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MARKETING MANAGEMENT

A THEORITICAL AND PRACTICAL PERSPECTIVE

Definitions of MARKETING
The performance of business activities that direct the flow of goods and services from producer to consumer. Getting the right goods , to the right people in the right place , at the right time , at the right price , with the right level of communication profitably. Identifying the needs, wants , desires of consumers and fulfilling them in such a way that the customer is delighted and the company objectives are met profitably. Solving customer problems profitably.

Difference Between Marketing & Sales


1. 2. 3. 4.

Marketing
Focus on customer Is about profit this year Delighting the customer Both new and repeat customers important with focus on repeat customers Long term vision

Sales
Focus on seller (product) is about revenue this week converting product into cash New customers is a priority, not bothered much about repeat customers. Short Term Outlook (week/ month)

5.

Successful companies
Committed to creating delighted customers. Ability to adapt to a continuously changing marketplace- market oriented dynamic strategic planning

3 key ideas in Strategic Planning


Treat companies business as an investment portfolio Assess accurately the future profit potential Strategy-game plan for achieving long term objectives/goals.

Large companies up to 4 organisation levels


Corporate Level Division Level Business Level Product Level

Corporate Strategic Planning


Planning Activities Corporate Mission

Establishing Strategic Business Units Assigning Resources Planning New Business

The 10 Ps
PRODUCT PLACE PRICE PROMOTION PACE PACKAGING PROCESS PLANNING PEOPLE POSITIONING

BOSTON CONSULTING GROUPS GROWTH SHARE MATRIX. GE MODEL ANSOFFS PRODUCT/MARKET EXPANSION GRID

IGOR ANSOFFS PRODUCT/MARKET EXPANSION GRID


Current Product New Product

Current Market Market Penetration Product Development

New Market

Market Development

Diversification

IGOR ANSOFFS PRODUCT/MARKET EXPANSION GRID


Market Penetration: Encourage current customers to buy more. Attract competitors customers to switch to its brand Convince non users who resemble current users to start using the companys product. Market Development Geographical expansion Channel expansion : If only present in consumer market, then look at institutional sales also.

IGOR ANSOFFS PRODUCT/MARKET EXPANSION GRID


Product development Strategy

Introduce products with new features Introduce different quality versions Alternative product forms Diversification Strategy

Business Mission

SWOT Analysis

Goal Formulation

Strategy Formulation

Business-Strategic Planning Process


Program Formulation

Implementation

Feedback & Control

GOAL FORMULATION

Objective in Quantitative Terms e.g- To increase market share to 15% in 2 years. Strategy Formulation Michael Porter 3 generic strategies Goals indicate what a business unit wants to achieve Strategy answers how to get there. 1. Overall cost Leadership :- Texas Instruments, Bajaj Auto 2. Differentiation : Achieving Superior Performance in an important customer benefit area e.g. : Quality Leader : Sundaram Fasteners Style Leader : Porsche Sports Car Technology Leader : Infosys 3. Focus: One or more narrow market segments, product line , geographical region etc. Understand the wants and pursue either cost or differentiation e.g. Arrow Shirts Beware of Marketing Myopia

MARKETING RESEARCH
Defn:- Systematic design , collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company. e.g. :- 1) Product-concept development and testing 2)Test marketing 3)Effectiveness of advertising 4) Brand image study 5) Demand analysis 6) Features/trend Analysis 7) Brand awareness analysis

MARKETING RESEARCH
1) 2) 3) 4) Why Research To ascertain the customers real needs To find new applications or what is the existing product being used for (Punjab- w/m) To find solution to existing problems To find why competition is doing well

MARKETING RESEARCH
YO FROOTI Define the situation: Will giving the rip and zip effect help broaden the market? Research objectives: 1) To find what kind of customers would prefer drinking straight:teenagers, executives. 2) To find how many are likely to switch to this packaging at different pricing. 3) What kind of flavors they would prefer 4) What other liquids can this container contain 5) When will consumers normally drink this 6) Will this package enable switching from Pepsis Miranda or other non-carbonated drink.

