marketing management nav

8/3/2019 Marketing Management Nav

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MARKETING MANAGEMENT1.MEANING

2.DEFINITION3.EVOLUTION OF MARKETING4.ROLE OF MARKETING INBUSINESS ANDSOCIETY5.OBJECTIVES6.NATURE7. DISTINCT MARKETINGCONCEPT

8.DIFFERENCE BETWEENMARKETING ANDSELLING9.FEATURES OF MARKETINGCONCEPT10.WHO BENEFITS FROMMARKETINGCONCEPT


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MARKETING MANAGEMENTMeaning:Marketing means selling of goodsand services. Inother words, it is the process bywhich goods are made

available to ultimate consumers fromtheir place of origin.Marketing consists of those activitieswhichare concerned with the transfer of

ownership of goods fromproducers to consumers. Marketing isregarded asproduction/sales oriented.Definition

The American Marketing Association (AMA)defines marketing as theprocess of planning and executing theconception,pricing,promotion


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and distribution of ideas,goods and servicesto create exchanges that

satisfy individual and organizational goals.Marketing deals with products.A productcan be a good,service or idea.A good;A good is a physical entityi.e. it is atangible product that canbe touched and feel.e.g. a shirt or a bar of

chocolate.A service:A service has no physical formor it is an intangibleproduct.A service is created when humanefforts are clubbed withmechanical efforts to provide intangiblebenefits,it gives some value totheconsumer.e.g.laundry,healthcare,transportation,banking etc.An idea:Ideas provide intellectual or

spiritual benefits toconsumers.e.g.politician selling idea likeprotection of human rights topolitical activities.


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Evolution of Marketing1.The Stage of Barter;Before the evolution

of industrialrevolution,the agriculturist,whether heproduced corn or cotton,meat orbutter,disposed off the surplus in hisimmediate neighbourhood.Theseproducts were required in the

neighbourhood by those people whowere not engaged in the same activity.Theagriculturist barterd thecorn,cotton,meat and butter produced byhim for leather,hand

tools,utensils and furniture produced by thecraftsman.there was noelaborate distribution system.Thisrepresented the stage of barter in theevolution of marketing.2.The Stage of Money Economy;No

fundamental or far reachingchange took place in this stage ofproduction and distribution of


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goods.The change was replacement ofbarter systemby the money

system,pricing became the mechanism ofthe exchange process.3.The Stage of Industrial Revolution;Farreaching changes tookplace in this stage.It introduced beginningof new business system.It

introduced new products,new systems ofmanufacture,new modes oftransportation and methods ofcommunication and brought aboutchanges in the physical and economicenvironment.Mass productionlead to variety of low priced goods.It lead toincome revolution,givinga great deal of disposable income to largemass of people.4.The Stage of Competition;Themass

production and massdistribution brought by Industrial revolutionsoon led to stage of


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competition.The situation demanded thefirms to make concious

efforts to make sure their products werepreffered overs those by theircompetitors.5.The Emergence of Marketing;After theSecond World War,thesize and characteristics of markets in many

countries of the worldchanged enormously.There was substantialincrease in thepopulation;the disposable increase perfamily increased,newindustrial concerns sprang up,a greatvariety of new products andservices strengthened the rapidlydeveloping consumer market;soselling of products and services becamevery difficult and

competitive.Abundant choices were madeavailable to the consumerand consumer occupied a place of greatimportance.The indusrial


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firms realized that it was not enough tomake one time sale and they

ensure that consumers come and buy theirproducts again andagain.They also ensure that product wasmade availabole at a placeconvenient to the consumer.Theyalsoensure best price of the product

and also if any complaint then after saleservice to be provided to theconsumer.This lead to emergence ofmarketing.

Modern Concept ofMarketingModern concept of marketingAccording to the modern concept,marketing is concerned withcreation of customers. Creation of

customers means identification ofconsumer needs and organising businessto satisfy these needs.


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Marketing in the modern sense involvesdecisions regarding the

following matters;1. Products to be produced2. Prices to be charged from customers3. Promotional techniques to be adopted tocontact and influenceexisting and potential customers.

4. Selection of middlemen to be used todistribute goods & services.This concept of marketing is regarded asconsumer oriented as theemphasis of business is laid on consumerneeds and their satisfaction.

Role of marketingRole of marketing in businessMarketing involves ascertaining the needsand requirements ofcustomers.This enables the firms toproduce goods and servicesaccordingly.


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Demand for goods and services is createdthrough the techniques of

advertising and personal selling.The role ofmarketing in businesssuccess has become vital because of thefollowing reasons.1. Technological changes are taking placeat fast pace.

2. Competition has become intense in themarket.3. Consumer tastes and preferences arechanging very fast.4. Production is organised on a large scale.Role of marketing in societyMarketing has also an important role insociety.;1.It makes new and better productsavailable to people.2.Increasing their standard of living.

3. It helps in creation of new jobs.4.It bridges the gap between productionand sale of goods, making


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economic activity possible. It integratesagricultural and industrial

sectors.Overall it leads to economic development ofthe country.

Objectives of marketingMarketing activities are organised toachieve the following

objectives:1. Consumer satisfaction : Marketingactivities are organised withthe objective of ensuring that consumersget maximum satisfaction

from the use of the product. Consumersatisfaction ensures steadyand growing demand for firms products.2. Product development : This objectiveaims at developing newand better products, which may provide

greater satisfaction toconsumers. Product development isnecessary for the survivaland growth of the firm.


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3. Sustaining Customer loyalty : Ifcustomers continue to make

repeated purchases of goods and services,it is possible to sustainthe demand for the products of the firm.4.Earning profits : Business must earnsufficient profit. Marketingactivities are organised with the objective of

earning adequateprofits for the firm.5. To secure competitive advantage :This objective of marketingensures that a firms products are preferredover competitorsproduct. Competitive advantage is achievedthrough cost efficiencyand quality improvements of the products.6. Growth in Sales : Marketing aims atincreasing the sale of

firms products. This is necessary tomaintain or increase themarket share of the firm. Market sharemeans percentage demand


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satisfied by the firm for a particular product.Growth in sales

ensures survival of the firm in the long run.7. Creation of goodwill : This objective ofmarketing ensures thata business firm is regarded as a useful partof society engagedin satisfying consumer needs. This help

business firms to surviveand grow.Nature of marketing1.Marketing is essentially a managerialactivity; It involvesdecisions regarding product, prices,promotion and place with theobjective of providing satisfaction toconsumers for the money they payand earning profits for the business firms.2.Marketing starts with the identification

of consumer needs;Onceconsumer needs are identified, goods andservices are designed and


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developed to satisfy those needs. Goodsare produced by production

department according to marketrequirements and as determined by themarketing department. This requires properco-ordination between thetwo departments.3.Advertising and personal selling are

important tools ofmarketing; They create an awarenessamong consumers of their needsfor goods and services. These activitieshelp in creating demand forproducts. This demand is met bydistribution of goods and servicesthrough various channels. After-sale serviceis also provided toconsumers.

DISTINCT MARKETING

CONCEPTSStudies have revealed thatdifferent organisations have


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different perceptions ofmarketing and it has lead to

the formation of differentconcepts of marketing suchas:1.The Exchange concept:a)Exchange of product between seller and

buyer.b)marketing is much more broader thanexchange and exchange isonly a part of it.c)it does not cover other aspects of

marketing like :1.concern for the customer2.creative selling3.generation of value satisfactions4.integrated action for serving the customer2.The Production concept:

a)All the focus is on the production.b)Concentrate on achieving high productionefficiency, low cost&mass distribution.


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c)This concept also fail to understand theneeds of the customer as

they believe that the steep decline in theunit cost arising from themaximization of output would bring them allthe customers and theprofit they need but this will not give themthe customer support as the

customers are motivated by the variety ofconsiderations in theirpurchases.d)As a result ,the production concept alsofails to serve the rightmarketing philosophy.e.g.Inexpensive Toys,electronics3.The Product concept:a)This concept is based on productexcellence-improvedproducts,new products and ideally designed

and engineered products.b)It also places the emphasis on qualityassurance.


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c)They spend considerable time and moneyon research and

development and bring in new variety ofproducts yet they fail in themarket.d)They do not bother to study the marketand the consumer in depth.e)they get so engrossed in their product

that they forget to find outwhat the customer actually need and whatthey would gladly accept.f)It leads to marketing myopia.Marketing Myopiaa)marketing myopia means crookedperception of marketing andshort sightedness about business.b)Excessive attention to the production orproduct or selling aspects atthe cost of customer and his actual

needs,creates a myopia.c)it leads to wrong or inadequateunderstanding of the market andhence failure in the market place.


