Marketing Management & Retail

BBM 106: MARKETING MANAGEMENT & RETAIL BANKING
REFERENCE BOOK MARKETING MANAGEMENT BY PHILIP KOTLER-13TH EDITION
OBJECTIVES OF THE COURSE

1. TO UNDERSTAND THE VARIOUS FACETS OF MARKETING MANAGEMENT WITH FOCUS ON BANKING PRODUCTS.
2. TO APPRECIATE THE NEED TO CREATE CUSTOMER VALUE AND SATISFACTION IN THE RETAIL BANKING SEGMENT.
DISTRIBUTION OF SLIDES
SECTION A: 20 CLASSES BEFORE MID-TERM
SECTION A: 18 CLASSES AFTER MID TERM
SECTION B: 20 CLASSES BEFORE MID-TERM

SECTION B: 18 CLASSES AFTER MID-TERM TOTAL NUMBER OF SLIDES: 100, 50 BEFORE, 50 AFTER AVERAGE OF 3 SLIDES PER CLASS.
CLASSROOM RULES
NO LATE COMING- 5 MINUTES GRACE PERIOD NO TALKING IN CLASS- BE MARKED ABSENT NO USE OF CELL PHONES AND COMPUTERS PLEASE SIT IN SAME PLACE EVERY CLASS.
MARKET AND MARKETING-CHAPTER 1

WHAT IS MARKETING?- IT IS ABOUT IDENTIFYING AND MEETING HUMAN & SOCIAL NEEDS. MARKETING IS AN ORGANISATIONAL FUNCTION FOR DELIVERING A PRODUCT OR SERVICE FOR VALUE TO A CUSTOMER FOR THE BENEFIT OF THE COMPANY & ITS STAKEHOLDERS. EX: BANK SERVICES AND PRODUCTS OFFERED TO ITS CUSTOMERS. WHAT IS MARKETED?GOODS- THE BULK OF MARKETING IS PHYSICAL GOODS THAT CONSUMERS WANT & NEED. SERVICES- 70-30 SERVICE MIX THAT INCLUDES BANKING SERVICES TO CUSTOMERS. MARKETING THE FINANCIAL SERVICES OF THE BANKING PRODUCTS AND SERVICES. THE BANKING SECTOR IS AN IMPORTANT TOOL IN THE LIFE OF CONSUMERS.
CORE MARKETING CONCEPTSCHAPTER 1

NEEDS, WANTS, AND DEMANDS: NEEDS ARE BASIC REQUIREMENTS OF AIR, FOOD, WATER, CLOTHING & SHELTER TO SURVIVE. THESE NEEDS BECOMES WANTS WHEN DIRECTED TO SPECIFIC OBJECTS TO SATISY NEEDS. EX. IN THE US, A NEED FOR FOOD MAY BE A HAMBURGER, FRIES AND A COKE. IN INDIA FOOD MAY MEAN CHAPPATIES/RICE/ DAL/VEGETABLE/NON VEG. DEMANDS ARE WANTS FOR SPECIFIC PRODUCTS BACKED BY AN ABILITY TO PAY. MANY WANT TO DRIVE A MERCEDES BUT NOT WILLING TO PAY- HONDA CUSTOMER. THERE ARE 5 TYPES OF NEEDS AS UNDER 1. STATED NEEDS- THE CUSTOMER WANTS AN INEXPENSIVE BANK. 2. REAL NEEDS- THE CUSTOMER WANTS A BANK WHOSE OPERATING COSTS ARE LOW. 3. UNSTATED NEEDS- THE CUSTOMER EXPECTS GOOD SERVICE FROM THE BANK. 4. DELIGHT NEEDS- THE CUSTOMER WOULD LIKE SOME EXTRAS FROM THE BANK FREE. 5. SECRET NEEDS- THE CUSTOMER WANTS HIS FRIENDS TO SEE HIM A SAVVY CUSTOMER.

THE SELLING CONCEPT HOLDS THAT IF CONSUMERS AND BUSINESS IF LEFT ALONE WILL NOT BUY ENOUGH SO THE COMPANY MUST HAVE AN AGGRESSIVE SELLING &PROMOTION EFFORT. THIS APPROACH IS FOR PRODUCTS THAT CONSUMERS DONT THINK OF BUYING LIKE CEMETRY PLOTS, INSURANCE. THIS IS PRACTICE IS BY COMPANIES WITH OVERCAPACITY AND BASED ON SELL WHAT THEY MAKE, RARTHER MAKE WHAT THE MARKET WANTS. THE MARKETING CONCEPT: THE APPROACH MOVED TOWARDS FINDING THE RIGHT PRODUCTS FOR YOUR CUSTOMERS .EX. DELL TARGETS CUSTOMERS WHO BUILD THEIR OWN COMPUTERS. THE MARKETING CONCEPT IS THE BEST APPROACH TO ACHIEVE ORGANISATIONAL GOALS SINCE SELLING FOCUSES ON THE NEEDS OF THE SELLER AND MARKETING ON THE NEEDS OF THE BUYER . THE HOLISTIC MARKETING CONCEPT IS BASED ON THE DEVELOPMENT, DESIGN, AND IMPLEMENTATION OF MARKETING PROGRAMS AND BELIEVES THAT EVERYTHING MATTERS IN MARKETING TO RECOGNIZE THE SCOPE AND COMPLEXITIES OF MARKETING ACTIVITIES.

MARKETING MANAGEMENT TASKS: DEVELOPING MARKETING STRATEGIES AND PLANS AS APPLIED TO THE BANKING SECTOR. CAPTURING MARKETING INSIGHTS INTO THE NEEDS AND WANTS OF THE BANK CUSTOMER. CONNECTING WITH CUSTOMERS WITH PRODUCTS FOR LONG TERM RELATIONSHIPS. BUILDING STRONG BRANDS OF THE BANKS PRODUCTS AND SERVICES FOR CUSTOMERS. SHAPING THE MARKET OFFERINGS WHICH IS THE QUALITY OF THE BANKS PRODUCT. DELIVERING VALUE OF THE PRODUCT OF THE BANK TO ITS OLD AND NEW CUSTOMERS. COMMUNICATING VALUE & CREATING LONG-TERM GROWTH FOR THE BANKS PRODUCTS.

SUPPLY CHAIN: CHANNEL FROM RAW MATERIALS TO PRODUCTION TO FINAL BUYERS. COMPETITION: INCLUDES ALL RIVALS AND SUBSITITUTES FOR A BUYER TO CONSIDER. MARKETING ENVIRONMENT: CONSISTS OF TASK ENVIRONMENT & BROAD ENVIRONMENT. NETWORK INFORMATION TECHNOLOGY: INTERENET HAS CHANGED MARKETING. GLOBALIZATION OF BUSINESS TO MARKET IN ANY COUNTRY FROM ANYWHERE. DEREGULATION OF BUSINESS TO MAKE IT A FREE MARKET ECONOMY . PRIVATISATION: MANY COUNTRIES HAVE PRIVATISED GOVT. COMPANIES FOR EFFICIENCY. HEIGHTENED COMPETITION FROM BRAND MANUFACTURERS AND FOREIGN BRANDS.

INDUSTRY CONVERGENCE BECAUSE OF COMPETITION OF BANKS FOR RATES OF INTEREST.
CONSUMER RESISTANCE: TO BANKING PRODUCTS THAT OVERSELL OR TOO RISKY.

RETAIL TRANSFORMATION OF SOME BANKS THAT ARE NOT PUBLIC SECTOR UNITS. NEW CONSUMER CAPABILITIES: 1. A SUBSTANTIAL INCREASE OF BUYING POWER FROM CONSUMERS WITH A CLICK AWAY. 2. A GREAT VARIETY OF GOODS AND SERVICES AVAILABLE TO THE CONSUMER. 3. A GREAT AMOUNT OF INFORMATION ABOUT ANYTHING FROM THE INTERNET. 4. ABILITY TO COMPARE PRODUCTS AND SERVICES TO PLACE ORDERS. 5. AN AMPLIFIED VOICE TO INFLUENCE PEER AND PUBLIC OPINION ON ANY THING.

INTERNAL MARKETING: HOLISTIC MARKETING INCORPORATES INTERNAL MARKETING. INTERNAL MARKETING IS THE TASK OF HIRING, TRAINING AND MOTIVATING EMPLOYEES WHO WANT TO SERVE CUSTOMERS WELL. INTERNAL MARKETING TAKES PLACE AT TWO LEVELS: 1. THE MARKETING FUNCTIONS OF SALES FORCE, ADVERTISING, CUSTOMER SERVICE, PRODUCT MANAGEMENT AND MARKET RESEARCH SHOULD ALL WORK TOGETHER. 2. ALL DEPARTMENTS SHOULD EMBRACE MARKETING AND MUST THINK CUSTOMER. PERFORMANCE MARKETING WHICH IS PART OF HOLISTIC MARKETING INVOLVES: FINACIAL ACCOUNTABILITY BY MARKETING DIRECTOR TO THE BOARD OF DIRECTORS. SOCIAL RESPONSIBILITY MARKETING BY THE COMPANY TO THE CONSUMERS INTERESTS.

TARGET MARKETS: MARKETERS CATER TO THE CUSTOMER NEEDS ACCORDINGLY.
POSITIONING : THE PRODUCT OR SERVICE IS POSITIONED ACCORDINGLY.

SEGMENTATION: THE MARKET IS SEGMENTATED ACCORDING TO THE ABOVE FACTORS OFFERING: VALUE PROPSITION OF THE COMPANY ACCORDING TO THE NEEDS OF CUSTOMER BRAND: IS AN OFFERING FROM A KNOW SOURCE, BATA, MCDONALDS, TATA, WIPRO. VALUE AND SATISFACTION: IS SUCCESSFUL IF DELIVERS VALUE AND SATISFACTION . MARKETING CHANNELS: COMMUNICATION BY TV, NEWSPAPERS, AND INTERNET DISTRIBUTION CHANNELS: TO DISPLAY OR DELIVER BY WHOLESALER, RETAILERS. SERVICE CHANNELS: BANKS, WAREHOUSING, TRANSPORTATION WITH POTENTIAL CUSTOMERS.

COMPANY ORIENTATION TOWARD THE MARKET PLACE: THE PRODUCTION CONCEPT: OLDEST CONCEPT WHERE CONSUMERS WILL PREFER PRODUCTS THAT ARE WIDELY AVAILABLE AND INEXPENSIVE AND COMPANIES BELIEVE IN HIGH PRODUCTION EFFICIENCY, LOW COSTS AND MASS DISTRIBUTION USED WHEN THE COMPANY WANTS TO EXPAND THE MARKET.
THE PRODUCT CONCEPT PROPOSES THAT CONSUMERS PREFER NEW PRODUCTS WITH INNOVATIVE FEATURES. COMPANIES FOCUS ON MAKING NEW PRODUCTS ALL THE TIME BUT MAY FALL INTO A BETTER MOUSE TRAP BECAUSE A NEW PRODUCT MAY NOT BE BETTER THAN THE OLD PRODUCT UNLESS IT ITS PRICED, ADVERTISED, DISTRIBUTED AND SOLD PROPERLY.
CORE CONCEPTS OF MARKETINGCHAPTER 1

RELATIONSHIP MARKETING: BUILDS LONGTERM RELATIONSHIPS WITH KEY PEOPLE TO RETAIN THEIR BUSINESS . THE FOUR KEY CONSTITUENTS ARE AS UNDER: 1. CUSTOMERS- CUSTOMER IS KING AND ALWAYS RIGHT EVEN IF WRONG. 2. EMPLOYEES- ARE KEY ASSETS FOR EFFECTIVE MARKETING PLANS AND GOALS. 3. MARKETING PARTNERS-SUPPLIERS, DISTRIBUTORS, DEALERS, AGENCIES. 4. MEMBERS OF THE FINANCIAL COMMUNITY- BANKS, SHAREHOLDERS, INVESTORS. THIS ASPECT OF MARKETING IS VERY IMPORTANT FOR THE BANKING SECTOR BECAUSE IT IS RELATIONSHIPS ONLY THAT KEEPS THE CUSTOMER LOYAL TO A BANK FOR LIFE. INTEGRATED MARKETING: THE MARKETERS TASK IS TO DEVISE MARKETING ACTIVITIES AND ASSEMBLE FULLY INTEGRATED MARKETING PLANS TO CREATE, COMMUNICATE AND DELIVER VALUE FOR CUSTOMERS. McCARTHY CLASSIFIED THEM AS MARKETING MIX TOOLS CALLED THE 4 PS OF MARKETING: PRODUCT, PRICE, PLACE AND PROMOTION.
THE 10 COMMANDMENTS OF MARKETING-CHAPTER 1

1. THE COMPANY SEGMENTS THE MARKET, CHOOSES THE BEST SEGMENTS AND DEVELOPS A STRONG POSITION IN EACH CHOSEN SEGMENT. 2. THE COMPANY MAPS ITS CUSTOMER NEEDS, PERCEPTIONS, PREFERENCES AND BEHAVIOR AND MOTIVATES ITS STAKEHOLDERS TO SERVE AND SATISFY THOSE CUSTOMER NEEDS. 3. THE COMPANY KNOWS ITS MAJOR COMPETITORS AND THEIR STRENGTHS & WEAKNESS. 4. THE COMPANY BUILDS PARTNERS OUT OF ITS STAKE HOLDERS AND REWARDS THEM. 5. THE COMPANY DEVELOPS SYSTEMS TO IDENTIFY OPPORTUNITIES AND RANK THEM. 6. THE COMPANY DEVELOPS A MARKETING PLANNING SYSTEM FOR SHORT/LONG TERM. 7. THE COMPANY HAS A STRONG CONTROL OVER ITS PRODUCT AND SERVICE MIX. 8. THE COMPANY BUILDS STRONG BRANDS USING COST EFFECTIVE PROMOTIONS. 9. THE COMPANY BUILDS MARKETING LEADERSHIP & TEAM SPIRIT WITH ITS DEPARTMENTS. 10. THE COMPANY CONSTANTLY ADDS TECHNOLOGY FOR COMPETITIVE ADVANTAGE
THE 10 DEADLY SINS OF MARKETINGCHAPTER 1

1. THE COMPANY IS NOT SUFFICIENTLY MARKET FOCUSED AND CUSTOMER DRIVEN.
2. THE COMPANY DOES NOT FULLY UNDERSTAND ITS TARGET CUSTOMERS

3. THE COMPANY NEEDS TO BETTER DEFINE AND MONITOR ITS COMPETITORS 4. THE COMPANY HAS NOT PROPERLY MANAGED ITS RELATIONSHIP WITH STAKEHOLDERS 5. THE COMPANY IS NOT GOOD IN FINDING NEW OPPORTUNITIES. 6. THE COMPANYS PRODUCT AND SERVICE POLICIES NEED TO BE IMPROVED. 7. THE COMPANYS MARKETING PLANS AND PLANNING PROCESS ARE DEFICIENT. 8. THE COMPANYS BRAND BUILDING AND COMMUNICATION SKILLS ARE WEAK. 9. THE COMPANY IS NOT WELL ORGANIZED TO CARRY ON EFFECTIVE MARKETING. 10. THE COMPANY HAS NOT MADE MAXIMUM USE OF TECHNOLOGY.
MARKETING MIX
PRODUCT
PRICE
PLACE
PROMOTION

