MARKETIN

G
MANAGEM
ENT

INSTRUCTION MANUAL

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 S.EZHILARASI
LECTURER/ MBA

BA9123 MARKETING MANAGEMENT LT P C

4004
UNIT – I INTRODUCTION 12

Marketing – Definitions - Conceptual frame work – Marketing environment : Internal and

External - Marketing interface with other functional areas – Production, Finance, Human
Relations Management, Information System. Marketing in global environment – Prospects
and Challenges.

UNIT – II MARKETING STRATEGY 12

Marketing strategy formulations – Key Drivers of Marketing Strategies - Strategies for

Industrial Marketing – Consumer Marketing –– Services marketing – Competitor analysis -
Analysis of consumer and industrial markets – Strategic Marketing Mix components.

Unit – III MARKETING MIX DECISIONS 12

Product planning and development – Product life cycle – New product Development and
Management – Market Segmentation – Targeting and Positioning – Channel Management –
Advertising and sales promotions – Pricing Objectives, Policies and methods.

UNIT – IV BUYER BEHAVIOUR 12

Understanding industrial and individual buyer behavior - Influencing factors – Buyer

Behaviour Models – Online buyer behaviour - Building and measuring customer
satisfaction – Customer relationships management – Customer acquisition, Retaining,
Defection.
UNIT – V MARKETING RESEARCH & TRENDS IN MARKETING 12
Marketing Information System – Research Process – Concepts and applications : Product –
Advertising – Promotion – Consumer Behaviour – Retail research – Customer driven
organizations - Cause related marketing - Ethics in marketing –Online marketing trends.
Total: 60
TEXT BOOKS
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1. Philip Kortler and Kevin Lane, Marketing Management, PHI 13th Edition, 2008
2. Paul Baisen et al, Marketing, Oxford University Press, 2008.

REFERENCES
1. Micheal R.Czinkota & Masaaki Kotabe, Marketing Management, Vikas Thomson
Learning, 2000.
2. Duglas,J.Darymple, Marketing Management, John Wiley & Sons, 2008.
3. NAG, Marketing successfully- A Professional Perspective, Macmillan 2008.
4. Boyd Walker, Marketing Management, McGraw Hill, 2002.
5. Dalvymple, Marketing Management, Wiley India Pvt Ltd, 2008.
6. Keith Flether, Marketing Management and Information Technology, Prentice Hall,
1998.

1.1 - MARKETING.............................................................................................................................................. 13

1.1.1 MARKET................................................................................................................................................... 13

1.1.2 FEATURES OF MARKET.............................................................................................................................. 13

1.1.3 KEY CUSTOMER MARKET.......................................................................................................................... 13

1.2 - MARKETING DEFINITIONS.......................................................................................................................... 13

1.2.1 MEANING................................................................................................................................................. 13

1.2.2 DEFINITION.............................................................................................................................................. 14

1.2.3 SCOPE OF MARKETING.............................................................................................................................. 14

1.2.4 OBJECTIVES OF MARKETING..................................................................................................................... 14

1.2.5 WHAT CAN BE MARKETED?....................................................................................................................... 14

1.2.6. CONSUMER AND CUSTOMER................................................................................................................... 15

1.2.8 SIMPLE MARKETING CONCEPT.................................................................................................................. 15

1.2.9 MARKETING MANAGEMENT - DEFINITION................................................................................................ 16

1.2.10 MARKETING MANAGEMENT TASKS......................................................................................................... 16

1.3 - CONCEPTUAL FRAME WORK...................................................................................................................... 16

1.3.1 COMPANY ORIENTATION TOWARD.......................................................................................................... 16

THE MARKET PLACE.......................................................................................................................................... 16

1.3.2 CORE MARKETING CONCEPTS OR FUNDAMENTAL MARKETING CONCEPTS................................................19

1.3.3 ELEMENTS OF MODERN MARKETING SYSTEM...........................................................................................21

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1.4 MARKETING PROCESS.................................................................................................................................. 22

1. 5 MARKETING ENVIRONMENT....................................................................................................................... 22

1. 6 MARKETING INTRFERACE WITH OTHER DISCIPLINES....................................................................................25

1.7 MARKETING IN GLOBAL ENVIRONMENT...................................................................................................... 28

1.7.1 FACTORS INFLUENCING GLOBAL MARKE................................................................................................... 28

1.7.2 COMPETING ON A GLOBAL BASIS – PROBLEMS AND PROSPECTS...............................................................29

KEY TERMS........................................................................................................................................................ 31

QUESTIONS....................................................................................................................................................... 32

2.1 MARKETING STRATEGY FORMULATIONS...................................................................................................... 36

2.1.1 STRATEGY................................................................................................................................................. 36

2.1.2 STAGES OF STRATEGIC PLANNING............................................................................................................. 36

2.1.3 STRATEGY FORMULATION........................................................................................................................ 36

2.1.4 STRATEGIC PLAN....................................................................................................................................... 38

2.2 MARKETING PROCESS.................................................................................................................................. 41

2.3 KEY DRIVERS OF MARKETING STRATEGIES................................................................................................... 42

2.4 STRATEGIES FOR INDUSTRIAL MARKETING.................................................................................................. 42

2.5 STRATEGIES FOR CONSUMER MARKETING................................................................................................... 42

2.6 SERVICES MARKETING................................................................................................................................. 43

2.6.1 SERVICE.................................................................................................................................................... 43

2.6.2 CHARACTERISTICS OF SERVICES................................................................................................................ 43

2.6.3SERVICE INDUSTRY.................................................................................................................................... 43

2.6.4 SERVICE MIX CATEGORIES......................................................................................................................... 43

2.6.5 TYPES OF MARKETING IN SERVICE INDUSTRIES......................................................................................... 43

2.6.6 MARKETING MIX IN SERVICE MARKETING:................................................................................................ 44

2.6.7 SERVICE QUALITY...................................................................................................................................... 44

2.6.8 DIMENSIONS OF SERVICE QUALITY “RATER MODEL”...............................................................................44

2.6.9 CLASSIFICATION OF SERVICES................................................................................................................... 44

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2.6.10 SERVICE STRATEGIES............................................................................................................................... 45

2.7 COMPETITOR ANALYSIS............................................................................................................................... 45

2.7.1 STEPS IN COMPETITOR ANALYSIS.............................................................................................................. 45

2.7.2 DESIGNING THE COMPETITIVE INTELLIGENCE SYSETM...............................................................................47

2.7.3 ATTACK STRATEGIES................................................................................................................................. 47

2.8 ANALYSIS OF CONSUMER AND INDUSTRIAL MARKETS.................................................................................47

2.8.1 CONSUMER MARKET................................................................................................................................ 47

2.8.2 INDUSTRY MARKET................................................................................................................................... 47

2.8.3 CONSUMER VS INDUSTRIAL MARKET........................................................................................................ 48

2.8.4 ANALYSIS OF CONSUMER MARKET........................................................................................................... 48

2.8.5 B2B MARKETING - BUSINESS TO BUSINESS MARKETING............................................................................48

2.8.6 FEATURES OF B2B..................................................................................................................................... 48

2.8.7 PARTICIPANTS IN BUSINESS BUYING......................................................................................................... 49

2.8.8 BUSINESS BUYING PROCESS...................................................................................................................... 49

2.8.9 CONSUMER BUYING PROCESS................................................................................................................... 49

2.9 MARKETING MIX COMPONENTS.................................................................................................................. 50

KEY TERMS........................................................................................................................................................ 51

QUESTIONS....................................................................................................................................................... 52

3.1 PRODUCT PLANNING AND DEVELOPMENT................................................................................................... 53

3.1.1 PRODUCT................................................................................................................................................. 53

3.1.2 CLASSIFICATION OF PRODUCTS................................................................................................................. 54

3.1.3 DIFFERENTIATION STRATERGY.................................................................................................................. 54

3.1.4 PRODUCT MIX DIMENSIONS..................................................................................................................... 55

3.1.5 PRODUCT PLANNING................................................................................................................................ 55

3.1.6 STEPS IN PRODUCT PLANNING.................................................................................................................. 55

3.1.7 IMPORTANCE OF PRODUCT PLANNING..................................................................................................... 55

3.2 PRODUCT LIFE CYCLE................................................................................................................................... 56

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3.2.1 MARKETING STRATEGIES FOR PRODUCT LIFE CYCLE..................................................................................57

3.3 BRAND........................................................................................................................................................ 58

3.3.1 ROLE OF BRAND:...................................................................................................................................... 58

3.3.2 BRANDS CAN CONVEY SIX LEVELS OF MEANING........................................................................................58

3.3.3 BRAND EQUITY......................................................................................................................................... 58

3.3.4 BRAND KNOWLEDGE:............................................................................................................................... 59

3.3.5 BRANDING DECISIONS.............................................................................................................................. 59

3.3.6 BRAND REPOSITIONING............................................................................................................................ 59

3.4 PACKAGING................................................................................................................................................. 59

3.4.1 PACKAGING INCLUDES.............................................................................................................................. 59

3.4.2 DEVELOPING AN EFFECTIVE PACKAGE....................................................................................................... 60

3.5 LABELING.................................................................................................................................................... 60

3.5.1 LABELING FUNCTIONS............................................................................................................................... 60

3.6 PRODUCT DEVELOPMENT............................................................................................................................ 60

3.6.1 WHAT IS A “NEW” PRODUCT?................................................................................................................... 60

3.6.2 SUCCESSFUL NEW PRODUCTS................................................................................................................... 60

3.6.3 NEW PRODUCT DEVELOPMENT PROCESS IDEAS TO STRATEGY..................................................................61

3.6.4 ADOPTERS OF NEW PRODUCTS MOVE THROUGH FIVE STAGES.................................................................62

3.7 TARGET MARKET......................................................................................................................................... 62

3.7.1 TARGET MARKETING - THREE MAJOR STEPS.............................................................................................. 62

3.7.2 LEVELS OF MARKET SEGMENTATION......................................................................................................... 62

3.7.3 CHARACTERISTICS OF MARKET SEGMENTATION.......................................................................................63

3.7.4 BASES FOR SEGMENTATION OF CONSUMER MARKET...............................................................................63

3.7.5 BASES OF SEGEMENTATION OF BUSINESS MARKETS.................................................................................64

3.7.6 TARGET MARKETING................................................................................................................................ 64

3.7.7 PATTERNS OF TARGET MARKET SELECTION............................................................................................... 64

3.7.8 POSITIONING............................................................................................................................................ 65
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3.7.9 POSITIONING STRATEGIES........................................................................................................................ 65

3.8 CHANNEL MANAGEMENT............................................................................................................................ 65

3.8.1CHANNEL MEMBERS.................................................................................................................................. 65

3.8.2 CHANNEL LEVELS...................................................................................................................................... 65

3.8.3 CHANNEL-DESIGN DECISIONS................................................................................................................... 66

3.8.4 CHANNEL MANAGEMENT DECISIONS........................................................................................................ 66

3.8.5 CHANNEL FACTORS................................................................................................................................... 67

3.8.6 CHANNEL DYNAMICS................................................................................................................................ 68

3.8.7 CONFLICT, COOPERATION, & COMPETITION.............................................................................................. 68

TYPES OF CONFLICT........................................................................................................................................... 68

3.8.8 CAUSES OF CONFLICT................................................................................................................................ 68

3.8.9 MANAGING CHANNEL CONFLICT............................................................................................................... 68

3.9 ADVERTISING.............................................................................................................................................. 68

3.9.1 SETTING THE ADVERTISING OBJECTIVES.................................................................................................... 69

3.9.2 DEVELOPING THE ADVERTISING CAMPAIGN.............................................................................................. 69

3.9.3 THE FIVE MS OF ADVERTISING.................................................................................................................. 69

3.9.4 MAJOR MEDIA TYPES................................................................................................................................ 70

3.10 SALES PROMOTION................................................................................................................................... 71

3.10.1 PURPOSE OF SALES PROMOTION............................................................................................................ 71

3.10.2 MAJOR DECISION IN SALES PROMOTION................................................................................................. 71

3.11 PRICING..................................................................................................................................................... 72

3.11.1SETTING THE PRICE.................................................................................................................................. 72

3.11.2 ADAPTING THE PRICE (Pricing policies and methods)...............................................................................73

KEY TERMS........................................................................................................................................................ 75

QUESTIONS....................................................................................................................................................... 76

4.1 INDIVIDUAL OR CONSUMER BUYER BEHAVIOUR.......................................................................................... 81

4.1.1FACTORS INFLUENCING CONSUMER OR INDIVIDUAL BEHAVIOUR..............................................................81

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4.1.2 CONSUMER BUYING DECISION PROCESS................................................................................................... 82

4.2 INDUSTRIAL BUYER OR ORGANIZATIONAL BUYER BEHAVIOR.......................................................................83

4.2.1 COMPARED TO CONSUMER MARKETS, BUSINESS MARKETS HAVE . . ........................................................83

4.2.2 OTHER BUSINESS MARKET CHARACTERISTICS...........................................................................................83

4.2.3 BUYING SITUATIONS................................................................................................................................. 83

4.2.4 BUYING CENTER MEMBERS FILL ONE OR MORE ROLES IN THE PURCHASE DECISION PROCESS...................84

4.2.5 MAJOR INFLUENCES ON INDUSTRY BUYERS.............................................................................................. 84

4.2.6 BUY PHASES OF INDUSTRIAL BUYING........................................................................................................ 85

4.3 MODELS OF BUYER BEHAVIOUR.................................................................................................................. 85

4.4 ONLINE BUYER BEHAVIOR........................................................................................................................... 86

4.5 BUILDING AND MEASURING CUSTOMER SATISFACTION...............................................................................87

4.5.1 CUSTOMER VALUE.................................................................................................................................... 87

4.5.2 CUSTOMER SATISFACTION........................................................................................................................ 87

4.5.3 TO MAXIMIZE CUSTOMER SATISFACTION................................................................................................. 87

4.5.4 SATISFIED CUSTOMERS ARE...................................................................................................................... 87

4.5.5 HIGH PERFORMANCE BUSINESSES............................................................................................................ 88

4.5.6 BUSINESS PRACTISES FOR CUSTOMER SATISFACTION................................................................................88

4.6 CRM............................................................................................................................................................ 89

4.6.1 CRM - DEFINITION.................................................................................................................................... 89

4.6.2 EFFECTIVE CUSTOMER RELATIONSHIP MARKETING REQUIRES...................................................................89

4.6.3 ELEMENTS OF CRM................................................................................................................................... 89

4.6.4 CRM LEADS TO ONE-ON-ONE MARKETING................................................................................................ 89

4.6.5 CUSTOMER RELATIONSHIP MANAGEMENT PROCESS (CRM)......................................................................90

