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Principle of Marketing
1. PRODUCT: A tangible item, a service, an
idea, a concept, a person.
DEVELOPMENT OF MARKETING - A
HISTORICAL PERSPECTIVE
Production Era – 1850s to 1920s
Sales Era – 1930s to 1950s
Marketing Era – 196s & 1970s
Societal Marketing Era – 1970s to 1990s
The Future---?
2. MARKETING INTRODUCTION
The exchange of something to satisfy an un-fulfilled need.
CONDITIONS OF EXCHANGE
Two or more persons/organizations must be
involved
There must be some unfulfilled need
The parties must be voluntarily involved
Each party must bring in something of value
There must be communication between the parties
involved.
3. CONCEPT OF UTILITY CREATION
Form Utility---- the physical or chemical form of
a product that makes it of value , e.g.,
conversion of lumber into furniture.
Place Utility ---- ready access makes the
product of value e.g., film on video.
Time Utility ---- timeliness creates utility e.g,.
Life saving drug.
Information Utility --- knowledge of existence of
a product.
Image Utility ---- emotional or psychological
value attached to a product
Possession Utility --- occurs when the
ownership exchange takes place.
The ability of a product to satisfy an un-fulfilled need
4. THE INTANGIBILITY & TANGIBILITY
CONTINUUM
Babysitting
Education
Legal services
Air travel
Fast foods
Cosmetics
Soft drinks
Clothing
sugar
TANGIBLE
ELEMENTS
INTANGIBLE
ELEMENTS
5. THE MARKETING CONCEPT
1. NATURE & RATIONALE
All an organization’s activities should be
customer oriented.
All marketing activities should be
coordinated
The above 2 activities are essential to
achieving economic benefits for the
organization
2. RELATIONSHIP MARKETING
Increasingly, customers are asking
organizations to built a long term relationship
which goes beyond short term benefits.
3. CUSTOMIZATION
This is a change from mass production / marketing
concept of multi-skilling & economics of scope
4. ETHICAL MARKETING
Becoming an important issue with increasing
education / awareness of customers and growing
legislature.
6. MARKETING MIX
Traditionally, Marketing Mix refers to a product or
service, its distribution, promotion and pricing
strategies. These four elements must satisfy the
needs of the target markets and simultaneously,
achieve organizational objectives. Marketing Mix
includes.
PRODUCT:
Managing existing products, adding new ones and
droping the failed ones. Strategies must also be
formulated regarding branding, packing and other
product features such as warranties, etc.
PRICE:
Price flexibility, related items in a product line,
terms of sale, allowing discounts.
PLACE (DISTRIBUTION):
Related to channel members, type of distribution,
extensive, intensive,selective.
PROMOTION:
Coordination of individual methods of promotion
such as advertising, personal selling and sales
promotion. Promotional strategies should be
adjusted according to the product life cycle
7. OPPORTUNITY
WINDOW
REFERS TO THE TIME
AVAILABLE FOR THE
PIONEERING COMPANY IN
THE BUSINESS TO MAXIMIZE
PROFITS BEFORE A SECOND
ENTRANT BECOMES A
COMPETITOR
EXAMPLE TCS IN PAKISTAN
GILLETTE
ROOH E AFZA
8. STRATEGIC MARKETING PLANNING
POSITIONING
Refers to a product’s image in the minds of its
customers, in relation to directly competitive products as well as
other products marketed by the same company.
DIFFERENTIALS ADVANTAGE
Refers to any feature of an organization or a brand
perceived by customer to be desirable and different from those of
the competition.
SELECTION OF TARGET MARKETS
Refers to a group of people/organizations at which a firm
directs a marketing strategy.
MEASUREMENT OF MARKET DEMAND
Enables the company to forecast its sales for a certain
period of time.
