You are on page 1of 11

3.

0 THEORETICAL ASPECT:
In the arena of competitive business, organizations are surviving on strategy, which play very
vital role to achieve the organization goal. Marketing policy is one of the major strategies for
stay in the market with brand locality. Especially in consumer products, the role of marketing is
very important to satisfy the customers through quality of product, attractive TV advertisement,
new flavor, better packaging, competitive pricing and product availability.
According to Webster, Preference is grant of favor or advantage to one over another. That means
some criteria of marketing that creates willingness to receive any product. That may be
influenced by the products quality, promotional activities, organizational commitment, facility,
packaging, value addition etc.

3.1 Market:
The set of actual and potential buyers of a product or service is called market.

Company
(Market)
Marketing
intermediaries

Suppliers

End
Users

Competitors
Figure: Elements of a Modern Marketing System.

3.2 Marketing:
Marketing is a social and Managerial process by which individuals and groups obtain what they
needs and wants through creating and exchanging products and values with others.

3.3 Needs:
Need is states of felt deprivation. Human needs are states of felt deprivation. They include basic
physical needs for food, clothing, and satisfy: social needs for belonging and affection and
individual needs for knowledge and experience.

3.4 Wants:

Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

15

Want are the form of human needs take as shaped by cultural and individual personality.

3.5 Demand:
Demand is human wants that are backed by buying power.

3.6 Market demographic:


Dividing a market into smaller groups of buyers distinct needs characteristics or behavior that
might require separate products or marketing mix.

3.7 Geographic:
Dividing a market into different geographical units such as nations, stats, regions, counties, cities
or neighborhoods.

3.8 Demographic:
Dividing the market into different groups based on demographic variables such as, sex, age,
family size, family life cycle, income, occupation, education, religion, race and nationality.

3.9 Behavioral factor:


Dividing a market into groups based on consumer knowledge, attitude, use or response to a
product.

3.10 Market positioning:


Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing
products in the minds of target consumers. PRAN Confectionery market positioning strategy is
More for the Same. That means PRAN offers superior quality products at the same price with
competitors.

3.11 Target market:


The process of evaluating each market segments attractiveness and selecting one or more
segments to enter.

3.12 Customer Satisfaction:


The extent to which a products perceived performance matches with buyers expectations. If the
products performance falls short of expectations, the buyer is dissatisfied. It the performance
matches or exceeds expectations, the buyer is satisfied or delighted (Principles of Marketing 13 th
edition, Philip Kotlar & Gary Armstrong).

expectations too high buyers are likely to be disappointed. Dissatisfaction can arise either from a
Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

they may satisfy those who buy but fail to attract enough buyers. In contrast, if they raise

15

Marketer must be careful to set the right level of expectations. If they set expectations too low,

decrease in product and service quality or from an increase in customer expectations. In either
case, it presents an opportunity for companies that can deliver superior customer value and
satisfaction.
Expectation> Performance= Dissatisfied.
Expectation= Performance= Satisfied.
Expectation< Performance = Delighted.
Although the customer center of firms seeks to deliver high customer satisfaction relative to its
competitors, it does not attempt to maximize customer satisfaction. A company can always
increase customer satisfaction by lowering its price increasing its services, but it may result in
lower profits. Thus, the purpose of marketing is to generate customer value profitably. This
requires a very delicate balance: The marketer must continue to generate more customer value
and satisfaction but not give away house.

3.13 Marketing mix (4 Ps) analysis:


The marketing mix is probably the most famous phrase in marketing. The elements are the
marketing 'tactics'. Also known as the '4 Ps', Marketing decisions generally fall into the
following four controllable categories:

Product

Price

Place (distribution)

Promotion

The concept is simple. Think about another common mix - a cake mix. All cakes contain eggs,
milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix
elements contained in it. So for a sweet cake add more sugar! It is the same with the marketing
mix. The offer you make to you customer can be altered by varying the mix elements.
"Marketing mix" is a framework which acts as a guideline for marketers to implement a
marketing concept. It consists of a set of major decision areas that a company needs to manage in
order to at least satisfy consumer needs.

marketing programme all of those elements are "mixed" to successfully achieve the company's
Prospect
of Confectionery
marketing
objectives.Marketing in Bangladesh-a special focus on PRAN

