1

Marketing Notes

Marketing mix
The set of controllable tactical marketing tools-product , price ,
place, and
promotion –that the firm blends to produce the response it wants
in the target
market

strategic marketing planning

The process of developing and maintaining a strategic fit between
the
Organization’s goals and capabilities and its changing marketing
opportunities .
It involves defining a clear company mission setting supporting
objectives,
designing a sound business portfolio, and coordinating functional
strategies .

personal selling
Personal selling is a part of marketing mix which is most effective
tool at later
stages of the buying process, particularly in building up buyer
preferences ,
conviction , and action. It has got three distinctive qualities such as
personal
confrontation , cultivation , and Response.

Marketing control
 2
The process of measuring and evaluating the results of marketing
strategies
and plans and taking corrective actions to ensure that objectives
are achieved.

Types of distribution channels.

A. The different distribution channels are Manufacturer , Dealers ,
Distributors ,
Wholesaler ,Retailer, Customer / consumers

marketing management
A. The art and science of choosing target markets and building
profitable
relationships with them. This involves getting , keeping , and
growing customers
through creating , delivering and communicating superior
customer value.

marketing research
A. The systematic design , collection , analysis and reporting of data
relevant to a
specific marketing situation facing an organization.

objective of packing.
A. The two objective of packing are:
 3
(i)Designing and producing the container or protecting wrapper
for a product.
(ii) packages should perform many sales tasks such as –from
attracting
attention , to describe the product , to making the sale.

product mix
A. The set of all product lines and items that a particular seller offers
for sale. A
company’s product mix has four important dimension: width,
length, depth and
consistency.

on-line marketing
A. Business through electronic media especially via internet is called
on-line
marketing. It is a part of direct marketing. There are two types of
marketing
channels that is commercial on-line services and the internet.

product line
A. A group of products that are closely related because they function
in a similar manner , are sold to the same customer groups , are
marketed through the same types of outlets, or fall within given
price ranges.

features of services marketing

• Intangibility ( services cannot be seen , tasted, felt , heard , or smelled before
purchase.
 4
• Inseparability ( services cannot be separated from their providers)
• Variability ( quality of services depends on who provides them and when,
where, and how)
• Perishability ( services cannot be stored for later sale or use)

product positioning
The way the product is defined by consumers on important attributes-
the place the product occupies in consumer’s minds relative to
competing products

product
A. Anything that can be offered to a market for attention, acquisition,
use or
consumption that might satisfy a want or need is called product

marketing audit
A. A comprehensive, systematic , independent and periodic
examination of a
company’s environment ,objective, strategies , and activities to
determine
problem areas and opportunities and to recommend a plan of
action to
improve the company’s marketing performance

advertising budget
A. A fixed amount kept to spend on advertisement is called
advertising budget
 5
which often depends on its stage in the product life cycle. For eg
new products
typically need large advertising budgets to build awareness and
to persuade
consumer’s to try the products. In contrast , mature brands
usually require
lower budgets as a ratio to sales.

advertising
A. Any paid form of non personal presentation and promotion of ideas ,
goods or
services by an identified sponsor is called advertising.

consumer behaviour
A. The buying behaviour of final consumers –individuals goods and
services for
personal consumption is called consumer behaviour.

direct marketing
A. Direct communication with carefully targeted individual consumers
to obtain an
immediate Response. Or It is an interactive marketing system that
uses one or
more advertising media to effect a measurable response and or
transaction at
any location.

Branding
 6
A. A name , term , sign , symbol , or design , or a combination of these ,
intended to
identify the goods and services of one seller or group of sellers and
to
differentiate them form those of competitors is called Branding

tele-marketing
A. Telemarketing describes the use of telephone operators to attract
new
customers to contact existing customers to ascertain satisfaction
levels, or to
take orders. In case of routinely taking orders, it is called telesales.

customer relationship management

A. Managing detailed information about individual customers and
carefully
managing customer “touch points” in order to maximize
customer loyalty is
called customer relationship management.

Different components of marketing environment

A. The different components of marketing environment are as follows:-
Microenvironment & Macroenvironment
Microenvironment : The actors close to the company that affect its ability to serve
its customers-the company , suppliers , marketing intermediaries , customer markets ,
competitors and publics. Marketing success will require working closely with other
company departments, suppliers, marketing intermediaries, customer markets, competitors
and publics, which combine to make up the company’s value delivery network.
 7
The company: In designing marketing plans , marketing
management takes other company groups into account-groups such as top management ,
finance , research and development , purchasing, operations and accounting. All these
interrelated groups form the internal environment.

Suppliers: Suppliers form an important link in the company’s

overall customer value delivery system. They provide the resources needed by the company
to produce its goods and services; supplier’s problem can seriously affect marketing.

Marketing intermediaries: firms that help the company to

promote , sell , and distribute its goods to final buyers, they include resellers , physical
distribution firms , marketing service agencies , and financial intermediaries.

Customers: The company needs to study five types of

customer markets closely. Consumer markets consist of individuals and households that buy
goods and services for personal consumption. Business markets buy goods and services for
further processing or for use in their production process, whereas reseller markets buy goods
and services to produce public services or transfer the goods and services to others who
need them. Finally international markets consist of these buyers in other countries, including
consumers, producers, resellers and governments.
competitors :-The marketing concept states that to be
successful a company must provide greater customer value ad satisfaction than its
competitors do. Thus, marketers must do more than simply adapt to the needs of target
consumers.
Publics: Any group that has an actual or potential interest in
or impact on an organization’s ability to achieve its objectives.

Macroenvironment:-The larger societal forces that affect the microenvironment –

demographic , economic, natural, technological, political and cultural forces.
 8
Demographic environment: The study of human population
in terms of size, density , location, age, race , occupation and other statistics are the aspects
which contribute to Demographic environment

Economic environment:-It includes the factors that affect

consumer buying power and spending patters.

Natural environment:-Natural resources that are needed as

inputs by marketers or that are affected by Marketing activities.

