1 bbm a marketng

8/3/2019 1 Bbm a Marketng

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MODULE 1: INTRODUCTION

Market communication

Sellers Market circle

OfExchange

Buyers

FEEDBACK

Marketing: Social and Managerial process by which individuals andgroups obtain what they need and want through creating and exchanging

products and value with others.

-Philip Kotler

Markets Needs, Wants&

Demands

Marketing offers (Products

services and experiences)

Core marketing

Concepts

Exchanges transactions&relationships Values &satisfactions


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Needs

Eg: Students has reach college on time Transport needs

Maslows hierarchy of needs

Self Actualization Self fulfillment

Esteem Recognition & Status

Social Sense of belonging & LoveSafety Security & ProtectionPhysiological Hunger & Thrust

Want

Shaped by culture & personality characteristicsEg: Bike: Hero Honda Caliber (Economy)

Pulsar (Style)

DemandBacked by purchasing power & willingness to buy

Eg: Car:Maruthi 800 (cheaper)Maruthi SX4 (costly)


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Marketing offers:

Products:Eg: FMCG & Durable Goods

Services:Eg: Hotels, Hospitals & Educational Institutions.

Persons:Eg: MLAs & Film Stars.

Places:

Eg: Kerala Gods own country.

Organizations:Eg: Reliance & Wipro

Information:Eg: BBC & ND TV.

Ideas:

Eg: Family Planning

Experiences:Eg: Wonderla.

Customer value:

Is the difference between the value and satisfaction that different products and services deliver oroffer when compare to the cost of product or service.

Eg: Ra-One Not worth watching.

Customer satisfaction :

How well the products performance lives up to the customers expectation.

Eg: Fiama- De-Wills - Good one - live up to the expectations

Ponds fairness cream. - Does not live up to the expectations.

Exchanges:Stage of offering and discerning the mutually beneficial and acceptable terms in the exchanging

the process.

Relationships:Market wants the customer to be fully satisfied with the transaction so that long-term

relationships can be built.


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Market:Place where buyers and sellers meet to buy or sell products.Eg: Consumer Market, Business Market and Global Market.

Marketing Selling

- Focuses on customer needs - Seller needs- Begins before production- - After production- Continues after sale - Ends With sale- Profits through customer- satisfaction

- Profits through salesvolume

Understanding the market place and customer needs

Customer needs, wants and demands

The most basic concept underlying marketing is that of human needs. Human needs are states of

felt deprivation. They include basic physical needs or food clothing, warmth and safety; social

for belonging and affection; and individual needs for knowledge and self-expression. These

needs were not created by marketers; they are the basic part of human makeup.

Wants are the form of human needs take as they are shaped by culture and individual personality.

An American needs food but wants a Big Mac, French fries and a soft drink. A person in

Mauritius needs food but wants a mongo, rice, lentils and beans. Wants are shaped by ones

society and are described in terms of objects that will satisfy needs, When backed by buying

power, wants become demands Given their wants and resources , people demand products with

benefits that add up to the most value and satisfaction.

Market offerings----products, services, and experiences

Consumers needs and wants are fulfilled through a market offering---some combination of

products, services, information or experiences offered to a market to satisfy a need or a want.

Market offerings are not limited to physical products, they also include service activities or

benefits offered for sale that are essentially intangible and do not result in ownership of anything.

Examples include banking, airlines, insurance hotel, tax preparation, and home repair services.

More broadly market offerings also include other entities such as persons places organisation,

information and ideas.


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Many sellers make the mistake of paying more attention to the specific products they offer than

the benefits and experiences produced by these products. These sellers suffer from marketing

myopia. They are so taken with their products that they focus only on existing wants and lose

sight of underlying customer needs.

Customer value and satisfaction

Customers form expectations about the value and satisfaction that various market offerings will

deliverand buy accordingly. Satisfied customers buy again and again and tell others about their

good experiences. Dis satisfied customers often switch to competitors and disparage the products

to others.

Marketers must be careful to set the right level of expectations. If they set expectations too low ,

they may satisfy those who buy it but fail to attract enough buyers. Of they raise the expectations

too high, buyers will be disappointed. Customers value and customer satisfaction are key

building blocks for developing and managing customer relationships.

Exchange and relationships

Marketing occurs when people decide to satisfy needs and wants through exchange relationships.

Exchange is the act of obtaining a desired object from someone by offering something in return.

Marketing consists of actions taken to build and maintain desirable exchange relationships with

target audiences involving a product, service idea or other object. Beyond simply attracting new

customers and creating transactions, the goal is to retain customers and grow their business with

the company. Marketers want to build strong relationships by consistently delivering superior

customer value.

Markets

The concept of exchange and relationships lead to the concept of a market, a market is the set of

actual and potential buyers of a product. These buyers share a particular need or want that can be

satisfied through exchange of relationships.

Creating these relationships takes work. Sellers must search for buyers, identify their needs,

design good market offering, set prices for them, promote them and store and deliver them.

Activities such as product development, research, communication, distribution, pricing and

service are core marketing activities.


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Marketing concept

Production concept: Consumers will favour products that are available at reasonable prices.

Improvement in production and distribution efficiency will be the focus for management under

this concept.

Ex.: Electrical appliances like fridge, washing machine, and microwave all were available onlyin white color (therefore called white goods), now we have choices of different colors.

Product concept: Consumers will favour products that offer the most in quantity performance

and innovative features.

Ex.: Mobile- Camera, internet, music, Calc. etc.

Selling concept: Consumers will not buy enough of the companys products unless it undertakes

pursue selling tactics for heavy promotion efforts.

Ex.: Mannapuram Gold loan.

Marketing concept: Achieving a companys objectives depend on understanding the needs andwants of target and delivering the demand satisfaction.

Selling Marketing

Needs of seller Needs of buyer

Customer concept: Companies shape separate offers, services, and manages to individual

customers, based on their individual preferrences. Buliding high customer loyalty and focusingon consumer life time value.