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d)It also leads to a wrong understanding orinadequate understanding

of the very nature of the business therebyaffecting its future.e)Since The business keep changing withtimes but the basicfundamental characteristics related tohuman need which business

seek to serve amd satisfy through itsproducts should be maintained.f)they should define their businessaccording to their fundamentalsand not in the terms of the products andservices manufactures atgiven point of time.E.g. movie makers should define theirbusiness as entertainment.4.The Sales concept:a)The sales concept maintains that a

company cannot expects itsproduct to get picked up automatically bythe customers.


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b)The company has to consciously push itsproducts.

c)Aggressive advertising,high powerpersonal selling,large scalepromotion,heavy price discounts,strongpublicity and public relationsare the normal tools that rely on thisconcept.

d)In this kind of concept companiesbelieved that selling issynonymous with marketing but in realitythere is a great deal ofdifference between selling and marketing.Marketing Selling1.Marketing starts with the customer ,present andpotential and focuses constantly on the need of thebuyer.Buyer is the centre of the businessuniverse.activities follow the buyer and his needs.1.Selling starts with the seller.It focuses on the need ofthe need.Seller is the centre of the businessuniverse.activities starts with sellers existing products.2.Emphasis on identification of a market opportunity

and fulfilling the needs of the customer.2.Emphasis on saleable surpluses available within thecorporation.3.Seeks to convert customer needs into products. 3.Seeks toconvert productinto cash,concerns itselfwith the tricks and techniques of getting the customers to


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buy the product available with the salesman in exchangeof cash.4.View business as customer satisfying process. 4.Viewbusiness as a goods producing process.

5.It is concern with the value satisfaction customershould get from the exchange.5.Overemphasis the exchangeaspectwithout caring forthe value satisfaction inherent in the exchange.6.The firm makes a total product offeringthat wouldmatch and satisfy the identified needs of thecustomers.6.The firm makes the product first and then figure out

how to sell it and make profit.7.Adopting more innovative technology to providebetter value to the customer.7.Emphasis on staying with the existing technology andreducing the cost of production.8.If the enterprise has a customer orientationconcernedmore about his needs,and make genuineefforts to satisfy those needs ,then it is practisingMarketing.8.If the enterprise has internal orientation concernedmore about itself and its products and the need todispose off its products,then it is practicing Selling.

Marketing Selling9.Consumer determines price;pricedetermines cost.

9.Costs determine price.10.They are seen as vital servicesto be provided to the customerskeeping in mind their convinience.


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10.Transportation,storage andother distribution functions are

merely a part of production11.In firms practising function.marketing,marketing is thecentral function of the business;theentire company is organisedaround the marketing function.

11.In firms practisingselling,production is the centralfunction of the business.12.Marketingviews the customeras the very purpose of thebusiness;sees business from pointof view of the customer.12.Selling views the customer asthe last link in the business.Features of Marketing Concept1.Consumer Orientation;Consumer

orientation places consumer atthe beginning as well as at the end of thebusiness cycle.Consumer


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becomesthe focal point of thebusiness.Organisations should

strive,adapt and alter products to keep pacewith the ever changingcustomer preferences and desires.2.Long term profitability;Customersatisfaction,which is a majortheme of the marketing concept does not

preach that a firm mustgenerate consumer and forget the othergoals of theorganisation.Instead it should treatcustomer as a pathway to theattainment of all the goals of theorganisation.And ,inthis process,theOrganisational goals including profits areautomatically realised.TheMarket Concept never suggests that profitis unimportant to the firm

but are essential for the survival and growthof any business.3.Integrated Management action;AllOrganisational departments


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should be well coordinated keepingmarketing as the pivot.Lack of

coordination between different departmentsor function can hamper theperformance of theorganisation.Themarketing departmentshould bewell coordinated with other departments like

R&D,finance,personneland manufacturing.The organisations that do not practiceintegrated management,thedepartments are preoccupied with theoptimisation of their specificactivities thus effecting the overall result.e.g. the engineering department may createa substandard product tosave cost of production.

Who benefits from the Marketing

Concept1.The Organisation;The organisation keepitself in the pace with the


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whole.

Marketing EnvironmentThe Performance of the firm depends uponits sales and sales dependupon the marketing environment thatinfluence its marketactivities.The marketing activities focus on

satisfying customerneeds.With the market environmentbecoming increasingly dynamic,itis necessary for the firm to keep pace withthe changing environment.A variety of internal and external forces

have an impact on anorganisation and its marketing environment.Internal forces are inherent to the firm andcan be controlled by themanagement.

External forces are dynamic and anychange in them bringuncertainties,threats and opportunities tothe marketers.


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Business Environment of a FirmFirmE xtern al E n viron m en t

In tern al E n viron m en tH u m an R esou rcesProd u ction Facility

R &DC om p an y LocationFin an cial C ap ab ilityC om p an y Im ag e

M acro E n viron m en tM icro E n viron m en tS u p p liersM arket In term ed iariesC u stom ersD em og rap h icPoliticalTech n olog ical

S ocio -cu ltu ralE con om icN atu ralLeg al

Macro EnvironmentMacro environmental forces do not affect

the operations of a companyaand its relationship with its customers andsuppliers,directly and


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immediately.However,they affect thecompany in the long run.1.Demographic Environment;Demographicsis a branch of sociology thatdeals with the study of the characteristics ofhuman population such assize,growth,density,distribution,gender andmarital status.E.g.demand for smaller houses and household

items has increasedsignificantly due to rise in the smaller families.Since no of children in a family has reducedand more women are taking upprofessions,the average income is on rise andthe amont spent on each person

has increased,people are looking for morelifestyle products.Cosumer Groups;Demographic variableshelp in distinguishing consumergroups.Condumer groups that attract theattention of marketers can be

classified as;Infants:The population of India is growing at analarming rate and the


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average spending per family is increasing,sothe demand for toys,baby careproducts,clothes and diapers is increasing.Children(School going-teens):the demand forschooldress,bags,shoes,stationary,confectionaries,bicycles and other teen-orientedproducts like i-pod,laptops,computers areincreasing.

Young Adults:Young adults in the age groupof 19-30 years with productslike motorbikes,music systems,clothes,fast foodjoints and sports car,thedemand for these products are increasing.Adults(35-50):Consumers in this age group are

more health concious,soindustries like pharmaceuticals,fitnessproducts,gym equipment,realestate,cars,home appliances,insurancesector,cars etc.

Senior citizens:This group has increased

the demand for healthcareservices,retirement housing,select skin careproducts.Companies like


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Tranquility have come up with products likewipers and mattress

protectors for seniors with bowel andbladder problems.Apart from Age other demographic factorsthat influence marketersdecisions are:Women:Women constitute nearly 50% of

the population and sincethey are taking professional jobs there isgreater demand for childcare and convinient products that savestimes in cooking,cleaning andshopping.e.g. companies likeMTR,ITC,Knorr have come up withproducts like precookedvegetables,noodles,chapatis.Singles:Nearly one third of the populationin India are Single.This

group includes single men and women,anddivorcees.Spending habitsof single are different like small houses,lessand convinient


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furniture,fewer and smallerappliances,smaller packages of

products ,spend heavily on travel,convinientfood,restaurants andentertainment.Occupation and Literacy:A literatecustomer is more demanding andconscious to advertising.The awareness is

high.They gatherinformation and then buy the product.e.g.advertisements inmagazines and newspapers create moredemand for personal careproducts,clothing and shoes.Location:Geographical location is anothervital element,whichdetermines the demand for the products.Aproduct may be wellaccepted in one region whereas fail in

another region.Cultural diversity:As a result of moreliberalization and globalizationpeople from various part of the world work


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together.Hipanics,Asians,Latinos andAmerican Africans constitue a

significant part of US population.Peoplewith different culturalbackgroung have differentneeds,wants,tastes and preferences.2.Political EnvironmentGovernment policies shape the economic

conditions and traderelationships and are influenced by thepoliticalenvironment.Government policies influencethe marketing decisionsand strategies of a firm.Organisationsshould closely monitor all thepolitical environment of thecountries.Foreign investment is lower inless stable countries.Domestic politics:

When Organizations help in electingcandidates that support theirindustry by funding election campaigns andsometimes run political


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ads for them.A company may contribute toone party at a time.