Page

firm blends to produce the response it wants in the target market". Hence, in an effective

15

According to Kotler et al. (1999) the mix is a set of "controllable tactical marketing tools that the

Origins of Marketing MIX (4 Ps):


The term "marketing mix" became popularized after Neil H. Borden published his 1964 article,
The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's
after James Culliton had described the marketing manager as a "mixer of ingredients". The
ingredients in Borden's marketing mix included product planning, pricing, branding, distribution
channels, personal selling, advertising, promotions, packaging, display, servicing, physical
handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into
the four categories that today are known as the 4 P's of marketing, depicted below: These four P's
are the parameters that the marketing manager can control, subject to the internal and external
constraints of the marketing environment. The goal is to make decisions that center the four P's
on the customers in the target market in order to create perceived value and generate a positive
response.

Definition of Marketing Mix:


The traditional marketing mix contains of four major elements, the "4-Ps of marketing". As
defined by Philip Kotler. (1999):
1. Product: "Anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need. In includes physical objects, services,
persons, places, organizations and ideas." Here our products are confectionery items.
2. Price: "The amount of money charged for a product or service, or the sum of the values
that consumers exchange for the benefits of having or using the product or service."
Here, price is competitive.
3. Promotion: "Activities that communicate the product or service and its merits to target
customers and persuade them to buy."
4. Place: "All the company activities that make the product or service available to target
customers." We supply confectionery products all over Bangladesh.
The set of controllable tactical marketing tools product, price, place and promotion that firm

Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

15

blends to produce the response it wants in the target market.

Marketing Mix
4Ps

PRODUCT

PRICE

PLACE

PROMOTION

Figure: The 4 Ps of the marketing mix

Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

15

All of these elements have their specific place in any company's marketing strategy:

Marketing Mix in Details

Product:
The product is the most important aspect of the marketing mix. The product can be a service
or even a holiday destination. Products have both tangible and intangible benefits. Tangible
benefits include benefits which can be measured such as the top speed of a car. Intangible
benefits are benefits that cannot be measured such as the enjoyment the customer will get
from the product.
It is important that the product is changed as necessary to bring it up to date and prevent it

from being overtaken by competitors.


Exactly what product or service are you going to sell to this market? Define it in terms of
what it does for your customer. How does it help your customer to achieve, avoid or preserve
something? You must be clear about the benefit you offer and how the customer's life or
work will be improved if he or she buys what you sell
The term "product" refers to tangible, physical products as well as services. Here are some
examples of the product decisions to be made:

Brand name

Functionality

Styling

Quality

Safety

Packaging

Repairs and Support

Warranty

Accessories and services

Price:
The product is the most important aspect of the marketing mix. The product can be a service
It is very important that the correct price is charged for a product. If the price is too high
consumers will avoid the product as they will believe it to be too expensive yet if the product

Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

so cheap. Also if the company charges too low a price, it may not cover its costs. There are

15

is priced too low they may believe that there is something wrong with the product for it to be

many different pricing strategies that companies can use to decide on a price for their product
including market and psychological pricing methods.
Exactly how much are you going to charge for your product or service, and on what basis?
How are you going to price it to sell at retail? How are you going to sell it at wholesale?
How are you going to charge for volume discounts? Is your price correct based on your costs
and the prices of your competitors.
Some examples of pricing decisions to be made include:
Pricing strategy (skim, penetration, etc.)

Suggested retail price

Volume discounts and wholesale pricing

Cash and early payment discounts

Seasonal pricing

Bundling

Price flexibility

Price discrimination

Value pricing is also common in luxury items. Sometimes, the higher the price, the more you
sell: Fashionable clothing or restaurants for snob people. Of course value pricing is limited by
the price elasticity as you have already learnt in Economics.

Place:
The product is the most important aspect of the marketing mix. The product can be a service.
The place is where you can expect to find your customer and consequently, where the sale is
realized. Knowing this place, you have to look for a distribution channel in order to reach
your customer.
The place is not where is located your business but where our customers are. For a retailer it
is the same but for a boat producer located in Philippines the real place is the entire world.
Do not confuse positioning and place. Here place means the real physical position of the

Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

15

customer in a geographic area or along a distribution channel.