Ex.: Pizza Hut- extra cheese, extra fillings.

Societal marketing concept: Calls marketers to balance three considerations in setting their

marketing policies.

Society

Needs, wants, Satisfaction Company-sales volume profit


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MODULE 2: MARKETING ENVIRONMENT

The Marketing Mix

Definition

The credit of introducing this concept of marketing mix goes to ProfessorN.H.Bordenof Harvard Business School of America. In his works, it refers to two things;a) A list of important elements or ingredients that make up this marketing programmeb) The list of forces having bearing on the marketing operations

The elements of Marketing Mix

The forgoing explanation made it amply clear that the marketing mix is made of four

elements namely PRODUCT, PRICE, PROMOTION and PLACE that constitute the heart ofmaking marketing decisions.

The Product mix

Product is the sum-total of physical and psychological satisfaction it provides to thebuyer. For instance, a car in a physical sense, is a fabricated conveyance powered by a gasoline

engine which its people form one place to another. To a teenager, with his driving license, it is asign that he is no longer a boy-but a fully grown up man; to his father, a particular make is an

indication of success in his life as a status symbol.

The Product Mix Variables

1) The Product-line and Product range: Product line is a group of closely related productswhich are able to satisfy of class of need, to be used together, to but sold to the same consumer

groups, to be moved through the same distribution channels or fall within a given price ranges.Each firm has its own product line, thus Godrej Company has product line consisting of

vanaspati, soaps, detergents, fridges, furniture, machine tools, soft drinks and so on.Product range on the other hand, speaks of the depths of specialisation in terms of

varieties based on consumer pockets and functional requirements. Take famous case of CocaCola, today, it has two sizes king and family size bottles.

Examples: 1) Amul

o Milko Cheeseo Buttero Curd

2) Tata

o Titano Tanishqo Tata salto TCSo Tata nano


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2) Product design: Product designed properly enhance their utility, attractiveness, case ofoperations, safety and appeal; good design; therefore increases sales volume, provides

advertising and selling features permit higher prices reduces manufacturing costs, minimizesservice and reduces transportation charges.

Examples: 1) Nokia- Case of operation

2) Tiger biscuit Red and yellow package and keeps biscuit fresh3) Honda civic- Great appeal

3) Product packaging: Packages protect the products against deterioration, preserve freshnessand flavour, ensure against evaporation loss and physical changes due to climatic conditions, and

diminish loss from handling and reducing the amount of shop-worn merchandise.An attractive package in a self-service store helps the consumers identify the product, builds

consumer confidence, describes merits and limits of the products and encourages impulsebuying.

Examples: 1) 5Star Golden package2) Nandini milk- Tetra packaging

3) Armani perfume- Fancy packaging

4) Product quality: These product quality standards are based on the factors like- colour,texture, flavour, weight, finish, appearance, size, shrinkage, strength, shape, moisture and the

other physical features depending on the nature of the product. Once the standards of quality areestablished by the manufacturer, continuous efforts are made to see that the products conform to

the standards set. Product quality depends on proper design, engineering, choice of materials,manufacturing processes, workmanship and packaging.

Examples: 1) Apple products2) Sony

3) Reebok4) Raymond

5) Product labelling: A product label may either be descriptive, informative, grade designation

or a combination of these. Labels are fixed to products to identify them and to describe theiringredients, quantity, quality and other characteristics. A descriptive label is one that describes

that describes the contents of the package or the ingredients of the product.Examples: 1) Lays

o Expiry Dateo Preservativeso Ingredientso Priceo Quantity

6) Product branding: A brand is a symbol, a mark, a name, a communication which bringsabout an identity of a given product. A brand is a product image, a quality, a value, a

personality.Examples: 1) Nike- Just do it

2) LOreal- Because your worth it3) Reebok- Impossible is nothing


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7) After-sale services and guarantees: Manufactures of machines, instruments, gadget and

technical equipment will have to establish service policy and plan for servicing their equipmentsafter sales. Mechanical service is an important sales asset. It is instrumental in securing repeat

sales, customer goodwill and word of mouth advertising. The heart of sound service policy is the

product guarantee or warranty which defines the producers liability for defects in materials orworkmanship over a certain period of time ranging from one year to five years under normalcircumstances.

Examples: 1) Maruti2) Aquaguard

Marketing Environment

The actors and forces outside marketing that affect marketing managements ability to build and

maintain successful relationships with target customers.

There are two types of Marketing Environment

1) Micro Environment2) Marco Environment

Microenvironment The actors close to the company that affects its ability to serve its

customers the company, suppliers, marketing intermediaries, customer markets, competitors

and publics.

Macro Environment The larger societal forces that affect the microenvironment demographic,

economic, natural, technological, political and cultural forces.

The Companys Microenvironment


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y The CompanyTop management sets the companys mission, objectives, broad strategies, and policies.

Marketing managers make decisions within the strategies and plans made by top management.

And under the marketing concept, all of these functions must think consumer. They should

work in harmony to provide superior customer value and satisfaction.

y SuppliersMarketing managers must watch supply availability supply shortages or delays, labor strikes

and other events can cost sales in the short run and damage customer satisfaction in the long run.

Example: Wal-Mart goes to great lengths to work with its suppliers. For example, it helps them

to test new products in its stores. And its supplier Development Department publishes a Supplier

Proposal Guide and maintains a supplier Web site, both of which help suppliers to navigate the

complex Wal-Mart buying process.

y Marketing IntermediariesMarketing Intermediaries help the company to promote, sell and distribute its products to final

buyers. They include resellers, physical distribution firms, marketing services agencies, and

financial intermediaries. These include wholesalers and retailers, who buy and resell

merchandise. Selecting and partnering with resellers is not easy.

