MARKETING

MANAGEMENT
Dr. ANANDA KUMAR
Professor & Head,
Department of Management Studies,
Christ College of Engg. & Tech.,
Puducherry, India.
Mobile: +91 99443 42433
E-mail: searchanandu@gmail.com
 MARKETING
 flow of goods & services from producers to
customers.
 consists of those activities involved in the flow of
goods & services from the point of production to the
point of consumption.
 finding out what people wants & creating
products, services or ideas that match those needs.
 DEFINITION OF MARKETING
An American Marketing Association as defined,
“Marketing is the process of planning and executing
the conception, pricing, promotion and distribution of
ideas, goods and services to create exchanges that
satisfy individual and organizational objectives”.
Kotler has defined “marketing as a social and
managerial process by which individuals and groups
obtain what they need and what through creating and
exchanging products and value with others”.
 OBJECTIVES OF MARKETING
1. To analyse marketing problems and suggest
suitable solutions.
2. To develop policies and their implementation for a
good result.
3. To derive intelligent appreciation of modern
marketing practices.
4. To develop successful distribution.
5. To analyse existing marketing function and remove
unnecessary procedures.
 MARKETING FUNCTIONS
Marketing Functions

Functions of Functions of Functions of

Exchange Physical Distribution Facilities

After Sales
Buying Assembling Selling Financing Risk taking
Services

Transportation Inventory Warehousing Material Handling

 MARKET & MARKETING

total demand of potential buyers

all activities aimed consumer satisfaction

place or area (covers exchange functions)

where buying & selling take place

other facilitating functions (financing, risk

bearing, after sales services etc.)
 SELLING & MARKETING
Starting Focus Means Objectives
point
Selling
Factory Product Selling & Profit through
Concept Promotion Sale Volume

Market Target Customer Integrated Profit through

market needs marketing customer
-ing
Concept satisfaction
 SELLING & MARKETING
Sl.
No SELLING MARKETING

1. Selling begins with the seller and the Marketing starts with the consumer
emphasis is on the product. and the emphasis is on the needs of
the customers.

2. Narrow in scope. Considers business as a consumer

satisfying process.

3. Considers business as a goods Considers business as a consumer

producing process satisfying process.

4. The product that is to be offered is The product that is to be offered

determined by the seller. determined by the buyer.

5. Packaging is considered as a mere Packaging is designed to provide

protection or a mere container for the maximum satisfaction and
the goods. convenience to the customer.
Sl.

No SELLING MARKETING

6 Price is determined on the basis of Price is determined by the

cost. consumer.

7 Production is the central function Marketing is the central function.

and sales is a secondary function. The whole concern is organized
around the marketing function.

8 Internal, company orientation External, marketing orientation.

 CONCEPTS OF MARKETING
1. The Exchange Concept
2. The Production Concept
3. The Product Concept
4. The Selling Concept
5. The Marketing Concept
6. The Societal Marketing Concept
Concepts of Stage 1 Stage 2 Stage 3 Result of Profits
Philosophies Stage 1-3
Vague idea Mass Mass Product Profit
Production about Production Production availability through
Concept customer at a low mass
wants price standardiza
tion
Vague idea Superior Distribution Superior Profit
Product about product by without performanc through
Concept customer R&D proper e product marketing
needs marketing availability myopia
mix
Vague idea Mass Maximum Product Profit
Selling about production use of availability through
Concept customer and selling buyer hard-sell
needs distribution technique inertia
Analyses Know what Integrated Product as Profit
Marketing target customer marketing per through
Concept market needs customer customer
requirement satisfaction
s
The Marketing Mix
 The Marketing Mix

• The tools available to a business to gain the reaction it is

seeking from its target market in relation to its marketing
objectives
• 4Ps –Product, Price, Place and Promotion
 MARKETING MIX – 4 P’S

Product Price

Marketing
Mix

Promotion Place
The Marketing Mix
 The 4 Ps & 4Cs

Marketing Convenience
Mix

Place
Product

Customer
Solution Price Promotion

Customer
Communication
Cost
 PRODUCT

1. Brand
2. Style
3. Color
4. Design
5. Product Line
6. Package
7. Warranty
8. Service
 PRICE

1. Price Strategy
2. Pricing Policy
3. Basic Price
4. Terms of Credit
5. Discount
6. Allowances
 PLACE

1) Distribution Channels
1. Wholesalers
2. Retailers
3. Mercantile Agents
2) Physical Distribution
1. Transport
2. Warehouse
3. Inventory
 PROMOTION

1. Personal Selling
2. Advertising
3. Publicity
4. Sales Promotion
OLD CONCEPT or PRODUCT ORIENTED CONCEPT

“Marketing is the performance of business activities

that direct the flow of goods and services from the
producer to consumer or user.”
- American Marketing Association

“Marketing comprises both buying and selling

activities.”
- Prof. J.F. Pyle
 OLD CONCEPTS OF MARKETING

Goods and Services Sales Profit through Sales

 NEW or MODERN or CUSTOMER ORIENTED
CONCEPT

“Marketing is the delivery of standard of living to the

society”.
- Prof. Paul Manure

Marketing is the process of discovering and

translating consumer needs and wants into product
and service specifications, creating demand for
these products and services and then in turn
expanding this.
- Prof. Malcolm, McNair
 NEW CONCEPTS OF MARKETING

Discovery of Production of
Consumer Needs Goods & Services

Creation of Demands Sales

Profit through
After Sales Service
Customer Satisfaction
 MARKETING ENVIRONMENT

 (A) Micro Environment

1. Company
2. Suppliers
3. Marketing Intermediaries
4. Customer Markets
5. Competitors
1. Company

• Interrelated groups
• Company objectives, strategies & policies
• Marketing manager makes decisions within plans
2. Suppliers

• Provide resources to produces goods &

services
• Must watch supply availability
• Supply storage or delay affects sales
3. Marketing Intermediaries

• Middlemen (includes wholesalers & retailers)

• Selecting the right middlemen is difficult
• Transportation
• Market research
• Financial intermediaries
4. Customer Market

1. Consumer markets
2. Business markets
3. Reseller markets
4. Government market
5. International market
5. Competitors

• Satisfy the needs & wants better than

competitors
• Different types of competitive strategy has to
be adopted.
• Best strategy
 (B) Macro Environment

