You are on page 1of 13


Marketing mean selling and advertising, like television commercials, newspaper ads, direct-mail offers, sales calls, and Internet pitches. However, selling and advertising are important, they are only two of many marketing functions. Today, marketing must be understood not only in the sense of making sale but in the sense of satisfying customers needs. If the marketers does a good job of understanding consumer needs, develops products that provide superior value, distributes and promotes them effectively, these products will sell very easily. Thus selling and advertising are only part of large marketing mix. Marketing is a process by which individuals obtain what they need and want through creating and exchanging products and value with others. what does this means?

Needs, Wants and Demands

The most basic concept underlying marketing is that of human needs. 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. Wants are the form taken by a human need shaped by culture and individual personality. A person needs food but wants burger, French fries, and a soft drink. When backed by buying power wants become demands. Given their wants and resources, people demand products that add up to the most value and satisfaction

Marketing occurs when people decide to satisfy need and wants through exchange. Exchange is the act of obtaining a desired object from someone by offering something in return.

Retaining and Growing Customers

Satisfied customers are more likely to be loyal customers, and loyal customers are more likely to give the company a larger share of their business.

Customer value and Satisfaction

Attracting and retaining customers can be a difficult task. Customers often face a bewildering array of products and services from which to choose. To attract and keep customers, a company must constantly seek ways to deliver superior customer value and satisfaction.

Customer Value
A customer buys from a firm that offers the highest customer perceived value. Customer perceived value is the customers evaluation of the difference between all the benefits and all the cost of a marketing offer relative to those of competing offer.

Customer Satisfaction
Outstanding marketing companies go out of their way to keep their customers satisfied. Satisfied customers make repeat purchases and tell others about their good experiences with the product. The key is to match customer expectations with company performance. Smart companies aim to delight customers by promising only what they can deliver, then delivering more than they promise.

Customers Loyalty and Retention

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 and remain loyal for a longer period. As satisfaction increases, so does loyalty.

convince Advertising is a good way to inform and persuade. An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period to time. Objectives of Advertising can be to inform, persuade or remind. Informative advertising is used heavily when introducing a new product category. In this case, the objective is to build primary demand. what are primary demands? Persuasive advertising becomes more important as competition increases. Here, the companys objective is to build selective demand. what are selective demands? Some persuasive advertising has become comparative advertising, in which a company or indirectly compares its brand with one or more other brands. Reminder advertising is important for mature products- its keeps consumers thinking about the product.

Setting the Advertising Budget

After determining its advertising objectives, the company next sets its advertising budget for each product. A brands advertising budgets often depends on its stage in the product life cycle. For example, new product typically need large advertising budgets to build awareness and to persuade consumers to try the products. In contrast, mature brands usually require lower budgets as a ratio to sales. Market share also impacts the amount advertising needed. Because building the market or taking share from competitors requires larger advertising spending than does simply maintaining current share, low-share brands usually need more advertising spending as percentage of sales. Also, brands in a market with many competitors and high advertising clutter must be advertised more heavily to be noticed above the noise in the market. Undifferentiated brands-those that closely resemble other brands in their product class (beer, soft drinks, and laundry detergents)may require heavy advertising to set them apart. When the product differs greatly from competitors, advertising can be used to point out the differences to consumers. How does a company know if it is spending the right amount? Be cause so many factors affect advertising effectiveness, some controllable and other not, measuring the results of advertising spending remains an inexact science. In most cases, managers must rely on judgment.

what factors?

Developing Advertising Strategy

Advertising strategy consists of two major elements: creating advertising message and selecting advertising media.

Creating the Advertising Message No matter how big the budget, advertising can succeed only if commercials gain attention and communicate well. Good advertising messages are especially important in todays costly and cluttered advertising environment Until recently, television viewers were pretty much a captive audience for advertiser. Viewers had only a few channels from which to choose. But with the growth in cable and satellite TV and remote control units, todays viewers have many more options. They can avoid ads by watching other cable channels. Just to gain and hold attention, todays advertising messages must be better planned, more imaginative, more entertaining and more rewarding to consumers

Message Strategy Thus, developing an effective message strategy begins with identifying customer benefits that can be used as advertising appeals. The advertiser must next develop a compelling creative concept-or big idea-that will bring the message strategy to life in a distinctive and memorable way.

Message Execution The advertiser now has to turn the big idea onto an actual ad execution that will capture the target markets attention and interest. The creative people must find the best style, tone, word and format for executing the message.

Deciding on reach, Frequency & 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. Frequency is measure of how many times the average person in the target market is exposed to the message. For products that need to be demonstrated, message on television may have more impact than messages on radio because television uses sight and sound. 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 Media planners consider many factors when making their media choice. The media habits of target consumers will affect media choice-advertisers look for media that reach target consumers effectively.