International Politics:MNCs try toinfluence foreign politicians andgovernments through the domesticgovernments.3.Economic Environment:The economic performance of a country is

measured by its GrossDomestic Product(GDP).The gap in GDPbetween rich and poorcountries has increased primarily due tohigher population growth inpoor countries.Purchasing powerparity(PPP) is used to compareincomes across nations.The higher the(PPP) of a country,the morebuying power it enjoys.Buying Power:The buying power of a

person depends upon thefinancial resources and the state of theeconomy.


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E.g.Due to inflation the prices of goods andservices increases so a

person can buy fewer goods if the incomeis constant.It means thepurchasing power decreases.So marketersshould study fluctuations inthe demand for their products,and developappropriate strategies.

The major sources Financial Resources ofbuying power are:A.Income:The income of an individual refers tothe total amount of moneyearned by him over a fixed period oftime.Sources of income

are;wages,rent,investments,dividends andsalary.a)Disposable income:The income left toconsumers after tax is disposableincome.b)Discretionary income:The income left after

purchasing the basic needs isknown as discreationary income.Customers usethem for their future savings


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or purchasing non-essentials.Change in thisincome affect sales.So themarketers should pay closer attention to thechanges in the income levels.B.Credit:Credit is obtained from financialinstitutions,banks andStores.Marketers can lure customers to usecredit by offering them attractiverates and payment plans.

C.Wealth:It refers to accumulated money ofindividuals,a group ofindividuals.Wealth ca n be generated throughsavings,inheritence,gambling,gifts and theft.Itcan be in the form ofBonds,property,jewellery and antiques.Wealth

increases the buyer power ofthe person.4.Socio-CulturalSocio-Cultural forces refer to theattitude,beliefs,norms,values and lifestylesof individuals in a society.

e.g.-As life style changes due to both husbandand wife working ,the marketfor ready made food and garments haveincreased and the shopping time is


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reduced significantly so this has given boost toshopping malls,supermarketswhere individuals can get everything under oneroof.Changes in the lifestyleof people affect the marketing environment.To agreat extend,social forcesdetermine what customers buy,how theybuy,where they buy,when theybuy,and how they use the products.

5.TechnologyToday ,technology guides the way we lead ourlives.Our eatinghabits,sleeping patterns,health care,and workstyle,are all influenced bytechnology.With the advantage of internet we

can work fromhomes.Advancement in technology has directimpact on the economicgrowth and the business which do not keeppace with the technology oftenfail to survive in the market.

Therefore it is important for marketers to knowthe type of technologyused,level of technological development incountry.


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Business functions that are directlyinfluenced by technology are listedbelow.1.Product: Technology can help improve theproduct design,reduce the costof manufacturing the existing products or comeup with the new product.E.g-technology developed byMicrosoft,Windows,has changed the way

world uses personal computing and millions usethe software.E.g-Earlier Automated Teller Machine(ATM)were offered by limited Banksso they enjoyed competitive advantage,now allthe banks are offering this

service it has become standard feature of asaving account.

2.Price:As the Technology is available atcheaper rates,more andmore business are adapting it fast.So the

companies are reducing theircost of products by which the price of theproduct will reduce


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therefore enabling marketing managers tomanage supply,forecast

demand and establish prices.3.Promotion:Technology hasrevolutionized the way wecommunicate with a vast number ofpeople.buyers and distributorsthrough various media like e-mail,voice

mail,cell phones,and faxmachines.Stores and Supermarkets havetied up with phone providersto promote them.So technology hasreduced the time of transmissionof data helping business to obtaincompetitive advantage.E.g.-Hutch and Reliance Infocomhaveprovided discount coupons forvarious products in selected stores.4.Advertising:Technological advancement

has brought about asignifivant change in the way businessadvertise.Creative ads can be


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developed in short time.Ad agencies aregaining business.Apart from

entertainment radio and televisionprovidevast media foradvertising.The jingles of certain ads areetched on the memory ofpeople soon even though the shelf life ofcommercials is small.

E.g. Pepsi-Youngistan can Wow.Kelvinator-Its the coolest onethums up-Taste the Thunder.5.Distribution:Technological advancementin the transportationindustry has helped bringing marketcloser.A sales person can providethe valuable information about the productlike the price,orderprocessing or status of stock by accessingcompany database.

E.g.- transit companies like FedEx promiseto deliver light weightproducts within twenty four hours via theirovernight carriers.


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6.NaturalTechnological developments have disturbedecological balance.E.g.-Global warming,Ozone layerdeplition,increase in harmful gases due topollution.So many manufacturing companies aredeveloping products that do notharm the environment.

Like Refrigerators indicate on their packagingthat they are Chloro florocarbon(CFC) free.A.Resources:Since companies uses rawmaterials to convert them intofinished product the companies have now

realised that natural resources arelimited.Therefore some companies aredemarketing their products.E.g.-Indian Oil Corporation are compaigning-Save oil-save india.B.Weather:In summers demand for water

coolers,AC,soft drinks,icecream,cotton clothes goes up.Whereas demand forWoolen clothes,room


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heaters and spicy food goes up in winters.A citylike Delhi demand forseasonal products is significant.

C.Pollution:Industrialization has broughtwith it hazards ofpollution,air ,water,noise,bio non-degradable wastes and CFC causingenvironmental degradation.So the

companies are using environmentalfriendly products like recycled paper,paperbags instead of polythenebags.D.Government intervention:The policiesof government,regarding

the natural environment varies fron oneanother.Some countriesrestrict the import of goods that causeecological balance.7.Legal

The laws and regulations of a country havea major impact on the way


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a company conducts itsbusiness.Therefore,marketers must be

updatedwith the important rules,regulations andActs that have a significanteffect on their businesses.E.g. Consumer protection Act-It came intoforce to safeguard the

interest of consumers.It is applicable in theWhole of India.Consumer can seek legal help when;A)A trader adopts unfair practices orrestrictive trade practices.B)Goods suffer from one and more defects.C)A trader charges higher prices for thesame goods.D)Services offer suffer from deficiences.E)Goods hazardeous to life are beingoffered to general public for

sale,against provisions of any law.Types of Competitive Structures1.Monopoly:It is a structure when one firmcompletely controls the supply


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of a product, which has no closer substitute.Due to the absence ofcompetition the firm controls the supply andprice of the product.E.g.-Railroad business2.Oligopoly:It is a structure where few sellerscontrol the major supply ofthe product. Companies operating in theoligopoly structure usually sell

branded products. Marketing and Advertisingare the key features of suchmarkets.3.Monopolistic competition: In this structure,many firms compete withone another. Each firm has a relatively small

market share.E.g.-textile industry and publishingindustry,footwear,clothing,childrenbooks.4.Pure competition: Any body can enter intosuch markets. It is an ideal

structure in which a large number of sellerscompete to offer relativelysimilar products.E.g-Unregulated agriculture market


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Marketing PlanningSTRATEGIC MARKETING PLANNING

Strategic marketing planning involvesanswering questions like whereshould be company 5 years down the line?Which are the markets it should serve?What are the products it should offer?Should there be any product line or brand

extentions,and,if yes then atwhat intervals?Importance of Strategic planningThe strategic planning process not onlyhelps an organization gain a

clear picture of its future, but it also helps inmaintaining goodrelationships among its variousdepartments.Strategy planning involves devising thebrand strategy, the product

strategy, sales strategy, sales promotionstrategy, and the advertisingstrategy.Scope of Strategic planning


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Companies need to formulate effectivestrategies to deal with

emerging technological change, ever-changing customer needs,turbulent market situations,unpredictiblecompetitions, and changesin political,legal,social,economic,andtechnological environments.

Case StudyOxembergs down to- Top StrategyOxemberg,a Rs.65 crore menswear brand belongingto the Rs 400 crore Siyaram Silk millscompany, was launched in 1992.Since 2002,it adopteda top-down- strategy. The brandtargeted B and C class cities where few people could

afford premium brands.These citiesaccounted for about 75 percent of the brand sales.The remaining 25 percent sales comefrom A class cities. When the brand was launchedinitially, A class cities were crowded withmajor brands like Raymonds, park Avenue, MaduraGarments, Louis Philippe andBombay dyeing Vivaldi among others. According toVijay Laxmi Poddar,E.D.,SiyaramSilkMills,it was difficult to compete with theseestablished brands in A class cities. Hencethey concentrated to small towns in the western andsouthern parts of the country, as the


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climatic conditions in these two regions were similar.The company increased its distributors in the south to40 by the beginning of 2003.Of these,

only two or three focused on A class cities. The salesin the southern region accounted forabout 35 to 40 percent of the entire sales. One reasonof Oxemberg success in the B and Cclass cities was that the retailers stock fewer brandsas compared to the A class cities. Thecompany price the brand at Rs.300 onwards andoffered various incentive schemes to

retailers. Today ,the company has a strong presencein the B and C class cities with about 70percent exclusive distributers,as compared to the 30percent exclusive distributors in 1995.Another reason for the brands success in the B and Cclass cities was that there was nomajor player operating in this segment who could

offer premium brand menswear at a lowprice. But recently, Oxemberg has been facing stiffcompetition as peter England (Rs 395onwards),Arvind Mills Excalibur(Rs.450 to Rs.850) andindigo nation(Rs 400 to Rs.800)start focusing on B and C classes.