Example: Partnering with marketing intermediaries: Coca-Cola provides Subway with much

more than just soft drinks. It also pledges powerful marketing support.

y CustomersThe company needs to study five types of customer markets closely. Consumer markets consist

of individuals and households that buy goods and services for personal consumption. Business

markets buy goods and services for further processing or for use in their production process,

whereas reseller market buy goods and services to resell at a profit. Government Markets are

made up of government agencies that buy goods and services to produce public services or

transfer the goods and services to others who need them. Finally, International markets consists

of these buyers in these countries, including consumers, producers, resellers, and Governments.

Each market type has special characteristics that call for careful study by the seller.

y CompetitorsThe marketing concept states that to be successful, a company must provide greater customer

value and satisfaction than its competitor do. Thus, marketers must do more than simply adapt to

the needs of target customers. They also must gain strategic advantage by positioning their

offerings strongly against competitors offerings in the minds of the customers.


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y PublicsThere are seven types of publics:

1) Financial publics influence the companys ability to obtain funds. Banks, investmenthouses, and stock-holders are the major financial publics.

2) Media publics carry needs, features and editorial opinions; they include newspapers,magazines and radio and television stations.

3) Government publics Management must take government developments into account.Marketers must often consult the companys lawyers on issues of product safety, truth in

advertising, and other matters.

4) Citizen action publics A Companys marketing decisions may be questioned byconsumer organizations, environmental groups, minority groups, and others. Its public

relations department can help it stay in touch with consumer and citizen groups.

5) Local Publics include neighborhood residents and community organizations. Largecompanies usually appoint a community relations officer to deal with the community,attend meetings, answer questions, and contribute to worthwhile causes.

6) General public A Company needs to be concerned about the general publics attitudetoward its products and activities. The publics image of the company affects its buying.

7) Internal publics include workers, managers, volunteers and the board of directors. Largecompanies use newsletters and other means to inform and motivate their internal publics.

When employees feel good about their company, this positive attitude spills over the

external publics.

The Companys Macro Environment


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y Demographic EnvironmentDemography is the study of human populations in terms of size, density, location, age, gender,

race, occupation and other statistics.

For example, consider China. More than a quarter century ago, to curb its skyrocketingpopulation, Chinese children known as little emperors and empresses are being showered

with attention and luxuries under whats known as the six-pocket syndrome. As many as six

adults two parents and four doting grandparents may be indulging the whims of each only

child.

y Economic EnvironmentThe economic environment consists of factors that affect consumer purchasing power and

spending patterns.

y Changing Consumer Spending PatternsFood, housing, and transportation use up the most household income. However, consumers at

different income levels have different spending patterns. Some of these differences were noted

over a century ago by Ernst Engel, who studied how people shifted their spending as their

income rose. He found that as family income rises, the percentage spend on food declines, the

percentage spent on housing remains about constant ( except for such utilities as gas, electricity,

and public services, which decrease) and both the percentage spent on most other categories and

that devoted to savings increase.

yNatural Environment

The natural environment involves the natural resources that are needed as inputs by marketers or

that are affected by marketing activities.

Example: Responding to consumer demands for more environmentally responsible products. GE

is using ecomagination to create products for a better world.

Market segmentation.

Definition: Market segmentation is the sub dividing of a market into homogenous sub-sects of

customers where any sub-sect may conceivably be selected as a market target to be reached with

a distinct marketing mix- Professor Philip Kotler.


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The bases for market-segmentation

There are two basic approaches to identify market segments. These are consumer characteristic

approach and consumer response approach.

A. Consumer characteristic approach.The characteristics portray the consumer in terms of where they live who theyare and how they behave .

1. Geographical characteristics- Here they segment in terms of zones(north, south,east ,west) , sales territories (states, divisions, districts , talukas , cities and

towns). This helps the marketers to concentrate their efforts to the exact place

where it can be fruitfully utilized. Eg:- wheat grown in north and rice in south.

2. Demographic and socio economic characteristics- demography is studying thehuman population in terms of size, density and distribution. These demographic

and socio-economic characteristics are- age group, sex, family size, income,

occupation, level of education, religion, social class etc.

3. Psychographic characteristic- It includes personality, attitudes and life styles.The variables of Personality are dominance, aggressiveness, objectivity,

achievements, motivation etc. Eg- Acc to a study, Ford cars attracted the

personality of people with variables like independent , impulsive, masculine, self

confidence and alert to change, Chevrolet cars attracted people who were

conservative ,thrifty prestige, conscious-less masculine and seek to avoid

extremes.

Lifestyle is the peoples activities, opinions and sum total of their interests and

values.

B. Consumer response approach.This approach believes in why a consumer buys a product rather than asking who the

consumer is.

1. Benefit response- Here the consumers are sub- divided according to their response tothe benefit that they receive from a product. Eg- Colgate and Close up stops bad

breath and gives white teeth. Ayurvedic products (Neem, Vicco etc)have no side

effects.

2. Usage response- This is based on the amount of usage of a particular product. Theseller distinguishes the user as heavy, medium and light. For Eg- Pepsi bottle is offamily pack, fridge pack and pet pack.

3. Loyalty response- Here the buyers are asked to compare the existing brands ofproducts. And rate them as they perceive them based on their liking. That way the

seller can tell those who are most loyal, moderately loyal and fickle minded.


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4. Occasion response-For daily use people use ordinary brand of tooth brush, soap,creams cakes, clothes etc but for special occasion people use specific brand of soaps,

creams, clothes, cakes. Etc

SWOT analysis

An overall evaluation of the companies strengths[s] weakness[w] oppurtunities[o]

and threats[t]

Managing the marketing functions begin with a complete analysis of the

companys situation. The marketer should conduct SWOT analysis to evaluate the company.

Strengths include internal capabilities resources and positive situational factors that may help the

company to serve its customers and achieve its objective.

Weakness includes internal limitations and negative situational factors that may interfere with

the companys performance.

Oppurtunities are favourable factors or trends in the external environment that the company

may be able to exploit to its advantages.

Threats are unfavourable external factors or trends that may present challenges to performance.