1. Demographic Environment
2. Economic Environment
3. Natural Environment
4. Technological Environment
5. Political Environment
6. Cultural Environment
1. Demographic Environment

• Population
2. Economic Environment
• Market requires consumers purchasing power and
spending patterns
• Upper class consumers – luxury goods
• Middle class consumers – some what careful
• Working class consumers – excluded food, clothing
& shelter
• Under class consumers – included food, clothing &
shelter
3. Natural Environment
• It refers to the natural resources which are needed
as inputs by marketers or that they are affected by
marketing activities
4. Technological Environment

• Every new technology replaces an older

technology.
• New technologies create new markets and
opportunities
5. Political Environment
• Marketing decisions are strongly influenced by the
political environment.
• The political environment comprises laws, govt.
agencies and pressure groups.
• Every marketing activity is subject to laws and
regulations.
• Laws affecting business has increased over the years
mainly for protecting the consumers from unfair
business practices.
6. Cultural Environment

• Cultural environment consists of forces that

affect society’s basic values, perceptions,
preferences and behaviours.
IMPORTANCE OF MARKETING
1. Importance of Marketing to the society
2. Importance of marketing to the company
3. Importance of marketing in developed economy
4. Importance of marketing in underdeveloped or
developing economy
5. Importance of marketing in Indian economy
1. Importance of Marketing to the society
i) Delivery of standard of living to the Society
ii) Decrease in distribution cost
iii) Increasing employment opportunities
iv) Protection against business slump
v) Increase in national income
2. Importance of marketing to the company

i) Helpful in business planning and decision

marketing
ii) Increase in the profit
iii) Helpful in communication between society and
business
5. Importance of marketing in Indian economy
(i) Increases in employment opportunities;
(ii) Balanced growth of the country;
(iii) Increase in the sale of goods;
(iv) Increase in profits;
(vi) Development of the means of communication;
(vii) Development of the means of transportation
(viii) Development of the means of warehousing;
(ix) Development of new media of advertisement and
sales promotion;
(x) Development of banking and insurance industries.
EVOLUTION OF MARKETING CONCEPT
1. Self-sufficient stage
2. Exchange-oriented stage
3. Production-oriented Stage (1869 -1930)
4. Sales-oriented Stage (1930-1950)
5. Marketing-oriented Stage (1950-1960):
6. Consumer-oriented Stage (1960s – present):
Marketing Planning
 “Marketing planning is the work of setting up
objectives for marketing activity and of determining
and scheduling the steps necessary to achieve
objectives”.
 A written document that acts as a guidebook
of marketing activities for the marketing manager
Marketing Planning
 Marketing plans typically include a description of:
- Market Conditions
- Products
- Buyers
- Sales potential
- Contract terms or pricing strategy
- Promotion and Distribution ideas
- Resources
Features of Marketing Plan
 It gives plan to allocate of marketing resources in the
best and most economical way.
 It gives guidance and direction of marketing activities.
 It is future course of marketing activities.
 Marketing planning is aim to achieve the goals of the
company.
 Marketing plan is Blue print of marketing future
actions.
 Marketing planning is one of the most effective
management tools.
 Careful planning leads for successful operation.
Importance of Marketing planning
 It is very helpful for identification of marketing
opportunities and threats.
 It focus on objectives.
 It is very helpful for identification of future
development.
 Improve the coordination of all the departments.
 Increases the effective actions.
 It reduces time and economical factor.
 It is very helpful for developing a company profile.
 Marketing planning achieves customer satisfaction
Elements/Components of Marketing planning

Elements of Marketing
Planning

Determining
the Policies Procedures Programme
objectives

Sales
Schedules Budgets
Forecast
STRATEGIC PLANNING
 Strategic Planning is the managerial process of
creating and maintaining a fit between the
organization’s objectives and resources and the
evolving market opportunities.
 It is a process which involves a set of decisions and
actions to achieve the objectives of an organisation.
 It is a set of objectives, policies and rules that
guide over time firm’s marketing efforts.
STRATEGIC PLANNING
Definition
“The formulation and implementation of plans and
carrying out of activities relating to the matters which
are of vital, pervasive or continuing importance to the
total organisation”.
- Sharplin
Strategic Planning Process
Business Mission

Internal Environment SWOT External Environment

(Strength / Weakness Analysis (Opportunities & Threats
Analysis) Analysis)

Formulation of Business
Goal

Formulation of Business
Strategy

Formulation of Programs

Implementation of the Plan

Program

Feedback & Control

1. Deciding on the business Mission
 the business mission should stem from the overall
corporate mission and objective of the firm.
 it should essentially express why it is in the
business portfolio of the company and what function
the corporate expects it to play.
 when a company expects the business unit to give
more market share in that particular industry
segment, it should set the mission statement for the
business.
2. Conducting SWOT analysis
 the firm needs to conduct a strength, weakness,
opportunity and threat analysis for the business unit.
 while strengths and weakness is analysis of
internal strength of the firm, opportunity and threat
analysis is the analysis of external environment to
identity the potential risks and returns opportunities
in the business.
 3. Formulating Goals for the Business Unit