So will the nature of the product- for example, fashions are best advertised in color magazines and automobile performance is best demonstrated on television. A message with a lot of technical data might require magazines, direct mailing or an online ad and Web site. Cost is another major factor in media choice. For example, network television is very expensive, whereas newspaper or radio advertising cost must less but also reaches fewer consumers.

Selecting Specific Media Vehicle The media planner now must choose the best media vehicles-specific media within each general media type. For example, television vehicles include Sony, Zee, Star Plus etc. Magazine vehicles include Newsweek, India Today, Famina, etc..

Deciding On Media Timing The advertiser must also decide how to schedule the advertising over the course of a year. For example, Hallmark advertises its greeting cards only before major holidays. Advertisers should choose the pattern of the advertisement. Continuity means scheduling ads events evenly within a given period. Pulsing means scheduling ads unevenly over a given time period. Thus, 52 ads could either be schedule at one per week during the year or pulsed in several bursts. The idea behind pulsing is to advertise heavily for a short period to build awareness that carries over to the next advertising period.

EVALUATING ADVERTISEMENT The sales effects of advertising are often harder to measure. Sales are affected by many factors besides advertising-such as product features, price and availability. For example, to test the effects of different advertising spending levels, Coca-Cola could vary the amount it spends on advertising in different advertising in different market areas and measure the differences in the resulting sales levels. It could spend the normal amount in one market area, half the normal amount in another area, and twice the normal amount in a third area. If the three market areas are similar and if all other marketing efforts in the area are the same, then differences in sales in the three areas could be related to advertising level.

Sales promotion consists of short-term incentives to encourage purchase or sales of a product or service. Whereas advertising offer reasons to buy a product or service, sales promotion offers reasons to buy now. An executive who buys a new Sony laptop gets a free carrying case. Sales promotion includes a wide variety of promotion tools designed to stimulate earlier or stronger market response. Rapid Growth of Sales Promotion Factors to the rapid growth of sales promotion are Firstly, inside the company, product managers face greater pressures to increase their current sales, and promotion is viewed as an effective short-run sales tool. Secondly, externally, the company faces more competition and competing brands are less differentiated. Competitors are therefore using sales promotion to help differentiate their offers. Thirdly, advertising efficiency has declined because of rising costs and media clutter. Finally, consumers have become more deal oriented and are demanding more deals from manufactures.

Promotion Tools
The main consumer promotion tools include sample, coupons, cash refunds, price packs. Samples Samples are offers of a trial amount of a product. Sampling is the most effective-but most expensive-way to introduce a new product. Some samples are free; for others, the company charges a small amount to offset its costs. Coupons are certificates that give buyers a saving when they purchase specified products. Coupons can stimulate sales of mature brands or promote early trial of a new brand. Cash refund offers (or rebates) are like coupons except that the price reduction occurs after the purchase rather that at the retail outlet. The consumer sends as proof of purchase to the manufacturer, who then refunds part of the purchase price by mail. Price packs can be single packages sold at a reduced price (such as two for the price of one), or two related products banded together (such as a toothbrush and toothpaste) Premiums are goods offered either free or at low cost as an incentive to buy a product, ranging from toys included with kids products to phone cards and CDs. A premium may come inside the package (in-pack), outside the package (on-pack), or through the mail. Advertising specialties are useful articles imprinted with an advertisers name that are given as gifts to consumers, like pens, calendars, key rings, shopping bags, etc.. Patronage Rewards Are cash or other awards offered for the regular use of a certain companys product or services.


What is a product?

A product is anything that can be offered to the market for use or consumption and that might satisfy a want or a need. Products include physical object, services, events, places, ideas, or mixes of these. Services are a form of product that consist of activities, benefits or satisfaction offered for sale that are essentially intangible and do not result in the ownership of anything. Eg. Banking, hotel, airline etc.

Products, Services and Experience

Marketing mix planning begins with formulating an offering that brings value to target customers and satisfies their needs. This offering becomes the basis upon which the company builds profitable relationship with customers. As product and services become more and more commoditized, many companies are moving to new level in creating value for their customers. To differentiate their offer, they are developing and delivering total customer experience. Whereas products are tangible and services are intangible, experience are memorable. Companies that market experiences realize that customers are really buying much more than just products and services. They are buying memories. Experience are sometimes confused with services, but experiences are as distinct from services as services are distinct from goods. Whereas products and services are external, experience exist only in the mind of the individual. An experience occurs when a company intentionally use goods and services to engage individual customer in a way that creates a memorable event.

