Professional Documents
Culture Documents
Marketing Notes
Marketing mix
The set of controllable tactical marketing tools-product , price ,
place, and
promotion –that the firm blends to produce the response it wants
in the target
market
personal selling
Personal selling is a part of marketing mix which is most effective
tool at later
stages of the buying process, particularly in building up buyer
preferences ,
conviction , and action. It has got three distinctive qualities such as
personal
confrontation , cultivation , and Response.
Marketing control
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The process of measuring and evaluating the results of marketing
strategies
and plans and taking corrective actions to ensure that objectives
are achieved.
marketing management
A. The art and science of choosing target markets and building
profitable
relationships with them. This involves getting , keeping , and
growing customers
through creating , delivering and communicating superior
customer value.
marketing research
A. The systematic design , collection , analysis and reporting of data
relevant to a
specific marketing situation facing an organization.
objective of packing.
A. The two objective of packing are:
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(i)Designing and producing the container or protecting wrapper
for a product.
(ii) packages should perform many sales tasks such as –from
attracting
attention , to describe the product , to making the sale.
product mix
A. The set of all product lines and items that a particular seller offers
for sale. A
company’s product mix has four important dimension: width,
length, depth and
consistency.
on-line marketing
A. Business through electronic media especially via internet is called
on-line
marketing. It is a part of direct marketing. There are two types of
marketing
channels that is commercial on-line services and the internet.
product line
A. A group of products that are closely related because they function
in a similar manner , are sold to the same customer groups , are
marketed through the same types of outlets, or fall within given
price ranges.
product positioning
The way the product is defined by consumers on important attributes-
the place the product occupies in consumer’s minds relative to
competing products
product
A. Anything that can be offered to a market for attention, acquisition,
use or
consumption that might satisfy a want or need is called product
marketing audit
A. A comprehensive, systematic , independent and periodic
examination of a
company’s environment ,objective, strategies , and activities to
determine
problem areas and opportunities and to recommend a plan of
action to
improve the company’s marketing performance
advertising budget
A. A fixed amount kept to spend on advertisement is called
advertising budget
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which often depends on its stage in the product life cycle. For eg
new products
typically need large advertising budgets to build awareness and
to persuade
consumer’s to try the products. In contrast , mature brands
usually require
lower budgets as a ratio to sales.
advertising
A. Any paid form of non personal presentation and promotion of ideas ,
goods or
services by an identified sponsor is called advertising.
consumer behaviour
A. The buying behaviour of final consumers –individuals goods and
services for
personal consumption is called consumer behaviour.
direct marketing
A. Direct communication with carefully targeted individual consumers
to obtain an
immediate Response. Or It is an interactive marketing system that
uses one or
more advertising media to effect a measurable response and or
transaction at
any location.
Branding
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A. A name , term , sign , symbol , or design , or a combination of these ,
intended to
identify the goods and services of one seller or group of sellers and
to
differentiate them form those of competitors is called Branding
tele-marketing
A. Telemarketing describes the use of telephone operators to attract
new
customers to contact existing customers to ascertain satisfaction
levels, or to
take orders. In case of routinely taking orders, it is called telesales.
marketing process
A. The following figure depicts the process of marketing.
Analyzing marketing opportunities
Meaning: The period during which a product lives in the market is termed as product life
cycle . In other words, product life cycle is the course of a products sales and profits over its
life time)
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Product life cycle should be preferably termed as product market life cycle , as its related
to a given particular market. The product life cycle concept indicated that the product is
boom or introduced , grows, attains maturity and the point of saturation in that market
and then sooner or later, it is bound to enter its declining stage i.e., decay in its sales)
1. Introduction: It starts when the product is introduced in a market, During this period
the sales revenue begins to grow but the rate of growth is very slow. Profits are non-
existent in this stage , because of the heavy expenses of product introduction . Much
money is required to attract distributors and buy their inventories. Promotion
spending is relatively high to inform consumers of the new product and get them to
try it. Products are brought continuously on a trial basis , weakness may be revealed
and they must be properly removed.