The goal of this analysis is to match the companys strengths to attractive oppurtunities in the

environment, while eliminating or overcoming the weakness and minimizing the threats.

INTERNAL

EXTERNAL

POSITIVE NEGITIVE

STRENGTHS WEAKNESSES

Internal capabilities that may help

a company reach its objectives

Internal limitations that may

interfere with a companys ability toachieve its objectives

OPPURTUNITIES THREATS

external factors trhat the companymay be able to exploit to its

advantages

current and emerging externalfactors that may challege the

companys performance.


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MODULE 3: MARKET SEGMENTS AND CONSUMER

BEHAVIOR ANALYSIS

Target marketing

Target Marketing Stratergies.

Market targeting is the process of deciding and preparing the marketing program for market ormarkets. It may so happen that small segments may not be of much interest but small companies

may prefer small segments.The size and the amount of sales volume expected from a given

segment helps the company in thoroughly analysing the segment for successful targeting.

Naturally,all companies expect a above average increase in sales and profit.That is why they

prefer segments with growth, potential. Successful segmentation leads the way for sound and

effective targeting of market or markets. Target market is one which the company serves or

decides to serve.Target market implies selecting one or more market segments or consumer

groups for marketing approach.

y Undifferentiated marketing/mass marketingThis stratergy puts forth only one product and tries to draw in all buyers with one marketing

programme.It is an attempt to design a product and a Marketing programme that appeals to

the broadest number of buyers.It relieves heavily on product differentiation to protect Itself

from competition.mass channels,mass advertising And universal themes.it aims to endow the

product with a superior image in peoples mind wether or not this is based on any real

difference.

Examples

1. Coco- cola meant only one thing to consumers.It was a patented soft drink available in asingle flavour and bottle size. Its theme was things go better with coco-cola

2. Pepsodent a toothpaste available in a single flavour in a tube .

ndifferentiated/mass

arkrting

Differentiated /mass

marketing

Concentrated

(Niche marketing)

Macromarketing(In

dividual or local

marketing)


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y Differentiated marketing/segmented marketingUnder differentiated marketing stratergy, a firm decides to operate in several or all segments ofthe market but designs separate products and marketing programmes for each. That is

differentiated stratergy involves a difference in marketing mix for each segment. By tailoring

their market offerings to many different segments, marketers hope to achieve additional sales

and increased consumer identification with a brand or company name.such firms work by long-

standing rule of thumb.The result is multiple product offerings and channels to reach

consumers

Examples

General motors of America tries to produce car for every purse-purpose and personality

2. Sunsilk tries to produce shampoo for different types of hair texture.

a. Hair fall solution-yellow

b. smooth and shine-pink

c. longer and stronger-black

y Concentrated marketing/niche marketingThis marketing becomes a must when the firms resources are Limited.Instead of going after a

small share of a large market, The firm goes after a large share of one one or two or few

Sub-markets.The major advantage of concentrated marketing is That the organisation can

become a specialist in the needs ofIts selected market segment.This firms achieves a strong

market Position in a particular segment or segments it serves,owing to its greater deeper

knowledge of the segments needs and special reputation it acquires.This enable savings in cost

through large run of a small number of products at the same time,it has positive impact on

advertising and distribution.The firm can earn high rates of return on its investment provided

the segment chosen is right.

Examples

Parker pen costing 100/- rupees and above

Rolls Royce automobile company ofUnited Kingdom has appealed only to the wealthiest

highest socially positioned automobile buyers.

MicromarketingMicromarketing is the practice of tailoring products and marketing programs to suit the tastes of

specific individual and locations.rather than seeing a customer in every

individual,micromarketers see the individual in every customer.micromarketing includes local

marketing and individual marketing.


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Local marketing

This involves tailoring brands and promotions to the needs and wants of local customer group

cities,neighbourhoods,and even specific stores.

Examples

1.Kerala sarees sold more in kerala.

2.bengal cotton sarees sold more in Bengal.

Individual marketing

Tailoring products and marketing programs to the needs and preferences of individual

customsers.individual marketing has also been labelled as one-to-one marketing,mass

customization and markets of one marketing.

Example: Getting dress stitched with a tailor.

Product positioning

In the process of product planning , it becomes an important task to position the product to the

right segment. It is because , all products do not appeal to all income groups , age groups, time

phases ,alike. It is but natural that is what is ones tea is anothers poison.

What is product positioning?

Product positioning is not what you do to a product ; positioning is what you do to the mind of a

prospect. As put by professor Philip, positioning is the act of designing the companys imageand value offer so that the segments customers understand and appreciate what the company

stands for in relation its competitors. It is an attempt to project different or refined or revised

product image in the market than one that has been prevailing.

Product positioning alternatives

1. By making altogether different claim or USP : The company might have made andadvertising claim earlier; now it can change it or it can be very much different from those

made by competing firms. Thus , Glindas product COMPLAN might have been

introduced as complete planned food. Now it can be introduced as Triple action fooddrink freshness in the morning energy during the day and sound sleep during the night

.

2. Highlighting the new product features : The company can pin-point the unique productfeatures not highlighted by the company or the competiting firms or far. Eg: poppy atom.


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3. By entering in new market segment: The company may promote a product in themarket segment which was untouched so far by it, its competitors. Eg : allonsolly

women

4. By introducing a new package design: Further, package of a product can be used ineffort to extend the product life-cycle. Updating may help to give the pack a more

contemporary image. New package features are, perhaps, more important than product

innovation it-self, as it is an integral part of marketing strategy. Eg : shampoo bottles ,

ponds cold-cream.

Four types of buying Behavior

Source: Adapted from Henry Assael, Consumer Behavior and Marketing Action (Boston: Kent

Publishing Company, 1987), p.87. Copyright 1987 by Wadsworth, Inc. Printed by permission of

Kent Publishing Company, a division of wadsworth, Inc.