 these goals are used to describe business objective

with respect to marketing expenditure of the firm for
a specific period of time.
 goals can be explained in terms of market share,
sales, profit, profitability in achieving the sale, level of
reputation and image desired by the business unit in
the industry.
4. Formulating Business Strategy
 Strategies are long-term goal directed actions.
 a company deliberately chooses a particular
strategy depending upon its strengths and goals set
for the business unit.
 Companies follow cost strategy when they can
produce and distribute goods and services at the
lowest possible cost compared to competitors to win
a larger market share.
5. Program Formulation and implementation
 once the business unit planning is over, the
marketing manager should develop detailed
supporting programs.
 these programs are purely functional plans to
execute the strategies.
 marketing managers need to develop a marketing
plan, which should include cost estimates, budget
allocations on various functional activities and link the
investments with the likely returns to decide whether
it is worth executing a particular program.
6. Feedback and Control
 for successful business planning and
implementation, it is important to monitor and
evaluate the execution at different points of time.
 firms design milestones and targets to measure
the performance and it they find a gap between what
was planned and the results of the plan, they need to
take corrective actions.
 feedback flow also helps in finding out the validity
of assumptions on likely market response.
INTEGRATED MARKETING
• The marketing manager co-ordinates the activities
of all the departments in an organization engaged in
manufacture. The policies of all the other
departments are adjusted on the direction and
suggestion of the Marketing manager. The
following are some of the important activities of the
marketing management under integrated
marketing.
• Collection of necessary data relating to market.
• Analyzing the data so collected and drawing
conclusions.
• Developing the product.
• Developing new techniques of marketing.
• Framing a detailed marketing programme.
• Implementing the marketing programme.
• Co-ordinating the wants and satisfaction of the
customers.
SOCIAL MARKETING
• Marketing can be used to bring not only products
and services but also social cause to the attention of
a market.
• The efforts make by such organisations to gain the
support of the society for a social cause or change is
called social marketing.
• The social causes include population control, energy
conservation, environmental protection and
cigarette smoking, drug control etc.
QUESTIONS
1. “Marketing is Business”. Comment
2. “Consumer is King”. Comment on the statement in
the light of modern concept of Marketing.
3. How consumer satisfaction leads to better sales?
4. Discuss on the problems of Marketing
Management in India.
5. “Marketers can create needs.” Do you agree? Give
reasons to support your answer.
6. What are the qualities of a sales manager?
7. Are Middlemen necessary? Discuss
QUESTIONS
8. “The money spends on advertising a product is an
investment and is not waste”. Do you agree? Give
reasons for your answer.
9. “All advertisement is a social waste” – Discuss.
10. “Good salesmen are born and not made” –
Comment on this statement.
11. “Customer relationship is very important for
marketing”. Explain.
12. “Marketing begins with consumer and ends with
consumer”.
QUESTIONS
13. “Marketing should aim at meeting a given
customer’s need rather than selling a given product.”
Do you agree with the statement? If so, why? Who
benefits from marketing concept and how?
14. “Instead of trying to market what is the easiest for
us to make, we must try to find out much more –
what is the consumer willing to buy? In other words,
we must apply our creativeness more intelligently to
people rather than products.” Explain this statement
in the context of the modern marketing concept.
BUYER or CONSUMER BEHAVIOUR
The modern marketing concept the buyer or consumer
is the Fulcrum; he is the life blood; he is the very
purpose of the business. He has to be closely followed
What he wants?
When he wants?
Where he wants?
How he wants?
The answer to those questions can be found through
consumer research. The answer of these questions
are important to marketers because they plan to
strategy of marketing.
CONSUMER BEHAVIOUR
 Glenn Wilters defines, “human behaviour refers to
the total process by which individuals interact with
their environment”. To be specific consumer
behaviour refers to the act of consuming a good or
service.
 According to Webster, “Buyer behaviour is all
psychological, social and physical behaviour of
potential customers as they become aware of,
evaluate, purchase, consume and tell other people
about products and services”.
CONSUMER MIND

Stimulus

Company controlled

Product Buy
Price
Consumer
Advertising Response
Mind
Display
Distribution No Buy
Social

Word of mouth
Reference group
Difference between Consumer & Customer
 A consumer refers to individuals who buy for
themselves or their family, whereas 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 who uses the product is called a consumer.
Every customer is a consumer but not every
consumer a customer.
IMPORTANCE OF CONSUMER BEHAVIOUR
 To identify consumer needs and wants.
 Understanding of consumer behaviour is essential
for the long run success of any marketing program.
 To design new products and marketing strategies
that would fulfill consumer needs.
 Consumer behaviour is thus the study of how
individuals make consumption decisions.
 To achieve consumer satisfaction the marketer
should know and understand consumer’s behaviour.
FACTORS INFLUENCING CONSUMER BEHAVIOUR

1. Internal Psychological factors

2. Social factors
3. Cultural factors
4. Economic factors
5. Personal factors
1. Internal Psychological factors
a. Motivation
b. Perception
c. Learning
2. Social factors
a. Family
b. Reference group
c. Roles and status
3. Cultural factors
a. Culture
b. Sub culture
C. Social class
4. Economic Factors

a. Personal Income
b. Family Income
c. Income expectations
d. Savings
f. Consumer credit
5. Personal Factors
1. Age and Stage in Life Cycle
2. Occupation
3. Lifestyle
Stages of the Consumer Buying Process
Need

Motive

Problem Recognition
Internal External
Search Information Search
Search

Evaluation of Alternatives

Buy Later Do not

Purchase Decision
buy

Purchase

Satisfaction Post Purchase Behavior Dissatisfacti

on

Habit
Formation
Problem Yes Information collection
About the T.V.
Recognition No
T.V. Show room
Information Advertisement
Need for a new T.V.
Search Stage Friends
Family
Magazines
Price
Alternative Clarity &Criteria
Size of Selection
Evaluation Model
Stage Expert Opinion

Purchase Decision
Purchase buy
Decision
Stage do not buy
 Economy
Type of T.V.
No luxury version

now
Timing of Purchase

later

dealer A
Where to Purchase

dealer B

Degree of Satisfaction
Post Satisfied
Purchase
Stage Dissatisfied
Consumer Marketing
The Marketing activities involved in selling their good
to consumers. Manufacturers supply goods directly to
retailers. Retailers keep the right good to satisfy the
customers. In consumer marketing manufacturers
and retailers advertise the products extensively.
Consumer Goods
Consumer goods are those goods which are directly
consumption by ultimate consumers.
For example Car, Television, Radio, Cycle, Shoe, Soap,
Toys, Toothpaste.
Classification of Consumer Goods
1. Shopping Goods
2. Convenience Goods
3. Speciality Goods
1. Shopping Goods
Shopping goods are consumers products. These goods are
not purchased frequently by the buyers. The cost of goods
are high.
Examples: T.V. Jewellery, Furniture, Washing Machines,
Radio, etc.
 This types of goods are not purchased frequently.
 This types of goods are high cost.
 Brand name is not essential.
 Shopping goods are some durable in nature.
 Shopping goods are distributed by selected number of
retail outlets.
 Comparison and evaluation are done by buyers.
2. Convenience Goods
This types of goods are purchase frequently. These
goods are purchase daily. Minimum effort is enough for
buying such goods.
Examples: Soap, Detergent, Toothpaste, Shaving Cream.
 This type of good are easily availble.
 This type of goods costs are less.
 The buyers gives importance to the Brand value.
 There is a regular are continuous demand for these
goods.
 This type of goods are distributed by all the channels.
3. Speciality Goods
This types of goods are know as luxurious goods. The
cost of goods are very high. Such goods possess
certain special characteristics that attract the buyers.
Examples: Cars, Computers, Refrigerators.
 These are very high.
 Buyers gives importance to the brand value.
 Special buying efforts are necessary.
 Long time is taken for purchasing.
 Marketing channels are very short.
Industrial Market
The industrial market is the market consisting of
individuals and organisations prepare goods and
services to be used in the production of further
products.
Industrial marketing is defined as the process of
marketing industrial goods. Which are used in
producing consumer goods.
MARKET SEGMENTATION
 In total market may differ in their wants,
purchasing power, buying attributes and buying
practices. A market segment is a meaningful buyer
group having similar wants. Segmentation helps in
grouping these consumers having similar wants or
desires.
 “Marketing Segmentation is the process of dividing
the total heterogeneous market for a product into
several submarkets or segments each of which tends
to be homogeneous in all sufficient aspects”.
 Chevrolet Optra Mercedes Benz BMW
Sonata Toyota Lexus