INTERNAL MARKETING
INTEGRATED MARKETING
HOLISTIC MARKETING
PERMORMANCE MARKETING
RELATIONSHIP MARKETING
CONSUMER BEHAVIOUR-CHAPTER 2
WHAT IS CONSUMER BEHAVIOUR? IT IS THE RESPONSE BOTH POSITIVE OR NEGATIVE TO THE ADVERTISING , PROMOTION AND MARKETING OF A COMPANYS PRODUCT OR SERVICE. THE AIM OF MARKETING IS TO MEET AND SATISFY TARGET CUSTOMER NEEDS AND WANTS BETTER THAN COMPETITORS. MARKETING ALWAYS LOOKING FOR TRENDS. EX.CELL PHONE IN 2006, THERE WERE OVER 2.6 BILLION SUBSCRIBERS, 200M WHERE IN THE US ONLY. CONSUMER BEHAVIOR IS THE STUDY OF HOW INDIVIDUALS, GROUPS AND ORGANISATIONS SELECT, BUY ,USE AND DISPOSE OF GOODS, SERVICES,IDEAS, OR EXPERIENCES TO SATISFY THEIR NEEDS AND WANTS. CONSUMERS BUYING BEHAVIOUR IS INFLUENCED BY CULTURAL, SOCIAL AND PERSONAL FACTORS. CULTURAL FACTORS EXERT THE BROADEST AND DEEPEST INFLUENCE.
PERCEPTION IS THE PROCESS BY WHICH WE SELECT, ORGANIZE AND INTERPRET INFORMATION TO CREATE A MEANINGFUL PICTURE OF THE WORLD. IN MARKETING, PERCEPTIONS ARE MORE IMPORTANT THAN REALITY TO AFFECT BEHAVIOR. SELECTIVE ATTENTION: IS THE ALLOCATION OF PROCESSING CAPACITY TO SOME STIMULUS. WE ARE EXPOSED TO OVER 1,500 ADS PER DAY. SELECTIVE ATTENTION HELPS TO DECIDE AS 1. PEOPLE WILL NOTICE STMULI RELATED TO A CURRENT NEED. COMPUTER ADS FOR IT. 2. PEOPLE WILL NOTICE STIMULI THEY ANTICIPATE- NOTICE COMPUTERS IN THAT STORE. 3. PEOPLE WILL NOTICE STIMULI WITH LARGE DEVIATIONS, RS 1000 OFF AGAINST RS 100. SELECTIVE DISTORTION IS TO INTERPRET INFORMATION TO FIT OUR PERCEPTIONS EX. MANY CONSUMERS TRY THE SAME BRAND COKE/PEPSI WITHOUT KNOWING . SELECTIVE RETENTION IS ONLY THE INFORMATION WE FEEL LIKE RETENTION. SUBLIMINAL PERCEPTION REQUIRES CONSUMERS ENGAGEMENT AND THOUGHT WHICH MARKETERS WILL IDENTIFY TO PROMOTE THEIR PRODUCT TO SATISY THEIR NEEDS.
CONSUMER BEHAVIOR-CHAPTER 2
BELEIFS AND ATTITUDES:THROUGH LEARNING & EXPERIENCE PEOPLE ACQUIRE BELEIFS AND AND ATTITUDES THAT INFLUENCE BUYING BEHAVIOUR. A BELIEF IS A DESCRIPTIVE THOUGHT THAT A PERSON HOLDS ABOUT SOMETHING. ATTITUDE IS A PERSONS ENDURING FAVOURABLE OR UNFAVORABLE EVALUATIONS, EMOTIONAL FEELINGS AND ACTIONS TOWARDS SOME OBJECT OR IDEA. EX: RELIGION, POLITICS, CLOTHES, MUSIC, FOOD AND EVERYTHING ELSE IN LIFE. EXPECTANCY-VALUE MODEL: DEVELOPS A SET OF BELIEFS ABOUT WHERE EACH BRAND STANDS ON EACH ATTRIBUTE FOR A BUYING DECISION. EX: BUYING A COMPUTER FOR 4 ATTRIBUTES OF MEMORY CAPACITY, GRAPHICS CAPACITY, SIZE AND WEIGHT. REDESIGN THE COMPUTER IF THE ATTRIBUTES ARE TO BE CHANGED. FOR A MANUFACTURER TO INFLUENCE BUYING DECISIONS.
PROBLEM RECOGNITION : THE BUYING PROCESS STARTS WHEN THE BUYER RECOGNIZES A PROBLEM THAT IS TRIGGERED BY INTERNAL/EXTERNAL STIMULI INFORMATION SEARCH: CONSUMERS SEARCH FOR LIMITED AMOUNT OF INFORMATION BEFORE MAKING THEIR BUYING DECISION AND THE SEARCH IS HEIGHTENED SEARCH FOR MILD SEARCH AND ACTIVE SEARCH. INFORMATION SOURCES: 1. PERSONAL: FAMILY, FRIENDS, NEIGHBOURS, ACQUAINTANCES 2. COMMERCIAL: ADVERTISING, WEBSITES, SALESPERSONS, DEALERS, PACKAGING, DISPLAYS. 3. PUBLIC: MASS MEDIA , CONSUMER- RATING ORGANIZATIONS. 4. EXPERENTIAL : HANDLING, EXAMINING , USING THE PRODUCT. EACH SOURCE HAS VARYING INFLUENCE ON THE CONSUMER BUYING DECISION BUT THE COMMERCIAL ASPECT IS VERY IMPORTANT ALONG WITH PERSONAL REINFORCEMENT.
MASLOW SAYS THAT HUMAN NEEDS ARE A HIERARCHY AS UNDER: PHYSIOLOGICAL NEEDS- FOOD, WATER, SHELTER SAFETY NEEDS- SECURITY, PROTECTION SOCIAL NEEDS- SENSE OF BELONGING, LOVE ESTEEM NEEDS- SELF ESTEEM, RECOGNITION, STATUS SELF ACTUALIZATION NEEDS- SELF DEVELOPMENT AND REALIZATION. PEOPLE WILL TRY TO SATISY THEIR MOST IMPORTANT NEED FIRST AND THEN CLIMB. HERZBERGS SAYS THERE ARE DISSATISFIERS AND SATISFIERS FOR EACH PURCHASE DECISION. THE ABSENCE OF DISSASATIFIERS IS NOT ENOUGH, SATTISFIERS SHOULD BE PRESENT. EX. BUYING A COMPUTER WITHOUT A MANUAL OR WARRANTY IS A DISSATISFIER SELLERS SHOULD DO THEIR BEST TO AVOID DISSATISFIERS FOR THEIR PRODUCTS. SELLERS SHOULD IDENTIFY THE MAJOR SATISFIERS FOR THEIR PRODUCT AND PROMOTE IT.
LEARNING INDUCES CHANGES IN OUR BEHAVIOUR ARISING FROM EXPERIENCE.
LEARNING IS PRODUCED BY DRIVES, STIMULI, CUES, RESPOSES AND REINFORCEMENT. EX.ONE BUYS A DELL COMPUTER AND HAPPY, HE MAY ALSO WANT A DELL PRINTER NOW. DISCRIMINATION IS THAT WE RECOGNIZE DIFFERENCES IN STIMULI & ADJUST RESPONSES.
MEMORY IS ALL INFORMATION AND EXPERIENCES THAT WE ENCOUNTER AND STORE. STM- SHORT TERM MEMORY WHICH IS TEMPORARY AND LIMITED INFORMATION STORED. LTM- LONG TERM MEMORY A MORE PERMANENT AND EXTENSIVE INFORMATION STORED.
KEY PSYCHOLOGICAL PROCESSES: MARKETING AND ENVIRONMENTAL ENTER THE CONSUMERS CONSCIOUSNESS AND CERTAIN PSYCHOLOGICAL PROCESSES COMBINE WITH CONSUMER CHARECTERISTICS TO RESULT IN DECISION PROCESS AND PURCHASE DECISIONS. MOTIVATION, PERCEPTION, LEARNING, MEMORY INFLUENCE CONSUMER RESPONSES
MOTIVATION: FREUD, MASLOW, HERZBERG- NEED BECOMES A MOTIVE TO ACT TO BUY.
FREUD ASSUMES THAT PSYCHOLOGICAL FORCES SHAPING PEOPLES BEHAVIOUR ARE UNCONSCIOUS AND A PERSON CANNOT FULLY UNDERSTAND HIS OWN MOTIVATIONS A PERSON EXAMINES NOT ONLY THE STATED CAPABILITIES BUT TO FACTORS OF SIZE SHAPE, WEIGHT- CONCEPT CALLED LADDERING SO MARKETERS HAVE TO CHANGE.
UNDERSTANDING CONSUMER BEHAVIOUR: 1. WHO BUYS OUR PRODUCT OR SERVICE AND WHO MAKES THE DECISION TO BUY? 2. HOW IS THE BUYING DECISION MADE AND WHO INFLUENCES THE DECISION TO BUY? 3. WHAT DOES THE CUSTOMER BUY AND WHY DO THEY BUY A PARTICULAR BRAND? 4. WHEN DO THEY BUY AND HOW IS OUR PRODUCT PERCEIVED BY CUSTOMERS? 5. WHAT ARE THE SOCIAL FACTORS THAT INFLUENCE THEIR PURCHASE DECISION? 6. DO CUSTOMERS LIFESTYLES INFLUENCE THEIR DECISIONS ? 7. HOW DO PERSONAL OR DEMOGRAPHIC FACTORS INFLUENCE THE PURCHASE DECISION?
THE BUYING DECISION PROCESS: THE FIVE-STAGE MODEL: THE BASIC PSYCHOLOGICAL PROCESS INFLUENCES WHO, WHAT, WHEN, WHERE, HOW AND WHY CONSUMERS MAKE BUYING DECISIONS AND THE CONSUMER PASSES THRU 5 STAGES 1. PROBLEM RECOGNITION 2. INFORMATION SEARCH 3. EVALUATION OF ALTERNATIVES 4. PURCHASE DECISION 5. POSTPURCHASE BEHAVIOUR.
OTHER THEORIES OF CONSUMER DECISION MAKING: LEVEL OF CONSUMER INVOLVEMENT IN TERMS OF THE LEVEL OF ENGAGEMENT AND THE AND ACTIVE PROCESSING THE CONSUMER RESPONDS TO A MARKETING STIMULUS. ELABORATION LIKELIHOOD MODEL: 1. THE CENTRAL ROUTE BASED ON THE MOST IMPORTANT ATTRIBUTES OF THE PRODUCT. 2. PEREPHERAL CUES WHICH INCLUDE A CELEBRITY ENDORSEMENT OF THE PRODUCT. LOW-INVOLVEMENT MARKETING STRATEGIES: PRODUCTS LIKE SALT, TOOTHPASTE. CONSUMERS WILL REACH OUT AND BUY THE SAME PRODUCT OUT OF HABIT ONLY. VARIETY-SEEKING BUYING BEHAVIOUR- CONSUMERS WILL SWITCH BRANDS FOR VARIETY. EX : BISCUITS- CONSUMERS WILL CHANGE FOR TASTE, PRICE, AVAILIBILITY.
SEARCH DYNAMICS: THE CONSUMER HAS A VARIETY OF CHOICES BEFOR BUYING. EX. CAR, HE CAN CHOOSE FROM COUNTRY OF ORIGIN OR MAKE AND MODEL OF THE CAR. EX. COMPUTER FROM APPLE, DELL, HP, TOSHIBA, COMPAQ, NEC, UNKNOWN BRAND. EVALUATION OF ALTERNATIVES: BASIC CONCEPTS TO UNDERSTAND THE ALTERNATIVES 1. THE CONSUMER IS TRYING TO SATISY A NEED. 2. THE CONSUMER IS LOOKING FOR CERTAIN BENEFITS FROM THE PRODUCT. 3. THE CONSUMER SEES EACH PRODUCT AS A BUNDLE OF ATTRIBUTES AS EXAMPLES: HOTELS- LOCATION, CLEANLINESS, ATMOSPHERE, PRICE MOUTHWASH- COLOUR, EFFECTIVENESS FOR GERM KILLING, TASTE, FLAVOUR, PRICE. TYRES- SAFETY, TREADLIFE, RIDE, QUALIITY, PRICE.
MEMORY PROCESSES: CONSTRUCTIVE PROCESS BECAUSE WE CANT REMEMBER EVERYTHING MEMORY ENCODING SHOWS HOW AND WHERE INFORMATION GETS INTO MEMORY THE GREATER ATTENTION WE PAY TO THE INFORMATION STIMULI, THE GREATER RESPONSE. MEMORY RETRIEVAL IS THE WAY INFORMATION GETS OUT OF MEMORY AS UNDER: 1. THE PRESENCE OF OTHER PRODUCT INFORMATION CAN PRODUCE INTERFERENCE EFFECTS 2. THE TIME BETWEEN EXPOSURE TO INFORMATION AND ENCODING MATTERS. THE LONGER THE TIME DELAY, THE WEAKER THE ASSOCIATION. 3. THE INFORMATION MAY BE AVAILABLE IN MEMORY BUT NOT ACCESSIBLE WITHOUT THE PROPER RETRIEVAL CUES OR REMINDERS. EX MARKETING IN A SUPERMARKET IS CRITICAL FOR PLACEMENT OF PRODUCTS ON AISLES FOR EASY RECALL TO BUY.
A LIFE STYLE IS A PERSONS PATTERN OF LIVING AS ACTIVITIES, INTERESTS, OPINIONS. MARKETERS SEEK THIS MATCH FOR THEIR PRODUCTS EX. COMPUTERS- ACHIEVER. LOHAS- LIFESTYLES OF HEALTH AND SUSTAINIBILITY- ORGANIC FOOD, SOLAR, YOGA. LIFESTYLES ARE WHETHER CONSUMERS ARE MONEY CONSTRAINED OR TIME CONSTRAINED. WALMART- LARGEST COMPANY IN THE WORLD FOR CONVENIENCE SHOPPING. IKEA WITH DO IT YOURSELF FURNITURE FOR VALUE & CONVENIENCE TO DO IT ON OWN. CONSUMERS WHO HAVE TIME CONSTRAINTS WILL MULTITASK OR GET IT DONE BY OTHERS BECAUSE TIME IS MORE IMPORTANT THAN MONEY- RICH ELITE CLASS .
INTERVENING FACTORS: AFTER BRAND EVALUATION, 2 GENERAL FACTORS CAN AFFECT THE PURCHASE INTENTION AND PURCHASE DECISION 1. THE ATTITUDE OF OTHERS THE EXTENT OF THE ATTITUDE OF OTHERS INFLUENCING. 2. OUR MOTIVATION TO COMPLY WITH THE OTHER PERSONS VIEWS ON THE PRODUCT. CONSUMERS DECISION TO MODIFY, POSTPONE, IS PERCEIVED RISK AS UNDER: 1. FUNCTIONAL RISK- THE PRODUCT DOES NOT PERFORM UPTO EXPECTATIONS. 2. PHYSICAL RISK- THE PRODUCT POSES A THREAT TO THE WELL BEING/HEALTH OF OTHERS. 3. FINANCIAL RISK- THE PRODUCT IS NOT WORTH THE PRICE PAID. 4. SOCIAL RISK- THE PRODUCT RESULTS IN EMBARRASMENT FROM OTHERS. 5. PSYCHOLOGICAL RISK- THE PRODUCT AFFECTS THE MENTAL WELL BEING OF USER. 6. TIME RISK- THE FAILURE OF THE PRODUCT RESULTS IN OPPORTUNITY COSTS IN FINDING ANOTHER SATISFACTORY PRODUCT.
OPINION LEADER IS A PERSON WHO INFORMS INFORMAL ADVICE ABOUT A PRODUCT TO A GROUP. MARKETERS ARE AFTER SUCH PEOPLE WHO WILL INFLUENCE THE GROUP. FAMILY: IS THE MOST IMPORTANT BUYING ORGANISATION FOR PRODUCTS IN SOCIETY.. THE FAMILY OF ORIENTATION CONSISTS OF PARENTS AND SIBLINGS WHO INFLUENCE RIGHT FROM CHILDHOOD AND THEY OBSERVE AND BUY PRODUCTS ACCORDINGLY. THE FAMILY OF PROCREATION- IS ONES SPOUSE AND CHILDREN THAT ARE INFLUENCED. RESEARCH SHOWS THAT WOMEN TAKE CARE OF THE BUYING OF HOUSEHOLD PRODUCTS. MAJOR DECISIONS OF BUYING OF HOUSE/FLAT, FURNITURE, FRIDGE, TV, COMPUTER AND OTHER MAJOR PURCHASES ARE JOINTLY DONE BY THE HUSBAND AND WIFE.
CULTURAL FACTORS: CULTURE IS THE FUNDAMENTAL DETERMINANT OF A PERSONS WANTS AND BEHAVIOUR. FAMILY AND OTHER INSTITUTIONS LIKE SCHOOL, COLLEGE, PEERS INFLUENCE BEHAVIOUR. EACH CULTURE CONSISTS OF SUB CULTURES LIKE NATIONALITIES, RELIGIONS, RACIAL GROUPS AND GEOGRAPHIC REGIONS THAT INFLUENCE MARKETING OF ITS PRODUCTS. MARKETERS MUST WATCH CULTURAL VALUES IN EACH REGION FOR THEIR PRODUCTS. MULTICULTURAL MARKETING STARTED ON THE BASIS OF THE BASIC CLASSIFICATION OF GROUPS IN THE US- WHITE, AFRICAN, HISPANIC AND ASIAN AMERICAN. THE SAME IN INDIA- NORTH, SOUTH, EAST, WEST, AND CULTURE OF EACH STATE.
POSTPURCHASE BEHAVIOUR: MARKETING DOES NOT END WITH THE PURCHASE DECISION. POSTPURCHASE SATISFACTION: SATISFACTION IS A FUNCTION OF THE CLOSENESS BETWEEN EXPECTATIONS AND THE PRODUCTS PERCEIVED PERFORMANCE. IF PERFORMANCE FALLS SHORT OF PERFORMANCE THE CONSUMER IS DISSAPOINTED IF THE PRODUCT MEETS EXPECTATIONS- THE CONSUMER IS SATISFIED. IF THE PRODUCT EXCEEDS EXPECTATIONS- THE CONSUMER IS DELIGHTED POSTPURCHASE ACTIONS: IF CONSUMER IS SATISFIED, WILL BUY THE PRODUCT AGAIN. IF UNSATISFIED CONSUMER WILL RETURN THE PRODUCT AND MAY COMPLAIN. POSTPURCHASE USE AND DISPOSAL: MARKETERS SHOULD KNOW HOW CONSUMERS USE AND DISPOSE THEIR PRODUCT. THE FASTER THEY USE THEIR PRODUCT, THE QUICKER THEY WILL COME BACK TO BUY. EX. TOOTHBRUSH HAVE COLOR INDICATORS TO SHOW USAGE. BATTERIES SHOW AN INDICATOR FOR THE AMOUNT OF CHARGE LEFT.
MENTAL ACCOUNTING REFERS TO THE WAY CONSUMERS CODE, CATEGORIZE AND EVALUATE FINANCIAL OUTCOMES OF CHOICES .EX LOSS OF RS 100 TICKET FOR CONCERT. MENTAL ACCOUNTING IS BASED ON THE FOLLOWING KEY CORE PRINCIPLES: 1. CONSUMERS TEND TO SEGREGATE GAINS- WHEN THE PRODUCT HAS MORE DIMENSIONS. 2. CONSUMERS TEND TO INTEGRATE LOSSES- HOME BUYERS EVALUATE THE LOSS OF VALUE. 3. CONSUMERS TEND TO INTEGRATE SMALLER LOSSES WITH LARGER GAINS- WITHOLDING TAXES EVERY MONTH FROM PAY CHECK BETTER THAN ONE LUMP SOME PAYMENT. 4. CONSUMERS TEND TO SEGREGATE SMALL GAINS FROM LARGE LOSSES- THE PRINCIPLE OF POPULARITY OF REBATE OF BIG TICKET PURCHASE ON CARS.
SOCIAL FACTORS LIKE FAMILY, REFERENCE GROUPS, SOCIAL STATUS AFFECTS BEHAVIOUR. REFERENCE GROUPS ARE ALL THE GROUPS THAT HAVE A DIRECT INFLUENCE ON THEIR ATTITUDES OR BEHAVIOUR AND ARE CLASSFIED AS UNDER: PRIMARY GROUPS THAT HAVE DIRECT INFLUENCE, FAMILY, FRIENDS, NEIGHBOURS ETC. THAT HAVE CONSTANT INTERACTION WHICH IS THE MAIN INFLUENCE FOR BEHAVIOUR. SECONDARY GROUPS LIKE MEMBERSHIP WHICH ARE LESS FORMAL & LESS INTERACTION. REFERENCE GROUPS INFLUENCE MEMBERS IN 3 WAYS: 1. THEY EXPOSE AN INDIVIDUAL TO NEW BEHAVIOURS AND LIFE STYLES. 2. THEY INFLUENCE ATTITUDES AND SELF CONCEPT OF THE INDIVIDUAL. 3. THEY CREATE PRESSURES FOR CONFORMITY THAT MAY AFFECT PRODUCT CHOICES.
LEVIS RUGGEDNESS, MTV-EXCITEMENT, CNN-COMPETENCE, CAMPBELLS- SINCERITY. RAYMONDS-BEST DRESSED MALE, HONDA ACCORD-FAMILY CAR, ROLEX-SUCCESS. ACTUAL SELF CONCEPT- CHOOSE BRANDS THAT WE WOULD LIKE OURSELVES TO BE. IDEAL SELF CONCEPT- HOW WE WOULD LIKE TO VIEW OURSELVES. OTHERS SELF CONCEPT- HOW WE THINK OTHERS SEE US LIFESTYLE AND VALUES- PEOPLE FROM THE SAME SUBCULTURE, SOCIAL CLASS AND OCCUPATION MAY LEAD QUITE DIFFERENT LIFESTYLES. 54% OF INDIAN POPULATION IS UNDER 30- APPROX 16 MILLION OR 3 % ARE HIGH EARNING TARGETS BECAUSE THEY SPEND ON EXPENSIVE CLOTHES, FOOD, ENTERTAINMENT, EXPENSIVE HOLIDAYS. LEVIS & HARLEY DAVIDSON HAVE TARGETTED INDIA.
PURCHASE DECISION: TAKEN ON THE BASIS OF 5 SUBDECISIONS AS UNDER 1. BRAND DEPENDING ON ATTRIBUTES AND FEATURES 2. DEALER RELATIONSHIP WITH SALES AND AFTER SALES SERVICE. 3. QUANTITY 4. TIMING- WEEKEND 5. PAYMENT METHOD- CREDIT CARD CONVENIENCE.
NONCOMPENSATORY MODELS OF CONSUMER CHOICE: THE EXPECTANCY VALUE MODEL IS A COMPENSATORY MODEL IN BUYING A PRODUCT TO SEE GOOD THINGS V/S BAD THINGS.
CONSUMERS OFTEN TAKE MENTAL SHORTCUTS CALLED HEURISTICS ARE RULES OF THUMB OR MENTAL SHORTCUTS IN THE DECISION MAKING PROCESS AS UNDER: 1. CONJUNCTIVE HEURISTIC- SETS A MINIMUM CUTOFF LEVEL FOR EACH ATTRIBUTE. 2. LEXICOGRAPHIC HEURISTIC- CHOOSE THE BEST BRAND ON THE BASIS OF ATTRIBUTES. 3. ELIMINATION-BY-ASPECTS HEURISTIC- COMPARES BRAND ATTRIBUTES AND ELIMINATES BRANDS THAT DO NOT MEET MINIMUM ACCEPTABLE CUTOFFS ON BUYING ATTRIBUTES.
ROLES AND STATUS- THE POSITION OF A PERSON IN AN ORGANISATION DEFINES HIS BUYING PATTERN AND MARKETERS TARGET THEM ACCORDINGLY.. PERSONAL FACTORS LIKE AGE, OCCUPATION, SOCIAL STATUS, LIKES AND INCOME. AGE AND STAGE IN THE LIFE CYCLE DETERMINES OUR BUYING PATTERN FOR PRODUCTS.
OCCUPATION AND ECONOMIC CIRCUMSTANCES ALSO INFLUENCE BUYING PATTERNS.

