Principles of Marketing Unit 1 Introduction WHAT IS MARKETING?  Marketing is managing profitable customer relationships.

The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction.  For eg.: Wal-Mart and Big-Bazaar has become world’s largest retailer, and one of the world’s largest companies, by delivering on its promise, “Always low prices, Always!” DEFINITION “ The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return”. -By Philip Kotler  Many people think of marketing only as selling and advertising. However, selling and advertising are only the tip of the marketing iceberg.  Today, marketing must be understood not in the old sense of making a sale- “telling and selling”but in the new sense of satisfying customer needs.  If the marketer understands consumer needs; develops products and services that provide superior customer value; and prices, distributes and promotes them effectively, these products will sell easily. THE MARKETING PROCESS The marketing process involves five steps. 1. Understand the market place and customer needs and wants. 2. Design a customer-driven marketing strategy. 3. Construct an integrated marketing program that delivers superior value. 4. Build profitable relationships and create customer delight. 5. Capture value from customers to create profits and customer equity. Under the market place and customer needs and wants Design a customer-driven marketing strategy Construct an integrated marketing program Build profitable relationships and create customer delight Capture value from customers to create profits and customer equity Create satisfied, loyal customers

Research Customers and the Market Place

Select customers to serve- market segmentation and targeting Decide on value propositiondifferentiation and positioning

Product and service designbuild strong brand Pricing- create real value Distributionmanage demand and supply chain Promotioncommunicate the value proposition

Manage Marketing Information and Customer Data

Customer relationship management (CRM): build strong relationship with chosen customers

Capture customer lifetime value Increase share of market and share of customer

Partner relationship management: build strong relationship with marketing partners

e. many sellers make the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products i. They conduct consumer research analyze mountains of customer data. activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything.  Dissatisfied customers often switch to competitors and disparage the products to others. Market Offerings. marketers need to understand customer needs and wants and the market place 1. banking. Wants and Demands. services. Needs.  Customer value and customer satisfaction are key building blocks foe developing and managing customer relationships.Products.  Market offering is nothing but some combination of products.  Marketers must be careful to set the right level of expectations. wants and demands. For e. Outstanding marketing companies go to great lengths to learn about and understand their customers’ needs. Exchange and Relationships  Marketing occurs when people decide to satisfy needs and wants through exchange relationships.  Smart marketers look beyond the attributes of the products and services they sell. they suffer from marketing myopia. within which they operate which includes understanding of five core customer and market place conceptsneeds. For eg. Given their wants and resources.Step1-  Understand the market place and customer needs and wants.(Core Concepts of Marketing)  As a first step.  However. . French fries and a soft drink. information or experiences offered to a market to satisfy a need or want. social needs for belonging and affection. Eg. 4. 5. hotel.  Market offerings are not limited to physical products. Services and Experiences  Consumers’ needs and wants are fulfilled through a market offering. services and experiences Value and satisfaction Exchanges and relationships Markets. Whereas if they raise expectations too high. tax preparation and home repair services.products. warmth and safety. 3. They also include services. and individual needs for knowledge and self expression.  Demands are human wants that are backed by buying power. 2. clothing.Core Concepts of Marketing:  Needs are states of felt deprivation which includes physical needs for food.  Wants are the form that human needs take as shaped by culture and individual personality. Banking industry. buyers will be disappointed. Their peoples at all levels-including top management-stay close to customers.  Satisfied customers buy again and tell others about their good experiences.  If they set expectations too low. people demand products with benefits that add up to the most value and satisfaction. they may satisfy those who buy but fail to attract enough buyers.g. airline. Value and Satisfaction  Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly. one needs food but want hamburger. wants and demands Market offerings.