Technological environment:-forces that create new

technologies , creating new product and market opportunities

Political environment: Laws, Government agencies , and

pressure groups that influence and limit various organizations and individuals in a given
society.
Cultural environment: Institutions and other forces that
affect society’s basic values, perceptions, preferences, and behaviour.

personal determinants of consumer behaviour

a. Personal determinants include Age and life cycle stage , occupation, economic
situation , lifestyle, personality , brand personality.

Age and life-cycle stage: People change the goods and

services they buy over their lifetimes. Tastes in food , clothes , furniture, and
recreation are often age related. Buying is also shaped by the stage of the family life
cycle-the stage through which families might pass as they mature over time.
marketers often define their target markets in terms of life-cycle stage and develop
appropriate products and marketing plans for each stage. Traditionally family cycle
 9
stages include young singles and married couples with children. Today, however
marketers are increasingly catering to a growing number of alternatives,
nontraditional stages such as unmarried couples, single marrying later in life,
childless couples , same sex couples , single parents , extended parents and others.

Occupation : A person’s occupation affects the goods and

services bought. Blue collar workers tend to buy more rugged work clothes, whereas
executives buy more business suits. Marketers try to identify the occupational groups
that have an above average interest in their products and services. A company can
even specialize in making products needed by a given occupational group. Thus,
computer software companies will design different products for brand managers,
accountants, engineers, lawyers and doctors.

Economic situation: A person’s economic situation will affect

product choice. Marketers of income-sensitive goods watch trends in personal
income, savings, and interest rates. If economic indicators point to a recession,
marketers can take steps to redesign , reposition, and re price their products closely.

Lifestyle: People coming from the same subculture, social

class, and occupation may have quite different lifestyles. Lifestyle is a person’s pattern
of living as expressed in his or her psychographics. It involves measuring consumer’s
major AIO dimensions- activities ( work , hobbies , shopping , sports, social events ) ,
interest ( food , fashion , family , recreation) and opinion ( about themselves, social
issues , business, products ) Lifestyle captures something more than the person’s social
class or personality . It profiles a person’s whole pattern of acting and interacting in the
world.

Personality and self-concept: Each person’s distinct

personality influences his or her buying behavior. Personality refers to the unique
 10
psychological characteristics that lead to relatively consistent and lasting responses to
one’s own environment. Personality is usually described in terms of traits such as self-
confidence , dominance, sociability, autonomy , defensiveness, adaptability and
aggressiveness. Personality can be useful in analyzing consumer behaviour for certain
product or brand choices. This idea is that brands also have personalities , and that
consumers are likely to choose brands whose personalities match their own. A brand
personality is the specific mix of human traits that may be attributed to a particular
brand. One researcher identified five brands personality traits.
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 )

marketing process
A. The following figure depicts the process of marketing.
Analyzing marketing opportunities

Selecting target markets

Developing the marketing mix

Managing the marketing effort.

Consumers stand in the center. The goal is to build strong and profitable
relationship with customers. As a first step, through market segmentation ( Dividing a
 11
market into distinct groups of buyers who have distinct needs, characteristics, or behaviour
and who might require separate products or marketing mixes) , targeting ( The process of
evaluating each market segment’s attractiveness and selecting one or more segments to
enter), and positioning ( arranging for a product to occupy a clear, distinctive , and desirable
place relative to competing products in the minds of great consumers ), the company decides
which customers it will serve and how. It identifies the total market, then divides it into
smaller segments, selects the most promising segments, and focuses on serving and
satisfying these segments.
Next , the company designs a marketing mix( the set
of controllable tactical marketing tools- product , price , place and promotion- that the firm
blends to produce the response it wants in the target market) made up of factors under its
control – product , price, and promotion. To find the best marketing mix and put it into
action, the company engages in marketing analysis, planning( The marketing logic by which
the business unit hopes to achieve its marketing objectives) ,implementation(the process that
turns marketing strategies and plans into marketing actions in order to accomplish strategic
marketing objective), and control( the process of measuring and evaluating the results of
marketing strategic and plans and taking corrective action to ensure that objectives are
achieved). Through these activities, the company watches and adapts to the actors and
forces in the marketing environment

product life cycle stages

A. Product life cycle and different stages of product life cycle or marketing strategies at
each stage

Meaning: The period during which a product lives in the market is termed as product life
cycle . In other words, product life cycle is the course of a products sales and profits over its
life time)
 12
Product life cycle should be preferably termed as product market life cycle , as its related
to a given particular market. The product life cycle concept indicated that the product is
boom or introduced , grows, attains maturity and the point of saturation in that market
and then sooner or later, it is bound to enter its declining stage i.e., decay in its sales)

Stages in the product life cycle :-

1. Introduction
2. Growth
3. Maturity
4. Saturation
5. Decline

1. Introduction: It starts when the product is introduced in a market, During this period
the sales revenue begins to grow but the rate of growth is very slow. Profits are non-
existent in this stage , because of the heavy expenses of product introduction . Much
money is required to attract distributors and buy their inventories. Promotion
spending is relatively high to inform consumers of the new product and get them to
try it. Products are brought continuously on a trial basis , weakness may be revealed
and they must be properly removed.

2. Growth: It is a period during which the product is accepted by consumers and the
traders. Attracted by the opportunities of profits, new competitors will enter the
market. They will introduce new product features , and the market will expand . The
increase in the competitors leads in an increase in the number of distribution outlets,
and sales jumps just to build reseller inventories . Prices remain where they are or fall
only slightly. Profit increases during the growth stage . The firm gives top pririority
to sales volume and quality maintenance may have secondary preference. In this
stage , effective distribution and advertising are considered as a key features.
 13
3. Maturity: This stage normally lasts longer than the previous stages, and it poses
strong challenges to marketing management. Most products are in the maturity stage
of the cycle, and therefore cost of marketing management deals with the product.
During this stage keen competition brings pressure on prices. Increasing marketing
expenditure and falling prices will reduce profits. Additional expenditure is involved
in products modification and improvement advertising and sales promotion . Overall
marketing effectiveness becomes the key factor in this stage.

