MASTER OF BUSINESS ADMINISTRATION
(INDUSTRY INTEGRATED)
TWO YEAR FULL TIME INDUSTRY INTEGRATED
M.B.A PROGRAMME
SELF LEARNING MATERIAL
MARKETING MANAGEMENT
Detailed Curriculum
Annamalai University Courses
Unit- I
Chapter – 1 Introduction
1. Introduction :
As this is a introduction chapter to marketing management, discusses about the meaning, definition, importance, various important concepts of marketing, and various marketing tasks such as conventional and stimulation marketing, maintenance marketing, synchro marketing etc.
2. Objectives :
• To know about meaning, definition of marketing
• To study about various important concepts of marketing
• To analyze various tasks of marketing
3. Content:
Marketing- definition
The American Marketing Association (AMA) defines marketing as ‘the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.
Importance
With the opening up of the Indian economy, we are beginning to taste the fruits of globalization. As already stated above, the phenomenon of change is nothing new. Everything changes with the passage of time. Marketing practices have evolved gradually over an extremely long period of time. In the sense that marketing is defined, it has been around since ancient times. In those earliest days, human beings learned to exchange things they needed with others. It can be assumed that th4e outcome of such exchanges was satisfying for concerned parties. Marketing as a discipline of study is relatively quite new. However, the purpose of exchanges then and how the same to satisfy is needs and wants.
Concepts in marketing
A cross sectional and longitudinal analysis of evolution of marketing thought and subsequent reliance of marketing managers on specific elements of marketing brings us to classify concepts of marketing into the following categories.
- The production concept:
It is based on the idea that the more we make, the more profitable we become. So let us go out there and make customers buy our products. Companies interested to take the benefit of scale of economies pursue this kind of orientation.
- The product concept:
Managers focus on developing superior products and improving the existing product lines over a period of time. Innovations in the scientific laboratory are commercialized and consumers get an opportunity to know and use these products.
- The selling concept:
It proposes that customers be they individuals or organizations will not buy enough of the firm’s products unless they are persuaded to do so through the selling effort. So companies should undertake selling and promotion of their products for marketing success.
- The marketing concept:
It proposes that the reason for success lies in the company’s ability to create, deliver and communicate a better value proposition through its marketing offer in comparisons to the competitors for its chosen target segment.
Marketing tasks
- Developing marketing strategies and plans: the first task facing Atlas is to identify its potential long-run opportunities, given its market experience and core competencies.
- Capturing marketing insights: Atlas needs a reliable marketing information system to closely monitor its marketing environment.
- Connecting with customers: atlas must consider how to best create value for its chosen target markets and develop strong, profitable long-term relationships with customers.
- Building strong brands: atlas must understand the strengths and weaknesses of the zeus brand as customers see it.
- Shaping the market offerings: at the heart of the marketing program is the product, the firm’s tangible offering to the market which includes the product quality, design, features and packaging.
- Delivering value: atlas must also determine how to properly deliver to the target market the value embodied in its products and services.
- Communicating value: Atlas must also adequately communicate to the target market the value embodied by its products and services.
- Creating long-term growth: based on its products positioning, Atlas must initiate new-product development, testing and launching as a part of its long term views
4. Revision points:
Definition, concepts of marketing, marketing tasks and concepts of marketing are the important points of the content to fix students in the learners’ minds and stabilize the learning outcomes.
5. Intext questions:
a. Define marketing?
b. Discuss about the important concepts of marketing?
c. Explain the important marketing tasks.
6. Summary :
Marketing is the process of creating, pricing, distributing and promoting goods, services, individuals, places or ideas.
Delivering products, which give value and satisfaction to the customer, is the main goal of marketers.
Marketing has developed through four stages namely, the production era, the sales era, the marketing era and the societal marketing era.
It is important to the marketer to understand about the different important marketing tasks such as conventional, stimulation, maintenance and synchro marketing.
7. Terminal exercises :
Short answer questions.
a. Define marketing?
b. Explain the importance of marketing?
c. What is conventional marketing?
d. What is stimulational marketing?
e. Define maintenance marketing.
f. Define synchro marketing.
g. What is traditional marketing?
h. Define modern marketing?
MCQs
The process of creating, pricing, distributing and promoting goods, services, individuals, places or ideas is known as
a. Selling
b. Idea generation
c. Marketing
d. Management
Which of the following places the customer at the beginning as well as at the end of the business cycle?
a. Long-term profitability
b. Functional integration
c. Consumer orientation
d. Marketing myopia
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘ A study on important marketing tasks performed by the organizations’
‘ Suggested reading/ reference books/set books :
daily news paper , magazines and internet
10. Learning activities:
Role plays – ‘as a business manager how he/she can take care of various tasks of marketing’
11. Key words:
o Conventional marketing: distributing hand-outs, direct mail, news paper advertising, etc.
- promotional materials usually go straight in the trash
o Stimulational marketing: marketing activity intended to stimulate demand for a product among those who are neither aware of it nor interested in it.
o Maintenance marketing: Promotional activity required to maintain a product’s or a firm's current market share in a highly competitive market
o Synchro marketing: it will improve your business performance in the critical areas of sales, marketing, knowledge, quality, customer satisfaction and cost reduction
o Traditional marketing: It tries to perfect the segmentation strategy used in traditional marketing
o Modern marketing: a blog about the role of social media, networks, web marketing and internet strategy in the world of marketing and communications.
Chapter – 2 Marketing Environment
1. Introduction
The performance of a company depends on its sales and its sales depend upon the marketing environment that influences its marketing activities
2. Objectives
• To understand marketing environment
• To study the micro environment of the business organization and
• To analyze the macro environment of the organization
•
3. Content
Marketing environment
Marketing Environment comprises of external factors over which the organization and management has little control. The relatively uncontrollable external forces are:
1. Demographic environment: Market means people with money and with a will to spend their money to satisfy their wants. Hence, marketing management is directly interested in demography, i.e., scientific study of human population and its distribution structure. Growing population indicates growing market particularly for baby products. But when we have reduction in the birth rate and the lower rate of growth of population, many companies 'specializing in baby products will have to adjust their marketing programme accordingly. Population forecasts during the next decade can be arrived at with considerable accuracy and on the basis of such forecasts marketing management can adjust marketing plans and policies to establish favorable relationship with demographic changes. Demographic analysis deals with quantitative Cements such as age, sex, education, occupation, income, geographic concentration and dispersion, urban and rural population, etc.
2. Economic environment: People constitute only one element of a market. The second essential element of a market is purchasing power and willingness to spend. Then only we have effective demand. Hence, economic conditions play a significant role in the marketing system. High economic growth assures higher level of employment and income, and this leads to marketing boom in many industries. Marketing plans and programmed are also influenced by many other economic items such as interest rates, money supply, price level, consumer credit, etc. Higher interest rates adversely influence real estate market and markets of consumer durables sold on installment basis. Exchange fluctuations, currency devaluation, change in political and legal set-up influence international marketing. The level of take-home pay determines disposable personal income and it influences marketing programmes directly. Economic conditions leading to recession can influence product planning, price fixing, and promotion policies of a business enterprise. Marketing mix must be formulated on the basis of important economic indices.
3. Social and Cultural Environment: Social and cultural forces influence the business concern in a significant way. New demands are created and old ones are lost in due course. There are three aspects of social environment:
1. Changes in our life-style and social values, e.g., changing role of women, emphasis on quality of goods instead of quantity of goods, greater preference to recreational activities, etc.
2. Major social problems, e.g., concern for pollution of our environment, socially responsible marketing policies, need for safety in occupations and products etc.
3. Consumerism is becoming increasingly important to marketing decision process. Societal marketing concept, demanding not only consumer welfare but also citizen welfare is very much emphasized. Marketer's are now called upon not only to deliver higher material standard of living but also assure quality of i life, i.e. environment free from pollution.
4. Political and Legal Forces: Political and legal forces are gaining considerable importance in marketing activities of business enterprises. Marketing systems are affected by government's monetary and fiscal policies, import - export policies, customs duties. Legislation controlling physical environment, e.g: anti-pollution laws also influence marketing, plans and policies. Consumer legislation tries to protect consumer interests. Marketing management cannot ignore the legislation regulating competition and protecting consumers. Business enterprises may not be If, allowed to resort to price discrimination, false and misleading advertising, exclusive distributorships and trying agreements, deceptive sales promotion devices, division of markets, exclusion of new competitors and such other unfair trade practices.
5. Science and Technology: Unprecedented development of science and technology since 1940 has created a phenomenal impact on our lives. We have witnessed in one generation radical change in our life-styles, in our consumption pattern as well as in our economic welfare. A new package of policies relating to technology has also been introduced. The nation is now attaching a great degree of importance to technological up gradation of practically all segments of industry. Better incentives have been built into the basic policies and systems so that technologically advanced nations find it attractive to collaborate with India in different sectors of industry and transfer the latest technologies in the respective fields. In particular, India is making rapid and significant advances In flelcis like energy, electronics, micro electronics, and communication and information technologies. There Is an all-round accent on securing high-technology on par with the developed nations and on becoming technologically competitive on the international scene,Technology is the way things are done: the methods, materials and techniques used to achieve commercial and industrial objectives. New technologies offer a main source of economic growth. Many businesses are earning handsome profits from products which did not exist 35 years ago. Electronic industry is the best example of exploiting new marketing opportunities. Computers and airplanes are entirely new industries. Dlgltal watches are killing the marketing prospects of traditional watches. Artlflcial flbre cloth has almost killed the pure cotton textile industries in many countries. Television has adversely affected radio and cinema industries.
4. Revision points
Micro environment of the organization and
Macro environment of the organization
5. Intext questions
- Define marketing environment
- What is micro environment?
- What is macro environment?
6. Summary
Marketing activities of a firm are influenced by both the internal and external environments. A firm can control internal forces to a greater extent, while external forces are uncontrollable and the firm has to adjust or manipulate its activities to survive in the market. The internal forces include human resources, production facility, R&D, company location, financial capability and company image. The external environment can be divided into the micro which consists of suppliers, marketing intermediaries and customers and macro consists of demographic, political, economic, socio, cultural, technology, and legal environment.
7. Terminal exercises
Short answer questions
- Define marketing environment.
- What is micro environment?
- What is macro environment?
MCQs
The use of scientific knowledge and tools to solve specific problems and perform tasks in an effective manner is known for
a. cultural development
d. technology
c. financial sources
d. organization power
Which one of the following does not come under the business life cycle/
a. Growth
b. Recession
c. Depression
d. Buying power
8. Supplementary materials
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘A study on macro environmental factors of an organization’
10. Suggested reading/ reference books/ set books
Daily news papers, magazines and internet
11. Learning activities
‘Visit any supermarket and analyze the factors contributing in increasing the market share ‘
12. Key words
Micro environment: the forces which affects the performance of the organization immediately
Macro environment: the forces which are not effects the performance of the organization immediately
Chapter – 3 Marketing strategies
1. Introduction:
The aim of marketers is always to identify and satisfy customer needs and wants profitably. In this chapter, we discuss various aspects of competition and how competitive strategies can be developed keeping these aspects in mind.
Objectives are a statement of where a company wants to go; strategy Is a grand design for getting there. Strategy is a battle plan fused out of marketing, financial, and manufacturing elements. Marketing strategy of a firm is the complete and unbeatable plan or instrument designed specifically for attaining the marketing objectives of the firm. The marketing objectives will tell us where the firm wants to go: the marketing strategy will provide the design for getting there.
2. Objectives :
• To know about the strategies
• To understand various markets
• To understand the applications of marketing strategies
3. Content:
Introduction to strategies
Marketing strategy is the Instrument leading to the attainment of the marketing objectives. It means that the burden of attaining the marketing objectives rests with marketing strategy. It is only logical then that marketing strategy takes its direction and cue from the objectives and goals of the firm.
The value delivery system
Marketing strategy of a firm is the complete and unbeatable plan or instrument designed specifically for attaining the marketing objectives of the firm. The marketing objectives will tell us where the firm wants to go: the marketing strategy will provide the design for getting there.
According to Michael E. Porter, "Marketing strategy has mainly one aim-to cope with competition. There are five major and vital forces that decide the nature and intensity of competition-the treat of new entrants
Value chain model
According to Michael E. Porter, every firm performs a set of activities that helps in designing, producing, marketing, delivering and supporting its products. These activities form a process. At every stage procurement to the after sales service is called the value chain. It identifies nine strategic activities i.e. five primary and four support activities to create value. Primary activities are the activities that are involved in creating, distributing, selling and providing after sales assistance for a product. Support activities assist primary activities by providing infrastructure that allows them to take place on an ongoing basis.
The central role of strategic planning
Before formulating, executing and implementing a strategy an organization has to analyze the changes taking place in the environment and the various options available. The organization should ensure that the strategies help achieve its goals and objectives.
The vision and mission of an organization form the basis for adopting a particular strategy. Companies need to formulate effective strategies to deal with emerging technological breakthroughs, ever-changing customer needs, turbulent market situations, unpredictable competition and changes in political legal social and economic environment s.
The corporate and divisional planning
Strategic planning involves framing corporate and divisional strategies. However, prior to that the company has to identify its position in the market. To day firms face global competition to sustain itself in a global market. Today firms face internal standards. The strategic planning process may suffer, if there is an increased resistance to change within the organization.