Demand Forecasting
Techniques used in forecasting market potential A) Extrapolation Techniques: 1) Persistence Model : 80 pieces in Feb, 100 pieces in March,---pieces in april. 2) Time Series decomposition : O=T*C*S*I Where O= Original data, C=Cyclical component S=Seasonal , I= Irregular component, T=Trend.

Demand Forecasting
E.g.: Washing Machines sold= Jan-Dec2003=12000 Estimation for year 2004 T=5% Growth :- 12000*(1.05)=12600, C=Business Recession expected (conservative estimates, 10% drop)=90%*12600=11340 If sales are same every month, then average per month=945. Add seasonal (S) component for festivals like Diwali , Durga Pooja, Pongal S= Seasonal Index:- 1.2 , Oct, Dec= 945*1.2=1134 Total O= 1134*2+945*10=11718

Demand Forecasting
B) Polling Techniques: Delphi Technique C) Historical Analogy : Sales experience of an earlier similar product is sometimes used as basis for forecasting sales of a new product. e.g. B/W:- CTV D) Econometric : E) Experimental : Test Marketing :new products.

SEGMENTATION Segmentation Base A) Geographic


Region City Size Climate

Variables
North South, East, West Major Metros, Sub Metros, Town Hot, cold, humid

B) Psychographic
Lifestyle Personality Extrovert, Introvert, Aggressive Conservative, Status Seekers

SEGMENTATION
C) Demographic Age Sex Family Size Education Occupation Income Religion

0-11,12-19,20-34 etc. Male, Female 1-2,3-4,5+ school, Graduate, PG Farmer, Professional, Housewife, Retired <15k,16-25k,26-35k etc. Hindu, Muslim, Sikhs, Christians

SEGMENTATION D) Behavioral
Benefit

Quality, Service, Economy, Speed, Prestige.

Use Related 1) Usage Rate: 2) Awareness Status 3) Brand Loyalty

Heavy, Medium , Light users Unaware, aware, interested enthusiastic. Strong, Medium , None

Use-Situational Time/Objective

Leisure, work, Morning, Night Gift, Fun , Achievement

Porters 5 Forces- Determining Segment Structural Attractiveness


Potential Entrants

Suppliers (Supplier Power)

Industry Competitors

Buyers (Buyer Power)

Substitutes (Threat of substitutes)

Positioning
Positioning starts with the product. But Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. Easiest way to get into the mind - Be First KODAK- Photography Xerox -- Copier Hertz --- Rent-a car

Positioning
6 STEPS IN POSITIONING PROGRAM What position do you own What position do you want to own? Whom must you outgun Do you have enough money. Can you sustain . Do you match your position.

Some Important Marketing Laws-Trout & Ries


1. Law of Leadership : The first desktop laser printer was introduced by HP-> Even today its the leader. Law of Category : f you cant be the first in a category , set up a new category , you can be first in. IBM::- First in mainframe DEC :- First in minicomputer DELL :- PC thru Direct Marketing

2.

3. Law of Mind

Better to be first in the mind then to be first in the market place.

Worlds first PC:- MITS ALTAIR 8800 in the mind :- APPLE Worlds first Mainframe : Remington Rand in the mind : IBM

Some Important Marketing Laws-Trout & Ries


4.) Law of Perception: Marketing is not a battle of products , its a battle of perceptions. e.g. :- 3 largest selling Japanese imported cars in USA are Honda, Toyota, Nissan But in Japan , Toyota outsells Honda Because : In Japan Honda stands for motorcycle whereas in USA Honda is Motorcar. So in Japan , the perception is how can a motorcycle company make great motorcars. 5) Law of Focus :The most powerful concept in marketing Owning a word in the mind of the consumer. CREST :-- CAVITIES VOLVO :-- SAFETY MERCEDES :-- ENGINEERING PEPSI :---- YOUTH BMW :----- DRIVING

6) Law of Exclusivity: Two companies cannot own the same word in the consumers mind. e.g. : DURACELL owns the long lasting word . Evereadys Energizer just cannot own long lasting. Asian paints vs. NEROLAC EXCEL(YAMRAJ AD.) 7) Law of Ladder : The strategy to use depends on which rung you occupy on the ladder. Hertz:- Leader in car rental. AVIS: Avis is only no.2 in RENT-A-CARS. So why go with us? WE TRY HARDER.