LUXURY

Baleno
Honda Civic
Accent
Toyota Corolla

MID SIZE Indigo

Esteem
FAMILY Opel Corsa
Ford Ikon

Getz, Swift Santro

Maruti 800 ECONOMY

Zen
Alto

Market Segmentation & Brand Positioning in Indian Passenger Car Industry

Bases/Methods of Market Segmentation
1. Geographic Segmentation
2. Demographic Segmentation
3. Psychographic Segmentation
4. Behavioural Segmentation
5. Benefit Segmentation
1. Geographic Segmentation
 Region: by continent, country, state, or even
neighborhood
 Size of metropolitan area: segmented according to
size of population
 Population density: often classified as urban,
suburban, or rural
 Climate: according to weather patterns common to
certain geographic regions
2. Demographic Segmentation
 Age
 Gender
 Family size
 Income
 Occupation
 Education
 Religion
 Social class
3. Psychographic Segmentation
 buyers are divided on the basis of the life style and
personality characteristics.
 way of living
 reflects the person’s living as a combination of his
actions, interests and opinions.
4. Behavioural Segmentation
 The market is divided on the basis of purchase
decision and product or brand usage made by
consumers.
 Behavioral segmentation is based on actual
customer behavior toward products.
Behavioral segmentation has the advantage of
using variables that are closely related to the product
itself. It is a fairly direct starting point for market
segmentation.
5. Benefit Segmentation
 These methods helps in describing the
characteristics of different segments rather than
finding out what causes these segments to develop.
 People suggesting benefit segments ground their
idea on assumption that benefits people expect out
of the product consumption situation are the basic
reason of purchase and customers can be grouped as
per the basic reason of their purchase.
Importance of Market Segmentation
 Markets have a variety of product
needs and preferences.
 Marketers can better define customer needs.
 Decision makers can define objectives
and allocate resources more accurately.
 No Market Segmentation

Segmented by Gender
Segmented by Age
TARGET MARKETING
 Market targeting is a process of taking decision
regarding the market segments to be served.
 Choosing one or more segments for which to
design your marketing operations
POSITIONING
 The place the product occupies in consumers’
minds relative to competing products.
 Typically defined by consumers on the basis of
important attributes.
 Positioning maps that plot perceptions of brands
are commonly used.
Example
Lux is positioned as beauty soap of Cine Stars
Vicks is an ointment for cold etc
why do this ?
Positioning Strategies
1. Positioning on Product Attributes
2. Positioning on Benefits
3. Positioning according to Usage Occasions
4. Positioning the product for certain classes of
users
Competitive Advantage
 Almost all the firms in the market try to achieve a
sustainable competitive advantage.
 a firms that offers the consumer the same value as
the competitors, but at a lower cost.
PRODUCT
 It is a goods, services or idea, including all attributes
provided in an exchange between buyer & seller.
 “A product is a set of tangible and intangible
attributes, including packaging, color, price,
manufacturer’s prestige, retailer’s prestige and
manufacturer’s and retailer’s services which the buyer
may accept as offering want satisfaction.
 A product is determined by the needs & desires of
the customer.
 A product is almost combinations of tangible &
intangible.
 CLASSIFICATION OF GOODS OR PRODUCTS

Products / Goods

Consumer Industrial
Goods Goods

Convenience Shopping Speciality

Goods Goods Goods

Materials
Equipments & Manufacturing or Management
Entering
Physical Facilities Services supplies Materials
Into the product
1. Convenience Goods: Goods which consumer buys
frequently, immediately and with minimum
shopping effort are classified as convenience
goods. Example: Cigarettes, newspapers,
magazines etc.
2. Shopping Goods: Goods which consumer selects
and buy only after making comparisons on such
bases as suitability, quality, price and style are
called as shopping goods. Example: Furniture,
ready-made garments, etc.
3. Speciality Goods: Goods for which significant
number of buyers is habitually willing to make a
special purchasing effort are known as speciality
goods. They should possess unique features or
have a high degree of brand identification or both.

 PRODUCT MIX
 Is the full list of all products offered for sale by a
company.
 Product mix is the set of all product lines and items
that a particular seller offers for sale to buyers.
Example:
Kodak’s Cameras, photographic supplies,
Chemicals, plastics and fibers.
Tata’s hair oil, cosmetics, locomotives, texiles, iron
and steel goods etc.
Godrej – soaps, office equipments, edible oil,
computers and other products.
PRODUCT LINE
 a group of related similar products that are
considered a unit because of marketing, technical or
use similarity.
 possessing reasonably similar physical
characteristics
PRODUCT ITEM
 a specific product
 product item is a distinct unit that is distinguishable
by size, price, appearance or some other attribute.
DIMENSIONS OF PRODUCT MIX
1. Length
2. Width
3. Depth
4. Consistency
1. Length:
The length of the product mix refers to the total
number of items in its product mix.

