging

• Promoting and Selling the Product

• Providing Information

• Protecting the Product

• Pest prevention

• Weather changes

Design
• Good design can improve the market of
product

• Customer Expectations

• Reputation

• Sells more

• Substandard product

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Product warranty
• A guarantee given to the
purchaser by a company stating
about

• Reliability

• Guarantee of product

• Repairs or exchanges

• It Increases confidence of buyer

Color
• Color has a strong psychological hold on people

• Used to ‘brand’ products and companies

• Influence consumers’ purchase decisions

• Effects consumer emotions

• Effects buying decisions

• The right colors communicate meaning

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Sellers Reputation

• Sellers are chosen on the basis

of reputation.

• Maintaining a good repo

• By information of other buyers.

• Known and trustful.

Seller’s services

• Seller’s
Services

• Maintenance • Business
& repair advisory
services services

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What is a Product Line?

A product line is that combination of products which;

 Belongs to a single manufacturer

 Shares similar Attributes

 Serves the common general purpose but;

 Targets different market segments

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Why Product line decisions?

 Provides better market access

 Involves huge investment/disinvestment

 Products have close mutual influence

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Expansion of product line

 Process of adding more products to the line

 Valid only if;

a) There is a well established brand arena & customers

are accustomed to switch.

b) Competitor lacks a comparable product

c) Competitor have already expanded to the proposed area.

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Contraction of the product line

 Dropping a product from the line.

 The reasons behind a drop may be;

a) Fine tuning the market performance

b) Eliminating a poor performing product

c) Uplifting a product with more potential

• This is a much difficult task since much money is already been

invested and hence products are allowed to linger on until they
become a loss.

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Alteration of the existing products

 An alteration may be in;

a. Design
b. Size
c. Colour
d. Texture
e. Flavour
f. Packaging
g. Advertising appeal

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Developing new use

for the existing products

 This is intended to attract a new category of customers to

the manufacturer without forming a new product.

 Investments in R&D and Advertisement is required.

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Trading Up

 Adding a high priced prestigious product to

the line so as to increase the sales of the

existing low priced product.

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Trading Down

 Introducing a low priced product to the

prestigious line so as to cater increased

demand.

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• Product line length

• shows the number of different products in a product line.

• Product Line Depth-

• shows how many subgroups the product line contains.

• Product Line Stretching-

• product stretching enables firms to fill any gaps they have identified in the

market.

• Downward Stretch

• Upward Stretch

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Changes in
market
demand

Competitive
Financial
action and
Influences
reaction

Product Marketing
influences Influences

Changes in market demand

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Competitive action and reaction

Marketing Influences

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Financial Influences

Product Influences

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