Corporate mission
The corporate mission of an organization explains the business of the organization. It also explains the type of customers the company is serving, its products and services and its business, technology, and functional capabilities. The corporate mission statement should be developed in tune with the core values of the organization. Developing bland mission statements, just for the sake of developing them, will serve no purpose and on the contrary may prove to be harmful for the company.
4. Revision points :
Strategy
Michael E. Porter’s Competitive Advantage
BCG matrix
Diversification strategies
5. Intext questions:
- What is strategy?
- What is value delivery system?
- What is BCG matrix?
- What are the business assessing strategies?
6. Summary:
In order to sustain itself in the market, it is imperative for an organization to develop and sustain an effective competitive advantage. This can be achieved with the help of a value chain and value delivery networks. Porter suggested that there are three generic strategies through which organization can gain competitive advantages. The competitive strategies should be developed on a basis of positions a company holds in the market.
7. Terminal exercises:
Short answer questions
- What is strategy?
- Explain about the value chain and value delivery system.
- Explain the BCG matrix
- Explain Ansoff’s growth strategy matrix
MCQs
The end results to be achieved by an organization is known as
a. Strategy
b. Objective
c. Reaction
d. Brand image
If the firm tends to serve a specific segment instead of catering to the entire market, the strategy is known as
a. Differentiation
b. Cost leadership
c. Focus
d. Generic
8. Supplementary materials :
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments :
Examine Tata group and its other SBU’s with the help of BCG matrix’
10. Suggested reading/ reference books/set books
Daily news papers, magazines and internet
11. Learning activities:
‘examine any retail mart of your location with the help of Michael E. Porter’s value chain model’
12. Key words :
Strategy: Strategies are the methods and techniques used to achieve the long-term and short-term goals of an organization
Core competency: It is a source of competitive advantage in that it makes a significant contribution to perceived customer benefits
Unit – II
Chapter – 1. Market Segmentation
1. Introduction:
Dividing the market by grouping the customers with similar tastes and preferences into one segment is called segmentation. Market segmentation is becoming increasingly important for marketers
2. Objectives :
• To know the need for segmentation
• To know the levels of segmentation
• The study the selection of segmentation variables
• To understand the effective segmentation
3. Content :
Need for segmentation
Market segmentation is a method for achieving maximum market response from limited marketing resources. This is made possible by recognizing the difference in the response characteristics of various parts of the market. In a sense, market segmentation is the strategy of 'divide and conquer'.
"Market segmentation consists of taking the total, heterogeneous market for a product and dividing it into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects".
Market segmentation levels
Market consists of buyers, and buyers differ in one or more respects. They may differ in their wants, purchasing power, geographical locations, buying attitudes and buying practices. This varied and complex buyer behavior is the root cause of market segmentation. A market segment is a meaningful buyer group having similar wants. Each segment can be a group of people with similar or homogeneous demand and this will enable the enterprise to have tailor-made marketing mix to each market segment. Segmentation is a consumer oriented marketing strategy. Though wants and desires of consumers are diverse, segmentation helps in grouping those consumers having similar wants or desires.
Demographic Segmentation: In demographic segmentation, the market is subdivided into different parts on the basis of demographic variables such as age, sex, family size, income, occupation, education, family life cycle, religion, nationality, or social class. Demographic variables have long been the most popular bases for distinguishing significant groupings in the market place. The selection of segmentation variables
Psychographic Segmentation is on The third category of segmentation it variables is the psychographic. Psychographic variables tend to refer to the individual and such aspects as his life-style, personality, buying motives and product knowledge and use. People within the same demographic group can exhibit vastly different traits.
Lifestyle: Life-style refers to the distinctive mode of orientation an individual or a group has toward consumption, work, and play. Such terms as hippies, swingers, stra1gl~ts, and Et-setters are all descriptive of different life-styles. Marketers are increasingly being drawn to life-style segmentation.
Personality: Marketers have used personality variables to segment the market. They try to endow their products with brand personalities (brand image, brand concept) designed to appeal to corresponding consumer personalities (self-images, self- concepts).
Benefits sought: Buyers are drawn to products with different buying motives. In the case of toothpaste, there are customers who seek decay prevention, bright 'teeth, good taste, or low price. An attempt is made to determine the demographic or psychographic characteristics associated with each benefit segment. Haley has characterized that seeking decay prevention as worriers, bright teeth as sociable, good taste as sensorial, and low price as independents.
4. Revision points :
Niche marketing
Criteria for segmenting consumer market
Criteria for segmenting industrial market
5. Intext questions:
- What is segmentation?
- What is niche market?
6. Summary:
Market segmentation is one of the most important strategic decision-making tools. Segmenting the market helps marketers to effectively cater to the needs of a particular group because their needs and wants will be homogeneous there are different levels of segmentation. As consumer markets and organizations differ significantly, the method of segmenting these markets also fifers significantly.
7. Terminal exercises:
Short answer questions
What is segmentation?
What is niche market?
What is behavioral segmentation?
What is single segment concentration?
MCQs
If the market is divided according to localities, regions, cities such segmentation is known as
a. Demographic
b. Geographic
c. Psychographic
d. Behavioral
Which one of the following is not come under the effective segmentation?
a. Measurable
b. Accessible
c. Actionable
d. dreadful
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments :
‘Submit a report on need for segmentation with respect to the mobile markets of your choice location’
10. Suggested reading/ reference books/set books :
Daily news papers, magazines and internet
11. Learning activities:
‘Visit any super market of your choice and study the segmentation done by the supermarket’
12. Key words
Segmentation: Dividing the market by grouping the customers with similar tastes and preferences into one segment is called segmentation.
Niche markets : it is defined as the marketers effort to position their product or service in smaller markets that have similar attributes and have been neglected by other marketers.
Chapter – 2. Market Targeting
1. Introduction:
After the process of effective segmentation, marketers must focus their attention on targeting the market segments that are relevant to their products and likely to respond positively to their marketing strategies
2. Objectives:
• To know what is market targeting
• To understand target market selection process
3. Content:
TARGET MARKET STRATEGIES
There are three target market strategies viz.,
1. Undifferentiated marketing
2. Differentiated marketing
3. Concentrated marketing
1. Undifferentiated Marketing. In undifferentiated marketing, the firm chooses not to recognize the different market segments making*up the market. It treats the market as an aggregate, focusing on what is common in the needs of.people rather than on what is different. It tries to design a product and a marketing programme that appeal to the broadest number of buyers. It relies on mass channels, mass advertising media, and universal themes. It aims to endow the product with a superior image in people's minds, whether or not this is based on any real difference.
Undifferentiated marketing is primarily defended on the grounds of cost economies. The fact that the product line is kept narrow minimizes production, inventory, and transportation costs. The undifferentiated advertising programme enables the firm to enjoy media discounts through large usage. The absence of segmental marketing research and planning lowers the costs of marketing research and product management. On the whole, undifferentiated marketing results in keeping down several costs of doing business.
2. Differentiated Marketing: Under differentiated marketing, a firm decides to operate in two or more segments of the market but designs separate product and/or marketing programmes for each.
In recent years an increasing number of firms have moved to a strategy of differentiated marketing. This is reflected in trends to multiple product offerings and multiple trade channels and media. net effect of differentiated marketing is to create more total sales undifferentiated marketing. However, it also tends to be true differentiated marketing increases the costs of doing business.
3. Concentrated Marketing: Both differentiated marketing, undifferentiated marketing imply that the firm goes after the wh market. However, many firms see a third possibility, one that is expect appealing when the company's resources are limited. Instead of gel after a small share of a large market, the firm goes after a large share of one or a few sub markets. Put another way, instead of spreading its thin in many parts of the market, it concentrates its forces to gain good market position in a few areas.
At the same time, concentrated marketing involves higher normal risks. The particular market segment can suddenly turn sour a competitor may decide to enter the same segment. For these reason many companies prefer to diversify in several market segments.
Selecting A MARKET TARGETING Strategy
Particular characteristics of the seller, the product, or the mar. Serve to constrain and narrow the actual choice of a market target strategy.
The first factor is company resources. Where the firm’s rescue is too limited to permit complete coverage of the market, its realistic choice is concentrated marketing.
The second factor is product homogeneity. Undifferentiated marketing is more suited for homogeneous products such as grape or steel. Products that are capable of great variation, such as came and automobiles, are more naturally suited to differentiation concentration.
The third factor is product stage in the life cycle. When a introduces a new product into the market place it usually finds practical to introduce one or, at the most, a few product versions. Firm’s interest is to develop primary demand, and undifferentiated marketing seems the suitable strategy; or it might concentrate on particular segment. In the mature stage of the product life cycle, fly tend to pursue a strategy of differentiated marketing.
4. Revision points :
Targeting
Target market selection process
5. Intext questions:
- What is target marketing?
- What is the criterion for target market selection process?
6. Summary:
After the effective segmentation, a marketer has to focus on targeting that chosen segment with marketing strategies that will be most suitable to the segment. Strategies such as selective specialization, market specialization, and product specialization will help a marketer analyze his capabilities to fulfill the needs of the market
7. Terminal executrices:
Short answer questions:
- What is target marketing?
- What is market specialization?
- What is product specialization?
MCQs
If the company targets whole market rather than any specific segment, then is called
a. Market specialization
b. Product specialization
c. Selective specialization
d. Full market coverage
Which of the following does not come under the operating variables?
a. Company technology
b. Product use status
c. Brand use status
d. Customer attitude
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments:
‘Submit a report on the target market selection process with reference to the pizza hut’
10. Suggested reading/reference books/set books
Daily news papers, magazines and internet
11. Learning activities:
‘Visit any mobile showroom of your location and find the practical applicability of target market selection processes’
12. Key words
Product specialization: a company specializing in a specific product category supplying to different segments effectively
Market specialization: concentrating on the different needs of a customer group.
Chapter – 3 Product Positioning
1. Introduction :
Product positioning is the image that a product produces in the minds of customers in comparison to the competitors’ products and also in comparison to other product of the same company.
2. Objectives :
• To know about product positioning
• To study the various positioning strategies
• To understand the pitfalls in positioning
3. Content:
PRODUCT POSITIONING
The significance of product positioning can be easily understood from David Ogilvy's assertion. 'The results of your campaign depend less on how we write your advertising than on how your product is positioned".
Let us understand product positioning through certain examples.
Great Shake, the newly introduced soyarnilk, is positioned as a health drink, and positioned against milk.
Cornplan is positioned as a health-builder, and positioned against milk, listing out the additional nutritive agents it possessed over milk.
Limca is positioned as a thirst-quenching soft drink. Rasna is positioned on the plank of economy and convenience.
The detergent powder, Nirma is positioned on the plank of econOrny, and it is positioned for a price-conscious segment of the detergent users.
POSITIONING TECHNIQUE
There are certain brands and companies which occupy a dominant position in the consumer's mind, on account of the distinction that the brand or company has already attained. For example, throughout the world, among the customers of computers, IBM holds a dominant position. No other brand can enter the market without somehow relating itself to IBM's position. So, wherever there is a dominant brand or competitor, the other brands have to reckon the leader's position.
Positioning is the outcome of a conscious strategy of marketing. Some unique features of the product, some unique features of the market or some unique features of the competition is normally isolated and around that feature the product is placed in the market. Positioning comes out of the marketing man's awareness that a product cannot be everything to everyone'. It can only be something to someone. Identifying these features imaginatively and using it as the 'Plank' on which to pedestal the product is the essence of positioning. So, the product can be positioned against a competing brand, it can be positioned for an exclusive well-to-do segment of the market, it can be positioned for men, it can be positioned for children, it can be positioned for the fun-lover youth, it can be positioned for a- health-conscious market, it can be positioned on a claim of luxury, a claim of distinctiveness, a claim or convenience, uniqueness, novelty or usage.
4. Revision points:
Definition, concepts of product positioning
Positioning strategies suggested by Al Ries and Jack Trout
Pitfalls of product positioning
5. Intext questions:
- What is product positioning?
- Explain the strategies for positioning.
- Explain the pitfalls relation to positioning.
6. Summary :
Positioning is a challenging task for marketers and any error in positioning or improper planning can hamper the credibility of the company and lead to a loss of the product’s position in the market. Hence, marketers need to take utmost care while positioning their products. Major positioning errors that can occur, once a firm has created a position for the product or service in the mind of the customer, it must communicate if effectively to its customers.
7. Terminal exercises :
Short answer questions.
- What is positioning?
- Explain under positioning
- Explain over positioning
- Explain doubtful positioning
- Explain confused positioning
MCQs
Product form, design, features, size of the package, product quality and durability all talk about
a. Product differentiation
b. Market differentiation
c. Business differentiation
d. Society differentiation
Companies can achieve a distinct differentiation for their products on the basis of the distribution channels they use. This is called as
a. Image differentiation
b. Service differentiation
c. Personnel differentiation
d. Channel differentiation
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘ A study on various positioning strategies followed by Airtel communication services ’
‘ Suggested reading/ reference books/set books :
daily news paper , magazines and internet
10. Learning activities:
‘Find out the various pitfalls occurred during the positioning of Tata Docomo services’
Key words:
Under positioning: the mistake of diluting the positioning strategy to make it more attractive
Over positioning: buyer may have a very narrow image of the company’s brand
Doubtful positioning: try to create brand awareness among customers even before positioning the brand clearly in the market
Confused positioning: marketers should not confuse customers by meddling too much with the positioning strategies
Chapter – 4 Consumer behavior
1. Introduction :
Consumer behavior is a study of how individuals make decisions to spend their available resources on consumption related items.