2. Width:
The width of the product mix refers to the number of
different product lines the company carries.
3. Depth:
Depth refers to how many varieties are offered in
each product line. In other words, the depth is
measured by assortment of sizes, colours, models,
prices and quantity offered within each product line.
4. Consistency:
The consistency of product mix is a measure of
how closely related its various product line are to
one another.
The relationship may be due to the use,
production requirements, distribution channels,
consumer behaviour and other characteristics.
Color Hair Care Skin Care Oral Care Deodoran Soaps & Toilet Beverage
Cosmetics ts Detergent Soaps s
Lakme Sunsilk Fair & Pepsoden Axe Surf Liril 3 Roses
Aviance Clinik Lovely t Pond’s Rin Lifebuoy Lipton
Pond’s Toothpast Rexona Wheel Lux Yellow
e & Tooth Denim OK Breeze lable
brush 501 Pears Lipton
Close-up Sunlight Hamam Green
Ala Rexona lable
Vim Dove Lipton Ice
Savlon Tea
Red Lable
Taj Mahal
Brooke
Bond
Taaza
 Bru

width
PRODUCT LINE DECISIONS
1. Changes in Market Demand
2. Competitive Action and Reaction
3. Marketing Influences
4. Product Influences
5. Financial Influences
FACTORS DETERMINING THE PRODUCT MIX
1. Changes in Demand
2. Cost of Production
3. Advertising & Distribution Costs
4. Competitive Action and Reaction
BENEFITS OF PRODUCT MIX
1. Sales Growth
2. Sales Stability
3. Profits
PRODUCT LIFE CYCLE

 PRODUCT LIFE CYCLE

Sales and
Profits ($)

Sales

Profits

Time
Product Introduction Growth Maturity Decline
Develop-
ment

osses/
nvestments ($)
PRODUCT LIFE CYCLE
1. INTRODUCTION
2. GROWTH
3. MATURITY
4. SATURATION STAGE
5. DECLINE
1. Introduction
 profits are negative or low
 volume of sale is less
 heavy expenses on distribution
 more money is required
 promotional expenditure is heavy
 highly risk
 advertising focus
2. Growth
 refers to a period of rapid market acceptance and
increasing profits
 competitors are enter
 product survival in the market
3. Maturity
 competition becomes more accurate
 sales continue to increase but the decreasing rate
 producer spend more advertising
 capture the market
 modification of marketing mix
 attract more customers
4. Saturation Stage
 sales of the product reach to the peak
 no further possibility increase it
 other competitors shall also become popular
5. Decline
 sales decline
 sales decline due to technological advances
 consumer’s shifts in taste
 increased competition
 some firms may withdraw from the market
NEW PRODUCT DEVELOPMENT
 A product introduce to the market as new –
whether they are genuine innovation or slight
modifications of the existing products.
 In most cases, the newness of the product is the
result of combining characteristics of products already
in existence.
NEW PRODCT DEVELOPMENT PROCESS /
STAGES
1. Idea Generation
2. Idea Screening
3. Concept Testing and Analysis
(a) Business Analysis
(b) Total Sales Estimation
(c) Estimating Cost & Profits
4. Product Development
5. Test Marketing
6. Commercialization
Failure of a Product
1. Inadequate market analysis
2. Product deficiencies
3. Lack of effective marketing effort
4. Higher costs than anticipated
5. Competitive strength or action
6. Improper timing of introduction
7. Technical or production problems
BRANDING
The traditional orientation of branding suggests that
brand name is a part of the brand consisting of words
or letters that form a means to identify and
distinguish a firm’s offer. A brand market is the
symbol or pictorial diagram that helps in the
identification of the product.
 PRODUCT PRICING
 Pricing means the exchange value of a product or
service in terms of money.
 Price can decide the success or failure of a
concern.
 The amount of money charged for a product or
service, or the sum of the values that consumers
exchange for the benefits of having or using the
product or service.
PRICING OBJECTIVES
1. Target of returns
2. Stability of Price
3. Maintenance of Market Share
4. Meet or Prevent Competition
5. Maximising Profits
FACTORS AFFECTING PRICING DECISIONS
Competition Government
Channels
Demand

Economical Factor
Product

Pricing
Decision
Suppliers
Demand

Cost of the Product

Consumer
Organisation
KINDS OF PRICING
1. Odd Pricing
2. Psychological Pricing
3. Customary Pricing
4. Prestige Pricing
5. Dual Pricing
6. Skimming Pricing
7. Negotiated Pricing
8. Geographical Pricing
9. Monopoly Pricing
10. Expected Pricing
1. Odd Pricing
When the price of a product is an odd number such a
pricing method is called odd pricing.

2. Psychological Pricing
Psychological pricing is based on customer price
perceptions. It has special appeal in certain target
markets. Bata shoe company adopts psychological
pricing. They are setting price such as Rs.299.95,
Rs.199.99 The buyers feel it in a marked down price.
3. Customary Pricing
These prices are fixed by custom. Some products
prices are same by different manufacturers.
Example: Soap, Toothpaste, Soft Drinks.

4. Prestige Pricing
Many customers judge the quality of a product by its
price. Luxury goods are undergo prestige pricing
method. Customer may fear that at the low price, it
cannot be of good quality.
5. Dual Pricing
When a manufacturers sells the same product at two
or more different prices. It is called as dual pricing.
The same products the prices are different at two
places. This pricing policy is followed in railway like
First Class, Second Class etc.
For same distance travel, same vehicle, the services
are sold to passengers at different prices under
different classes.
6. Skimming Pricing
A product introduced in the market by high initial
price of the product. It gives enormous profits in the
initial stage of market period. It is a strategy of
recovering rapidly the investment. The market of the
product does not respond satisfactorily the price can
be lowered.
7. Geographical Pricing
Geographical pricing involves the company in deciding
how to price its products to customers in different
locations. Added the price of transportation cost to
the goods to different regions or zone.