Levels of product and services

Product planners need to think about product and services on three levels. Each level adds more customer value. The most basic level is the core benefit, which addresses the question What is the buyer really buying? At the second level, product planner must turn the core benefit into actual product. They need to develop product and service feature, design, quality level, brand name and packing. Eg. Sony camera is an actual product. Its name, parts, styling, features, packaging, and other attributes have all been combined carefully to deliver the core benefit- a convenient, high quality way to capture important moments.

Finally, product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits. Sony must offer more than just a camera. Sony and its dealers also gives buyer a warranty on parts , instruction on how to use the camera, quick repair service when needed.

Product and Service Classification

Products fall into two broad classes based on the types of consumers that use them - consumer products and industrial products.

Consumer Products
Consumer products are product bought by final consumers for personal consumption. Marketers usually classify these products further as Convenience products Are consumer products that the customer usually buys frequently. Examples include soap, candy, newspapers, and fast food. Convenience products are usually low priced, and marketers place them in many locations to make them readily available when customers need them. Shopping products When buying shopping products and services, consumers spend much time and effort in gathering information and making comparisons. Examples include furniture, clothing, hotel services etc. Specialty Products are consumer products with unique characteristics or brand identification. Examples include specific brands and types of cars, designer clothes. Unsought products are consumer products that the consumer either does not know about or knows about but does not normally think of buying, Like new innovations are unsought until the consumer becomes aware of them through advertising.

Industrial Products
Industrial Products are those purchased for further processing or for use in conducting a business. Thus, the distinction between a consumer product and an industrial product is based on the purpose for which the product is bought.

Persons, Places, and Ideas

In addition to tangible products and services in recent years marketers have broadened the concept of a product to include other market offerings like persons, places and ideas. People can also be thought of as products. Person marketing consists of activities undertaken to create, maintain or change attitudes or behavior toward particular people. Todays presidents market themselves, their parties, and their platforms to get needed votes and program support. Professionals such as Doctors lawyers accountants and architects market themselves in order to build their reputations and increase business. Creating or associating with well-known personalities often helps these organizations achieve their goals better. Place marketing involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places. Cities, states, regions and even entire nations compete to attract tourists, new residents conventions and company offices and factories. Ideas can also be marketed. This area has been called social marketing. Such programs include public health campaigns to reduce smoking, alcoholism, drug abuse, and overeating. Other social marketing efforts include environmental campaigns to promote wild life protection , clean air, and conservation.

Developing Product And Service

Developing and marketing a product and service involves important decision about Product Attributes Branding Packing Labeling

Product Attributes
Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by product attributes such as quality features design. Product quality is one of the marketers major positioning tools. Quality has a direct impact on product or service performance; thus it is closely linked to customer value and satisfaction. Product quality has two dimensions level and consistency. In developing a product the marketer must first choose a quality level that will support the products position in the target market. Here, product quality means performance quality - the ability of a product to perform its functions. Companies rarely try to offer the highest possible performance quality level since only few customers want or can afford the high levels of quality offered in products. Instead

companies choose a quality level that matches target market needs and the quality levels of competing products. High quality also can mean high levels of quality consistency, i.e.freedom from defects and consistency in delivering a targeted level of performance. Product Features A product can be offered with varying features The company can create higher level models by adding more features. Features are a competitive tool for differentiating the companys product from competitors products. The company should periodically survey buyers who have used the product and ask these questions: How do you like the product? Which specific features of the product do you like most? Which features could we add to improve the product? The answer provide the company with a rich list of feature ideas.

Product Design Another way to add customer value is through distinctive product design. Good design contributes to a products usefulness as well as to its looks.

Perhaps the most distinctive skill of professional marketers is their ability to create maintain protect, and enhance brands of their products and service. A brand is a name that identifies the maker or seller of a product or service. Branding helps buyers in many ways. Brand names help consumers identify products that might benefit them. Brands also tell the buyer something about product quality. Buyers who always buy the same brand know that they will get the same features, benefits, and quality each time they buy.

Packaging involves designing and producing the container or wrapper for a product. The package includes a products primary container (the tube holding colgate total toothpaste). It may also include a secondary package that is thrown away when the product is about to be used (the cardboard box containing the tube of Colgate). Finally, it can include a shipping package necessary to store, identify and ship the product (a corrugated box carrying six dozen tubes of colgate). Labeling - printed information appearing on or with the package is also part of packaging. In recent times however numerous factors have made packaging an important marketing tool. Increased competition and clutter on retail store shelves means that packages must now perform many sales tasks from attracting attention, to describing the product, to make the sale.

Labels may range from simple tags attached to products to complex graphics that are part of the package. They perform several functions. Primary function of label is to identifies the product or brand. The label might also describe several things about the product, who made it, where it was made, when it was made, its contents, how it is to be used and how to use it safely. Finally the label might promote the product through attractive graphics.