DefinitionStrategic planning is the process ofidentifying an


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organization's long-term goals andobjectives and then

determining the best approach forachieving those goals andobjectives.CORPORATE AND DIVISIONALSTRATEGIC PLANNING

Companies that have different businessunits undertake corporateplanning through a series of meetings. Thehead quarters provideguidelines for the business units toformulate strategic plans.Corporate plan has to be developed in sucha way that it adds valueto the organization.The Corporate vision and mission pavesthe way for the creation of

long-term and short-term objectives, theplanning strategies areadopted to realize these objectives.


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There are five basic activities thatcompanies undertake;

1.Corporate mission2.Establishment of SBUs(StrategicBusiness units)3.Resource Allocation of SBUs4.Planning new business activities and5.downsizing existing businesses1.Corporate missionThe corporate mission of an organizationexplains the business of theorganization. It also explains- the type ofcustomers the company is serving itsproducts and services, itsbusiness,technological,and functionalcapabilities.The corporate mission statement should bedeveloped keeping in mind the corevalues of the organization. Mission statementsshould be framed in such a way

that they are easily understandable by theemployees and give a clear picture ofwhat company is trying to achieve. Missionstatement should be authentic and


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different from other companies.2.Establishment of SBUs(Strategic BusinessUnits)It is a separate and self-sufficient business unitoperating in the market with itsown customers and competitors. Each SBUshould have its own head who isresponsible for its planning.3.Resources Allocation to SBUs

Resources allocation to strategic business unitsis done by differentiating thecompanys businesses according to theirpotential and identifying whether theyare profitable. For that estimations we use BCGcompetitive model

BCG MarketGrowth/Market ShareMatrixQuestion Marks-These business units arecharacterized by low market shareand high growth rate. These organizations haveto make huge investment in


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advertising and promotion because potentialusers are not aware of theirproducts. With the market growing rapidly, it iseasier to gain market share.Since their growth rate is uncertain that resultsfrom changes in technologies,distribution channel, So only a few questionmarks move to stars.Stars-These business units have large market

share in fast growing markets orindustries. Firms need to invest in stars as theindustry is still emerging and themarket share is growing. But once the industryreaches the stage of maturity,the stars hardly need any investment and

become major resources for the firms.Cash Cows-These business units have a largemarket share in a mature andslow growing industry. These businesses havea strong business position andnegligible investment requirements and so the

returns from these business areoften more than their investment requirements.Dogs-These business units have a low marketin an intensely competitive,


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mature industry generating low profits. A dogdoes not need much investment,but it ties up its capital in the industry to earnbetter results.

Planning New BusinessesCompanies have to deal with situationswhere there is a gap betweenactual and projected sales. The firm then

has to devise strategies tofill this gap or rather increase the sales.Downsizing Existing BusinessesCompanies need to consider theimportance of growth, and similarlythe importance of gradually removing old

and sick businesses thatare not adding any value to the company.The removal of thesebusinesses is vital so that resources can beallocated to new and

lucrative business activities.SWOT AnalysisSWOT Analysis is the process of analyzingthe company and the


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environment in which it is operating. Thisanalysis helps in

formulating effective strategies for thecompany and ready forcompetition.Strength-The strength can be anything thatadd value to thebusiness.Infrastructure,its employees, its

marketing team, its latestproduct innovation, its international qualitystandards.Weakness-Incompetent management,untrained employees, poormarketing strategies, low quality productsor lack of proper financialcapabilities. They are external factors.Opportunities-They are external factorsand are critical for itseffective functioning. Opportunity can be

new potential market withample scope of growth, opportunities tocollaborate throughpartnerships.


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Threats-New competitor in the market,price reduction in the

competitors products or a new productintroduced in the market thatwill eat the companys share.

Steps in the PlanningProcessMARKETING PLANE xecu tive S u m m ary

A ction Prog ram sA C h art S p ecifyin g th e C on ten tsProjected Profit an d Loss S tatem en tO p p ortu n ity an d Issu e A n alysisM arketin g S trateg y

MARKETING PLANC on trol

MARKET SEGMENTATION AND MARKETTARGETINGSegmentation is all about dividing the market to

serve them better valueprepositions.Dividing the market by grouping the customerswith similar tastes and


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preferences into one segment is calledsegmentation. Ifmarketers knowwhich segment of the market they are targeting,they can design theirmarketing mix to suit the customer in thesegment.NEED FOR SEGMENTING MARKETSMarket segmentation looks at marketsconsisting of customers who differ

in their wants and needs.MARKET SEGMENTATION LEVELSA market consists of different consistsconsumers possessing innumerabletastes and preferences. Depending on theirmarketing approach and the nature

of the products, marketers can adopt differentlevels of segmentation.1.Segment marketing2.Individual Marketing3.Niche Marketing4.Local marketing

1.Segment Marketing; Marketers dividethe target market intodifferent segments on the basis of similarneeds. The focus on


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segmenting the market by providingsatisfaction to that segment to

large extend. It is also to identify, capturingand retaining potentialnew markets.For e.g.- Tata entered the jewelry marketwith the brand nameTanishq.it segmented the market on the

basis of the level of purityrequired by people and targeted peoplewho wanted 24 carat goldunlike other conventional jewelers.E.g.Oyzterbay-it segmented the market byselling daily wear jewelersbetween the range of Rs.500-Rs.5000.2.Individual marketing; It is the extremelevel of segmentationwhere marketers focus on individualcustomers.

E.g.-Most companies are approachingindividuals through e-mails topromote their product.


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3.Niche Marketing; A niche is a smallsegment of the market that

has some specific unsatisfied needs. Forniche marketing to besuccessful a company should understandits strengths andweaknesses, its customers and itscompetitors. The firm should also

clearly differentiate itself from itscompetitors.For e.g.-Saint Gobain,a French glasscompany, has carved out aniche for itself by entering the fragmentedglass market.4.Local Marketing; Most marketers whohave a global presence tendto offer customized products to suit thelocal markets. Even if theproduct is successful globally, it may fail in

the local market becauseof unmatched tastes and preferences.E.g.-Mc Donald's entered Indian market in1996,initially it had


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burgers and other related items on themenu which were foreign to

Indian taste, therefore to suit the Indiantaste they introducedindianized products like Mc Alootikki,Paneer salsa etc.THE SELECTION OF SEGMENTATIONVARIABLES

Before segmenting the market a companyshould evaluate whethersegmenting will be profitable to thecompany and whether it will helpincreasing its sales and market share.Consumer markets are mostly segmentedbased on1.Geographic segmentation2.Demographic segmentation3.Psychographic segmentation1.Geographic segmentation; The market

is divided into according togeographical areas such aslocalities,regions,cities,states and countries.


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in such segmentation, a marketer need tohave clear idea about what to

serve.E.g.-T.O.I. publishes local editions todifferent regions such as delhitimes.2.Demographic segmentation; Themarket is divided into groups

based on demographic attributes such asage,gender,income,occupation,religion,race,nationality,social class,family size etc.The following are some ofthe demographic variablesused to segment the market:1.Age and Life cycle stage; The taste andpreferences keepchanging.E.g.-a 12 year boy might likechocolates but might dislike atthe age of 30.So Cadbury's starting focus

on youth and old people toboost up its sales in 14 years and abovesegment.2.Gender;Many products like


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garments,watches,shoes,jewellery,wristwatches,magazines etc. are

segmented according to gender. There arecertain brands which arepositioned exclusively for a specific sex.E.g.-Raymond is a brand exclusively formen.Gillette have shaving accessories

exclusively for men but now theyhave also produced products specially forwomen. This is the casewhere products were manufactured to suitone gender but laterswitched to another gender.3.Income;Marketers tend to segmentproducts and services such asapparels,automobiles,travel,etc. on thebasis of income groups. Noweven the middle income group consumers

can have excess to luxuriessuch as cars, homes due to loan andinstallment facilities.