2. Growth: It is a period during which the product is accepted by consumers and the
traders. Attracted by the opportunities of profits, new competitors will enter the
market. They will introduce new product features , and the market will expand . The
increase in the competitors leads in an increase in the number of distribution outlets,
and sales jumps just to build reseller inventories . Prices remain where they are or fall
only slightly. Profit increases during the growth stage . The firm gives top pririority
to sales volume and quality maintenance may have secondary preference. In this
stage , effective distribution and advertising are considered as a key features.
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3. Maturity: This stage normally lasts longer than the previous stages, and it poses
strong challenges to marketing management. Most products are in the maturity stage
of the cycle, and therefore cost of marketing management deals with the product.
During this stage keen competition brings pressure on prices. Increasing marketing
expenditure and falling prices will reduce profits. Additional expenditure is involved
in products modification and improvement advertising and sales promotion . Overall
marketing effectiveness becomes the key factor in this stage.
4. Decline:-Under the decline stage, the sales decline .It may be gradually displaced by
some new innovation. Sales decline for many reasons, including technological
advanced, shifts in consumer states, and increased competition It may be driven out
of the market by other new innovations. At this stage price becomes the primary
weapon of competition and it is necessary to reduce considerable expenditure on
advertising and sales promotion .Cost control becomes the key to generate profits.
Esteem needs
( self esteem , recognition, status)
Beliefs and Attitudes: Through doing and learning, people acquire beliefs and attitudes.
These, in turn influence their buying behaviour. A belief is a descriptive thought that a
[person has about something. Marketers are interested in the beliefs that people
formulate about specific products and services, because these beliefs make up product
and brand images that affect buying behaviour. If some of the beliefs are wrong and
prevent purchase, the marketer will want to launch a campaign to correct them. People
have attitudes regarding religion, politics, clothes, music, food and almost everything
else. Attitude describes a person’s relatively consistent evaluations, feelings and
tendencies toward an object or idea. Attitude put people into a frame of mind of liking or
disliking things, of moving toward or away or away from them.
marketing strategies at each stage of product life cycle
Product life cycle and different stages of product life cycle or marketing strategies at each
stage
Meaning: The period during which a product lives in the market is termed
as product life cycle . In other words, product life cycle is the course of
a products sales and profits over its life time)
Product life cycle should be preferably termed as product market life cycle , as its related
to a given particular market. The product life cycle concept indicated that the product is
boom or introduced , grows, attains maturity and the point of saturation in that market
and then sooner or later, it is bound to enter its declining stage i.e., decay in its sales)
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1. Introduction stage:
(a) Product strategy : In case of product , company will offer a basic product
rather then extension of product in different areas.
(b) Price strategy: The company here fixes high price during this stage because in
order to promote the basic sale of a product therefore company uses cost-plus.
(c) Distribution strategy: The company will build selective distribution with an
intention to go for potential market.
(d) Advertising strategy: The company build product awareness among an early
adopters and dealers.
(e) Sales promotion: The company uses heavy sales promotion in this stage.
2. Growth stage:-
(a) Product strategy : The company offer product extensions , service , warranty .
(b) Price strategy: The company fixes the price in such a way to penetrates the
market
(c) Distribution strategy: The company build intensive distribution
(d) Advertising strategy: The co., build awareness and interest in the mass market
(e) Sales promotion: The company reduce ot take advantage of heavy consumers
demand.
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3. Maturity stage:
(a) Product strategy: the co., diversify brand and models
(b) Price strategy: The company fix the price to match or beat competitors
(c) Distribution strategy: The co., build more intensive distribution
(d) Advertising strategy : The company here stress brand differences and benefits.
(e) Sales promotion: The company increase to encourage brand switching.
4. Decline stage:
(a) Product strategy: The co., phase out weak items.
(b) Price strategy: The company fixes a cut price.
(c) Distribution strategy :The company go selective phase out and unprofitable
outlets.
(d) Advertising strategy: The company reduce to the level needed to retain hard-
core loyal.
(e) Sales promotion strategy: Here the sales promotion reduce to minimal level.
Why the new emphasis on retaining and growing customers? In the past,
many companies took their customers for granted, facing an expanding economy and
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rapidly growing markets, companies could proactive a” leaky bucket” approach to
marketing. Growing markets meant a plentiful supply of new customers. Companies
could keep filling the marketing bucket with new customers without worrying about
losing old customers through holes in the bottom of the bucket.