8) Law of Division Over time a category will divide and become two or more categories. Computers

Mainframes(IBM)

MINIS(DEC) Workstations (SUN)

Super (CRAY)

PC (Apple, Compaq)

Fault Tolerant (Tandem)

PRODUCT
Defn: A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. e.g. :- Physical Goods :-- Cars, W/M Services :- Training Persons :- Michael Jackson Ideas : - Family Planning

Five Levels of Product Level 1 : Core Benefit : Fundamental benefit that the customer is buying . E.g. :- Hotel :-Rest, CTV :Entertainment

Product
Level 2:- Generic Benefit : Basic version of the product. e.g. : Hotel : consists of a building with rooms. W/M : Metal/plastic body with console panel Level 3 : Expected Product : A set of attributes and conditions that buyers normally expect and agree when they purchase the product. e.g. : Hotel : Clean Bed, soap, towels, telephone CTV : Tuning on remote, cable ready.

Product
Level 4 : Augmented Product : includes additional services and benefits that distinguishes the companys offer from competitors offers. e.g. : Hotel : Complimentary breakfast, Flat CTV, 24 Hrs checkout, etc. Level 5: Potential Product: All augmentations and transformations that the product might ultimately undergo in the future. e.g. : Computer compatible TV (which can operate at room temperatures)

Eight Stages of New Product Development Idea Generation Idea Screening Concept Development & Testing Marketing Strategy Business Analysis Product Development Market Testing Commercialization

Eight Stages
1) Idea Generation :
Source of New Product Ideas:Customers , Employees, Competitors Products and services , sales team Idea Generating Techniques : Brain Storming , Need/Problem Identification , Problem /Need Identification 2) Idea Screening: Drop Error Go Error

3) Concept Development & Testing:


A product concept is an elaborated version of the idea expressed in meaningful consumer terms. 4) Marketing Strategy Development : a) Describes the size , structure of the target market, Positioning, sales, Market share in the first few years. b) Product, Price, Place, Distribution strategy. c) Long run sales and profit goals. 5) Business Analysis:
Actual costs to R&D, MFG. ,Marketing cost and Profit Projection

6) Product Development: 1) Develop Prototype 2) Functional & Consumer Tests

7) Market Testing : Testing in select outlets with actual brand name and packaging 8) Commercialization : When to enter the market How to enter the market

Product width : Different Product categories the company is in Product Length : In each product category how many products are available Product depth : Variants that are offered for each product.

Product Strategies
1) Downward Stretch 2) Upward Stretch 3) Two-way Stretch

BRANDING
Products dont sell , Brands sell The ultimate aim of product manager must be to convert the product into a successful brand. Japanese Name : TOKYO TSHUSIN KOGYO KABUSHIKI KAISHA English name : Tokyo Telecommunications Engineering company

BRANDING
CITIBANK : The citi never sleeps. HSBC : The worlds local bank. Canara Bank: Growing to serve. Serving to grow. LOREAL: Because youre worth it. Maybelline: May be shes born with it. May be its Maybelline. GO GOA : 365 days on a holiday. Kerala : Gods own country. Retreat : city ends. Life begins. KL : VISION CITY Malaysia : Truly Asia. Singapore : Singapore Roars Hong Kong: Live it up.

BRANDING
BPL : Believe in the best. Videocon : Bring home the leader Technology for health and Pleasure. Sansui :Better then the best Born in Japan . Entertaining the world. LG :Digitally yours. Nokia :Connecting people Motorola : Intelligence everywhere. Ceat Tyres : Born Tough. Femina : For the woman of substance. For generation W.

BRANDING
Orange : Wherever you go, our network follows. Reliance India Mobile : Kar lo Duniya Mutthi Mein. Aaj Tak : Sabse Tej. Chevrolet optra : The new name for luxury. Santro Xing : The sunshine car. Tata Indigo: Spoil Yourself. Mitsubishi Lancer: Always in control. Raymond : For the complete man. Tata Salt : Desh ka namak. Louis Philippe: The upper crest.