4.6.6 CUSTOMER DATABASES AND DATABASE MARKETING ARE THE KEY TO EFFECTIVE CRM............................90

4.6.7 MEASURING CRM..................................................................................................................................... 90

4.6.8 TYPES OF CRM.......................................................................................................................................... 90

4.6.9 GROUND WORK OF CUSTOMER RELATIONSHIP MANAGEMENT................................................................91

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4.7 CUSTOMER ACQUISITION............................................................................................................................ 91

4.8 CUSTOMER RETENTION............................................................................................................................... 91

4.9 CUSTOMER DEFECTION................................................................................................................................ 91

4.9.1 HOW COMPANIES LOSE CUSTOMERS........................................................................................................ 92

4.9.2 CREATING STRONG CUSTOMER BOND...................................................................................................... 92

4.9.3 BUILDING LOYALTY................................................................................................................................... 93

4.10 CUSTOMER DISSATISFACTION.................................................................................................................... 93

KEY TERMS........................................................................................................................................................ 93

QUESTIONS....................................................................................................................................................... 94

5.1 MARKETING INFORMATION SYSTEM........................................................................................................... 97

5.1.1. DEFINITION............................................................................................................................................. 97

5.1.2 MIS - COMPILE INFORMATION FROM....................................................................................................... 97

5.1.3 INTERNAL RECORDS SYSTEMS................................................................................................................... 97

5.1.3.1 INFORMATION FLOW OF MARKETING INFORMATION SYSTEM...............................................................97

5.1.3.2 DESIGN AND BUILDING OF MARKETING INFORMATION SYSTEM............................................................98

5.1.4 MARKETING INTELLIGENCE....................................................................................................................... 98

5.1.4.1 IMPROVING THE QUALITY OF MARKETING INTELLIGENCE SYSTEM DATA REQUIRES...............................98

5.1.4.2 ELEMENTS OF MARKETING INTELLIGENCE.............................................................................................. 98

5.1.4.3 METHODS OF MARKETING INTELLIGENCE.............................................................................................. 99

5.1.4.4 STEPS TO IMPROVE QUALITY OF MARKETING INTELLIGENCE..................................................................99

5.2 MARKETING RESEARCH PROCESS................................................................................................................. 99

5.2.1.CHARACTERISTIC FEATURES OF RESEARCH................................................................................................ 99

5.2.2 NEED FOR MARKET RESEARCH................................................................................................................ 100

5.2.3 TYPES OF RESEARCH............................................................................................................................... 100

5.2.4 SIGNIFICANCE OF RESEARCH................................................................................................................... 100

5.2.5 MARKETING RESEARCH PROCESS............................................................................................................ 101

5.3 MARKETING DECISION SUPPORT SYSTEM.................................................................................................. 104

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5.4 APPLICATIONS OF MARKETING RESEARCH................................................................................................. 104

5.4.1 PRODUCT RESEARCH............................................................................................................................... 104

5.4.2 ADVERTISING AND PROMOTION RESEARCH............................................................................................ 105

5.4.3 CONSUMER RESEARCH........................................................................................................................... 105

5.4.5 SALES METHODS OR RETAIL RESEARCH................................................................................................... 105

5.4.6 MARKET RESEARCH SATISFACTION STUDIES............................................................................................ 106

5.4.7 COMPETITION RESEARCH........................................................................................................................ 106

5.4.8 DISTRIBUTION RESEARCH....................................................................................................................... 106

5.4.9 PRICE RESEARCH..................................................................................................................................... 106

5.5 CUSTOMER DRIVEN ORGANIZATION.......................................................................................................... 107

5.5.1 BENEFITS................................................................................................................................................ 107

5.5.2 STEPS FOR BECOMING CUSTOMER DRIVEN............................................................................................. 107

5.5.3 MAKING THE CUSTOMER BUSINESS PARTNER.........................................................................................107

5.6 CAUSE MARKETING OR CAUSE-RELATED MARKETING................................................................................107

5.6.1 BENEFITS OF CAUSE RELATED MARKETING.............................................................................................. 108

5.6.2 ONLINE CAUSE MARKETING.................................................................................................................... 108

5.6.3 TYPES - CAUSE MARKETING CAN TAKE ON MANY FORMS, INCLUDING....................................................108

5.6.4 EXAMPLES.............................................................................................................................................. 108

5.7 ETHICAL ISSUES IN MARKETING................................................................................................................. 110

5.7.1 NOT EMPLOYING ETHICAL MARKETING PRACTICES.................................................................................110

5.7.2 ETHICAL PRODUCTS AND DISTRIBUTION PRACTICES................................................................................111

5.7.3 UNETHICAL ADVERTISEMENT.................................................................................................................. 111

5.7.4 OFFENSIVE MATERIALS AND OBJECTIONABLE MARKETING PRACTICES....................................................112

5.8 DATABASE MARKETING............................................................................................................................. 112

5.9 ONLINE MARKETING (E-COMMERCE)......................................................................................................... 113

5.9.1 INTERNET DOMAINS............................................................................................................................... 113

5.9.2 WEBSITE DESIGN - THE SEVEN “C’S” OF WEB SITE DESIGN.......................................................................113

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5.9.3 DOT.COM REVENUE AND PROFIT MODELS.............................................................................................. 114

5.9.4 CHARACTERISTICS OF ONLINE MARKETING............................................................................................. 114

5.9.5 ADVANTAGES OF ONLINE MARKETING.................................................................................................... 114

5.9.6 ADVERTISING ONLINE............................................................................................................................. 115

5.9.7 TYPES OF ONLINE ADVERTISING.............................................................................................................. 115

KEY TERMS...................................................................................................................................................... 115

QUESTIONS..................................................................................................................................................... 117

PREVIOUR YEAR QUESTION PAPER MAY/JUNE 2007........................................................................................ 129

PREVIOUR YEAR QUESTION PAPER MAY/JUNE 2010........................................................................................ 130

GLOSSARY....................................................................................................................................................... 132

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 UNIT I

 MARKETING
 MARKETING DEFINITIONS
 CONCEPTUAL FRAME WORK
 MARKETING PROCESS
 MARKETING ENVIRONMENT
 MARKETING INTRFERACE WITH OTHER DISCIPLINES
 MARKETING IN GLOBAL ENVIRONMENT

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 UNIT 1

1.1 - MARKETING

1.1.1 MARKET

Market was a physic al place where buyers and sellers gathered to buy and sell goods.
A market is the set of actual and potential buyers of a product. These buyers share a
particular need or want that can be satisfied through exchange.

1.1.2 FEATURES OF MARKET

 Consumer Orientation
 Integrated marketing
 Consumer satisfaction

1.1.3 KEY CUSTOMER MARKET

1. Consumer market

Companies selling mass consumer goods and services such as soft drinks, cosmetics,
air travel and equipment spend a great deal of time trying to establish superior
brand image.

2. Business market

Companies selling business goods and services often face well – trained and well –
informed professional buyers who are skilled in evaluating competitive offerings.
Business buyers buy goods in order to make or resell a product to others at a profit.

3. Global market

Companies selling goods and services in the global market place face additional
decisions and challenges. They must decide which countries to enter and how to
enter each country and how to adapt their product and service features to each
country and how to price their products in different countries.

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1.2 - MARKETING DEFINITIONS

1.2.1 MEANING

It deals with identifying and meeting human and social needs – “Meeting needs
profitably”. It is not just a sale, a new sense of satisfying customer needs

1.2.2 DEFINITION

(i) According to American Marketing association “Marketing is the performance of business

activities that directs the flow of goods and services from producer to customer”

(ii) Philip Kotler – “Marketing is a societal process by which individuals and groups
obtain what they need and want through creating, offering and freely exchanging
products and services of value with others”

1.2.3 SCOPE OF MARKETING

 Places
 Properties
 Organizations
 Goods
 Services
 Experiences
 Information
 Ideas
 Events
 Persons

1.2.4 OBJECTIVES OF MARKETING

 Analyzing marketing problems and suggest suitable solutions

 Developing a broader framework for thinking about marketing
 Analyzing existing marketing function and remove unnecessary procedures
 Successful distribution of product is another notable objective of marketing.

1.2.5 WHAT CAN BE MARKETED?

 Goods
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  Services

 Experiences

 Events

 Places

 Properties

 Organizations

 Information

 Ideas

1.2.6. CONSUMER AND CUSTOMER

Consumer: A consumer refers to individuals who buy for themselves or their family

Customer: A customer can also mean the retailer or person who buys from the manufacturer,
etc. for ultimate sale to others.

The one who buys the product is called a customer and the one who uses the product is called a
consumer.
1.2.7 MARKETERS AND PROSPECTS

A marketer is someone who seeks a response (attention, a purchase) from another

party, called the prospects. It two parties are seeking to sell something to each other, we
call them both marketers.

Marketers are skilled in stimulating demand for a company’s products, but this is too
limited a view of the tasks they perform. Marketing managers seek to influence the
level, timing, and composition of demand to meet the organization’s objectives.

1.2.8 SIMPLE MARKETING CONCEPT

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1.2.9 MARKETING MANAGEMENT - DEFINITION

Philip Kotler – “Marketing management is the art and science of choosing target markets
and building profitable relationship with them”

What is Marketing?
Brand
Positioning Integrity
Differentiation
Being Strategy Core Tactic
BRAND
BRAND
Brand
Value Indicator

1.2.10 MARKETING MANAGEMENT TASKS

 Developing marketing strategies and plans
 Capturing marketing insights
 Connecting with customers
 Building strong brands
 Shaping the market offerings
 Delivering value
 Communicating value
 Creating long term growth

1.3 - CONCEPTUAL FRAME WORK

1.3.1 COMPANY ORIENTATION TOWARD

Production Concept
THE MARKET PLACE

Product Concept

Marketing Concepts Selling Concept

Marketing Concept

Holistic marketing concept

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The Production concept

Improvements in Production and distribution efficiency will be the focus. When

product cost is too high the management has to bring it down. The production concept
holds that consumers will favour products that are available and highly affordable, and
that management should therefore focus on improving production and distribution
efficiency

The Product concept

Continuous improvement in product quality, performance and innovative features.

Consumers will favor those products that offer the most quality, performance and
innovative features, and that an organization should thus devote energy to making
continuous product improvements.

Selling concept

Many organizations follow the selling concept, which holds that consumers will not
buy enough of the organization's products unless it undertakes a large-scale selling and
promotion effort.

Marketing concept

The marketing concept holds that achieving organizational goals depends on

determining the needs and wants of target markets and delivering the desired
satisfactions more effectively and efficiently than competitors do.

Start Focus Means Ends

Selling Existing Profit through sales volume

Concept Factory product Promoting

Profit through customer satisfacti

Marketing Customer Integrated marketing
Market
concept Need

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Holistic marketing concept

 Based on development, design and implementation of marketing programs,

processes, and activities that recognizes their breadth and interdependencies.
 Four components of holistic marketing are:
o Relationship marketing: Aims building mutually satisfying long term
relationships with key parties – customers, suppliers, distributors, and
other marketing partners in order to earn and retain their business.
o Integrated marketing: Marketers task is to devise marketing activities and
assemble fully integrated marketing programs to create, communicate and
deliver value for consumers.
Four Ps Four Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication
o Internal marketing: Task of hiring, training and motivating able
employees who want to serve customers well.
o Social Responsibility marketing: The societal marketing concept holds
that the organization should determine the needs, wants and interests of
target markets. It should then deliver the desired satisfactions more
effectively and efficiently than competitors in a way that maintains or
improves the consumer's and the society's well-being. Balancing three
considerations

Societal (Human welfare, environment)

Consumers Company

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 (Need, wants, satisfaction) (Sales volume, profits, growth)

1.3.2 CORE MARKETING CONCEPTS OR FUNDAMENTAL MARKETING

CONCEPTS

 Target markets and market segmentation

 Marketplace, market-space, meta markets

 Marketers & prospects

 Needs, wants, demands

 Product offering and brand

 Value and satisfaction

 Exchange and transactions

 Relationship and networks

 Marketing channels

 Supply chain

 Competition

 Marketing environment

 Marketing program

Target markets and market segmentation

 Differences in needs, behavior, demographics or psychographics are used to identify

segments.
 The segment served by the firm is called the target market.
 The market offering is customized to the needs of the target market.

Marketplace, market-space, meta markets

 Marketplace (physical entity, Lowe’s)

 Market space (virtual entity, Amazon)
 Meta markets refer to complementary goods and services that are related in the
minds of consumers

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Need (limited), want (unlimited), and demands

 Need
 Physiological need – Food, cloth, shelter
 Social need - Belonging, affection
 Individual need - Knowledge, education, self development
 Want
Shaped by culture and individual personality (e.g.) American food and Indian food
 Demand
Wants backed by purchasing power and willingness to buy.

Offering and brands

A product is any offering that can satisfy a need or want. (e.g.) goods, services, places,
and properties

Value and Satisfaction

It is the difference between the value the customer gain from buying and using a
product and the cost of buying the product

Exchanges

Act of obtaining an object which one needs from another by offering some other thing
in return.

Transaction

When 2 parties reach an agreement it becomes transaction. (e.g.) When a customer pays
Rs.400000 and buy Ford Figo car it becomes transaction.

Relationship & Networks

Aim of building long – term mutually satisfying relations with key parties’ - customer,
suppliers and distributors.

Marketing channels

Marketers use three kinds of marketing channels

 Communication channels – Newspapers, televisions and Internet

 Distribution channels – ware houses, transportation
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 Trade channels – Wholesalers, distributors and retailer

Market

Place where buyers and sellers meet.

Supply chain

 Stretches from raw materials to components to final products that are carried to final
buyers.
 Each company captures only a certain percentage of the total value generated by the
supply chain.

Competition

Four levels of competition can be distinguished by the level of product substitutability

 Brand competition
 Industry competition
 Form competition
 Generic competition

Marketing environment

The following forces in the broad environment have a major impact on the task
environment

 Demographics
 Economics
 Natural environment
 Technological environment
 Political-legal environment
 Social-cultural environment

1.3.3 ELEMENTS OF MODERN MARKETING SYSTEM

Environment

Company
Market Intermediaries
Suppliers
Suppliers

Competitors
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 Environment

1.4 MARKETING PROCESS

Create value for customers and build customer relationship

 Understand the market place and customer need

 Designing a customer driven marketing strategy
 Construct a marketing program that delivers superior value
 Build profitable relation and create customer delight
 Capture value from customers

1. 5 MARKETING ENVIRONMENT

 Forces outside marketing that affect marketing management’s ability to build

and maintain successful relationship with target customers.
 It consists of internal and external forces that directly or indirectly influence an
organization’s marketing activities

MARKETING ENVIRONMENT

MICRO ENVIRONMENT MACRO ENVIRONMENT

Company Demographic
Supplier Economic
Marketing Intermediaries Natural
Customers Technological
Competitors Political
Public Legal 22 | P a g e
Cultural
Micro environment

Forces close to the company that affects its ability to serve its customers

1. Company

They should think about consumer and work in harmony to provide customer value
and satisfaction

2. Suppliers

They provide resources needed by the company. They form an important link in the
company’s overall customer value delivering systems.