High involvement Low involvement

Significant difference

Between brands

Few differences

Between brands

y Complex buying behaviorConsumer has much to learn about the product category. For example, a pc buyer may not know

what attributes to consider. Many features carry no real meaning: a 3.4GHz Pentium processor,

WUXGA active matrix screen, or 4GB dual-channel DDR2 DRAM memory.

This buyer will pass through a learning process, first developing beliefs about the product, then

attitudes, and then making a thoughtful purchase choice. Marketers of high involvement products

Complex

Buying

Behavior

Dissonance

Reducing

Buying behavior

Variety

Seeking

Buying behavior

Habitual

Buying

Behavior


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must understand the information-gathering and evaluation behavior of high-involvement

consumers. They need to help buyers learn about product-class attributes and their relative

importance. They need to differentiate their brands features, perhaps by describing the brands

benefit using print media with long copy. They must motivate store salespeople and the buyers

acquaintances to influence the final brand choice.

y Dissonance- Reducing Buying BehaviorDissonance reducing buying behavior occurs when consumers are highly involved with an

expensive, infrequent, or risky purchase, but see little difference among brands. For examples,

consumer buying carpeting may face a high-involvement decision because carpeting is expensive

and self-expressive. Yet buyers may consider most carpet brands in a given price range to be the

same. In this case, because perceived brand differences are not large, buyers may shop around to

learn what is available, but buy relatively quickly. They may respond primarly to a good price or

to purchase convenience.

After the purchase, consumers might experiencepost purchasedissonance (after-sale

discomfort) when they notice certain disadvantages of the purchased carpet brand or hear

favorable things about brands not purchased. To counter such dissonance, the marketers after-

sale communications should provide evidence and support to help consumers feel good about

their brand choices.

y Habitual Buying BehaviorHabitual buying behavior occurs under conditions of flow consumer involvement and little

significant brand difference. For example, take salt. Consumers have little involvement in this

product category-they simply go to the store and reach for a brand. If they keep reaching for the

same brand, it is out of habit rather than strong brand loyalty. Consumers appear to have low

involvement with most low-cost, frequently purchased products.

In such cases, consumer behavior does not pass through the usual belief attitude- behavior

sequence. Consumers do not search extensively for information about the brands, evaluate brand

characteristics, and make weighly decisions about which brands to buy. Instead, they passively

receive information as they watch television or read magazines. Ad repletion creates brand

familiarity rather than brand beliefs formed by passive learning, followed by purchase behavior,

which may or may not be followed by evaluation.

Because buyers are not highly committee to any brands, marketers of low-involvement products

with few brand differences often use price and sales promotions to stimulate product trial. In

advertising for a low-involvement product, ad copy should stress only a few key points. Visual

symbols and imagery are important because they can be remembered easily and associated with

the brand. Ad campaigns should include high repletion of short-duration.


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y Variety- Seeking Buying BehaviorConsumers undertake variety seeking behavior in situations characterized by; low consumer

involvement but significant perceived brand differences. In such cases, often do a lot of brand

switching. For example, when buying cookies, a consumer may hold some beliefs, choose a

cookie brand without much evaluation, and then evaluate that brand during consumption. But the

next time, the consumer might pick another brand out of boredom or simply to try something

different. Brand switching occurs for the sake of variety rather than because of dissatisfaction.

In such product categories, the marketing strategy may differ for the market leader and minor

brands. The market leader will try to encourage habitual buying behavior by dominating shelf

space, keeping shelves fully stocked, and running frequent reminder advertising. Challenger

firms will encourage variety seeking by offering lower prices, special deals, coupons, free

samples, and advertising that presents reasons for trying something new.

Buyer Decision Process

The Buyer Decision Process

Now that we have looked at the influences that affect buyers, we are ready to look at how

consumers make buying decisions. Figure 5.7 shows that the buyer decision process consists of

five stages: need recognition, information search, evaluation of alternatives, purchase decision,

and post purchase behavior. Clearly, the buying process starts long before the actual purchase

and continues long after. Marketers need to focus on the entire buying process rather than on just

the purchase decision.

The figure suggests that consumers pass through all five stages with every purchase. But in more

routine purchases, consumers often skip or reverse some of these stages. A woman buying her

regular brand of toothpaste would recognize the need and go right to the purchase decision,

skipping information search and evaluation. However, we use model in Figure 5.7 because it

Need

Recognition

Information

Search

Evaluation of

Alternatives

Purchase

Decision

Post purchase

Behavior


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shows all the considerations that arise when a consumer faces a new and complex purchase

situation.

y Need Recognition.The buying process starts with need recognition- the buyer recognizes a problem or need. Theneed can be triggered by internal stimuli when one of the persons normal needs-hunger, thirst,

sex-rises to a level high enough to become a drive. A need can also be triggered by external

stimuli. For example, an advertisement or a discussion with a friend might get you thinking

about buying a new car. At this stage, the marketer should research consumers to find out what

kinds of needs or problems arise, what brought them about, and how they led the consumers to

this particular product.

y Information searchAn interested consumer may or may not search for more information. If the consumers drive is

strong and a satisfying product is near at hand, the consumer is likely to buy it then. If not, the

consumer may store the need in memory or undertake an information search related to the need.

For example, once youve decided you need a new car, at the least, you will probably pay more

attention to car ads, cars owned by friends, and car conversations. Or you may actively look for

reading material, phone friends, and gather information in their ways. The amount of searching

you do will depend on the strength of your drive, the amount of information you start with, the

ease of obtaining more information, the value on additional information. And the satisfaction you

get from searching.

Consumers can obtain information from any several sources. These include personal sources

(family, friends, neighbours, acquaintances), commercial sources(advertising, salespeople, web

sites, dealers, packaging, displays), public sources (mass media, consumer-rating organization,

internet searches), and experiential sources (handling, examining, using the product). The

relative influence of these information sources varies with the product and the buyer. Generally,

the consumer receives the most information about a product and the buyer. Generally, the

consumer receives the most information about a product from commercial sources- those

controlled by the marketer. The most effective sources however, tend to be personal.