2. Objectives :
• To know the factors influencing consumer buying behavior
• To understand the buying decisions
• To study the buying decision process
3. Content:
INTRODUCTION 1
The buyer is a complex person, influenced by the social environment in which he lives-his family, his society, his neighbor, his friends, his lob, his colleagues. Every component of his social environment leaves some imprint on him and influences him in his day-to-day life. His purchases and consumption are carried out within the larger context of his living. And his role as a buyer is not distinct from his role as a human being. Buyer behavior, after all, is a specific aspect of general human behavior. And, it is only natural that-it is as complex as general human behavior.
THE BUYER
Buyer is a riddle. He is not a simple entity. His needs vary from security needs to self-actualization needs. When the buyer takes a buying decision, there is no rigid rule to bind him. His decision may either be spontaneous on the spot, or the made after a thorough analysis.
BUYER BEHAVIOUR
Buyer behavior is defined as "all psychological, social and physical behavior of potential customers as they become aware of, evaluate, purchase, consume, and tell others about products and services". In other words, buyer behavior includes the acts of individuals directly Involved in obtaining and using economic goods. These acts are the result of a sequence of decisions made by the buyer. These decisions are influenced by various factors. Hence buyer behavior is the process by which individuals decide whether, what, when, where, how and from whom to purchase goods and serviced
The above definition gives the following information about buyer behavior:
1. Buyer behavior involves both individual (psychological) processes and group (social) processes.
2. Buyer behavior is reflected by post-purchase evaluation which indicates satisfaction or non-satisfaction.
Buyer behavior includes communication, purchasing and consumption behavior.
4. Buyer behavior is shaped by social environment.
5. Buyer behavior includes both consumer and industrial buyer behavior.
THEORIES OF BUYER BEHAVIOUR
1. Economic Theory: According to economic theory, the buyers are assumed to be rational in their decision-making. They follow the law of marginal utility. Consumers evaluate the alternatives available and they chose that alternative which would provide him with highest utility and lowest cost. The consumers have a set of needs and tastes. They have got a certain amount of purchasing power. He may not be able to fulfill all his needs because his purchasing power is the limiting factor. Hence, he allocates his expenditure over different products at given prices so as tp maximize utility. Thus, the law of equip-marginal utility enables him to secure maximum utility from limited purchasing power. The purchasing decision is based on economic calculations and reason.
Economic model of consumer behavior is unidimensional. The following presumptions are made about buyer behavior:
i) Lower the price of the product, larger will be the quantity bought-price effect.
ii) Higher is the purchasing power, higher will be the quantity bought-income effect.
iii) Lower the price of a substitute product, lesser the quantity that will be bought of the original product-substitution effect.
iv) Higher the promotional expenditure, higher will be the sales-communication effect.
Economic model assumes that markets are homogeneous. But now markets are assumed to be heterogeneous. Hence the economic man is a myth. Buying process is not always rational and price is not the only factor of motivation. Buying is not always at the lowest price. It is obvious that the economic model is insufficient to explain the intricacies of buyer behavior.
Learning Theory: Classical psychologists interpret man's needs are coming about through the interplay of drives, stimuli, cues, responses, and reinforcement. Every organism has innate physiological drives connected with survival. Psychologists distinguish between primary drives (such. as hunger, thirst, sex, and pain avoidance) and learned drives (such as fear, guilt, pride and acquisitiveness). The latter are learned through experience in trying to satisfy primary drives.
The response is the organism's reaction to the configuration of stimuli and cues. If the response is rewarding, the probability of a similar response next time to the same cue configuration is reinforced. If a response is not rewarding, the probability of a similar response is diminished.
Cue configurations are constantly changing. For example, the shopper's favorite brand may be out of stock or he may see another brand on sale. He will shift to similar stimuli because learned responses are generalized.
A countertendency to generalization is discrimination. When a person tries two similar brands and finds one more rewarding, his ability to discriminate between similar cue configurations improves. Discrimination increases the specificity of the cue- response connection, while generalization decreases the specificity.
Thus, the learning theory has the following predictions.
1. Learning refers to change in behavior brought about by practice Or experience. Almost everything one does or thinks is learned.
2. Product features such as price. Quality, service, brand, package etc., acts as cues or hints influencing consumer response.
3. Marketing communications such as advertising, sales promotion also act as guides persuading buyer to purchase the product.
4. Response is decision to purchase.
3. Psycho analytic Theory: This theory is developed from tile thoughts of Sigmund Freud. He postulated that the personality has three basic Dimensions: id refers to the free mechanism that leads to strong drives. such drives (motives) are not influenced by morality or ethics. Ego refers to the act of weighing consequences anti tries to reconcile with reality. It is an equilibrating device that leads to socially acceptable behavior and imposes rationality on the ~d. The ego weighs the consequence of an act rather than rushing blindly into the activity.
Super ego is a person's conscience. It is highly rational and tries trying keeping the activities morally right. In essence, the id urges an enjoyable
the super ego presents the moral issues involved and the ego act as the arbitrator in determining whether to proceed or not. This has led to motivation research and has proved to be useful in analyzing buyer behavior. This, in turn, has contributed some useful insights in the advertising and packaging fields.
4. Socio cultural Theory: Man is primarily a social animal and his wants and behavior are largely influenced by the group of which he is a member. The tendency of all people is to "fit in" a society in spite of their personal likes and dislikes. Most of the luxury goods are bought primarily because one's neighbor or friend of the same status bought it. Culture, subculture, social classes, reference groups, family are the different factor groups that influence buyer behavior.
4. Culture: Culture is the most fundamental determinant of a person's wants. The individual learns the values of his culture through a process called socialization. Culture has a great deal to do with how an individual sees, thinks, and feels. This becomes obvious when one steps into another culture. He suddenly becomes aware of his cultural biases. International marketers in particular must study cultural differences as a pr~lucie to planning their products and marketing programmed in different countries.
5. Sub cultures: Each culture contains smaller groups or subcultures, and each of these provides more specific identification and socialization for its members. Nationality groups, Religious groups, racial groups, and Geographical areas are the four types of subcultures identified. Major marketers, although their markets are broad, require to variations in the needs and preferences of different subcultures.
6. Social class: Virtually all human societies exhibit social stratification. Stratification may take the form of a caste system where the members of different castes are reared for certain roles and cannot change their caste membership. More frequently, stratification takes the form of social classes. Social classes are relatively homogeneous and enduring divisions in a society which are ordered with respect to each over and whose members share similar values, life-styles, interests, and behavior.
7. Marketers have found social class a useful variable for segmenting markets. Products, advertising appeals, services, and. atmospheres can be designed to appeal to specific social classes. Social classes show distinct differences in their tastes in clothing, home furnishings, leisure activity, automobiles, and so on. There is evidence that social classes diver in their purchase decision processes as well.
8. Reference groups: An individual is influence by the many small groups with which he interacts. Some are primary groups (family, close friends, neighbors and fellow worked and others secondly (fraternal organizations, professional associations). He is also influenced by groups of which he is not a member, such as sports clubs and movie clubs. Groups that interact and influence the attitudes and behavior of an individual are called reference groups.
9. Reference group influences consumption behavior most strongly in those product and brand categories that are visible and even conspicuous. The more cohesive the reference group, the more effective its communication process; and the higher the individual esteems it, the more influential it will be in shaping his product and brand choices.
10. The Person: From what has been said, a person's basic motivations are heavily influenced by social learning. The norms and value systems in his culture, subculture, social class, and reference groups leave an indelible imprint on his needs and wants.. These social forces deserve the most careful study by marketers trying to interpret the objectives that might motivate consumer interest in the products and brands.
The Nicosia Model: In recent years, since efforts have been made by marketing scholars to build behavior models totally from the marketing man's standpoint. The Nicosia and the Howard and Sheth model are two important models in this category. Both of them belong to the group called the systems model, where the human being is analyzed as a system with stimuli as the input to the system and behavior as the output of the system.
11. The model tries to establish the links between a firm and its consumer-how the activities of the firm influence the consumer and result in his decision to buy. The- messages from the firm first influence the predisposition of the consumer towards the product. Depending on the situation, he develops a certain attitude towards the product. It may lead to a search for the product or an evaluation of the product. If these steps have a positive impact on him, it may result in a decision to buy. This is the sum and substance of the 'activity explanations' in the Nicosia model. The Nicosia model groups these activities into four basic fields.
12. FYekl One has two sub-fields-the firm’s attributes. Art advertising message from the firm reaches the consumer's attributes. Depending on the way the message is received by the consumer, a certain attribute may develop, and this becomes the input for Field two. Field Two is the area of search and evaluation of the advertised product and other alternatives. If this results in a motivation to buy, it becomes the input for Field Three. Field Three consists of the act of purchase. And Field Four consists of the use of the purchased item. There is an output from Field Four - feedback of sales results to the firm.
13. The Howard-SheVh Model: John Howard and Jagdish Sheth put forward the Howard and Sheth model in 1969, in their publication entitled The Theory of Buyer Behavior'. The logic of the model runs
14. There are inputs in the form of stimuli. There is output beginning with attention to a given stimulus and ending with purchase In between the inputs and the outputs there are variables affecting perception and learning. These variables are termed 'hypothetical' since they cannot be directly measured at the time of occurrence.
15. Over the years, several other models have also been put forward, with the intention of explaining buyer behavior. All these models have certain merits and certain Limitations. They do not fully explain the complex subject of buyer behavior. Nor do they establish a straight input-output equation on buyer behavior. And, none of them provides a precise answer to the why's or how's of buyer behavior. They merely explain the undercurrents of human behavior from different angles and premises. But these models will certainly be helpful in gaining at leas a partial insight into buyer behavior. BUYING MOTIVES
16. A consumer buys a particular product because he is influenced b certain motives. Motive is a strong feeling, urge, instinct, desire or emotion that makes the buyer to react in the form of a decision to buy For that matter, every human activity is motivated and is not spontaneous. Consumers, for example, are goal-seekers who gratify their needs by purchases and consumption. In other words, needs are the motivational element behind purchase. These needs were classified by Abraham H. Maslow, in a pyramid form known as 'Hierarchy of Needs'
BUYING PROCESS: The buying process includes the following five steps:
1. Need Recognition Buying process begins when a person begins to feel that a certain need or desire has arisen. The need may be activated by internal or external factors. The intensity of the want will indicate the speed with which a person will move to fulfill the want. The buyer I will postpone the less important motives. Marketing management should offer appropriate cues to promote sale of the product.
2. Information Search: Aroused needs can be satisfied promptly when the: desired product is not only known but also easily available. But when it is not clear what type or brand of the product can offer best satisfaction, the person will have to search for information. This may relate to the brand, location and the manner of obtaining the product Consumers can use many sources, like family, friends, neighbors, opinion leaders and acquaintances. Marketers also provide relevant information through salesman, advertisements, dealers, packaging, sales promotion and window-displaying. Mass-media like newspapers, radio and television provide information.
3. Evaluation of Alterative: This is the critical stage in the process of buying. There are several important elements in the process of evaluation:
1. A product is viewed as a bundle of attributes. These attributes or features are used for evaluating alternative brands. For example, a product like it has certain common attributes such as taste, flavor, strength, aroma, color, number of cups per packet and price.
Information cues or hints about a set of characteristics of the product In brand such as quality, price, distinctiveness, availability etc.
2. Brand Images and brand concepts can help In the evaluation of alternatives
3. In order to reduce the number of alternatives, some consumers may consider more critical attributes and mention the level of for those attributes.
4. Occasionally, consumers may use an evaluation process permitting trade off among different alternatives.
Marketers should grasp thoroughly the process and utility functions for designing and promoting the product.
5. Purchase Decision: While the consumer Is evaluating the alternatives, he will develop some likes and dislikes about the alterative brands. This attitude towards the brand influences the intention to buy. Thus the prospective buyer heads towards final Selection. In addition to all other factors, situational factors like dealers terms, falling prices etc.. Also are considered. Perceived risk may also influence the decision to purchase. High priced products involve higher risk. Sophisticated products involve performance risk. Consumers may not have confidence in foreign products involving higher coat and they would prefer national brands to reduce risks and problems of service after sale.
6. Post-purchase Experience and Behavior: The brand purchase and the product use provide feedback of Information regarding attitudes If the derived satisfaction is as per the expected satisi^ract10n, it will create brand preference influencing future purchase. But if the purchased brand does not yield desired satisfaction, negative feelings will occur arid this will create anxiety and doubts. Ibis phenomenon is called cognitive dissonance. There be lack of harmony between the buyer's beliefs and his purchase decision. Marketer creates dissonance by attracting users of other brands to his brand. Advertising and sale promotion can help in this Job of brand Switching.
4. Revision points:
Definition, concepts consumer behavior
Buying roles
Steps in Buying decision process
5. Intext questions:
- What is consumer behavior
- Explain various buying roles
6. Summary :
Studying the consumer buying behavior is a very complex process, as it involves not only the economic factors but also the emotional factors. Buying roles and buying decision constitute consumer’s decision-making behavior
7. Terminal exercises :
Short answer questions.