attract. All of the arrows represent relationships that must be developed and managed.  All of the actors in the system are affected by major environmental forces.  Marketing Management can be defined as the art and science of choosing target markets and building profitable relationships with them. political/ legal and social/ cultural. a company’s success at building profitable relationships depends not only on its own actions but also on how well the entire system serves the needs of final consumers. the marketing manager must answer two important questions What customers will we serve? i. For eg. promote them and store and deliver them. Wal-Mart cannot fulfill its promise of low prices unless its suppliers provide merchandise at low costs.  Activities such as product development.  It does this by dividing the market into segments of customers (market segmentation) and selecting which segments it will go after (target marketing). buyers also carry on marketing. research. design good market offerings. identify their needs. delivering and communicating superior customer value. set prices for them. Exchange is the act of obtaining a desired object or response from someone by offering something in return.  Marketers want to build strong relationships by consistently delivering superior customer value. either directly or through marketing intermediaries.  Sellers must search for buyers. what’s our target market?  How can we serve these customers best? i.  A market is the act of actual and potential buyers of a product or service. marketing involves serving a market of final consumers in the face of competitors. marketing management can design a customer-driven marketing strategy. Elements of a modern marketing system  Although we normally think of marketing as being carried on by sellers. communication. keep and grow target customers by creating.e.  In the usual situation.  Each party in the system adds value for the next level.  The company and the competitors send their respective offers and messages to consumers. technological. Step 2Designing a Customer-Driven Marketing Strategy  Once it fully understands consumers and market place.  Thus. Markets  The concepts of exchange and relationships lead to the concept of a market. physical. economic.demographic. what’s our value proposition? Selecting customers to serve The company must first decide who it wills serve.  Consumers do marketing when they search for the goods they need at prices they can afford. .  The marketing manager’s aim is to find. distribution.  These buyers share a particular need or want that can be satisfied through exchange relationships. pricing and services are core marketing activities.  To design a winning marketing strategy. And Ford cannot deliver high quality to car buyers unless its dealers provide outstanding sales and service.  Company purchasing agents do marketing when they track down sellers and bargain for good terms.e.

also kuch kuch hota hai. the company’s marketing strategy outlines which customers the company will serve and how it will create value for these customers. with punch line someone somewhere is made for each other…stating that it’s a love story. they may not serve any customers well.e. timing and nature of their demand.  Next. price.  It must decide how much it will charge for the offer (price) and how it will make the offer available to its target consumers (place). marketing managers must decide which customers they want to target and the level. But marketing managers know that they cannot serve all customers in every way. building customer relationships.. . marketing management is customer management and demand management.  The major marketing mix tools are classified into four broad groups. Fair & Lovely’s punch line says “Kale ko bhi gora bana de”. place and promotion. Some people think of marketing management as finding as many customers as possible and increasing demand. the firm must first create a need-satisfying market offering (product).“Why should I buy your brand rather than a competitor’s?  Companies must design strong value propositions that give them the greatest advantage in their target markets. the company wants to select only customers that it can serve well and profitably. the set of marketing tools the firm uses to implement its marketing strategy. designing a customer-driven marketing strategy and constructing marketing programs.  By trying to serve all customers.  It consists of the firm’s marketing mix.the fire…indicating that its an action movie. integrated marketing program that communicates and delivers the intended value to chosen customers.  Simply put. Step 3Preparing an Integrated Marketing Plan and Program  So. Choosing a Value Proposition The company must also decide how it will serve targeted it will differentiate and position itself in the marketplace.  Finally.  Instead.  Until recently.  Customer relationship management (CRM) is perhaps the most important concept of modern marketing.  A company’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. it must communicate with target consumers about the offer and persuade them to its merits (promotion).  Eg. CRM has been defined narrowly as a customer data management activity.  To deliver on its value proposition.  Thus. called the four Ps of marketing: product. Step 4Building Customer Relationships  The first three steps in the marketing process. Daag. move-aaahhh se aahhhhh tak…etc.  The marketing program builds customer relationships by transforming the marketing strategy into action.  Such value propositions differentiate one brand from another. They answer the customer’s question.  Thus the firm must blend all these marketing mix tools into a comprehensive.understanding the market place and customer needs.all lead up to the fourth and the most important step: i. the marketer develops an integrated marketing program that will actually deliver the intended value to its target customers.