PERSONALITY AND SELF CONCEPT THAT CHARECTERISTICS EACH PERSON HAS TO BUY. BRAND PERSONALITY BY JENNIFER AAKER IDENTIFIED AS UNDER. 1. SINCERITY- DOWN TO EARTH, HONEST, WHOLESOME, AND CHEERFUL 2. EXCITEMENT- DARING, SPIRITED, IMAGINATIVE AND UP TO DATE. 3. COMPETENCE- RELIABLE, INTELLIGENT AND SUCCESSFUL 4. SOPHISTICATION- UPPER CLASS AND CHARMING. 5. RUGGEDNESS- OUTDOORSY AND TOUGH.
CONSUMER BEHAVIOR-CHAPTER 2
SUMMARY OF CONSUMER BEHAVIOR:
1. CONSUMER BEHAVIOR IS INFLUENCED BY THREE FACTORS: A. CULTURAL, CULTURE, SUBCULTRE AND SOCIAL CLASS. B. SOCIAL REFERENCE GROUPS, FAMILY, SOCIAL ROLES AND STATUS. C. PERSONAL FACTORS LIKE AGE, LIFESTYLE, PERSONALITY, SELF CONCEPT. 2. FOUR MAIN PSYCHOLOGICAL PROCESSES AFFECT CONSUMER BEHAVIOUR A. BEHAVIOUR, B. MOTIVATION, C. PERCEPTION, D. LEARNING, E. MEMORY
3. MARKETERS MUST UNDERSTAND WHO MAKES THE BUYING DECISIONS. 4. THE BUYING PROCESS CONSISTS OF PROBLEM RECOGNITION, INFORMATION SEARCH EVALUATION OF ALTERNATIVES, PURCHASE DECISION AND POSTPURCHASE BEHAVIOUR. 5. CONSUMERS ARE DECISION MAKERS AND SUBJECT TO MANY CONTEXTUAL INFLUENCES.
PURCHASE DECISION
ATTITUDES OF OTHERS
UNANTICIPATED SITUATIONAL FACTORS
PURCHASE INTENTION
EVALUATION OF ALTERNATIVES
MARKET SEGMENTATION-CHAPTER 3
WHAT DO YOU MEAN BY MARKET SEGMENTATION? COMPANIES CANNOT CONNECT WITH ALL CUSTOMERS SO THEY DIVIDE MARKETS INTO GROUPS WITH DISTINCT WANTS & NEEDS.
MARKET SEGMENTATION IS TO DIVIDE MARKETS INTO GROUPS WITH DISTINCTIVE WANTS AND NEEDS SINCE THEY CANNOT CONNECT WITH ALL CUSTOMERS.
MARKET TARGETING IS TO SELECT ONE OR MORE MARKET SEGMENTS TO ENTER.
MARKET POSITIONING IS TO COMMUNICATE THE BENEFITS FOR EACH SEGMENT FOR THE COMPANY.
BEHAVIORAL VARIABLES DEPENDS ON THE FOLLWING FACTORS AS UNDER: OCCASIONS: GIFT GIVING FOR DIWALI, CHRISTMAS, VALENTINES DAY, MOTHERS DAY. BENEFITS: NOT EVERYONE WHO BUYS A PRODUCT WANTS THE SAME BENEFIT FROM IT. EX WINE- BUYER GETS IT AS A GIFT OR AS A CONNOISER OF WINE FOR VALUE FOR MONEY. USER STATUS: EVERY PRODUCT HAS ITS NONUSERS, EX-USERS, POTENTIAL USERS, FIRST TIME USERS AND REGULAR USERS. EX. BLOOD BANK DONORS. USAGE RATE- MARKETS SEGMENTED INTO LIGHT, MEDIUM AND HEAVY USERS.HEAVY USERS ARE LOYAL TO ONE BRAND OR NEVER LOYAL TO ONE BRAND TO TRACE THEIR USAGE. BUYER-READINESS STAGE- SOME ARE UNAWARE, AWARE, INFORMED, INTERESTED, DESIRE THE PRODUCT AND SOME INTEND TO BUY THE PRODUCT.
NICHE MARKETING- CUSTOMER GROUP SEEKING A DISTINCTIVE MIX OF BENEFITS. THE CUSTOMERS HAVE A DISTINCT SET OF NEEDS AND WILL PAY PREMIUM PRICES FOR THE PRODUCT. THE NICHE IS SMALL BUT HAS SIZE PROFIT & GROWTH POTENTIAL.EX LEVIS. LARGE COMPANIES LIKE IBM HAVE LOST TO NICHE MARKETERS LIKE DELL, COMPAQ, ETC. HALLMARK IN THE US AND ARCHIES IN INDIA HAVE CAPTURED THE GREETING CARD BIZ. LOCAL MARKETING: REFLECTS A GROWING TREND CALLED GRASSROOTS MARKETING. MARKETING CONCENTRATES TO GETTING AS CLOSE TO THE NEEDS OF THE CONSUMER. EX. STARBUCKS, COSTCO IN THE US. BATA, COLGATE, TIDE, DOVE , PARACHUTE COCONUT OIL. INDIVIDUAL MARKETING- CUSTOMIZED MARKETING OR ONE TO ONE MARKETING-THEY GET ALL INFORMATION FROM INTERENET AND THE PRODUCT IS CUSTOMERIZED FOR THEIR NEEDS. EX. DELL COMPUTERS- YOU CAN DESIGN YOUR OWN COMPUTER ON LINE.
LOYALITY STATUS: MARKETERS HAVE FOUR GROUPS BASED ON BRAND LOYALITY STATUS. 1. HARD CORE LOYALS- CONSUMERS WHO BUY ONLY ONE BRAND ALL THE TIME. 2. SPLIT LOYALS- CONSUMERS ARE LOYAL TO TWO OR THREE BRANDS. 3. SHIFTING LOYALS- CONSUMERS WHO SHIFT LOYALITY FROM ONE BRAND TO THE OTHER. 4. SWITCHERS- CONSUMERS WHO SHOW NO LOYALITY TO ANY BRAND. ATTITUDE- 5 ATTITUDES ENTHUSIASTIC, POSITIVE, INDIFFERENT,NEGATIVE, HOSTILE. THE CONVERSION MODEL MEASURES THE STRENGTH OF CONSUMERS PSYCHOLOGICAL COMMITMENT TO BRANDS AND THEIR OPENNESS TO CHANGE AS FOUR GROUPS. 1. CONVERTIBLE- MOST LIKELY TO DEFECT. 2. SHALLOW- UNCOMMITTED TO A BRAND AND COULD SWITCH. 3. AVERAGE- COMMITTED TO THE BRAND THEY ARE USING AND UNLIKELY TO SWITCH. 4. ENTRENCHED- HIGHLY COMMITTED TO THE BRAND AND UNLIKELY TO SWITCH IN FUTURE.
BEHAVIORAL SEGMENTATION: DIVIDES BUYERS INTO GROUPS ON THE BASIS OF THEIR ATTITUDE, USE OF OR RESPONSE TO A PRODUCT. DECISION ROLES: DEPENDS ON THE MAN OR WOMAN ACCORDING TO THE PRODUCT. MEN WILL BUY THEIR SHAVING AND PERSONAL NEEDS AND WOMEN WILL ACCORDINGLY. PEOPLE PLAY 5 ROLES IN A BUYING DECISION: 1. INITIATOR- A PERSON EXPRESSES A NEED OR WANT TO HAVE A DESIRED PRODUCT. 2. INFLUENCER- THE PERSON IS INFLUENCED BY THE VIEWS OF OTHERS ON THE PRODUCT. 3. DECIDER- THE DECISION IS MADE TAKING INTO CONSIDERATION ALL ALTERNATIVES 4. BUYER- THE BUYER DECIDES TO BUY THE PRODUCT. AND 5. THE USER OF THE PRODUCT.
MARKET SEGMENTS MUST RATE FAVORABLY ON THE FIVE CRITERIA TO BE USEFUL: MEASURABLE: SIZE, PURCHASING POWER & CHARACTERISTICS CAN BE MEASURED. SUBSTANTIAL: THE SEGMENTS ARE LARGE AND PROFITABLE ENOUGH TO SERVE. THE SEGMENT SHOULD BE THE LARGEST HOMOGENOUS GROUP. ACCESSIBLE: THE SEGMENTS CAN BE EFFECTIVELY REACHED AND SERVED. DIFFERENTIABLE: THE SEGMENTS ARE DISTINGUISHABLE AND RESPOND DIFFERENTLY TO DIFFERENT MARKETING MIX ELEMENTS AND PROGRAMS. ACTIONABLE: EFFECTIVE PROGRAMS TO BE FORMED TO ATTRACT & SERVING THE SEGMENTS
THE FOUR GROUPS WITH LOWER RESOURCES ARE: 1. BELEIVERS- CONSERVATIVE, CONVENTIONAL PEOPLE BELIEVE IN TRADITIONAL PRODUCTS. 2. STRIVERS- THEY ARE FUN LOVING PEOPLE TO COPY BUYING PRODUCTS LIKE RICH PEOPLE. 3. MAKERS- THEY ARE DOWN TO EARTH PEOPLE, WORK WITH HANDS & LIKE HOME PRODUCTS. 4. SURVIVORS- ELDERLY PASSIVE PEOPLE WHO ARE CONCERNED WITH CHANGE AND ARE LOYAL TO THEIR FAVORITE BRANDS. MARKETERS HAVE TO UNDERSTAND THE PROFILE OF THEIR CONSUMERS ACCORDING TO THE ABOVE FACTORS AND TARGET THEIR CONSUMERS ACCORDINGLY FOR MARKET SEGMENTATION ON THE BASIS OF PSYCHOGRAPHIC SEGMENTATION.
THE MODEL ALSO CLASSIFIES NON-USERS INTO FOUR GROUPS BASED ON THEIR BALANCE OF DISPOSITION AND OPENNESS TO TRYING A BRAND FROM LOW TO HIGH.
1. STRONGLY UNAVAILABLE- UNLIKELY TO SWITCH WITH PREFERENCE FOR CURRENT BRANDS
2. WEAKLY UNAVAILABLE- NOT AVAILABLE TO THE BRAND BECAUSE THEIR PREFERENCE LIES WITH THE CURRENT BRAND , ALTHOUGH NOT STRONGLY.
3. AMBIVALENT- AS ATTRACTED TO THE BRAND AS THEY ARE TO THE CURRENT BRANDS. 4. AVAILABLE- MOST LIKELY TO SWITCH BRANDS AND ACQUIRED IN THE SHORT RUN.
MEGAMARKETING IS THE STRATEGIC COORDINATION OF ECONOMIC, PSYCHOLOGICAL. POLITICAL AND PUBLIC RELATIONS SKILLS TO GAIN THE COOPERATION OF A NUMBER OF PARTIES TO ENTER AND OPERATE IN A GIVEN MARKET. PEPSI USED MEGAMARKETING TO ENTER THE INDIAN MARKET AFTER COKE LEFT INDIA. JAPANESE ENTER THE CAR MARKET AND THEN CATER TO DIFFERENT SEGMENTS TOYOTA-TERCEL/CORROLA- SMALL CARS, TOYOTA CAMRY-MIDSIZE, LEXUS- LUXURY. ETHICAL CHOICE OF MARKET TARGETS: MARKETERS MUST TARGET SEGMENTS CAREFULLY TO AVOID CONSUMER BACK LASH. MARKET TARGETTING MAY ALSO GENERATE PUBLIC CONTROVERSY. TEACHERS AND PARENTS HAVE MIXED FEELINGS ABOUT MARKETING FOR SCHOOL KIDS. FAST FOOD COMPANIES LIKE MC DONALDS ARE TARGETTED FOR JUNK FOOD ADVERTISING. PEPSI AND COKE ARE TARGETTED FOR COMPETITIVE ADVERSTISING OF THEIR PRODUCTS. CAR COMPANIES HAVE BEEN TARGETTED FOR DECEPTIVE ADVERTISING OF THEIR CARS.
MARKET SEGMENTATION- CHAPTER 3