Commercial sources normally inform the buyer , but personal sources legitimize or evaluate

products for the buyer.

y Evaluation of AlternativesThe marketer needs to know about alternative evaluation-that is, how the consumer processes

information to arrive at brand choices. The consumer arrives at attitudes toward different brands

through some evaluation procedure. How consumers go about evaluating purchase alternatives

depend on the individual consumer and the specific buying situation. In some cases, consumers

use careful calculations and logical thinking. At other times, the same consumers make buying


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decision on their own; sometimes they turn to friends, consumer guides, or salespeople for

buying advice.

Taste Price Quality

E.g.:F

rooti7

97

= 23

Tropicana 6 7 8 =21

y Purchase DecisionThe consumers purchase decision will be to buy the most preferred brand but two factors can

come between the purchase intention and the purchase decision. The first factor is the attitudes of

others. If someone important to you thinks that you should buy the lowest-priced car, then the

chances of your buying a more expensive car are reduced.

Second factor is unexpected situational factors. The consumer may form a purchase intention

based on factors such as expected income, expected price, and expected product benefits. The

economy might take a turn for the worse, a close competitor might drop its price, or a friend

might report being disappointed in your preferred car. Thus, the preferences and even purchase

intentions do not always result in actual purchase choice.

y Postpurchase BehaviorPost purchase behavior of interest to the marketer. What determines whether the buyer is

satisfied or dissatisfied with a purchase? The answer lies in the relationship between theconsumers expectations and the products perceived performance. If the product falls short of

expectations, the consumer is disappointed; if it meets expectations, the consumer is satisfied; if

it exceeds expectations, the consumer is delighted.

The larger the gap between expectations and performance, the greater the consumers

dissatisfaction. Almost all major purchases result in cognitive dissonance or discomfort caused

by post purchase conflict. After the purchase, consumers are satisfied with the benefits of the

chosen brand and are glad to avoid the drawbacks of the brands not bought. However, every

purchase involves compromise. Consumers feel uneasy about acquiring the drawbacks of the

chosen brand and about losing the benefits of the brands not purchased. Thus, consumers feel atleast some post purchase dissonance for every purchase.


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MODULE 6: PROMOTION STRATEGY

The promotion mix

The specific blend of advertising , sales promotion,public relation,personal selling and direct

marketing tools that the company uses to persuasively communicate customers value and buildcustomer relationships.

The five mojor promotion tools are

y Advertising :- Any paid form of nonpersonal presentation and promotion of ideas,good or services by an identified sponsor.

y Sales promotion :-short term incentives to encourage the purchase or sales of a productor services.

y Public relations :- building goods relations with th companys various publics byobtaining favorable publicity , building up a good corporate image and handling or

heading off unfavorable rumors , stories and events.

y Personal selling:- personal presentation by the firms sales force for the purpose ofmaking sales and building customers relationship.

y Direct marketing:- direct connection with carefully targeted individual consumers toboth obtain an immediate response and cultivates lasting customers relationships the

use of direct mail,telephone,direct-response tv,e-mail,internet and other tools to

communicate directly with specific consumers.

Advertising

Any paid form of non personal presentation and promotion of ideas, good or services by an

identified sponsor.Possible advertising objectives:-

Information advertising:-

y Communicating customer value and informing the market of a price changey Telling th market about th new product and describing available servicesy Explaining how the product works and correcting false impressionsy Suggesting new uses for a product and building a brand and company image

Persuasive advertising:-

y Building brand preference and persuading customers to buy nowy Encouraging switching to your brand and persuading customers to receive a sales cally Changing customers perception of the brand and persuading customers to tell others

about

y Product attributes and reminding consumers where to buy the product


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Reminder advertising :-

y Maintaining customer relationships and reminding consumer where to buy th producty reminding Consumers that the product may be needed in the near futurey keeping the brand in customers minds during off-seasons

Selecting Advertising Media

Advertising media

The technical through which advertising messages are delivered to their intended audiences.Profiles of major media types

y TelevisionAdvantages

Good Mass- Marketing coverage; low cost per exposure; combines sight, sound, and motion;appealing to the senses

LimitationsHigh absolute costs, high clutter; fleeting exposure; less audience selectivity.

y NewspapersAdvantages

Flexibility; timeliness; good local market coverage; board acceptability; high believability

Limitations

Short life; poor reproduction quality: small pass-along audience

y Direct mailHigh audience selectivity; flexibility; no ad completion within the same medium; allowspersonalization

Limitations

Relatively high cost per exposure, Junk Mail image

y MagazinesHigh geographic and demographic selectivity; credibility and prestige; high- qualityreproduction; long life and good pass along readership

Long ad purchase lead time; high cost; no guarantee of position

y RadioAdvantages

Good local acceptance; high geographic and demographic selectivity; low cost

Limitations

Audio only, fleeting exposure, low attention (The half heard medium) fragmented audience


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y OutdoorAdvantages

Flexibility; high repeat exposure; low cost; low message competition; good positional selectivity

Limitations

Little audience selectivity, creative limitations

y InternetAdvantages

High selectivity; low cost; immediacy; interactive capabilities

Limitations

Demographically skewed audience; relatively low impact; audience controls exposure

Public Relations

Building good relations with the companys various publics by obtaining favorablepublicity, building a good corporate image and handling or heading off unfavorable

rumors, stories, events.

y .press relationsy .specific productsy .national or local community relationsy .legislators and government officials to influence legislation and regulationy .relationship with share holdersy .non profit organizations to gain financial or volunteer support

Eg : the state of new York turned its image around when its I LOVE NEW YORK publicity

and advertising campaign took root , bringing in millions more tourists .