8. Monopoly Pricing
The price is fixed by manufacturers who has no
competition in the market. It is termed as monopoly
pricing.
9. Expected Pricing
This type of price will be accepted by the consumers.
The customer response is analyzed and then fix a
price of the product.
Process / Stages of Price Determination of a Product

Estimating Demand

Anticipate Competition

Expected Determining Share of Market

Selection of Pricing Strategy

Marketing Policies of the Company

Setting the Price

CHANNEL OF DISTRIBUTION
“A Channel of distribution or marketing channel is
the structure of intra-company organisation units and
extra company agents and dealers, wholesalers and
retailers through which a commodity, product or
service is marketed”.
- American Marketing Association
• pathway taken by the goods as they move from the
production point to point of consumption
• direct or indirect transfer of title of goods
• through whole seller, retailer or agencies
CHANNEL DISTRIBUTION

Intermedia
Producer Consumer
ries

Distribution
Channel
LEVELS OF CHANNELS
1. Direct Marketing Channel/Zero Level Channel
2. Indirect Marketing Channel
a. One-Level Channel
b. Two-Level Channel
c. Three-Level Channel
d. Four-Level Channel
1. Direct Marketing Channel/Zero Level Channel

Producer Consumer

2. Indirect Marketing Channel

a. One-Level Channel
Producer Retailer Consumer

Producer Distributor Consumer

b. Two-Level Channel
Wholesaler/
Producer Distributor Retailer Consumer
 c. Three-Level Channel:

Producer Distributor Wholesaler Retailer Consumer

d. Four-Level Channel:

Producer Agent Distributor Wholesaler Retailer

Consumer
FUNCTIONS OF MARKETING CHANNELS
1. Buying
2. Selling
3. Transporting
4. Financing
5. Promoting
6. Negotiating
FACTORS INFLUENCING THE SELECTION OF A
CHANNEL
Distribution
Policy Product
Competition Characteristics

Factors
Environmental influencing the Cost of
Characteristics Selection of a Channel
Channel

Customer Company
Characteristics Characteristics
Middlemen
Characteristics
Channel Design Decisions
Analysis of Customer’s Desired Service
Output Levels

Establishing Channel Objectives

Identifying Major Channel Alternatives

Evaluating the Major Alternatives

Channel Management Decision

Selection of Channel Members

Training of Channel Members

Motivation of Channel Members

Evaluation of Channel Members

Modification of Channel Arrangements

DIRECT MARKETING
 Direct marketing is also called as channel less
retailing.
 It uses non-personal communication media i.e.,
advertising media to make a sale at any location.
 Under this method, customers can be contacted
through sales personnel, by post namely, mail-order
sale, by phone, radio, newspaper, television,
magazines, by home computers, etc.
METHODS OF DIRECT MARKETING
1. Direct Mail
2. Tele Marketing
3. Personal Selling
4. Direct Response Television
5. Direct Response Print Media
6. Online Marketing
7. Mobile Marketing
MARKETING INTERMEDIARY
 Marketing intermediary: wholesaler or retailer
that operates between producers and consumers or
business users; also called a middleman.
CLASSIFICATION OF MIDDLEMEN
1. Agent Middlemen
Kinds of Agent Middlemen
a. Brokers
b. Commission Agents
c. Manufacturer’s Agents
d. Selling Agent
2. Merchant Middlemen
a. Wholesalers
b. Retailers
WHOLESALER
 Wholesale means marketing of goods in relatively
large quantities. The wholesalers are the connecting
link between the manufacturers and the retailers.
They buy in large quantities and resell them to
retailers in smaller lots.
WHOLESELLER
Serviced of wholesaler to requirements of
manufacturer
 He keeps price steady and prevents their
fluctuations.
 He provides storage facilities for the goods till they
are needed by manufacturers.
 He takes participate in advertising and sale
promotion tasks in the manufacturers.
 Wholesaler gives information about the product
market, consumer needs and opinions to the
manufacturers.
WHOLESELLER
Services of Wholesaler to the retailer
 He is delivering the goods promptly to the retailer.
 He provides credits facilities to the retailers.
 The wholesaler offers advice and assist retailer with
their operations. Management assistance regarding
techniques of stocking, displaying, point of sale
promotion and trainings are providing by wholesaler.
 He shares the risk involved in marketing.
 He provides facilities for concentration and handling
of goods.
FUNCTIONS OF THE WHOLESALERS
1. Buying and Assembling
2. Warehousing
3. Transporting
4. Financing
5. Risk-bearing
6. Grading, Packing and Packaging
7. Selling
RETAILING
 is the last link in the chain of channel.
 is a business enterprise which sells primarily to
consumers.
 it consists of the activities involved in selling
directly to the consumers, producers find it
convenient to distribute their goods through the
retailers.
FUNCTIONS OF THE RETAILERS
1. Buying and assembling of goods from various
producers or wholesalers
2. Storing of the goods
3. Risk-bearing
4. Transportation of goods from the godown of
wholesalers.
5. Grading and packaging.
6. Providing market information
7. Extension of credit facilities to the consumers.
8. Selling
RETAILERS TYPES
There are many ways retailers can be categorized
depending on the characteristics being evaluated. For
our purposes we will separate retailers based on six
factors directly related to major marketing decisions:
 target markets served
 product offerings
 pricing structure
 promotional emphasis
 distribution method
 service level
Methods of Retailing
Method of Retailing

Small Scale Large Scale

a. Independent Stores
a. Department Stores
b. Vending Machines
b. Chair or Multiple Shops
c. Discount Houses
c. Mail Order
d. Supermarkets
e. Hyper Markets
ESSENTIAL REQUISITES FOR SUCCESS IN
RETAILING
1. Selection of goods
2. Effective buying
3. Proper location
4. Display of goods
5. Advertising
Channel Design
 Channel design includes decisions concerning
channel length and channel width
 Decisions associated with forming new or altering existing
channels.
 In a market the number of middlemen i.e., selling agents,
few wholesalers, established retailers. Deciding upon the best
channel is a important role for successful marketing.
SELECTION OF CHANNEL DESIGN
Analyzing of Customer’s desired service
output levels

Establishing Channel Objectives

Identifying the Major Channel

Alternatives

Evaluating Channels
CHANNEL MANAGEMENT DECISIONS
Selection of Channel Members

Training of Channel Members

Motivation of Channel Members

Evaluation of Channel Members

Modification of Channel
Arrangements
INTEGRATED MARKETING
COMMUNICATION
 The product’s design, its price, the shape and
colour of its package and the stores sell it – all
communicate something to buyers.
 Manager need to communicate & promote the
final product
 Communication refers unified message about the
product or services of the firm.
 20th century idea generate integrated marketing
communication
INTEGRATED MARKETING
COMMUNICATION PROCESS
Sender
The Company Encoding Decoding by Self
The Marketing Co. Media
Mix Receiver
The Intermediaries Decoding by
The Retailer Message
others

NOISE

Responses
Sales Increase
Feedback Awareness Increase
Other Communication
Objectives
 PROMOTION MIX

1. Personal Selling
2. Advertising
3. Publicity
4. Sales Promotion
1. Personal Selling
 Oral communication with potential buyers of a
product with the intention of making a sale. The
personal selling may focus initially on developing a
relationship with the potential buyer, but will always
ultimately end with an attempt to "close the sale".