3. Marketing Intermediaries

This aid the company in Promoting, Selling and distributing its goods to final buyers

 Middle men – Agent, brokers, dealers, wholesalers, retailers

 Physical distribution firms – Warehousing firm, transportation firm
 Marketing service agencies – Media firms
 Financial intermediaries – Banks, Credit and insurance companies.

4. Customers

Marketers keep track of what customers want and grab emerging maker opportunities.

5. Competitors

Competitors have to be identified and monitored to gain and maintain customer

loyalty.

6. Public

Most organizations establish public relation department.

Macro environment

Larger societal force that affect marketing environment. It is considered to be beyond

the control of organization.
23 | P a g e
1. Demographic

Study of human population in terms of size of population, density, location, gender,

race, age, birth, educational characteristics

2. Economic

Consist of factors that affect consumer purchasing power and spending patterns.

3. Natural

The process of acquiring and analyzing information in order to understand the market,
set of procedures is used by managers to obtain everyday information about
development in marketing environment. Reading books, newspapers, talking to
customers, suppliers and distributors.

4. Technological

Marketers need to know how new technologies can serve human needs.

5. Political

The form of Government adopted by country and political stability. Laws protecting
consumers from unfair trade practices

6. Legal

Marketers have to function within the legal framework. (e.g.) Liquors advertisings are
banned.

7. Cultural

Unified result of factors like religion, language and education. Consists of societal basic
value and behavior

1. 6 MARKETING INTRFERACE WITH OTHER DISCIPLINES

1. Marketing as an equal function

Production Finance

Marketing HR

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2. Marketing as a more important function
Production Finance

Human Marketing resource

3. Marketing as a major function

Production

MARKETING

MARKETING
H
R

Finance

4. The customer as the controlling function

PRODUCTION FINANCE

HR MARKETING
CUSTOMER

25 | P a g e
5. The customer as the controlling function and marketing as the integrative function

Production

Marketing

H Customer
R
Finance

6. Research and development

 They spend time meeting customers and listening to their problems.

 They welcome the involvement of marketing, manufacturing and other departments
to each new project.
 They bench mark competitors’ products and seek “best of class” solutions.
 They solicit customer reactions and suggestions as the project progresses.
 They continuously improve and refine the product on the basis of market feedback.

7. Purchasing

 They proactively search for the best suppliers.

 They build long term relationships with fewer but more reliable, high – quality
suppliers.
 They don’t compromise quality for price savings

8. Manufacturing

 They invite consumers to visit and tour their plants.

 They visit customer plants.

26 | P a g e
 They willingly work overtime to meet promised delivery schedules.
 They continuously search for ways to produce goods faster and/or at lower cost.
 They continuously improve product quality, aiming for zero defects.
 They meet customer requirements for “customization” where possible.

9. Marketing

 They study customer needs and wants in well-defined market segments.

 They allocate marketing effort in relation to the long-run profit potential of the
targeted segments.
 They develop winning offers for each target segments
 They measure company image and customer satisfaction on a continuous basis.
 They continuously gather and evaluate ideas for new products, product
improvements, and services.
 They urge all company departments and employees to be customer – centered.

10. Sales

 They have specialized knowledge of the customer’s industry.

 They strive to give the customer “the best solution”.
 They only make promises that they can keep.
 They feed back customers’ need and ideas to those in charge of product
development.
 They serve the same customers for a long period of time.

11. Logistics

 They set a high standard for service delivery time and meet this standard
consistently.
 They operate a knowledgeable and friendly customer service department that can
answer questions, handle complaints, and resolve problems in a satisfactory and
timely manner.

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12. Accounting

 They prepare periodic “profitability” reports by product, market segment,

geographic areas, order sizes, channels and individual customers.
 They prepare invoices tailored to customer needs and answer customer queries
courteously and quickly.

13. Finance

 They understand and support marketing expenditures that produce long-term

customer preference and loyalty.
 They tailor the financial package to the customer’s financial requirements.
 They make quick decisions on customer creditworthiness.
 Public relations
 They send out favorable news about the company and “damage control”
unfavorable news
 They act as an internal customer and public advocate for better company policies
and practices

1.7 MARKETING IN GLOBAL ENVIRONMENT

1.7.1 FACTORS INFLUENCING GLOBAL MARKET

 Political changes
 Social legislation
 Economic Environment
 Technological changes
 Socio cultural factors

1.7.2 COMPETING ON A GLOBAL BASIS – PROBLEMS AND PROSPECTS

DECIDING WHETHER TO GO ABROAD

DECIDING WHICH MARKET TO ENTER

DECIDING HOW TO ENTER THE MARKET

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 DECIDING ON THE MARKETING PROGRAM

1. Deciding whether to go abroad

Factors drawing companies into the International arena

 Global firms offering better products or lower prices can attack the company’s
domestic market.
 The company discovers that some foreign markets present higher profit
opportunities than the domestic market.
 The company needs a larger customer base to achieve economies of scale.
 The company wants to reduce its dependence on any one market.
 The company’s customers are going abroad and need servicing.

Before going abroad, the company must weigh several risk

 The company might not understand foreign customer preferences and fail to
offer a competitively attractive product.
 The company might not understand the foreign country’s business culture or
know how to deal effectively with foreign nationals.
 The company might underestimate foreign regulations and incur unexpected
costs.
 The company might realize that it lacks managers with international experience.
 The foreign country might change its commercial laws, devalue its currency, or
undergo a political revolution and expropriate property.

2. Deciding which market to enter

Before getting into global market the company has to think about which market suits
the company. Factors to be considered which selecting the market

 Market entry and market costs are high

 Product and communication costs are high
 Population and income size and growth are high in the initial countries chosen
 Dominant foreign firms can establish high barriers to entry

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3. Deciding how to enter the market

Indirect and direct export

 Occasional exporting
 Active exporting
 Indirect exporting
 Domestic-based export merchants
 Domestic-based export agents
 Cooperative organizations
 Export-management companies

Licensing

 Management contracts
 Contract manufacturing
 Franchising

Joint venture

Direct investment

1. Deciding on the marketing program

Marketing mix of the company are to be altered according to the market they are going
to enter.

Product

 Straight extension
 Product adaption
 Product invention
 Backward invention
 Forward invention

Promotion

 Communication adaption
 Dual adaption

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Price

 Price escalation

Companies have three choices

 Set a uniform price everywhere

 Set a market-based price in each country
 Set a cost-based price in each country
 Transfer price
 Dumping
 Arm’s-length price
 Gray market

Place

 Seller’s international marketing headquarters

 Channels between nations
 Channels within foreign nations

KEY TERMS
Active exporting Customer value
Arm’s-length price Customers
Backward invention Demands
Brand Demographic
Brand competition Direct investment
Business market Domestic-based export agents
Communication adaption Domestic-based export merchants
Company Dual adaption
Competition Dumping
Competitors Entrepreneurial marketing
Consumer market Events
Consumer satisfaction Exchange
Contract manufacturing Experiences
Cooperative organizations Export-management companies
Customer satisfaction Form competition
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Formulated marketing Marketplace
Forward invention Market-space
Franchising Meta markets
Generic competition Micro environment
Global market Needs, wants, demands
Goods Occasional exporting
Gray market Organizations
Human want Persons
Ideas Physiological need
Indirect and direct export Places
Indirect exporting Price
Individual need Price escalation
Industry competition Product
Information Product adaption
Integrated marketing Product concept
Internet Product invention
Intrepreneurial marketing Production concept
Joint venture Promotion
Licensing Properties
Macro environment Selling concept
Management contracts Services
Market Social need
Market segmentation Societal marketing concept
Marketers Straight extension
Marketing Suppliers
Marketing channels Supply chain
Marketing concept Target markets
Marketing environment Transaction
Marketing intermediaries Transfer price
Marketing management Value
Marketing program
QUESTIONS

1) Discuss why you should study marketing?

2) What is Remarketing?
3) What is product concept?
4) Explain the approach of marketing.
5) Describe the difference between selling and marketing.
6) Explain marketing environment for the business enterprise of consumer goods.
7) Explain marketing process.
8) Explain the factors influencing global environment
9) List the various challenges of global environment.
10) Define marketing and explain how marketing has evolved to the current state as
it is practiced.
11) Marketing involves satisfaction of consumer needs. Elucidate the statement.

32 | P a g e
12) What are the marketing concepts? Explain the evolution process of management
philosophy.
13) Distinguish between selling and marketing.
14) What is marketing orientation? How will you find out the level of marketing
orientation of a firm?
15) What is a complex exchange process? How different it is from the utilitarian
exchange process?
16) Explain the difference between a ‘economic man’ and ‘marketing man’.
17) How will you explain social marketing in the context of an exchange process?
18) Explain the marketing management process.
19) What are the various environmental factors influencing marketing decisions?
Why is it necessary to monitor the external environment?
20) What is a competitive environment? What influence does it have on the
marketing decisions?
21) Who are the major players in a competitive marketing environment? What role
does the general public play in influencing the decisions in a competitive
marketing system?
22) “The legal environment for marketing decisions is basically a positive
environment”. Comment.
23) What are the rights and responsibilities of consumers?
24) Examine the variables affecting the domestic societal environment.
25) How does change in technology influence decision making in marketing?
26) How are changes in cultural factors affecting business and creating new business
opportunity?
27) What are the factors used for measuring demographic environment? How
relevant are they for business decisions?
28) Why is it important to constantly monitor the environment? How relevant are
they for business decisions?
29) Why is it important to constantly monitor the environment? What methods will
you use to conduct environmental scanning?
30) What factors influence the decision on product-mix in global marketing?
31) Explain the concept of ‘straight extension’. Given suitable example.
32) Explain the role of non –price factors in formulating export policy.
33) What are the major decisions involved in Global marketing?
34) Define global marketing and discuss its scope.
35) Why should a firm think of entering into global markets?

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 UNIT II

2.1 MARKETING STRATEGY FORMULATIONS

2.2 MARKETING PROCESS

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2.3 KEY DRIVERS OF MARKETING STRATEGIES

2.4 STRATEGIES FOR INDUSTRIAL MARKETING

 2.5 STRATEGIES FOR CONSUMER MARKETING

UNIT – II

2.1 MARKETING STRATEGY FORMULATIONS

2.1.1 STRATEGY

It is “a unified comprehensive and integrated plan designed to ensure that the basic
objectives of the enterprise are achieved”

2.1.2 STAGES OF STRATEGIC PLANNING

 Strategic plan
 Marketing Process
 Plan into action

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2.1.3 STRATEGY FORMULATION

1. The planning process

Putting plans into action involves four stages analysis, planning, implementation and
control. The relationship between these functions that is common to strategic planning,
marketing planning or the planning for any other function.

Analysis

Planning begins with a complete analysis of the company's situation. The company
must analyze its environment to find attractive opportunities and to avoid
environmental threats. It must analyze company strengths and weaknesses, as well as
current and possible marketing actions, to determine which opportunities it can best
pursue. Analysis feeds information and other inputs to each of the other stages.

Planning

Through strategic planning, the company decides what it wants to do with each
business unit. Marketing planning involves deciding marketing strategies that will help
the company attain its overall strategic objectives. Marketing, product or brand plans
are at the centre of this.

Implementation

Implementation turns strategic plans into actions that will achieve the company's
objectives. People in the organization that work with others both inside and outside the
36 | P a g e
company implement marketing plans. Successfully implementing programs requires
four sets of skills

 Diagnostic skills
 Identification of company level
 Implementation skills
 Evaluation skill

2. Control

Control consists of measuring and evaluating the results of plans and activities, and
taking corrective action to make sure objectives are being achieved. Analysis provides
information and evaluations needed for all the other activities.

Types of Control

 Annual plan
 Responsibility of top and middle management
 Examines whether planned results are achieved
 Profitability
 Responsibility of marketing controller
 Examines where the company is making and losing money
 Efficiency
 Responsibility of line & staff and / or marketing controller
 Evaluates and attempts to improve spending efficiency of marketing
expenditures
 Strategic
 Responsibility of top management and marketing auditor
 Examines whether company is pursuing its best opportunities.

Strategic controls should be conducted periodically via

 Marketing-effectiveness reviews
 Marketing audits

Additional reviews to consider

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  Marketing excellence review
 Ethical and social responsibility review

2.1.4 STRATEGIC PLAN

The strategic plan contains several components the mission, SWOT analysis, portfolio
analysis, and strategies.

Mission statement

A statement of the organizations purposes -what it -wants to accomplish in the

environment. Mission statements define the company’s major competitive scopes

 Industry scope
 Products and applications scope
 Competence scope
 Vertical scope
 Market-segment scope
 Geographical scope

SWOT analysis

It is distillation of the findings of the internal and external audit which draws attention
to the critical organizational strengths and weaknesses and the opportunities and
threats facing the company

 Opportunities and threats stemming from the external environment

 Monitoring key forces for trends
 For each trend, conduct an MOA - Marketing Opportunity Analysis
 Internal strengths and weaknesses
 Brand awareness, image, reputation
 Distribution, pricing, customer loyalty, product benefits
 Finance, R&D, manufacturing

Business portfolio

The collection of businesses and products that make up the company

Portfolio analysis
38 | P a g e
A tool by which management identifies and evaluates the businesses that make up the
company.

The BCG growth-share matrix

Strategic Business Unit (SBU)

A unit of the company chat has a, separate miss ton and objectives and than can be
planned independently fro m other company businesses. An SBU can be a company
division, a product line -within a division, or sometimes a single product or brand.
Strategic Business Units share three characteristics

 Single business or collection of businesses which can be managed separately

 Has own set of competitors

 Has manager responsible for strategic planning and profits

Growth-share matrix (BCG) Boston Consulting Group:

A portfolio-planning method that evaluates a company's strategic business units (SBUs)

in terms of their market growth rate and relative market share. SMU& are classified as
stars, cash cotes, question marks or dogs.

1. Stars

Stars are high-growth, high-share businesses or products. They often need heavy
investment to finance their rapid growth. Eventually their growth will slow down, and
they will turn into cash cows,
39 | P a g e
2. Cash cows

Cash cows are low-growth, high-share businesses or products. These established and
successful SBUs need less investment to hold their market share. Thus they produce
cash that the company uses to pay its bills and to support other SBUs that need
investment.