Defn:- A name ,symbol, design which is intended to identify the goods ,services of one company and to differentiate the goods from those of competitors. BRAND NAME DECISION
Individual Brand Name : P & G :- Ariel, Pantene A Blanket Family Name : Philips Company Name combined with individual product names:Britannia 50-50 Videocon Bazoomba

BRANDING

BRANDING Brand Strategy Line Extension Brand Extension Multi Brand New Brands

PRICING
Differential Pricing : Same brand is sold at different prices/different times to consumers. Competitive Pricing : Prices are set to exploit competitive position. Product Line Pricing : Related brands are sold at prices that exploit mutual dependencies.

Pricing
DIFFERENTIAL PRICING : 1) Periodic Discounting : - Skimming Strategy Cater to early adopters ----after that the price reduced to cater to the next group of buyers. e.g. : BPL MOBILE/ORANGE. 2) Second Market Discounting : Dumping --Firms selling Price in foreign market is below its average cost in home country. (e.g. dumping by china)

Pricing
B) COMPETITIVE PRICING :

1) Penetration Pricing : Price substantially below main competitors. (AKAI, AMUL) 2) Geographic Pricing : In same country prices different to take advantage of sales tax/transportation savings.

Pricing
Product Line Pricing : 1) Complementary Pricing : & Captive Pricing : Razor & Blades, Cameras & Films , Auto Spare Parts, VCD Player & Software. Two Part Pricing : Service Industry :Fixed + variable usage fee (MTNL) Entry fee + every ride /game/place separate pricing :-- SENTOSA ISLAND (SINGAPORE)

2) PREMIUM PRICING : Basic & Deluxe Hotel


rooms, Front & Tear Auditorium seats, Basic & Deluxe cars:Firms make profit on Premium versions

Pricing
Product Line Pricing 3) Product Bundling : Season pass cheaper then daily tickets Car + accessories , the price is lesser then if each item is bought separately. 4) Image Pricing : of its different a higher price. The quality. Firms bring out an identical version current product with a name/packaging and intention is to signal

Promotion
Advertising Sales Promotion Personal Selling PR

Sales promotion
Consumer Promotion (Manufacturer point of view) To increase sales of self brand To divert attention from competition brands. Enables manufacturers to adjust to periods of low demand. Induce customers to try new products/brands. Customer point of view. Enables customers to have a better understanding of real prices. Consumers feel good that they get value for money deals.

Sales Promotion
Consumer Promotion Tools: Samples : Free samples with TOI , Mid-day, Filmfare. Coupons: FMCG companies: 15% discount coupon or some rupees off for the next purchase. Price Packs: Pack of 2 or more at reduced price. Banded Pack : Two related products banded together (toothpaste with toothbrush, VCD player with software.) Contests : Answer a few questions, write a slogan. Free Trials: Free auto drives. Warranties: 3 yr on CTV, 7 yrs on compressor.

Sales Promotion
Scratch n win offer: Money back offer Loyalty promotion: Frequent Flyer programs Cross promotion: Two related product categories promoting together , mostly the second product is free. Tie-in promotion : used in conjunction with consumer durables wherein total is lower then if bought separately.

Dealer promotion Tools


Annual Schemes Quarterly schemes: Scratch n win scheme:

Marketing Warfare
Defensive Warfare
Is what market leaders wage

Offensive Warfare
Is strategy for No.2 or No.3 in a category

Flanking Warfare
Smaller or new players that are trying to get a foothold in a category by avoiding the main

Guerilla Warfare
Is often the land of smaller companies

MARKETING WARFARE
SIMPLY THINK OF COMPETITORS AS THE ENEMY . ATTACK OR FLANK OR KEEP INNOVATING DEPENDING ON YOUR POSITION IN THE STRATEGIC SQUARE. NEVER HESITATE TO DESTROY COMPETITION OR ELSE U WILL BE A PART OF HISTORY.