MARKET TARGETING: ROGER BEST HAS A 7 STEP APPROACH FOR NEEDS-BASED MARKET SEGMENTATION APPROACH. 1. NEEDS-BASED SEGMENTATION- GROUP CUSTOMERS ON THE BASIS OF SIMILAR NEEDS. 2. SEGMENT IDENTIFICATION- DETERMINE WHICH DEMOGRAPHICS, LIFESTYLES AND USAGE BEHAVIOUR MAKES THE SEGMENT DISTINCT AND IDENTIFIABLE. 3. SEGMENT ATTRACTIVENESS- USE MARKET GROWTH, COMPETITIVE INTENSITY AND MARKET ACCESS TO DETERMINE THE OVERALL ATTRACTIVENESS OF EACH SEGMENT. 4. SEGMENT PROFITABILITY- DETERMINE SEGMENT PROFITABILITY. 5. SEGMENT POSITIONING- CREATE VALUE PROPOSITION & PRODUCT PRICE POSITION STRATEGY BASED ON THE THAT SEGMENTS UNIQUE CUSTOMER NEEDS & WANTS. 6. SEGMENT ACID TEST- CREATE SEGMENT STORYBOARD TO TEST EACH POSITION STRATEGY. 7. MARKETING-MIX STRATEGY- EXPAND SEGMENT POSITIONING STRATEGY TO INCLUDE ALL ASPECTS OF THE MARKETING MIX: PRODUCT, PRICE, PROMOTION AND PLACE.
EVALUATING AND SELECTING THE MARKET SEGMENTS: THE COMPANY MUST LOOK AT TWO FACTORS: THE SEGMENTS OVERALL ATTRACTIVENESS AND THE CO.S OBJECTIVES. THERE ARE THREE PATTERNS OF MARKET SELECTION AFTER EVALUATING EACH SEGMENT. SINGLE-SEGMENT CONCENTRATION: THROUGH CONCENTRATED MARKETING THE COMPANY GAINS A KNOWLEDGE OF SEGMENTS NEEDS AND ACHIEVES A STRONG MARKET PRESENCE. IT HAS OPERATING ECONOMIES THRU PRODUCT SPECIALISATION, AND DISTRIBUTION. SELECTIVE SPECIALIZATION: THE CO. SELECTS A NUMBER OF SEGMENTS EACH ATTRACTIVE. THERE MAY BE NO SYNERGY AMONG SEGMENTS BUT EACH IS A MONEYMAKER. PRODUCT SPECIALISATION : THE CO. MAKES A PRODUCT TO SELL TO DIFFERENT SEGMENTS. EX. MICROSCOPE TO SELL TO UNIVERSITY, GOVERNMENT, COMMERCIAL LABORATORIES.
LEVELS OF MARKET SEGMENTATION: TO START SEGMENTATION IS MASS MARKETING, MASS PRODUCTION, MASS PROMOTION MASS DISTRIBUTION OF ONE PRODUCT FOR ALL BUYERS EX. COKE IN A 6.5 OZ BOTTLE. MASS MARKETING CREATES LARGE MARKETS WITH LOWER PRICES & HIGHER MARGINS. NEW TREND IS FOR MICROMARKETING AT 4 LEVELS, SEGMENTS, NICHES,LOCAL,INDIVIDUAL SEGMENT MARKETING IS A GROUP OF CONSUMERS THAT SHARE SIMILAR WANTS & NEEDS. MARKET SEGMENTS ARE CLASSFIED INTO THREE WAYS: 1. HOMOGENOUS PREFERENCES WHEN ALL CONSUMERS HAVE THE SAME PREFERENCES. 2. DIFFUSED PREFERENCES- WHEN CONSUMERS VARY IN THEIR PREFERENCE. 3. CLUSTERED PREFERENCES- NATURAL MARKETS FROM CONSUMERS WITH SHARED PREFS.
MARKET SPECIALIZATION: THE CO. CONCENTRATES ON SERVING MANY NEEDS OF A CUSTOMER GROUP. THE COMPANY CAN SELL AN ASSORTMENT OF GOODS TO A LAB. FULL MARKET COVERAGE: THE CO. SERVES ALL CUSTOMER GROUPS WITH ALL THE PRODUCTS THAT THEY NEED. ONLY LARGE CO.S LIKE GM, MICROSOFT AND COKE CAN DO IT. IN UNDIFFERENTIATED MARKETING THE COMPANY IGNORES SEGMENT DIFFERENCES AND GOES AFTER THE WHOLE MARKET WITH ONE OFFER. THIS APPROACH STANDARDIZES THE MARKETING, PROMOTION AND MANUFACTURE OF THE PRODUCT TO KEEP COST LOW. UNDIFFERENTIATED MARKETING IS THE MARKETING COUNTERPART TO MASS PRODUCTION. IN DIFFERENTIATED MARKETING THE COMPANY OPERATES IN SEVERAL MARKET SEGMENTS AND DESIGNS DIFFERENT PRODUCTS FOR EACH. SOME PRODUCTS FOR MEN & WOMEN. THIS MARKETING INCREASES SALES FOR THE COMPANY BUT THE COSTS WILL INCREASE.
BASIS FOR SEGMENTING CONSUMER MARKETS: 1. GEOGRAPHIC SEGMENTATION: DIVIDING THE MARKETS ACCORDING TO NATIONS, STATES REGIONS, COUNTIES, CITIES AND NEIGHBORHOODS- STOCK PRODUCT FOR LOCAL NEEDS. 2. DEMOGRAPHIC SEGMENTATION: DIVIDING THE MARKET ON THE BASIS OF AGE, FAMILY SIZE, LIFE CYCLE, GENDER, INCOME, EDUCATION, GENERATION, AND SOCIAL CLASS. 3. PSYCHOGRAPHIC SEGMENTATION : IS THE SCIENCE OF USING PSYCHOLOGY AND DEMOCRAPHICS TO BETTER UNDERSTAND CONSUMERS. THE 4 GROUPS WITH HIGHER RESOURCES ARE: A. INNOVATORS- SOPHISTICATED BUYERS WITH GOOD TASTES. B- THINKERS- MATURE CONSUMERS WHO ARE SATISFIED BY VALUE IN THE PRODUCT. C- ACHIEVERS- SUCCESSFUL PEOPLE WHO FOCUS ON CAREER AND FAMILY. D- EXPERIENCER- YOUNG IMPULSIVE PEOPLE WHO SEEK VARIETY AND ENTERTAINMENT.
SUMMARY: 1. TARGET MARKETING INCLUDES MKT.SEGMENTATION, TARGETING & POSITIONING. 2. TARGET MARKETS AT SEGMENTS, NICHES, LOCAL AREAS AND INDIVIDUALS. 3. MORE COMPANIES PRACTICE INDIVIDUAL AND MASS CUSTOMIZATION 4. CONSUMER CHARECTERISTICS AND RESPONSES ARE 2 BASIS FOR SEGMENTATION. 5. MARKETERS USE ALL THESE VARIABLES ALONG WITH OTHER OPERATIONAL VARIABLES. 6. MARKET SEGMENTS MUST BE MEASURABLE, SUBSTANTIAL, ACCESSIBLE, DIFFERENTIABLE AND ACTIONABLE. 7. A COMPANY MUST DECIDE ON SINGLE SEGMENT, SEVERAL SEGMENTS, SPECIFIC PRODUCT SPECIFIC MARKET OR THE FULL MARKET FOR THEIR MARKETING OF THEIR PRODUCTS. 8. MARKETERS MUST DEVELOP SEGMENT-BY-SEGMENT INVASION PLANS AND CHOOSE MARKETS IN A SOCIALLY RESPONSIBLE MANNER.
PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER-4

PRODUCT IS IMPORTANT IN MARKETING & BEHIND A GREAT BRAND IS A GREAT PRODUCT. A PRODUCT IS ANYTHING THAT CAN BE OFFERED TO A MARKET TO SATISFY A WANT OR NEED IN PLANNING, NEEDS TO ADDRESS THE 5 PRODUCT LEVELS CALLED A CUSTOMER VALUE HIERARCHY AND EACH LEVEL ADDS MORE CUSTOMER VALUE. 1. THE FIRST LEVEL IS CORE BENEFIT- CUSTOMER DEPOSITS MONEY AND EARNS INTEREST. 2. THE SECOND LEVEL TO TURN CORE BENEFIT INTO BASIC PRODUCT- BANKING SERVICES 3. AT THIRD LEVEL IT IS EXPECTED PRODUCT- GOOD BANK WITH CONVENIENT LOCATION. 4. AT THE FOURTH LEVEL- AUGUMENTED PRODUCT THAT EXCEEDS CUSTOMER EXPECTATIONS. IN INDIA COMPETION TAKES PLACE AT THE EXPECTED PRODUCT LEVEL ONLY. 5. AT THE FIFTH LEVEL- POTENTIAL PRODUCT WHICH EXCEEDS ALL EXPECTATIONS AND MARKETERS USE THIS LEVEL TO DETERMINE THE FUTURE NEEDS OF THE CONSUMER.
PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT LINE ANALYSIS: COMPANIES DEVELOP A BASIC PLATFORM AND THE PRODUCT IS CHANGED FOR REQUIREMENTS. EX. CAR BUILDERS BASIC MODEL- MODEL HOME. PRODUCT LINE MANAGERS NEED TO KNOW THE SALES AND PROFITS FOR EACH ITEM IN THEIR LINE TO DETERMINE WHICH ITEMS TO BUILD, MAINTAIN, DIVEST AND UNDERSTAND EACH PRODUCT LINES MARKET PROFILE.
A COMPANY CAN CLASSIFY ITS PRODUCTS INTO FOUR TYPES THAT YIELD DIFFERENT GROSS MARGINS DEPENDING ON SALES VOLUME AND PROMOTION EX. LAP TOP COMPUTERS. 1. CORE PRODUCTS- BASIC LAPTOP COMPUTERS THAT PRODUCE HIGH SALES VOLUMES.
2. STAPLES- ITEMS AS FASTER CPUS WITH HIGH MARGINS, LOWER SALES, NO PROMOTION. 3. SPECIALITIES- ITEMS WITH LOWER SALES VOLUME BUT PROMOTED- DIGITAL EQUPMENT. 4. CONVENIENCE ITEMS- ADD ON ITEMS LIKE CARRYING CASES WITH HIGH VOLUME.

CO-BRANDING AND INGREDIENT BRANDING: C0-BRANDING IS WHEN TWO OR MORE WELL KNOWN BRANDS ARE COMBINED INTO A JOINT PRODUCT OR MARKETED TOGETHER IN SOME FASHION EX.KFC,PIZZA HUT,TACO BELL CO-BRANDINGS ADVANTAGE IS TO POSITION IN THE PRODUCT WITH MILTIPLE BRANDS. CO-BRANDING BRINGS ADDITIONAL SALES FROM EXISTING MARKETS AND OPENS NEW CONSUMERS AND REDUCES THE COST OF PRODUCTION SINCE COMBINING TWO BRANDS. THE DISADVANTAGE OF CO-BRANDING IS CONFUSION OF THE CONSUMERS ABOUT BRANDS. INGREDIENT BRANDING IS A SPECIAL CASE OF CO-BRANDING WHICH CREATES BRAND EQUITY FOR MATERIALS OR COMPONENTS CONTAINED WITH OTHER BRANDED PRODUCTS. EX. DOLBY NOISE REDUCTION IN BOSE SPEAKERS. SUBWAY SANDWICHES & LAYS CHIPS.

PACKAGING MUST ACHIEVE THE FOLLOWING OBJECTIVES FOR CONSUMERS AND COMPANY: 1. IDENTIFY THE BRAND. 2. CONVEY DESCRIPTIVE AND PERSUASIVE INFORMATION. 3. FACILITATE PRODUCT TRANSPORTATION AND PROTECTION. 4. ASSIST AT HOME STORAGE 5. AID PRODUCT CONSUMPTION. PACKAGING SHOULD HAVE AESTHETIC CONSIDERATIONS TO COLOUR, SHAPE AND SIZE . IT MUST PASS ENGINEERING TESTS TO STAND NORMAL CONDITIONS, VISUAL TESTS, DEALER TEST TO FIND PACKAGING ATTRACTIVE AND FINALLY CONSUMER TESTS.

PACKAGING, LABELLING, WARRANTIES, AND GUARANTEES: MANY MARKETERS CONSIDER PACKAGING AS THE 5TH P AFTER PROMOTION. PACKAGING IS ALL ACTIVITIES OF DESIGNING & PRODUCING THE CONTAINER FOR PRODUCT. PACKAGING MAY INCLUDE UPTO THREE LEVELS OF MATERIAL. PRIMARY PACKAGE- COLOGNE COMES IN A BOTTLE. SECONDARY PACKAGE- THE BOTTLE IS PLACED IN A CARDBOARD BOX. SHIPPING PACKAGE- CONTAINING SIX DOZEN BOXES. PACKAGE IS THE BUYERS FIRST ENCOUNTER WITH THE PRODUCT AND THE PACKAGING CAN EITHER TURN ON OR OFF THE CUSTOMER TO AFFECT FUTURE EXPERIENCES.

GOOD PACKAGING CREATES THE FOLLOWING OPPORTUNITIES FOR CONSUMERS. 1. SELF SERVICE: SUPERMARKETS STOCK 15,000 ITEMS, THEY PASS 300 ITEMS PER MINUTE. PACKAGING SHOULD ATTRACT ATTENTION, DESCRIBE FEATURES, CREATE CONFIDENCE. 2. CONSUMER INFLUENCE- CONSUMERS ARE WILLING TO PAY MORE FOR CONVENIENCE, APPEARANCE, DEPENDABILITY AND PRESTIGE OF BETTER PACKAGING. 3. COMPANY & BRAND IMAGE- PACKAGING CONTRIBUTES TO INSTANT RECOGNITION OF THE COMPANY AND BRAND WHICH CAN CREATE A VISIBLE BILLBOARD EFFECT IN THE STORE. 4. INNOVATION OPPORTUNITY- INNOVATATIVE PACKAGING BRING LARGE BENEFIT TO CONSUMERS AND PROFIT TO PRODUCERS. EX. HEINZ UNIQUE UPSIDE-DOWN BOTTLE HAS HELPED TO REVITALIZE BRAND SALES.
PRODUCT AND NEW PRODUCT DEVELOPMENT- CHAPTER 4

LABELING: IS A SIMPLE TAG ATTACHED TO THE PRODUCT FOR INFORMATION OF PRODUCT. LABELS PERFORM SEVERAL FUNCTIONS AS UNDER: 1. THE LABEL IDENTIFIES THE PRODUCT OR BRAND- SUNKIST WITH ORANGES. 2. THE LABEL MUST ALSO GRADE THE PRODUCT. 3. THE LABEL MUST ALSO DESCRIBE THE PRODUCT ABOUT WHERE IT IS MADE, ETC. 4. LABELING ALSO HELPS TO PROMOTE THE PRODUCT BY ATTRACTIVE GRAPHICS. WARRANTIES AND GUARANTEES: WARRANTIES ARE FORMAL STATEMENTS OF EXPECTED PRODUCT PERFORMANCE BY MFG. ALL SELLERS ARE RESPONSIBLE TO SATISFY A BUYERS REASONABLE EXPECTATIONS. PRODUCTS UNDER WARRANTY CAN BE RETURNED FOR REPAIR, REPLACEMENT OR REFUND. EXTENDED WARRANTIES ARE VERY LUCRATIVE FOR MANUFACTURERS AND RETAILIERS. EX. A.T. CROSS GUARANTEES THEIR PENS FOR LIFETIME FOR REPAIR, REPLACE NO CHARGE.

