Module:1
Chapter:1 Nature & Scope of Marketing
Introduction to Marketing
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Turn off that alarm brush your teeth take a shower have breakfast get dressed travel to work use the copier go out for dinner at ____ - fall asleep We use more than 250 brands by the time our day ends !!
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Marketing is natural
Analogy of marketing with the natures law of survival of the fittest
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What is sold
A grocery shop sells Channa A restaurant sells ChannaBhatura MDH , a food company sells ready to eat channa masala Tata Consultancy Service sells TCS Certainity
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What is Marketed?
Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas
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Lets define
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What is Marketing?
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
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Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
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Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably The Chartered Institute of Marketing
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The right product, in the right place, at the right time, and at the right price Adcock et al
Marketing is the human activity directed at satisfying human needs and wants through an exchange process
Philip Kotler
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There will always be a need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available. Peter Drucker
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Business Markets
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Customer :
Customer are those who buy goods and services.
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Selling Concept
Marketing Concept
Society
Consumers
Company
(Profits)
Holistic Marketing
The Holistic Marketing concept is bases on the development, design and implementation of marketing programs, processes and activities that recognizes their breadth and interdependencies. Holistic marketing recognizes that everything matters in marketing and that a broad, integrated perspective is often necessary.
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Middle Management
Front-line people Customers
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Top management
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Product
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What is a Product?
A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.
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Product Mix
Total sum of all products and variants offered by an organization (Hindustan Unilever Limited)
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Product Differentiation
Product form Features Customization Performance Conformance Durability Reliability Repairability Style
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Service Differentiation
Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair
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PRICE
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Definition:
In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.
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Objectives of Pricing
Short-term profit maximization Short-term revenue maximization Maximize quantity Maximize profit margin Differentiation Survival
Source: http://entrepreneurs.about.com/od/salesmarketing/a/pricingstrategy.htm
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Place
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Retailer
Consumer
Mfg
Wholesaler
Retailer
Consumer
Retailer
Consumer
Promotion
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Concept of Promotion
Promotion is all personal and impersonal efforts by a seller to Inform Persuade or Remind a target audience.
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Personal Selling
Direct presentation of a product to a prospective customer by a representative of the organization selling it.
Face to face Over the phone
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Advertising
The non-personal communication of information usually paid for & usually persuasive in nature, about products (goods & services) or ideas by identified sponsor through various media.
Broadcast media (TV, Radio) Print media (newspapers, magazines) Outdoor media (billboards) Internet Mobile phones Other media
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Sales Promotion
Incentives given to encourage sales and help personal selling.
Premiums Event sponsorships Contests Trade shows In-store displays, samples, rebates Discounts and coupons
Promotion
Public Relations
Efforts to develop favorable attitudes and opinions about products/organizations
Newsletters Annual reports Lobbying, charitable events etc.
Publicity
News stories about organization & products
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Place
Customer Solution
Convenience
Price Promotion
Customer Cost
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Communication
Promotion
Price Place
Information
Value Access
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( chapter 3 in detail)
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Consumer Behavior
The behavior that consumer display in buying, using and disposing of products & services.
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Social Factors
Personal Factors
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What is Culture?
Culture is the fundamental determinant of a persons wants and behaviors acquired through socialization processes with family and other key institutions.