Marketing Warfare
Principles of Defensive Marketing Warfare Only the market leader should consider playing defensive. The best defensive strategy is the courage to attack yourself Strong competitive moves should always be blocked. e.g : Gillette : The best a man can get. Owned wet shaving market with Blue and Super Blue Blade. Launched Trac II (nonadjustable ) and ATRA (adjustable double bladed razor)

Marketing Warfare
Launched Good News (inexpensive disposable razor to counter BIC (French company which launched disposable razor) Mach 3:- 3 bladed razors Market share of over 60% in USA/Europe. Other examples: INTEL (286,386,486,PENTIUM etc.) J&J : :- Tylenol :- reduced price from $2.85 for 100 to $1.85 to beat Bristol Myers Datril.

Marketing Warfare
Principles of Offensive Marketing Warfare: The main consideration is the strength of the leaders position. Find a weakness in the leaders strength and attack at that point. Launch the attack on as narrow a front as possible. e.g. : AVIS :-- Rent from AVIS . The line at our counter is shorter:- AVIS attacked Hertz:-- weakness inherent in Hertzs position as the largest Rent-A-Car company. XEROX: Out-innovated the leader 3M (by developing a better copying process-dry instead of wet copying)

Marketing Warfare
Fed Express used principle 3 by saying When it absolutely , positively has to be there overnight (small packages less then 70 pounds)= challenged the leader EMERY. Wall Street Journal was the leader (2 Mn daily) for financial and business information. The name positions it as a financial paper , so the business side can be attacked == Business Times , The daily business newspaper.

Marketing Warfare
Principles of Flanking.
1) 2) 3) A good Flanking move must be made into an uncontested area. Tactical surprise ought to be an important element of plan. The pursuit is as critical as the attack itself. Michael Dell flanked the computer industry and Direct Marketed:- $ 500 Mn company in 5 years. Miller Lite flanked the beer industry with Lite beer. DEC flanked IBM (Minicomputers)

Marketing Warfare
Mercedes-Benz flanked GM (Cadillac cars ) at the high end. Volkswagen's Beetle flanked GMs big cars. Avon flanked cosmetic companies who used traditional distribution methods by resorting to direct door-to-door selling. To launch a true flanking attack you must be the first to occupy the segment. Otherwise its just an offensive attack against a defended position. Flanking skill requires exceptional foresight because there is no established market for the new product or service. Indian examples: Nirma, Close-up.

Marketing Warfare
Principles of Guerilla Marketing Warfare.
Find a segment of the market small enough to defend. No matter how successful you become , never act like a leader. Be prepared to bug out at a moments notice. e.g.: Rolls-Royce : High priced Guerilla : nobody competes because 1) existing market is small 2) The company initially has an enormous advantage. Indian examples: 1) Arun Ice-cream : T.N 2) Naturals Ice-cream : Mumbai 3) Crown CTV : Gujarat. (Geographic Guerillas)

CONSUMER BEHAVIOUR
Critical Factors For Retail To Succeed
BUTT BRUSH EFFECT

Shoppers need a landing strip:- transition zone Keep baskets scattered : Shoppers have only 2 hands. Seating Arrangements: For companions to site and watch some programs while others shop. Design Shopping carts with coffee /coke cup holders. Design main aisle and sub aisles keeping in mind the mother with baby strolly. Parking space.

CONSUMER BEHAVIOUR
Consumers slow down when they see reflective surfaces keep important items near mirrors. Most Consumers walk towards their right when they enter the showroom/super market. CAPTURE RATE : How much of what is on display is seen by shoppers. There is a reliable zone in which shoppers will probably see merchandise. :-reliable zone is from slightly above eye level down to about knee level. :-- so keep only large items above or below the reliable zone.

CONSUMER BEHAVIOUR
BOOMERANG RATE: This is the measure of how many times shoppers fail to walk completely through an aisle from one end to the other. How to get shoppers to the back/end of aisle is a challenge Keep kiddie stuff at the end. For drugstore:- keep pharmacy items at the end. Keep cosmetics at the end with mirrors nearby. Keep new releases, new products at the end. Keep demos at the end. Keep changing the look of the store.