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E.g. Titan have introduced Sonata,targeting the lower end. Regalia,

the upper end and fast track aimed atyounger generation.4.Generation;Generation also plays amajor role in segmenting themarket.E.g.-various activities like

Movies,Cars,music etc.affect their productpurchase patterns.5.Social class; Social class segmentationis influenced by customerchoices of automobiles, interior decorators,clothing preferences. Thetastes and preferences of the social classalso change with the times.E.g.-Allen Solly was mens formal wear nowfocusing on Womenswear, due to changing social habits.

3.Psychographic segmentation; inpsychographic segmentation,variables to segment the consumermarkets are


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lifestyle,personality,values ,motivation andbeliefs. It helps marketers

to understand buyer behavior better anddesign products, which willappeal the consumers. People also buyproducts that reflect theirlifestylee.g.-A rich person will move in

mercedes,will wear a Rolex, perfumewill be Valentino and will use pen like MontBlanc reflects his lifestyle.Lifestyle; Since different people leaddifferent life styles they buyproducts accordingly to suit theirlifestyle.E.g. Top manager willusually buy formal wear or Titan introducedfast track to youngurbanities.

Personality; Personality characteristics suchasaggression,masculinity,extroversion etc. alsoinfluence the buyer behavior of


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individuals. Marketers presume that people whoeither have a particularcharacteristic or aspire to have the particularcharacteristic, will beinfluenced positively to buy that particularbrand.Values; Values affect the customer behaviorand marketers believe that ifthe values of the customers can be influenced,

their impact on the customerwill be for a longer period. Marketers can usevalues and beliefs to segmentthe markets.

4.Behavioral Segmentation;Organizations can divide markets onthe basis of behavior that customers showtowards the usage of theproducts. This segmentation is mostsuitable for product drivenorganizations. But its usage is restricted

when new customers come tothe marketer. Various variables areoccassions,benefits,user status,loyalty ,etc.


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Occassions:Markets can also be classifiedon the basis of various

occasions because people need differentproducts for differentoccasions.E.g.-Kelloggs promoted its cereals as abreakfast item.Archies cameout with special cards like mothers day,

father's day, valentinesday.etc.Benefits: In this segmentation market isdivided on the basis of thebenefits customers seek from the products.Usage rate: The usage rate of a particularproduct/service can be dividedinto heavy ,medium or light.E.g. Indian Airlines gives the frequent flierstatus to its heavy users.Customer earn mileage points, which can beexchanged to host of servicesranging from a stay in luxury hotels to freetravel to internationaldestinations.


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Loyalty status: loyalty status of a particularmarket can be divided into fourgroups.1.Hard core loyals;Consumers,who areextremely brand loyal.e.g.- the beetle Automobile of Volkswagenachieved that status.2.Split loyals;Split royals are those customerswho use more than one

brands.E.g- a customer may use two or threebrands of perfumes.3.Shifting loyals;Customers who shift theirloyalty from one brand toanother E.g.-A customer use cinthol soap forsome time may shift to Dove

4.Switchers;Switchers are those customers whoare not brand specific Thesepeople might buy any brand on impulse or toseek variety.TOTAL QUALITY MANAGEMENTTotal Quality management is essentially the

constant striving to producewhat the customer wants, by carefullyeliminating defects prior to and


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after the products have been delivered tothe customers.The team in charge of maintaining quality inorganizations, usuallyundertake three steps when something goeswrong in the process.1.The team members try to identify theproblem.2.rectify it

3.Communicate the process to the entireorganization so that care can betaken to avoid such problems in the future.The team responsible should also interact withR&D department tounderstand the root of the problem and how

they can be avoided in thefuture. The joint efforts of the R&D and theQuality management teamprovide better results for the organization.PRODUCT AND PRODUCT LINESPRODUCT PERSONALITY; The following

constitute the components ofa product.A. Core features; A core feature is the basiccomponent of a product. In


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designing any product, a company has to firstdefine the core benefits that aproduct offers. All the marketing activities canbe built upon the core benefitsof the product.E.g.-Car its core feature is as a private meansof transport.B.Associated Features; Every product has aset of associated features. For

e.g.- Car its associated features are its shape,its size and capacity, powerstering,suspension system, the auto lockingsystem,color,automatic glass panerolling, brand name rolling etc.Firms selling the similar product compete on the

basis of the associatedfeatures cause the core features are the samefor all. Marketers try to innovatearound the associated features to make theproduct distinct from thecompetitors product.

Brand name;Brand name is the mostimportant associated feature ofthe product.The Product is identified by theBrand name.It identifies


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the product offered by one seller fromanother.The brand includes a

name,symbol,design or a combination ofthese.Companies invest a lotof time and money in building a brand.E.g.- A customer no longer asks for aproduct alone but they ask for aspecific brand like Colgate tooth paste,

Gillette shaving cream,Revlonlipstick,luxor Pen etc.Packaging ;main purpose of packaging isto protect the product fromdamaging and smooth handling atdistribution stage.Packaging alsoplays a vital role in promoting a product.Thesize,color,design andlabelling of the package helps in attractingcustomers attention.E.g.-Calcium Sandoz tablets are packed in

the puppy shape bottle thusattracting children who are ultimateconsumers.


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labelling; Every product has its uniquelabel. A label contains written

information about the attributes of theproduct. It helps the buyer inunderstanding the features and compositionof the product. It alsogives other information like the date ofmanufacture, date of

expiry,barcodes,batch no. etc.

Nature of the product1.Generic Product:generic product areunbranded,plainly packed productsand are less expensive than branded products.

2.Expected Products:After developing thebasic product,the marketersadds attributed to transform the product intoexpected product.Marketers tryto identify attributes and conditions required bythe customers and try to

build these into their products.3.Augmented product:Companies do not limitthe attributes of a product


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rather they try to put in additional attributes inthe product to differentiate itfrom the competitors product.Augumentedproductsusually exist in mature markets or where thecustomers are reasonablysophisticated.4.Potential product: Potential products areproducts which include all the

improvements that are possible under giventechnological,economic andcompetitive conditions.Only big companies withhuge resources makesignificant investments in producing potentialproducts.

Product HierarchyIt is an organizational chart that depicts thearray of products offered in agiven market.

a)Product Class:Product class can bedivided into cars,trucks,bikesetc.b)Product form:The Cars can be dividedinto Sports car,family car or


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trucks can be classified as heavy duty andsemi heavy duty trucks.

c)Variation in the form:cars with twodoors,with four doors etc.d) brands: For cars we haveFiat,chevrolet,Skoda etc.For trucks we have tata,Mahindra etc.Product Classification

Products have been classified on the basis ofcharacteristics like;1.Usage2.Durability3.TangibilityDurability and Tangibility: Based on durability

and tangibility, productscan be classified into three groups1.Non-durables2.durables3.services1.Non durables:Non durables goods are

tangible in nature.They areconsumed over a short period of time..Fore.g.All fast moving consumer


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goods(FMCG) like soaps,tooth paste, petroletc.They are consumed by theconsumers at a fast rate,hence they arepurchased frequently by theconsumers.2.Durables:Durable goods are tangible innature.They are consumed over arelatively longer period of time,usually two orthree years or more.

Services: Servicesare intangible andperishable by nature. Services can beindependent like hair cut or free home deliveryor after sale service offeredwith the main product.Usage: Based on usage of the products, they

are divided into:a)Consumer products; Since no consumersthink alike and depending upontime, money and risks( social, functional andphysical) involved in buying theproduct. Hence single product can fit into

several categories at the same time.1.Convinience products2.Shopping products3.Speciality products


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4.Unsought productsb)Industrial products1.Production goods

2.Support Goods1.Convinience products;They arerelatively inexpensive and boughtfrequently.These products are usuallybought with minimum ofthought and efforts.they are not affected byfashion andfad.Convinience products can becatagorized into staplegoods(milk,bread,newspapersetc.).Marketers sell convinience

products through retail stores stock them inself-service shelves.For E.g.-Wrigleys chewing gum,Feminamagazine,Gillette Sensor,etc.are placed at counters and shelves near thecheck-out points at Food

World outlets,so that a customer is boundto look at them whilewaiting for his turn at the check out counter.


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Marketers also try to use screen displays atthe entrance of the store.

E.g.-Ponds beauty care displaying itsproducts.2.Shopping Products;Shopping productsare products for which abuyer is willing to spend time and effort inplanning and making

purchase decisions.These products areexpected to have longer lifeand are purchased less frequently.They aremore expensive andavailable at limited outlets.Buyers evaluatefeatures like price,productfeatures,warranties,quality,after salesservices,etc in a brand.E.g.-home appliances,cameras,T.V.3.Speciality Products;Speciality productsare products which have

one or more unique features.Theseproducts are available at fewselected outlet or single outlet.Customerare person or brand loyal.