4. Decline:-Under the decline stage, the sales decline .It may be gradually displaced by
some new innovation. Sales decline for many reasons, including technological
advanced, shifts in consumer states, and increased competition It may be driven out
of the market by other new innovations. At this stage price becomes the primary
weapon of competition and it is necessary to reduce considerable expenditure on
advertising and sales promotion .Cost control becomes the key to generate profits.

psychological determinants of consumer behaviour

A person’s buying choices are further influenced by four major psychological
factors. Motivation, perception , learning , and beliefs and attitudes

Motivation: A need that is sufficiently pressing to direct the person to seek

satisfaction of the need. A person has many needs at any given time. Some are
biological, arising from states of tension such as hunger, thirst, or discomfort.
Others are psychological, arising from the need for recognition, esteem or
belonging. A need becomes a motive when it is aroused to a sufficient level of
intensity. Psychologist has developed theories of human motivation. Two of the
most popular – the theories of Sigmund freiud and Abraham maslow- have quite
different meanings for costumer analysis and marketing.
 14

Maslow’s hierarchy of needs

Self actualization needs

( self –development and realization)

Esteem needs
( self esteem , recognition, status)

Social needs (sense of belonging, love)

Safety needs (security, protection)

Physiological needs (hunger, thirst)

Perception: A motivated person is ready to act. How the person acts is
influenced by his or her own perception of the situation. All of us learn by the flow of
information through our five senses. Sight, hearing, smell, touch and taste. However, each
of us receives, organizes, and interprets this sensory information in an individual way.
Perception is the process by which people select, organize, and interpret information to
form a meaningful picture of the world. People can form different perceptions of the same
stimulus because of three perceptual processes: selective attention, selective distortion, and
selective retention. People are exposed to a great amount of stimuli every day.

Learning: When people act, they learn. Learning describes changes in an

individual’s b behaviour arising form experience. Learning theorists say that most
 15
human behaviour is learned. Learning occurs through the interplay of drives, stimuli,
cues , responses , and reinforcement.
Drive is a strong internal stimulus that calls for action.
Stimulus is object
Cues are minor stimuli that determine when, where, and how the person responds.
A practical significance of learning theory for marketers is that they can build
up demand for a product by associating it with strong drives, using motivating, cues, and
providing positive reinforcement.

Beliefs and Attitudes: Through doing and learning, people acquire beliefs and attitudes.
These, in turn influence their buying behaviour. A belief is a descriptive thought that a
[person has about something. Marketers are interested in the beliefs that people
formulate about specific products and services, because these beliefs make up product
and brand images that affect buying behaviour. If some of the beliefs are wrong and
prevent purchase, the marketer will want to launch a campaign to correct them. People
have attitudes regarding religion, politics, clothes, music, food and almost everything
else. Attitude describes a person’s relatively consistent evaluations, feelings and
tendencies toward an object or idea. Attitude put people into a frame of mind of liking or
disliking things, of moving toward or away or away from them.
marketing strategies at each stage of product life cycle
Product life cycle and different stages of product life cycle or marketing strategies at each
stage
Meaning: The period during which a product lives in the market is termed
as product life cycle . In other words, product life cycle is the course of
a products sales and profits over its life time)

Product life cycle should be preferably termed as product market life cycle , as its related
to a given particular market. The product life cycle concept indicated that the product is
boom or introduced , grows, attains maturity and the point of saturation in that market
and then sooner or later, it is bound to enter its declining stage i.e., decay in its sales)
 16

Stages in the product life cycle :-

1. Introduction
2. Growth
3. Maturity
4. Saturation
5. Decline

Marketing strategies at each stage of Product life cycle:-

1. Introduction stage:
(a) Product strategy : In case of product , company will offer a basic product
rather then extension of product in different areas.
(b) Price strategy: The company here fixes high price during this stage because in
order to promote the basic sale of a product therefore company uses cost-plus.
(c) Distribution strategy: The company will build selective distribution with an
intention to go for potential market.
(d) Advertising strategy: The company build product awareness among an early
adopters and dealers.
(e) Sales promotion: The company uses heavy sales promotion in this stage.

2. Growth stage:-
(a) Product strategy : The company offer product extensions , service , warranty .
(b) Price strategy: The company fixes the price in such a way to penetrates the
market
(c) Distribution strategy: The company build intensive distribution
(d) Advertising strategy: The co., build awareness and interest in the mass market
(e) Sales promotion: The company reduce ot take advantage of heavy consumers
demand.
 17
3. Maturity stage:
(a) Product strategy: the co., diversify brand and models
(b) Price strategy: The company fix the price to match or beat competitors
(c) Distribution strategy: The co., build more intensive distribution
(d) Advertising strategy : The company here stress brand differences and benefits.
(e) Sales promotion: The company increase to encourage brand switching.

4. Decline stage:
(a) Product strategy: The co., phase out weak items.
(b) Price strategy: The company fixes a cut price.
(c) Distribution strategy :The company go selective phase out and unprofitable
outlets.
(d) Advertising strategy: The company reduce to the level needed to retain hard-
core loyal.
(e) Sales promotion strategy: Here the sales promotion reduce to minimal level.

customer relationship management

A. The overall process of building and maintaining profitable customer relationships
by delivering superior customer value and satisfaction. Thus, today’s companies
are growing beyond designing strategies to attract new customers and create
transactions with them. They are using customer relationship management to retain
current customers and build profitable , long term relationships with them. The new
view is that marketing is the science and art of finding , retaining, and growing
profitable customers.

Why the new emphasis on retaining and growing customers? In the past,
many companies took their customers for granted, facing an expanding economy and
 18
rapidly growing markets, companies could proactive a” leaky bucket” approach to
marketing. Growing markets meant a plentiful supply of new customers. Companies
could keep filling the marketing bucket with new customers without worrying about
losing old customers through holes in the bottom of the bucket.

However, companies today face some new marketing realities.

Changing demographics , more sophisticated competitors , and overcapacity in many
industries- all of these factors mean that there are fewer customers to go around. Many
companies are now fighting for shares of flat or fading markets. Thus , the costs of
attracting new consumers are rising. In fact, on average, it costs 5 to 10 times as much to
attract a new customer than to keep an existing one.