3. Question Marks

Question marks are low-share business unite in high growth markets. They require cash
to hold their share, let alone increase it. Management has to think hard about question
marks - which ones they should build into stars and which ones they should phase out.

4. Dogs

Dogs are low-growth, low-share businesses and products. They may generate enough
cash to maintain themselves, but do not promise to be large sources of cash.

Strategies

 Market penetration
 Market development
 Diversification

2.2 MARKETING PROCESS

 Analyzing market opportunities

 Developing marketing strategies

40 | P a g e
  Planning marketing programs
 Managing the marketing effort
 Segmentation
It is the process of dividing a market into distinct subgroups of consumers
with distinct needs, characteristics or behavior. Bases for segmentation
 Geographic
 Demographic
 Psychographic
 Selecting target market
The firm has to evaluate the segments and decide which one to target
 Undifferentiated marketing
 Differentiated marketing
 Concentrated or Niche marketing
 Positioning
The place the product occupies in the consumers minds relative to
competing product.
 Marketing mix
 Action plan
The action plan shows when activities will start, be reviewed and be
completed.

2.3 KEY DRIVERS OF MARKETING STRATEGIES

 Economic climate
 Demographic climate
 Market
 Technology
 Competitive activity
 Channel pressure
 Demographic changes
 Politics
 Product and service quality

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  Marketing mix
 Cost of capital
 Manufacturing facilities
 Visionary capable leadership

2.4 STRATEGIES FOR INDUSTRIAL MARKETING

 Leveraging the Power of the technology

 Targeting the Right Clients

 Sticking to the Plan

2.5 STRATEGIES FOR CONSUMER MARKETING

 Product

 Communications

 Price

 Distribution

 Service

2.6 SERVICES MARKETING

2.6.1 SERVICE

Service is any act or performance that one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Its production may of may
not be tied to a physical product.

2.6.2 CHARACTERISTICS OF SERVICES

 Intangibility
 Inseparability
 Variability
 Perishability

2.6.3SERVICE INDUSTRY

 Government sector
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  Private nonprofit sector
 Business sector
 Manufacturing sector

2.6.4 SERVICE MIX CATEGORIES

 Pure tangible good no services

 Tangible good with accompanying services
 Hybrid equal parts service and goods
 Major Service with accompanying minor goods and services
 Pure service

2.6.5 TYPES OF MARKETING IN SERVICE INDUSTRIES

 External Marketing Price, Distribute, Promote the service.

 Internal marketing Train and motivate employees to serve customers well.
 Interactive Marketing Improving Employees skill in serving the client.

Company

Internal External

Marketing Marketing services Marketing

Employees Interactive Customers

Marketing

2.6.6 MARKETING MIX IN SERVICE MARKETING:

 Product
 Price
 Place
 Promotion
 People

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  Physical evidence
 Process

2.6.7 SERVICE QUALITY

Responsiveness of an organization to meet the customer expectation

2.6.8 DIMENSIONS OF SERVICE QUALITY “RATER MODEL”

 Reliability
 Assurance
 Tangibles
 Empathy
 Responsiveness

2.6.9 CLASSIFICATION OF SERVICES

SERVICES

CONSUMER INDUSTRY

 Food services  Financial

 Hotels  Insurance
 Personal care  Engineering services
 Entertainment  Advertising & Promotion
 Transport  Ware housing
 Communication

2.6.10 SERVICE STRATEGIES

 Demand-side strategies

 Use differential pricing

 Cultivate nonpeak demand

 Develop complementary services

 Install reservation systems

 Supply-side strategies

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  Hire part-time employees

 Introduce peak-time efficiency routines

 Increase consumer participation

 Plan facilities for future expansion

 Share services

2.7 COMPETITOR ANALYSIS

2.7.1 STEPS IN COMPETITOR ANALYSIS

IDENTIFYING COMPETITORS

ASSESSING COMPETITORS OBJECTIVES

IDENTIFYING COMPETITORS STRATEGIES

ASSESSING COMPETITORS STRENGTH & WEAKNESS

REACTION PATTERN
1. Indentifying Competitors

 Industry point
o Number of Sellers and Degree of Differentiation
o Entry , mobility, exit barriers
o Cost structure
o Degree of globalization
o Degree of vertical integration
 Market point Companies that satisfy the same customer needs.

2. Assessing competitor objectives

 Profit
 Market share
45 | P a g e
  Technological leadership
 Service

3. Identifying competitors strategy

 Strategic group
 Corporate level
 Functional level
 Business level

4. Assessing competitors strength and weakness

 Dominant
 Strong
 Favorable
 Tenable
 Weak
 Nonviable

5. Reaction pattern

 The laid back competitor

 The selective competitor
 The tiger competitor
 The stochastic competitor

2.7.2 DESIGNING THE COMPETITIVE INTELLIGENCE SYSETM

 Setting up the system

 Collecting the data
 Evaluating and analyzing the data
 Disseminating information and responding

2.7.3 ATTACK STRATEGIES

 Frontal attack
 Flank attack
 Encirclement attack
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  Bypass attack
 Guerilla attack

2.8 ANALYSIS OF CONSUMER AND INDUSTRIAL MARKETS

2.8.1 CONSUMER MARKET

Consumer markets are those markets for products and services bought by individuals
for their own or family use.

 FMCG
 Consumer durables
 Soft goods
 Services

2.8.2 INDUSTRY MARKET

It involves the sale of goods between businesses. They are not aimed at consumers.

 Selling finished goods

 Selling raw materials or components
 Selling services

2.8.3 CONSUMER VS INDUSTRIAL MARKET

 Fewer buyer
 Larger buyer
 Close supplier - customer relationship
 Geographically concentrated buyer
 Derived demand
 Inelastic demand
 Fluctuating demand
 Professional purchasing

2.8.4 ANALYSIS OF CONSUMER MARKET

Keen understanding of people. Five basic questions are asked in a good consumer
analysis

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  Who are consumers?
 How do they use the product?
 What motivated consumers to buy?
 What do consumers look for in a product?
 How do consumers look at life?

2.8.5 B2B MARKETING - BUSINESS TO BUSINESS MARKETING

It is also called as industrial marketing. It is the marketing of goods and services from
one business to another. It can be

 Raw materials
 Finished goods
 Services

2.8.6 FEATURES OF B2B

 Professional purchasing effort

 Complex buying decisions
 Formalized buying process
 Buyers and sellers work closely together
 Demand is inelastic
 Demand is derived from final consumer demand.

2.8.7 PARTICIPANTS IN BUSINESS BUYING

 Users
 Influencers
 Buyers
 Deciders
 Gate keepers

2.8.8 BUSINESS BUYING PROCESS

Problem recognition

General need description

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 Product specification

Supplier search

Proposal solicitation

Supplier selection

Order –routine specification

Performance review

2.8.9 CONSUMER BUYING PROCESS

 When the consumers first acquainted with the product category and brands?
 What the consumers brand beliefs are?
 How involved they are with the product?
 How they make their brand choices?
 How satisfied they are after purchase?
1. Problem Recognition
2. Information search
 Personal source
 Commercial sources
 Public sources
 Experiential sources
3. Evaluation of alternatives
4. Purchase decision
5. Attitude of others
6. Unanticipated situational factors
a. Brand decision
b. Vendor decision
c. Quality decision
d. Timing decision
e. Payment method decision
7. Post purchase behaviour
 Post purchase satisfaction
 Performance < Expectation = Disappointment
 Performance = Expectation = Satisfied
 Performance > Expectation = Delighted
 Post purchase actions
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  Exit option
 Voice option
 Post purchase product uses

2.9 MARKETING MIX COMPONENTS

Marketing mix is the set of tools that the firm uses to pursue its marketing objectives in
the target market.

Four Ps Four Cs

Product Customer solution

Price Customer cost

Place Convenience

Promotio Communication
n

KEY TERMS
B2b marketing Competition
Branding Consumer market
Business portfolio Control
Buyer behaviour Corporate
Bypass attack Demand-side strategies
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Demographic Portfolio analysis
Diversification Positioning
Encirclement attack Price
External marketing Product
Finished goods Product specification
Flank attack Quality
Frontal attack Raw materials
Growth-share matrix Segmentation
Guerilla attack Service
Industry market Service quality
Inseparability Services marketing
Intangibility Strategic business unit (sbu)
Interactive marketing Strategic plan
Internal marketing Strategy
Market development Supply-side strategies
Market penetration Swot analysis
Marketing mix Target market
Marketing strategy The bcg growth-share matrix
Mission statement Variability
Perishability

QUESTIONS
1) Define marketing strategies.
2) Explain strategic planning process
3) Describe portfolio analysis?
4) What is marketing mix? Explain the components of marketing mix.
5) Enumerate the strategic business unit planning process.
6) Discuss industrial marketing strategies.
7) Explain the classification of services
8) Explain the importance of marketing services
9) What is competition? Discuss the factors affecting competition.
10) How to analyze competitor? Explain.
11) List the categories of competitor. Illustrate with example.
12) Explain the various types of attacking strategy.
13) Define service concept and explain its relevance in a modern society.
14) Is it important to separate services and products in modern day marketing?
Support your decision with suitable arguments.
15) What is a pure service? Explain the continuum of services.
16) Explain the characteristics of pure services.
17) Explain the following concepts:
Inseparability, Intangibility, Variability, Perishability & Inability to own services
18) What are the various ways of classifying services? Explain the role of
intangibility in service marketing.
19) Compare goods and services and explain how these differences affect the nature
of services marketing.
20) On what grounds the 4Ps of product marketing are not sufficient in service
marketing? Explain the relevance of following elements in services marketing,
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 - Physical Evidence, People & Process
21) Explain the relevance of service product mix in marketing of services with
suitable example of levels of service product.
22) Why is quality an important factor in service marketing? How to measure
dimensions of service quality?
23) Explain the role of following dimensions in measuring and managing service
quality
- Reliability, Responsiveness, Empathy & Assurance

UNIT III

3.1 PRODUCT PLANNING AND DEVELOPMENT

3.2 PRODUCT LIFE CYCLE

3.3 BRAND

3.4 PACKAGING

3.5 LABELING

3.6 PRODUCT DEVELOPMENT

3.7 TARGET MARKET

3.8 CHANNEL MANAGEMENT

3.9 ADVERTISING

3.10 SALES PROMOTION

3.11 PRICING 52 | P a g e
 UNIT III

3.1 PRODUCT PLANNING AND DEVELOPMENT

3.1.1 PRODUCT

Product is anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need

3.1.2 CLASSIFICATION OF PRODUCTS

PRODUCTS

DURABILITY & TANGIBILITY

Non –durable CONSUMER GOODS INDUSTRIAL GOODS
Durable
Services Convenience Material
Shopping Capital items
Specialty Suppliers & business services
Unsought goods
3.1.3 DIFFERENTIATION STRATERGY

It is the act of designing a set of meaningful differences to distinguish the company’s

offering from competitors offerings.

PRODUCT DIFFERENTIATION

PRODUCT SERVICES
Form Ordering ease PERSONNEL
Features Delivery Competence
Performance Installation Courtesy 53 | P a g e
Conformance Customer training Credibility
Durability Customer consulting Reliability
Reliability Maintenance Responsiveness
 CHANNEL IMAGE
Coverage Symbols
Expertise Media
Performance Events
Atmosphere

3.1.4 PRODUCT MIX DIMENSIONS

 Width number of product lines

 Length total number of items in mix
 Depth number of product variants
 Consistency degree to which product lines are related

3.1.5 PRODUCT PLANNING

“Product planning is the act of marketing out and supervising the research, screening,
development, and commercialization of new product the modification of existing lines
and the discontinuance of margin s or unprofitable items”

Three important considerations of product planning

1) Development and introduction of new product

2) Bringing alterations in the existing lines to suit the requirements of customers
3) Elimination of unprofitable products

3.1.6 STEPS IN PRODUCT PLANNING

 Knowledge of product background

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  Sales and profit projections
 Strategy development
 Action plan and control

3.1.7 IMPORTANCE OF PRODUCT PLANNING

 Minimization of risk
 Promotes survival
 Marketing program
 Strength for facing competition
 Instrument of growth
 Discharging social responsibility
 Ensures profit

3.2 PRODUCT LIFE CYCLE

The life cycle of product comprises of four stages

 Introduction
 Growth
 Maturity
 Decline

1. Introduction

 Low sales
 High costs per customer
 Negative profits
 Innovator customers
 Few competitors

2. Growth

 Rising sales
 Average costs
 Rising profits
 Early adopters customers
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  Growing competition

3. Maturity

 Peak sales
 Low costs
 High profits
 Middle majority customers
 Stable/declining competition

4. Decline

 Declining sales
 Low costs
 Declining profits
 Laggard customers
 Declining competition

3.2.1 MARKETING STRATEGIES FOR PRODUCT LIFE CYCLE

1. Introduction stage

 Rapid skimming
 Slow skimming
 Rapid penetration
 Slow penetration

2. Growth stage

 Product quality
 New market segments
 Price sensitivity buyers

3. Maturity stage

 Market modification
o Convert nonusers
o Enter new market segments

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 o Win competitors customers
 Product modification
o Quality improvement
o Style improvement

4. Decline stage

 Increasing firms investment

 Maintaining firms investment level
 Decreasing firms investment level selectively
 Harvesting
 Divesting

3.3 BRAND

”A name, term, sign, symbol, or design, or a combination of these, intended to identify

the goods or services of one seller or group of sellers and to differentiate them from the
competition.”

Brand name - Words, numbers

Brand mark – Symbol

Trade mark – Registered Brand name or brand mark

Trade name – compresses many brands Eg) TATA, Honda

3.3.1 ROLE OF BRAND:

 Identifies the source or maker of a product

 Differentiate identical product
 Brand simplifies decision making of consumer and reduce risk
 Signal certain level of quality

3.3.2 BRANDS CAN CONVEY SIX LEVELS OF MEANING

 Attributes
 Benefits
 Values

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  Culture
 Personality
 User

3.3.3 BRAND EQUITY

Brand equity refers to the positive differential effect that a brand name has on
customers. It is the added value endowed to products and services. This value may
reflected in how consumers think, feel, and act with respect to the brand, as well as
price, market share, and profitability that the brand commands for the firm.

 is related to many factors.

 allows for reduced marketing costs.
 is a major contributor to customer equity.

3.3.4 BRAND KNOWLEDGE: It consists of thoughts, feelings, images, experiences,

beliefs associated with brand. (Eg) Volvo – Safety, Hall mark – Caring.