Companies are also realizing that losing a customer means losing more
than a single sale. It means losing the entire stream of purchases that the customer would
make over a lifetime of patronage.
The value of the entire stream of purchases that the customer would
make over a lifetime of patronage is called customer lifetime value. The key to building
lasting customer relationship is to create superior customer value and satisfaction.
Satisfies customers are more likely to be loyal customers, and loyal customers are more
likely to give the company a larger share of their business.
A customer buys form the firm that offers the highest customer
perceived value which is the customer’s evaluation of the difference between all the
benefits and all the costs of a marketing offer relative to these of competing offers.
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Customer satisfaction is the extent to which a product’s perceived performance matches
a buyer’s expectation.
A. Promotion mix is the specific mix of advertising , personal selling, sales promotion,
public relations, and direct marketing tools that the company uses to pursue it’s
advertising and marketing objective
Negative impact:
• Advertising also has some shortcomings. Although it reaches many people quickly,
advertising is impersonal and cannot be as directly persuasive as can company’s sales
people.
• Advertising can carry on only a one-way communication with the audience and they
does not feel that it has to pay attention or response
• Advertisements through TV require very large budgets.
Negative impact:
Sales promotion effects are often short lived. However, sales promotion is not
effective as advertising or personal selling in building long-run brand preference.
The following are major tools of sales promotions methods
Coupon: Certificates that gives buyers a saving when they purchase a specified product.
Cash refund offer ( rebate) : Offer to refund part of the purchase price of a product to
consumers who send a “Proof of purchase” to the manufacturer.
Price pack ( cents off deal) : reduced price that is marked by the producer directly on the
label or package.
Premium: good offered either free or at low cost as an incentive to buy a product.
Advertising speciality: Useful article imprinted with an advertiser’s name . given as a gift
to consumers.
Patronage reward: Cash or other award for the regular use of a certain company’s product
Or service.
Point of purchase (POP) promotion: Display and demonstration that takes place at the
point of purchase or sale.
Contests , sweeptakes, games: promotional events that give consumers the chance to win
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something- such as cash , trips or goods- by luck or through
extra effort.
Discount: A straight reduction in price on purchases during a stated period of time.
Public relations:- Building good relations with the company’s various publics by obtaining
favorable publicity , building up a good corporate image, and
handling or heading off unfavorable rumours, stories and
events.
Public relation departments may perform any or all of the following functions:-
• Press relations or press agentry
• Product publicity
• Public affairs
• Lobbying’
• Investor relations
• Development
Major public relations tools:
• News
• Speeches
• Special events
• Written materials
• Audio visual materials
• Corporate identity materials
• Public service activities etc.
Personal selling : Personal selling consists of personal presentation by the firms sales
force for the purpose of making sales and building customer relationship.
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In other words personal selling is the process of assisting and persuading a
prospective buyers to buy a product in a face to face situation. It involves direct and
personal contacts between the seller and the customer.
Personal selling involves specific tools such as sales presentation , trade shows
and incentive program.
Pre approach
Approach
Handling objections
Closing
Follow up
The above four components are together known as promotion mix and it is not
compulsory that every firm will market the product using all its depend up on the company
strategy , plans , budget , type of product etc.
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segmentation
b. Market segmentation can be defined as the process of dividing a market into
distinct subsets of consumers with common needs or characteristics and
selecting one or more segments to target with a distinct marketing mix.