2. Advertising
 Any paid form of non-personal communication of
ideas or products in the "prime media": i.e. television,
newspapers, magazines, billboard posters, radio,
cinema etc. Advertising is intended to persuade and
to inform. The two basic aspects of advertising are the
message (what you want your communication to say)
and the medium (how you get your message across)
3. Publicity
 It is non-personal stimulation of demand for a
product. Business unit by placing commercially
significant news about it in a publication or obtaining
favourable presentation of it upon radio, T.V.
The communication of a product, brand or business
by placing information about it in the media without
paying for the time or media space directly. otherwise
known as "public relations" or PR.
4. Sales Promotion
 Providing incentives to customers or to the
distribution channel to stimulate demand for a
product.
MARKETING RESEARCH
 Marketing basically consists of identifying the needs
of consumers and satisfying them. Marketing research
plays a key role in the area of consumers, competition
and marketing environment.
 “As the systematic gathering, recording and analysing
of data about problem relating to do marketing of goods
and services”.
 A study of the facts relations to any problem in fixed
of marketing.
 It is the study of marketing problems, techniques and
other related decision making and their implementation.
OBJECTIVES OF MARKETING RESEARCH
 To evaluate various plans, policies etc.
 To define the market for a product.
 To forecast the market share and future sales.
 To formulate various Marketing strategies,
Programmes and Policies.
 Marketing research can bring about the right
product, right place, right consumers, right price and
right sales promotion techniques.
 To find out most suitable channel.
 To find out most suitable pricing.
 To asses the effectiveness of advertising.
IMPORTANCE OF MARKETING RESEARCH
 To understand why customers buy a particular product.
 To know the marketing opportunity.
 To understand marketing problems.
 To help in the selection of a right course of action.
 To know about customer acceptance of the product.
 To understand the distribution network of the product.
 To forecast the probable volume of the future sales.
 To forecast the expected market share.
 To asses competitive strengths & policies.
ADVANTAGES OF MARKETING RESEARCH
1. Marketing research is used to measure market
potential, characteristics and share of markets for a
particular brand or company.
2. It helps in obtaining information that could lead to
the formulation of short and long-range forecasts.
3. Companies can use marketing research to evaluate
new product opportunities, and product
opportunities, and product acceptance and to test
existing products relative to the competitor’s
products.
ADVANTAGES OF MARKETING RESEARCH
4. Marketing research helps make better advertising
decisions.
5. It also helps to evaluate the effectiveness of
marketing activities and draws attention to a
potential problem.
6. Marketing research is helpful in planning
questionnaires to test comprehension, work
norms, memory factors, etc.
SCOPE OF MARKETING RESEARCH
1. Sales Analysis
2. Sales & Distribution Methods & Policies
3. Product Management
4. Advertising Research
5. Media Research
6. Corporate Research
7. Syndicated Research
STEPS IN MARKETING RESEARCH
Identifying the Marketing
problem its objectives

Framing Research Design

Primary Data
Techniques of Data Collection
Secondary Data
Analysis of Data
Preliminary Section
Presentation of Report
Main Body
Reference Section
IMPORTANT QUESTIONS
1. What is the Product? Explain different concept of a
product.
2. Discuss the possible pricing policies for the product
of a new manufacturing company. What factors will
you take into account in formulating a suitable price
strategy?
3. What is the use of discriminating pricing?
4. Explain the concept of Product Mix decision in
marketing with examples.
5. Explain the New Product development stages with
examples.
IMPORTANT QUESTIONS
6. Describe the pricing strategy that can be followed by
Functional organisation.
7. What are the marketing problems and opportunities
of a product management structure for an insurance
company?
8. Why a new product fails? How to solve the problems
of new products failure?
9. Briefly explain the different stages of Product Life
Cycle (PLC).
10. What is the Penetration pricing?
IMPORTANT QUESTIONS
11. What is meant by product positioning? How it can
be done?
12. Explain the factors contributing to the success and
failure of the product.
13. Analyse the reason for the Increasing number of
discount sales in the country.
14. When should be company in take a price change?
15. Discuss the Marketing Strategy in the various
stages of PLC.
IMPORTANT QUESTIONS
16. What are the functions performed by market
intermediaries?
17. What is Promotion Mix? Describe its elements
with suitable examples.
18. Differentiate Advertising with Public Sector.
19. Analyse the importance of major decisions in Sales
Promotion.
20. Write a short note on Franchisee.
21. Differentiate Advertising with Sales Promotion.
22. Describe different types of Promotional pricing.
IMPORTANT QUESTIONS
23. Explain the factors that influence promotion mix of a
company.
24. Explain the role of retailers and wholesalers in the
distribution channels.
25. How can Advertiser overcome the problems of literacy in
their markets?
26. Explain the reason for channel conflicts in marketing.
27. Give on appropriate promotion mix for a departmental store.
28. Explain the different modes of the marketing mix.
29. Discuss the various steps involved in Developing programme.
30.Discuss the various steps involved in Advertising programme.
INDUSTRIAL MARKETING
 is also treated as Business-to-Business Marketing,
or Business Marketing, or Organizational Marketing.
 Industrial marketing/business marketing is to
market the products and services to business
organizations: manufacturing companies, government
undertakings, private sector organisations, educational
institutions, hospitals, distributors, and dealers.
 The business organizations, buy products and
services to satisfy many objectives like production of
goods and services, making profits, reducing costs,
and, so on.
Characteristics of Industrial Marketing
1. Market Characteristics
a. Size of the Market
b. Geographical Concentration
2. Product Characteristics
3. Buyer Behaviour
4. Channel Characteristics
5. Promotional Characteristics
6. Price Characteristics
TYPES OF INDUSTRIAL CUSTOMERS
1. Commercial Enterprises
2. Government Customers
3. Institutional Customers
4. Cooperative Customers
SERVICES MARKETING
 regardless of the “product”, there is a services
component to the offerings of all firms
 in some cases, a service is the principal purpose of
the transaction, as in the rental of a car, a haircut, or
legal services -- we refer to this as the core service
 in others, service is performed in support of the
sale of a tangible product -- these are referred to as
supplementary services
SERVICE MARKETING
 Service is any act or performance that one party
can offer to another that is essentially intangible and
does not result in any ownership of anything.
- PHILIP KOTLER
The Goods-Services
Continuum

Canned Ready- Auto- Draperies, Rest- Repairs: Air Insurance,

foods made mobiles Carpets aurant auto, house, travel Consulting,
clothes meals landscaping Teaching

MOSTLY GOODS MOSTLY SERVICES

CHARACTERISTICS OF SERVICE MARKETING

Intangibility

Inseparability
Service
Marketing
Variability

Perishability
1. Intangibility
 services are intangibility cannot be seen, tasted,
felt, heard or smelled before purchase.