the company now constructs an integrated marketing program.  In this broader sense. beyond practicing good CRM. marketing is the process of building profitable customer relationships by creating value for customers and capturing value in return.  Thus.  Thus.  With its marketing strategy decided. the marketer outlines a value proposition that spells out what values the company will deliver in order to win target customers.  It thus deals with all aspects of acquiring.  The company develops product offers and creates strong brand identities for them. in the first four steps the company creates value for customers and in the final step it reaps rewards of its strong customer relationships by capturing value from customers. The Production Concept 2. This helps the company to capture customer lifetime value and greater share of customer.  It prices these offers to create real customer value and distributes these offers to make them available to target consumers. however. Step 5Capturing Value from Customers  The first four steps in the marketing process involve building customer relationships by creating and delivering superior customer value. Here. the company cannot do it alone.  It then designs a customer-driven marketing strategy based on the answers to two simple questions:  The first question is “What consumers will we serve?” (Market segmentation and targeting). Instead. firms must also practice good partner relationship management. market share and profits.  The second marketing strategy question is “How can we best serve targeted customers?” (Differentiation and positioning). Good marketing companies know that they cannot serve all customers in every way.  The first four steps of the marketing process focus on creating value for customers.  Finally. they need to focus their resources on the customers they can serve best and most profitably. the company designs promotion programs that communicate the value proposition to target consumers and persuade them to act on the market offerings.that transforms the marketing strategy into real value for customers.  The final step involves capturing value in return. By this definition it involves managing detailed information about individual customers. the firm creates highly satisfied customers who stay loyal and buy more. The Product Concept . keeping and growing customers.  By creating superior customer value.  The company first gains a full understanding of the market place by researching customer needs and managing marketing information. what is marketing? Pulling it all together…  Simply put. So. This in turn means greater long-term returns for the firm.consisting of a blend of the four marketing mix elements or the four Ps. The result is increased long-term customer equity for the firm. It must work closely with marketing partners both inside the company and throughout the marketing system. in the form of current and future sales. marketers practice CRM to create customer satisfaction and delight.  In creating customer value and relationships.  Throughout the process. MARKETING CONCEPTS Business enterprises conduct their marketing activity around these five concepts: 1. CRM is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

 Selling is preoccupied with the seller’s need to convert his product into cash whereas marketing deals with the idea of satisfying customer needs by offering a quality product and the whole cluster of things associated with creating.  Selling focuses on the needs of the seller and marketing focuses on the needs of the buyer. deliver and communicate a better value proposition through its marketing offer. in comparison to the competitors for its chosen target segment.  So companies should undertake selling and promotion of their products for marketing success. performance and other innovative features. The Production Concept  The production concept emerges out of the production orientation of the firm.  The problem with this approach is the assumption that the customer will certainly buy the product after persuasion and if dissatisfied will not complain. The Selling Concept 4. The Marketing Concept  The marketing concept proposes that the reason for success lies in the company’s ability to create. The Selling Concept  The selling concept proposes that customers. the more profitable we become. in which their goal is to sell what they produce than what the customer really wants.  Managers focus on developing superior products and improving the existing product lines over a period of time. delivering and finally consuming it.  Application of this concept however leads to poor quality of service and higher level of impersonalization in business.  Many times it is observed that innovations enter in the market before the market is ready for the product.  This seems to be a viable strategy in a developing market where market expansion is the survival strategy for the business. The Marketing Concept 5. fire fighting equipments including fire extinguisher. vacuum cleaner.  This approach is applicable in the cases of unsought goods like life insurance. So let us go out and make customers buy our products. .3.  The problem with this orientation is that the managers forget to read the customer’s mind and launch products based on their own technological research and scientific innovations.  It is based on the idea that the more we make. The Societal Marketing Concept.  In reality this does not happen and companies pursuing this concept often fail in business. The Product Concept  The product concept has the proposition that consumers will favour those products that offer attributes like quality.  So managers try to achieve higher volume by lowering production costs and following intensive distribution strategy.  These industries are seen having a strong network of sales force  Firms with high capacity apply this orientation. be the individuals or organizations will not buy enough of the firm’s products unless they are persuaded to do so through the selling effort.  Innovative products are launched without educating the customers about them and the probable benefit or value that the customer is likely to get by using the new products. etc.  The basic proposition is that customers will choose products and services that are widely available and are of low cost.