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Subcultures
Nationalities
Geographic regions
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Social Classes
Upper uppers Lower uppers Upper middles Middle class Working class Upper lowers Lower lowers
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Social Factors
Reference groups
Family
Social roles
Statuses
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Personal Factors
Age
Selfconcept Lifestyle Values Personality Life cycle stage
Occupation
Wealth
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Motivation
Perception
Learning
Memory
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Motivation
Maslows Hierarchy of Needs Behavior is driven by the lowest, unmet need Herzbergs Two-Factor Theory Behavior is guided by motivating and hygiene factors
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Perception
Selective Attention
Selective Retention Selective Distortion Subliminal Perception
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Market Demand
Chapter :2
Management-II
Chapter:2 Market Demand
Demand States
Negative Nonexistent Latent
Declining
Irregular
Full
Overfull
Unwholesome
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Demand
Negative Demand : * consumers dislike the product and may even pay a price to avoid it. * Eg. : vaccinations * Marketing Task : Market Analysis, Positive promotion, change belief & attitude of people, product redesign, lower price
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Demand
Nonexistent Demand : * consumers may be unaware of or uninterested in the product. * foreign language courses * Marketing Task : connect the benefits of the product with peoples needs and interests
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Demand
Latent Demand : * consumers may share a strong need that cannot be satisfied by an existing product * Harmless Cigarettes, More fuel efficient car * Measure the size of potential market, analyze strength of the company, develop goods and services to satify the demand
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Demand
Declining Demand : * consumers begin to buy the product less frequently or not at all. * Typewriter, Desktop pc * analyze the causes of the decline and determine whether demand can be resituated by new target markets, by changing product features or by more effective communication. * reverse declining demand through creative remarketing
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Demand
Irregular Demand : * consumer purchases vary on a seasonal, monthly, weekly, daily or even hourly basis. * tours and travels peak in weekends * Marketing Task : Synchromarketing Flexible pricing, promotion and other incentives
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Demand Forecasting
A forecast is a prediction or estimation of a future situation, under given conditions. Sales Forecast is an task of projecting the future sales of the firm -Two types of Forecasting 1. Short Term Forecasting 2. Long Term Forecasting
Levels of forecast
(i) Macro-economic forecasting: Censes survey. Young India survey by CNN (ii) Industry demand forecasting: Tatas Westside had conducted a survey in 1997 about retail market before starting the Westside retail outlet on Dec 15th 1998. (iii) Firm demand forecasting: Godrej (iv) Product-line forecasting: helps the firm to decide which of the product or products should have priority in the allocation of firms limited resources. P&G whether to produce more of hair shampoo( either head and shoulders or Pantene) or to produce Tide or Camay soap. Premium End segment
Disadvantages:
Congenital optimism and congenital pessimism. near-future forecasting is only possible,
Delphi Method: : Opinions are first collected from experts and then instead of mathematical averaging efforts are made to match them.
To narrow down the gap experts are brought together, arranging one or more meetings and arriving at some narrow range for the forecast under attempt.
Advantages Forecast can be made easily and speedily. Different experts ideas and opinions are taken into consideration for forecasting. Suitable when past record of sales is not available or a new product is to be introduced. Expenses are very less than actual survey. Disadvantage: The reliability of forecasting is always doubtful because forecasting is based on opinions and suggestions and not actual facts.
Advantages: Forecast comes direct from horse's mouth. first-hand unbiased information Disadvantages: costly, unwillingness of consumers to answer uncertainty, time consuming, respondents might himself not clear about his consumption pattern
It basically assumes that the variable will follow its previously established pattern if the pattern of sales repeats itself fairly accurately in a given period of time. In graphical Sales Trend Analysis Method the period is taken on X- axis and the corresponding sales values are on Y-axis.
Finding seasonal fluctuations in the variable Predicting turning points in future movements of the variable
Management - II
Chapter:3
Market Segmentation
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Local areas
Individuals
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The Himalaya Drug Company serves a growing niche market by focusing on ayurvedic medicines and health supplements
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Behavioral
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Geographic Segmentation
Local market
Urban Market Rural Market Regional Market National Market International Market
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Demographic Segmentation
Age and Life Cycle
Life Stage Gender Income & Education Generation Social Class Religious Customs
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Behavioral Segmentation
Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude
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The Brand Funnel Illustrates Variations in the Buyer-Readiness Stage Aware Ever tried Recent trial Occasional user Regular user Most often used
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Loyalty Status
Hard-core
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Purchasing Approaches
Situational Factors Personal Characteristics
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Demographic
Which industry we serve Company Size Location of company
Operating Variable
Technology User or Nonuser status Customer Capabilities
Purchasing Approach
Purchasing- function organization (Centralized v/s Decentralized) Power structure (Engineering v/s Finance dominated) Nature of Existing Relationship (String v/s one time) General Purchasing policies Purchasing Criteria
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Situational Factor
Urgency Specific Application Size or order
Personal Characteristics
Buyer seller similarity Attitude toward risk Loyalty
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Accessible
Differentiable Actionable
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Targeting Market
After dividing the market into different divisions when the market planning and marketing strategy are arranged keeping one of these divisions in view, it is known as Target Market. 1. Single product-Single Market 2. Single Product- Many Market 3. Many Product-Many Market
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The Revolution brand of readymade womens apparel successfully focuses on the niche segment of plus-size clothes.
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Positioning
Positioning means occupying a distinctive place into the mind of target customer Stages of Product Positioning
Identification of implies comp0etitive benefit Selection of competitive benefit To give information competitive benefit
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