SERVICES DIFFERENTIATION: WHEN THE PHYSICAL PRODUCT CANNOT BE DIFFERENTIATED. 1. ORDERING EASE: REFERS HOW EASY IT IS FOR A CONSUMER TO PLACE AN ORDER. 2. DELIVERY: REFERS TO HOW WELL THE PRODUCT OR SERVICE IS BROUGHT TO CUSTOMER. 3. INSTALLATION: EASE OF INSTALLATION AND WORK DONE TO MAKE IT OPERATIONAL. 4. CUSTOMER TRAINING: HOW WELL THE EMPLOYEES ARE TRAINED FOR SERVICING. 5. CUSTOMER CONSULTING- DATA, INFORMATION SYSTEMS AND ADVICE TO CUSTOMERS. 6. MAINTENANCE AND REPAIR: DESCRIBES THE SERVICE PROGRAM FOR CUSTOMERS. 7. RETURN POLICY OF THE COMPANY FOR DEFECTIVE PRODUCTS- 5% EXCHANGE/RETURN.

DOWN-MARKET STRETCH: A COMPANY IN THE MIDDLE MARKET MAY WANT TO INTRODUCE A LOWER PRICED LINE FOR ANY OF THE THREE REASONS: 1. THE COMPANY WAY WANT TO ATTRACT CUSTOMERS FOR VALUE PRICED GOODSWALMART. BEST BUY, MOORE. 2. THE COMPANY MAY WANT TO TIE UP LOWER END COMPETITORS FROM MOVING UP. 3. THE COMPANY MAY FIND THAT THE MIDDLE MARKET IS STAGNATING OR DECLINING. UP-MARKET STRETCH: COMPANIES WANT TO ENTER THIS MARKET TO ACHIEVE MORE GROWTH, HIGHER MARGINS OR TO SHOW THAT THEY ARE FULL SCALE MANUFACTURERS. EX.JAPANESE CARS HAVE TOYOTA LEXUS, NISSANS INFINITI AND HONDAS ACURA. TWO-WAY STRETCH: COMPANIES MAY WANT TO STRETCH THEIR LINE IN BOTH DIRECTIONS.

THE PRODUCT HIERARCHY: SIX LEVELS USING LIFE INSURANCE AS AN EXAMPLE.
1. NEED FAMILY- THE CORE NEEDS OF THE EXISTENCE OF A PRODUCT FAMILY-SECURITY.

2. PRODUCT FAMILY- ALL PRODUCTS SATISFIES A CORE NEED WITH REASONABLE EFFECTIVENESS: EX SAVINGS AND INCOME.
3. PRODUCT CLASS- A GROUP OF PRODUCTS HAVING FUNCTIONAL COHERENCE- FINANCIAL

4. PRODUCT LINE: A GROUP OF PRODUCTS THAT ARE CLOSELY RELATED BECAUSE THEY PERFORM A SIMILAR FUNCTION AND SOLD TO SAME CUSTOMERS- LIFE INSURANCE. 5.PRODUCT TYPE: A PRODUCT LINE THAT HAS THE SAME FORMS- EX. TERM LIFE INSURANCE 6. STOCKKEEPING UNIT: A DISTINCT UNIT WITH AN ATTRIBUTE-RENEWABLE TERM INSURANCE.

DIFFERENTIATION: TO BE BRANDED PRODUCTS MUST BE DIFFERENTIATED EX. TATA STEEL, TIDE, PARLE-G, 50/50 FROM BRITANNIA, MYSORE SANDAL WOOD SOAP. PRODUCT DIFFERENTIATION: FORM: MANY PRODUCTS CAN BE DIFFERENTIATED BY FORM, SHAPE AND SIZE, STRUCTURE EX. ASPIRIN DIFFERENTIATED BY DOSAGE SIZE, SHAPE, COLOR, COATING, ACTION TIME. FEATURES: PRODUCTS OFFERED WITH DIFFERENT FEATURES TO SUPPLEMENT FUNCTION. EX. CELL PHONE FROM BASIC FEATURES TO I-PHONE AND BLACKBERRY. CUSTOMIZATION : MASS CUSTOMIZATION IS THE ABILITY OF A COMPANY TO MEET EACH CUSTOMERS REQUIREMENTS. EX. BMV & MERCEDES CAR. PERFORMANCE QUALITY: IS THE LEVEL AT WHICH THE PRODUCTS PERFORMANCE OPERATES LOW, AVERAGE, HIGH OR SUPERIOR.

LINE FILLING: A COMPANY MAY ALSO ADD MORE ITEMS INTO THEIR LINE FOR PROFITS, SATISFY THE NEEDS OF THE CUSTOMER, UTILIZE EXCESS CAPACITY , PLUG COMPETITION. LINE MODERNIZATION, FEATURING AND PRUNING:
PRODUCT LINES NEED TO BE MODERNIZED PERIODICALLY TO RETAIN MARKET- CARS. PRODUCT LINE MANAGERS NEED TO CHOOSE ONLY SOME ITEMS TO FEATURE THAT ARE GOOD SELLERS AND MIX WITH ITEMS THAT ARE NOT SELLING- LOSS LEADERS. PRODUCT LINE MANAGERS MUST CONSTANTLY REVIEW ITEMS THAT ARE NOT SELLING OR DEAD WOOD PRUNING THE LINE TO REDUCE LOSSES AND INTRODUCE NEW ITEMS.

CONFORMANCE QUALITY : IS EXPECTED BY BUYERS OF ALL THE PRODUCTS PURCHASED. DURABILITY IS A MEASURE OF THE PRODUCTS EXPECTED LIFE UNDER NORMAL CONDITIONS.
RELIABILITY IS A GAUGE THAT A PRODUCT WILL NOT MALFUNCTION IN A PERIOD OF TIME.
REPAIRBILITY IS A MEASURE OF FIXING A PRODUCT WHEN IT MALFUNCTION OR FAILS. STYLE: DESCRIBES THE PRODUCTS LOOK AND FEEL TO THE BUYER. DESIGN: IS THE TOTALITY OF THE PRODUCTS FEATURES FOR CUSTOMER REQUIREMENTS.

PRODUCT SYSTEMS AND MIXES: A PRODUCT SYSTEM IS A GROUP OF DIVERSE RELATED ITEMS THAT WORK COMPATABILY. A PRODUCT MIX IS THE SET OF ALL PRODUCTS AND ITEMS A SELLER OFFERS FOR SALE. A COMPANYS PRODUCT MIX HAS THE FOLLOWING CHARECTERISTICS: 1. WIDTH OF A PRODUCT SHOWS HOW MANY PRODUCT LINES THE COMPANY CARRIES. 2. THE LENGTH OF A PRODUCT MIX IS THE TOTAL NUMBER OF ITEMS IN THE MIX. 3. THE DEPTH OF A PRODUCT MIX SHOWS HOW MANY VARIANTS ARE IN EACH LINE EX TIDE COMES IN TWO SCENTS AND COMES IN POWDER AND LIQUID FORM. 4. THE CONSISTENCY OF THE PRODUCT MIX SHOWS HOW CLOSELY THE VARIOUS PRODUCT LINES ARE IN END USE, PRODUCTION, DISTRIBUTION CHANNELS OR SOME OTHER WAY.
PRODUCT AND NEW PRODUCT DEVELOPMENT- CHAPTER 4.

MARKET PROFILE: PRODUCT MANAGER SEE HOW THE LINE IS AGAINST COMPETITION LINE. PRODUCT MAP SHOWS WHICH COMPETITORS ITEMS ARE COMPETING AGAINST OUR LINE.
PRODUCT LINE LENGTH- COMPANYS OBJECTIVES INFLUENCE PRODUCT LINE LENGTH TO INDUCE UPSELLING- GM WOULD LIKE TO MOVE CUSTOMERS FROM CHEVROLET TO BUICK TO CADILLAC. SIMILAR WITH MARUTI, HONDA, HUYUNDAI FROM BASIC TO LUXURY MODELS
A COMPANY LENGTHENS IS PRODUCT LINE BY 1. LINE STRETCHING 2. LINE FILLING. LINE STRETCHING OCCURS WHEN A COMPANY LENGTHENS ITS PRODUCT LINE BEYOND ITS CURRENT RANGE. IT CAN STRETCH ITS LINE DOWN-MARKET, UP-MARKET OR BOTH WAYS.
PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER-4

PRODUCT CLASSIFICATIONS: ON DURABILITY, TANGIBILITY AND CONSUMER/INDUSTRIAL USE. DURABILITY AND TANGIBILITY: CLASSIFIED INTO THREE GROUPS 1. NONDURABLE GOODS THAT ARE CONSUMED FREQUENTLY EX.SOAP- SMALL MARKUP. 2. DURABLE GOODS THAT LAST LONGER AND REQUIRE SELLING AND AFTER SALES-FRIDGE 3. SERVICES ARE INTANGIBLE & REQUIRE SUPPLIER CREDIBILITY- LEGAL ADVICE. CONSUMER GOODS CLASSIFICATION: 1. CONVENIENCE GOODS- BOUGHT FREQUENTLY WITH MINIMUM EFFORT, NEWSPAPERS ETC 2. SHOPPING GOODS- GOODS THAT CONSUMERS COMPARE WITH PRICE, QUALITY .CLOTHES 3. SPECIALITY GOODS- THAT HAVE UNIQUE CHARECTERISTICS EX. MERCEDES CAR. 4. UNSOUGHT GOODS THAT HE IS UNAWARE LIKE LIFE INSURANCE, CEMETRY PLOTS.
PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER -4

INDUSTRIAL GOODS CLASSIFICATION: 1. MATERIAL AND PARTS THAT ENTERS THE MANUFACTURE OF THE PRODUCT COMPLETELY. RAW MATERIALS FARM PRODUCTS, WHEAT, COTTON, NATURAL PRODUCTS-FISH MANUFACTURED MATERIALS AND PARTS- COMPONENT MATERIALS- IRON, CEMENT COMPONENT PARTS ENTER THE FINISHED PRODUCT WITH NO CHANGE IN FORM. 2. CAPITAL ITEMS ARE LONG LASTING GOODS THAT DEVELOP THE FINISHED PRODUCT. INSTALLATION- CONSISTS OF BUILDINGS AND HEAVY EQIPMENT FOR MAJOR PURCHASES. EQUIPMENT- INCLUDES PORTABLE FACTORY EQUIPMENT, LIKE COMPUTERS ETC. 3. SUPPLIES AND BUSINESS SERVICES ARE SHORT TERM GOODS FOR THE FINISHED PRODUCT. MAINTENANCE AND REPAIR ITEMS, PAINT, OPERATING SUPPLIES- LUBRICANT, PENCILS. BUSINESS SERVICES INCLUDE MAINTENANCE AND REPAIR SERVICES- COPIER REPAIR BUSINESS ADVISORY SERVICES- LEGAL, MANAGEMENT, CONSULTING, ADVERTISING.
PRODUCT AND NEW PRODUCT DEVELOPMENT- CHPT 4 SUMMARY

1. PRODUCT IS THE FIRST AND MOST IMPORTANT ELEMENT OF THE MARKETING MIX. 2. IN MARKET OFFERING- THE MARKETER NEEDS TO THINK OF FIVE LEVELS OF PRODUCT. 3. PRODUCTS ARE DURABLE, RELIABLE, DURABLE AND NON DURABLE GOODS. 4. BRANDS CAN BE DIFFERENTIATED ON THE BASIS OF DIFFERENT PRODUCT OR SERVICE. 5. A PRODUCT MIX- CLASSIFIED AS TO WIDTH, LENGTH, DEPT AND CONSISTENCY. 6. A COMPANY MAY CHANGE THE PRODUCT BY LINE FILLING, STRETCHING, PRUNING. 7. CO- BRANDING IS MARKETING JOINTLY WITH OTHER BRANDS TO INCREASE SALES. 8. PRODUCTS MUST BE PACKAGED AND LABELED TO CREATE APPEAL & VALUE .
PRICING- CHAPTER 5
PRICE IS ONE ELEMENT OF THE MARKETING MIX THAT PRODUCES REVENUE-OTHERS COSTS. PRICE IS THE EASIEST ELEMENT TO ADJUST AND ALSO COMMUNICATES TO THE MARKET THE POSITIONING OF ITS PRODUCT OR BRAND EX. GILLETTTE REVEALS POWER OF PRICING. UNDESTANDING PRICING: PRICE IS NOT JUST A NUMBER OR TAG- IT COMES IN MANY FORMS RENT, TUTION, WAGES, COMMISSIONS- YOU PAY THE PRICE FOR SOME GOODS OR SERVICE. IT IS MADE UP OF MANY COMPONENTS- BUY A NEW CAR, THE STICKER PRICE CAN BE ADJUSTED BY MANY INCENTIVES OFFERED BY THE DEALER. PRICE IS THE MAJOR DETERMINANT OF BUYERS CHOICE. CONSUMERS PUT PRESURE ON RETAILERS TO REDUCE PRICE AND RETAILERS PUT PRESSURE ON MANUFACTURERS. AS A RESULT THE MARKETPLACE IS HEAVILY DISCOUNTED WITH SALES
PRICING- CHAPTER 5
SETTING THE PRICE FOR THE FIRST TIME WHEN COMPANY INTRODUCES A PRODUCT AS : STEP 1: SELECTING THE PRICING OBJECTIVES: THE COMPANY FIRST DECIDES WHERE IT WANTS TO POSITION ITS MARKET OFFERING WITH FIVE OBJECTIVES AS UNDER: 1. SURVIVAL- MAJOR OBJECTIVE IF OVERCAPACITY, COMPETITION AND AS LONG AS PRICE COVERS VARIABLE COSTS AND SOME FIXED COSTS AND TO BE IN BUSINESS. 2. MAXIMUM CURRENT PROFIT: SET A PRICE THAT WILL MAXIMIZE CURRENT PROFITS. 3. MAXIMUM MARKET SHARE: HIGHER SALES VOLUME FOR LOW COSTS & HIGHER PROFITS. 4. MAXIMUM MARKET SKIMMING: START PRICE HIGH AND THEN LOWER EX. SONY TV. 5. PRODUCT QUALITY LEADERSHIP: AIM TO BE THE PRODUCT LEADER IN THE MARKET.
PRICING-CHAPTER 5
STEP 2: ESTIMATING COSTS: DEMAND SETS A CELING ON THE PRICE TO CHARGE FOR PRODUCT.COST SHOULD COVER PRODUCTION, DISTRIBUTION, SELLING & PROFIT. TYPES OF COSTS AND LEVELS OF PRODUCTION: FIXED COSTS: OVERHEADS LIKE RENT, SALARIES THAT DO NOT VARY WITH PRODUCTION/SALE
VARIABLE COSTS VARY DIRECTLT WITH THE LEVEL OF PRODUCTION OF UNITS/ SALES.
TOTAL COSTS INCLUDE THE SUM OF ALL FIXED AND VARIABLE COSTS FOR A PRODUCT. AVERAGE COST IS THE TOTAL COST OF PRODUCTION DIVIDED BY NO. OF UNITS.
ACCUMULATED COST CHANGES WITH THE QUANTITY OF PRODUCTION.

