Marketing Management

31/10/2011 IGTC Class 5&6 Sivapriya Krishnan

Branding Challenges
Branding Decisions-Brand Sponsor Brand Name Decision -Brand Strategy Brand Reposition Decision

Branding
Three commonly used research approaches to get at a brand meaning: 1.Word Association 2.Personification 3.Brand Essence through laddering

Branding
Building brand identity and thereby developing a brand bonding with the consumers is very important Name, logo, colours, tagline, symbols. There must be a vision and mission for every brand Brand contract must be honest Bonding develops not through advertising but by the brand experience

Brand Equity
Brand Equity is the positive differential effect that knowing a brand name has on consumers When the brands are identical, consumer preference for one over the other signifies the brand equity The extent to which consumers will pay a premium for the particular brand is a measure of brand equity

Brand Equity
Brand Equity provides a number of competitive advantages : Trade leverage distributors and retailers Command higher price Launch extensions as base credibility is high Defence against price competition

Packaging & Labelling

Packaging is all the aspects of designing and producing the container for a product Packaging is both an art and a science Packaging should fulfill all needs in respect to social and legal requirements

Packaging & Labelling

Factors influencing the growth of packaging:
Need for self service : convenience , handling and attractiveness Consumer affluence Company and brand image Innovation opportunity

Packaging & Labelling

Labelling : A label is a simple tag which designates a package.

Packaging & Labelling

Labels perform several functions
Identification Grading Description Promotion Legal Compliance

Product / Brand Image

In marketing terms, products find space in the consumer minds according to his/ her perceptions
Perceptions are subjective, Governed by individual values, Beliefs, experiences, environment

TV Cosmetics Soaps Dets

Mobiles

Food

Brand A B, C etc

Consumers Mind

Innumerable products and brands jostling for the consumers mind space

Product Positioning
Slotting the product in the consumers mind Output : Successful creation of a customer focussed value Proposition , a cogent reason as to why the target market should buy the product.

Product Positioning
Acc. To Kotler, arranging for a product to occupy a clear, distinctive, desirable place in the market and in the minds of the target consumers.

Product Positioning
What is positioning ? It is not what you do to a product, but what you do to the mind of the consumers

Product Positioning
Differentiation : Process of adding a set of meaningful and valued differences to distinguish the companys offerings from competitors offerings

Product Positioning
Positioning encompasses the following
Position as a place Position as a rank Position as a mental attitude

Product Positioning
What is perceptual mapping? Draw a map of the overall category benefits Represent the consumer perceptions in a two / multi dimensional space to see where our brand is positioned as against others

Perceptual map - soaps

Liril Nirma Bath Lux UTILITY

COSMETIC Mysore Sandal Camay Dove

Hamam
Margo Lifebuoy HEALTH Neko

LUXURY
Cinthol

Product Positioning
Positioning methods :
Product feature positioning Benefit positioning Specific usage positioning User category positioning Position against other products Positioning by usage By product class

Product Positioning
Positioning is easy for the first mover The human mind cannot rank more than seven items at a time Once your mind is set, difficult to reset

Product Positioning
1.

2.
3.

4.
5.

6.

Important the difference delivers a highly valued benefit to a sufficient number of buyers Distinctive The difference is delivered in a distinctive way Superior the difference is superior to other ways of obtaining the benefit Preemptive the difference cannot be easily copied by others Affordable - the buyer should afford to pay for the difference Profitable it should be profitable to introduce the difference

Product Positioning
Positioning Errors :
Under positioning Over positioning Confused positioning Doubtful positioning

Pricing
Price A value attached for the services and the inherent worth of a product or service. Not just a number tag on an item

Pricing
Price produces revenue other Ps produce costs Price is by easier to adjust compared to other Ps Price conveys a certain intended value proposition to he consumers

Setting the price

Selecting the pricing objective | Determining demand | Estimating Costs | Analysing competition | Selecting a pricing method | Selecting the final price

Selecting the price

Companies select five major objectives :
Survival Maximise current profit Maximise market share Maximum market skimming Product quality leadership

Determining the demand

Price sensitivities Analyse past prices sales and other estimates Price experiments In all of the above the competitive reaction to pricing will have to be built in.