Brand has the following features

 Brand awareness
 Brand acceptability
 Brand preference
 Brand loyalty

3.3.5 BRANDING DECISIONS

Branding Brand
Brand Sponsors Brand Name Brand Strategy
decision Repositioning
Line extensions
Brand Manufacture brand Individual Positioning

No Brand Distributor brand Blanket family Brand Extension Re-Positioning

Licensed brand Separate family Multi –brand
Company –
Individual New brand
names
Co-branding
3.3.6 BRAND REPOSITIONING

 A brand report card can be used to audit a brand’s strengths and weaknesses.

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  Changes in preferences or the presence of a new competitor may indicate a need
for brand repositioning

3.4 PACKAGING

It includes the activities of designing and producing the container for a product.

3.4.1 PACKAGING INCLUDES

 The primary package

 The secondary package
 The shipping package

3.4.2 DEVELOPING AN EFFECTIVE PACKAGE

 Determine the packaging concept

 Determine key package elements
 Testing
 Engineering tests
 Visual tests
 Dealer tests
 Consumer tests

3.5 LABELING

The label is a simple tag attached to the product or an elaborately designed graphics
that is part of the package.

3.5.1 LABELING FUNCTIONS

 Identifies the product or brand

 May identify product grade
 May describe the product
 May promote the product
 Legal restrictions impact packaging for many products

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3.6 PRODUCT DEVELOPMENT

3.6.1 WHAT IS A “NEW” PRODUCT?

 New-to-the-world products
 New product lines
 Additions to existing product lines
 Improvements and revisions of existing products
 Repositioned products
 Cost reduction products

3.6.2 SUCCESSFUL NEW PRODUCTS

 Offer a strong relative advantage

 Reflect better understanding of customer needs, and beat the competition to
market
 Exhibit higher performance-to-cost ratios and higher contribution margins
 Are launched with larger budgets
 Have stronger top management support

3.6.3 NEW PRODUCT DEVELOPMENT PROCESS IDEAS TO STRATEGY

1. Idea generation

The new product development process starts with the search for ideas. New product
ideas can come from many sources Customers, scientists, competitors, employees,
channel members and top management. Company can conduct market surveys to learn
about consumer needs and desires.

2. Idea screening

Any company can attract good ideas by organizing itself properly. The purpose of
screening is to door poor ideas as early as possible. The rationale is that product -
development costs rise substantially with each successive development stage.

3. Concept development

It is the stage of converting product idea into a physical form. Building the product with
the changed specifications of customer needs.
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4. Concept testing

Concept testing involves presenting the product concept to appropriate target

consumers and getting their reactions. This concept can be presented symbolically or
physically.

5. Marketing strategy development

After testing the new product, the manager must develop a preliminary marketing
strategy plan for introducing the new product into the market. The plan consists of
three parts. The first part describes the target market’s size, structure, and behaviour;
the planned product positioning; and the sales, market share and profit goals sought in
the first few years.

6. Business analysis

After management develops the product concept and marketing strategy, it can
evaluate the proposal’s business attractiveness. Management needs to prepare sales,
cost, and profit projection to determine whether they satisfy company objectives.

7. Product development
8. Market testing

3.6.4 ADOPTERS OF NEW PRODUCTS MOVE THROUGH FIVE STAGES

 Awareness
 Interest
 Evaluation
 Trial
 Adoption

3.7 TARGET MARKET

3.7.1 TARGET MARKETING - THREE MAJOR STEPS

1. Market segmentation

Identifying and profiling distinct groups of buyers who differ in their needs and
preferences.

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2. Market targeting

Selecting one or more market segments to enter.

3. Market positioning

Establishing and communicating the key distinctive benefit(s) of the company’s market
offering to each target.

3.7.2 LEVELS OF MARKET SEGMENTATION

 Segment market
o Homogeneous preferences
o Diffused preferences
o Clustered preferences
 Niche market
 Local marketing
 Individual marketing

3.7.3 CHARACTERISTICS OF MARKET SEGMENTATION

 Measurable
 Substantial
 Accessible
 Differentiable
 Actionable

3.7.4 BASES FOR SEGMENTATION OF CONSUMER MARKET

1. Geographic

 Nation or country
 State or region
 City or metro size
 Density
 Climate

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2. Demographic

 Age, race & gender

 Income, education
 Family size
 Family life cycle
 Occupation
 Religion, nationality
 Generation
 Social class

3. Psychographic

 Lifestyle
o Activities
o Interests
o Opinions
 Personality
 Core values

4. Behavioral

 Occasions
 Benefits
 User status
 Usage rate
 Loyalty status
 Buyer-readiness
 Attitude

3.7.5 BASES OF SEGEMENTATION OF BUSINESS MARKETS

 Operating variables
 Purchasing approaches
 Situational factors

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  Personal characteristics
 Demographic variables

3.7.6 TARGET MARKETING

Evaluating and selecting market segments requires assessing the segment’s overall
attractiveness in light of company’s objectives and resources

3.7.7 PATTERNS OF TARGET MARKET SELECTION

 Single-segment concentration
 Selective specialization
 Product specialization
 Market specialization
 Full market coverage

3.7.8 POSITIONING

Positioning is the act of designing the company’s offering and image to occupy a
distinctive place in the target market’s mind.

Points of difference – PODs are attributes or benefits consumers strongly associate

with a brand, positively evaluate and believe that they could not find to the same extent
with a competitive brand.

Points of parity – Associations that are not necessarily unique to the brand but may in
fact be shared with other brands.

3.7.9 POSITIONING STRATEGIES

 Attribute positioning
 Benefit positioning
 Application positioning
 User positioning
 Competitor positioning
 Price positioning

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3.8 CHANNEL MANAGEMENT

Marketing channels are sets of interdependent organizations involved in the process of

making a product or service available for use or consumption.

3.8.1CHANNEL MEMBERS

 Forward flow functions

o Develop / disseminate communication
o Store and move the physical products
o Oversee transfer of ownership
 Backward flow functions
o Place orders with manufacturers
o Facilitate payment of bills

3.8.2 CHANNEL LEVELS

 Zero-level (direct marketing) channel

 One, two, and three-level channels
 Reverse flow channels

Service sector channels use agencies and locations to access population to be served

3.8.3 CHANNEL-DESIGN DECISIONS

 Analyzing consumers’ desired service output levels

o Lot size,
o Waiting time,
o Product variety,
o Spatial convenience,
o Service backup
 Establishing objectives / constraints
 Identifying major channel alternatives
o Types of intermediaries
 Company sales force
 Manufacturers agency

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  Industrial distributors
o Number of intermediaries
 Exclusive distributors
 Selective distributors
 Intensive distributors
o Terms and responsibilities
 Evaluating major channel alternatives
o Economic criteria
o Control criteria
o Adaptive criteria

3.8.4 CHANNEL MANAGEMENT DECISIONS

 Selecting channel members
 Training channel members
 Motivating channel members
o Coercive power
o Reward power
o Legitimate power
o Expert power
o Referent power
 Evaluating channel members
 Modifying channel arrangements

3.8.5 CHANNEL FACTORS

1. Intermediary type

 Merchants
o Buy, take title, and resell merchandise
 Agents
o Find customers, negotiate, do not take title to merchandise
 Facilitators
o Aid in distribution, do not negotiate or take title to merchandise

2. Number of intermediaries

 Exclusive distribution

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 o Severely limited distribution
 Selective distribution
o Some intermediaries willing to carry good are selected
 Intensive distribution
o Offering is placed in as many outlets as possible.

3. Terms and responsibilities of intermediaries

 Price policies
o Price list and schedule of discounts
 Conditions of sale
o Payment terms and guarantees
 Territorial rights
o Define territory / terms
 Services to be performed by party

3.8.6 CHANNEL DYNAMICS

 Vertical Marketing Systems

o Corporate VMS
o Administered VMS
o Contractual VMS
 Horizontal Marketing Systems
 Multichannel Marketing Systems

3.8.7 CONFLICT, COOPERATION, & COMPETITION

TYPES OF CONFLICT

 Vertical channel conflict

 Horizontal channel conflict
 Multichannel channel conflict

3.8.8 CAUSES OF CONFLICT

 Major causes Goal incompatibility; unclear roles and rights

 Other potential causes exist

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3.8.9 MANAGING CHANNEL CONFLICT

 Subordinate goal adoption

 Exchange people between channel levels
 Cooptation
 Diplomacy
 Mediation
 Arbitration

3.9 ADVERTISING

It is any paid form of non-personal presentation and promotion of ideas, goods, or

services by an identified sponsor.

3.9.1 SETTING THE ADVERTISING OBJECTIVES

The advertising objectives must flow from prior decisions on target market, market
positioning and marketing mix. Objectives can be classified according to

 Informative advertising
 Persuasive advertising
 Reminder advertising
 Reinforcement advertising

3.9.2 DEVELOPING THE ADVERTISING CAMPAIGN

 Message generation and evaluation

1) Creative belief with positioning statement
 Creative development and execution – how it is said
1) Television ads
2) Print ads
3) Radio ads
 Social responsibility review

3.9.3 THE FIVE MS OF ADVERTISING

 Mission Objectives can be classified by aim

o Inform
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 o Persuade
o Remind
o Reinforce
 Money Factors considered when budget-setting
o Stage of product life cycle
o Market share and consumer base
o Competition and clutter
o Advertising frequency
o Product substitutability
 Message Factors considered when choosing the advertising message
o Message generation
o Message evaluation and selection
o Message execution
o Social responsibility review
 Media
o Deciding on reach, frequency, and impact
o Selecting media and vehicles
 Target audience media habits
 Product characteristics
 Message characteristics
 Cost
o Determining media timing
o Deciding on geographical media allocation
 National buys
 Spot buys
 Local buys
 Measurement - Evaluating Advertising Effectiveness
o Communication-effect research
 Direct rating method
 Portfolio test
 Laboratory test
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 o Sales-effect research

3.9.4 MAJOR MEDIA TYPES

 Newspapers
 Television
 Direct mail
 Radio
 Magazines
 Outdoor
 Yellow pages
 Newsletters
 Brochures
 Telephone
 Internet

3.10 SALES PROMOTION

It consists of a diverse collection of incentive tools, mostly short term, designed to

stimulate quicker or greater purchase of particular products or services by consumers or
the trade.

3.10.1 PURPOSE OF SALES PROMOTION

 Attract new tries or brand switchers

 Reward loyal customers
 Increase repurchase rates

3.10.2 MAJOR DECISION IN SALES PROMOTION

 Establishing objectives
 Selecting consumer – promotion tools
o Samples
o Coupons
o Cash refund offers
o Price packs

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 o Sweepstakes
o Free trials
o Cross promotion
o Point of purchase displays and demonstrations
 Selecting trade – promotion tool.
o Persuade retailer to carry the brand
o Persuade retailer to carry more units than the normal amount
o Induce retailer to promote the brand by featuring, display and price
reductions.
o Stimulate retailers to push the product
 Selecting business and sales force promotion tools
o Trade shows and conventions
o Sales contests
o Specialty advertising
 Developing the program
 Pre testing the program
 Implementing and controlling the program
 Evaluating Results

3.11 PRICING

A firm must set a price for the first time when it develops a new product, when it
introduces its regular product into a new distribution channel or geographical area, and
when it enters bids on new contract work. Price has many names namely, Rent, Tuition,
Fare, Monthly payment, Fee, Dues, Interest, and Donation.

3.11.1SETTING THE PRICE

1. Select pricing objective (Pricing objective)

 Survival
 Maximize current profits
 Maximize market share
o Penetration strategy

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  Market skimming
o Skimming strategy
 Product quality leaders
 Partial cost recovery

2. Determining the demand

 Understand factors that affect price sensitivity

 Estimate demand curves
 Understand price elasticity of demand
o Elasticity
o In elasticity

3. Estimating Cost

 Types of costs and levels of production must be considered

 Accumulated production leads to cost reduction via the experience curve
 Differentiated marketing offers create different cost levels

4. Analyze competition

 Firms must analyze the competition with respect to

o Costs
o Prices
 Pricing decisions are also influenced by quality of offering relative to competition

5. Selecting pricing methods (Pricing methods)

 Markup pricing
 Target-return pricing
 Perceived-value pricing
 Value pricing
 Going-rate pricing
 Auction-type pricing
 Group pricing

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5. Select final price

It requires consideration of factors such as

 Psychological pricing
 Gain-and-risk-sharing pricing
 Influence of other marketing mix variables
 Company pricing policies
 Impact of price on other parties

3.11.2 ADAPTING THE PRICE (Pricing policies and methods)

Geographical Pricing

o Barter
o Compensation deal
o Buyback arrangement
o Offset

Price Discounts and Allowances

o Cash discounts
o Quantity discounts
o Trade-in allowances
o Functional discounts
o Seasonal discounts
o Promotion allowances

Promotional Pricing Tactics

o Loss-leader pricing
o Special-event pricing
o Cash rebates
o Low-interest financing
o Longer payment terms
o Warranties and service contracts
o Psychological discounting

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Discriminatory Pricing Tactics

o Customer segment pricing

o Product-form pricing
o Image pricing
o Channel pricing
o Location pricing
o Time pricing

Product-Mix Pricing Tactics

o Product-line pricing
o Optional-feature pricing
o Captive-product pricing
o Two-part pricing
o By-product pricing
o Product-bundle pricing

KEY TERMS
Advertising Channel levels
Advertising budget Channel management
Advertising message Channel members
Application positioning Channel pricing
Attribute positioning Channel-design decisions
Auction-type pricing Clustered preferences
Barter Co-branding
Benefit positioning Communication-effect research
Brand Compensation deal
Brand equity Competitor positioning
Brand extensions Concept development
Brand repositioning Concept testing
Brand strategy Conflict
Branding Consumer – promotion
Business analysis Convenience
Buyback arrangement Customer segment pricing
By-product pricing Decline
Capital items Diffused preferences
Captive-product pricing Discriminatory pricing tactics
Cash discounts Durable
Cash rebates Experiential brands
Channel conflict Five ms of advertising
Channel dynamics Functional brands

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Functional discounts Price positioning
Gain-and-risk-sharing pricing Price sensitivity buyers
Geographical pricing Pricing
Going-rate pricing Product
Group pricing Product development
Growth Product life cycle
Homogeneous preferences Product planning
Horizontal marketing systems Product-bundle pricing
Idea generation Product-form pricing
Idea screening Product-line pricing
Image brands Product-mix pricing tactics
Image pricing Promotion allowances
Individual marketing Promotional pricing tactics
Informative advertising Psychological discounting
Introduction Psychological pricing
Labeling Quantity discounts
Line extensions Rapid penetration
Local marketing Rapid skimming
Location pricing Reminder advertising
Longer payment terms Repositioning
Loss-leader pricing Sales promotion
Low-interest financing Sales-effect research
Market skimming Seasonal discounts
Marketing strategy development Segment market
Markup pricing Services
Material Shopping
Maturity Skimming strategy
Media Slow penetration
Multi - brands Slow skimming
Multichannel marketing systems Special-event pricing
New product Specialty
New brands Suppliers & business services
Niche market Target-return pricing
Non –durable Time pricing
Offset Trade – promotion
Optional-feature pricing Trade-in allowances
Packaging Two-part pricing
Penetration strategy Unsought goods
Perceived-value pricing User positioning
Persuasive advertising Value pricing
Price Vertical marketing systems
Price discounts and allowances Warranties and service contracts
QUESTIONS
1) Discuss product planning.
2) Explain the new product development process with suitable example.
3) Suggest suitable strategies for growth and maturity stage of PLC