Geographic
World region or country Eg: North America , western America , middle
east, china , India , Canada Mexico
country region Pacific, mountain, west north central , new
city or metro size England
Density Under 5000; 5000-20000, 20000-50000 et
Climate Urban , suburban , rural
Northern , southern
Demographic
Age Under 6 , 6-11 , 12-19 , 20-34 , 35-49 , 50-64, 65+
Gender Male , female
Family size 1-2 , 3-4, 5+
Family life-cycle Young , single; young, married , no children;
young, married with children; older, married with
children; older, married, no children
Income Under 10,000 ;10,000-20000;20000-30000 etc
Occupation Professional &technical; supervisors; operatives
Education etc
Religion Grade school or less; some high school etc
Race Catholic , pretestant, jewish, muslim , hindu etc
Generation Asian , Hispanic , black , white
Nationality Baby boomer , Generation X , Generation Y
North America , south America, British, French etc
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Psychographic
Social class Lower lowers, upper lowers , working class ,
middle class , upper middles, lower uppers , upper
uppers
Life style Achievers, strivers , strugglers
Personality Compulsive , gregarious, authoritarian, ambitious
Behavioral
Occasions Regular occasions; special occasion
Benefits Quality , service , economy , convenience , speed
User status Nonuser , Ex-user , potential user etc
User rates Light user , medium user , heavy user.
Loyalty status None , medium , strong, absolute
Readiness stage Unaware, aware, informed , interested, desirous etc
Attitude toward product Enthusiastic , positive, indifferent , negative,
hostile
The above table shows the segmentation of market according to different types of variable
which is necessary before advertising or selling the product.
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marketing audit
The marketing audit covers all major marketing areas of a business, not
a few trouble spots. IT assess the marketing environment , marketing strategy ,
marketing organization, marketing systems, marketing mix, and marketing productivity
and profitability. The audit is normally conducted by an objective and experienced
outside party. The findings may come as a surprise- and sometimes as a shock- to
management. Management then decides which actions make sense and how and when to
implement them.
tele-marketing
A. Tele-marketing is nothing but using the telephone to sell directly to customers-has
become the major direct-marketing communication tool. Telephone marketing now
accounts for more than38 % of all direct – marketing media expenditures and 36% of
direct marketing sales. We are all familiar with telephone marketing directed toward
consumers, but B2B marketers also use telephone marketing extensively, accounting for
58% of all telephone marketing sales.
In the broad sense, the marketer tries to bring about a response to some
marketing offer. The response may be more than simply buying or trading products and
services. Marketing consists of actions taken to build and maintain desirable exchange
relationship with target audiences involving a product , service , idea, or other object.
Beyond simply attracting new customers and creating transactions, the goal is to retain
customers and grow their business with the company. Marketers want to build strong
economic and social connections by promising the consistently delivering superior value.
Markets:-
The concept of exchange and relationship lead to the concept of a
market. A market is the set of actual and potential buyers of a product. These buyers share a
particular need or want that can be satisfied through exchange relationship. The size of a
market depends on the number of people who exhibit the need , have resources to engage in
exchange, and are willing to exchange these resources for what they want.
Information search
Evaluation of alternatives
Purchase decision
Information search:-
An interested consumer may or may not search for more
information. If the consumer’s drive is strong and a satisfying product is near at
hand , the consumer is likely to buy it then. If not, the consumer is likely to buy it
then. If not, the consumer may store the need in memory or undertake an
information search related to the need.
The consumer can obtain information from any of several
sources. These include personal sources , ( family , friends , neighbors ,
acquaintances) , commercial sources ( advertising , salespeople , dealers ,
packaging, displays) public sources ( mass media , consumer rating organizations)
and experiential sources ( handling , examining , using the product) the relative
influence of these information sources varies with the product and the buyer.
Evaluation of alternatives:-
The marketer needs to know about alternative evaluation – that
is , how the consumer processes information to arrive at brand choices.
Unfortunately , consumers do not use a simple and single evaluation process in all
buying situation. Instead, several evaluation processes are at work.
Purchase decision:-
Idea generation:-
New product development starts with idea generation. It means the
systematic search for new product ideas. According to one well known management
consultant “ for every 1000 ideas , only 100 will have enough commercial promise to merit
a small scale experiment , only 10 of those will warrant substantial financial commitment,
and of those only a couple will turn out to be unqualified success”.
So most of the companies typically generates many ideas in order to
find a few good ones. Thus, the company gets various ideas by its internal and external
sources such as customers , competitors , distributors and suppliers and others.
Idea screening:-
The purpose of idea generation is to create a large number of ideas, the
purpose of the succeeding stage is to reduce that number. The first idea reducing stage is
idea screening , which helps to spot good ideas and drop poor one as soon as possible.
