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Changing Business Environment in India and Need for Marketing Changing Technology With times, science & technology

nology have evolved. With them have evolved our needs, wants and demands. Mass production and mass consumption is not exactly mass anymore. More focused marketing efforts are required from the marketer. The marketplace has conveniently been replaced by market-space for a lot of us; for the rest of us it s a w-i-p.

Globalization The world is a global village due to internet. The physical boundaries of the world have been dimmed. Offerings have become international; and so has competition

Deregulation Deregulation has enabled foreign companies to set up shop in India It can be considered as a threat and an opportunity

Brick-Click-Flick Formats Transmigration from a simple brick to brick & click to give competition to hugely successful pure-play click companies. An eventual involvement of flick as well due to many cultural and other shifts.

Customer Intelligence An ever improving customer intelligence has forced firms to come out with cheaper and better quality products. Internet has blurred international boundaries and the domestic firms have risen to the occasion to provide them competition. Customers are time-starved and are willing to pay premium for an offering much nearer to their requirements. They perceive fewer real product differences.

They are exhibiting even less brand loyalty.

Retail Transformation A shift in the retail market from being totally unorganised to organised has brought about a paradigm shift in the retail habits of consumers. Now store-based owners face a stiff competition from catalogue houses, direct-mail firms, newspapers, magazines and home-shopping (on TV). Stores have started responding with shifting their focus from marketing of products to marketing of experiences which, if provided with due market intelligence, the other media would find hard to counter. Examples: Barista including a book store inside their premises, personal selling to customers in-stores, customization on-sight by many food brands etc.

Extended Scope: R&D Physical handling and transportation Exchange facilitation Make pricing decisions Make product decisions Make promotion decisions Make packaging decisions Make purchasing decisions Make international market decisions Organise their marketing departments, etc.

Marketing Management Process

It consists of the following : 1. Organising 2. Analyzing 3. Selection

4. Development 5. Managing 6. Implementation 7. Control STEP 1 ORGANISING : A clear thought process has to be in place for the Marketing Management Process to even exist in the first place. The marketer has to bear in mind with pristine clarity the following in sequential order: 1. The Company 2. The Business 3. The Product The Company: 1. Be Consistent & clear headed 2. Organize The Business: 1. Be innovative and creative 2. Be Authentic 3. Remember - Rome wasn t built in a day 4. Set up processes in place even before you start with anything 5. Lead by example 6. Encourage experiential learning 7. Obtain relevant & useful permissions Define your goals Decide what industry you want to operate in and KISS Find people Define your engagement strategy Define your HR policies to retain and nurture talent

The Product: 1. Decide on your product s Marketing Mix. 2. Define explicitly your Target segment and the positioning strategies. 3. Understand the Consumer Behaviour of your target segment through Market Research. 4. Get personally involved in the Purchasing activities and set up processes for this department. 5. Kick-start Branding activities for your product. 6. Create innovative and useful Packaging. 7. Decide on the most effective and profitable Channels of distribution for your product. 8. Indulge in Marketing Communications for the promotion of your product.

STEP 2 - ANALYZING: The next step would be to analyze the market structure and its behaviour. A company s marketing environment consists of the actors and factors external to the marketing management function of the organization that intrude on the marketing management s ability to develop and maintain successful transactions with its target customers. Keeping in mind these factors, we have to see what new opportunities are coming into the market and evaluate them accordingly. The factors and forces that affect marketer s ability to develop and maintain successful transactions with its target customers is called the Marketing Environment. The marketing environment is made up of: Micro Environment Macro Environment

The Company: In designing marketing plans, the marketing manager takes into account other company groups: Top Management Finance Institutional Share Holders R&D

Purchasing Manufacturing

All these groups form the Internal Environment of the company. Suppliers: They provide the resources needed for the company to produce goods. They are very crucial to the output. Marketing Intermediaries: Firms that help the company to promote, sell and distribute its goods to final buyers. They include: Resellers Physical Distribution firms Marketing Services Agencies Financial Intermediaries

Cost, delivery & speed have to be considered as per the company s overall value delivery system.

Customers: They have to be studied very closely by the marketer. There are 5 types of customer markets, namely: Consumer Markets: Individual & households for personal consumption. Business Markets: Buy products to be used as inputs. Reseller markets: Buy goods & services to resell at a profit. Government Markets: Govt. agencies that buy goods & services to produce public services or to pass them on to those who need them. International Markets: Consists of all of the above from other countries.