Major Public Relation Tools

1. News : PR professionals find or create favorable new s about the company and itsproducts or people . some times news stories occur naturally , and sometimes the PR

person can suggest events or activities that would create news

2. Speeches: can also create product and company publicity , increasingly companyexecutives must field questions from the media or give talks at trade associations or

sales meetings , and these events can either build or hurt the companys image

3. Special Events : PR tool is tanging from news conferences . press tours , grandopenings , and fireworks displays to laser shows , hot air balloon. Releases, multimedia

presentations , star studded spectaculars or educational programs designed to reach and

interest target publics .


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4. Written Materials : public relations people also prepare written materials to reach andinfluence their target markets . these materials include annual reports , brochures , articles

, and company news letters and magazines

5. Audio Visual Materials : audiovisual materials such as films , slide and sound programs, DVDs , and online videos are being used increasingly as communication tools .

corporate identity materials can also help create a corporate identity that the public

immediately recognizes logos, stationery, brochures , signs, business forms, business

cards, buildings , uniforms and company cars and trucks all become marketing tools

when they are attractive, distinctive , and memorable . companys can improve public

goodwill by contributing money and t ime to public service activities

6. Buzz Marketing: it takes advantages of social networking process by getting consumersthemselves to spread information about a product or service to others in their

communities

7. Mobile tour marketing :these days , it seems that almost every company is putting itsshow on the road

Personal selling:Promotion mix is the compendium of personal selling, publicity, advertising, sales promotion,

and public relations.

Definition:

personal selling is the oral presentation in a conversation with one or more prospective

purchasers for the purpose of making sales:it is the ability to persuade thepeople to buy goods

and services at a profit to the seller and benefit to the buyer

Merits and limitations of personal selling

1)flexibility and adaptability; a salesman can adjust himself to the varying needs,

moods,motives,impulses,attitudes,and other behavioural variables of the prospects.

2)minimum waste; the message is likely to reach them without distortion and diffusion. This is

perhaps the greatest merit in contrast to advertising where the message is released enmasseresulting in message diffusion and distortion causing more wastage or promotional efforts.

3)Acts as a feed back; being in direct contact with the consumers, he has the advantage of

collecting and transmitting the relevant market information affecting his company.

4)creates lasting impression; the personal selling process is so direact and penetrating that

lasting business relations can be developed between the selling house and the clientele.


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5)pulls through logical sequence; a salesman pulls through the customer in the step by step

selling process starting with attention and ending with satisfaction with interest, desire,

conviction, and action juxtaposted between.

Limitations

1. It is expensive2. Difficulty of getting right kind of salesman3. Stake in consumer loyalty4. More administrative problems

Sales-Promotion

Objectives

The sales-promotion manager is to develop specific sales programme objectives in order toestablish guide lines for selecting an appropriate sales promotion and establish a basis for

evaluating the program so designed, as he does for other programmes. The sales-promotion

objectives formulated should reflect the basic contribution that a sales-promotion programme

makes in implementing the market strategy. The objectives should be stated to specify the

desired type of action because the primary effect of a sales promotion programme is to

stimulate some consumer or dealer action. Though the authors have developed good many lists

of possible accomplishments of sales-promotion programmes, there can be essentially six types

of objectives that may be established as indicated in the following table.

Objectives Alternative Programmes1.Inquiries

2.Product Trails

3.Repurchase4.Traffic Building

5.Inventory building

6.Promotional Support

Free gifts-Mail in coupons for information, Catalog offer-Exibits-

Demonstrations.Coupons-Rupees off specials-Free samples,Contests-Premiums

On pack coupons-Mail in coupons for rebate-Continuity Premiums.Special sales-Weekly specials-Entertained events-Retailer coupons

premiums.Multi-packs-Special price on twos-Merchandise allowance-Return

allowance.Reusable display cases-Sales contests for distributor sales people-

Promotional allowance-Cooperative promotions.

5. 1.Stimulating inquiries: Such enquiries may be from the consumers or dealers asking forthe detailed information about a product or a service or even a request for visiting an

exhibit at trade association. Such inquiries can be generated and encouraged by offering

such incentives as demonstration of a product, a free catalogue, a premium or a prize.

This objective is generally selected when the manager wants to identify and attract new

prospects for his company products and services. It is of use to attract prospects when


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potential buyers are few and hard to find. In case of existing customers, it can be used to

introduce modified products. Further, this objective is appropriate as a means to

overcome consumer resistance to new products.

6. Increasing product trails: The managers who are responsible for the success of a newproduct or products and the problem child problems go to establish the objective of

increasing trial of a product in the expectation that the trial would lead to product

satisfaction and the conversion of desire into demand, or changing from old brands to

new one. In cases where products are to be demonstrated to convince the consumers, this

objective is inevitable. Product trial objective is of special significance in case of all the

consumer products, with low perceived risk, because the usage experience may lead to

favourable attitudes faster than advertising in such cases. The most useful programmes

for introduction of new products are free samples and premiums. Even coupons and

rupees off sales price can be used fruitfully.

7. Encouraging repurchases: Building of buying habit leads to brand loyalty in most of thelow perceived risk products. The aim is tie buyer to the product or a store throughincentives. Hence, the manager needs those promotional incentives that tie the buyer to

a seller. Coupons have a definite role to play in tagging customer to a product brand.

Similarly, the retailers may encourage stores loyalty through special sales offer or

continuity promotions. Continuity promotions include trading stamps, games and contests

running over a period of a week or weeks or the gifts distributed in increments in time

period. These guarantees repurchase.

8. Traffic building: Traffic building implies encouraging more inflow of new buyers andrepurchasers. This is usually the case with consumer durable items where consumers

hesitate to go on for those products. Traffic building objective is attained by offering

incentives like special sales, weekly specials, retailer coupons and premiums. Very oftenthe retailers use entertainment events like having authors autograph copies of their

books, and special attractions placed in shopping malls to attract the consumers entering

the retail outlet, who are likely to make some impulse buying.