Marketing aims at reducing the cost of distribution as far as possible. A sound marketing system can give protection against business slump by discovering new markets. reducing cost of distribution. Provides employment. 3.The main object of marketing is to provide goods and services to the society according to their needs and taste at reasonable and affordable prices. . All activities such as planning. etc provide soft drinks which are harmful for the health. They provide energy drinks which will help the consumers to quench their thirst as well as remain healthy whereas companies like coca-cola.  For eg. finance or design revolve around the marketing decisions. 5. Pepsi.Trade cycles causes fluctuations in prices. Importance to the Firms: 1. Marketing creates and increases demand for the new and existing products and thus raises the standard of living of the people. purchase. etc. wants and intentions of the target market and to deliver the expected satisfaction more effectively and efficiently than the competitors in a way to preserve or enhance the consumer’s and society’s well being. In order to satisfy the various wants of people new inventions are made.Sound marketing system helps in providing employment in different marketing processes such as marketing research. SIGNIFICANCE/ IMPORTANCE OF MARKETING/ RELEVANCE OF MARKETING IN A DEVELOPING ECONOMYImportance of marketing is mainly attributed to the following category: A. The marketing concept is thus an elaborative attempt to explain the phenomenon that rests on four key issues like target market. In today’s economy. retail and wholesale business. production is planned according to the sales forecasts and not according to the production capacity of the firm. An increased demand stimulates production activity in the country which in turn increases the national income. Increase in national income. modifying or improving he existing product and suggesting alternative uses. making it acceptable to customer. Protection against business slump. customer need. storing and warehousing. Marketers use marketing channels to reach its end users. publicity work. Importance to society: 1. Sometimes there is a period of depression followed by a period of boom. takes into consideration the health of the consumers. Thus. Delivery of goods as per standard of living.: the fruit juice companies like Tropicana.  The societal marketing concept is thus an extension of the marketing concept to cover society in addition to the consumers. 4. leading to wide spread unemployment and a chain of other evils. The Societal Marketing Concept  The societal marketing concept proposes that enterprise’s task is to determine the needs.Business planning and decision-making. marketing decisions influence the business decisions. etc. cloud 9. 2. With the decrease in demand many small units stop production. Reduction in distribution cost. B. transport.Sound marketing system is associated with creation of increased demand for goods and services. so that the commodities might be within the reach of maximum number of consumers. A period of depression and low prices is very harmful to the economy. production. integrated marketing communication and profitability.Marketing is helpful not only to plan the production but also in business planning and taking various decisions regarding business. So they lay focus only on the marketing aspect and not on the societal marketing aspects. real.

A rapid development of the economy is possible only by adopting the modern methods of marketing. negotiation of terms of sale such as quality.When production is seasonal but consumption is annual or when production is continuous but consumption is seasonal storage becomes necessary. The goods have sometimes to be collected and assembled at one place. Buying and assembling are two distinct processes which involve elements such as kind. Buying is the first step in the process of marketing. and price.Transportation is he movement of goods from the centre of production to the centre of consumption. An effective marketing system will help mobilize modern and innovative techniques of marketing. the volume of production with all its upto-date technology is generally more than the demand.Buying is the one part of exchange process. E. “Marketing System”. The profit making object of a business concern is achieved only through the sale of goods. Facilitating Functions: . products. The opening of new markets have been possible by the quick transportation &communication. it is called buyer’s market. A god system of transportation increases the value of goods by the creation of place utility. quantity and price of product. Importance to underdeveloped economy.Business collects various information regarding customer’s changing behaviors from time to time through marketing. Physical Supply Functions: 1. market research. Buying. C. selection of channel of distribution. regular supply. Marketing system requires an economical and effective transportation system. In such a situation only those firms succeed which adopts.2. On the other hand when the demand for the goods and services exceeds supply. Transportation.When the supply of goods exceeds the demand. Storage involves holding and preserving of goods between the time of their production to the time of their consumption. 3. C. 3. 2. purchased from different sources.Assembling means creation and maintenance of the stock of goods. it is absolutely necessary that the quantity produced must be disposed off rapidly within the country itself or abroad which is possible only by a very sound and advanced “Marketing System”. Importance in Buyer’s and Seller’s Market. Marketing also provides information to the firm about the competitors.In developed countries. other being the selling. and a retailer has to buy goods to be sold to the consumer. a wholesaler has to buy goods to sell to the retailer. Marketing helps in increasing the business profits by reducing the selling cost on one hand and increasing the demand of the product on the other hand through advertising and sales promotion activities. date of delivery and other terms and conditions. Source of information. Storage and Warehousing. production. Increasing profits.Every business is carried on with the profit motive. Importance to Developed Economy. lower price and improved services to the consumers. quality. it is called seller’s market. creation of demand. Buying involves transfer of ownership of goods. All this requires specialized knowledge on the part of the buyers. FUNCTIONS OF MARKETING A. It helps the firm in framing its own policies or making necessary adjustments therein accordingly. Assembling. 2. This function involves product planning and development. etc. Exchange Functions: 1. In order to maintain the level of production. B. Selling-Selling is important from the point of view of the seller as well as the consumer.Marketing has a special significance in underdeveloped economies. A manufacturer has to buy raw materials for production. D. marketing and price policies. It has resulted in the extension of markets.