- What is consumer behavior
- Who is initiator
- What is problem recognition
- What is post purchase dissonance
MCQs
Which one of the following does not come under the personal factors?
a. Age and lifecycle stage
b. Occupation
c. Life style
d. Family
Which one of the following does not come under psychological factors?
a. Motivation
b. Perception
c. Learning
d. Occupational and financial status
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘ A study on various buying roles with respect to buying a laptop ’
‘ Suggested reading/ reference books/set books :
daily news paper , magazines and internet
10. Learning activities:
‘Find out the post purchase behavior of any cell phone user’
Key words:
Post purchase dissonance: when a customer does not get all the features he was looking for in the product
Post purchase satisfaction: if the product meets the expected performance, the customer is satisfied
Chapter – 5 Marketing mix concept
1. Introduction :
The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and promotion.
2. Objectives :
• To understand the marketing mix concept
3. Content:
Introduction
• Marketing mix is a major concept in modern marketing.
• Marketing mix is a model of crafting and implementing marketing strategy.
• Prof. Neil H Borden first used the term ‘Marketing Mix’ in 1949, while reading James Culliton’s description of the ‘Activities of Business Executive’.
• According to him, the marketing process includes the following factors ……
Distribution
Advertising
Personal selling and
Pricing
• There are virtually dozens of marketing mix tools. However, Prof. E Jerome McCarthy classified the ‘marketing mix’ variables in terms of 4Ps.
Product
Price
Place (Distribution) and
Promotion
• This classification is believed to be quite popular in marketing circles across the world
There are other marketing mix classifications by ……..
I. Albert Frey’s Two factor classification
1. The offering
• product
• Packaging
• Brand
• Price and
• Service
2. Methods and Tools includes
• Distribution Channels
• Personal selling
• Advertising
• Sales Promotion
• Publicity
II. William Lazer and EJ Kelly’s classification includes
• Goods and services mix
• Distribution mix and
• Communication mix
III. Mary Bitner and Bernard Booms’s classification includes 7Ps
• people
• process and
• Physical Evidence
A more recent marketing mix classification proposed by Robert Lauterborns focuses on customer’s point of view and it includes
1. Customer benefit
2. Customer cost
3. Customer convenience and
4. Communication
• It is that 4Ps correspond to customer’s 4Cs
• 1. Product (Customer Benefit)
• ‘without a good product, you have nothing’
• Directly related to satisfying the customer needs and wants
• According to Philip Kotler ‘A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy the need or want’
A product includes:
Physical products
Services
Persons
Places
Organizations and
Ideas
Product attributes are:
Quality
Variety
Design
Brand
Packaging
Services
Warranties etc.
2. Promotion (Marketing Communication)
• Exchange between marketers and customers
• Satisfies the goals of organizations as well as individuals
• Promotion mix includes
Advertising
Personal selling
Sales promotion
Direct marketing and
Publicity or public relations
There are lot of difference between personal selling and direct marketing. Direct marketing is broader term. Direct marketing includes personal selling, mail order selling, tele network selling, catalogue selling, even network and multilevel marketing comes under direct selling.
'Direct marketing is a process in which the middle men are removed and the product is directly sold to the end users or consumers. While personal selling is one to one selling in which the sales person visits a prospect and closes the sell. The middle man can also resort to personal selling by means of sales persons. But personal selling is mainly associated with direct marketing.
3. Place/Distribution (Customer convenience)
• Availability of products in adequate quantities at places
• Distribution cost as low as possible (inventory, transportation and storage)
• Market coverage…….
– Intensive - e.g. soaps
– Selective – e.g. computers
– Exclusive – e.g. cars or Jewelry etc
4. Price (Customer Cost)
• Can be altered quickly
• Imparts an image to the product
– Marketing Mix Coherency
• ‘How well the different elements of the mix blend together to accomplish the designed impact’
– Marketing Mix Dynamics
• ‘The mix must be adopted to suit the changing business environment, changes in the organization’s resources and product offering.
4. Revision points:
Product
Price
Promotion and
Physical distribution
5. Intext questions:
- What is marketing mix?
- Explain the marketing mix.
-
6. Summary :
The term 'marketing mix' was first used in 1953 when Neil Borden, in his American Marketing Association presidential address, took the recipe idea one step further and coined the term "marketing-mix". A prominent marketer, E. Jerome McCarthy, proposed a 4 P classification in 1960, which has seen wide use. The four Ps are product, price, place and promotion
7. Terminal exercises :
Short answer questions.
- What is marketing mix
- What is product?
- What is price?
MCQs
When a marketer provides the product at locations preferred by the customer is known as
a. Possession utility
b. Place utility
c. Form utility
d. Time utility
The industrial revolution of the seventeenth century brought about the
a. Production era
b. Sales era
c. Marketing era
d. Marketing concept
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘Submit a report on the importance of understanding four Ps ’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘Find out the promotional mix adopted by the Big Bazaar during the festival season’
Key words:
Marketing mix: Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's
Chapter – 6 Sales Forecasting Techniques and Criteria.
1. Introduction :
Sales forecasting is especially difficult when you don’t have any previous sales history to guide you, as is the case when you’re working on preparing cash flow projections as part of writing a business plan.
2. Objectives :
• To understand sales forecasting
• To understand the techniques for sales forecasting
3. Content:
INTRODUCTION
A sales forecast is an estimate of the amount or unit sales for a specified future period under a proposed marketing plan or programme. The American Marketing Association has defined sales forecast as "an estimate of sales, in dollars or physical units for a specified future period under a proposed marketing plan or programme and under an assumed set of economic and other forces outside the unit for which the forecast is made"
The making of a proper sales forecast requires assessment of- two sets of factors:
i) The outside uncontrollable forces likely to influence the company's sale, such as the weather, government activity and competitive behavior.
ii the internal marketing methods or practices of the firm that are likely to affect its sales, such as product, quality, price, advertising, distributing and service.
The sales forecast may be for a specified product or for the entire product line or it can be for a market as a whole or any portion of it Once the sales forecast is prepared, it becomes the key controlling factor in all operational planning throughout the company. The forecast is the basis of sound budgeting. Financial planning or working capital requirements, plant expansion, and other needs is based on anticipated sales. Scheduling of all production as setting man power needs, purchasing raw material requirement, and determining the rate of production output, depends upon sales forecast.
USES OF SALES FORECAST
Sales forecasting serves the following purposes:
1. It enables the company concerned to meet the growing needs by balancing supply and demand. As far as sudden and temporary pressures are concerned, forecasting helps the organization to avoid them.
2. It is a useful for measuring the efficiency of sales department. Sales forecasting may be said to occupy a forefront seat in management.
3. Reliable sales forecasting is a first rate aid to proper pricing whether in terms of costs or in terms of what the market will bear.
4. It aids in reallocation of sales territories.
5. It mitigates the twin evils of under-stocking and over-stocking.
6. It fits as a tonic for financial departments which may make of sales forecast.
7. It acts as a friend, philosopher and guide in so far as plant layout, warehousing and transportation facilities are concerned.
8. Seasonal or timely fluctuations may be easily met with by averaging out production and employment over the year.
9. Maximum regularization of production which forecasting makes possible serves to eliminate completely or reduce substantially the need for over-time work at premium rates. It also eliminates slack periods in which workers have nothing to do.
CRITERIA IN SALES FORECASTING
The following are the criteria frequently used:
Market potential (or industry potentials)
Company potential (or sales potential).
Market demand (or industry demand).
Company demand (or sales possibilities.
Market forecast (or industry forecast).
Company forecast (or sales forecast).
Some of the most common techniques used for sales forecasting are discussed below:
1. Joy Method/Executive Opinion Method Under this method, opinions of the top executives (from marketing, production, finance and other departments) regarding future sales volume is obtainable. Such method provides forecasts easily and quickly; does not require an elaborate statistics; permits combining and averaging the specialism opinion of different executives. But such method lacks scientific validity and may turn out to be absolutely wrong and deceptive; and it also disperses responsibility for accurate forecasting.
2. Sales Force Corny site Method: As per the sales force composite method, the sales forecasting is done by the sales force. All- salesmen develop the forecast for their respective territories; the territory-wise forecasts are consolidated at branch/region area level; and the aggregate of all these forecasts is taken as the corporate forecast.
3. Export Opinion Method: This is yet another method of sales forecasting this is somewhat different from the jury method and the sales force composite method. In those two methods, opinions of the executives- and sales force are used to develop the forecast. In survey of expert opinion method, experts in the concerned field inside or outside the organization are approached for their estimates. This method may be relatively more useful when to industry forecast is developed than in company level sales forecast.
4. Users' Expectation Method This method is adopted for industrial marketing. The advantage here is that the customers comprise only a small group. Clearly, if a company can obtain an adequate and reliable information sample of what customers will buy, even though the act orders are not in-hand, it will have a good basis upon which to develop a sales forecast.
As pointed out, this method cannot be adopted in consumer goods marketing as the customers are large in number. Secondly, is to expectations cannot be predicted accurately.
5. Market Share Methods use a simple method of sales forecast in which the desired/planned market share of the firm is the key factor. They work out the industry forecast apply their market share factor and deduce the company's sales forecast. The market share factor is developed based on past trend, company's competitive position, brand preference etc. Such conversion of industry forecast into company sales forecast requires considerable expertise. By a detailed marketing audit, the firm must correctly appraise its market standing, brand image, market share and strengths and weaknesses as compared with the competitors in the industry. It must also correctly assess through reliable marketing intelligence, its competitor's plans, policies and activities. Only then, the forecast arrived at by this method will have a good degree of reliability. Retail audit would also be of considerable help in employing the maillot share method; it would help assess the industry position as well as the individual firm’s market shares.
SELECTION OF APPROPRIATE FORECASTING METHOD
The forecaster must carefully choose his method of forecasting from among the wide variety of methods. Basically, the method chosen must match the requirements of his product and his organization. Since all the methods have their associated merits and demerits and there is clothing like an ideal forecasting method that could be applied to advantage in all situations, the forecaster must assess the suitability of the specific method to his specific situation before commissioning the forecasting exercise. Quite often, the forecaster can improve his forecast by choosing a combination of more than one method.
SALES FORECASTING PROCEDURE
The usual steps involved in sales forecasting are:
1. Determining the objectives for which the sales forecasts are to be used.
2. Dividing Company's products into homogeneous groups
3. Determining the relative importance of the factors which affect sales of each such group.
4. Selecting the appropriate sales forecasting method.
5, Collecting and analyzing the sales and drawing conclusions there from.
6. Converting the conclusions into specific forecasts relating to
7. Applying these forecasts to company’s operations, and
8. Periodically reviewing and revising the forecasts.
4. Revision points:
Sales forecasting
Techniques for sales forecasting
Criteria for sales forecasting
5. Intext questions:
- What is sales forecasting
- What are the techniques used for sales forecasting
6. Summary :
Companies need to forecast their sales, in order to function smoothly and to achieve their objectives. To estimate current and future demand for the product, they use composite sales force opinion, survey of buyer intentions, expert opinion, past sales analysis and test marketing method.
7. Terminal exercises :
Short answer questions.
- What is sales forecasting?
- What is expert opinion method?
MCQs
Using composite sales force opinion, the sales team is involved in estimating the
a. Present demand
b. Future demand
c. Product current demand
d. Market analysis
Which of the following analysis determines the sales system using statistical tools by developing sets of equations?
a. Test marketing method
b. Past sales analysis
c. Exponential smoothing
d. Statistical demand analysis
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘Submit a report on sales forecasting techniques ’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘Find out the sales forecasting techniques adopted by Big Bazaar during the festival season’
12. Key words:
Exponential smoothing: the weighted average of past sales giving a higher weightage to more recent sales
Unit - III
Chapter – 1 Product - Product life cycle (PLC)
1. Introduction :
Marketing begins with the identification of consumer needs and wants, and culminates with successfully fulfilling those needs through the 4Ps of marketing. A product can be a good, a service, an idea or a combination of all these. Product planning is systematic decision-making related to all aspects of all development and management of a firm’s product. At the same time product life cycle analysis is a very valuable tool in the hands of marketers
2. Objectives :
• To understand about the product
• To know about the product personality
• To know the product classification
• To understand the PLC
3. Content:
PRODUCT PLANNING
It is the starting point for entire marketing programme in a firm. It embraces all activities, which enable producers and middlemen to determine what should constitute a company's line of products. Product planning has been defined as "the act of marking out and supervising the research, screening, development, and commercialization of new products; the modification of existing lines and the discontinuance of marginal or unprofitable items'.
In other words, product planning involves three important considerations:
la) the development and introduction of new products;
lb) the modification of existing lines to suit the changing consumer needs and preferences; and
(c) the discontinuance or elimination of unprofitable or marginal products;
PRODUCT Development
Product development embraces the technical activities of product research, engineering and design. It requires the collective participation of production, marketing, engineering, and research departments.' The scope of product-planning and product development activities covers the decision making and programming in the following areas:
Which product should the firm make and which should it buy?
Should the company expand or simplify its line?
How each new item could be more useful?'
Is the quality right for the intended use and market~
What brand, package and label should be used for each product?
How should the product be styled and designed, and in what sizes and colours, and what materials should it produce?
In what quantities should each item be produced, and what inventory control should be established?
How should the product be priced?
PRODUCT LIFE CYCLE
Products, like people, have a certain length of life, during which they pass through different stages. For some, the life cycle may be as short as a month, while for others it may last for quite a sufficiently long period. The examples may be of a fashionable dress or an electrical appliance. From the time the product idea is born, during its development, and upto the time it is launched in the market, a product goes through the various phases of its development. Its life begins with its market introduction; next it goes through a period during which its market grows rapidly. Ultimately, it reaches marketing maturity after which its market declines and finally the product dies. It is worth noting that the duration of each stage is different among products. Some takes years to pass through the introductory stage, while others may be accepted in a few weeks. Further, not all products go through all stages, some fail in the initial stages, others may reach the maturity stages after a long time. "In virtually all cases decline and possible abandonment are inevitable because (1) the need for the product disappears; (2) a better or less expensive product is developed to fill the same need, or (3) a competitor does a superior marketing job."