9. Organizations internal environment
Controllable factors
Financial resources
Expansion/Retrenchment
Size of operations
Strength of the company
Lease/ buy options
Advertising
Securities for taking long/short-term loans
Production facilities
Production facilities to meet specifications
Operation on optimum capacity
Accepting external jobs
10. EXTERNAL MACRO ENVIRONMENT
NON – CONTROLLABLE
• DEMOGRAPHICS
Ratio of urban to rural population
High populating growth rate
Demographic shifts
Aging of population
Ration of minorities
• ECONOMIC CONDITIONS
business cycles marked by recessions &
booms
Gross domestic product (GDP)
Real Income
Purchase Power Perity (PPP)
Inflation
Interest Rates
11. POLITICAL & LEGAL FORCES
• Monetary & Fiscal Policies
• Social legislation & Regulations
• Government Relationship with Industries
• Legislation special related to marketing
TECHNOLOGY
• Invent of computer / internet
• E B I Z (E-Commerce)
• Change in lifecycle because of technology advancements
• Change in business pattern
12. LOCATION
• Prime location leads to reduced operating
costs
RESEARCH & DEVELOPMENT
• Customer satisfaction from existing
products
• product innovation
• keeping and edge over the competitor
HUMAN RESOURCES
• Employing Experts
• A Manager Concept (Multi–Tasking)
• An asset rather than a liability
COMPANY IMAGE
• Perception of the Consumer
• Providing meaningful benefit to the
Customer
COORDINATION AMONG INTERNAL FACTORS
•Coordination for the conduction of 4/5 Ps
13. EXTERNAL MICROENVIRONMENT
PARTIALLY CONTROLLABLE
THE MARKET
A place where buyers and sellers meet,
goods & services are offered for sale, and
transfers of ownership occur.
OR
People or organizations with need to
satisfy, money to spend, and willingness to
spend money.
FACTORS TO BE CONSIDERED
• People /Organizations with needs
• Purchasing Power
• Buying Behavior
THE SUPPLIER
No firm can sell a product without
being able to make or buy it.
14. MARKET FORCES
• THE CUSTOMER
Who, what do they buy, how do they buy,
when do they buy.
• industry behavior
Structure, CR, attitudes of intermediaries,
motivation
• COMPETITORS
Company’s positioning relative to
competitors, nature of competition (monopoly
vs. oligopoly vs. pure competitions)
• GOVERNMENTS & REGULATORY
AUTHORITIES
Control over marketing activities &
competitors activities.
15. Psychological factors: motivation, perception,
attidtud4es, personality and concept of self.
Situational factors: time dimensions: when do customers
buy?
Physical & Social Dimensions: where do they buy?
Terms of Purchase: how do they buy?
Moods: Conditions in which thy buy
16. SOCIAL GROUP
SOCIAL
CLASSES
CHARACTERISTICS
A Businessmen owning large
properties or senior managers
working with MNCs, large
landowners.
B Smaller businessmen, middle level
executives, small and medium size
land holding farmers.
C1 White collar workers, e.g., school /
College teacher, doctors, engineers.
C2 Blue collar workers, e.g., auto
mechanics
D Un-skilled or semi-skilled blue collar
workers, e.g., landless farmers,
nomads, etc.
E Partially employed, old / retired
people with limited income,
unemployed
17. FAMILY LIFE CYCLE
STAGE IN LIFE
CYCLE
CHARACTERISTICS
SINGLE Young, single, male /
female living alone.
Generally student /
young professional.
Emphasis on
convenience products,
dine-outs small packs.
MARRIED WITH NO
CHILDREN
Younger, mid 20s-early
30s, emphasis on dine-
out / entertainment.
Dowry makes life easier.
MARRIED WITH YUONG
CHILDERN
Emphasis on children
products, e.g., baby
food medicine, clothing.
Later, children’s
education.
MARRIED WITH
GRWON UP CHILDREN
Emphasis on children’s
professional
education,savings for
building a house.
Children’s marriage
OLD COUPLE Emphasis on medical
care, security
SINGLE SURVIVOR One member family
19. CONSUMER MARKETS & BUYING BEHAVIOR
Critical variables include:
Geographic distribution
Urban/rural
Concentration of population by geographic areas,
etc….