Companies are also realizing that losing a customer means losing more
than a single sale. It means losing the entire stream of purchases that the customer would
make over a lifetime of patronage.

The value of the entire stream of purchases that the customer would
make over a lifetime of patronage is called customer lifetime value. The key to building
lasting customer relationship is to create superior customer value and satisfaction.
Satisfies customers are more likely to be loyal customers, and loyal customers are more
likely to give the company a larger share of their business.

Attracting and retaining customers can be a difficult task. Customers

often face a bewildering array of products and services form which to choose. To attract
and keep customers, a company must constantly seek ways to deliver superior customer
value and satisfaction.

A customer buys form the firm that offers the highest customer
perceived value which is the customer’s evaluation of the difference between all the
benefits and all the costs of a marketing offer relative to these of competing offers.
 19
Customer satisfaction is the extent to which a product’s perceived performance matches
a buyer’s expectation.

Highly satisfied customers produce several benefits for the company.

Satisfied customers are less price sensitive. They talk favorably to others about the
company and its products remain loyal for a longer period. However, the relationship
between customer satisfaction and loyalty varies greatly across industries and
competitive situation. So, Maintaing a separate department for customer relationship
management is a must and should be handled cautiously.

components of promotion mix

A. Promotion mix is the specific mix of advertising , personal selling, sales promotion,
public relations, and direct marketing tools that the company uses to pursue it’s
advertising and marketing objective

Advertising: It is an paid form of non personal presentation and promotion of ideas ,

goods or services by an identified sponsor. It is the most visible form of all promotion tools
which involves specific tools such as : newspapers, radio , television, telephone,
magazines ,outdoor postures, direct mail , internet etc..
Nature of advertising:-
 20
Positive impact:-
Advertising can reach masses of geographically dispersed buyers at a low cost
per exposure , and it enables the seller to repeat a message many times.
• Eg. Television advertising can reach huge audiences
• Beyond its reach, large scale advertising says something positive about the
seller’s size, popularity and success.
• As usual public nature , consumers tend to view advertised products as more
legitimate ( lawful)
• Advertising is also very expressive because it allows the company to dramatize its
products through the artful use of visuals, print, sound and coloour.
• On the other hand, advertising can be used to build a long term image for a
product ( such as coca-cola ads) which is triggering sales.

Negative impact:
• Advertising also has some shortcomings. Although it reaches many people quickly,
advertising is impersonal and cannot be as directly persuasive as can company’s sales
people.
• Advertising can carry on only a one-way communication with the audience and they
does not feel that it has to pay attention or response
• Advertisements through TV require very large budgets.

Sales promotion: sales promotion consists of short-term incentives to encourage

purchase or sale of a product or service. It includes a wide assortment of tools such as
coupons, contests , cent-off deals , premiums and others.

Nature of sales promotion:-

Positive impact:
• Sales promotion attracts consumer attention , offers strong incentives to purchase.
• It can be used to dramatize product offers and to boost sagging sales.
 21
• It invites and reward quick response ( advertising says “Buy our product” sales
promotion says “Buy it now.

Negative impact:
Sales promotion effects are often short lived. However, sales promotion is not
effective as advertising or personal selling in building long-run brand preference.
The following are major tools of sales promotions methods

Sample: A small amount of a product offered to consumers for trial.

Coupon: Certificates that gives buyers a saving when they purchase a specified product.

Cash refund offer ( rebate) : Offer to refund part of the purchase price of a product to
consumers who send a “Proof of purchase” to the manufacturer.

Price pack ( cents off deal) : reduced price that is marked by the producer directly on the
label or package.

Premium: good offered either free or at low cost as an incentive to buy a product.

Advertising speciality: Useful article imprinted with an advertiser’s name . given as a gift
to consumers.

Patronage reward: Cash or other award for the regular use of a certain company’s product
Or service.

Point of purchase (POP) promotion: Display and demonstration that takes place at the
point of purchase or sale.
Contests , sweeptakes, games: promotional events that give consumers the chance to win
 22
something- such as cash , trips or goods- by luck or through
extra effort.
Discount: A straight reduction in price on purchases during a stated period of time.

Allowance: Promotional money paid by manufacturers to retailers in return for an

agreement to feature the manufacturer’s products in some way.

Public relations:- Building good relations with the company’s various publics by obtaining
favorable publicity , building up a good corporate image, and
handling or heading off unfavorable rumours, stories and
events.
Public relation departments may perform any or all of the following functions:-
• Press relations or press agentry
• Product publicity
• Public affairs
• Lobbying’
• Investor relations
• Development
Major public relations tools:
• News
• Speeches
• Special events
• Written materials
• Audio visual materials
• Corporate identity materials
• Public service activities etc.

Personal selling : Personal selling consists of personal presentation by the firms sales
force for the purpose of making sales and building customer relationship.
 23
In other words personal selling is the process of assisting and persuading a
prospective buyers to buy a product in a face to face situation. It involves direct and
personal contacts between the seller and the customer.
Personal selling involves specific tools such as sales presentation , trade shows
and incentive program.

Personal selling process

Prospecting and qualifying

Pre approach

Approach

Presentation and demonstration

Handling objections

Closing

Follow up

The above four components are together known as promotion mix and it is not
compulsory that every firm will market the product using all its depend up on the company
strategy , plans , budget , type of product etc.
 24

segmentation
b. Market segmentation can be defined as the process of dividing a market into
distinct subsets of consumers with common needs or characteristics and
selecting one or more segments to target with a distinct marketing mix.