Competitors: Marketer s aim is to provide greater value & satisfaction to his customers than his competitors do. No single competitive marketing strategy fits all. Other micro and macro factors have to be kept in mind before devising their strategic strategies. The marketer must gain strategic advantage by positioning their offerings strongly against competitor s offerings in the minds of consumers. Publics: Any group that has an actual or potential impact on an organization s abilities to achieve its objectives:

Financial Publics Media Publics Govt. Publics Citizen Action Groups Local publics

The company and all micro factors operate in a larger environment which has the capabilities to provide opportunities and pose threats to the company. They are as follows: Demography Technological Natural Political Cultural

STEP 3 - SELECTION: Once the company is through evaluating its alternatives, its time now for it to perform a selection process for the opportunities that it has analyzed. The selection criteria of the MMP consists of : Demand Measurement Forecasting

The company has to measure and forecast the size, growth potential and size of each of the opportunities. Market Potential: It is the maximum limit that the demand for a product can reach, in a particular industry. At this level the expenditure approaches infinity for a marketing environment. After successfully estimating market demands, the next task is to choose a level of marketing effort. The chosen level will produce an expected level of sales. The sales forecast is the expected level of company sales based on a chosen plan and assumed marketing environment.

The company s sales forecast does not establish a basis of deciding what to spend on marketing. On the contrary, the sales forecast is the result of an assumed marketing expenditure plan.

STEP 4 DEVELOPMENT: Marketing Strategy is the marketing logic by which the business unit expects to achieve its marketing objectives. Marketing strategy consists of making decisions on the business s marketing expenditures, marketing mix, and marketing allocations in relation to expected environmental and competitive conditions. Marketing Mix is the mixture of controllable marketing variables that the organization uses to pursue the sought level of sales in the target market. Marketing Mix Variables 4 P s Distribution channels include: Direct (on-site) Direct Mail Personal Selling Telemarketing Internet (e-Commerce) Agents Wholesalers Retailers Vending Machines

STEP 5 MANAGING: Self: Plan. Set your goals. Work on the roadmap. Execute the roadmap according to plan. Evaluate the outcome. Look at every new opportunity as an exciting and new-life experience.

Plan the future, but live in the present.

Competition: Industry Concept of Competition An industry is involved in providing those set of goods and services to a particular segment of society which are substitutes (w.r.t. functionality) and competitive (w.r.t. price). Types of industry competition scenarios: Pure Monopoly: High price, higher margins, little or no service Oligopoly: Large firms producing highly differentiated to standardized products. Monopolistic Competition: Many competitors are able to differentiate their products in whole or in parts. Pure Competition: Many providers offer the same product or service. If a competitor advertises to create a differentiation, he would migrate to monopolistic competition.

Competition: Write about SWOT Analysis STEP 6: IMPLEMENTATION All the hard work done in the previous stages reaches a crescendo where the strategies, selection, analysis etc. are put to test. This is the moment when the company actually gets down to implementing its decisions which are decided aprior. All Action takes place here and now!! Organisational structures are developed and put in place to assist all the actions taking place within the firm. The ambience and culture of the organisation is set in the form a processes and hierarchies being defined clearly and explicitly.

STEP 7: CONTROL Control systems are created by the organisation to manage, command, direct or regulate the behavior of other devices or systems. Control systems are put into place to determine the performance of the implemented actions. This is hugely important for the organisation as only now will a company know whether its processes are yielding the outputs (sales, revenues, profits etc.). Actual Vs. Target is calculated.

If there is a negative deflection, immediate steps are mandated to identify and take care of problems, if any. If there is a positive deflection, Best Practices are formed for any future use on a similar project. Annual plan, profitability, and strategic controls have gained immense importance over the past to keep the processes within Control .

Market probing can be defined as the research tools available to the marketer to know about the consumer behaviour. With market probing, the intention of the management is to know why a consumer would buy their product and in which circumstances would a consumer not buy the product. Marketing research is a systematic inquiry that provides information to guide managerial decisions. More specifically, it is a process of planning, acquiring, analyzing, and disseminating relevant data, information, and insights to decision makers in ways that mobilize the organization to take appropriate actions that, in turn, maximize business performance. VIEW PPT TITLED SCALING