demographics
Age distribution
Gender
Family life-cycle
Education
Income
Ethnic groups
Social influences
Cultures ad Sub-Cultures
Religion
Social Class
Reference groups
Role & influence of family
Psychological Factors
Motivation
Perception
Attitudes
Personality
Concept of Self
20. BUSINESS MARKETS & BUYING
BEHAVIOUR
BUSINESS MARKETS EXIST:
To produce other goods / services
To resell to other users or consumers
To conduct Organizational Operations
COMPONENTS OF THE BUSINESS MARKETS
Agricultural Market
Reseller Market
Government Market
Services Market
Non-Business Market
International Market
CHARACTERISTICS OF THE BUSINESS MARKET DEMAND
Derived demand
Inelastic Demand
Demand widely fluctuates
Buyers are well informed
BUYING SITUATION
New Task Buying
Straight Re-buy
Modified Re-buy
21. MULTIPLE ROLES IN BUYING
User
Influencer
Decision Maker
Gate-keeper
Buyers
BUYING PATTERN OF BUSINESS USERS
Direct Purchase
Nature of Relationship
Frequency of Purchase
Size of Order
Length of Negotiation Period
Reciprocity Arrangements
Service Expectations
Dependability of Supplies
leasing
22. “EVERY HUMAN IN THIS WORLD HAS THE
RIGHT TO BELIEVE THAT BECAUSE OF
HIM/HER WAS THE WORLD CREATED.”
By Eleanor Roosevelt
23. DIMENSIONS OF SEGMENTATION
GEOGRAPHIC SEGMENTATION
DEMOGRAPHIC SEGMENTATION
AGE
YOUNGSTERS
TEEANGERS
MIDDLEDAGED
SENIORS
25. SINGLE SEGMENT VS MULTIPLE
SEGMENT STRATEGIES
SINGLE SEGMENT STRATEGIES
Enable the seller to penetrate the market in
depth and to acquire a reputation as specialist
in a limited market.
Risk associated is, the firm has all eggs in one
basket.
26. MULTIPLE-SEGMENT
STRATEGY
Two or more groups of buyers are identified.
Different marketing mix is developed to attract
each segment. Segmentation with no change
in product, separate promotional appeals each
tailored to a given segment are devised.
28. SEGMENTATION PROCESS
ON THE BASIS OF PRIOR
experience and judgment
BASED ON STRUCTURED
analyses supported by some marketing
research.
29. POSITIONING THE
PRODUCTS
The ability of the organization to attract
attention of the prospective customer towards
the product and to differentiate it in a favorable
way from competitors is called positioning. This
effort basically aims at developing the image of
a product in such a way that the targeted
clientele gets quickly attracted.
30. POSITIONING IN RELATION TO
COMPETITOR
FLANK ATTACK OR HEAD-TO-HEAD
POSITIONING
Positioning the product directly against the
competitor is called a Flank Attack. This
strategy is suitable for a firm that already has a
consolidated differential advantage or not be
adopted when a competitor has a stronger
market position.
e.g., Launch of newspaper Aaj Ki Awaz
Seven Star Cigarettes
Delta Airlines
31. POSITIONING IN RELATION TO A
PRODUCT CLASS OR ATTRIBUTE
An organization’s positioning strategy may
entail association or distancing it from a
product class or attribute.
Examples
Made in Japan
Environmentally friendly
Recyclable Packing
Green Peace
32. POSITIONING BY PRICE
AND QUALITY
This type of positioning strategy defines
the price & quality relationship and
advocates that the higher price signifies
a higher quality.
Examples:
A Rolls Royce car
The diamond called Kohinoor
Statues of Buddah
The painting called Mona Lisa
Local Market Examples
Foreign franchises offering edibles
Food offered in five star hotels
33. At the speed of 60 miles an hour, the only sound
you hear is the tickling of a clock.
Hamaisha saath nibhana tou, sooti hay mairi ladli
Hamaisha saath nibhana too, parhti hai mairi ladli
Hamaisha saath nibhana too, rukhsat hoi meri ladli
Apnay saath bhi lai thi baiti ko bhi yayhi doongi
Gold Leaf, for the taste alone
Red & White - the taste of adventure
Berger Robbiolac All Rounder
Wills Kings – Paradigm Shift
Low hassle in getting rid of packaging
Environmentally friendly product
34. MARKET SEGMENTATION
Market segments are groups of customers having
similar needs / wants and preferences. It enables
the organization to more closely match its marketing
mix with the customers needs or demands.
35. OPPORTUNITIES
Can we enter new markets?
Can we expand our product line?
Are competitors weak or complacent?
Will our markets grow?
THREATS
Are we likely to get new competitors?
Will other products be substituted for ours?
Will new government policies impede our business?
Are we vulnerable to economic downturns?
Will buyer’s tastes and preferences change?
Will demographic shifts hurt us?