 Its main defect is that it is repetitive and time consuming. Institutional Approach  Under this approach. Labelling. such as quality and size of the product. Economic Approach 1. the description and analysis of the different institutions engaged in marketing are undertaken. It facilitates purchase and sale of goods.  The marketing situation of each product is studied as regards to its sources of supply.  In this method. 3. provides convenience to the customers. labeling helps in curtailing defraudation of consumers by the retailers. DIFFERENT APPROACHES OF MARKETING 1. A good package makes the handling of the product easier for both the consumer as well as the dealer. commodity serves as a focus around which other aspects of marketing are studied. A good package protects the product against deterioration.  Here we not only study products but also analyze the various functions and activities of the producers. . 4. Grading. Management Approach or Decision-Making Approach 5. The label is usually affixed on the package. A standard is a measure that is generally recognized as a model for comparison.  This approach is also called as descriptive approach. Packaging may be defined as the general group of activities which involve designing and producing the container or wrapper for a product. The identification creates consumer awareness. Institutional Approach 3. Legal Approach 6. agents. etc. It gives information regarding the nature. term. It stresses the features of the product which are advertised. increases economy and communicates information about the product. Branding.Standardization has now been accepted as an ethical basis of marketing. Labelling thus helps in the identification of the product. Packaging. Standards are determined on the basis of colour. weight. Standardization..Branding is the art of marketing. Grading is required for the products like food grains.A label is a small slip placed on the product.Grading is the act of separating or sorting out goods into a number of grades according to established specifications. etc. cosmetics. Good packaging also helps in inventory control.1. fruits. benefits and services consistently to the buyers. Commodity Approach  This approach studies marketing on the basis of “commodity”. retailers. batch no. Goods are purchased by brand name. of the product. sign or symbol to a product/ service for specific identification of one seller or group of sellers. 5. etc. A label plays an important role in making the package and branding function meaningful.  Sometimes the classification of products also becomes difficult. A brand is essentially a sellers promise to provide specific features.Package is the external wrapper or container of the product. wholesalers. which in turn helps to build good product image and enhance chances of repeat purchases. 2. It is the measurement of giving a particular name. Commodity Approach 2. marketing organization and policies involvement of middlemen. etc. transporters. And by mentioning the price of the product. quality and other factors of a product. ownership. Functional Approach 4. contents. extent of market. preserves the freshness and flavor of the product. price. A label is medium through which the manufacturer gives necessary information to the consumer about the product. 2.

 Then it becomes necessary to bring accessibility in making goods available for consumption as and when demanded by those ultimate consumers.  The process of equalization involves proper adjustment of supply at all centers of distribution. assembling.  Therefore. quality and quantity.  All these activities are included in the process of concentration including financing and riskbearing also.  As countries develop and multinational trade increased due to globalization. standardization and grading and handling of customers order brings more importance in the marketing process. standardization. grading. where transport equalizes supply place-wise and warehousing equalizes it time-wise.  This approach is definitely an improvement over the former ones but not entirely free from defects. retailers. transportation. middlemen etc are engaged in this activity as the goods are distributed through these different channels for sale to consumers. inventory management. storage.  Thus it can be said that equalization is the process of making available the goods in a particular place or market just in accordance to the actual demand so that the chances of loss might be minimized. selling.  This approach is also considered defective as it fails to bring out effectively the inter-relations of all the institutions. Concentration In a highly developed and a large economy. Here the marketing process is split up into three important factors i. many a times.  The intermediaries like wholesalers. .  The basis of this approach is that marketing is purely a management function.  The assembled stock of goods is sub divided into smaller lots required to meet the needs of buyers.  However changes in marketing are brought about by two types of factors i.  The process involves storage and transportation of goods in required quantities. The different institutions serve as separate “cells” of the marketing body and the functions performed by each cell form part of whole marketing. Dispersion Dispersion is that process through which goods and services produced are delivered to their real consumers at the right time and right place in the right quantity. particular products are produced at one place and customers may be located thousands of miles away.  Specific functions are those concerned with buying. through the most appropriate channels of distribution.e. controllable and uncontrollable. transportations. Management Approach  It combines certain features of the other earlier mentioned three approaches.e. the product should be available at centre point from where the product can be purchased by the consumers. where the supply of goods has to be balanced with the demand for goods on the basis of time. 4. Functional Approach  It splits down the field of marketing into separate functions. then activities like storage. 3. say at distant places. financing. Equalization Equalization is the intermediate activity which occurs between the process of concentration and dispersion. risk taking and marketing research etc.