SAMPLING: Sampling is that part of statistical practice concerned with the selection of a subset of individual observations within a population of individuals intended to yield some knowledge about the population of concern, especially for the purposes of making predictions based on statistical inference. Sampling is an important aspect of data collection. Researchers rarely survey the entire population for two reasons (Adr, Mellenbergh, & Hand, 2008): the cost is too high, and the population is dynamic in that the individuals making up the population may change over time. The three main advantages of sampling are that the cost is lower, data collection is faster, and since the data set is smaller it is possible to ensure homogeneity and to improve the accuracy and quality of the data. Each observation measures one or more properties (such as weight, location, color) of observable bodies distinguished as independent objects or individuals. In survey sampling, survey weights can be applied to the data to adjust for the sample design. Results from probability theory and statistical theory are employed to guide practice. In business and medical research, sampling is widely used for gathering information about a population. Sampling Process: The sampling process comprises several stages: 1. 2. 3. 4. Defining the population of concern Specifying a sampling frame, a set of items or events possible to measure Specifying a sampling method for selecting items or events from the frame Determining the sample size

5. Implementing the sampling plan 6. Sampling and data collecting Sampling methods Within any of the types of frame identified above, a variety of sampling methods can be employed, individually or in combination. Factors commonly influencing the choice between these designs include:
y y y y y

Nature and quality of the frame Availability of auxiliary information about units on the frame Accuracy requirements, and the need to measure accuracy Whether detailed analysis of the sample is expected Cost/operational concerns

Simple random sampling In a simple random sample ('SRS') of a given size, all such subsets of the frame are given an equal probability. Each element of the frame thus has an equal probability of selection: the frame is not subdivided or partitioned. Furthermore, any given pair of elements has the same chance of selection as any other such pair (and similarly for triples, and so on). This minimises bias and simplifies analysis of results. In particular, the variance between individual results within the sample is a good indicator of variance in the overall population, which makes it relatively easy to estimate the accuracy of results. However, SRS can be vulnerable to sampling error because the randomness of the selection may result in a sample that doesn't reflect the makeup of the population. For instance, a simple random sample of ten people from a given country will on average produce five men and five women, but any given trial is likely to overrepresent one sex and underrepresent the other. Systematic and stratified techniques, discussed below, attempt to overcome this problem by using information about the population to choose a more representative sample. SRS may also be cumbersome and tedious when sampling from an unusually large target population. In some cases, investigators are interested in research questions specific to subgroups of the population. For example, researchers might be interested in examining whether cognitive ability as a predictor of job performance is equally applicable across racial groups. SRS cannot accommodate the needs of researchers in this situation because it does not provide subsamples of the population. Stratified sampling, which is discussed below, addresses this weakness of SRS. Simple random sampling is always an EPS design, but not all EPS designs are simple random sampling. Systematic sampling Systematic sampling relies on arranging the target population according to some ordering scheme and then selecting elements at regular intervals through that ordered list. Systematic sampling involves a

random start and then proceeds with the selection of every kth element from then onwards. In this case, k=(population size/sample size). It is important that the starting point is not automatically the first in the list, but is instead randomly chosen from within the first to the kth element in the list. A simple example would be to select every 10th name from the telephone directory (an 'every 10th' sample, also referred to as 'sampling with a skip of 10'). As long as the starting point is randomized, systematic sampling is a type of probability sampling. It is easy to implement and the stratification induced can make it efficient, if the variable by which the list is ordered is correlated with the variable of interest. 'Every 10th' sampling is especially useful for efficient sampling from databases. Example: Suppose we wish to sample people from a long street that starts in a poor district (house #1) and ends in an expensive district (house #1000). A simple random selection of addresses from this street could easily end up with too many from the high end and too few from the low end (or vice versa), leading to an unrepresentative sample. Selecting (e.g.) every 10th street number along the street ensures that the sample is spread evenly along the length of the street, representing all of these districts. (Note that if we always start at house #1 and end at #991, the sample is slightly biased towards the low end; by randomly selecting the start between #1 and #10, this bias is eliminated.) However, systematic sampling is especially vulnerable to periodicities in the list. If periodicity is present and the period is a multiple or factor of the interval used, the sample is especially likely to be unrepresentative of the overall population, making the scheme less accurate than simple random sampling. Example: Consider a street where the odd-numbered houses are all on the north (expensive) side of the road, and the even-numbered houses are all on the south (cheap) side. Under the sampling scheme given above, it is impossible' to get a representative sample; either the houses sampled will all be from the odd-numbered, expensive side, or they will all be from the even-numbered, cheap side. Another drawback of systematic sampling is that even in scenarios where it is more accurate than SRS, its theoretical properties make it difficult to quantify that accuracy. (In the two examples of systematic sampling that are given above, much of the potential sampling error is due to variation between neighbouring houses - but because this method never selects two neighbouring houses, the sample will not give us any information on that variation.) As described above, systematic sampling is an EPS method, because all elements have the same probability of selection (in the example given, one in ten). It is not 'simple random sampling' because different subsets of the same size have different selection probabilities - e.g. the set {4,14,24,...,994} has a one-in-ten probability of selection, but the set {4,13,24,34,...} has zero probability of selection. Systematic sampling can also be adapted to a non-EPS approach; for an example, see discussion of PPS samples below. Stratified sampling