36. QUESTION CHECKLIST FOR SWOT
ANALYSES
STRENGTHS
Do we have a distinct competitive advantage?
Do we have adequate financial resources?
Can we do something better than our competitors.?
Do buyers think well of us?
Are we known at the market leader?
Do we have proprietary technologies.?
Can we produce and market at lower costs?
Does our management team have a good track record?
WEAKNESSES
Do we lack a clear strategic direction?
I sour competitive position deteriorating?
Are our profitability obsolete?
Is our profitability lower than it should be?
Do we lack management depth and talent?
Are we missing any key skills?
Do we have internal operating problems?
Are we short of cash to fund current and future
business efforts?
Do we have a weak image in the market?
37. GENERIC NAMES WHICH WERE
EARLIER BRAND NAMES
ASPIRIN
ESCALATOR
KEROSENE
ZIPPER
THERMOS
38. STAGES IN ADOPTION PROCESS
AWARENESS
INTEREST
EVALUATION
ADOPTION
CONFIRMATION
ADVOCACY
39. VALUATION OF BRANDS
BRAND ORGANIZATION VALUE IN $
BILLION
Marlboro Philip 31.2
Coca Cola Coca Cola 24.4
Budweiser Anheuser Busch 10.2
Pepsi Cola Pepsico 9.6
Nescafe Nestle 8.5
Winston Nabisco 6.1
Pampers P & G 6.1
Camel Nabisco 4.4
Johnnie Guinness 2.6
Barbie
Dolls
Mattel 2.2
Smirnoff
Vodka
Grand
Metropolitan
2.2
Kraft Philip Morris 2.2
So
40. BRAND AWARENESS
The ability of potential buyers to recognize or
recall a brand as a member of a certain
product category. Linkages between product
class and brand are involved.
41. DRIVE FOR BRAND AWARENESS
HIGH INVESTMENT ON TV
Average 10% of sales turnover in case of
leading brands.
PROMOTION AGAINST TARGET
MARKETS
Pepsi – Youth
Gold Leaf – The older man
42. CONSTRUCTION OF A BRAND NAME
NAME, SYMBOLS, SLOGANS NAME
Easy to learn increases recall rate
Different / unusual
Interesting – rhyme, humor
Creates a mental picture
Precise – less number of words used
Emotional – disseminating joy, obsession,
passion.
43. METHODS FOR THE COLLECTION OF DATA
SURVEY METHOD
Personal Interviews
Focus Group Discussions
Telephonic Survey
OBSERVATION
EXPERIMENTAL METHOD
44. Trends in Retailing – Experiences from Developed Countries
MAJOR STRATEGIES BEING EMPLOYED BY
RETAILERS
SHORT-TERM
loyalty cards
Use of customer data-base
Sharing of EPOS data for inventory management,
segmentation, response time,etc
efficient Customer response (ECR)
LONG TERM
Increasing shopping experience – catering for young
mothers, better layout, more extensive range.
Additional facilities – banking, direct marketing etc.
45. DETERMINING INTENSITY OF
DISTRIBUTION
INTENSIVE – Distribution through every
reasonable outlet.
SELECTIVE – Distribution through multiple but
not all outlets.
EXCLUSIVE – Distribution through limited /
restricted outlets.
LEGAL ISSUES IN DISTRIBUTION
EXCLUSIVE DEALERSHIP – Prohibits dealer
from carrying products of competitors.
TYING CONTRACTS – Supplier sells to
middleman on condition that a less demanded
product is also bought.
REFUSAL TO DEAL – Manufacturer refuses to
deal with certain independent middlemen.
EXCLUSIVE TERRITORY POLICY – When
producer demarks territory and sales can only be
made in the particular territory.
46. MARKETING RESEARCH
WHY MARKET RESEARCH?
COMPETITIVE PRESSURE
As more and more companies enter in a particular
market, there is always need to maintain
differential advantage or a unique selling
proposition (USP)
EXPENDING MARKETS
because of globalization, companies enter new
markets and there is need to know about these
new markets, so as to formulate appropriate
marketing mix for a environment.
COST OF MISTAKES
Experimentation in market is no longer possible
because it can be fatal for the organization, e.g.,
cost of introducing a new drug is approximately
US $500 million and takes around 10-12 years.