CONSUMER BEHAVIOUR
WHAT WOMEN WANT

Women once made entire wardrobes for the family. Today the family is lucky if she has time to stitch even a loose button. Women who are housewives generally shop for time pass :shopping time : 1.00 p.m to 8.00 p.m. Working Women shop whenever they have spare time: prefer convenience stores :- open from 7.00 p.m 10.30 p.m Working women have enabled growth of many product categories like cosmetics, ready-to-eat food, clothes, vehicles etc. Great window shoppers/searchers with a high degree of patience.

CONSUMER BEHAVIOUR
When two women shop together :- they often end up spending more time and money then if they were alone. Great influencers for cars and consumer durables. Direct buyers for cosmetics, dresses and groceries.

CONSUMER BEHAVIOUR
SHOP LIKE A MAN Men dont like shopping. Patient companion for the woman while she shops. Men always move faster then women thru the stores aisle. Impatient , will not search, whatever is available :- will decide quickly. As per research 65% of male shoppers who tried something on bought it as against 25% women. 72% of men look at price tags as compared to 86% women. Will like to leave the showroom as early as possible. Man almost always pays.

CONSUMER BEHAVIOUR
Man gives in faster to childrens demand then woman. Conventional wisdom is sell to woman and close to man.: Why because while the man may not love shopping , he gets a definite thrill from the experience of paying.

CONSUMER BEHAVIOUR
WELCOME TO KIDDIELAND They want to feel and touch whatever comes their way and if they like something they will pester their mom/dad till one of them agrees to buy :-- usually the dad. Keep things below reliable zone of elders :-- reliable zone for kids. Most parents want their kids to have the best :-- huge demand for toys, books, clothes, kiddy food, diapers, baycots ,strolly etc. Keep kids engrossed in the store :- toy room , Disney videos. Colouring books starring a puppy , kitten & handful of crayon:- kids love them and parents can shop in peace.

CONSUMER BEHAVIOUR
WHAT ABOUT THE OLDIES Nearly 20% of the world population >50 years. Have eyesight problem:- but all literature for pharma, manuals for camera, telephone directory are so small in writing that these people cannot decipher. Preferred colours :- red, white and black. Their eyes receive less light then young people, so stores/restaurants need to be brightly lit. ATMs , Mobile phones, remotes need to have larger buttons.

CONSUMER BEHAVIOUR
Huge market for shoes , baggy loose pants, open necked shirts :- oldies prefer them Do a lot of sight-seeing( vacation) Skin care, hair care :-- young at heart

CONSUMER BEHAVIOUR
What Shoppers Love Touch : All goods Mirrors Discovery Recognition: You shop where they know your name. Good Bargains What Shoppers Hate Too many mirrors Long Lines for payment or for trial. Rude, slow service Not properly illuminated trial rooms. Goods out of stock.

CONSUMER BEHAVIOUR
CYBER SHOPPING
What cyber shopping can provide that physical retailing cannot Limitless Selection : e.g. : In the book category , a superstore can house 1,00,000 titles, while the online bookstores -2-3 million titles in stock. Price Comparison: Using a search engine you can instantly find hundreds of retailers selling the exact product you want. This allows for comparison shopping at a fast pace. Convenience : You can shop from home, office. Shop at any time of the day/night. You dont have to worry about parking.

CONSUMER BEHAVIOUR
Speed: You can enter a website whenever you want and move thru it at your pace , then zip thru payment procedure like lightning. Information: on-line limitless amount of info. Where internet is used 1) ONLINE Trading of stocks. 2) Buying air tickets. 3) Books,CDs are bought online. 4) Gifts, flowers, wine ,greeting cards. 5) Computer hardware and software.

CONSUMER BEHAVIOUR
Reference: Many buyers go to the real world stores, find what they want (in terms of features) and then shop the web for better prices. Motivated shoppers :- visit stores :- choose and then log on net and buy from a retailer who keeps price low by not having to pay rent, overheads, labour cost etc. Lets Get Human : There are three big things that stores alone can offer shoppers Touch, Trial or any other sensory stimuli. Immediate gratification. Social Interaction.