Some analysts see brands as the major enduring asset of a company, outlasting the companys specific products and facilities.

Brand Equity
Brand are more than just names and symbols. Brands represent consumers perceptions and feelings about a product and its performance - everything that the product or service means to consumers. Brands vary in the amount of power and value they have in the marketplace. A powerful brand has high brand equity, Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service. A measure of a brands equity is the extent to which customers are willing to pay more for the brand.

Brand Name Selection

It begins with a careful review of the product and its benefits, the target market, and proposed marketing strategies. Desirable qualities for a brand name include the following (1) It should suggest something about the products benefits and qualities. (2) It should be easy to pronounce recognize and remember. (3) The brand name should be distinctive. (4) It should be capable of registration and legal protection.

Most manufacturers take years and spend millions to create their own brand names. However some companies license names or symbols previously created by other manufacturers, names of well known celebrities or characters from popular movies and books. For a fee, any of these can provide an instant and proven brand name. Sellers of childrens products attach an almost endless list of character names to clothing toys.

Brand development
A company has four choices when it comes to developing brands. Line Extensions : Line extensions occur when a company introduces additional items in a given product category under the same brand name, such as new flavors, forms colors ingredients, or package sizes. Brand Extensions : A brand extension involves the use of a successful brand name to launch new or modified products in a new category Barbie Doll brand into new categories ranging from Barbie home furnishings Barbie cosmetics, and Barbie electronics to Barbie books Barbie sporting goods. A brand extension gives a new product instant recognition and faster acceptance. It also saves the high advertising costs usually required to build a new brand named. However, the extension may confuse the image of the main brand. And if a brand extension fails it may harm consumer attitudes towards the other products carrying the same brand name. Multibrands Companies often introduce additional brands in the same category. New Brands A company may create a new brand name when it enters a new product category for which none of the companys current brand names is appropriate.

Managing Brands
Brands are not maintained by advertising but by the brand experience. Today, customers come to know a brand through a wide range of contacts and touch points. These include advertising, personal experience with the brand, word of mouth, personal interactions with company people, telephone interactions, company web pages etc.. Any of these experiences can have a positive or negative impact on brand perceptions and feelings. The company must put care into managing these touch points. Also, the company should build pride in its employees regarding their product and services so that their enthusiasm will spill over to customers. Many companies go even further by training and encouraging their distributors and dealers to serve their customers well. Finally companies need to periodically audit their brands strengths and weaknesses.

Services Marketing
Service industries vary greatly. Governments offer services through courts, employment services, hospitals. Private not for profit organizations offer services through museums, charities, churches. A large number of business organizations offer services like airlines, banks, hotels, insurance companies, consulting firms, medical and law practices.

The Nature and Characteristics of a Service

Service intangibility means that services cannot be seen, tasted, felt heard or smelled before they are bought. For example people undergoing cosmetic surgery cannot see the result before the purchase. Airline passengers have nothing but a ticket and the promise that they and their luggage will arrive safely at the intended destination hopefully at the same time. Buyers draw conclusions about quality from the place, people, price, equipment and communications that they can see. Physical goods are produced then stored later sold and still later consumed. In contrast services are first sold then produced and consumed at the same time. Service inseparability means that services cannot be separated from their providers. Whether the providers are people or machines. Service variability means that the quality of services depends on who provides them as well as when, where and how they are provided. Service perish ability means that services cannot be stored for later sale or use. Service firms often design strategies for producing a better match between demand and supply Hotels and resorts charge lower prices in the off season to attract more guests.

Marketing strategies for Service Firms

Just like manufacturing businesses, good service firms use marketing to position themselves strongly in chosen target markets. However, because services differ from tangible products, they often require additional marketing approaches. In a product business, products are fairly standardized and can sit on shelves waiting for customers. But in a service business, the customer and front-line service employee interact to create the service. Thus service providers must interact effectively with customers to create superior value during service encounters. Effective interaction, in turn depends on the skills of front line service employees and on the support processes backing these employees.

The Service-Profit Chain

Successful service companies focus their attention on both their customers and their employees. They understand the service-profit chain, which links service firm profits with employee and customer satisfaction. Service marketing requires more than just traditional external marketing. Service marketing also requires internal marketing and interactive marketing. Internal marketing means that the service firm must effectively train and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction. Infact, internal marketing must proceed external marketing. Interactive marketing means that service quality depends heavily on the quality of the buyer seller interaction during the service encounters. In product marketing, product quality often depends little on how the product is obtained. But in service marketing, service quality depends on both the service deliverer and the quality of the delivery.