methods adopted. advertising. These internal factors are adjustments in prices. While doing this he should try to reduce the cost of marketing the products and at the same time win the goodwill of the customers.  There are many enactments past under legislation which regulates and controls the entire business activities. demand. Controllable forces are those marketing forces which are within the control of the firm. purchasing power. their approach to customers. etc. social and political forces. Integrated Marketing.The marketing manager has to take decisions on the various elements of the marketing mix in an integrated way.  Also the business has to evaluate the product from the competitor’s point of view. acceptability. Determining Objectives. etc. For a customer does not purchase a product just because of its price or utility or appearance. Hence it requires market study from various points of views.e. 2. 5. new channels and new innovations in the field of marketing.  Management of change due to changing customer needs. modify its strategies to pull the customers by creating greater demand.It is the function of the marketing manager to determine the marketing objectives of the company. The marketing objectives must be fixed keeping in mind the overall objectives .  One has to analyze the market from the consumer’s point of view such as their needs. and maintaining good public relations.  Selection management and control of channels of distribution.  Such an approach is incapable of giving the complete idea of marketing. competition. 6. These are external environmental forces such as economic. Economic Approach  Under this approach marketing is concerned with creation of value demand. new products. Functions of Marketing Manager: 1.  Uncontrollable forces are those marketing forces which are beyond the control of a business firm unless it is forecasted well in advance. taste. personal selling. Thus the marketing manager has to integrate all the elements of the marketing mix in such a way that the consumer finds the final deal very attractive.  Supervision and control over sales manager. Legal Approach  This approach is very narrow and it is a part of a political environment as it concentrates only on one aspect i.  Growth of existing markets for company’s products. etc. how their marketing strategies are.  In India this aspect has a particular significance. supply and price. Role of Marketing Manager:  Formulation of marketing plans and policies in consultation with the chief executive or managing director.  It may be possible by improving the utility of the product or with attractive and useful packaging and various other marketing gemics. product manager and marketing services manager who are responsible for implementing marketing program. price policy. advertising manger.  Development of marketing mix and marketing program for all products of the company. the effect of transfer of goods or title in a legal way.  It should try to understand its weaknesses.  Modification of marketing plans and programs on the basis of feedback of information from customers and channel members.  Development of new markets. etc.

will have to be decided and then he will have to organize for the channels of distribution and will have to select the channel accordingly. etc. He will have to decide whether the advertising will be done by a separate department in his organization or it would be better to entrust the work of advertising to the outside professionals. Service. or to use a combination of both these methods.The marketing manager has to decide upon the distribution strategy that he has to adopt. planning the long term marketing programme. Not only does he have to fix the marketing objectives. planning the sales policies. to select and train personnel for the sales department. it has to be consumer oriented and has to take care to see maximum satisfaction is given to the customers. Does he want a limited distribution or a widespread distribution. Any complaints and problems of the customers are to be dealt with at once.The marketing executive has to decide upon the advertising and sales promotion policy as well. to organize sales territories and fix sales quotas. He should be clear on whether his company wants to produce a single product or a line of products. 8. 6. pricing objectives.The marketing manager must be very clear as to the type of customer who will use his product. . to motivate the sales personnel and to organize and develop the channels of distribution. promotion objectives and physical distribution objectives.It is the duty of the marketing manager to fix the pricing policy in keeping with the marketing and over all company policy. Thus a marketing manager must see to it that proper after sales services are given to the customers. Selling. 7.of the firm. The marketing manager has to plan as to how the objectives that have been determined will be implemented.Planning is deciding in advance what is to be done. The pricing policy and product policy are interrelated. Pricing Policy. Thus his product policy objective must be consumer oriented and in keeping with the overall marketing objective. but he has to crystallize the product objective. 9. The marketing executive should fix the price in such a way that it results in maximum profit for the company from the volume of sales secured at that particular price. For proper planning the marketing manager has to carry out functions like marketing research. Distribution Strategy. All companies carry out planning for the smooth functioning of its organisation. 5. Proper Planning. 3. 4. Advertising and Sales Promotion. Product Policy.After sales service is regarded as an integral part of modern marketing management. In fact in today’s competitive business world if a company has to survive. planning for product diversification.The marketing manager has to perform the following functions in regard to selling: to direct the sales manger to regulate sales. He has to integrate and direct all these objectives towards the overall marketing objectives.