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E.g.-Mercedes-Benz car,Mont blanc penetc.

4.Unsought Products;Unsought productsare products that a customerpurchases when he is faced with suddenproblem.E.g.-Umbrellas, Insurance policies etc.Industrial Products;Industrial products are the

products that are purchasedto produce other products or facilitate thesmooth functioning of anorganisation.1.Production Goods;production goods are thegoods that are used solely for

the production of a manufacturers products;1.Raw material;they are required in bulk.E.g.-Fabric,crude oil,chemicals,farm productsetc.2.Component parts;Acomponent is a finishedproduct or a product that

needs little processing before becoming a partof main product.E.g.-Wheels,seats,glass panes are componentsof car.


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3.Process material;They are used directly inthe production of the finalproduct.E.g.-Perfumes have alcohol as base for itsproduct.Preservatives for processed foodSupport products;Support products are productsthat facilitate theproduction.They do not become a part of the final

product.1.Capital equipment;it comprises of large tools andmachines that are used forproduction of goods or for providing services.Theyare usually expensive.2.Accessory equipment;Accessories are thoseproducts that help in production or

office activities.They are relatively lessexpensive.They are purchaesdmorefrequently and demand less services.E.g.-Computers,calculators,furniture etc.3.Consumable supplies;Consumable supplies areconsumed during production and

delivery but are not part of final product.E.g.-pencil,paper,Envelopes(officestationary),brooms(maintainence items),repairitems(handy tools,replacement parts).


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each product in the product line.E.g.-Lifebuoy Active Red comes in threesizes:125gm,100gm and 60gmcakes.4.Consistency;It refers to how close are theproduct lines as far as productionrequirement,distribution,end usage isconcerned as they are consumer goods.E.g.-HLL products are consumer goods so they

have same distributionchannels and produced in similar manufacturingfacilities.

Product mix of HLLConfectionaries

ColourcosmeticsHair care Skin care Oral careDeodrants Soaps anddetergentToilet soaps BeveragesMax lakme Sunsilk Fair & lovelyPepsodent Axe Surf Liril LiptonYellow label

Aviance Clinic Ponds Close-up Ponds Rin Lifebuoy LiptonGreen label

Rexona Wheel Lux Red labelDenim Ok Breeze Lipton Icetea501 Pears Taj MahalVim Hamam BrookeBond Taaza


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Sunlight

RexonaB

ruAla Doveu ct lin eep th

Positioning the ProductProduct positioning is the image projected bythe product against the

competitors product and other products of thesame firm.Marketers use variousstrategies to position the product in the market.Some of these strategies are:a) Positioning the product in relation to thecompetitors product.

E.g.-Pepsi and Coke-They position themselvesdirectly against each other.b)Position the product in relation to the targetmarket.E.g.-Coke targeted its Diet Coke at calorieconscious people.

c)Positioning in relation to product class.Eitherby associating ordissassociating it from a common class ofproducts.


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d)Decline

The Four Stages ofproduct LifeCycle1.Introduction Stage; When any product isintroduced in

the market, heavy expenditure is incurred onadvertising and othermethods of increasing the sale. This is knownas introductorystage.Introductory stage is marked by zeroprofits and negligible sales.

2.Growth Stage; During the growth period,sale of the product increases fastand cost of production comes down due toincrease in scale ofproduction.Profits earned increasesubstantially.

3.Maturity Stage;During the maturity stage, thegrowth in sale of the product slows down.Profits also start declining.


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After the maturity stage there is a stage ofdecline, when the productstarts losing its acceptance. There is a pressurefor price cut. Firmsgenerally start withdrawing the product aftermaturity stage. In this stage thecustomers try out new products and substitutes.4.Decline Stage;During this stage,the sales ofthe product fall rapidly,forcing

firms to withdraw from the market.The reasonfor decline in sales could be1)technological advances 2)increase incompetition 3)shift in consumerstasts and preferences.

Marketing MixIntroductionThe basic task of marketing is the deliveryof product(s) to consumersso that their needs are fulfilled andorganizational objectives are also

achieved. This involves several importantdecisions, e.g. decidingabout the product or products which shouldbe offered for sale, price


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of the product, markets where productsmay sell and the means of

communication with the consumer for thesale of the product. Allthese decisions form part of marketing-mix.The elements of marketing mix havebeen classified under fourheads

1.product,2.price,3.place and4. promotion.That is why marketing mix is said to be acombination of 4 Ps.

1.ProductProduct refers to a physical product or aservice or an idea which aconsumer needs and for which he is readyto pay.

Products is the key element of anymarketing mix.The decisions concerning product mayrelate to -


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a) Product attributes; Product attributesrefer to the quality, features

and design of the product.A product shouldserve the purpose forwhich it is made, in terms of utility andquality. In a competitivemarket, products are differentiated on thebasis of certain features or

design.b) Branding; Brand is an identification ofproduct. In a competitivemarket, many products are sold by brandnames. It plays an importantrole in creation of demand while branding aproduct, it should beensured that the name is simple, easy toread and pronounce and ifpossible, it should have an appeal.c) Packaging and labelling; Packaging

means putting the products insuitable containers or packets such as tin,plastic jar or card board box,


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etc. Packaging should be such that productis protected and easily

handled.Labelling serves the purpose of indicatingthe contents, weight ormeasure, instructions for use, price, nameof the producer, date ofmanufacture and expiry, etc. The

information on the label is essentialfor various reasons.d) Product support service; Service maybe by way of installationservice, training in product use, after saleservice, credit and financingservice, etc. It should be decided whetherservices would be providedfree or against separate charge.e) Product mix;A company may decide toa single or a variety of

products,add new products, or withdrawcertain products. Relevantdecisions are made keeping in view thescope of marketing. Such


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decisions are called product line or productmix decisions.

2.Price; Price is the amount charged for aproduct or service. It is theconsideration paid by consumers for thebenefit of using any productor service. Price fixation is an importantaspect of marketing. Pricing

decisions of a company are affected byboth internal as well asexternal factors.There may be two methods of price-fixation:

1. Cost-based approach; This is the

simplest method of pricing.Generally companies add a certainpercentage of Profit, to the totalcost of the product. The total cost of theproduct is calculated aftertaking all types of costs into

consideration.2. Competition-based approach; Theprices are determined on the


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basis of conditions in the market.Companies may follow any one of

the following three approaches.a) Price-in-lineb) Market-plusc) Market-minusa.Price-in-line; means prices fixed nearlyequal to the prices of close

alternatives. Prices are decided by themarket forces of demandand supply.b. Market-plus;When companies charge(fix up) a price which ismore than the priceof existing substitutes, itis called market pluspricing. This approach is adopted when thequality of a product isbetter, or it has a popular brand name, or itspackaging is attractive

and useful. Consumers will pay more onlywhen they find distinctivedifferences in the product and itssubstitutes.


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c) Market-minus;Sometimes businessenterprises get ready to supply

products at a price lower than the marketprice. It may be adopted tograb a larger market share or to make anewly introduced productmore popular. This approach is calledmarket-minus approach.

PromotionPromotion refers to using methods ofcommunication with twoobjectives :(i) informing the existing and potential

consumers about aproduct(2) to persuade consumers to buy theproduct. It is animportant element of marketing mix.Various tools of communication form part of

promotion mix. Thetools should be combined. These decisionsare known as promotionmixdecisions.


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Tools of Promotion-mix1.Advertising2.personal selling3.sales promotion and4. publicity

AdvertisingAdvertising is an impersonal form ofcommunication for which the

seller pays in order to promote a physicalproduct or service. It maybePrint form;1. newspapers2.magazines, or

Audio form;1. radio and other similiar methodsAudio-visual forms;1. Television,2.cinema screen, etc.

Personal sellingPersonal selling is a personalcommunication with one or more


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prospective buyers for the purpose ofselling a product or service.

These days, personal selling is consideredto be the most effectivetool.- it involves personal interaction, hencefeed back is receivedimmediately;

- it is quite flexible, salesman can adjustcommunication accordingto the level of customers under-standing.- it is more persuasive; buyers can beconvinced about the utilityof the product;- impressive salesman leaves animpression on the prospectivebuyer; it may increase sales in the future.

Sales PromotionSales promotion means the use of short-

term incentives which aredesigned to encourage immediate purchaseof a product or service by


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the buyer. Most of the sales promotionactivities come in the form of

someincentive for the buyer; hence salesgenerally increase immediately.sales promotion tools while introducing anew product.It includes ;

1.offer of discounts2.free gifts3.free sample4.coupons5.demonstration6.store display, etc.E.g.-One tooth brush free with one 100gmof Close-up dental cream .