According to Philip kotler: “Market segmentation is the sub-dividing of

market into homogeneous subsections of customers where any sub-section may
conceivably be selected as a market target to be reached with a distinct marketing
mix”
 25
The major variables that might be used in segmenting consumer markets are as
follows:-
A. Geographic
B. Demographic
C. Psychographic &
D. Behavioral

Geographic
World region or country Eg: North America , western America , middle
east, china , India , Canada Mexico
country region Pacific, mountain, west north central , new
city or metro size England
Density Under 5000; 5000-20000, 20000-50000 et
Climate Urban , suburban , rural
Northern , southern
Demographic
Age Under 6 , 6-11 , 12-19 , 20-34 , 35-49 , 50-64, 65+
Gender Male , female
Family size 1-2 , 3-4, 5+
Family life-cycle Young , single; young, married , no children;
young, married with children; older, married with
children; older, married, no children
Income Under 10,000 ;10,000-20000;20000-30000 etc
Occupation Professional &technical; supervisors; operatives
Education etc
Religion Grade school or less; some high school etc
Race Catholic , pretestant, jewish, muslim , hindu etc
Generation Asian , Hispanic , black , white
Nationality Baby boomer , Generation X , Generation Y
North America , south America, British, French etc
 26
Psychographic
Social class Lower lowers, upper lowers , working class ,
middle class , upper middles, lower uppers , upper
uppers
Life style Achievers, strivers , strugglers
Personality Compulsive , gregarious, authoritarian, ambitious
Behavioral
Occasions Regular occasions; special occasion
Benefits Quality , service , economy , convenience , speed
User status Nonuser , Ex-user , potential user etc
User rates Light user , medium user , heavy user.
Loyalty status None , medium , strong, absolute
Readiness stage Unaware, aware, informed , interested, desirous etc
Attitude toward product Enthusiastic , positive, indifferent , negative,
hostile

The above table shows the segmentation of market according to different types of variable
which is necessary before advertising or selling the product.
 27

marketing audit

c. A comprehensive, systematic, independent and periodic examination of

a
company’s environment, objectives, strategies and activities to determine problem areas
and opportunities and to recommend a plan of action to improve the company’s
marketing performance matches a buyer’s expectations.

Marketing audit is done when deviation occurs at the time of marketing

control which is the process of measuring and evaluating the results of marketing
strategies and plans and taking corrective action to ensure that objectives are achieved as
many surprises occur during the implementation of marketing plans, the marketing
department must practice constant marketing control. It involves four steps first
management first sets specific marketing goals. It then measures its performance in the
marketplace and evaluates the causes of any differences between expected and actual
 28
performance. Finally management takes corrective action to close the gaps between its
goals and its performance. This may require changing the action programs or even
changing the goals.

The marketing audit covers all major marketing areas of a business, not
a few trouble spots. IT assess the marketing environment , marketing strategy ,
marketing organization, marketing systems, marketing mix, and marketing productivity
and profitability. The audit is normally conducted by an objective and experienced
outside party. The findings may come as a surprise- and sometimes as a shock- to
management. Management then decides which actions make sense and how and when to
implement them.

tele-marketing
A. Tele-marketing is nothing but using the telephone to sell directly to customers-has
become the major direct-marketing communication tool. Telephone marketing now
accounts for more than38 % of all direct – marketing media expenditures and 36% of
direct marketing sales. We are all familiar with telephone marketing directed toward
consumers, but B2B marketers also use telephone marketing extensively, accounting for
58% of all telephone marketing sales.

Marketers use outbound telephone marketing to sell directly to

consumers and business. Inbound toll – free 800 numbers are used to receive orders from
television and print ads, direct mail, or catalogs. The use of 800 numbers has taken off in
recent years as ,ore and more companies have begun using them, and as current users
have added new features such as toll-fee fax numbers. Residential use has also grown.
To accommodate this rapid growth, new toll free area codes (888,877,866) have been
 29
added. After the 800 area code was established in 1967, it took almost 30 years before its
8 million numbers were used up. In contrast, 888 area code numbers established in 1996
were used up in only 2 years.

Properly designed and targeted tele marketing provides many

benefits, including purchasing convenience and increased product and
Service information, However, the recent explosion in unsolicited telephone marketing has
annoyed many consumers, who object to the almost daily “junk phone calls” that pull them
away from the dinner table or fill the answering machine. Lawmakers around the country
are responding with legislation ranging from banning unsolicited telemarketing calls during
certain hours to letting households sign up for “Do not call” lists. Most telemarketers
support some action against random and poorly targeted telemarketing. As a direct
marketing Association executives notes “We want to target people who want to be
targeted”.

Objectives of sales promotion

A. Sales promotion consists of short term incentives to encourage the purchase or sale of a
product or service. The objectives of sales promotion are as follows:-
 To increase short term sales or to help in building long –term market share.
 Sales promotion helps to reinforce the product’s position and build long-term
customer relationship.
 Trade and sales force promotions supports the firm’s personal selling process.
 To expand the target market
 To add extra value to the product and develop brand franchise
 The develop favorable consumer experience with the product.
 30

Core concepts of marketing

A social and managerial process whereby individuals and groups obtain what they
need and want through creating and exchanging products and value with others.
The following are the core concepts of marketing
 Needs, wants , and demands
 Marketing offers , products , services and experience
 Value and satisfaction
 Exchange, transaction and relationship
 Markets

Needs , wants and demands:-

Human needs are states of felt deprivation. They include
basic physical needs for food, clothing, warmth, and safety; social needs for belonging and
affection; and individual needs for knowledge and self-expression . These needs were not
created by marketers ; they are a basic part of the human makeup.
 31
Wants are the form human needs take as they are shaped
by culture and individual personality. An American needs food but wants Big mac and soft
drink. A person in Mauritius needs food but wants a mango, rice , lentils ,and beans. Wants
are shaped by one’s society and are described in terms of objects that will satisfy needs.
When backed by buying power, wants become Demands. Given their wants and resources,
people demand products with benefits that add up to the most value and satisfaction.

Marketing offers- Products, services and experiences:-

Companies address needs by putting forth a value proposition , a set of
benefits that they promise to consumers to satisfy their needs. The value proposition is
fulfilled through a Marketing offer- some combination of products, services , information,
market to satisfy a need or want. Marketing offers are not limited to physical products. In
addition to tangible products , marketing offers include services, activities or benefits
offered for sale that are essentially intangible and do not result in the ownership of anything.
Examples include banking , airline , hotel , tax preparation , and home repair services. More
broadly , marketing gofers also include other entities, such as persons, places, organizations,
information, and ideas.