branding.UNIT 3. transportation & warehousing. The Marketing Mix has four main sub mixes. he should be careful to consider the market forces and on the other hand think of a total marketing program instead of relying on any one aspect. -Phillip Kotler Thus. packaging & labeling. personal selling. FACTORS AFFECTING MARKETING MIX  MARKET FACTORS- .product planning & development.  Better use of resources. sales promotion & publicity.advertising.price policies.  Precision. discounts & credit facilities.Marketing Mix promotes better utilization of limited resources as it helps the marketing manager to understand his customer and invest in the areas in which the customer is interested.Marketing Mix helps in reminding the marketing manager that on one hand.  The Price Mix.  Collectively Effective.MARKETING MIX “Marketing Mix is a set of controllable variables and their levels that the firm uses to influence the target market”. colleges. etc.  The Promotion Mix.  Balanced Approach.  Applicable to business as well as non-business organization. according to this definition any variable under the control of the firm that can influence the customer demand is a marketing mix variable.  The Place Mix or Physical Distribution Mix. They are as follows:  The Product Mix. such as clubs. associations.The components of marketing mix are individually important but their significance lies in the mix or blend so as to make them collectively effective in the dynamic marketing of distribution. IMPORTANCE/ ULITLITY OF MARKETING MIX  Attracting customers-to face competition & to promote its company’s sales it needs to attract customers by providing the best mix.Marketing Mix provides precision (accuracy) to the study of marketing.Marketing Mix is applicable to business as well as non-business organisation.

dresser and closet (a small cupboard). ideas.  Social Dimension. and the prestige that is felt upon the ownership of the product. the marketer prepares an expected product.Product.The Customer Value Hierarchy  In planning its market offering. Place & Promotion Planning. safety components.  At the third level. intangible or both.“ Product is a bundle of utilities consisting of various product features and accompanying services”. warranty. bathroom.  A product is anything that can be offered to a market to satisfy a want or need. safety to users. It the expectations are fulfilled its repeat demand is the result.  At the fourth level. A hostel guest buys “rest and sleep”.These presume that the society too is offered desirable or salutary product which brings not only an immediate satisfaction but also yields in the long run consumer welfare and best use of scanty resources. Hotel guest expects a clean bed.e.  Products that are marketed includes physical goods. etc. PRODUCT MIX Definition.  At the second level. Price. The 4 P’s. 2.A product conveys a message indicating a bundle of expectations to a buyer. Competition 3. the brand name. desk. delivery. the service or the benefit the customer is really buying.Consists of 3 dimensions  Managerial Dimension. the marketer has to turn the core benefit into a basic product. PRODUCT CLASSIFICATION . Alderson. PRODUCT CONCEPT. concern for a cleaner and better environment. the marketer prepares an augmented product that exceeds customer expectation i. Government Control  MARKETING FACTORS1.  At the fifth level.e it tries to offer customer delight.  In simple words. However it should be noted that each augmentation adds cost and augmented benefits soon become expected benefits.  Thus a product is a bundle of all kinds of satisfaction both material and non-material ranging from economic utilities to socio-psychological satisfaction. services.e. For eg. information. the 1st level is the core benefit i. the marketer needs to address five product levels.It includes the related product features and services i. events. people. type. maintenance and repair. Market Research.e. quality of life.  In fact a ‘product’ means not just the physical product but includes all the services before and after sales service.  Products are tangible. Each level adds more customer value and all five constitute a customer value hierarchy. The Pattern of Distribution System 4.1. fresh towels. properties and organizations. places. working lamps and a relative degree of quiet. towels. stands the potential product which encompasses all the possible augmentations and transformations the product or offering might undergo in the future. PRODUCT LEVELS. etc. Here is where companies search for new ways to satisfy customers and distinguish their offer. Eg. package. Thus a hotel room includes a bed.  Consumer Dimension. a product is anything that can be offered to a market to satisfy a want or a need. By-W. a set of attributes and conditions which buyers normally expect when they purchase a product. Consumer Behavior 2. installation.  The fundamental level i.