Estimating Costs
Fixed , variable and total costs structures. Costs of RM / PM and other overheads Japanese method of Target Costing
Determine the final product appeal and then cost each element

Analyse Competition
Nearest competitor prices, costs Reactions of competition to a given price

Select the pricing method

Mark up pricing Target return pricing Perceived value pricing Value Pricing Going rate pricing Auction type pricing Group pricing

Select the pricing method

Mark up pricing Add up a standard mark up to the products cost
E.g. construction companies, legal and accounting firms use this method

This method does not take into account market realities Works only if the price fetches expected sales

Select the pricing method

Mark up pricing Most popular 1) estimating costs is easier than estimating demand 2) prices tend to be similar, price war is reduced 3)fair to both buyers and sellers

Select the pricing method

Target return pricing Pricing is done according to targetted rate of return on investment (roi) Public utilities use this method for determining returns Companies strive to lower fixed/variable costs, to break even faster

Select the pricing method

Perceived value pricing Pricing done on what the consumers perceive as value of the product Value is given for :
Brand image Performance Customer support Supplier reputation Esteem

Select the pricing method

Perceived value pricing There are three different buyers :
Price buyers : stripped down price and reduced services Value buyers : innovate and re affirm value Loyal buyers : constantly build relationship

Select the pricing method

Value pricing Charging low prices for a fairly high value item In retail, Everyday Low Pricing (EDLP) is observed The other is : High Low Pricing charge high but run frequent promotions

Select the pricing method

Going rate pricing Price based on competition in the market No demand and cost parameters are considered

Select the pricing method

Auction type pricing Based on the highest bidder Disposes higher inventories Used for high value items

Select the pricing method

Group pricing Consumers group together for a better price E.g. co-operatives, mandis

Select the final price

In selecting the final price the company include factors like
Psychological pricing Gain and risk sharing pricing Influence of other marketing mix elements Company pricing policy

Adapting Pricing
Geographical segmentation Price discounts and allowances Promotional Pricing Discriminatory pricing Product mix pricing

Initiating and responding to price changes

Initiating price cuts Initiating price increases Responding to competition

Nine Price Strategies

Price P r o d u c t Q u a l i t y

Premium Strategy

High value strategy

Super value strategy Good value strategy Economy Strategy

Overchargin Medium g strategy value strategy Rip Off False Strategy Economy Strategy

Marketing Segmentation
- Market Groups affected by the product for a specific function with a certain competition - (refer to fig 1. pg. 26 of the block 2, unit 1) - Segmentation is the basis of breaking up these subgroups for a marketing mix

Segmentation
Market segments are : sub classes of the market grouped together on the basis of similarity of wants, behaviour and income parameters Can be called a group of people who seek by far the same aspects of the product In reality , it is a marketers definition and concept of the market

Segmentation
Relationship of a segment to a market Differences of the segment based on demands Mobility of buyers across similar segments

Segmentation
Segmentation vs product differentiation Product differentiation products designed according to appeales of a given segment Differentiation is complete if there are differences in the following :
Physical aspects Services offered Convenience image

Segmentation
Benefits of segmentation:
Clarity about the consumers Exploit market better Better match of product to consumer needs Better loyalty

Segmentation
Doubts :
Not mutually groups not water tight compartments Commercial viability of small segments Competitive practices of rivals Insignificant differences exist between brands

Segmentation
Doubts :
Not mutually groups not water tight compartments Commercial viability of small segments Competitive practices of rivals Insignificant differences exist between brands

Marketing Research
- The systematic gathering , recording and analysing of data about problems related to the marketing of goods and services The American Marketing Association definition

Marketing Research
- Purpose of research :
Decision making tool facilitation Risk reduction Discovering profitable opportunities

Marketing Research - Scope

Study of consumer behaviour Product design Designing distribution channels Advertising design through consumer perception - Social marketing

Marketing Research
Steps in marketing research Problem definition Research design Field work Data Analysis Report presentation

Marketing Research
- Steps in marketing research - Problem definition define the issue on hand - Give a correct overview of current scenario and future objective

Marketing Research
- Steps in marketing research Research Design - Data collection - Research instrument - Sampling plan

Marketing Research
- Steps in marketing research Field work - Planning and supervision

Marketing Research
- Steps in marketing research Data Analysis - Classifying raw data - Summarising data - Analytical methods to analyse and then make an inference

Marketing Research
Application of research Sales and market analysis Product research Corporate research Advertising research