Where the population embraces a number of distinct categories, the frame can be organized by these categories into separate "strata." Each stratum is then sampled as an independent sub-population, out of which individual elements can be randomly selected.[2] There are several potential benefits to stratified sampling. First, dividing the population into distinct, independent strata can enable researchers to draw inferences about specific subgroups that may be lost in a more generalized random sample. Second, utilizing a stratified sampling method can lead to more efficient statistical estimates (provided that strata are selected based upon relevance to the criterion in question, instead of availability of the samples). Even if a stratified sampling approach does not lead to increased statistical efficiency, such a tactic will not result in less efficiency than would simple random sampling, provided that each stratum is proportional to the group s size in the population. Third, it is sometimes the case that data are more readily available for individual, pre-existing strata within a population than for the overall population; in such cases, using a stratified sampling approach may be more convenient than aggregating data across groups (though this may potentially be at odds with the previously noted importance of utilizing criterion-relevant strata). Finally, since each stratum is treated as an independent population, different sampling approaches can be applied to different strata, potentially enabling researchers to use the approach best suited (or most cost-effective) for each identified subgroup within the population. Advantages over other sampling methods 1. Focuses on important subpopulations and ignores irrelevant ones. 2. Allows use of different sampling techniques for different subpopulations. 3. Improves the accuracy/efficiency of estimation. 4. Permits greater balancing of statistical power of tests of differences between strata by sampling equal numbers from strata varying widely in size. Disadvantages 1. Requires selection of relevant stratification variables which can be difficult. 2. Is not useful when there are no homogeneous subgroups. 3. Can be expensive to implement. Cluster sampling Sometimes it is cheaper to 'cluster' the sample in some way e.g. by selecting respondents from certain areas only, or certain time-periods only. (Nearly all samples are in some sense 'clustered' in time although this is rarely taken into account in the analysis.)

Cluster sampling is an example of 'two-stage sampling' or 'multistage sampling': in the first stage a sample of areas is chosen; in the second stage a sample of respondents within those areas is selected. This can reduce travel and other administrative costs. It also means that one does not need a sampling frame listing all elements in the target population. Instead, clusters can be chosen from a cluster-level frame, with an element-level frame created only for the selected clusters. Cluster sampling generally increases the variability of sample estimates above that of simple random sampling, depending on how the clusters differ between themselves, as compared with the within-cluster variation. Nevertheless, some of the disadvantages of cluster sampling are the reliance of sample estimate precision on the actual clusters chosen. If clusters chosen are biased in a certain way, inferences drawn about population parameters from these sample estimates will be far off from being accurate. Quota sampling In quota sampling, the population is first segmented into sub-groups, just as in stratified sampling. Then judgment is used to select the subjects or units from each segment based on a specified proportion. For example, an interviewer may be told to sample 200 females and 300 males between the age of 45 and 60. It is this second step which makes the technique one of non-probability sampling. In quota sampling the selection of the sample is non-random. For example interviewers might be tempted to interview those who look most helpful. The problem is that these samples may be biased because not everyone gets a chance of selection. This random element is its greatest weakness and quota versus probability has been a matter of controversy for many years. Convenience sampling or Accidental Sampling Convenience sampling (sometimes known as grab or opportunity sampling) is a type of nonprobability sampling which involves the sample being drawn from that part of the population which is close to hand. That is, a sample population selected because it is readily available and convenient. It may be through meeting the person or including a person in the sample when one meets them or chosen by finding them through technological means such as the internet or through phone. The researcher using such a sample cannot scientifically make generalizations about the total population from this sample because it would not be representative enough. For example, if the interviewer was to conduct such a survey at a shopping center early in the morning on a given day, the people that he/she could interview would be limited to those given there at that given time, which would not represent the views of other members of society in such an area, if the survey was to be conducted at different times of day and several times per week.