This is a description of the typical product life cycle. This does not mean that every single product necessarily passes through all these stages. Several new products, all of a sudden, find their way into decline before entering the growth stage. However, most successful products can be seen to pass through the typical life cycle. The knowledge that a product will pass through such a cycle of life is helpful in evolving proper product policies and promotion and pricing strategies. A marketer can also try to foresee at the very outset the pattern of life of the proposed product and plan the product strategy, pricing strategy and promotion strategy, so as to shape the life cycle of the product to suit his objectives and requirements.
4. Revision points:
Product – meaning
Classification of goods
Product planning and development
Product life cycle
5. Intext questions:
- What is product?
- Explain the classification of goods
- What is PLC?
6. Summary :
A product can be a good, a service, an idea, or a combination of all these. Products can be classified on the basis of their characteristics like usage, and durability and tangibility. A product life cycle usually comprises of four stages i.e. introduction, growth, maturity and decline.
Each stage of PLC calls for the application of different marketing strategies.
7. Terminal exercises :
Short answer questions.
- What is PLC?
- What is the classification of goods?
MCQs
The products which are unnamed, plainly packaged products and are less expensive then branded products are called as
a. Generic products
b. Expected products
c. Augmented products
d. Product hierarchy
Which of the following gives marketers a better understanding in managing their profitable products and eliminating the unprofitable ones?
a. New product development
b. Product life cycle
c. SWOT analysis
d. Industrial profile
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘prepare and present a report on PLC with respect to any electronic good of your choice ’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘make a list of strategies followed by LG during the growth stage of its air conditioners ’
Key words:
Rapid skimming: launching the product at higher price and higher promotional level to skim the market rapidly
Line pruning: removing unprofitable products or unnecessary products from the product line.
Chapter – 2 New Product Development - Innovation
1. Introduction :
Advances in science and technology have changed the lifestyles of people, their food habits, standard of living, social customs, expectations, etc., people are seeking better improved products that are easy to use, occupy less storage space, are aesthetic and provide value for money . The increasing expectations of customers is forcing companies to concentrate more on product innovations
2. Objectives :
• To study the new product development
• To study the concept of Innovation
• To understand product obsolescence and elimination
• To study the product related strategies
3. Content:
SIGNIFICANCE OF NEW PRODUCT DEVELOPMENT New product development is one of the most important components of product policy and product management. It Is not enough if existing product lines arid products are appraised properly, products art positioned effectively and brand decisions are taken wisely. A progressive firm must always consider new product development as a cardinal element of its product policy.
NEW PRODUCTS BECOME NECESSARY FOR MEETING THE CHANGES IN DEMANDS Innovation is the essence of all growth. In an age of scientific and technological advancement change is a natural outcome-change in food habits, change in confront and conveniences of life, change in social customs and habits, chant in expectations and requirements. Any business has to be vigilant these changes taking place in its environment. People always seek bet/ and better products more convenience in products, more fashion, and more value for the money they part with. A business firm has to respond to these dynamic requirements of Its clientele, add these responses tat the shape of new products and new services. Through such as response the firm reaps a good deal of benefits.
Keen competition is leading to increasingly fragmented markets. A new product is aimed at capturing a large share of a small market segment rather than the mass market. This means smaller sales and profits, although the company may maintain its position longer.
New products have to increasingly satisfy public criteria in addition to promising reasonable profits. They must be designed with consideration given to consumer safety and ecological compatibility. Government requirements have slowed down the rate of innovation in the drug industry and have considerably complicated product design and advertising decisions in such industries as cosmetics, automobiles, small appliances, and toys.
A company typically has to develop a great number of new-product Ideas in order to finish with a few good ones. Thus management finds itself in a dilemma; it must develop new products, yet the odds weigh heavily against their success. The answer still must lie in new product Development, but conducted in a way that reduces the risk of failure. Two needs stand nut; the need for effective organizational arrangements and the need for improved techniques at each stage of the new product development process
STAGES IN NEW PRODUCT DEVELOPMENT
New product development goes through several important stages as given below:
Idea Generation: The first stage of the new product's evolution begins with an idea for the product. Hence this stage is also termed as 'Idea Generation'.
The new product ideas may come from customers, dealers, in company sources or from research organization. Consumers' problems are the most fertile ground for the generation of new product ideas. This is equally true of both industrial products and consumer products. From shampoos to computers, customers are generating product ideas. And innovation-bound companies are cashing in on them. Several companies follow user-stimulus strategies by announcing attractive rewards for good new product ideas. Experienced workforce, research staff and salesman are also source of product ideas.
SCREENING
The main purpose of the first stage in the new-product develops process Is to increase the number of good ideas. The main purpose all the succeeding stages is to reduce the number of ideas. The camp is not likely to have the resources or the inclination to develop all the new-product ideas, even if they were all good: And they will not be equally good. Evaluation and damson now enter the pure. The idea-pruning stage is screening.
CONCEPT DEVELOPMENT
During this stage the 'idea-on-the paper' is turned into 'product-on-hand'. In other words, the idea is converted into a prod that is producible and demonstrable. This stage is also termed Technical Development'. It is during this period that all develop of the product, from idea to final physical form, take place.
CONCEPT TESTING
This is different from test marketing of the product which takes place at a later stage. What is tested at this stage is the 'product concept' itself-whether the prospective consumers understand the product idea,. whether they are receptive towards the idea, whether they actually need such a product and whether they would try out such a product if it is made available of getting the market response to the product idea, this exercise helps bring the company's own version of the product concept into clearer focus. Because, in the absence of any real product to by shown to the respondents at this stage, the company has to make very elaborate and definite statements about the product, its attributes and benefits.
BUSINESS ANALYSIS
This stage is crucial in the total process of new product development because several vital decisions regarding the protect are taken based on Ale analysis done at this stage. This stage will decide whether from the financial and marketing point of view, the project is worth proceeding with. Investment analysis and profitability analysis of the project under different assumptions are made at this stage. The project’s overall impact on the corporation's financial position with and without the new product are estimated and compared. The financial estimates would be reliable only if they are based on a fairly accurate demand forecast and related market factors. The marketing experts by now should have undertaken detailed exercises on the marketability of the product.
The purpose of this stage is to project the future sales, profits, and rate of return for the proposed new product, and to determine whether these meet the company's objectives. If they do, the company will develop the new product. Business analysis is done not only at this stage but the development process as new information is accumulated about the product and the market.
PRODUCT Development
Product ideas appearing sound from a business point of view can now be turned over to the research and development department. Up to now, it has existed only as idea, or perhaps as a drawing, or a very crude mock-up. Deco it represents a very large investment, which is likely to dwarf idea-evaluation costs incurred in the earlier stages. Much time money go into trying to develop a technically feasible product. And Jin it provides an answer as to whether the product idea can be translated into a technically and commercially feasible product. If not, company's investment up to now is lost except for any by-prod information gained in the process.
Three steps are involved in the product-development stage: proto development and ' consumer testing, branding and packaging.
'The first task is for the research and development department build a physical prototype that realizes the attributes specified in product concept and is trouble-free and economical to manufacture Consumer testing goes hand in hand with prototype development Various methods have been proposed for the testing of consumers preferences among a set of prototype alternatives, such as pal comparisons, multiple choices, and ranking procedures. Consumers normally asked to sample the alternative products in a laboratory home setting, and the testing organization exercises the normal con to avoid biased results.
TEST MARKETING
Test marketing is a form of risk control and ensures avoidance costly business errors. It is a controlled marketing experiment at possible cost and risk; to decide the soundness and feasibly at full-fledged marketing of the product. If totally new products introduced into the market cn a commercial scale without resorting marketing, it may so happen that the product was not the right one for the chosen market. It may be too costly a mistake for the fern. Test marketing of a product may indicate that the sales prospectus for the product is bound to be poor. The firm can save the investment by dropping the new product idea. On the contrary, if the results received from the test marketing are positive and encouraging, the firm may go ahead with the commercial production and marketing of the new product.
Test marketing is an experiment that has to be carefully conducted. Care is required in selecting the test markets and control markets, in monitoring the test and in analyzing and interpreting the test results. In many cases, test marketing is also a time-consuming process; it has to be carried out for long duration in order to obtain reliable and meaningful indications. And if competitors get information regarding the test, it is possible for them to manipulate the test process and thereby make the test results unreliable.
In the Indian context, test marketing as a marketing technique is becoming popular in recent times. In the past, only giant corporations like Hindustan Lever and Tata used to go in for test marketing. Now more firms with the help of their advertising agencies are going ill for test marketing before a new product is commercially launched.
CMMERCIALIZATION
In this stage the product is submitted to the market, and thus commences its life-cycle. Commercialization is also the phase where marketing is most active in connection with the new product. This stage Is considered to be a critical one for any new product and should therefore be handled carefully. For instance, it should be checked whether advertising and personal selling have been done effectively and whether proper cutlets have been arranged for the distribution. Despite the care with which the previous development stages have been planned, unforeseen events can impair commercialization seriously.
4. Revision points:
Stages of new product development
Importance of innovation
Causes for product obsolescence
Different strategies related to product
5. Intext questions:
- What is innovation?
- What is new product development?
6. Summary :
Firm develop new products to increase the width and depth of their product mix and compete in the market place. The stages of new product development are idea generation, screening, concept testing and business analysis, product development, test marketing and commercialization
7. Terminal exercises :
Short answer questions.
- What is new product development?
- What is Innovation?
- What is product obsolescence?
MCQs
Which one of the following does not come under the new product development process/
a. Concept testing and business analysis
b. Idea generation
c. Idea screening
d. Dumping
When the product is introduced in a few select cities is known as
a. Commercialization
b. Test marketing
c. Business analysis
d. Product protocol
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘submit a report on New product development ’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘study and observe product related strategies with respect to the new product development ’
Key words:
Product protocol: it is prepared by involving the different parties involved in product development. It contains product specifications and lays down the role to be played by each department the contributes to new product development
Chapter – 3 Branding, Packing, labeling, Warranting, Trade Mark, Copy Right Patents.
1. Introduction :
A brand is a name, term, sign, symbol or design or a combination of all these elements that companies use to convey the identity of its goods or services to customers and differentiates them from the product or services of the competitors.
Packing is a process of developing a design and a container for a product.
Labeling is the process of exhibiting important information on the product’s package.
Warranting is a process of authorization or certification; sanction, as given by a marketer
Trademark is a type of intellectual property, and typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements.
Copy right is a legal right granted to the marketer or to the manufacturer
Patents The exclusive right, granted by the government, to make use of an invention or process for a specific period of time, usually 14 years.
2. Objectives :
• To know about branding
• To know about packing
• To know about labeling
• To know about warranting
• To know about trade mark
• To know about copy right and patents
3. Content:
A brand is a name, term, sign, symbol or design or a combination of all these elements that companies use to convey the identity of its goods or services to customers and differentiates them from the product or services of the competitors.
Packing is a process of developing a design and a container for a product.
Labeling is the process of exhibiting important information on the product’s package.
Warranting is a process of authorization or certification; sanction, as given by a marketer
Trademark is a type of intellectual property, and typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements.
Copy right is a legal right granted to the marketer or to the manufacturer
Patents The exclusive right, granted by the government, to make use of an invention or process for a specific period of time, usually 14 years.
4. Revision points:
Importance of Branding
Use of Packing
Importance of Labeling
Meaning to Warranting
Meaning to trade mark
Copy right patents
5. Intext questions:
- What is Branding?
- What is packing?
- Explain Labeling
- Explain Warranting
- What is Trade mark?
- Explain Copy right patents
6. Summary :
A brand is a name, term, sign, symbol or design, or a combination of those elements used to identify a company’s goods or services to consumers and to differentiate them from the products or services of the competitors. Packaging is the process of developing design and container for a product. Labeling is the process of exhibiting important information on the product’s package. Warranting is a process of authorization or certification; sanction, as given by a marketer. Trademark is a type of intellectual property, and typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements. Copy right is a legal right granted to the marketer or to the manufacturer. Patents The exclusive right, granted by the government, to make use of an invention or process for a specific period of time, usually 14 years.
7. Terminal exercises :
Short answer questions.
- What is Branding?
- What is packing?
- Explain Labeling
- Explain Warranting
- What is Trade mark?
- Explain Copy right patents
MCQs
The combination of assets and liabilities associated with a brand that enhances or depreciates the value of the brand is known as
a. Brand
b. Brand challenge
c. Brand equity
d. Brand name
A brand which is positioned well will stay for a longer time in the consumer’s mind. It is called
a. Brand consistency
b. Customer value proposition
c. Brand associative
d. Right positioning of the brand
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘write a report on the importance of package ’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘list out any 20 product brands and logos of FMCG sector ’
Key words:
Warranting is a process of authorization or certification; sanction, as given by a marketer
Trademark is a type of intellectual property, and typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements.