PublicityPublicity takes place when a favourablepresentation is made through

mass media about a product or service.People believe more on suchnews than in advertising. It covers peoplewho do not entertain


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personal selling and sales promotionapproaches. It is a non-paid form

of communication. Very few products orservices are covered bypublicity.PackagingIt is also considered as a powerful salespromotion tool these

days. It immediately attracts the buyer andmakes him buy theproduct.This tool has produced good results in caseof consumer goods.

PlaceOnce the goods are manufactured,packaged, priced and promoted,they must be made available to theconsumers. Place is anotherimportant element of marketing mix as it

covers Activities related toplacing the products. It ensures variousfacilitating services need to be arrangedlike;


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1. transportation2.warehousing,

3.inventory control4.order processing.Two elements of placeare;(A) Channels of distribution(B) Physical distribution(A) Channels of Distribution :

There can be various levels of channel. It isfor theproducer to decide which level would suitthe sale of his product.Number of Channel LevelsDistribution channel starts from theproducer and ends with theconsumer.Channels of CommunicationChannel 1 Manufacturer ConsumerChannel 2 Manufacturer Retailer ConsumerChannel 3 Manufacturer Wholesaler RetailerConsumerChannel 4 Manufacturer Wholesalers JobersRetailer Consumer


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Channel 1 is called a direct marketingchannel. It has no intermediary

level. Producers sell products directly to theconsumers.Channel 2 includes one intermediary whichis generally a retailer.Retailers buy products directly from themanufacturer and sell these to

the consumers.Generally electronic goods like televisions,computers, are soldthrough this channel level.Channel 3 consists of two levels, typically awholesaler and a retailer.This channel is often used by smallmanufacturers of food items, andother products.Channel 4 contains three middlemenlevels. Jobbers usually come

between wholesalers and retailers. Theybuy from wholesaler and sellto small retailers who generally are notserved by wholesalers.


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(B) Physical Distribution :Physical distribution comprises all those

activities which delivercustomer satisfaction by supplying righttype of products at right placeand at right time regularly.Components of physical distribution :-(i) Order Processing:Physical distribution

begins with customersorder. Both the company and customer arebenefitted if orderprocessing is carried out quickly andaccurately. These dayscomputers are used which establish a linkbetween retailers andproducers.(ii) Warehousing;Every company muststore goods to maintain aproper flow.Storage facilities are important

because production andconsumption cycles generally do not match.(iii) Inventory;Inventory level also affectscustomer satisfaction.


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Marketers wouldlike that company havingenough stock to ful fill all

customers order immediately.(iv) Transportation;Transportation hasinfact, facilitated the physicaldistribution of goods and services over alarger area. Modes oftransportation may include road, rail, water,

air, etc. The choice ofmode of transport affects the pricing andcondition of goods.

Marketing researchMarketing research provides informationabout consumers andmarkets,and their reactions to variousproducts,prices,distribution,andpromotion strategies.Marketing researchinvolves collection and

analysis of relevant facts to solve marketingproblems.It is a logical method of solving marketingproblems.


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Marketing research may consist of any orall of the following :

(1) Research on markets: This is a studyof customers and theircharacteristics.(2) Research on Products: This is a studyof products, whichinvolves development and introduction of

new products,improvement of existing products andwithdrawal of old productsfromthe market.(3) Research on marketing methods andpolicies: This branch ofmarketing research studies issues relatingto advertising, personalselling, pricing and channels of distribution.The marketing research process hasfollowing steps:

1.Formulating the problem;The purpose ofconducting marketing researchis to find a suitable solution for a specific andimmediate problem faced by abusiness manager.


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2.Developing objectives of the research;Theobjectives of the researchshould be clear and specific.The objectivesshould cover all the questionsregarding the purpose of the study,how thestudy to be conducted.3.Designing an effective research plan;It isusing the tools and techniquesto conduct marketing research.

The research instruments generally used tocollect primary data are;1.Questionnaires2.Mechanical instruments.

4.Data collecting techniques1.Questionnaires;Questionnaires are formalset of questions to collect therequired information.This is ome of the mosteffective techniques used inthe surveys.The contents,phrasing and thesequence of thequestionnaireshould be clear and non-

confusing.2.Mail interviews; The cost is relativelylow.The questionnaire is sent on


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the mail and the customer can respond at hisconvinience.The identity can be kept secret and thecustomer can express their ideasopenly.3.Telephonic interviews;They are conductedwhen the information requiredis not great and need to be collected quickly.4.personal interviews;They are conducted

when interviewer andinterviewee are physically present at oneplace.They can be one to one orone to many.Theinterviewer can ask questionsand records the responsesfrom the respondents.

5.Mechanical instruments;Instruments likegalvanometers measure theresponses on various parameters such asemotions,interest etc.

Secondary Data;Secondary data iscollected from companysexternal and internal resources.Companys internal resources include;1.annual reports2.Sales reports


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Companys external resources could be;1.Independant magazines

2.journals3.legal documents5.Evaluating the data and preparing aresearch report;Once theinformation is collected,it is edited andcoded.The coded data is then

tabulated and evaluated and detailedresearch report is made.Thisreprt is submitted to the management tomake effective decisions toattract potential business opportunities.

RetailingMeaningretailing is a business activity that involvesselling products/servicesto customers for non-commercialindividualor family

use.Normally,retailing is the last stage ofthe distribution process.Over the past few years,industrial gaintslike Tatas westside,Eureka


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forbes,Pantaloons,Big Bazaar,Shoppersstop and lifestyle have made

a foray into the Indian retail market.Globalization and the increase in the doubleincome households hasgiven a tremendous boost to the spendingpower of consumersthereby opening a plethora of opportunities

for retailers.Since both parents are working and peoplehave less time forshopping the shopping time has reducedbut the disposable incomehas increased.Hence,customers are on thelookout for instant productsand services to save time.

Generally retailers are classifiedinto four catagories:1.Retailing based on ownership2.Retailing based on the extent ofproduct lines handled


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3.Retailing based on the servicesvs.goods lines handled

4.Non-store based retailing1.Ownership;a)It primarily includes independentretailers,where a retailers own only asingle retail unit.Individual retailing units can beset up with minimumlicensing requirements.However,the marketshare of the individual retailersis significantly low as compared to other form ofretail ownership.b)Chain retailership;These retailers ownseveral retail outlets.Purchasingdecisions and activities are carried out centrallyfrom these various outlets.E.g.-Pantaloons and Food World.c)leased department;A retailer takes a portionof a major store or outlet onlease or rent and is responsible for decorating

his section of the store.Inreturn for the leased or rental space,the retailerpays an amount equal to apercentage of his sales to the store owner.


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E.g-Big Bazaar

d)Vertical Market Units;In vertical marketunit,all the threefunctions of business manufacturing,wholesaling and retailing-maybe owned by a single person,and comprisea fully integrated

system.When the three functions areowned by two persons,itcomprises a partially integrated system,andwhen owned by threedifferent individuals,they are calledindependent systems.e)Consumer cooperatives;they are retailoutlets that are owned andoperated by a group of consumers.Therepresentatives of theseconsumers look after the day-to-day

operations of the retail outlet.E.g.-AMUL(Anand Milk Producers UnionLimited) are successfulmilk cooperatives.


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2.The extend of Product Lineshandled

It includes speciality stores,departmentalstores,discountstores,supermarkets and hypermarkets.a)Speciality stores;Speciality stores offera wide selection ofspecially chosen goods pertaining to asingle product line.Thexsestores provide a narrow product line but awide assortment of choicewithin this product line.These stores targetsmall segment of market

for sales.E.g.-Health and Glow stores by Goenkagroup and they offer solutionsfor better health in the form of Ayurvedicproducts.b)Departmental Stores;They offer wide

selection of product forconsumers.There is considerably largeretail space with separate


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sections allocated for toiletories,foodstuff,body care products etc.

E.g.-Westside,Shoppers Stop andLifestyle.c)Discount Stores;They offer products atless than the retail price.Thepurpose of doing so is to obtain profits onlarge volume sales.Discount

stores are targeted to middle and lowerlevel class who are priceconcious.d)Supermarkets;They are based on theconcept of self service.Thecustomers can pick and choose productson their own from a varietyof brands displayed on the shelf.e)Hypermarkets;They are very largesupermarkets with the shopfloor area ranging between two lakh to

three lakh square feet.Theyoffer wide variety of products ranging fromneedle to householdequipment.