TARGET COST IS THE COST TO AFTER TARGETTING WHAT THE PRODUCT SHOULD SELL AT.
PRICING-CHAPTER 5
STEP 3: ANALYZING COMPETITORS COSTS, PRICES AND OFFERS: THE COMPANY SHOULD FIX THE COST COMPARING THE FEATURES WITH THE NEAREST COMPETITOR AND CHANGE/ ADD FEATURES ACCORDINGLY. STEP 4: SELECTING A PRICING METHOD: 1. MARKUP PRICING WHICH IS TO USE THE STANDARD MARK UP AS UNDER: VARIABLE COST PER UNIT RS 10 FIXED COSTS RS 300,000 EXPECTED UNIT SALES RS 50,000 THE MFG UNIT COST IS GIVEN BY: UNIT COST= VARIABLE COST + FIXED COSTS DIVIDED BY UNIT SALES 10 + 300,000 DIVIDED BY 50,000= RS 16 SUPPOSE YOU WANT A 20% MARK UP ON SALES MARKUP PRICE= UNIT COST DIVIDED BY 1-DESIRED RETURN = RS 16/1-O.2= RS 20 THE MFG WILL CHARGE THE DEALER RS 20 AND MAKE A PROFIT OF RS 4 PER UNIT IF 50% ON SELLING PRICE- MARK UP 100% TO RS 40 PER UNIT.
PRICING- CHAPTER 5
. PERCEIVED VALUE PRICING ACCORDING TO THE FOLLOWING VARIABLES: BUYERS IMAGE OF THE PRODUCT PERFORMANCE THE CHANNEL DELIVERABLES THE WARRANTY QUALITY CUSTOMER SUPPORT AND ATTRIBUTES OF ESTEEM, REPUTATION AND TRUSTWORTHINESS. EX. CATERPILLAR PRICED AT RS 100,000 WHILE COMPETITION PRICED AT RS 90,000 RS 90, 000 IS THE TRACTORS PRICE IF ONLY EQUIVALENT TO THE COMPETITOR. RS 7,000 IS THE PRICE PREMIUM FOR CATERPILLARS SUPERIOR DURABILITY RS 6,000 IS THE PRICE PREMIUM FOR CATERPILLARS SUPERIOR RELIABILITY RS 5, 000 IS THE PRICE PREMIUM FOR CATERPILLARS SUPERIOR SERVICE. RS 2, 000 IS THE PRICE PREMIUM FOR CATERPILLARS LONGER WARRANTY ON PARTS. RS 110,000 IS THE NORMAL PRICE TO COVER CATERPILLARS SUPERIOR VALUE. RS 10, 000 DISCOUNT RS 10, 000- FINAL PRICE. THE KEY TO PERCEIVED VALUE PRICING IS TO DELIVER MORE VALUE THAN COMPETITOR.
PRICING-CHAPTER 5
. VALUE PRICING: WIN LOYAL CUSTOMERS BY CHARGING LOW FOR QUALITY OFFEREING. EX WALMART FOR EVERYDAY LOW PRICING EDLP FOR ALL CUSTOMERS . DOLLAR STORES- SAME CONCEPT SHOULD BE IN INDIA. EVERYTHING RS 100. EDLP IS ADOPTED BECAUSE CONSTANT SALES AND PROMOTIONS ARE COSTLY. . GOING RATE PRICING IS THE PRICE FIXED ACCORDING TO COMPETITION AND MARKET. EX. PETROL PRICES IN THE US.- SOME CHARGE LESS OR MORE AND CONVENIENCE TOO. . AUCTION TYPE PRICING FOR VOLUME USERS WITH THE INTERNET AND EBAY. . SELECTING THE FINAL PRICE BASED ON THE ABOVE STEPS BASED ON THE COMPANYS POLICY, IMPACT OF OTHER MARKETING ACTIVITIES,
PRICING-CHAPTER 5
2. TARGET RETURN PRICING: THE COMPANY DECIDES WHAT % RETURN ON INVESTMENT. SUPPOSE THE MFG. HAS INVESTED RS 10 LAKHS AND WANTS 20% ROI= 200,000 TARGET RETURN PRICE-UNIT COST + DESIRED RETURNX INVESTED CAPITAL/ UNIT SALES = 16 + .20 X 10,00000/ 50,000 = RS 20. IF SALES DONT REACH 50,000 UNITS THE MANUFACTURER CAN DO A BREAK EVEN ANALYSIS AND THE FORMULA IS UNDER: BREAK EVEN VOLUME= FIXED COST DIVIDED BY PRICE-VARIABLE COST = 300,000 DIVIDED BY RS20-10 = 30,000. THE BREAKEVEN VALUE IS AT 30,000 UNITS.
PRICING-CHAPTER 5
GEOGRAPHICAL PRICING: ACCORDING TO CONSUMERS IN DIFFERENT COUNTRIES. PROMOTIONAL PRICING: LOSS LEADER PRICING- SUPERMARKETS USE THIS APPROACH TO BRING CUSTOMERS IN. SPECIAL EVENT PRICING: PRICING FOR SPECIAL EVENTS LIKE DIWALI AND CHRISTMAS CASH REBATES FOR PURCHASE OF ITEMS IN A CERTAIN TIME PERIOD. LOW INTEREST FINANCING AND LONGER PAYMENT TERMS- CAR PURCHASES. WARRANTIES AND SERVICE CONTRACTS FREE FOR BIG TICKET ITEMS LIKE CARS, TVS ETC. PSYCHOLOGICAL DISCOUNTING: ITEM WAS RS 299, NOW RS 199 FOR A LIMITED PERIOD.
PRICING- CHAPTER 5
DIFFERENTIATED PRICING: PRICE DISCRIMINATION WHEN A COMPANY SELLS THE SAME PRODUCT AT DIFFERENT PRICES AT DIFFERENT LOCATIONS. SECOND DEGREE PRICE DISCRIMINATION WHEN THE SELLER CAHARGES LESS FOR VOLUME. THE THIRD DEGREE PRICE DISCRIMINATION FOR DIFFERENT PRICES AS UNDER : CUSTOMER SEGMENT PRICING- MUSEUMS CHARGE LESS FOR STUDENTS, SR. CITIZENS. PRODUCT FORM PRICING: DIFFERENT VERSIONS ARE PRICED DIFFERENT AS PER PACKAGE. IMAGE PRICING- PERFUME MFG. PUT SAME PERFUME IN DIFFERENT BOTTLES. CHANNEL PRICING- COKE PRICES IF YOU BUY IN A RESTAURANT OR A SMALL STORE. LOCATION PRICING- THEATRE PRICING FOR DIFFERENT SEATS FOR A MOVIE. TIME PRICING- PRICES ARE ACCORDING TO TIME OF DAY, WEEK DAY AND WEEKEND.
PRICING- CHAPTER 5
A CHANGING PRICING ENVIRONMENT: BUYERS CAN: GET INSTANT PRICE COMPARISON FROM VENDORS ON ANY PRODUCT IN THE MARKET. NAME THEIR PRICE AND GET IT ON PRICELINE.COM FOR THE BEST PRICE ON AIRLINE ETC. GET PRODUCTS FREE BY BUYING ONE PRODUCT AND GETTING ANOTHER FREE/DISCOUNTED. SELLERS CAN: MONITOR CUSTOMER BEHAVIOUR AND TAILOR OFFERS TO INDIVIDUALS. GIVE CERTAIN CUSTOMERS ACCESS TO SPECIAL PRICES.
PRICING-CHAPTER 5
HOW COMPANIES PRICE: IN SMALL COMPANIES, PRICES ARE FIXED BY THE BOSS ON HIS INFORMATION ABOUT COSTS. IN LARGE COMPANIES IT IS FIXED BY A DIVISION REPORTING TO THE MARKETING DIVISION. CONSUMER PSYCHOLOGY AND PRICING TO BE FIXED. THE 99C CONCEPT, 50% OFF, FREE. REFERENCE PRICES BY CONSUMERS ON SAME PRODUCT BY DIFFERENT COMPANIES. PRICE-QUALITY INFERENCES BY CONSUMERS WHO USE PRICE AS AN IDICATOR OF QUALITY AND IMAGE. A RS 1000 BOTTLE OF PERFUME MAY ONLY CONTAIN RS 100 OF PERFUME BUT THE GIFT GIVER GIVES THE IMPRESSION FOR HIGH REGARD FOR THE RECEIVER. PRICE ENDING- CONSUMERS SEE PRICE AS 299 IN THE 200 RANGE AND NOT 300 RANGE.
PRICING-CHAPTER 5
DETERMINING DEMAND BY THE RELATIONSHIP BETWEEN PRICE AND DEMAND. IN NORMAL CASES, HIGHER THE PRICE, LOWER THE DEMAND. SOME CONSUMERS THINK HIGHER THE PRICE, BETTER QUALITY, PRICE TOO HIGH- DEMAND FALLS. PRICE SENSITIVITY: TO ESTIMATE DEMAND IS TO WHAT AFFECTS PRICE SENSITIVITY. CONSUMERS ARE LESS SENSITIVE TO PRICE FOR LOW COST ITEMS, DO NOT NOTICE THE HIGHER PRICE, HIGHER PRICE IS JUSTIFIED AND SLOW TO CHANGE BUYING HABITS. ESTIMATING DEMAND CURVES: BY USING DIFFERENT METHODS SURVEYS- EXPLORE HOW MANY UNITS CONSUMERS WILL BUY AT DIFFERENT PRICE LEVELS. PRICE EXPERIMENTS- VARY THE PRICES OF DIFFERENT PRODUCTS AT DIFFERENT PRICES. STATISTICAL ANALYSIS- PAST PRICES, QUANTITIES SOLD, AND OTHER FACTORS INVOLVED. PRICE ELASTICITY OF DEMAND- MARKETERS NEED TO KNOW HOW RESPONSIVE OR ELASTIC DEMAND WOULD BE TO A CHANGE IN PRICE.
PRICING- CHAPTER 5 SUMMARY

1. PRICE IS THE ONLY ELEMENT THAT PRODUCES REVENUE, OTHERS PRODUCE COSTS. 2. TO SET PRICING POLICY A COMPANY FOLOWS A SIX STEP PROCEDURE. 3. COMPANIES DO NOT HAVE A FIXED PRICE AND CHANGES ACCORDING TO FACTORS. 4. COMPANIES NEED TO CHANGE PRICES AFTER DEVELOPING PRICING STRATEGIES DEPENDING ON MANY FACTORS LIKE CAPACITY UTILIZATION, , RECESSION ETC. 5. COMPANIES MUST ANTICIPATE COMPETITOR PRICE CHANGES AND ACT ACCORDINGLY. 6. A COMPANY MUST UNDERSTAND COMPETITORS CHANGE IN PRICES AND HOW AND WHEN IT WILL LAST TO DEVELOP A STRATEGY ACCORDINGLY.
ADVERTISING AND SALES PROMOTION CHAPTER-6

ADVERTISING IS ANY PAID FORM OF NONPERSONAL PRESENTATION AND PROMOTION OF IDEAS, GOODS OR SERVICES BY AN IDENTIFIED SPONSOR. ADS ARE A COST EFFECTIVE WAY TO SEND MESSAGES TO EDUCATE PEOPLE ABOUT PRODUCT THE 5 MS IN DEVELOPING AN ADVERTISING PROGRAM ARE:
1. MISSION: WHAT ARE YOUR ADVERTISING OBJECTIVES?

2. MONEY: HOW MUCH MONEY CAN WE SPEND? 3. MESSAGE: WHAT MESSAGE SHOULD WE SEND? 4. MEDIA: WHAT MEDIA SHOULD WE USE? 5. MEASUREMENT: HOW SHOULD WE EVALUATE THE RESULTS?
ADVERTISING AND SALES PROMOTION CHAPTER 6

SETTING THE ADVERTISING OBJECTIVES: AN ADVERTISING GOAL IS A SPECIFIC COMMUNICATIONS TASK AND ACHIEVEMENT LEVEL TO BE ACCOMPLISHED WITH A SPECIFIC AUDIENCE IN A SPECIFIED PERIOD OF TIME. ADVERTISING OBJECTIVES CAN BE CLASSIFIED AS UNDER: INFORMATIVE ADVERTISING- TO CREATE BRAND AWARENESS OF NEW PRODUCTS. PERSUASIVE ADVERTISING: TO CREATE A LIKING TO PURCHASE A NEW PRODUCT . REMINDER ADVERTISING: REMINDS PEOPLE TO REPEAT PURCHASE A PRODUCT. EX. COKE. REINFORCEMENT ADVERTISING- CONVINCE CURRENT BUYERS THAT THEY MADE THE RIGHT CHOICE EX. CAR ADS ADVERTISE CUSTOMERS ENJOYING THE FEATURES OF THE CAR.

DECIDING ON THE ADVERTISING BUDGET: FIVE FACTORS FOR SETTING THE BUDGET. 1. STAGE IN THE PRODUCT LIFE CYCLE- NEW PRODUCTS NEED LARGE ADVERTISING BUDGETS 2. MARKET SHARE AND CONSUMER BASE- HIGH MARKET SHARE BRANDS NEED LESS ADVERTISING EXPENSE AS A PERCENTAGE OF SALE TO MAINTAIN SHARE. 3. COMPETITION & CLUTTER- NEED TO SPEND MORE ON ADVERTISING WITH COMPETITION. 4. ADVERTISING FREQUENCY- THE NUMBER OF REPITITIONS TO REINFORCE THE AD. 5. PRODUCT SUBSTITUABILITY- PRODUCTS LIKE BANKS, SOFT DRINKS, AIRLINES NEED HEAVY ADVERTISING TO ESTABLISH A DIFFERENT IMAGE TO PREVENT SWITCHING.

EVENTS AND EXPERIENCES ARE CONDUCTED FOR THE FOLLOWING OBJECTIVES: 1. TO IDENTIFY WITH A PARTICULAR TARGET MARKET OR LIFESTYLE. 2. TO INCREASE AWARENESS OF COMPANY OR PRODUCT NAME. 3. TO CREATE OR REINFORCE PERCEPTIONS OF KEY BRAND IMAGE ASSOCIATIONS. 4. TO ENHANCE CORPORATE IMAGE AND EVOKE FEELINGS TOWARDS COMPANY/PRODUCT. 5. TO ENTERTAIN KEY CLIENTS AND REWARD KEY EMPLOYEES. 6. TO PERMIT MERCHANDISING OR PROMOTIONAL OPPORTUNITIES. 7. TO EXPRESS COMMITMENT TO THE COMMUNITY ON SOCIAL ISSUES.

DECIDING ON MEDIA TIMING AND ALLOCATION: CONTINUITY MEANS EXPOSURES APPEAR EVENLY THROUGHOUT A GIVEN PERIOD. CONCENTRATION CALLS FOR SPENDING ALL THE ADVERTISING BUDGET IN A SINGLE PERIOD FOR THE HOLIDAY SEASON TO GENERATE MAX. SALES IN THE SHORTEST PERIOD OF TIME. FIGHTING MEANS ADVERISING FOR A PERIOD WITH NO ADVERTISING AFTER THAT FOLLOWED BY ADVERTISING AGAIN. THIS IS USEFUL WHEN ADVERISING BUDGET IS LOW. PULSING IS CONTINOUS ADVERTISING AT LOW WEIGHT LEVELS REINFORCED PERIODICALLY BY WAVES OF HIGHER ACTIVITY. IT DRAWS ON THE STRENGTH OF CONTINOUS ADVERTISING AND FLIGHTS TO CREATE A COMPROMISE SCHEDULING STRATEGY.

EVALUATING ADVERTISING EFFECTIVENESS: COMMUNICATION EFFECT RESEARCH- TEST TO BE DONE BEFORE & AFTER ADVERTISING: 1. WHAT IS THE MAIN MESSAGE YOU GET FROM THIS AD? 2. WHAT DO YOU THINK THEY WANT YOU TO KNOW, BELIEVE OR DO ? 3. HOW LIKELY IS IT THAT THIS AD WILL INFLUENCE YOU TO TAKE ACTION ? 4. WHAT WORKS WELL IN THE AD AND WHAT WORKS POORLY ? 5. HOW DOES THE ACT MAKE YOU FEEL ? 6. WHERE IS THE BEST PLACE TO REACH YOU WITH THIS MESSAGE ?

DEVELOPING THE ADVERTISING CAMPAIGN: MARKETERS USE BOTH ART AND SCIENCE TO DEVELOP THE MESSAGE STRATEGY OR POSITIONING OF THE AD FOR CREATIVE STRATEGY. ADVERTISERS USE THE FOLLOWING THREE STEPS TO CREATE THE CAMPAIGN: 1. MESSAGE GENERATION AND EVALUATION- MOST ADS HAVE THE SAMENESS ABOUT THEM. CAR ADS SHOW A CAR BEING DRIVEN AT HIGH SPEEDS TO SHOW DURABILITY. THE ADS SHOULD BE DIFFERENT TO REINFORCE THE CONCEPT FOR MARKET POSITIONING. 2. CREATIVE DEVELOPMENT & EXECUTION: THE ADS IMPACT DEPENDS NOT ONLY ON WHAT IT SAYS BUT ALSO HOW IT SAYS IT. EX. TV ADS,PRINT ADS, RADIO COMMERCIALS. 3. LEGAL AND SOCIAL ISSUES: ADVERTISERS AND THEIR AGENCIES MUST MAKE SURE THAT THEIR ADS DO NOT OVERSTEP SOCIAL AND LEGAL NORMS OR OFFEND SOCIETY.

ALTERNATIVE ADVERTISING OPTIONS: PLACE ADVERTISING AS UNDER : BILLBOARDS HAVE TRANSFORMED VISUAL ADVERTISING BY THE EFFECTIVENESS OF THE AD. PUBLIC SPACES: ADS ARE PLACED IN MOVIES, LOUNGES, AIRPORTS, SPORTS ARENAS. PRODUCT PLACEMENTS: PRODUCTS ARE CONTINOUSLY ADVERTISED ON TV BY BUYING TIME FOR MAX. EXPOSURE. THEY GET FREE TIME BY GIVING THEIR PRODUCTS FREE-NIKE. POINT OF PURCHASE (POP)- ADVERTISING ON SHOPPING CARTS, CHECK OUT COUNTERS. SELECTING SPECIFIC MEDIA VEHICLES: CIRCULATION: THE NUMBER OF PHYSICAL UNITS CARRYING THE ADVERTISING AUDIENCE: THE NO. OF PEOPLE EXPOSED TO THE VEHICLE EFFECTIVE AD EXPOSED AUDIENCE: THE NO. OF PEOPLE TARGETTED WHO SAW THE AD.