Distribution is about getting the products to the customer. Some examples of


distribution decisions include:

Distribution channels

Market coverage (inclusive, selective, or exclusive distribution)

Specific channel members

Inventory management

Warehousing

Distribution centers

Order processing

Transportation

Reverse logistics

It exists today, with the internet, more channels than in the past but basically, you have to
consider three main distribution channels:

Selling to the customers:

Whether you sell by yourself ( as retailer) whether you employ a sales force, you are in
these cases in front of the final customer. There are not intermediaries between you and
him. Unfortunately, except for the retailer business, this situation is far to be the
general case.

Selling to the retailers:

For example, you manufacture the fun boards and you sell them to the Arizona
retailers. This practice could be a bit complicated.

Selling to the wholesalers:

There are maybe four or five sport articles wholesalers in Arizona. You sell your fun
boards to these big men. On turn the wholesalers sell the fun boards to the retailers
which finally sell to their customers
As you can see, the choice of your distribution channel heavily depends on your product and

Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

buckets to the final consumer!

15

place in the productive process. If you are in coal mining, do not expect to sell some coal

Promotion:
The product is the most important aspect of the marketing mix. The product can be a service
in the context of the marketing mix, promotion represents the various aspects of marketing
communication, that is, the communication of information about the product with the goal of
generating a positive customer response. Marketing communication decisions include:

Promotional strategy (push, pull, etc.)

Advertising

Personal selling & sales force

Sales promotions

Public relations & publicity

Marketing communications budget

Advertising, public relations and so on are included in promotion and consequently in the
4Ps. Sometimes, packaging becomes a fifth P. As promotion is closely linked to the sales, I will
mention here the most common features about the sale strategy.

Definition:
The function of promotion is to affect the customer behavior in order to close a sale. Of
course, it must be consistent with the buying process described in the consumer analysis.
Promotion includes mainly three topics: advertisement, public relations, and sales promotions.

Advertisement:
It takes many forms: TV, radio, internet, newspapers, yellow pages, and so on. You have to take
notice about three important notions:
Reach is the percentage of the target market which is affected by your advertisement. For
example, if you advertise on radio you must know how many people belonging to your segment
can be affected.

gross rating point. You have to evaluate it before any advertisement campaign.
Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

must be exposed seven times to the message before to be aware of it. Reach, frequency gives the

15

Frequency is the number of time a person is exposed to your message. It is said that a person

Message:
Sometimes, it is called a creative. Anyway, the message must: get attraction, capture interest,
create desire and finally require action that is to say close the sale.

Public relations:
Public relations are more subtle and rely mainly on your own personality. For example, you can
deliver public speeches on subjects such as economics, geo-economics, futurology to several
organizations (civic groups, political groups, fraternal organizations, professional associations)
These speeches will enable you to develop new relationships and their cost is nil!

Sales promotion:
Sales promotion is a short time incentive to consumers and retailers to buy and sales products
more by lowering prices. There are many forms of sales promotions. It includes fair trades,
coupons, bonus pack, cash back and discounts and is linked to the sales strategy.

Limitations of Marketing MIX (4Ps):


The marketing mix framework was particularly useful in the early days of the marketing concept
when physical products represented a larger portion of the economy. Today, with marketing more
integrated into organizations and with a wider variety of products and markets, some authors
have attempted to extend its usefulness by proposing a fifth P, such as packaging, people,
process, etc. Today however, the marketing mix most commonly remains based on the 4 P's.
Despite its limitations and perhaps because of its simplicity, the use of this framework remains

Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

15

strong and many marketing textbooks have been organized around it.

A Summery table of the Marketing MIX:


The following table summarizes the marketing mix decisions, including a list of some of the
aspects of each of the 4Ps.

Summary of Marketing Mix (4Ps) Decisions


PRODUCT

PRICE

PLACE

PROMOTION

Functionality

List price

Channel members

Appearance

Discounts

Channel motivation Personal selling

Quality

Allowances

Market coverage

Public relations

Packaging

Financing

Locations

Message

Brand

Leasing options Logistics

Warranty

Service levels

Advertising

Media
Budget

Prospect of Confectionery Marketing in Bangladesh-a special focus on PRAN

Page

15

Service/Support