gds about which the consumer is not much aware of or does not normally think of buying. It can then develop a package that will both delight customers and yield profits to the company.  Packaging.gds which are intangible. fashion. legal advice. White Linen perfume. etc. A company should therefore design its products and support services in such a way as to profitably meet the needs of target customers. sign.chocolates. symbol or design or a combination of these that identifies the maker or seller of the product or service. 2.gds having unique characteristics or brand identification for which buyers are willing to make special purchasing effort. Convenience Goods. a secondary package that is thrown away when the product is about to be used ( cardboard box containing the tube) and shipping package to store.gds purchased after enough search on such basis as suitability. Durable Goods.  Product Planning & Development. Mercedes Benz.Labels may range from simple tags attached to the products to complex graphics that are part of the package.  Labelling. On the basis of Durability & Tangibility: 1.Perhaps the most distinctive skill of professional marketers is their ability to create. Product support services are the one’s that augment actual products. 4. 3.haircuts. inseparable. term.  1. identify and ship the insurance.gds which are not long lasting-vegetables. eatables. price. etc. packaging & labeling. 2. day to day usage items like soap. name. Labelling gives information regarding the nature. paste etc. improve product performance. appliance repairs. protect and enhance brands of its products and services.Customer service is another element of product strategy. 3. variable and perishable.  Branding. encyclopedia. Non-durable Goods.gds which are long lasting-clothes.It includes the activities of designing and producing the container or wrapper for a product. style. cosmetics. Unsought Goods.  Consumer Goods Classification: 1.It includes proper market research and understanding the consumer needs and then designing the product accordingly. vegetables. etc. A brand is a name. electronic items.  Product Design. smoke detectors. Shopping Goods. Also emergency gds like umbrella. cut production cost and give the product a strong competitive advantage in the target market. biscuits. The package may include the product’s primary container ( the tube holding the toothpaste). branding.product planning & development. A company’s offer to the market place usually includes some services which can be a minor or a major part of the total offer. maintain. drinks. Services. Speciality Goods. sweaters. quality. etc. 2. MRP. content. raincoat. Branding has become so strong that hardly anything goes without branding. etc. fruits. PRODUCT MIX DECISSIONS .Another way to add customer value is through distinctive product design. Eg. etc. etc. Good design can attract attention.gds purchased without any planning or search effort.  Product Support Services. Eg. 3. product design. Industrial Goods Classification: Raw MaterialUnfinished GoodsFinished Goods- The Product Mix.

etc. a new product means “a product that opens upon entirely new market. Wipro is into food. GROWTH. of versions” offered of each product in the line. furniture.  Eg. An organization with several product lines has a product mix.In this stage. This stage is characterised by:  Increase in competition  Increased volume of sales  Improvement in the quality of the product  Price reduction  Reduction in the promotional expenditure to sales ratio.Palmolive is fairly narrow with only oral care.width. This stage is characterised by:  Increase in sales at a decreasing rate  Cut throat competition  Exit of poor competitors  New changes in the product  Increase in promotional efforts.  A company’s product mix has 4 dimensions.This is the phase when sales decline because customer preferences have changed in favour of more efficient and better products. Colgate Max Fresh comes in 3 flavours and 3 sizes. distribution channels or some other way.  Product Mix “width” refers to “number” of different product lines the company carries. profit margins however decline. The number of competitors increase considerably. production requirement.In this stage.  Product Mix “depth” refers to the “no. The number of competing firms also gets reduced and generally the industry now has limited product versions available to the customer. the maturity of product is reflected in terms of its capacity to face competition. of items” the company carries within its product lines. sales do rise but at a decreasing rate. Eg. Sales increases sharply and at an increasing rate.  Product Mix “length” refers to the “total no. depth and consistency.In this stage the product is new and distinctive. length. This stage is characterised by:  slow rise in sales and profit margins  limited competition  high income group buyers (innovators)  frequent product modifications  high production and marketing costs  narrow product line  high prices  limited distribution and primary demand cultivation. personal care. This stage is characterised by: . computer solutions. PRODUCT LIFE CYCLE INTRODUCTION STAGE. DECLINE STAGE.  Finally the “consistency “ of the product mix refers to how closely related the various product lines are in end use. the product achieves considerable and widespread approval in market. In this stage. MATURITY. replaces an existing product or significantly broadens the market for an existing product. Width of colgate. Eg. household items. bulbs. A product mix consists of all product lines and items that a particular seller offers for sale. Here. Colgate Palmolive have consistency where distribution channels are same. Colgate has a big product mix length with almost 12 toothpastes and 8 toothbrushes. Eg. Eg.

2. Control Tool. the management is pre-warned of the likely changes in the product position. Thus. IMPORTANCE OF PLC 1.Since a product has a predictive life pattern and the problems likely to be encountered in different stages of PLC are known.Once product life pattern and behaviour of forces lying on it are known.. 2. Predictive Tool. Planning Tool. profits. A drastic reduction in sales  Decline in profits  Exit of the product from the market. When their position in the PLC is monitored. it serves as an important market tool. Product modification. For eg. in different stages are known. 3. . Although it is difficult to forecast these changes with any degree of exactness. dealers. not all of them fair identically. promotion and pricing strategies and dealer motivation program may be planned much earlier than the market conditions warrant. behaviour patterns of sales. competitors. management is better placed to plan its strategy in advance so as to fully exploit the product potential. some not.In case of a multi-product company when a number of products are simultaneously offered in the market. 3. it may indicate the types of changes required in the marketing strategy so as to fully exploit their potential and attain maximum market share. it undoubtedly provides a preview of the broad spectrum of product events likely to occur. Some fare better.

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