GROWING CUSTOMER EXPECTATIONS
Customer now expect more benefits for less
money. It is only through research that we, as
marketers, can find out what they expect and try
47. COMMITTED BUYER
LIKES THE BRAND
Consider it a friend
SATISFIED BUYER
Has switching costs
SATISFIED / HABITUAL BUYER
No reason for change
SWITCHER / PRICE SENSITIVE
Indifferent – no brand loyalty
THE LOYALTY PYRAMID
48. Business markets & buying
behavior
Business Markets exist.
To produce other goods/services
To resell to other users or consumers
To conduct organizational operations
Components of the Business Markets
Agricultural Market
Reseller Market
Government Markets
Services Market
Non-Business Market
International Market
Characteristics of the Business Market Demand
Derived Demand
Inelastic Demand
Demand Widely Fluctuates
Buyers are Well Informed
Buying situations
New task buying
Straight Re-buy
Modified Re-buy
49. Multiple Roles in Buying
User
Influencer
Decision Maker
Gate-Keeper
Buyers
Buying Pattern of Business Users
Direct Purchase
Nature of Relationship
Frequency of Purchase
Size of Order
Length of Negotiation Period
Reciprocity Arrangements
Service Expectations
Dependability of Supplies
Leasing
50. Competition
Brand competition
Substitute Products
General competition
Social & cultural forces
Change in consumption patter
Difference in lifestyle
Two income families
Changing gender roles
Conspicuous consumption
A premium on time
Health & environmental issues
52. QUESTION CHECK FOR SOWT
STRENGTHS
• Do we have a distinct competitive advantages?
• Do we have adequate financial resources?
• Can we do something better than our competitors?
• Do buyers think well of us?
• Are we known at the market leader?
• Do we have proprietary technologies?
•Can we produce and market at lower costs?
• does our management team have a good track record?
WEAKNESS
• Do we lack a clear strategic direction?
• I sour competitive position deteriorating?
• Are our facilities obsolete?
• Do we lack management depth and talent?
• Are we missing any key skills?
• Do we have internal operating problems.?
• Are we have short of cash to fund current and future
business efforts?
• Do we have a weak image in the market?
53. SINGLE SEGMENT VS MULTIPLE SEGMENT
STRATEGIES
SINGLE SEGMENT STRATEGIES
Enable the seller to penetrates the market in
depth and to acquire a reputation as
specialist in a limited market. Risk associated
is, the firm has all eggs in one basket.
54. MULTIPLE – SEGMENT STRATEGY
Two or more groups of buyers are identified.
Different marketing mix is developed to
attract each segment. Segmentation with no
change in product, separate promotional
appeals, each tailored to a given segment are
devised.
55. MARKET RESEARCH
Why Market Research?
COMPETITIVE PRESSURE
As more and more companies enter in a particular
market, there is always need to maintain a
differential advantage or a Unique Selling
Proposition (USP)
EXPANDING MARKETS
Because of globalization, companies enter new
markets and there is need to know about these
new markets, so as to formulate appropriate
market6ing mix for a new environment.
COST OF MISTAKES
Experimentation in market is no longer possible
because it can e fatal for the organization, e.g.
cost of introducing a new drug is approximately
US $ 500 million and takes around 10-12 years.
GROWING CUSTOMER EXPECTATIONS
Customers now expect more benefit for less
money. It is only through research that we, as
marketers, can find out what they expect and try
to provide to them economically.
56.
57. A BRAND
A Name
Symbol
Sign
Mark
Color
Or the combination of above
58. REASONS FOR BRANDING FOR CONSUMER
Ensure recognition
Ensure repeat purchase
Ensure Quality
59. REASONS FOR BRANDING FOR BRAND
OWNERS
Offers Premium on Price
Can be Sold
Can be Promoted
60. BRANDING STRATEGIES
CORPORATE BRANDING STRATEGY
Suggest that every product is
promoted by a different brand name
e.g. Lux, Surf Excel, Lifebuoy, Dalda,
Lirl etc.
61. FAMILY BRANDING STRATEGY
Suggest that all products of one company be
promoted by the same name, e.g. HP, Sony,
Panasonic, LG etc.
62. PRODUCT NAME COMBINED WITH FAMILY
NAME
Suggest that a company may use that strength
the of the company name with the name of the
product e.g. Toyota Corolla, Service Don Carlos,
City Bank Visa etc.