75 | P a g e
4) How do marketing strategy and marketing mix strategy change across the PLC
stage.
5) Explain brand management practices in India.
6) What are the causes and methods of product modification and product elimination?
7) What is market segmentation? Explain the levels of market segmentation
8) Explain product positioning strategies.
9) Explain the factors affecting channel distribution.
10) List out the functions of marketing channel.
11) Write short note on channel conflict?
12) Explain market segmentation, targeting and positioning with a real life example.
13) Explain the marketing channel process.
14) What are the methods of pricing decisions?
15) Explain the process of price determination of a product.
16) Define sales promotion. Explain different promotion strategies.
17) Explain the advantages and limitations of various media of advertisement.
18) Explain the process of price determination of a product.
19) Discuss the importance of market segmentation in marketing decisions and explain
the basic methods of market segmentation.
20) Define market segmentation and discuss the significance of market segmentation in
India.
21) What is meant by market segmentation? What are the criteria for successful market
segmentation?
22) Is the understanding of market segments equally valuable in marketing all kinds of
goods and services? Give reasons.
23) “Market segmentation is very useful for effective marketing of any product”.
Elaborate.
24) Discuss various methods of segmenting the consumer markets.
25) Market segmentation is important for target markets and target markets are
important for product positioning, Elaborate with examples.
26) What is the objective of market segmentation? Explain the bases of market
segmentation for industrial markets?
27) What is meant by marketing segmentation? What will be the suitable base for the
marketing of Television?
28) What elements influence the decisions on the principles of effective segmentation?
29) Write a short note on Product Differentiation and product positioning.
30) Write a short note on market segmentation for industrial products.
31) “Target marketing follows market segmentation’ Discuss
32) “Successful segmentation is a prerequisite to customer profitability”. What are the
different approaches used to identify and measure market segments. Illustrate with
examples.
33) What is positioning? What are the various steps in positioning process?
34) Define a product. What are the various viewpoints to explain the concept of a
product?
35) What do you understand by product benefit? Explain different types of product
benefits.
36) Explain different layers of a product with suitable examples. Explain the relevance
of these evaluations in the context of product decisions.
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37) Write an essay on product policy for any marketing organization.
38) Why are objectives and strategies considered as the pillars for the success of any
product? Discuss with examples.
39) Critically examine the factors that influence product mix strategies.
40) “The elements of product policy are difficult to determine”. Comment.
41) What is meant by standardization of products? What are the advantages of
standardization of products?
42) Distinguish between generic market and product market.
43) Distinguish between consumer products and industrial products. Explain various
classification of industrial products.
44) What are constituents of product mix? Explain the meaning of the following
a. Product width
b. Product depth
c. Product length
d. Product consistency
45) Define a new product and new product development process.
46) What kinds of structures are possible for managing new product development
process?
47) Explain the role of new product development process in an organization.
48) Explain the stages in the new product development process.
49) Define product planning. How is it different from product development?
50) Explain the concept generation and marketing structure identification stage.
51) Explain the following concepts
a. Concept testing
b. Product testing
c. Test marketing
52) How are concepts screened? Explain the errors at concepts screening stage.
53) What are the steps involved in a new product launch? Discuss with the help of a
suitable example.
54) What is a product life cycle? Show a similarity between product life cycle and
human life cycle.
55) What are the various shapes of product life cycle curves? Explain why they get such
shapes.
56) Explain the characteristics and strategies for the following stages:
a. Introduction stage
b. Growth stage
c. Maturity stage
d. Decline stage
57) Explain the various strategic considerations in product life cycle management.
58) Explain the factors responsible for changes in the shape of the product life cycle
curve.
59) What is brand? What is the distinction between a product and brand?
60) What are the advantages of branding? What value does the organization and
customers get out of the branding process?
61) What are the disadvantages of branding? How do these disadvantages affect the
consumers?
62) What do you mean by branding decisions? Explain different branding decisions.
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63) Explain the brand strategy decisions.
64) What are different forms of extension and what precautions should one take while
making a brand extension decision?
65) What do you mean by price? Explain the objectives of pricing policy of a business
firm.
66) Explain the importance of pricing in a marketing mix. What are the determinants in
pricing a product?
67) What are the factors affecting pricing decisions in a marketing organization?
68) Why do pricing objectives vary from organization to organization? What is the
importance of pricing objectives in deciding the future of a firm?
69) Discuss the basic methods of pricing and on what situations each of these methods
will hold relevance.
70) What does pricing polity mean? How can the pricing policy be developed for an
organization?
71) What are various kinds of pricing strategies? Discuss each one of them with
examples.
72) Explain the following pricing options:
a. Skimming pricing
b. Penetrative pricing
c. Going rate pricing
d. Sealed bid pricing
73) How should the prices of new to the market product pricing to be decided? In what
situations should a company follow initial high pricing strategy?
74) What are the fundamental issues in deciding retailer prices? Explain the following
methods of pricing;
a. Loss Leader pricing
b. Mark up pricing
c. Mark down pricing
d. Team pricing
e. Automatic Re pricing
75) What is meant by a marketing channel? What are the objectives of channel or
distribution management?
76) Define marketing channel. What are the important functions of various channels?
77) Explain the various types of channels with suitable Indian examples.
78) Explain the various steps involved in design of a distribution channel.
79) What are the various factors, which must be considered while channel selection?
80) What are the factors influencing the selection of distribution channel?
81) What methods are used to motivate channel members?
82) What are channel conflicts? What causes conflict and explain the methods to resolve
channel conflict?
83) What is “Retailing”? Briefly describe with examples the most important store types,.

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 UNIT IV

4.1 INDIVIDUAL OR CONSUMER BUYER BEHAVIOUR

4.2 MODELS OF BUYER BEHAVIOUR

4.3 INDUSTRIAL BUYER OR ORGANIZATIONAL BUYER BEHAVIOR

4.4 BUILDING AND MEASURING CUSTOMER SATISFACTION

4.5 CUSTOMER ACQUISITION

4.6 CUSTOMER RETENTION

4.7 CUSTOMER DEFECTION

4.8 CUSTOMER DISSATISFACTION

4.9 CRM

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 UNIT IV

4.1 INDIVIDUAL OR CONSUMER BUYER BEHAVIOUR

Consumer behavior or buyer behavior or individual behaviour is defined as behavior

that consumers display in searching for purchasing, using, evaluating and disposing of
products services that they expect will satisfy their needs.

4.1.1FACTORS INFLUENCING CONSUMER OR INDIVIDUAL BEHAVIOUR

Consumer behavior is influenced by

 Cultural factors: Exert broadest and deepest influence

o Culture
o Subculture
o Social classes upper uppers, lower uppers, upper middles, middle class,
working class, upper lowers, lower lowers.
 Social factors
o Reference groups
 Membership
 Primary vs. secondary
 Aspirational vs. dissociative
o Family
o Social roles and statuses
 Personal factors
o Age
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 o Stage in life cycle
o Occupation
o Economic circumstances
o Lifestyle
o Personality
o Self-concept
 Psychological factors
o Motivation
o Perception
o Learning
o Beliefs
o Attitudes

4.1.2 CONSUMER BUYING DECISION PROCESS

In addition to understanding how these factors influence consumers, marketers must

identify and understand

 Who makes the buying decision?

 The types of buying decisions
 The stages in the buying process
 Buying roles
o Initiator
o Influencer
o Decider
o Buyer
o User
 Buying behavior
o Complex buying behavior
o Dissonance-reducing buying behavior
o Habitual buying behavior
o Variety-seeking buying behavior
 Buying decision process

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 o Problem recognition
o Information search
o Evaluation of alternatives
o Purchase decision
o Post purchase behavior Consumers’ expectations are compared to
performance
 Post purchase satisfaction influences future behavior
 Purchasing behavior
 Word-of-mouth communications

4.2 INDUSTRIAL BUYER OR ORGANIZATIONAL BUYER BEHAVIOR

Organizational buying is “the decision-making process by which formal organizations

establish the need for purchased products and services and identify, evaluate, and
choose among alternative brands and suppliers.”

4.2.1 COMPARED TO CONSUMER MARKETS, BUSINESS MARKETS HAVE . . .

 Fewer buyers
 Larger buyers
 Geographically concentrated buyers
 Close relationships with their supplier-customers

4.2.2 OTHER BUSINESS MARKET CHARACTERISTICS

 Fluctuating demand
 Derived demand
 Inelastic demand
 Professional purchasing
 Multiple buying influences
 Multiple sales calls
 Direct purchasing
 Reciprocity
 Leasing

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4.2.3 BUYING SITUATIONS

 Straight rebuy
o Routine reorders from approved vendor list
o Low involvement, minimal time commitment
o Example copier paper
 Modified rebuy
o Specifications, prices, delivery terms or other aspects require modification
o Moderate level of involvement and time commitment
o Example desktop computers
 New task
o Purchasing a product or service for the first time
o High level of involvement and time commitment; multiple influences
o Example selecting a web site design firm or consultant

4.2.4 BUYING CENTER MEMBERS FILL ONE OR MORE ROLES IN THE

PURCHASE DECISION PROCESS

 Initiators
 Users
 Influencers
 Deciders
 Approvers Buyers
 Gatekeepers

4.2.5 MAJOR INFLUENCES ON INDUSTRY BUYERS

 Environmental
o Demand level
o Economic outlook
o Interest rates
o Technological change
o Politics/regulations
o Competition

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 o Concerns for social responsibility
 Organizational
o Objectives
o Policies
o Procedures
o Organizational structures
o Systems
 Interpersonal
o Interests
o Authority
o Status
o Empathy
o Persuasiveness
 Individual
o Age
o Income
o Education
o Job position
o Personality
o Risk attitudes
o Culture

4.2.6 BUY PHASES OF INDUSTRIAL BUYING

 Problem recognition
 General need description
 Product specification
 Supplier search
 Proposal solicitation
 Supplier selection
 Order-routine specification
 Performance review

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4.3 MODELS OF BUYER BEHAVIOUR

1. Economic model

 Economic model of consumer behaviour views the buyer as a rational man and his
buying decisions will only be concerned with utility. Deriving maximum utility or
benefit from products using his resources will be the economic man’s sole objective.

2. Psycho – analytical model

 The individual consumer has a complex set of deep seated motives that drive him
towards certain buying decisions. Buyer’s decisions can be influenced by appealing
to these hidden desires and longings.

3. Sociological model

 Individual buyer is influenced by society he is influenced by intimate groups and

social classes, his buying decisions are not rational, several of his decisions may be
due to social compulsions.

4. Systems model

 Human being is analyzed as a system, with stimuli as the input to the system and
behaviour as the output of the system.

5. Nicosia model

 Fransesco Nicosia put forward his model of buyer behaviour in 1966.

 Link between firm and consumer
 How the activities of the firm influence consumer and result in his decision to
buy
 If these activities have positive impact it result in decision to buy.
 Four fields
o Firm attribute, consumer attribute
o Area of search and evaluation of advantage product and other alteration
results in motivation.
o Act of purchase
o Use of purchased item and feed back of sales results to the firm.

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4.4 ONLINE BUYER BEHAVIOR

 Credit card/Debit card facilities

 Information availability
 Accessibility
 Convenience
 Credit card/debit card information safety
 Time saving
 Guaranteed quality

4.5 BUILDING AND MEASURING CUSTOMER SATISFACTION

4.5.1 CUSTOMER VALUE

Customer delivered value is the difference between total customer value and total
customer cost

 Total customer value It is the bundle of benefits customers expect from a given
product or service.
 Total customer cost It is the bundle of costs customers expect to incur in
evaluating, obtaining, using, and disposing of the product or service.

4.5.2 CUSTOMER SATISFACTION

“A person’s feelings of pleasure or disappointment resulting from comparing a

product’s perceived performance (or outcome) in relation to his or her expectations.”

4.5.3 TO MAXIMIZE CUSTOMER SATISFACTION

 Don’t exaggerate the product / service’s capabilities in advertising or other

communications
o Dissatisfaction will result
o FTC may become involved
 Don’t set expectations too low
o Market size will be limited

4.5.4 SATISFIED CUSTOMERS ARE

 Are loyal longer

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  Buy more (new products & upgrades)
 Spread favorable word-of-mouth
 Are more brand loyal (less price sensitive)
 Offer feedback
 Reduce transaction costs

4.5.5 HIGH PERFORMANCE BUSINESSES

Set Stake-
strategies holders
By
to satisfy Processes
improving
key...
and Resources
critical Organization
aligning...
business..
.
 Stakeholders
o Identify several stakeholder groups
o How might the needs of these groups conflict with each other?
 Processes
o New product development
o Customer attraction and retention
o Order fulfillment
o Reengineering work flows
o Building cross functional teams
 Resources
o Resources include labor, materials, machines, energy, and information
o Outsourcing vs. ownership Own and nurture core competencies

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  Organization
o Organization refers to the organization’s policies, structures, and
corporate culture
o Corporate culture shared experiences, stories, beliefs, and norms within
an organization

4.5.6 BUSINESS PRACTISES FOR CUSTOMER SATISFACTION

 Market Sensing

 Customer Acquisition

 Customer Relationship Management

 Fulfillment Management

 New Offering Realization

4.6 CRM

4.6.1 CRM - DEFINITION

CRM a comprehensive approach for creating, maintain and expanding customer

relationship. Customer Relationship Marketing (CRM) allows companies to

 Deliver real-time customer service

 Customize market offerings, products, services, media, and messages

4.6.2 EFFECTIVE CUSTOMER RELATIONSHIP MARKETING REQUIRES

 Reducing customer defection rates

 Extending the life of the customer relationship
 Enhancing customer sales / profit potential
 Making low-profit customers MORE profitable or terminating them
 Focusing on high value customers

4.6.3 ELEMENTS OF CRM

 Strategy
 Skill set
 Technology
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  Tactics
 Processes

4.6.4 CRM LEADS TO ONE-ON-ONE MARKETING

Four Steps for One-to-One Marketing

 Don’t go after everyone; carefully identify your prospects and customers.