Value and satisfaction:-

Consumers usually face a broad array of products and services that
might satisfy a given need. Customer value is the difference between the values the
customer gains from owning and using a product and the costs of obtaining the product.
Customers form expectations about the value of various marketing offers and buy
accordingly. How do buyers form their expectations? Customer expectations are based on
past buying experiences, the opinions of friends , and marketer and competitor information
and promises.
Customer satisfaction with a purchase depends on how well the
product’s performance lives up to the customer’s expectations. Customer satisfaction is a
key influence on future buying behavior. Satisfied customers buy again and ell others about
 32
their good experiences. Dissatisfied customers often switch to competitors and disparage the
product to others.

Exchange , Transaction , and Relationship:-

Marketing occurs when people decide to satisfy needs and wants
through exchange. Exchange is the act of obtaining a desired object from someone by
offering something in return. Whereas exchange is the core concepts of marketing, a
transaction, in turn, is marketing ‘s unit of measurement . A Transaction consists of a trade
of values between two parties:

In the broad sense, the marketer tries to bring about a response to some
marketing offer. The response may be more than simply buying or trading products and
services. Marketing consists of actions taken to build and maintain desirable exchange
relationship with target audiences involving a product , service , idea, or other object.
Beyond simply attracting new customers and creating transactions, the goal is to retain
customers and grow their business with the company. Marketers want to build strong
economic and social connections by promising the consistently delivering superior value.

Markets:-
The concept of exchange and relationship lead to the concept of a
market. A market is the set of actual and potential buyers of a product. These buyers share a
particular need or want that can be satisfied through exchange relationship. The size of a
market depends on the number of people who exhibit the need , have resources to engage in
exchange, and are willing to exchange these resources for what they want.

Marketers are keenly interested in markets. Each nation’s economy and

the whole world economy consists of complex, interacting sets of markets that are linked
through exchange processes. Marketers work to understand the needs and wants of specific
 33
markets and to select the markets that they can serve best. In turn , they develop products
and services that create value and satisfaction for customers in these markets. The result is
profitable long –term customer relationship.

Major steps in selecting advertising media

The major steps in media selection are
(1) Deciding on reach, frequency , and impact
(2) Choosing among major media types
(3) Selecting specific media vehicles
(4) Deciding on media timing

Deciding on Reach, Frequency and impact:-

To select media, the advertiser must decide what reach
and frequency are needed to achieve advertising objectives. Reach is a measure
of the percentage of people in the target market who are exposed to the ad
campaign during a given period of time.
The advertiser also must decide on the desired media
impact- the qualitative value of a message exposure through a given medium.
 34
Eg: for products that need to be demonstrated, messages on television may have
more impact than messages on radio because television uses sight and sound. The
same message in one magazine may be more believable than in another. In
general, the more reach, frequency, and impact the advertiser seeks, the higher the
advertising budget will have to be.

Choosing among major media types:-

The media planner has to know the reach , frequency ,
and impact of each of the major media types. Media planners consider many
factors when making their media choices. The media habits of target consumers
will affect media choice – advertisers look for media that reach target consumers
effectively. So will nature of the product – eg: fashions are best advertised in
color magazines and automobile performance us best demonstrated on television.

Media impact and cost must be reexamined regularly.

for a long time , television and magazines have dominated in the media mixes of
national advertisers, with other media often neglected. Recently, however as network
television cost saor and audiences shrink, many advertisers are looking for new ways
to reach consumers.

Three media benefiting greatly from the shift are outdoor

advertising, cable television, and digital satellite television system.
Medium Advantages
News paper Flexibility , timeliness,
good local market
coverage, broad
acceptability , high
believability
Television Good mass- market
coverage; low cost per
exposure; combines sight;
sound and motion;
appealing to the senses
Direct mail No ad competition within
Limitations
Short life, poor reproduction
quality, small pass- along
audience
High absolute costs; high
clutter; fleeting exposure;
less audience selectivity
Relatively high cost per
 35
the same time Exposure
Radio Good local acceptance; Audio only ; low attention ;
high geographic and
fragmented audiences
demographic selectivity;
low cost
High geographic and Long ad purchase lead time
demographic selectivity ;
Magazines ;high cost ; no guarantee of
credibility and prestige;
high quality reproduction position

Outdoor Flexibility; high repeat Little audience selectivity ;

exposure; low cost; low
creative limitations
message competition;
good positional
selectivity

Internet High selectivity ; low Small, demographically

cost; immediately ; skewed audience; relatively
interactive capabilities low impact; audience
controls exposure

Selecting specific media vehicles;-

The media planner now must choose the best media e the
vehicles – specific media within each general type. Media planners must compute the
cost per thousand persons reached by a vehicle .They must also consider the costs of
producing ads for different media. Whereas newspaper ads may cost very little to
produce, flashy television ads may cost million.

Deciding on media timing:-

The advertiser must also decide how to schedule the
advertising over the course of a year. Suppose sales of a product peak in December
and drop in march. The firm cn vary its advertising to follow the seasonal pattern, to
oppose the seasonal pattern, or to be the same all year. Most firms do some seasonal
advertising. Some do only seasonal advertising. Finally the advertiser has to choose
the pattern of the ads. Continuity means scheduling ads evenly within a given period.
 36
Pulsing means scheduling ads unevenly over a given time period. Recent advances in
technology have had a substantial impact on the media planning and buying
functions. Today, for eg: computer software applications called media optimizers
allow media planners to evaluate vast combination of television programs and prices.
Such programs help advertisers to make better decisions about which mix of
networks, programs and hours of the day will yield the highest reach per ad dollar.

channel design decision

Designing a channel system calls for analyzing consumer needs , setting channel
objectives, identifying major channel alternatives and evaluating them.

Analyzing customer needs:-

Marketing channels are part of the overall customer value delivery
network. Each channel member adds value for the customer. Thus, designing the marketing
channel starts with finding out what target consumers want from the channel.
Providing the fastest delivery, greatest assortment , and most services
may not be possible or practical. The company and its channel members may not have the
resources or skills needed to provide all the desired services. So, as customers are totally
different in their needs – analyzing it in a proper way is necessary to design channel
decision.