Industrial Marketing
Characteristic Features of Industrial Products Derived Demand Limited no. of buyers. Scale of purchase is greater. Complex nature of products. Buying is a group process. Suppliers Reputation Rational Buying Motive Emphasis is on personal selling Short Distribution channel.

Distribution Strategies
EXCLUSIVE DISTRIBUTION : Distributing through company outlets or franchisee e.g. : LG PLAZA, HONDA Showrooms:- only company products are available. INTENSIVE DISTRIBUTION : Placing the products in as many outlets as possible. Products : Soaps, cigarettes, soft drinks , BPL MOTS etc. ( each outlet has various brands

Distribution Strategies
SELECTIVE DISTRIBUTION : Here companies select a combination of Exclusive distribution (only companys products) & Intensive Distribution (some important outlets which are multibrand outlets) e.g. SAMSUNG , VIDEOCON

Criteria for choosing Channel Partners


Financial Strength of Prospective Channel Partner : revenue, P& L statement , balance sheet etc. Sales Strength : no. of salesmen and their technical competency Product Lines: 1) Competitive products, 2) Compatible products 3) Complementary products. Reputation : 1) leadership 2) Well Established 3) Level of expertise. Market coverage : Geographic coverage , outlets per market area. Sales Performance.

Criteria for choosing channel partners


Advertising & Sales promotion programs. Ordering & Payment Procedures. Willingness to share data : a) customers b) Inventory c) sales figures. Installation & Repair services .

Factors Retailers use in choosing companies


Accepts unsold or damaged merchandise returns Has quick and easy ordering procedures Provides prompt delivery Maintains adequate supply Good reputation /Brand Name Has a large product range. Provides deliveries in lots as desired by retailer. Promotes brand on a regular basis. Provides adequate margins. Offers good schemes, quantity discounts Extends credit > 30 days. Has good competent sales team/product/technical team. Ensures prompt service Provides good store displays (POP)

Distribution
Retailing : Consists of the activities involved in selling goods and services to ultimate consumers. A retail sale is one in which the buyer is an ultimate consumer and the buying motive for a retail sale is always personal or family satisfaction derived from the final consumption of item being purchased. Wholesalers: Wholesaling is concerned with the activities of those persons or establishments which sell to retailers and other merchants , and/or to industrial , institutional and commercial users , but who dont sell in significant amount to ultimate consumers.

Functions Performed by wholesalers/Retailers for manufacturers.


Market coverage: Convenience to customers Sales contact : company sales force would be calling on a relatively small number of wholesalers/retailers rather then the much larger number of customers. Inventory Holding: Stock the products of the companies that they represent.They reduce the manufacturers financial burden and risk associated with holding large inventories. Market Information: Customer Support : service, spare parts.

Functions Performed by wholesalers/Retailers for Customers


Product Availability: ready availability of range of products. Assortment,convenience: Brings together from a variety of manufacturers an assortment of products that can greatly simplify the customers selection and ordering tasks. Bulk-Breaking : Distributor buys in bulk and gives to customers in unit of one : SKU. Credit and Financial Assistance Advice and Technical Support :(installation -->A/C,PC) Customer Service : Delivery , after sales help .

Services Marketing
Defn: A service is any act or performance that one party can offer to another that is essentially intangible and doesn't result in the ownership of anything . Its production may or may not be tied to a physical product. E.g : Airlines, hotels,banks,insurance,brokers , real estate companies, police,post office, colleges,hospitals.

Services Marketing

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Services Marketing
Characteristics of service
Intangibility Inseparability Perishability Variability

Services Marketing
Intangibility : Cannot be seen , tasted,felt, heard or smelled before purchase. Tangibilize the intangible e.g HDFC bank 1) People : quick service,courteous,helpful 2) Machinery : state of the art ATMs, WAN network etc will connote modern and effective bank. 3) Place : Exterior, Interior ambience : should connote class.

Services Marketing
Inseparability: Services are typically produced and consumed simultaneously. Perishability: Services cannot be stored. Unused electric power, idle seats in bus, train represent business which is lost forever. Variability: Services are highly variable , since they depend on who provides them and when and where they are provided.

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