 Group customers by their needs and their value to the company; aggressively
pursue the most valuable customers.
 Build stronger relationships with customers via individual interaction.
 Customize messages, services, and products for each customer.

4.6.5 CUSTOMER RELATIONSHIP MANAGEMENT PROCESS (CRM)

 Creating and managing data mining and warehousing

 Development of Organization structure

Product planning Pricing strategies Channel management

Data warehouse

 Promotion in technologySales force productivity

strategy
Investment Customer services

 People

4.6.6 CUSTOMER DATABASES AND DATABASE MARKETING ARE THE KEY

TO EFFECTIVE CRM

Database uses include

 Best prospect identification

 Matching offers to customers
 Deepening customer loyalty
 Reactivating customer purchasing
 Avoiding serious mistakes

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4.6.7 MEASURING CRM

 Balanced score card

 Catalytic measure

4.6.8 TYPES OF CRM

 Operational CRM
 Analytical CRM
 Collaborative CRM

4.6.9 GROUND WORK OF CUSTOMER RELATIONSHIP MANAGEMENT

 Identify companies prospects and customers

 Differentiate customers in terms of their needs and their value to the company
 Interact with individual customers to improve your knowledge about their
individual needs and to build stronger relationships.
 Customize products, services and messages to each customer
 Reducing the rate of customer defection
 Increasing the longevity of the customer relationship
 Enhancing the growth potential of each customer through cross selling and up
selling
 Making low-profit customers more profitable or terminating them’
 Focusing disproportionate effort on high – value customers.

4.7 CUSTOMER ACQUISITION

Customers are becoming harder to please. It is not necessary to produce satisfied

customers, several competitors can do this. The challenge is to produce delighted and
loyal customers. Companies seeking to expand their profits and sales have to spend
considerable time and resources searching for new customers. To attract new customers
company must keep them and increase their business.

4.8 CUSTOMER RETENTION

 If the price of a brand appears very high, the customer perceives a mismatch
between price and value.

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  If a new product which is advanced in technology, offering better features and
performance enters the market.
 If customers are dissatisfied with the service, presales, during sales and after
sales they would switch over to substitute.

4.9 CUSTOMER DEFECTION

Customers could also defect from a brand due to personal reasons- shift of residence,
change in preferences, influences of family and friends and sentimental reasons.

 Reducing customer defection is highly desirable

o Define and measure retention rate
o Identify causes of attrition
o Estimate profit lost from customer defection (customer lifetime value)
o Estimate cost to reduce defection; take appropriate action
 Drivers of customer retention
o Brand Equity
o Relationship Equity
o Value Equity

4.9.1 HOW COMPANIES LOSE CUSTOMERS

 1% - Die
 3% - Move away to new location
 4% - Are natural floaters
 5% - Move on recommendations of family or friends
 9% - Find somewhere cheaper
 10% - Are chronic complainers
 68% - Go elsewhere because the people who serve them are indifferent to
 their needs.

4.9.2 CREATING STRONG CUSTOMER BOND

 Adding Financial Benefits

 Frequency programs
 Club memberships
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  Adding Social Benefits
 Personalize customer relationships
 Adding Structural Ties
 Create long-term contracts
 Charge less for ongoing purchases
 Link product to long-term service

4.9.3 BUILDING LOYALTY

Company should invest in building loyalty so that the cost does not exceed the gains?

Five different levels of investment in customer relationship building

 Basic marketing
 Reactive marketing
 Accountable marketing
 Proactive marketing
 Partnership marketing

4.10 CUSTOMER DISSATISFACTION

 Embarrassment
 Expectation

Dissatisfaction occurs when what is provided is less than customer expectation.

 Customer will stop purchasing from the product as soon as they find
alternatives.
 They will tell nine to ten existing or potential customer about the causes of their
dissatisfaction
 The majority causes of dissatisfaction will not be reported to the company, this is
silent majority who suffers in silence.
 Whatever the company does later, these lost customers will never come back.

KEY TERMS
Accountable marketing Attitudes
Analytical crm Balanced score card
Approvers buyers Basic marketing
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Beliefs Influencer
Buyer Initiator
Buyer behaviour Learning
Catalytic measure Leasing
Collaborative crm Market sensing
Complex buying behavior Modified rebuy
Consumer buyer behaviour Nicosia model
Crm One-to-one marketing
Customer acquisition Online marketing
Customer acquisition Operational crm
Customer bond Organizational buyer behavior
Customer databases Partnership marketing
Customer defection Perception
Customer dissatisfaction Pop up window
Customer relationship management Post purchase
Customer retention Proactive marketing
Customer satisfaction Product specification
Customer value Psycho – analytical model
Decider Reactive marketing
Derived demand Reference groups
Dissonance-reducing buying behavior Sociological model
Economic model Stake holders
Fluctuating demand Straight rebuy
Gate keeper Systems model
Habitual buying behavior User
Individual buyer behaviour Variety-seeking buying behavior
Industrial buyer behavior Word-of-mouth communications
Inelastic demand
QUESTIONS
1) Explain the factors influencing consumer behaviour
2) Explain organizational buyers and buying decisions
3) Explain online marketing
4) What are the factors that determine customer satisfaction? Explain.
5) Explain different online advertising options for marketer.
6) Describe the strategies to prevent customer defection.
7) Explain CRM Process
8) Explain the different types of CRM.
9) What is customerization?
10) Define consumer behaviour and distinguish between consumer behaviour and
consumption behaviour.
11) What is consumer behaviour? What is the importance of studying consumer
behaviour?
12) Discuss how and why the field of consumer behaviour was developed.
13) Explain the various theories of buying behaviour. What is their importance in
marketing?
14) Discuss various buying motives. What are the influences of these motives on the
purchase process?
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15) What are the various roles played by individuals in the purchase processs?
16) Discuss the stages of buying decision process.
17) Explain the various factors, which affect the consumer buying behaviour.
18) Name the sociological factors determining buyer behaviour.
19) Explain the following:
a. Motivation
b. Perception
c. Learning
d. Attitude
20) How do groups influence consumer decisions?
21) Discuss the role of psychological factors in the making of a purchase decision by
an individual.
22) How do organization markets and their behaviour differ from those of final
consumers?
23) How many organizational factors influence organizational buyers?
24) Describe the steps involved in the organizational buying decision process?
25) Why is it important for an organization to be responsive to consumers?
26) Explain consumer and organizational goods. What is the difference in the
marketing of both types of goods?
27) What environmental factors influence the organizational decision making?
28) What are the various buying situations? What should a sales manager to do in
each of these situations?
29) What is a buying center? What roles do people play in buying center?
30) What are the various roles played by people and institutions in organization
decision making?
31) What are the various organizational products and services? How difficult is to
market them in comparison to end consumer marketing?

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 UNIT V

5.1 MARKETING INFORMATION SYSTEM

5.2 MARKETING RESEARCH PROCESS

5.3 MARKETING DECISION SUPPORT SYSTEM

5.4 APPLICATIONS OF MARKETING RESEARCH

5.5 CUSTOMER DRIVEN ORGANIZATION

5.6 CAUSE MARKETING OR CAUSE-RELATED MARKETING

5.7 ETHICAL ISSUES IN MARKETING

5.8 DATABASE MARKETING

5.9 ONLINE MARKETING (E-COMMERCE)

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 UNIT V

5.1 MARKETING INFORMATION SYSTEM

5.1.1. DEFINITION

According to Kotler “Marketing Information System consists of people, equipment and

procedures brought together, analyze, evaluated and distribute needs, timely and
accurate information to marketing decision makers”.

5.1.2 MIS - COMPILE INFORMATION FROM

 Internal records systems

 Marketing intelligence systems

 Marketing research

 Marketing decision support analysis

5.1.3 INTERNAL RECORDS SYSTEMS

 Order-to-payment cycle is key

 Timely sales reports help to better manage inventory

 Customer, product, salesperson and other databases can be mined for fresh
insights

Every company should organize and channelize a continuous flow of market related
information to marketing managers.

 Changes happening in marketing environment

 Changes in buyer behaviour, consumption patterns and competitors activities.

5.1.3.1 INFORMATION FLOW OF MARKETING INFORMATION SYSTEM

Information Processing Information out

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Macro Periodical reports

Marketing Information system

5.1.3.2 DESIGN AND BUILDING OF MARKETING INFORMATION SYSTEM

 Knowledge Of Problem
 Information needed
 Developing the information required
 Distribution of information is needed

5.1.4 MARKETING INTELLIGENCE

Marketing intelligence is everyday information about development in marketing

environment that helps managers prepare and adjust marketing plans. It is a set of
procedures and data sources used by marketing managers.

 Reading books
 Newspaper
 Trade journals
 Talking and listening to customers, suppliers and distributors.

5.1.4.1 IMPROVING THE QUALITY OF MARKETING INTELLIGENCE SYSTEM

DATA REQUIRES

 Training and motivating sales force to report developments

 Motivating channel members to share important intelligence

 Collecting competitive intelligence

 Developing a customer advisory panel

 Purchasing information from commercial data sources

 Establishing a marketing information center within the company

5.1.4.2 ELEMENTS OF MARKETING INTELLIGENCE

 Marketing research

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  Information analysis
 Distribution of information
 Operating the marketing information system

5.1.4.3 METHODS OF MARKETING INTELLIGENCE

 Unfocussed scanning
 Semi focused scanning
 Informal search
 Formal search.

5.1.4.4 STEPS TO IMPROVE QUALITY OF MARKETING INTELLIGENCE

 The field sales force can be trained and motivated to indentify and promptly
report new developments in the market.
 Distributors, retailers and other intermediaries
 Analyzing competitors published reports, brochures, product literature,
attending trade shows, talking competitor’s employees.
 Online consumer feedback systems customer complaints sites, customer reviews.
 It can also purchase Marketing intelligence from professional research firms

5.1.5 MARKETING MODELS

 Time series model

 Brand switching model
 Linear programming model
 Elasticity model
 Regression and correlation
 ANOVA
 Discounted cash flows
 Sensitivity analysis

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5.2 MARKETING RESEARCH PROCESS

“Marketing research specifies the information manages and implements data collection
process, analysis and communicates the findings and their implications”

5.2.1.CHARACTERISTIC FEATURES OF RESEARCH

 Research is directed towards the solution of problem

 Research is highly purposive
 Research is characterized by patient and un hurried activity
 Research is logical and objective
 Research is carefully recorded and reported
 Researches based upon observable experience
 It is carried out in a systematic and objective manner.
 It involves the process of gathering, recording and analysis of data.

5.2.2 NEED FOR MARKET RESEARCH

 Formulating marketing strategies

 Shift from local to national and international markets
 Effectiveness of channel management
 Consumer satisfaction
 Shift from price competition to non price competition
 Correction of defects
 Effectiveness of sales force

5.2.3 TYPES OF RESEARCH

 Pure and Applied research

 Historical and Futuristic research
 Exploratory and Explanatory research
 Descriptive and prescriptive research
 Case study and survey research
 Experimental and desk research.
 Longitudinal and cross sectional research.

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5.2.4 SIGNIFICANCE OF RESEARCH

 Problem solving
 Societal behaviour
 Societal development
 Social planning, prediction and control
 Social welfare

5.2.5 MARKETING RESEARCH PROCESS

Defining the problem

Research design

Sampling design

Collection of data

Analysis and interpreting data

Preparing report

1. Defining the problem

In problem formulation for research the three principle considerations are to be

followed

 Originating Questions
 Rational Questions
 Specifying Questions

Sources of Research Problems

 Daily Problem
 Theory of one’s own interest
 Technological developments
 Unexplored areas

Types of research problems

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  Empirical problems
 Analytical problems
 Normative problems

Hypothesis

Hypothesis of the problem it is a statement capable of being tested and thereby verified
or rejected.

Types of hypothesis

 Abstract hypothesis Vs Measurable hypothesis

 Descriptive hypothesis Vs Relational hypothesis
 Null hypothesis Vs Alternative hypothesis
 Explorative Vs Explanatory hypothesis

2. Research design

It is a detailed plan of action for research.

Types of research design

 Exploratory research design

 Descriptive research design
 Diagnostic research design
 Experimental research design

3. Sampling design

Sampling refers to the method of selecting a sample form a given universe with a view
to draw conclusions about the universe. The research has to indicate in considerable
detail about the population, the sample size and the sampling technique.

 Sample
It is a small representation of a large group
 Population
It is the entire collection of items one wishes to study in order to draw
conclusions.

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4. Collection of data

Data is information relating to research.

Types of data

 Primary data
Observation, experiment and Interview
 Secondary data
o Internal Sources
o Government Publications
o Periodicals and Books
o Commercial Data
o On-Line
o Associations
o Business Information

Tools of collecting data

 Questionnaire
 Schedule

5. Data analysis and interpreting

It is the process of scrutinizing the data to improve the quality of the report.

It consists of three steps 1) Editing 2) coding 3) Tabulation. Statistical tool for analysis
are T – test, F – test, Chi square test and correlation analysis are popular tools.

Quantitative or statistical tools used in marketing decision support systems

1. Multiple regressions

A statistical technique for estimating a “best fitting” equation showing how the value of
a dependent variable varies with changing values in a number of independent
variables. Example A company can estimate how unit sales are influenced by changes
in the level of company advertising expenditures, sales force size, and price.

2. Discriminant analysis

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A statistical technique for classifying an object or persons into two or more categories.
Example A large retail chain store can determine the variables that discriminate
between successful and unsuccessful store locations.

3. Factor analysis

A statistical technique used to determine the few underlying dimensions of a larger set
of intercorrelated variables. Example A broadcast network can reduce a large set of TV
programs down to a small set of basic program types.

6. Report writing

It is the final phase of a research investigation. After the collected data has been
analyzed various conclusions and generalization have been drawn through
interpretation then the report has to be prepared.

Contents or key elements of report

 Preliminary section
o Title page
o Acknowledgement
o Preface
o Table of contents
o List of tables and figures
 Main body
o Introduction
o Review of literature
o Analysis and interpretation
o Conclusion
 Reference section
o Bibliography
o Appendix

5.3 MARKETING DECISION SUPPORT SYSTEM

It is defined a “coordinated collection of data, systems, tools, and techniques with

supporting software and hardware by which an organization gathers and interprets

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information from business and the environment and turns it into a basis for marketing
action.”