Product development costs rise greatly in later stages, so the company wants to go ahead
only with the product ideas that will turn into profitable product.
Business analysis:-
Once management has decided on its product concept and marketing strategy,
it can evaluate the business attractiveness of the proposal. Business analysis involves a
review of the sales , costs, and profit projections for a new product to find out whether they
satisfy the company’s objectives. If they do, the product can move to the product
development stage. The company uses the sales and costs figures to analyze the new
product’s financial attractiveness.
Product development:-
Developing the product concept into a physical product in order to
ensure that the product idea can be turned into a workable product or if the product concept
passes the business test, it moves into product development.
The R&D department will develop and test one or more physical
versions of the product concept. Often products undergo rigorous tests to make sure that
they perform safely and effectively, or that consumers will find value in them.
Test marketing:-
Test marketing is the stage of new product development in which the
product and marketing program are tested in more realistic market setting. Test marketing
gives the experience with marketing the product before going to the great expense of full
introduction. The amount of test marketing needed varies with each new product. However,
when introducing a new product requires a big investment , or when management is not sure
of the product or marketing program, a company may do a lot of test marketing. When using
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test marketing , consumer products companies usually choose one of three approaches-
standard test markets, controlled test market or simulated test market.
Commercialization:-
Test marketing gives management the information needed to make a
final decision about whether to launch the new product. If the company goes ahead with
Commercialization- introducing the new product into the market- it will face high costs.
The company launching a new product must first decide on introduction timing. ext, the
company must decide where to launch the new product – in a single location , a region , the
national market, or the international market.
Pre approach
Approach
Handling objections
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Closing
Follow up
Prospecting and Qualifying:-
The first step in the selling process is prospecting- identifying
qualified potential customers. Approaching the right potential customers is crucial to selling
success. The sales person must often approach many prospects to get just a few sales.
Although the company supplies some leads , salespeople need skill in finding their own.
They can ask current customers for referrals. They can cultivate referral sources such as
suppliers, dealers , non competing salespeople, and bankers. They can search for prospects
in directories or on the web and track down leads using the telephone and direct mail. Or
they can drop in unannounced on various offices.
Sales people also need to know how to qualify leads- that is ,
how to identify the good ones and screen out the poor ones. Prospects can be qualified by
looking at their financial ability, volume of business, special needs , location and
possibilities for growth.
Pre approach:-
The step in the selling process in which the salesperson learns as
much as possible about a prospective customer before making a sales call. The salesperson
can consult standard industry and online sources , acquaintances and others to learn about
the company. The sales person should set call objectives , which may be to qualify the
prospects , to gather information, or to make an immediate sale.
Approach:-
During the approach step, the salesperson should know how to
meet and greet the buyer and get the relationship off to a good start. This step involves the
salesperson’s appearance , opening lines, and the follow-up remarks. The opening lines
should be positive to build goodwill from the beginning of the relationship. This opening
might be followed by some key questions to learn more about the customers needs or by
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showing a display or sample to attract the buyer’s attention and curiosity. As in all stages of
the selling process , listening to the customer is crucial.
Handling objections:-
Customers almost always have objections during the presentation or
when asked to place an order. The problem can be either logical or psychological , and
objections are often unspoken , In handling objections, the salesperson should use a positive
approach, seek out hidden objections , ask the buyer to clarify any objections , take
objections as opportunities to provide more information, and turn the objections into reasons
for buying.
Closing:-
After handling the prospect’s objections, the salesperson now tries to close the
sale. Some salespeople do not get around to closing or do not handle it well. They may kacj
confidence , feel guilty about asking for the order , or fail to recognize the moment to close
the sale. Salespeople should know how to recognize closing signals from the buyer,
including physical actions, comments, and questions.
Follow up:-
Follow-up is necessary if the salesperson wants to ensure customer
satisfaction and repeat business. Right after closing, the salesperson should complete any
details on delivery time, purchase terms and other matters. The sales person then should
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schedule a follow –up call when the initial order is received, to make sure there is proper
installation, instruction and servicing. This visit would reveal any problems, assure the
buyer of the salesperson’s interest , and reduce any buyer concerns that might have arisen
since the sale.
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