Setting channel objectives:-

Companies should state their marketing channel objectives in terms of
targeted levels of customer service. The company should decide which segments to serve
and the best channels to use in each case. In each segment, the company wants to minimize
the total channel cost of meeting customer service requirements.
 37
The company’s channel objectives are also influenced by the nature of
the company, its products, its marketing intermediaries, its competitors, and the
environment .

Identifying major alternatives:-

When the company has defined its channel objectives , it should next
identify its major channel alternatives in terms of types of intermediaries, the number of
intermediaries , and the responsibilities of each channel member.
A firm should identify the types of channel members available to carry
out its channel work. The following channel alternatives might emerge from management
discussions: Company sales force: Assign outside salespeople to territories and have them
contact all prospects in the area or develop separate company sales forces for different
industries. Manufacturer’s agency- Hire manufacturer’s agent- independent firms whose
sales forces handle related products from many companies – in different regions or
industries to sell the new test equipment. Industrial distributors:- find distributors in the
different regions or industries who will buy and carry the new line. Given them exclusive
distribution , good margins , product training and promotional support.
Companies must also determine the number of channel members
to use at each level, Three strategies are available : Intensive distribution : Stocking the
product in as many outlets as possible. Exclusive distribution : Giving a limited number
of dealers the exclusive right to distribute the company’s products in their territories.
Selective distribution: The use of more than one, but fewer than all , of intermediaries who
are willing to carry the company’s products.

Evaluating the major alternatives:-

Using economic criteria, a company compares the likely sales,
costs, and profitability of different channel alternatives and selects the best one among it.
Thus, to be considered , a channel involving long-term commitments should be greatly
superior on economic and control grounds.
 38

Buyer decision process.

A. Buyer decision process consists of the following stages:-
Need recognition

Information search

Evaluation of alternatives

Purchase decision

Post purchase behaviour

Need recognition:-
The buying process starts with need recognition – the buyer
recognizes a problem or need. The need can be triggered by internal stimuli when
one of the person’s normal needs – hunger , thirst – rises to a level high enough to
become a drive. A need can also be triggered by external stimuli.
The marketer should research consumers to find out what kinds
of needs or problems arise, what brought them about , and how they led the
consumer to this particular product.
 39

Information search:-
An interested consumer may or may not search for more
information. If the consumer’s drive is strong and a satisfying product is near at
hand , the consumer is likely to buy it then. If not, the consumer is likely to buy it
then. If not, the consumer may store the need in memory or undertake an
information search related to the need.
The consumer can obtain information from any of several
sources. These include personal sources , ( family , friends , neighbors ,
acquaintances) , commercial sources ( advertising , salespeople , dealers ,
packaging, displays) public sources ( mass media , consumer rating organizations)
and experiential sources ( handling , examining , using the product) the relative
influence of these information sources varies with the product and the buyer.

Evaluation of alternatives:-
The marketer needs to know about alternative evaluation – that
is , how the consumer processes information to arrive at brand choices.
Unfortunately , consumers do not use a simple and single evaluation process in all
buying situation. Instead, several evaluation processes are at work.

How consumers go about evaluating purchase alternatives

depends on the individual consumer and the specific buying situation. Marketers
should study buyers to find out how they actually evaluate brand alternatives . if
they know what evaluative processes go on, marketers can take steps to influence
the buyer’s decision.

Purchase decision:-

In the evaluation stage, the consumer ranks brands and forms

purchase intentions. Generally , the consumer’s purchase decision will be to buy
 40
the most preferred brand, but two factors can come between the purchase
intention and the purchase decision. The first factor is the attitudes of others, and
the second factor is unexpected situation factors . The consumer may form a
purchase intention based on factors such as expected income, expected price , and
expected product benefits . However, unexpected events may change the purchase
intention. Thus , preferences and even purchase intentions do not always result in
actual purchase choice.

Post purchase behaviour:-

The stage of the buyer decision process in which consumers take
further action after purchase , based on their satisfaction or dissatisfaction. The
larger the gap between expectations and performance, the greater the consumer’s
dissatisfaction . This suggests that sellers should make product claims that
faithfully represent the product’s performance so that buyers are satisfied. Some
sellers might even understate performance levels to boost consumer satisfaction
with the product.
Almost all major purchases results in cognitive dissonance, or
discomfort caused by post purchase conflict. After the purchase, consumers are
satisfied with the benefits of the chosen brand and are glad to avoid the
drawbacks of the brands not bought. However, every purchase involves
compromise. Consumers feel uneasy about acquiring the drawbacks of the chosen
brand and about losing the benefits of the brands not purchased. Thus , consumer
feel at least some post purchase dissonance for every purchase.
A dissatisfied consumer responds differently. Whereas , on
average, a satisfied customer tells 3 people about a good product experience , a
dissatisfied customer grips to 11 people. Clearly, bad word of mouth travels
farther and faster than good word of mouth and can quickly damage consumer
attitudes about a company and its products.
By studying the overall buyer decision, marketers may be able to
find ways to help consumers move through it. If customers know about the
 41
product but are not buying because they hold unfavorable attitudes towards it.
The marketer must find ways to either change the product or change consumer
perceptions.

stages of new product introduction

A. Given the rapid changes in consumers taste , technology, and competition,
companies must develop a steady stream of new products and services.
A firm can obtain new product in tow ways: one is through acquision
I,e, by buying a whole company, a patent, or a license to produce
someone else’s product. The other is through New product
development in the company’s own research and development.
Meaning:-
New product development means the development of original products.
Product improvement , product modifications and new brands through the firms own
Research and development efforts.
New product introduction stages:-
• Idea generation
• Idea screening
• Concept development and testing
• Marketing strategy
• Business analysis
• Product development
 42
• Test marketing &
• Commercialization

Idea generation:-
New product development starts with idea generation. It means the
systematic search for new product ideas. According to one well known management
consultant “ for every 1000 ideas , only 100 will have enough commercial promise to merit
a small scale experiment , only 10 of those will warrant substantial financial commitment,
and of those only a couple will turn out to be unqualified success”.
So most of the companies typically generates many ideas in order to
find a few good ones. Thus, the company gets various ideas by its internal and external
sources such as customers , competitors , distributors and suppliers and others.

