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Marketing Management - II

Module 1
Marketing Mix
Product Management

Marketing Mix

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Marketing Mix
Group of marketing variables controlled by
a business
Aimed at implementing the marketing
strategy directed at a specific market
segment
Initial variables 12

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Marketing Variables
Product planning

Promotions

Pricing
Branding
Distribution channels
Personal selling
Advertising

Packaging
Display
Servicing
Physical handling
Fact finding and analysis

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The 4 Ps

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Marketing Mix Strategy


Fiskars Orange: the
ubiquitous pair of
scissors
Project Orange Thumb:
community gardening
groups
Viral marketing

o Fiskars fan community


o Interaction on what you can
do with your scissors
o Most passionate twitterers
community leaders

Direct mail

o To exclusive traders for


picking inventory

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Product

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Product vs. Marketing


Management
Product

Marketing

Scope

Narrow
Single product/product line

Broad
Portfolio of products

Decision
making

Tactical

Strategic

Time
horizon

Short-run

Long-run

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Positioning the Product

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Demarcating the Market


Food &
entertainment

Beverages

Soft drinks

Diet colas

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Total Product Concept


Core benefits: Transportation
Expected product: The basic
features that provide the core
benefit
Augmented product: Features
that are beyond expectation
Potential product: Features
added on

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Consumer Product Classification

Convenience
Shopping
Specialty
Unsought

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Consumer Product Classification


Convenience

Shopping

Specialty

Unsought

High

Low

Infrequent

Infrequent

Comparison & Minimal


Shopping Effort

Moderate

High

Minimal

Brand loyalty

Low

Higher

High

Low

Price

Low

Higher

High

Low to high

Availability

Widespread

Fewer outlets Few outlets

Low to high

Promotion

Mass
promotion

Advertising
and
personal
selling

Heavy
advertising
and
personal
selling

Purchase
Frequency

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Targeted
promotion

Industrial Product Classification

Capital equipment
Components
MRO
Raw materials
Processed materials

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Product Portfolio
Collection of all products offered by a firm
Portfolio management
o Decisions regarding current and future products
o Finite company resources

Mix dimensions
o Width
o Depth
o Length = Width x Depth

Width

o Expansion
o Extension
o Cannibalisation
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Depth

Additions

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LG India Product Portfolio


Home
Entertainment

Mobile
Phones

Computers

Home
Appliances

Air
Conditioners

Commercial

Flat Panel TVs

Smart Phones

Laptops

Refrigerators

Split

Cassette AC

CRT TVs

Basic Phones

Monitors

Dishwashers

Window

Ducted AC

3D TVs

Projectors

Microwave
Ovens

Dome Cameras

Home Theatre
Systems

Optical Media

Washing
Machines

IR Cameras

Music Systems

Vacuum
Cleaners

Access Control
Systems

DVD Players

Water Purifiers

Displays

Blu-Ray Players

Air Purifiers

Car infotainment
Video
Conferencing
Systems

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Product Strategy
Product positioning
o Cost (value) differential
o Feature differential

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Cost Differential
Economies of scale
Innovative purchasing, logistics, selling,
advertising
Criteria
o High volume single product (or family of
products)
o Efficient facilities

Risks
o Shift in consumer taste
o Technological shifts
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Differentiation
Quality especially for technology
products
Status
Convenience & service
Distribution
Brand

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Status

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Product Life Cycle

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Product Objectives
Introduction
o The basic product

Growth
o Add features
o Product line extension

Maturity
o Diversify to attract new customers
o Extend the life cycle

Decline
o Reduce costs
o Remove slow-selling variants
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Marketing Goals
Introduction

o Build awareness
o Encourage trial
o Heavy expenditure in promotion

Growth

o Take advantage of growing demand


o Build brand
o Mass communications

Maturity

o Maximise market share, and thus, profits


o Build brand preference

Decline

o Eliminate or reduce investments


o Reduce promotions to minimum level

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Limitations
Based on past results
Not fixed
Not true for each and every marketing
situation
o Fads, styles

More applicable to product categories rather


than individual brands
Difficult to identify the exact stage
Stifles marketing innovation decline stage
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Diffusion of Innovations
The speed of adoption of a product
Population is segmented based on the
openness towards innovations

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Adopter Categories
Openness to innovation: % of population
2.5

16

13.5
Innovators
Early Adopters

34

34

Early Majority
Late Majority
Laggards

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Category Traits

Innovators techies; like having new or


unusual things; testers; report on weaknesses
Early adoptersopinion leaders (visionaries);
social implications; less price sensitive; willing
to adopt if given personalised solutions &
good service
Early majority - pragmatists
Late majority conservatives; technologyshy; price sensitive
Laggards skeptics; resist until maintaining
status quo becomes difficult
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ACCORD Model

Advantage - Relative
Compatibility
Complexity
Observability Communicability
Risk - Financial or social
Divisibility

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NPD Process

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Types of New Products

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New Product Ideas from


Customers
1.
2.
3.
4.

Observe usage
Problems in usage
Dream products?
Form a brand community
o Social networking sites

5. Challenge to
change/improve
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Thank You!

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