9. Encouraging inventory building: One of the aims of every manufacturer is to see thatconsumers do not suffer because of stockouts in retail outlets. That is why they want their

retailers to build up sufficient inventories to reduce possible stockouts to help consumers

a ready supply. Put alternatively, manufacturers or retailers want the buyers to build

inventories through higher purchase rates. This is the case with marketers with Star or

Cash Cow products and they set this objective because of excess capacity or sluggish

growth. Sometimes large inventory building increases consumption on rate also on the

part of consumers.

10.Getting dealer promotional assistance: This objective of getting dealer promotionalassistance is achieved by coordinating with personal selling. Generally, sales contests and

special cash or merchandise allowances are offered in return for dealer agreements to

offer special display places or space to accept more merchandise in anticipation of


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consumer promotions, or to provide additional selling or advertising effort. Further, this

objective is used to build sales indirectly by building dealers business.

Sales Promotion Tools:

The sales-promotion tools can be seen from the angles of dealers and consumers.

A. Dealer PromotionsMiddlemen are the vital link in the chain of distribution. The term dealer is used here to

include the retailers, wholesalers and distributions. The dealer promotions are of three types

namely, dealer loaders, dealer coupons and point of purchase promotion.

1. Dealer loaders:Deal loader is the premium offered to dealers tied with the quantity with of purchases. Dealer-loader offers, perhaps, among the best known sales-promotion tactics designed to sell in order to

get the traders to stock greater quantities at specific times.

The basic reasons of dealer loading are:

i. To avoid product hunting by the customersii. To distribute over large retail outlets

iii. To keep alive the communicationiv. To correct seasonal slumpsv. To increase volumes in specific areasvi. To counter-act competition

vii. To force distribution in new areasThere can be three basic loader premium schemes namely, merchandise deals, price deals

and gift novelties to dealers.

I. Merchandise deals: When a marketer aims at building a dealer inventories byoffering additional qualities of saleable merchandise as an incentive, it is

referred to as merchandise deal. Thus, Tata, Hindustan lever and Godrej

companies offer 4 soap cakes for every 3 soap cakes purchased.

II. Price deals: Under price deals for dealers, special discounts are offered overand above the regular discounts agreed upon between the dealers and the

company. For example, if regular discount is Rs. 5.00 per case, dealers may be

given Rs. 6.00 per case that is Rs. 1.00 extra per case.

III.Gift Novelties: Many a times, the marketing house prefers to give awayattractive and useful articles as presents to the dealers against the order placed.


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These gift-novelties can be transistors, radio sets, clocks, watches, cupboards,

chairs, tables, cash boxes, lamps, steel utensils, lemon and lunch sets dress

material and the like.

2. Dealer Coupons:Dealer coupons plans are useful in building brand loyalties among the dealers but are rarely

implemented in India. In a way, dealers brand loyalty is only a reflection of consumer loyalty.

However, the marketer stands to gain much if he initiates dealer coupon plans. A coupon is

simply a document that entitles the holder certain stated concessions. The function is to serve as

inducement to the dealers stock the said item or items. That way it is very simple. A marketing

company places coupons in bulk pack or packs and exchange them for gift merchandise listed in

a catalogue. In practice, the plan operation is little complicated. However, there is nothing like

this, if brand loyalty is the prime aim to be achieved.

3. Point of Purchase Promotion: This is another dose of incentives and has two techniquesnamely,

y Dealer Stock Display Contestsy Dealer Sales Contests

I. Dealer Stock Display Contests:In real sense, a display contest amongst dealers is more an advertising medium than

an incentive offer. Here, the best display arranged gets the prize.

II. Dealer Sales ContestsSales contest is a sales incentive competition organized amongst salesmen or dealers.

Sales contests require participating dealers to compete among themselves in terms of

sales performance during a given period.

B. Consumer Promotion

Consumer premium plans are of two types- direct consumer offers and conditional consumer

offers.

Direct Consumer Offers

1. Off the pack premium- Gift articles are given along with the product. Is is also called ascounter premium offers. Eg- Cadbury 5 star chocolate give pencil het free to the buyers,

empty jars are given with refill packets, a plastic bucket is given with detergent soap etc.

2. Banded premium offers- Here two products are sold together , often in one combinationpack, at sometimes less than their normal combined selling price of which one serving as

premium. Eg- Colgate Palmolive, a tooth brush with a pack of paste. 200gm. Hamam

soap with magic brand detergent powder.


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3. In pack offers. It is most popular in India as consumers receive the premiumimmediately on the purchase of the product. Eg TTK products company offered idly

stand free packed inside a prestige pressure cooker; Sharp edge Company placed 2

erasmic shaving blades inside the pack of Erasmic shaving cream.

4. Container premium offer. In case of small sized products a gift article cannot be placedinside or banned with the product, hence the product is placed in attractive and reusable

containers which itself serves as a gift. Eg Surf powder in plastic jars.

5. Price deals. A temporary price deductions used to attract the consumer. Eg Brook BondIndia, Lipton India have been offering cash discounts on different sized packs.

6. Quantity Deals. They offer the consumer more quantity of the same product as premiumat no extra cost, or at nominal increase in price

Conditional Consumer Offers.

1. Coupon premium plan. In this consumers are to save coupons usually issued as a part ofproduct package. Eg Parle G soft drinks arranges for collection of bottle tops to win aprize.

2. Self Liquidating offers (SLO). The essential feature of this is that the buyers of a firmsproduct, upon proof of the purchase, are given an option to obtain the premium offer

article at a price far less than it would cost in shops. Eg India Tobacco Company

distributed photographs of celebrated cricketers in case of Scissors brand cigarette.

3. Referrel Premium Plans. Here the manufacturers ask the satisfied customer to tell hisfriends and relatives about the product. And in return gets and reward or premium. Eg A

yearly gift (pocket diary) to the person sponsoring the subscribers to the magazine

Readers Digest.

4. Consumer Contests. Contests are set up among the consumers in which prizes areoffered. These maybe picking correct answers, completing sentences, suggesting a name

for the product, etc, where fabulous cash and non cash prizes are given to winners.

1 bbm a marketng

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