Idea screening:-
The purpose of idea generation is to create a large number of ideas, the
purpose of the succeeding stage is to reduce that number. The first idea reducing stage is
idea screening , which helps to spot good ideas and drop poor one as soon as possible.
Product development costs rise greatly in later stages, so the company wants to go ahead
only with the product ideas that will turn into profitable product.

Concept development and testing:-

An attractive idea must be developed into a product concept. Product
concept is a detailed version of new product idea started in meaningful consumer term, and
concept testing calls for testing new product concepts with a group target consumers to find
out whether the concept have strong consumer appeal.

Marketing strategy and development:-

Designing an initial marketing strategy for a new product based on the
product concept. The marketing strategy statement consists of three parts : The first part
 43
describes the target market; the planned product positioning ; and the sales; market share ,
and profit goals for the first few years
The second part of the marketing strategy statement outlines the
product’s planned price, distribution, and marketing budget for the first year; The third part
of the marketing strategy statement describes the planned long –run sales , profit goals , and
marketing mix strategy.

Business analysis:-
Once management has decided on its product concept and marketing strategy,
it can evaluate the business attractiveness of the proposal. Business analysis involves a
review of the sales , costs, and profit projections for a new product to find out whether they
satisfy the company’s objectives. If they do, the product can move to the product
development stage. The company uses the sales and costs figures to analyze the new
product’s financial attractiveness.

Product development:-
Developing the product concept into a physical product in order to
ensure that the product idea can be turned into a workable product or if the product concept
passes the business test, it moves into product development.
The R&D department will develop and test one or more physical
versions of the product concept. Often products undergo rigorous tests to make sure that
they perform safely and effectively, or that consumers will find value in them.

Test marketing:-
Test marketing is the stage of new product development in which the
product and marketing program are tested in more realistic market setting. Test marketing
gives the experience with marketing the product before going to the great expense of full
introduction. The amount of test marketing needed varies with each new product. However,
when introducing a new product requires a big investment , or when management is not sure
of the product or marketing program, a company may do a lot of test marketing. When using
 44
test marketing , consumer products companies usually choose one of three approaches-
standard test markets, controlled test market or simulated test market.

Commercialization:-
Test marketing gives management the information needed to make a
final decision about whether to launch the new product. If the company goes ahead with
Commercialization- introducing the new product into the market- it will face high costs.
The company launching a new product must first decide on introduction timing. ext, the
company must decide where to launch the new product – in a single location , a region , the
national market, or the international market.

process of personal selling

A. Personal selling consists of personal presentation by the firms sales force for the purpose
of making sales and building customer relationship.
In other words personal selling is the process of assisting and persuading a
prospective buyers to buy a product in a face to face situation. It involves direct and
personal contacts between the seller and the customer.
Personal selling involves specific tools such as sales presentation , trade shows
and incentive program.

Personal selling process

Prospecting and qualifying

Pre approach

Approach

Presentation and demonstration

Handling objections
 45
Closing

Follow up
Prospecting and Qualifying:-
The first step in the selling process is prospecting- identifying
qualified potential customers. Approaching the right potential customers is crucial to selling
success. The sales person must often approach many prospects to get just a few sales.
Although the company supplies some leads , salespeople need skill in finding their own.
They can ask current customers for referrals. They can cultivate referral sources such as
suppliers, dealers , non competing salespeople, and bankers. They can search for prospects
in directories or on the web and track down leads using the telephone and direct mail. Or
they can drop in unannounced on various offices.
Sales people also need to know how to qualify leads- that is ,
how to identify the good ones and screen out the poor ones. Prospects can be qualified by
looking at their financial ability, volume of business, special needs , location and
possibilities for growth.

Pre approach:-
The step in the selling process in which the salesperson learns as
much as possible about a prospective customer before making a sales call. The salesperson
can consult standard industry and online sources , acquaintances and others to learn about
the company. The sales person should set call objectives , which may be to qualify the
prospects , to gather information, or to make an immediate sale.

Approach:-
During the approach step, the salesperson should know how to
meet and greet the buyer and get the relationship off to a good start. This step involves the
salesperson’s appearance , opening lines, and the follow-up remarks. The opening lines
should be positive to build goodwill from the beginning of the relationship. This opening
might be followed by some key questions to learn more about the customers needs or by
 46
showing a display or sample to attract the buyer’s attention and curiosity. As in all stages of
the selling process , listening to the customer is crucial.

Presentation and demonstration:-

During the presentation step of the selling process, the salesperson tells
the product “story” to the buyer, presenting customer benefits and showing how the product
solves the customer’s problems. The problem-solver salesperson fits better with today’s
marketing concept than does a hard-sell salesperson or the glad –handing extrovert. Today ,
advanced presentation technologies allow for full multimedia presentations to only one or a
few people. Audio-and video cassettes , CD’s, laptop computers with presentation software ,
and online presentation technologies have replaced the flip chart.

Handling objections:-
Customers almost always have objections during the presentation or
when asked to place an order. The problem can be either logical or psychological , and
objections are often unspoken , In handling objections, the salesperson should use a positive
approach, seek out hidden objections , ask the buyer to clarify any objections , take
objections as opportunities to provide more information, and turn the objections into reasons
for buying.

Closing:-
After handling the prospect’s objections, the salesperson now tries to close the
sale. Some salespeople do not get around to closing or do not handle it well. They may kacj
confidence , feel guilty about asking for the order , or fail to recognize the moment to close
the sale. Salespeople should know how to recognize closing signals from the buyer,
including physical actions, comments, and questions.

Follow up:-
Follow-up is necessary if the salesperson wants to ensure customer
satisfaction and repeat business. Right after closing, the salesperson should complete any
details on delivery time, purchase terms and other matters. The sales person then should
 47
schedule a follow –up call when the initial order is received, to make sure there is proper
installation, instruction and servicing. This visit would reveal any problems, assure the
buyer of the salesperson’s interest , and reduce any buyer concerns that might have arisen
since the sale.

**************************