CHOOSING AMONG MAJOR MEDIA TYPES: TARGET AUDIENCE MEDIA HABITS- RADIO & TV ARE THE MOST EFFECTIVE MEDIA FOR TEENS
PRODUCT CHARECTERISTICS: WOMENS DRESSES ARE BEST SHOWN IN COLOUR MAGAZINES BUT HIGH-TECH PRODUCTS LIKE DIGITAL CAMERAS, CELL PHONES BETTER ON T.V.
MESSAGE CHARECTERISTICS: TIMELINESS AND INFORMATION CONTENT WILL INFLUENCE MEDIA CHOICE.EX. A MESSAGE FOR A SALES EVENT TOMORROW WILL REQUIRE TV, RADIO.
COST: TV ADVERTISING IS EXPENSIVE BUT NEWSPAPER ADS ARE RELATIVELY INEXPENSIVE.
ADVERTISING AND SALES PROMOTION CHAPTER -6

DECIDING ON MEDIA AND MEASURING EFFECTIVENESS: AFTER CHOOSING THE MESSAGE THE ADVERTISERS NEXT TASK IS TO CHOOSE THE MEDIA TO CARRY IT. DECIDING ON REACH, FREQUENCY AND IMPACT: MEDIA SELECTION IS FINDIING THE MOST COST EFFECTIVE MEDIA TO DELIVER THE NUMBER OF EXPOSURES TO THE TARGET AUDIENCE. THE NEXT IS TO FIND OUT NO. OF EXPOSURES. REACH(R)- THE NO. OF DIFFERENT PERSONS OR HOUSEHOLDS EXPOSED TO A MEDIA. FREQUENCY(F)- THE NO. OF TIMES WITHIN A PERIOD OF TIME THAT PERSON IS EXPOSED. IMPACT(I)- THE QUALITATIVE VALUE OF EXPOSURE THROUGH A GIVEN MEDIUM. TOTAL NUMBER OF EXPOSURES (E)= R X F WEIGHTED NUMBER OF EXPOSURES(WE)= R X F X I

DEVELOPING THE PROGRAM: PRETESTING: THE SALES PROMOTION PROGRAM IS PRETESTED ON THE BASIS OF PAST EXPERIENCE, WHICH TOOLS ARE APPROPIATE AND THE BEST EFFICIENT METHOD.
IMPLEMENTING: THE SALES PROMOTION IS IMPLEMENTED AFTER PRETESTING.
CONTROLLING: THE SALES PROMOTION IS CONTROLLED FOR THE ENTIRE PROCESS. EVALUATING THE PROGRAM: THE PROGRAM IS EVALUATED ON THE BASIS OF INCREASE IN SALES VERSUS THE COST OF THE SALES PROMOTION.

PUBLIC RELATIONS IS A PART OF SALES PROMOTION TO PROMOTE A COMPANYS PRODUCT. THE PUBLIC RELATIONS DEPARTMENT OF A COMPANY PERFORMS THE FIVE FUNCTIONS: 1. PRESS RELATIONS- INFORMATION ABOUT THE COMPANY AND ITS PRODUCTS TO PUBLIC.
2. PRODUCT PUBLICITY- SPONSOR EFFORTS TO PUBLICIZE THE PRODUCT.

3. CORPORATE COMMUNICATIONS- UNDERSTANDING BY EXTERNAL/ INTERNAL COMMUNICATION. 4. LOBBYING: DEALING WITH GOVERNMENT OFFICIALS TO ADHERE TO LIGISLATION. 5. COUNSELLING- ADVISING MANAGEMENT ABOUT PUBLIC ISSUES .

ADVERTISING VERSUS PROMOTION: ADVERTISING TO SALES RATIO WAS 60: 40, NOW IT IS 75% ,50% TRADE, 25% CONSUMER. SALES PROMOTIONS CREATE CLUTTER, COUPONS, DEALS, DEVALUE THE PRODUCTS VALUE. MAJOR DECISIONS IN USING SALES PROMOTIONS TO IMPROVE SALES: ESTABLISH OBJECTIVES: SALES PROMOTION OBJECTIVES DERIVE FROM MARKETING OBJECTIVES OF THE PRODUCT WHICH WILL BE FACTORED INTO THE PRICE OF THE PRODUCT. SELECTING CONSUMER PROMOTION TOOLS: THE PROMOTION PLANNER SHOULD TAKE INTO ACCOUNT THE TYPE OF MARKET, CONSUMER AND DECIDE ON THE PROMOTION TOOL TO USE. THE CAR INDUSTRY USES A WHOLE BUNCH OF INCENTIVES FOR BUYERS TO BUY.

SELECTING TRADE PROMOTION TOOLS: MFG USE A NUMBER OF TRADE PROMOTIONS AS: 1. PERSUADE THE WHOLESALER OR RETAILER TO CARRY THE BRAND. 2. PERSUADE THE WHOLESALER OR RETAILER TO STOCK MORE UNITS. 3. TO INDUCE THE RETAILER TO PROMOTE THE BRAND WITH PRICE REDUCTIONS ETC. 4. TO STIMULATE RETAILERS AND THE SALES TEAM TO PUSH THE PRODUCT. SELECTING BUSINESS AND SALES-FORCE PROMOTION TOOLS: COMPANIES SPEND A LOT OF MONEY IN DEVELOPING BUSINESS PROMOTION TOOLS BY EXHIBITING IN TRADE SHOWS AND CREATING VARIOUS INCENTIVES FOR SALES FORCE SALES OF THE PRODUCT.

SALES PROMOTION IS A KEY INGREDIENT IN A MARKETING CAPAIGN WITH INCENTIVES. ADVERTISING OFFERS A REASON TO BUY, SALES PROMOTION OFFERS AN INCENTIVE TO BUY. OBJECTIVE OF SALES PROMOTION IS TO ATTRACT NEW BUYERS, REWARD LOYAL CUSTOMERS SALES PROMOTIONS ATTRACT BRAND SWITCHERS LOOKING FOR LOW PRICE, GOOD VALUE. SALES PROMOTIONS OF HIGH TICKET ITEMS PRODUCES SALES IN THE SHORT RUN ONLY. PROMOTIONS TEMPT CUSTOMERS TO TRY NEW PRODUCTS WITH LOW PRICING. SALES PROMOTIONS HELPS MANUFACTURERS TO ADJUST SHORT TERM VARIATIONS IN SUPPLY AND DEMAND AND CAN TEST HOW HIGH PRICE TO CHARGE AND TO DISCOUNT.
ADVERISING AND SALES PROMOTION SUMMARY- CHAPTER 6

1. ADVERTISING IS ANY PAID FORM OF PRESENTATION AND PROMOTION OF PRODUCT. 2. DEVELOPING AN ADVERISING PROGRAM IS A FIVE STEP PROCESS. SET OBJECTIVES, ESTABLISH A BUDGET, CHOOSE THE MESSAGE AND EVALUATE SALES EFFECTS. 3. SALES PROMOTION CONSISTS OF A DIVERSE COLLECTION OF TOOLS TO STIMULATE SALES IT INCLUDES TOOLS FOR CONSUMER PROMOTION, TRADE PROMOTION, BUSINESS AND SALES FORCE PROMOTION. 4. EVENTS AND EXPERIENCES HELP IN SALES PROMOTIONS IF MANAGED PROPERLY. 5. PUBLIC RELATIONS INVOLVES A VARIETY OF PROGRAMS TO PROMOTE A COMPANYS IMAGE WHICH IN TURN HELPS IN SALES PROMOTION OF THE PRODUCT.
MARKETING SERVICES- CHAPTER 7

DIRECT MARKETING IS THE USE OF CONSUMER DIRECT CHANNELS TO REACH AND DELIVER GOODS AND SERVICES TO CUSTOMERS WITHOUT USING MARKETING MIDDLEMEN. DIRECT MARKETING CHANNELS ARE DIRECT MAIL, CATALOG, TELEMARKETING, T.V, MOBILE, WEB SITES, INTERNET, AND GET A MEASURABLE RESPONSE THROUGH DIRECT MARKETING. DIRECT MARKETERS BUILD A LONG TERM RELATIONSHIP WITH THEIR CUSTOMERS BY SENDING THEM BIRTHDAY CARDS, PROMOTION OF PRODUCTS, SPECIAL BUYING EVENTS. BENEFITS OF DIRECT MARKETING: MARKET DEMASSIFICATION HAS CREATED MARKET NICHES FOR CONSUMER BENEFITS. SELLERS ALSO BENEFIT BY BUYING A MAILING LIST AND TARGETTING THEM DIRECT. DIRECT MARKETING REACHES THE CONSUMER DIRECTLY AND IS VERY COST EFFECTIVE.
MARKETING SERVICES-CHAPTER 7
OFFER ELEMENTS & STRATEGY HAS FIVE ELEMENTS-PRODUCT, THE OFFER, THE MEDIUM DISTRIBUTION METHOD AND THE CREATIVE STRATEGY WHICH ALL CAN BE TESTED.
1. THE OUTSIDE ENVELOPE SHOULD BE IN COLOUR AND CATCH THE ATTENTION OF BUYER. 2. THE SALES LETTER SHOULD BE BRIEF IN ONE PAGE SIGNED BY AN IMPORTANT PERSON. 3. A COLOURFUL CIRCULAR ACCOMPANYING THE LETTER INCREASES THE RESPONSE. 4. THE LETTER SHOULD FEATURE A WEB SITE AND A TOLL FREE NUMBER TO CALL. 5. A PREAID POSTAGE PAID RETURN ENVELOPE WILL DRAMATICALLY INCREASE THE REPONSE.
DIRECT MAIL: MEANS SENDING AN OFFER, ANNOUNCEMENT OR MATERIAL DIRECTLY TO THE CUSTOMER LIKE FLYERS, CDS, DVDS, WHICH IS POPULAR FOR BOTH. OBJECTIVE: DIRECT MARKETING HOPES TO GET AN ORDER-RESPONSE RATE OF 2%-GOOD. TARGET MARKETS AND PROSPECTS: DIRECT MARKETERS USE THE R-F-M FORMULA. R: RECENCY: SELECT CUSTOMERS ACCORDING TO HOW MUCH TIME SINCE LAST PURCHASE.. F: FREQUENCY OF PURCHASE BY THE CONSUMER OF THE PRODUCT. M: MONETARY AMOUNT PURCHASED OF THE PRODUCT SINCE A CUSTOMER. MARKETERS ALSO IDENTIFY CUSTOMERS ON THE BASIS OF AGE, SEX, INCOME, EDUCATION. EX. COLLEGE STUDENTS WILL BUY LAPTOPS, CLOTHES, CELL PHONES, BIKES, ENTERTAINMENT NEWLY WEDS WILL BE LOOKING FOR HOUSING, FURNITURE, CARS, HOME APPLIANCES.
WORD OF MOUTH AND SOCIAL NETWORK SITES LIKE FACEBOOK HAVE BECOME IMPORTANT. PRINCIPLES OF PERSONAL SELLING: AN ANCIENT ART FOR EFFECTIVE MARKETING & SALES. THE SIX STEPS ARE AS UNDER : 1. PROSPECTING AND QUALIFYING THE CUSTOMER BY ASKING RELEVANT QUESTIONS. 2. PREAPPROACH- THE SALESPERSON NEEDS TO GET ALL INFORMATION ABOUT THE CO. 3. PRESENTATION AND DEMONSTRATION USING THE FEATURES, ADVANTAGES, BENEFITS & VALUE APPROACH.- FABV 4. OVERCOMING OBJECTIONS- QUESTIONS ANSWERED ABOUT THE PRODUCT OR SERVICE. 5. CLOSING THE SALE BY FINDING OUT THE RIGHT TIME TO CLOSE WITH THE CUSTOMER. 6. FOLLOWUP AND MAINTENANCE- FOLLOWUP REQUIRED FOR CUSTOMER SATISFACTION.
PUBLIC AND ETHICAL ISSUES IN DIRECT MARKETING: IRRITATION: MANY PEOPLE DONT LIKE THE AMOUNT OF MATERIAL AND PHONE CALLS. UNFAIRNESS- SOME MARKETERS TAKE ADVANTAGE OF VULNERABLE PEOPLE- ELDERLY. DECEPTION AND FRAUD- WHAT PRODUCT IS DESCRIBED IS NOT WHAT IS SENT. INVASION OF PRIVACY- PRIVATE INFORMATION OF CREDIT CARD DETAILS CAN BE MISUSED. INTERNET MARKETING IS THE LATEST TOOL IN INTERACTIVE MARKETING TO BE EFFECTIVE. WEBSITES GIVES ALL INFORMATION OF THE COMPANY, PRODUCTS TO ORDER ONLINE. MOBILE MARKETING IS ALSO HAPPENING BY GETTING SMS MESSAGES ON DAILY BASIS.
TELEMARKETING IS THE USE OF TELEPHONE AND CALL CENTRES TO DESCRIBE THE PRODUCT TO SELL CUSTOMERS, PROVIDE SERVIVES, TAKE ORDERS AND ANSWER QUESTIONS.
COMPANIES USE CALL CENTRES FOR INBOUND TELEMARKETING-RECEIVING CALLS.
OUTBOUND TELEMARKETING TO INITIATE CALLS TO PROSPECTS AND CUSTOMERS.
TELEMARKETING IS INCREASING IN BUSINESS TO BUSINESS MARKETING. US JEWELRY BIZ.
EFFECTIVE TELEMARKETING IS GETTING & TRAINING THE RIGHT TELEMARKETERS .
MARKETING SERVICES CHAPTER 7 SUMMARY

1. DIRECT MARKETING IS AN INTERACTIVE MARKETING SYSTEM USING DIFFERENT METHODS 2. DIRECT MARKETERS PLAN CAMPAIGNS BY DECIDING OBJECTIVES, TARGET MARKETS. 3. DIRECT MARKETING INCLUDES DIRECT MAIL, CATALOG, TV, WEBSITES, MOBILE. 4. INTERACTIVE MARKETING GIVES MAXIMUM OPPORTUNITIES FOR SALES. 5. WORD OF MOUTH MARKETING IS EFFECTIVE ON SOCIAL WEBSITES LIKE FACEBOOK. 6. THE SIX STEPS IN PERSONAL SELLING ARE PROSPECTING AND QUALIFYING, PREAPPROACH, PRESENTATION AND DEMONSTRATION, OVERCOMING OBJECTIONS, CLOSING AND FOLLOW UP MAINTENANCE.
RETAIL BANKING
INTRODUCTION TO RETAIL BANKING: BANKING AS DEFINED IN THE BANKING REGULATION ACT IS ACCEPTANCE OF DEPOSITS FOR THE PURPOSE OF INVESTMENT AND LENDING AND NOT REPAYABLE OTHERWISE THAN ON DEMAND. THE NATIONALIZATION OF MAJOR COMMERCIAL BANKS IN THE EARLY 1980S RESULTED IN FINANCIAL CONTROL OF THE BANKING SECTOR BY THE GOVERNMENT . LIBERALISATION IN 1992 BROUGHT A LOT OF REFORMS IN THE COUNTRY IN BANKING. FOREIGN BANKS WERE ALLOWED TO OPERATE IN INDIA WITH CERTAIN RESTRICTIONS. CONVENTIONAL BANKING HAS CHANGED TO PROFESSIONAL HI-TECH BANKING.
RETAIL BANKING
MEANING OF RETAIL BANKING: RETAIL BANKING REFERS TO OFFERING FINANCIAL PRODUCTS AND SERVICES RELATED TO DEPOSITS AND ASSETS TO INDIVIDUAL CUSTOMERS FOR PERSONAL CONSUMPTION. BANKS CONCENTRATE ON VARIOUS SEGMENTS LIKE PROFESSIONALS, STUDENTS ETC.
RETAIL BANKING IS NOTHING BUT SHARED BUSINESS:

A DEPOSIT OF ONE LAKH FROM A SINGLE CUSTOMER VERSUS DEPOSITS OF RS 10,000 EACH FROM 10 DIFFERENT CUSTOMERS.
THE CORPORATE AND RETAIL DIVIDE IS NOTHING BUT INTERNAL SEGMENTATION AND THE CUSTOMER ALWAYS REMAINS A CUSTOMER.
RETAIL BANKING
WHAT IS RETAIL BANKING? RETAIL BANKING IS THE PROCESS BY WHICH BANKS MARKET AND SELL FINANCIAL PRODUCTS AND SERVICES TO CUSTOMERS. TARGET RETAIL BANKING: URBAN AND RURAL CUSTOMERS FOR BANKS TYPES OF RETAIL BANKING SCHEMES: SAVINGS ACCOUNT- INTEREST OF 4% COMPOUNDED DAILY PAYABLE MONTHLY OR QUARTERLY DEPENDING ON THE BANKS POLICY. CURRENT ACCOUNT: DESIGNED FOR BUSINESS CUSTOMERS WITH OVERDRAFT FACILITY NO INTEREST ON DEPOSITS AND MINIMUM BALANCE OF AT LEAST RS 1000 UPTO 10, 000 DEPENDING ON POLICY OF THE BANK. FIXED DEPOSITS: DEPOSITED AMOUNTS EARN INTEREST WHICH IS PAID ON MATURITY OR MONTHLY DEPENDING ON THE NEEDS OF THE CUSTOMER. SENIOR CITIZENS GET 1 % MORE THAN OTHER CUSTOMERS.
RETAIL BANKING
STUDENT EDUCATION LOANS: MOST BANKS OFFER THIS PRODUCT FOR STUDENTS AND THE INTEREST AND REPAYMENT TERMS AS PER THE BANK. GOLD LOANS: MOST BANKS OFFER THIS PRODUCT WITH THE GOLD AS COLLATERAL AND THE RATE OF INTEREST AND REPAYMENT DEPENDING ON THE BANK. FOREIGN EXCHANGE ALLOWANCE: ALL PUBLIC SECTOR BANKS OFFERS THIS SERVICE AND THE TERMS AND CONDITIONS DEPENDS ON THE BANKS. RBI GUIDELINE IS THAT AN INDIVIDUAL MAY TAKE UPTO $ 10, 000 IN FOREIGN EXCHANGE IN A FINANCIAL YEAR. IT COULD BE A COMBINATION OF CURRENCY OR TRAVELLERS CHEQUES. CREDIT CARDS: MOST BANKS OFFER THIS PRODUCT AND OFFER LINES OF CREDIT DEPENDING ON ANNUAL SALARY AND CREDIT WORTHINESS OF THE CUSTOMER. EVERY BANK USES DIFFERENT CRITERIA TO EVALUATE THIS ASPECT.
RETAIL BANKING
BUSINESS LOANS: MOST BANKS OFFER THIS PRODUCT FOR START UP AND RUNNING BUSINESS AND THE RULES AND GUIDELINES DEPEND ON EACH BANK .
HOME EQUITY LOANS: SOME BANKS OFFER THIS PRODUCT DEPENDING ON THE EQUITY IN YOUR HOME AND THE RULES AND GUIDELINES DEPENDING ON THE BANK. MOBILE BANKING: SOME BANKS OFFER THIS PRODUCT TO ACCESS YOUR ACCOUNT.
RETAIL BANKING IS A VERY IMPORTANT ASPECT FOR A BANK TO TAKE CARE OF ITS CUSTOMERS NEEDS, WANTS AND DEMANDS AND THE BANK HAS TO BE CONSTANTLY IMPROVING ITS PRODUCTS AND SERVICES FOR THE SATISFACTION OF THE CUSTOMER.
RETAIL BANKING
FIXED DEPOSITS: LOANS CAN BE TAKEN AGAINST AMOUNT DEPOSITED AT 1-2% MORE THAN THE INTEREST EARNED WITH REDUCING BALANCE METHOD FOR PAYMENT. ATM/DEBIT CARDS: EVERY BANK OFFERS THESE CARDS FOR ACCESS TO YOUR ACCOUNT. INTERNET BANKING: EVERY BANK OFFERS THIS SERVICE FOR ONLINE ACCESS ANYWHERE. SMS ALERTS: MOST BANKS OFFERS THIS SERVICE TO KEEP THE CUSTOMER AWARE. MULTICITY CHEQUES: STATE BANK OFFERS THIS SERVICE TO BE USED AT ANY STATE BANK. HOUSING LOANS: ALL BANKS OFFER THIS PRODUCT AT INTEREST RATES UPON THE BANK. CAR LOANS: ALL BANKS OFFER THIS PRODUCT FOR FINANCING WHICH IS VERY EASY.
RETAIL BANKING
MARKETING SLOGANS OF SOME INDIAN BANKS: 1. ALLAHABAD BANK- A TRADITION OF TRUST 2. BANK OF BARODA- INDIAS INTERNATIONAL BANK 3. BANK OF INDIA- RELATIONSHIP BEYOND BANKING 4. BANK OF MAHARASTRA- ONE FAMILY ONE BANK 5. DENA BANK- TRUSTED FAMILY BANK 6. HDFC BANK- WE UNDERSTAND YOUR WORLD
RETAIL BANKING
7. IDBI BANK- BANKING FOR ALL 8. INDIAN BANK- TAKING BANKING TECHNOLOGY TO THE COMMON MAN 9. INDIAN OVERSEAS BANK- GOOD PEOPLE TO GROW WITH 10. KARNATAKA BANK- YOUR FAMILY BANK ACROSS INDIA 11. KARUR VYSYA BANK- SMART WAY TO BANK 12. KOTAK MAHINDRA BANK- LETS MAKE MONEY SIMPLE 13. UNION BANK OF INDIA- GOOD PEOPLE TO BANK WITH
RETAIL BANKING
14. ORIENTAL BANK OF COMMERCE- WHERE EVERY INDIVIDUAL IS COMMITTED 15. PUNJAB NATIONAL BANK- THE NAME YOU CAN BANK UPON 16. SOUTH INDIAN BANK- EXPERIENCE NEXT GENERATION BANKING
17. STATE BANK OF INDIA- WITH YOU ALL THE WAY

18. STATE BANK OF MYSORE- WORKING FOR A BETTER TOMORROW 19. STATE BANK OF TRAVANCORE- SINCE 1945 A LONG TRADITION OF TRUST 20 STATE BANK OF PATIALA- BLENDING MODERNITY WITH TRADITION 21. SYNDICATE BANK- FAITHFULLY FRIENDLY 22. VIJAYA BANK- A FRIEND YOU CAN BANK ON
RETAIL BANKING
OPERATION OF ATMS- SWIPE METHOD & INSERT METHOD- ADVANTAGE/DISADVANTAGE MAX. AMOUNT ALLOWED TO WITHRAW PER DAY: RS 20,000 FOR MOST INDIAN BANKS MAX. CURENCY DISPENSED: RS 100 NOTES, SOMETIMES RS 500 AND RS 1000 LOCATION OF ATM IS IMPORTANT FOR MAXIMUM USE OF DISPENSING THE PRODUCT-CASH PRECAUTION WHILE USING ATMS : NEVER WRITE YOUR PIN NUMBER ON THE CARD. ALWAYS LOOK BEHIND YOU TO SEE IF ANYONE IS LOOKING AT YOUR PIN NUMBER. SWIPE CARD AND IMMEDIATELY PUT BACK IN WALLET/PURSE. WAIT FOR CARD TO COME OUT BEFORE LEAVING THE ATM. TAKE THE PRINTED RECEIPT WITH YOU.
RETAIL BANKING IN INDIA

INDIAN BANKING SECTOR HAS UNDERGONE TREMENDOUS CHANGES SINCE 1992 BANKING INDUSTRY IS FACING NUMEROUS CHALLENGES LIKE: INCREASE IN COMPETITION AMONG BANKS WITH THE ENTRY OF PRIVATE SECTOR BANKS. INCREASE IN LEVEL OF NON-PERFORMING ASSETS. NEED TO ENHANCE THE EMPLOYEE PRODUCTIVITY HIGH OPERATIONAL COSTS OF PUBLIC SECTOR BANKS UNLIKE PRIVATE SECTOR BANKS. THE ECONOMY IN INDIA IS CHANGING FROM A POLICY OF SAVE AND SPEND TO A SPEND AND SAVE CONCEPT.
RETAIL BANKING
NEED FOR RETAIL BANKING: BANKS CANNOT RELY ON BIG CORPORATES DUE TO HIGH RISK FACTORS OF REPAYMENT. BANKS WANT TO SPREAD OUT THEIR RISK BY TARGETTING RETAIL CUSTOMERS. GROWING CONSUMERISM IN INDIA HAS ENCOURAGED RETAIL BANKING. RETAIL BANKING MARKET HAS TREMENDOUS GROWTH POTENTIAL FOR BANKS. IN THE PAST CONSUMERS NEVER THOUGHT OF BUYING CONSUMER GOODS ON CREDIT. NOW 70% OF CONSUMER GOODS ARE BOUGHT ON CREDIT AGAINST 40% 5 YEARS AGO.
RETAIL BANKING
PRESENT SCENARIO IN INDIA: BANKS ARE TRYING TO BECOME A ONE STOP SHOPPING FOR ALL RETAIL BANKING CUSTOMER NEEDS FROM SAVINGS ACCOUNTS, FIXED DEPOSITS, CREDIT CARDS, HOUSING LOANS, CAR LOANS, STUDENT LOANS, INSURANCE POLICIES ETC. TRADITIONAL BRANCH BANKING HAS CHANGED WITH BANKING AT ANY SIMILAR BANK BRANCH ALL OVER INDIA AND ACCESS TO ONES ACCOUNT BY INTERNET BANKING. CREDIT CARD BUSINESS IS GROWING AT 25% PER YEAR IN INDIA WITH 5.5 BILLION CARD HOLDERS AND SLOWLY PEOPLE ARE GETTING USED TO THE PLASTIC MONEY CULTURE. VEHICLE FINANCE MARKET IS DOING WELL WITH 75% OF THE VEHICLES SOLD ARE THROUGH CONSUMER LOAN SCHEMES.
RETAIL BANKING
SAVINGS ACCOUNTS: ENCOURAGES PEOPLE TO SAVE AND GET 4% INTEREST DAILY. CURRENT ACCOUNT: USEFUL FOR BUSINESS WITH OVERDRAFT FACILITY NO INTEREST. FIXED DEPOSITS: MONEY PLACED IN A DEPOSIT ACCOUNT FOR FIXED INTEREST WHICH CAN ONLY BE AVAILABLE ON MATURITY. EARLY WITHRAWAL WITH PENALTY AND INTEREST. REATAIL LOANS AS UNDER: LOANS AGAINST FIXED DEPOSITS RANGING FROM 1% TO 2% DEPENDING ON THE BANK. HOME LOANS ARE VERY POPULAR WITH HDFC THE NUMBER ONE BANK. AUTO FINANCING BY BANKS WITH DEFAULT RATE OF ONLY 1%
RETAIL BANKING
CONSUMER CREDIT/ FMCG: FMCG SECTOR GROWING AT 15% WITH EASY CREDIT TERMS. CONSUMER CREDIT FOR EDUCATION, TRAVEL, MEDICAL EXPENSES AND CONSUMER GOODS. DEFAULT RATE IS 3%-4% SO THE RATE OF INTEREST IS HIGH FROM 11% TO 14% CREDIT CARDS : SIX MILLION USERS WITH POTENTIAL OF 40 MILLION. CREDIT CARDS HAVE INCREASED FROM 6 LAKH IN 1992 TO 60 LAKH BY 2002 CREDIT CARD SPENDING IS AROUNR RS 18, 000 CRORE WHICH IS LESS THAN 1% OF PERSONAL CONSUMPTION COMPARED TO 30% IN THE US. DEBIT CARD USE IS BECOMING POPULAR SO ONE WILL NOT FALL INTO THE CREDIT TRAP.
RETAIL BANKING
DELIVERY CHANNEL: PEOPLE DONT VISIT THEIR BRANCH FOR BANKING NEEDS ANYMORE ATMS HAVE MADE BANKING SO EASY THAT ONE CAN ACCESS THE ACCOUNT WORLWIDE INTERNET BANKING HAS CHANGED THE WAY BANK WITH A CLICK ON THE COMPUTER. DEBIT CARDS LIKE A CREDIT CARD BUT MONEY IS WITHRAWN IMMEDIATELY FROM ACCOUNT DEBIT CARD IS LIKE A CHEQUE AND THERE ARE NO FEES LIKE A CREDIT CARD.
DEBIT CARD CAN WITHRAW MONEY FROM ANYWHERE IN THE WORLD IN THAT CURRENCY.
RETAIL BANKING
STRATEGIES TO INCREASE RETAIL BANKING: ADVANTAGES OF RETAIL BANKING: STABLE AND CORE DEPOSITS BY CONSUMERS LOW COST FUNDS AND BUILDS CUSTOMER BASE INCREASES SUBSIDIARY BUSINESS A SAFE AND CONVENIENT WAY TO SAVE. ASSET SIDE: GOOD AVENUE FOR FUNDS AND BETTER YIELD FOR THE BOTTOM LINE. HELPS ECONOMIC REVIVAL THROUGH INCRESAED PRODUCTIVITY. IMPROVES LIFESTYLES AND HELPS PEOPLE WITH AFFORDABLE CREDIT. INNOVATIVE PRODUCT DEVELOPMENT WITH MINIMUM MARKETING EFFORTS. RISK IS LESS IN THE HOUSING AND VEHICLE LOAN SEGMENT.
RETAIL BANKING
DISADVANTAGES: HANDLING SO MANY RETAIL LOAN ACCOUNTS TO PREVENT THEM FROM BECOMING DEFAULTERS AND NON PAYING ACCOUNTS NPAS INDIAN BANKS HAVE REALIZED THAT THE RETAIL CUSTOMER IS BETTER THAN CORPORATE. E-COMMERCE IN RETAIL BANKING- CUSTOMERS USE INTERNET BANKING TO ACCESS THE ACCOUNT FROM ANYWHERE IN THE WORLD. CONCERNS OF E-COMMERCE SECURITY: TRANSACTION SECURITY WITH FEAR OF MISUSE OF PASSWORD BY STRANGERS. IDENTITY THEFT WITH CREDIT CARD FRAUD ON THE RISE WORLWIDE.

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BBM 106: MARKETING MANAGEMENT & RETAIL BANKING

REFERENCE BOOK MARKETING MANAGEMENT BY PHILIP KOTLER-13TH EDITION

OBJECTIVES OF THE COURSE

SECTION B: 20 CLASSES BEFORE MID-TERM

MARKET AND MARKETING-CHAPTER 1

CORE MARKETING CONCEPTSCHAPTER 1

CORE MARKETING CONCEPTSCHAPTER 1

CORE MARKETING CONCEPTSCHAPTER 1

CORE MARKETING CONCEPTSCHAPTER 1

CORE MARKETING CONCEPTSCHAPTER 1

CONSUMER RESISTANCE: TO BANKING PRODUCTS THAT OVERSELL OR TOO RISKY.

CORE MARKETING CONCEPTSCHAPTER 1

CORE MARKETING CONCEPTSCHAPTER 1

POSITIONING : THE PRODUCT OR SERVICE IS POSITIONED ACCORDINGLY.

CORE MARKETING CONCEPTSCHAPTER 1

CORE CONCEPTS OF MARKETINGCHAPTER 1

THE 10 COMMANDMENTS OF MARKETING-CHAPTER 1

THE 10 DEADLY SINS OF MARKETINGCHAPTER 1

2. THE COMPANY DOES NOT FULLY UNDERSTAND ITS TARGET CUSTOMERS

CORE MARKETING CONCEPTSCHAPTER 1

CORE MARKETING CONCEPTSCHAPTER 1

MOTIVATION: FREUD, MASLOW, HERZBERG- NEED BECOMES A MOTIVE TO ACT TO BUY.

OCCUPATION AND ECONOMIC CIRCUMSTANCES ALSO INFLUENCE BUYING PATTERNS.

UNANTICIPATED SITUATIONAL FACTORS

MARKET TARGETING IS TO SELECT ONE OR MORE MARKET SEGMENTS TO ENTER.

1. STRONGLY UNAVAILABLE- UNLIKELY TO SWITCH WITH PREFERENCE FOR CURRENT BRANDS

MARKET SEGMENTATION- CHAPTER 3

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER-4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT- CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

1. NEED FAMILY- THE CORE NEEDS OF THE EXISTENCE OF A PRODUCT FAMILY-SECURITY.

3. PRODUCT CLASS- A GROUP OF PRODUCTS HAVING FUNCTIONAL COHERENCE- FINANCIAL

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

RELIABILITY IS A GAUGE THAT A PRODUCT WILL NOT MALFUNCTION IN A PERIOD OF TIME.

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER 4

PRODUCT AND NEW PRODUCT DEVELOPMENT- CHAPTER 4.

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER-4

PRODUCT AND NEW PRODUCT DEVELOPMENT-CHAPTER -4

PRODUCT AND NEW PRODUCT DEVELOPMENT- CHPT 4 SUMMARY

ACCUMULATED COST CHANGES WITH THE QUANTITY OF PRODUCTION.

PRICING- CHAPTER 5 SUMMARY

ADVERTISING AND SALES PROMOTION CHAPTER-6

1. MISSION: WHAT ARE YOUR ADVERTISING OBJECTIVES?

ADVERTISING AND SALES PROMOTION CHAPTER 6

ADVERTISING AND SALES PROMOTION CHAPTER 6

ADVERTISING AND SALES PROMOTION CHAPTER 6

ADVERTISING AND SALES PROMOTION CHAPTER 6

ADVERTISING AND SALES PROMOTION CHAPTER 6

ADVERTISING AND SALES PROMOTION CHAPTER 6

ADVERTISING AND SALES PROMOTION CHAPTER 6

ADVERTISING AND SALES PROMOTION CHAPTER 6

COST: TV ADVERTISING IS EXPENSIVE BUT NEWSPAPER ADS ARE RELATIVELY INEXPENSIVE.

ADVERTISING AND SALES PROMOTION CHAPTER -6

ADVERTISING AND SALES PROMOTION CHAPTER 6

Marketing Management & Retail

Marketing Management & Retail