Copy right is a legal right granted to the marketer or to the manufacturer
Unit - IV
Chapter – 1 Pricing
1. Introduction :
In this chapter, we study some of the important strategies adopted by producers. Beginning with the significance and importance of price to a marketer, we eventually analyze the pricing objectives and go on to determine the factors that affect the demand patterns. This will be followed by an evaluation of the various pricing methods and selection of a pricing policy. Lastly, the chapter concludes with a discussion on how marketers can adapt themselves to changing marketing dynamics and the effect of price changes on customers and competitors.
2. Objectives :
• To understand the meaning and objectives of pricing
• To study the significance and importance of price to a marketer
• To know pricing policies
• To know strategic pricing methods
3. Content:
Stanton, Etzel and Walker have rightly observed, "the pricing objective of making as much money as possible is probably followed more than any other goal." He pointed out here that profit maximization should not be equated with profiteering, high prices, and monopoly. The objective of profit maximization Implies in a given set of market conditions, management attempts to maximize profits through the instrument of price. Stanton and others further observe that a profit maximization goal Is likely to be far more beneficial to a company if it is pursued. To do this, however, firms may have to accept modest profits or even losses over the short term. For example, a firm entering a new geographic territory or introducing a new product thinks best by initially settling low prices to build a customer base. Repeat purchases from this large group of customers may allow the firm to maximize its profits over the long terra.
INCREASE SALES VOLUME
This is one of the sales oriented objectives. This objective is adopted b achieve either a rapid growth or to discourage potential competitors tom entering a market. The increase in sales is usually stated as a percentage Increase in sales volume over a certain period say, 1 year or 5 years. Management may seek higher sales volume by discounting or by some other aggressive pricing strategy. Sometimes companies are prepared to incur a loss in the short run to expand sales Volume Cloth Merchants, Garments Dealers, Electrical Appliances Dealers run end of season sales. In hotel industry reduction to prices h tariff for accommodation is seen during off-season to increase sales Volume.
MAINTAIN OR INCREASE MARKET SHRE
Another important pricing objective is to maintain or enlarge market bare A firm may aim to secure a target market share by employing Dice as an input. The market share as a pricing objective is especially for companies in developing countries like India, where market passion is a phenomenon of economic development.
Pricing Strategies
There are many ways to price a product. Let's have a look at some of them and try to understand the best policy/strategy in various situations.
Penetration pricing: Where the organization sets a low price to increase sales and market share.
Skimming pricing: The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer.
Competition pricing: Setting a price in comparison with competitors.
Product Line Pricing: Pricing different products within the same product range at different price points. An example would be a video manufacturer offering different video recorders with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.
Bundle Pricing: The organization bundles a group of products at a reduced price.
Psychological pricing: The seller here will consider the psychology of price and the positioning of price within the market place. The seller will therefore charge 99p instead £1 or $199 instead of $200
Premium pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services, Porsche etc.
Optional pricing: The organization sells optional extras along with the product to maximize its turnover. This strategy is used commonly within the car industry.
4. Revision points:
Pricing policies
Strategic pricing methods
5. Intext questions:
- What is pricing?
- What are strategic pricing methods?
6. Summary :
Pricing of products and services is a crucial issue for managers and involves a thorough and a deep understanding of principles and practices governing the business environment. Organizations need to adopt a systematic process to determine the prices of their products and services. Marketers should develop pricing objectives for setting the prices. Firms use various methods to measure the demand curves. The popular methods adopted by marketers to fix the price of their products and services include geographic pricing, promotional pricing, discriminatory pricing, discounts and allowances, experience curve pricing and product mix pricing.
7. Terminal exercises :
Short answer questions.
- What is pricing/
- What are different methods of pricing?
MCQs
The fundamental objective of organizations is to maximize their
a. SBU’s
b. Profit
c. Wealth
d. Goodwill
Customers are less price sensitive, when the products are purchased as an extension of products that were purchased in the past. This phenomenon is known as
a. Sunk investment effect
b. Total expenditure effect
c. Unique value effect
d. Inventory effect
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘submit a report on importance of pricing to the marketers ’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘Find out the different methods of pricing followed by mart super market ’
Key words:
Discriminatory pricing: companies charge different customers differently for the same product on the basis of their paying capacity and the value of the customer
Transfer pricing: when one division of an organization transfers or sells goods or services to another division
Chapter – 2. Promotion Mix –sales promotion and Advertising and advertising Budgets
Introduction :
Sales promotion can be defined as an activity taken up to boost the sales of a product. Compared to any other element of the promotional mix, sales promotion is more action oriented. Advertising create awareness, interest and desire for products and services in customers in customer to buy them and organizations have been continuously increasing their advisements budgets to attract more customers.
1. Objectives :
• To understand the promotion and promotion mix
• To understand the purpose of promotion
• To know the promotion strategies
• To study the sales promotion
• To know about the advertising
• To know the kinds of advertising budget
2. Content:
1. INTRODUCTION
In the preceding lesson promotion in general and sales pi in particular were discussed. In this lesson an attempt is made b advertising and its various important aspects as another i element in the promotion-mix.
2. ADVERTISING - MEANING & NANRE
Several authors have defined advertising in various ways. The theme has more or less remained the same. According Stanton and others advertising consists of all the activities if presenting to an audience a non-personal, sponsor-identified message about a product or organization. And widely accepted definition is that of the American Marketing Association. According to it, advertising is, "any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor". This definition indicates that advertising is a paid, non-personal communication it lays emphasis on presentations and promotion. 'The presentation of the sales message may be visual as 'well/ as oral. Importance is also
The field of advertising management is made up of a system of interacting organizations and institutions, all of which play a role in the advertising process. At the core of this system are advertisers, the organizations that provide the financial resources that support advertising. Advertising management is heavily focused on the analysis, planning, control, and decision-making activities of this core institution i.e. the advertiser
CLASSIFICATION OF ADVERTISING MEDIA
In advertising, media refer to those through which the message of an advertisement is presented. The message may appear in newspapers, magazines or calendar, or may be heard in a ratio or shown on a screen in a cinema hall or displayed on posters or in neon sign.
A classification of advertising media is presented below
1. Indoor Advertising
Press Media
• News papers
• Magazines
Radio
TV
Film
2. Outdoor Advertising
Mural (posters)
o Advertising Board
Vehicular Sky advertising
3. Direct Advertising
Sales Letters
Circular Letters
Folders
4. Promotional Advertising
Window Display Showrooms
Hand Bills
Painted Displays
Electric Displays
Advertising is an important element in promotion-mix. It is any paid form of non-personal presentation and promotion of Ideas, goods, or services by an Identified sponsor. Advertising helps In Introducing new products, stimulates demand, increases sales volume, reinforces the middlemen's promotional efforts, and develops brand preference, and so on. Advertising may be indoor, outdoor, direct or promotional. A variety of tools are available under each category. While selecting press media, circulation, frequency, appeal and cost factors are taken into account, Film and advertising especially the sponsored programmed have gradually assumed increasing importance
3. Revision points:
Promotion mix
Sales promotion
advertising budget
4. Intext questions:
- What is advertising?
- What is sales promotion?
- What is promotion mix?
5. Summary :
Advertising is paid form of most widely used personal mass communication. It can be in oral, written or visual form and is sponsored by an identifiable source. Sales promotion is an activity taken up to boost the sales of a product. It includes a host of activities like advertising, public relations, free samples, free gifts, etc.
6. Terminal exercises :
Short answer questions.
- What is promotion mix?
- What is advertising ?
- What is advertising budget?
MCQs
Which one of the following is not an advertising objective?
a. Inform
b. Persuade
c. Remind
d. Budget
Which one of the following is considered as the rational approaches to setting advertising budget?
a. Objective task method
b. Affordability method
c. Percent of sales method
d. Competitive parity method
7. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
8. Assignments
‘submit a report on importance of advertising budgets ’
9. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
10. Learning activities:
‘Find out the different methods used as a part of sales promotion with reference to Titan of your location’
Key words:
Advertising: paid form of communication
Advertising budget: the amount of money allocated by a firm for its advertising campaigns for a specific period of time
Chapter – 3 Sales Management
1. Introduction :
Marketing is the lifeblood of an organization. It supports a host of operational functions, including selling. Marketing differs from selling in many respects. Management of personal selling requires planning, implementation and evaluation of sales force strategies
2. Objectives :
• To understand sales management
• To know salesmanship qualities
• To analyze effective sales process
3. Content:
Sales management
The importance of the sales function varies across organizations depending upon its nature and variety of products, target market, consumer density and dispersion and the competitive practices. It is the sales management that translates the marketing plan into action. Sales management is sometimes described as the muscle behind marketing management. In fact, it does much more than provide muscle.
The following megatrends affect the growing importance of sales management
* Intense foreign competition
* Rising customer expectations
* Increasing buyer expertise
* Revolutionary developments in communications
There is an increased integration of marketing and sales functions. The nature and scope of a sales management functions can be clearly understood from the check list given below.
Qualities of a Good Salesman
The personality of the salesman plays a very important lo field of sales. Sales personality includes all the qualities d salesman. When one compares two salesmen, one having personality anti the other not having it there will be remarkable in the sales made by them.
Courtesy is an indication-of refinement and culture. The sales should always be polite and courteous. By showing polite behave exercises courtesy. Being punctual appointments, becoming pool customers, receptionists and secretaries, listening attentively maintaining a cool temperament are some of the important cob rules. A salesman has to show good manners to customers. The seal of an organization greatly depends on good manners and portent the salesmen. Manners of a salesman either make him prosperous his career. A salesman should avoid biting nails, clasping and uncle hands, swinging back and forth in the chair, keeping hands swig back and forth in the chair etc.
Accessibility is another criteria to know whether pars organization could be a potential buyer. Accessibility means whether prospect is approachable by the salesman or not. Physical accessibly is less important than financial accessibility. If the salesman approaches a prospect, but with very high expenses it is said that so prospect does not have accessibility.
The important prospecting methods are:
1. Endless chain method
2. Centre of influence method
3. Cold canvass method
4. Direct mail and Telephone method
A travailing salesman may follow any one of the following ways of approach for gaining an interview with the prospect.
* Personal call without introduction
* Personal call with introduction
* Sending business card
* Writing for an interview
* Appointment over telephone
* Use of sales letters
The approach followed by the retail salesman/indoor salesman is different. This class of salesmen does not move from place to place fat prospecting. Collecting details of the prospects is also required in retard selling. Such prospects are aware of the products and one attracted to the store by means of advertising, displays, etc.
Presentation and Demonstration
"Presentation" means the presentation of the product to customer or prospect, and is closely related to the buying process. Sad presentation involves the presentation of the product and demonstration of its features and benefits to the prospect, and shoe how the product meets the customers' needs. It attempts to increase the desire for the product and arouses the willingness of the prospects purchase the product. If the salesman will be prompt in presenting the articles to the prospects, he usually conveys his willingness or indicated to server them. Prompt action creates a favorable mood in the mini of the prospects. Clarity in presentation is essential and the salesman should always try to complete it for the satisfaction of prospects, details of articles, about their uses and working, model, texture, etc, have to be explained to the prospect. The prospect should be allow fondle, handle, test the articles for their satisfaction.
Attracting attention, awakening interest, creating desire, conviction and ultimately action process is also followed by the salesmen. Various methods and principles exist for successful personal selling at each stage. An effective and successful salesman should have the knowledge of self, the knowledge of the company and its product and that of the competitors too. He has to develop his sales personality. He must possess a certain qualities in order to become successful.
4. Revision points:
Sales management
Personal selling process
Salesmanship qualities
5. Intext questions:
- What is sales management?
- What are the qualities of a sales manager?
6. Summary :
Management of the sales force has become essential for companies to achieve the predetermined goals. Sales personnel can be classified as order takers, order getters and support personnel. Personal selling is the face to face interaction of a seller with a potential buyer.
7. Terminal exercises :
Short answer questions.
- What is personal selling?
- What is the important role of sales personnel in increasing the market share?
MCQs
Which of the following plan provides a fixed amount of salary to the sales personnel at the end of the week or month?
a. Straight commission
b. Straight salary
c. Salary plus commission
d. Only commission
The process of assessing the performance of the sales personnel is known as
a. Evaluating the sales force
b. Motivating the sales force
c. Compensation plan
d. Training sales personnel
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘submit a report on the qualities of a sales person ’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘Find out the process of personal selling by observing the home loan executives of ICICI Bank of your location’
12. Key words:
Sales quotas: the targets that specify the desired performance required from each sales person
Unit- V
Chapter – 1 channels of distribution
1. Introduction :
A channel facilitates the transfer of ownership and the physical exchange of products and services. The length of a channel represents the number of intermediary levels that exist between the producer and the final user.
2. Objectives :
• To understand distribution
• To know the selection of channel of distribution
• To study about wholesalers and retailers and their function and importance
• To understand about the transport
• To know the role and importance of wholesalers and retailers in distribution network
3. Content:
• Distribution (or place) is one of the four elements of marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user.
• The other three parts of the marketing mix are product, pricing, and promotion.
The Distribution Channel
Chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user
Channels
A number of alternate 'channels' of distribution may be available:
Distributor, who sells to retailers Retailer (also called dealer or reseller), who sells to end customers
Advertisement typically used for consumption goods Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc.
There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.
Importance of distribution channels
A distribution channel comprising of right channel partners offers the services to end users at the right time without any delay. A well networked and properly knitted distribution channel plays an important role in enhancement of sales growth. It is the key for resellers to get the real picture and review of the product. Besides, giving them the first step aid in understanding product and answering their queries, the distribution partners bridge the gap between vendors and resellers. They facilitate them with the ability to roll back to the vendors to rectify any problem and also to concentrate on the market with right policies in place.