5.4 APPLICATIONS OF MARKETING RESEARCH

5.4.1 PRODUCT RESEARCH

Product is an important component in the marketing mix. A product is anything that

offers to a market for attention, acquisition and use of consumption which might satisfy
wants or need. There are five visualizing levels in marketing a product. They are

 Core benefit
 Generic product
 Expected product
 Augmented product
 Potential product

Product research also carries out the study on the following areas

 Product line
 Product design
 Testing new products
 Brand preference

5.4.2 ADVERTISING AND PROMOTION RESEARCH

This attempt to assess the

 Likely impact of an advertising campaign in advance

 Measure the success of a recent campaign.
 Media research
 Efficiency of sales
 Promotional measures

5.4.3 CONSUMER RESEARCH

 Consumer behaviour
 Buying influences

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  Consumer profile
 Consumer database
 Brand switching
 Motivation

5.4.5 SALES METHODS OR RETAIL RESEARCH

 Testing new sales

 Program
 Analyzing sales problems
 Sales territory analysis
 Testing sales forecasting and budgeting methods.

5.4.6 MARKET RESEARCH SATISFACTION STUDIES

 Market potential
 Market size
 Market share
 Market segment
 Market survey
 Sales forecasting
 Demand survey

5.4.7 COMPETITION RESEARCH

 Competition analysis
 Competitive structure
 Competitors products
 Price
 Promotions
 Channel policies
 Selling methods

5.4.8 DISTRIBUTION RESEARCH

 Types of marketing intermediaries

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  Dealers reaction to the company and its products
 Different modes of transportation
 Distribution cost analysis
 Warehousing efficiency study

5.4.9 PRICE RESEARCH

 Evaluation of pricing strategy

 Assessing pricing
 Patterns of competitors

5.5 CUSTOMER DRIVEN ORGANIZATION

Good companies are customer focused. In a competitive market retaining customer for
a longer period is needed, to become customer driven organization. Great companies
don’t just focus on the customers instead they develop a relation with customers. Every
decision they take is driven by customers what they want, not what the companies
think they want.

5.5.1 BENEFITS

 Loyalty of customers
 Service as a differentiator
 Market information
 Higher profits

5.5.2 STEPS FOR BECOMING CUSTOMER DRIVEN

 Customer retention
 Create right culture

5.5.3 MAKING THE CUSTOMER BUSINESS PARTNER

 Recognize the advantages of making customers business partners.

 Evaluate the ways in which organization strengthen its relation.
 Effective and ineffective customer service
 Suggesting marketing efforts that will strengthen customer relationship.

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5.6 CAUSE MARKETING OR CAUSE-RELATED MARKETING

It refers to a type of marketing involving the cooperative efforts of a "for profit"

business and a non-profit organization for mutual benefit. The term is sometimes used
more broadly and generally to refer to any type of marketing effort for social and other
charitable causes, including in-house marketing efforts by non-profit organizations.
Cause marketing differs from corporate giving (philanthropy) as the latter generally
involves a specific donation that is tax deductible, while cause marketing is a marketing
relationship not necessarily based on a donation.

5.6.1 BENEFITS OF CAUSE RELATED MARKETING

The possible benefits of cause marketing for nonprofit organizations include an

increased ability to promote the nonprofit organization's cause via the greater financial
resources of a business, and an increased ability to reach possible supporters through a
company's customer base. The possible benefits of cause marketing for business include
positive public relations, improved customer relations, and additional marketing
opportunities.

5.6.2 ONLINE CAUSE MARKETING

Although originally a marketing strategy that occurred offline, cause marketing has
been conducted more and more through online channels in the last decade. This is due
in part to the increasing percentage of households with internet connections. As with
other types of marketing campaigns, companies can leverage online marketing channels
along with other offline channels such as print and media. It Is sometimes referred to as
integrated marketing.

5.6.3 TYPES - CAUSE MARKETING CAN TAKE ON MANY FORMS, INCLUDING

 Product, service, or transaction specific

 Promotion of a common message

 Product licensing, endorsements, and certifications

 Local partnerships

 Employee service program

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5.6.4 EXAMPLES

Example 1

A good example of a company that implements this strategy is Johnson & Johnson. For
the past five years this company has been working hard toward becoming more
environmentally friendly by reducing generated hazardous waste, decreasing water
use, and using alternative sources of energy for production. This is a smart move for
Johnson & Johnson, because they were one of the first one to recognize the
environmentally friendly social movement that’s been happening all around the world.
Another way that Johnson & Johnson is improving its image is by partnering with
organizations such as UNICEF to provide medical care for women and babies in India
and by contributing millions of dollars each year to humanitarian works all around the
world. Even though companies that implement cause-related marketing strategy
exercise their social responsibility, some critics see this as “cause-exploitation”. This is
because cause-related marketing allows a company to improve its image, increase sales,
and gain a competitive advantage; some companies may choose to implement this
strategy not to exercising their social responsibility, but just to have its benefits.

Example 2

Tata Group The Company’s philanthropic activities can be dated to as early as 1892.
They have run Endowment Schemes to provide higher education for deserving Indians.
Over 3,500 Tata scholarships have been awarded. J R D Tata institutionalized CSR in the
1970s and decided that the group shall be mindful of its social and moral
responsibilities to the consumers, employees, shareholders, society and the local
community for all its major companies.

In July 2002, Tata Steel presented the first corporate sustainability report, which would
serve as a benchmark and a confidence-builder for other Tata companies. It also has
formed group resource under the TCCI (Tata Council for Community Initiatives) on
corporate sustainability and a strategy to assist other Tata companies on corporate
social responsibility. The group resource on corporate sustainability would work on
developing a Tata model using technical inputs from the UNDP.

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The Tata’s have spent Rs. 1.5 billion on social services—the highest by any corporate
house in the country during 2001 and 2002. The thrust area was rural development,
which included community health, basic education and vocational training. It also
spends on basic infrastructure and disburses money through various charitable trusts
and relief and reconstruction societies.

Example 3

Infosys Formed in 1981 by N R Narayana Murthy, Infosys follows a socially responsible

and sustainable path in conducting business. Even during the boom time of the 1990s
when the stock prices of IT companies were skyrocketing, the company believed in
sharing the wealth with the community and its employees. This practice of the
company stems from the personal belief of Narayana Murthy to give back to the society
more than what it gave him. It also substantiates the role and motivation of the CEO
and the top management in making the company a responsible corporate citizen.

Infosys has won many awards such as Best Employers to Work for in India, Golden
Peacock Award for Excellence in Corporate Governance in the Global Category by the
World Council for Corporate Governance, London and Corporate Citizenship Award
by The Economic Times. According to a recent report, Infosys spends about Rs. 50
million on social activities.

Example 4

ETHICS Ethics are a collection of principles of right conduct that shape the decisions
people or organizations make. Practicing ethics in marketing means deliberately
applying standards of fairness, or moral rights and wrongs, to marketing decision
making, behavior, and practice in the organization.

In a market economy, a business may be expected to act in what it believes to be its own
best interest. The purpose of marketing is to create a competitive advantage. An
organization achieves an advantage when it does a better job than its competitors at
satisfying the product and service requirements of its target markets. Those
organizations that develop a competitive advantage are able to satisfy the needs of both
customers and the organization.

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5.7 ETHICAL ISSUES IN MARKETING

 Public protection
 Respondents protection
 Client protection

5.7.1 NOT EMPLOYING ETHICAL MARKETING PRACTICES

 Dissatisfied customers
 Bad publicity
 Lack of trust
 Lost business
 Legal action

5.7.2 ETHICAL PRODUCTS AND DISTRIBUTION PRACTICES

Several product-related issues raise questions about ethics in marketing, most often
concerning the quality of products and services provided. Among the most frequently
voiced complaints are ones about products that are unsafe, that are of poor quality in
construction or content, that do not contain what is promoted, or that go out of style or
become obsolete before they actually need replacing. An organization that markets
poor-quality or unsafe products is taking the chance that it will develop a reputation for
poor products or service. In addition, it may be putting itself in jeopardy for product
claims or legal action. Sometimes, however, frequent changes in product features or
performance, such as those that often occur in the computer industry, make previous
models of products obsolete. Such changes can be misinterpreted as planned
obsolescence

 Quality
 Distribution process
o Pressuring vendors to buy more than they need.
o To reduce display space for competitors products, when delivery not
possible by the promised date.
 Research

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5.7.3 UNETHICAL ADVERTISEMENT

Marketers often misuse the advertisements in the business world.

a) White collar robbery

The advertisements about the prices of computer and peripheral and the resulting rise
for the customer who is saddled with substandard items can only be categorized under
“White collar robbery”

b) Free bees

Many advertisements declare free gifts such a s audio systems or purchasing T.V, Cars,
Scooters.

c) Harmful advertisements

The impossible adventures for soft drinks shown on the T.V affect the young ones and
they try such misadventure.

d) Misleading Advertisements

These advertisements do not directly cause any harm but no doubt it create wrong
impressions about quality of products or services. For example a hair oil band
guaranteeing protection against loss of hair misleads people.

5.7.4 OFFENSIVE MATERIALS AND OBJECTIONABLE MARKETING PRACTICES

Marketers control what they say to customers as well as and how and where they say it.
When events, television or radio programming, or publications sponsored by a
marketer, in addition to products or promotional materials, are perceived as offensive,
they often create strong negative reactions. For example, some people find advertising
for all products promoting sexual potency to be offensive. Others may be offended
when a promotion employs stereotypical images or uses sex as an appeal. This is
particularly true when a product is being marketed in other countries, where words and
images may carry different meanings than they do in the host country.

When people feel that products or appeals are offensive, they may pressure vendors to
stop carrying the product. Thus, all promotional messages must be carefully screened
and tested, and communication media, programming, and editorial content selected to

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match the tastes and interests of targeted customers. Beyond the target audience,
however, marketers should understand that there are others who are not customers
who might receive their appeals and see their images and be offended.

5.8 DATABASE MARKETING

Data both internal and external are compiled, organized, stored and updated in
computer – database. Customer database is an organized collection of information
about individual consumers.

 Customer past purchase history

 Demographics
 Psychographics

Database marketing is the process of building, maintain and using customer database
for the purpose of contacting, transacting and building customer relationship.

5.9 ONLINE MARKETING (E-COMMERCE)

It is the process of two or more parties making business transactions through internet.

There are three types of online marketing channels

 E-Business
 Setting up web sites
 Customer relationship marketing

5.9.1 INTERNET DOMAINS

 B2C = Business-to-Consumer
o Benefits include greater ordering convenience, lower cost, easier
information and price gathering
 B2B = Business-to-Business
o Volume is 10-15% higher than B2C.
o Benefits include lower costs via B2B auctions, buying alliances, greater
access to information.
 C2C = Consumer-to-Consumer
o Transactions occur via online trading sites such as eBay.

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 o Consumers are creating online product information via newsgroup and
chat room dialogues
 C2B = Consumer-to-Business
o Facilitate communication between customer and businesses.

5.9.2 WEBSITE DESIGN - THE SEVEN “C’S” OF WEB SITE DESIGN

 Context
 Content
 Community
 Communication
 Connection
 Commerce
 Customization

5.9.3 DOT.COM REVENUE AND PROFIT MODELS

 Advertising income
 Sponsorship income
 Alliance income
 Membership and subscription income
 Profile income
 Product and service sales income
 Transaction commissions and fees
 Market research/ information
 Referral income

5.9.4 CHARACTERISTICS OF ONLINE MARKETING

 Evaluate and order products through the internet

 24 – Hours access
 Greater speed of transactions and delivery
 Convenience shopping

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5.9.5 ADVANTAGES OF ONLINE MARKETING

 Convenience
 Choice
 Control
 Information
 Interactive
 Benefits to marketers

5.9.6 ADVERTISING ONLINE

 They can place ads in special sections offered by the major commercial on-line
services.
 Ads can also be placed in certain internet news groups that are set up for
commercial purpose
 The company can pay for online ads that pop-up while subscribers are surfing
online services.

5.9.7 TYPES OF ONLINE ADVERTISING

 Banner Ads
 Pop – up windows
 Tickers (banners that moves across the screen)
 Road blocks (full screen ads that users must click through to get to other screens)
 Sponsorships
 Micro site
 Interstitials
 Browser ads
 Alliances and affiliate programs

KEY TERMS
Abstract hypothesis vs measurable Anova
hypothesis Applied research
Advertising and promotion research Augmented product
Alliances and affiliate programs B2c
Analysis Banner ads
Analytical problems Bibliography
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Brand switching Micro site
Brand switching model Misleading advertisements
Browser ads Motivation
C2c Multiple regressions
Case study and survey research Normative problems
Cause marketing Null hypothesis vs alternative hypothesis
Cause-related marketing Observation,
Competition research Experiment
Consumer behaviour Interview
Consumer database Online cause marketing
Consumer profile Online marketing
Consumer research Originating questions
Customer driven organization Pop – up windows
Data interpreting Population
Database Potential product
Database marketing Price research
Demand survey Primary data
Descriptive and prescriptive research Processing
Descriptive hypothesis vs relational Product research
hypothesis Psychographics
Diagnostic research design Pure and applied research
Discounted cash flows Questionnaire
Discriminant analysis Rational questions
Distribution research Regression and correlation
E-commerce Research design
Elasticity model Review of literature
Empirical problems Road blocks
Ethics Sales forecasting
Expected product Sales methods or retail research
Desk research Sample
Experimental research design Sampling design
Explanatory Schedule
Explorative vs explanatory hypothesis Secondary data
Explanatory research Sensitivity analysis
Factor analysis Specifying questions
Free bees Sponsorships
Generic product Tickers
Harmful advertisements Time series model
Historical and futuristic research White collar robbery
Hypothesis
Information
Internet domains
Interstitials
Linear programming model
Longitudinal and cross sectional research.
Marketing decision support system
Marketing information system
Marketing intelligence
Marketing research
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 QUESTIONS

1) Define marketing research? Explain the various steps involved in marketing

research.
2) Discuss the contents in a marketing research process.
3) Explain the characteristics of good marketing research.
4) Explain Ethical issues with suitable example
5) What is cause related marketing?
6) What is unethical advertising?
7) Define marketing research and explain the factors which limit the acceptance of
marketing research.
8) Differentiate between market research and marketing research.
9) Discuss the importance of marketing research for the producer
10) Explain the steps in marketing research process.
11) Briefly discuss the nature and scope of marketing research, in the context of
economic liberalization in the country.
12) What are the limitations and weaknesses of marketing research?
13) What is marketing research? What are the possible areas of marketing research?
14) Could the same type of marketing research be used to develop a marketing plan
and to evaluate the effectiveness of the marketing plan? Explain.
15) How is marketing research directed towards setting goals and establishing
strategies likely to be different from marketing research directed towards the
development of a marketing plan? Explain.
16) What are the major reasons for the growing importance of marketing research in
India?

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17) Briefly comment on the problems faced by researchers in conducting marketing
research in India.
18) Marketing research can be conducted on all of the marketing mix factors. Discuss
19) Discuss the objectives of marketing research.

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