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3.Service vs.Goods Retail StrategyMix;

Retailing business can also be classified intogoods and services.A)In goods retailing,physical products are soldsuch as groceries.B)In services retailing,the consumer does notget the ownership of a product

such as spa or beauty parlours.C)There are other retailers who offer acombination of both goods andservices such as video parlours. They sell andrent video CDs.The Service sector are growing faster than

manufacturing and the goodssector globally.Service retailing can be divided into;1.Rented goods services;In this case,theconsumer pay the fees for the timebut he does not own it.E.g.-Hertz car rental

offer cars on rent.2.Owned goods service retailing;The serviceprovider does not own thegoods that he services.E.g.-Annual PCmaintainence or AC maintainence


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contracts.3.Non goods service retailing;Personalservices are provided.No physicalgoods are involved.E.g.-Tutors,personaltrainers,real stoke brokers etc.

4.Non-Store based retailingIt can be in the form of;1.Direct selling;It is the process of selling the

products directly to theconsumers by meeting them personally in theirhomes,offices or other nonstore locations.Products sold using this methodinclude vaccuumcleaners,water purifiers,milk,news paper andmagazines etc.2.Direct marketing;It is the process ofexposing the consumer to theproduct or service,through mailers,telephonecalls,cable,satellitetelevision,or radio and ask for direct responsefrom customers.E.g.-TSN(Tele Shopping Network) promotetheir products throughtelevision channels and invite direct responsefrom customers.


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3.Automatic Vending;It is a type of non storeretailing in which vendingmachines are used to dispense goods andservices to customers without anysales person.When customer inserts the coin inthe vending machine,itdelivers the product or service to thecustomer,For e.g.-Cold drink vendingbooths,telephone booths etc.

FrancisingMeaningFranchising is a contractual and legalbinding agreement

between a franchiser and afranchisee.A franchiser may be the owner ofthea trademark or atradename,a producer of goods and

servicesprovider.Hegives the right to thefranchisee the right to do


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the business under his trademark,trade name,product.or

service.Strategic Issues in RetailingA retail strategy has six major elements asdescribed below;1.Situation analysis;Before venturing into thebusiness the vendor should

conduct a situational analysis to assess thecurrent position of his businessand directiond it must take.This includeevaluation of his strengths andweaknesses. Making decisions whether to startbusiness on a sole

proprietorship,partnership and whether to investin entire new business,buyan existing business,or start a franchise.Taking management decisions whether tomanage business of his own or to9hire a professional and decisions whether to

centralize or decentralize hisbusiness.2.Setting objectives;He should set long orshort term targets.It includes an


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overall growth in sales,stability in sales andprofits and achieving highermarket share.It also includes customersatsfaction,meet the expectation ofstock holders and enhance the image of thestore.

3.Identification of Target markets andconsumers;In this the

retailer can choose between:1.Mass marketing;When he has to sell hisproducts and services to alarge number of customers.2.Concentrated marketing;When theproducts and services are

targeted at a specific group of customers.3.Differentiated marketing;When theproducts are targeted at two ormore distinct groups of customers. when acompany attempts toappeal to two or more clearly definedmarket segments with a specificproduct and unique marketing strategytailored to each separate


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segment. differentiated marketing createsmore total sales and it also

increases the costs of doing business.E.g.-Firms such as Maruti-Suzuki usedifferentiated marketing toattract all segments. Others, such asHyundai, and Microsoft appeal totwo or more segments, but not all

segments.4.Developing an Overall Strategy;This isdone by taking intoaccount two or more variables;1.Controllable variables;The controllablevariables are that can becontrolled by the retailer such as;1.Working hours2.investment capital3.location of the outlet4.advertising and promotional strategies

etc.2.Non-controllable variables;They arethose elements that are cannot


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be controlled by the retailer and to which hehas to adapt himself.

1.Technological advancement2.Competition3.Government regulations5.Developing specific activities;it involvesdecisions based on day today operations activities like pricing of the

products andcommunicating with the customers.1.Location;Location of the store is ofsignificant strategic importance.A retailer can adapt himself to changingmarket conditions bychanging his product,price,promotion ordistribution strategy butchanging the store location is very difficultand can impact businessin the long-term.Therefore to choose an

appropriate location isreleventeven if there are future marketchanges.Scientific research


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has to be conducted.Next,the researchersstudy the capability of the

store to attract maximum customers fromdifferent geographiclocations.Then an analysis is done toestimate the sales that an outletcan generate.In this way,a location that willgenerate maximum sales

can be selected.6.Store Image Decisions;The store imageis an important factorinfluencing the consumers choice of thestore.If the retail store istargeting mass market,then the storesappeal should be balanced as toattract as many people as possible.The younger generation is attracted to ayoung trendy storeimages.They consider aspects like the

aesthetics of the store,theresponsiveness of the sales staff and thequality of the merchandise.


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The older generation like to associate withthose stores that have

evolved with the times along with them.Case StudyBCPLs Petrol Pump Retail RevolutionPetrol pumps in India have come a long way from beingdusty, poorly lit places manned byshabbily clothed and indifferent personnel, to the shoppingmalls of the early 21st century.BharatPetroleum Corporation Ltd.(BCPL),a leading player in the

Indian petroleum industry, receivedwide acclaim for having brought about this change in theIndian fuel retailing business.In the mid 1990s,the oil industry felt the need to establishstrong brand identities. Until then, theindustry seemed to have adopted an indifferent approachtowards customer service. With the

deregulation of the oil industry in April 2002,Indian playersrealized that they needed to becomemore customer focused.BPCLs pioneering efforts increating brand awareness for its productswere thus a welcoming change.BPCLs first foray intopetrol pump retailing was through BharatShell Ltd.(Shell).The store, offering eatables, softdrinks,stationary,newspapers,magazines,frozenfoods, light bulbs, audio cassettes and CDs,came as apleasant surprise to Indian consumers.By July 1999, 35 ofBCPLs retail outlets across thecountry had the Bazaar, stores running


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successfully, in october,2000,BCPL,pioneered anotherrevolutionary concept by launching aMcDonaldss fast food outlet at a petrol pump near

Mathura (UP) on theD

elhi Agra highway.The 4000 sq.ft,180 seat outlet was set up at a cost ofRs.40 million.Mc.Dolds paid a fixed rent,besides a percentage of its sales to BCPL,for using thefacility.In January 2001,BCPL further upgraded the Bazaarstores ,and a month later, launched theIn& Outstores at around 40 outlets in

Bangalore,Mumbai,Delhi,Kolkata and Chennai. To offerenhanced services to its customers,BCPL tied up with thevarious companies from a number ofdifferent industries:fast food,photography,music,financialservices,ISPs,ecommerceportals,document centres,ticketing,greetingcards,ATMs,and courier services.

International MarketingMeaningAccording to The AmericanMarketing Association(AMA) ,International marketing is

the multinationalprocess of planning and executingthe


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conception,pricing,promotion anddistribution of

ideas,goods and services to createexchanges that satisfyindividual and organizationalobjectives.

International marketing Vs

DomesticMarketing InternationalMarketingDomestic Marketing1 .In tern ation al m arketin g stu d ies

th e "h ow " an d "w h y" a p rod u ctsu cceed s or fails ab road an d h owm arketin g efforts affect th e

ou tcom e.

1.Domestic marketing studiesabout a product sales in the

2.Marketing methods used outside nationalmarket.the home marketing are foreignmarketing.


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2.Domestic marketing isconcerned with the marketing

practices within the marketershome country.3. International marketinginvolves two or more sets ofenvironmental uncontrollablevariables originating from various

contries.3.Domesticmarketing involvesone set of uncontrollables derivedfrom the domestic market.

Trade

Trade is the voluntary exchange ofgoods, services, or both.Trade is also called commerce ortransaction. A mechanismthat allows trade is called a market.

It is the commercial exchange(buying and selling on


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domestic or international markets) ofgoods and services.

GATTGeneral Agreement of Tariff andTrade is an agreementamong more than 120 countries,thepurpose of which is to

lower barriers to the free flow ofgoods and servicesbetween nations.

Instruments of trade PolicyThey are called as trade barriers.There aresix main instruments oftrade policy;

1.tarriffs2.Subsidies3.Import Quotas

4.Voluntary export restrictions5.Local content requirements6.Administrative policies1.Tarriffs;


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A tarriff is a tax levied on imports.A tarriff raisesthe cost of imported goodsrelative to products produced in domesticmarket. The principle objective oftarriff is to protect domestic producers andemployees against foreigncompetition,t

marketing management nav

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