Market review influences future strategies. There are so many live examples to walk you through the importance of distribution channel. The article lists some. The feature first draws the scenario of organization prior to distributors and later on the magical spell that distribution channel brought to their business.
Role and functions of wholesalers
Wholesale markets are generally found only in developing countries these days. They are located in district or regional cities and take the bulk of their produce from rural assembly markets located in production areas, where the transactions are small scale and usually take place between farmers and traders. The distinction between rural assembly markets and secondary wholesale markets is that secondary wholesale markets are in permanent operation (rather than being seasonal in nature or dealing in specialized produce), larger volumes of produce are traded than at the rural assembly markets and specialized functions may be present, such as commission agents and brokers.
Terminal wholesale markets are located in major metropolitan areas, where produce is finally channeled to consumers through trade between wholesalers and retailers, caterers, etc. Produce may also be assembled for export. In some countries, such as India and China, terminal markets also supply other parts of the country. For example, New Delhi serves as a distribution centre to the south of India for apples grown in the Himalayan foothills. The problems of terminal wholesale markets are usually ones of congestion caused by an unsuitable location or by an inappropriate mixture of wholesale and retail functions. Traditionally, wholesale markets were built adjacent to city centers, located at a focal point of the inter-city transport facilities and close to the main retailing areas. Population growth, changes in urban land-use patterns and the development of modern transport systems have all influenced the suitability and functionality of existing sites.
Role and functions of retailers
All retailers deal with the customers of varying tastes and temperaments. Therefore, they should
be active and efficient in order to satisfy their customers and also to induce them to buy more. Let
us see what the retailers do in distribution of goods.
(i) Buying and assembling of goods: Retailers buy and assemble varieties of goods from
Different wholesalers and manufacturers. They keep goods of those brands and variety
Which are liked by the customers and the quantity in which these are in demand?
(ii) Storage of goods: To ensure ready supply of goods to the customer retailers keep their
goods in stores. Goods can be taken out of these store and sold to the customers as and
when required. This saves consumers from botheration of buying goods in bulk and storing
them.
(iii) Credit facility: Although retailers mostly sell goods for cash, they also supply goods on
credit to their regular customers. Credit facility is also provided to those customers who
buy goods in large quantity.
(iv) Personal services: Retailers render personal services to the customers by providing expert
advice regarding quality, features and usefulness of the items. They give suggestions
considering the likes and dislikes of the customers. They also provide free home delivery
service to customers. Thus, they create place utility by making the goods available when
they are demanded.
(v) Risk bearing: The retailer has to bear many risks, such as risk of:
(a) fire or theft of goods
(b) deterioration in the quality of goods as long as they are not sold out.
(c) change in fashion and taste of consumers.
(vi) Display of goods: Retailers display different types of goods in a very systematic and
attractive manner. It helps to attract the attention of the customers and also facilitates quick
delivery of goods.
(vii) Supply of information: Retailers provide all information about the behavior, tastes, and fashions
And demands of the customers to the producers through wholesalers. They become a very
Useful source of information for marketing research.
Selection of channel:
The selection of distribution is affected by many of factors, which play significant role while choosing the channel for distribution. It may include the buying pattern of consumer, type of the product is perishable, or auto mobile, weight and bulk and it also depends on the company's resources.
The main affecting factors are following.
Organization objectives - If company objective is to have mass appeal and rapid market penetration.
Type of product - Perishable products should have a short distribution channel, FMCG goods should have a wide reaching, intensive distribution channel.
Nature and extent of market- Distribution to consumer market or industrial markets would be different channel structures.
Existing channel for comparable product- company may chose it's existing channel of distribution for relative product.
Buying habit of customers- Understanding consumer needs and criteria for buying
Channel Availability - Channels may not be available
4. Revision points:
Channels of distribution
Wholesalers
Role of retailers
5. Intext questions:
- What is channels of distribution
- What are the important functions of retailer
6. Summary :
A marketing channel can be understood as an organized network of agencies and institutions, which perform activities required to link producers with users to accomplish the marketing task. Marketing channels perform the function of facilitating the exchange process, alleviating discrepancies, standardizing transaction, matching buyers and sellers and proving customer service.
7. Terminal exercises :
Short answer questions.
- What are channels of distribution?
- Who are the facilitators of channels of distribution
-
MCQs
The study of the impact of environmental forces such as economic, legal, political, social, technological and competitive ones on marketing channels is called
a. Tying agreements
b. Dealing agreement
c. Channel dynamics
d. Channel management
The process where producers, wholesalers and retailers perform the marketing activities jointly is known as
a. Vertical marketing system
b. Horizontal marketing system
c. Corporate horizontal marketing
d. Contractual marketing
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘Prepare a report on the importance of channels of distribution with reference to entertainment industry’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘ make a list of facilitators of channels of distribution after the careful analysis of Spencer markets’
12. Key words:
Negotiation: the process of reaching an agreement on the price and other conditions for facilitating easier transfer of ownership and possession of goods
Chapter – 2 Ware housing decisions.
1. Introduction :
Warehousing is a physical system that comprises a set area or space, tools and laborers to handle the goods. The ware housing process involves controlling the flow of goods in and out of the warehouse, through proper documentation and recording. Normally, warehouses are two types, storage warehousing and distribution warehousing.
2. Objectives :
• To understand warehousing
• To study the functions of warehousing
• To know the types of warehousing
3. Content:
Warehousing facilities are necessary to prevent the loss arising out of defective storage and also to equip the farmers with a convenient instrument of credit. Both the Agricultural Finance Sub-Committee (1945) and the Rural Banking Enquiry Committee (1950) emphasized the importance of ware housing as a method of promoting rural banking and finance in India.
All India Rural Credit Survey Committee (1954) recommended a three tire system of warehousing: at the national level, state and district level, village and rural level.
At present there are three main agencies in the public sector which are engaged in building large scale storage/warehousing capacity. They are: the Food Corporation of India (FCI), Central Warehousing Corporation (CWC), and State Warehousing Corporation (SWC).
FCI provides storage capacity for food grains. It has its own go downs and it also hires storage capacity from other sources such as CWC, SWC's, State Governments and private parties. In 1960-61, there were only 40 general warehouses in the countries with a total capacity of less than 0.1 million tonnes. By the end of 1988-89, the three public sector units has a storage capacity of nearly 32 million tonnes.
Besides, public sector agencies, co-operatives have also constructed warehouses in rural areas for storage of their members' produce, for stocking of fertilizers and other inputs and consumer articles. To avoid unfair competition with the go downs of the co-operative marketing societies, the state warehousing corporations do not open warehouses at any place below the sub divisional level. By 1987-88, a total storage capacity of over 10 million tonnes in the co-operative sector was available.
Kinds of warehouses
There are broadly speaking four kinds of warehouses.They are:
a. private warehouses which are usually maintained by joint-stock companies, firms and individuals;
b. Duty-paid public ware houses which are maintained by dock authorities or port trust authorities at port
c. Bonded warehouses which are maintained either by dock authorities or by the Government and
d. licensed warehouses which are private warehouses run by co-operative societies or by private agencies, after obtaining license from the Government.
Benefits of the warehouses
The following are some of the benefits of the warehouses.
a. It gives withholding power to the agriculturist to tide over difficulties and helps them to secure better prices for their produce.
b. It gives purchasing power to traders.
c. It tends to cushion the price fluctuation and stabilize prices as it equates supply to demand.
d. It facilitates future trading.
e. It plays a very important role in implementing the agricultural price policy of the Government
f. It obviates the need for unnecessary cross-transport.
g. Huge wastages which occur owing to improper storage of agricultural produce will be minimized if warehousing develops on a large scale.
h. Warehouses render various subsidiary services, such as sorting and packing commodities for shipment, cleaning and drying goods and preparing them for the market, acting as forwarding agents for exporters of good, purchasing goods on behalf of clients, and collecting and disseminating marketing intelligence.
4. Revision points:
Warehouses
Functions of warehouses
Types of warehouses
5. Intext questions:
- What is warehousing
- Types of warehouses
6. Summary :
Warehouses form an important component of logistics. A warehouse is a place, which holds raw material or finished goods. Normally, warehouses are two types, storage warehousing and distribution warehousing. Warehouse perform various functions such as holding goods in storage, stock mixing, transloading or cross docking, and protecting the organization from contingencies .
7. Terminal exercises :
Short answer questions.
- What are the types of warehousing?
- What is cold storage warehouse?
MCQs
Storing the raw material, other components, and finished goods is known as
a. Storage warehousing
b. Distribution warehousing
c. Merchandising
d. Holding goods
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘Prepare a report on the functions of warehousing’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘ visit any warehouse near to your location and find out the functioning of warehousing ’
Key words:
Cross docking: transferring goods from one place to another
Chapter – 3. Marketing Research and Information
1. Introduction :
Marketing research provides information about consumers and markets, and their reactions to various products, prices, distribution and promotion strategies. Marketing information system is a process which helps marketers manages their marketing efforts, effectively and efficiently.
2. Objectives :
• To understand marketing research and information
• To know about marketing research
• To understand the objectives and process of marketing research
3. Content:
Marketing Research
Marketing research is the function that links the consumer, customer, and public to the marketer through information - information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the methods for collecting information, manages and implements the data collection process, analyzes, and communicates the findings and their implications." American Marketing association - Official Definition of Marketing Research
The Marketing research Process.
Marketing research is gathered using a systematic approach. An example of one follows:
1. Define the problem. Never conduct research for things that you would 'like' to know. Make sure that you really 'need' to know something. The problem then becomes the focus of the research. For example, why are sales falling in New Zealand?
2. How will you collect the data that you will analyze to solve your problem? Do we conduct a telephone survey, or do we arrange a focus group? The methods of data collection will be discussed in more detail later.
3. Select a sampling method. Do we us a random sample, stratified sample, or cluster sample?
4. How will we analyze any data collected? What software will we use? What degree of accuracy is required?
5. Decide upon a budget and a timeframe.
6. Go back and speak to the managers or clients requesting the research. Make sure that you agree on the problem! If you gain approval, then move on to step seven. 7. Go ahead and collect the data.
8. Conduct the analysis of the data.
9. Check for errors. It is not uncommon to find errors in sampling, data collection method, or analytic mistakes.
10. Write your final report. This will contain charts, tables, and diagrams that will communicate the results of the research, and hopefully lead to a solution to your problem. Watch out for errors in interpretation.
Marketing research and information
An 'MIS' is a planned system of the collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management. In a way it is a documented report of the activities those were planned and executed. According to Philip Kotler "A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers
At the start, in businesses and other organizations, internal reporting was made manually and only periodically, as a by-product of the accounting system and with some additional statistic(s), and gave limited and delayed information on management performance. Previously, data had to be separated individually by the people as per the requirement and necessity of the organization. Later, data and information was distinguished and instead of the collection of mass of data, important and to the point data that is needed by the organization and was stored.
In their infancy, business computers were used for the practical business of computing the payroll and keeping track of accounts payable and accounts receivable As applications were developed that provided managers with information about sales, inventories, and other data that would help in managing the enterprise, the term "MIS" arose to describe these kinds of applications. Today, the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems, resource and people management applications, ERP, SCM, CRM, project management and database retrieval application
4. Revision points:
Marketing research
Marketing information
Objectives of research
Process of research
5. Intext questions:
- What is research?
- What are the objectives of research/
- What are the important steps of research?
6. Summary :
Marketing research is the careful analysis of a business situation by scientifically analyzing it and using various statistical applications to the subject of study. A marketing information system helps companies provide crucial marketing information to managers using internal record system, marketing intelligence system, marketing decision support system etc.
7. Terminal exercises :
Short answer questions.
- What are the important steps of marketing research?
- What is marketing information systems?
MCQs
Which one of the following does not come under the marketing research process?
a. Formulating the problem
b. Developing objectives
c. Designing research plan
d. Implementation of research design
Which of the following enables a company to keep in contact with its marketing team by disseminating and receiving the latest information?
a. Order payment cycle
b. Sales reporting systems
c. Marketing research process
d. Marketing decision support system
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘Submit a report on importance of marketing information systems’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘Prepare a report on customer tastes and preferences by adopting the important steps of marketing research ’
12. Key words:
Market potential: optimum sales volume
Marketing intelligence system: it helps a marketing manager analyze the marketing environment by proving relevant information
Unit - VI
Chapter – 1. Consumerism
1. Introduction :
• Consumerism is the equation of personal happiness with consumption and the purchase of material possessions
2. Objectives :
• To understand consumerism
• To study the problems of consumer protection
• To know about the public distribution of essential commodities
3. Content:
Consumerism
• In the good olden days the principle of Caveat emptor', which meant buyer beware governed the relationship between seller and the buyer. In the era of open markets buyer and seller came face to face, seller exhibited his goods, buyer thoroughly examined them and then purchased them. It was assumed that he would use all care and skill while entering into transaction.
The maxim relieved the seller of the obligation to make disclosure about the quality of the product. In addition, the personal relation between the buyer and the seller was one of the major factors in their relations. But with the growth of trade and its globalization the rule no more holds true. It is now impossible for the buyer to examine the goods before hand and most of the transactions are concluded by correspondence. Further on account of complex structure of the modern goods, it is only the producer / seller who can assure the quality of goods. With manufacturing activity becoming more organized, the producers / sellers are becoming more strong and organized whereas the buyers are still weak and unorganized. In the age of revolutionized information technology and with the emergence of e-commerce related innovations the consumers are further deprived to a great extent. As a result buyer is being misled, duped and deceived day in and day out. Mahatma Gandhi, the father of nation, attached great importance to what he described as the "poor consumer", who according to him should be the principal beneficiary of the consumer movement. He said "A Consumer is the most important visitor on our premises. He is not dependent on us we are on him. He is not an interruption to our work; he is the purpose of it. We are not doing a favor to a consumer by giving him an opportunity. He is doing us a favor by giving an opportunity to serve him."
Inspite of these views consumerism is still in its infancy in our country, thanks to the sellers market and the government monopoly in most services. Consumer awareness is low due to the apathy and lack of education among the masses. No one has told them about their rights - to be informed about product quality, price, protection against unsafe products, access to variety of goods at competitive prices, consumer education etc. What consumerism lacks here is education and information resources, testing facilities, competent leadership, price control mechanism, and adequate quasi-judicial machinery. The providers of goods and services have been reluctant to give due consideration to consumer interest protection.
In present situation, consumer protection, though as old as consumer exploitation, has assumed greater importance and relevance. Consumerism is a recent and universal phenomenon. It is a social movement. Consumerism is all about protection of the interests of the consumers. According to McMillan Dictionary (1985) "Consumerism is concerned with protecting consumers from all organizations with which there is exchanged relationship. It encompasses the set of activities of government, business, independent organizations and concerned consumers that are designed to protect the rights of consumers". The Chamber's Dictionary (1993) defines Consumerism as the protection of the interests of the buyers of goods and services against defective or dangerous goods etc. "Consumerism is a movement or policies aimed at regulating the products or services, methods or standards of manufacturers, sellers and advertisers in the interest of buyers, such regulation maybe institutional, statutory or embodied in a voluntary code occupied by a particular industry or it may result more indirectly from the influence of consumer organizations"
As commonly understood consumerism refers to wide range of activities of government business and independent organizations designed to protect rights of the consumers. Consumerism is a process through which the consumers seek redress, restitution and remedy for their dissatisfaction and frustration with the help of their all organized or unorganized efforts and activities. It is, in-fact a social movement seeking to protect the rights of consumers in relation to the producers of goods and providers of services. In-fact consumerism today is an all-pervasive term meaning nothing more than people's search for getting better value for their money. Consumer is the focal point of any business. Consumers' satisfaction will benefit not only business but government and society as well. So consumerism should not be considered as consumers' war against business. It is a collective consciousness on the part of consumers, business, government and civil society to enhance consumers' satisfaction and social welfare which will in turn benefit all of them and finally make the society a better place to live in.
Components of Consumerism
There are various components of consumerism. First and foremost is self-protection by consumers. Consumer must be aware of his rights, raise voice against exploitation and seek redressed of his grievances. Consumers' consciousness determines the effectiveness of consumerism. It is the duty of the consumer to identify his rights and to protect them. Voluntary Consumer Organizations engaged in organizing consumers and encouraging them to safeguard their interests is another important element of consumer movement The success of consumerism lies in the realization of the business that there is no substitute for voluntary self-regulations. Little attention from the business will not only serve consumers interest but will also benefit them. Some businesses in India have come together to adopt a code of conduct for regulating their own activities. Regulation of business through legislation is one of the important means of protecting the consumers. Consumerism has over the time developed into a sound force designed to aid and protect the consumer by exerting, legal, moral and economic pressure on producers and providers in some of the developed countries.
4. Revision points:
Consumerism
Problems of consumer protection
Government and marketing
ISI, ACMARK
Public distribution of essential commodities
5. Intext questions:
- What is Consumerism?
- Explain ISI, AGMARK
6. Summary :
Businesses have realized that wealthy consumers are the most attractive targets for marketing their products. The upper class' tastes, lifestyles, and preferences trickle down to become the standard which all consumers seek to emulate. The not so wealthy consumers can “purchase something new that will speak of their place in the tradition of affluence”. A consumer can have the instant gratification of purchasing an expensive item that will help improve their social status
7. Terminal exercises :
Short answer questions.
- Explain about ISI and AGMARK?
- What is consumerism?
MCQs
An organized movement by the consumers to protect themselves from exploitation by sellers is called
a. Customer right
b. Consumer forums
c. Consumerism
d. Community relations
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘submit a report on role of government in protecting the consumer interest towards their buying and consumptions’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘Study the public distribution of essential commodities and prepare a list of essential commodities ’
12. Key words:
Consumerism: Consumerism is the equation of personal happiness with consumption and the purchase of material possessions
Chapter – 2. The Indian Marketing Environment
1. Introduction :
In this chapter we will discuss about the Indian marketing environment. We will try to learn how markets has evolved over the years and the influence of external factors in shaping the Indian markets.
2. Objectives :
• To know about the economic reforms and its implications on Indian economy
• To understand Indian market in a transition
• To know the key dimensions of Indian market
3. Content:
Introduction
Currently in India, the national economy and marketplace are undergoing rapid changes and transformation. A large number of reasons could be attributed to these changes. One of the reasons in these changes in the Indian Market Scenario is Globalization, and the subsequent and resulting explosive growth of global trade and the international competition.
The other reason for these changes in the Indian Market Scenario is the technological change. This is an important factor because the technological competitiveness is making, not only the Indian market, but also the global marketplace cutthroat.
In the Indian Marketing Scenario, the market success goes to those companies that are best matched to the current environmental imperatives. Those companies that can deliver what the people want and can delight the Indian customers are the market leaders.
Today the companies are operating in such a marketplace where survival of the fittest is the law. In order to win, the companies are coming out with various new and evolving strategies because the Indian market is also changing very fast. It is to capture the Indian market, that the Indian and the Multi National Companies are using all of their resources.
The Indian market is no longer a sellers market. The winner is the one who provides value for money. A large number of companies have huge idle capacities, as they have wrongly calculated the market size and installed huge capacities. This has further contributed to converting the Indian market into a buyers market.
The Indian Marketing Scenario is one of the biggest consumer markets and that is precisely the reason why India has attracted several MNC’s. These large Multi National Companies have realized that to succeed in the Indian market-place they need to hire Indian representative who are much more aware of the Indian economic, political, legal and social realities. In the Indian Marketing Scenario, it is the MADE FOR INDIA marketing strategies that work
Economic reforms and its implications on Indian economy
The economy of India is one of the fastest growing economies in the world. Since its independence in the year 1947, a number of economic policies have been taken which have led to the gradual economic development of the country. On a broader scale, India economic reform has been a blend of both social democratic and liberalization policies.
Economic reforms during the post independence period
The post independence period of India was marked by economic policies which tried to make the country self sufficient. Under the economic reform, stress was given more to development of defense, infrastructure and agricultural sectors. Government companies were set up and investment was done more on the public sector. This was made to make the base of the country stronger. To strengthen the infrastructure, new roads, rail lines, bridges, dams and lots more were constructed.
Key dimensions of Indian market
Due to the trend to globalization and multi-country companies penetrating into domestic market, Taiwan medium-sized IT service firm (as it grows to a certain scale) had better to develop international market in order to maintain competitive advantage. Rajala (2003, 2006) et al. applied qualitative research and case-study to explore four major dimensions: profit model, product strategy, marketing channels and services. The four dimensions focused mostly on individual firm’s operation. But in order to catch the globalization trend of information services industry, we need to have a comprehensive model to enter into the international market. This research, through Delphi method theory and AHP approach, would extract the key business dimensions provided by the experts and the enterprise decision-makers in Taiwan. We proposed six dimensions and 14 sub dimensions and pointed out the weights of each through AHP approach. We believe our proposal will be a better model for developing the international market than the four dimensions suggested by Rajala et al. Finally, we hope that the results and recommendations of this research will help the information services industry develop the international market more successfully.
4. Revision points:
Economic reforms
Dimensions of Indian markets
5. Intext questions:
- Explain Indian marketing environment?
- Explain key dimensions of Indian marketing environment?
6. Summary :
The Indian market is evolving to become one of the leading consumer markets of the world. This is due to strengthening of Indian economy over the years and post liberalization in particular. The Indian market has also undergone several changes over the years. Consumers have moved from cautious spenders and maverick savers to quality buyers in the market.
7. Terminal exercises :
Short answer questions.
- What is is Indian marketing environment?
- What are the key dimensions of Indian marketing environment
MCQs
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘ the Indian market is gradually becoming consumer oriented.’ Discuss the statement with reference to consumerism.
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘Conduct a literature and secondary data survey of evolution of the Indian cellular market in the recent past ’
12. Key words:
NCAER: national council of applied economic research
Chapter – 3. Ethics in Marketing
1. Introduction :
We often see discrepancies between the promised and actual performances of products or services. This makes us feel that we have been deceived or cheated and some products and services may even cause physical injury. This chapter discusses the importance of ethics in marketing programs.
2. Objectives :
• To know about the importance of marketing ethics
• To know social impact of marketing
• To know social regulations in marketing
• To know the business regulations in marketing
3. Content:
Introduction
Ethics (also known as moral philosophy) is a branch of philosophy which seeks to address questions about morality; that is, about concepts like good and bad, right and wrong, justice, virtue, etc.
Importance of marketing ethics
The world of business is changing because customers are demanding more. Never have marketing ethics been more important to us. We want ecologically friendly products made in a socially conscious manner. Nobody likes the idea of corporations exploiting the poor to produce cheaper products. Nor are we comfortable with manufacturing techniques that harm the environment.
We are beginning to avoid stores that ignore marketing ethics in order to offer a product for less. Retailers that try to cut corners face lawsuits far more often than they once did. If you are starting a business, you'll have more success if you consider the significance of marketing ethics.
You'll only make it if you can prove that your products are made ethically and with social conscience. In Britain, a company called The Body Shop is very successful precisely because it is ultra aware of marketing ethics. The Body Shop sells skin care products and cosmetics. This company is against animal testing, supports community trade, defends human rights and protects the planet.
Today's consumers are unwilling to buy so much as a bubble bath if they believe someone or something had to suffer so that they could relax in a tub full of suds.
Social impact of marketing
Communications That Change Lives, Communities and Our World
How do you make a social investment that will also have a positive impact on your brand? Reputation? Bottom line? And how do you encourage individuals to engage in healthier, safer behaviors that will benefit themselves and society? More than 100 professionals in FH's Social Impact Practice Group have helped dozens of governments, nonprofit organizations, and corporations ask and answer these questions.
Our Social Marketers Shape Beliefs and Attitudes
The foundation of our social impact work is research, upon which we develop the strategic communications and marketing solutions that drive results. We've worked with clients around the globe to prevent risky behaviors, manage diseases, promote life-saving research, and help build healthy, sustainable communities. We manage multimillion dollar programs spanning oceans and small, neighborhood initiatives targeting a few city blocks. Our work is award-winning, but more important, it's life-changing.
Marketing Outreach That Leads to Life-Changing Results
Fleishman-Hillard partnered with the Susan G. Komen Breast Cancer Foundation to help increase awareness among women aged 20 to 39 about the benefits of early detection. Together we created On the Way to the Cure—The Komen College Tour, an innovative, interactive campaign targeting college females about the benefits of breast health. More than
8.5 million media impressions were generated, and 80 percent of the women who were reached committed to improved breast-cancer prevention.
Fleishman-Hillard joined the New Jersey Department of Health and Senior Services to catapult New Jersey Breathes' "Spare the Air: It's What We Breathe" youth campaign into a statewide movement. Through an awareness-raising grassroots campaign Fleishman-Hillard was able to increase the number of smoke-free policies statewide, collect more than 40,000 signatures to generate legislative support, generate 4 million local and regional print media impressions, and reach a broadcast audience of nearly 8 million.
Social regulations in marketing
Social regulation is ubiquitous in the US healthcare system, and American healthcare organizations claim to be among the most regulated institutions in the world. Yet relatively little is known about the impact of social regulation on these organizations' performance, or about the characteristics or determinants of effective regulatory strategies and approaches. This paper explores the use of social regulation in US healthcare, drawing on the wider literature on regulation in other countries and settings and on the growing body of general regulatory theory. It offers a framework for analyzing and comparing regulatory arrangements, presents the findings from an exploratory qualitative study of regulators and regulated organizations, and concludes by developing a framework of the emergent characteristics of effective regulation which might be used in future evaluations of healthcare regulation.
4. Revision points:
Ethics
Society
Individual
Business
5. Intext questions:
- Explain ethics?
- What is society?
- Explain the role of business organizations in protecting the norms of the society
6. Summary :
The characteristics that define the acceptable conduct in marketing are called as marketing ethics. Organizations need to market their products and services in such a manner that they do not have any negative impact on society and environment.
7. Terminal exercises :
Short answer questions.
- What is ethic?
- What is regulating marketing?
- What is environmentalism?
MCQs
Which of the following is the most important social commitment issue in marketing?
a. Consumer moment
b. Green marketing
c. Social status
d. Individual status
8. Supplementary materials:
Tapan K Panda, Philop kotler, daily news papers, magazines, and internet
9. Assignments
‘ prepare a report on business regulations in marketing.’
10. Suggested reading/ reference books/set books :
Daily news paper, magazines and internet
11. Learning activities:
‘Conduct a survey on any two retail stores and list out their regular marketing practices in relations to importance of ethical practices by the business organizations ’
12. Key words:
Ethics: The characteristics that define the acceptable conduct.
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