2. Inseparability
 difficult to separate services from the service
provider; mainly direct sales; staff are essential to the
delivery of quality services
3. Variability
 virtually every service is different; very difficult to
standardize quality.
 it is otherwise called heterogeneity.

4. Perishability
 those not sold can not be stored
Some Services Firms

 Rural marketing

Rural marketing
 The companies to create an awareness of their
goods and services, vast segments in the rural sectors
in Asian Countries, still remain untapped.
 Lifebuoy was one of the first soaps with rural areas
as the key target market.
 The rural market is a fast growing one and has a
huge population with a great level of disposable
income.
 Sometimes, existing products might have to be
modified to suit these markets too accordingly.
INDIAN RURAL MARKET
 The urban metro products and marketing products
can be implemented in rural markets with some or no
change.
 The rural marketing required the separate skills
and techniques from its urban counter part.
 Low priced products can be more successful in
rural markets because the low purchasing, purchasing
powers in rural markets.
 Rural consumers have mostly homogeneous group
with similar needs, economic conditions and
problems.
OPPORTUNITIES IN RURAL MARKETS
1. Untapped Potential
2. Market Size and Potential
3. Current Consumption
4. Increasing Income
5. Accessibility of Markets
6. Competition in Urban Areas
RURAL CONSUMER BEHAVIOUR
1. Social and Behavioral Influences
2. Cultural and social Practices
3. Influence of Perception
4. Attitude to Quality and Price
5. Brand Preference and Loyalty
INTERNATIONAL MARKETING
 International business is the activity of engaging in
business operations across national boundaries/borders.
 International business is the field of study that
concerns itself with the development, strategy and
management of multinational enterprises in the global
context of complex and dynamic business environments.
 Actually the complete gamut of the whole context
and interest in international business lies in
multinational enterprises, culture and communications-
as also the special skills that are required to operate in
global business environment.
REASONS FOR GLOBALIZATION
1. Bulk Sales
2. Relative Profitability
3. Insufficiency of Domestic Demand
4. Reducing Business Risks
5. Legal Restrictions for Internal Growth
6. Obtaining Imported Inputs
7. Social Responsibility
8. Increased Productivity
9. Technological Improvement
NON-PROFIT MARKETING
 It is the marketing of a product or service in which
the offer itself is not intended to make a monetary
profit for the marketers.
CLASSIFICATION of NON-PROFIT
MARKETING
1. Classification by Degree of Tangibility
2. Classification by Organization Structure
3. Classification by Objectives of the Organization
1. Classification by Degree of Tangibility

2. Classification by Organization Structure

3. Classification by Objectives of the
Organization

MARKETING PROCESS
• Formulation of marketing strategy
• Marketing planning
• Marketing programming, allocating and budgeting
• Marketing implementation
• Monitoring and auditing
• Analysis and research
• Schematic of marketing process
 Strategy
Formulation
Marketing
Planning

Programming, Allocating
& Budgeting

Implementation
Analysis &
Research

Monitoring &
Auditing
The Environment for Marketing Decisions

Demographical
Environment Cultural
Environment
Competitive
Environment

Economic Internal
Environment Organizatio
nal Social
processes Environment

Legal
Environment Technological
Environment
MARKET ENTRY DECISIONS
 If we are in Business

Should
we
Compete
?

In what
Product- If yes
Market
Should we
compete?

How
should
we
compete
?
OBJECTIVES OF PRICING DECISIONS
1. Ensuring Target returns
2. Market share
3. Preventing Competition
4. Maximizing the Profit
5. Ability of the customers
6. Stabilizing the price
 External
External Factors
Factors
Pricing
Pricing
Decisions
Decisions
Internal
Internal Factors
Factors
Factors to Consider when Setting Prices
Factors to Consider When Setting Price

Internal • Market positioning

Factors influences pricing strategy
• Other pricing objectives:
• Marketing – Survival
objectives – Current profit maximization
– Market share leadership
• Marketing mix – Product quality leadership
strategies • Not-for-profit objectives:
– Partial or full cost recovery
• Costs – Social pricing
• Organizational
considerations
Factors to Consider When Setting Price

Internal
Factors • Pricing must be carefully
coordinated with the other
marketing mix elements
• Marketing
• Target costing is often used
objectives to support product
• Marketing mix positioning strategies
based on price
strategies • Nonprice positioning can
• Costs also be used
• Organizational
Factors to Consider When Setting Price

Internal
Factors • Types of costs:
– Variable
– Fixed
• Marketing – Total costs
objectives • How costs vary at different
• Marketing mix production levels will
influence price setting
strategies • Experience (learning) curve
• Costs effects on price
• Organizational
Factors to Consider When Setting Price

Internal
Factors • Who sets the price?
– Small companies: CEO or top
management
• Marketing – Large companies: Divisional
objectives or product line managers
• Price negotiation is
• Marketing mix common in industrial
strategies settings
• Costs • Some industries have
pricing departments
• Organizational
considerations
Factors to Consider When Setting Price

External
• Types of markets
Factors – Pure competition
– Monopolistic competition
• Nature of market – Oligopolistic competition
– Pure monopoly
and demand
• Consumer perceptions of
• Competitors’ costs, price and value
prices, and offers • Price-demand relationship
– Demand curve
• Other – Price elasticity of demand
environmental
elements
Factors to Consider When Setting Price

External • Consider competitors’ costs,

Factors prices, and possible reactions
when developing a pricing
strategy
• Nature of market • Pricing strategy influences the
nature of competition
and demand – Low-price low-margin strategies
inhibit competition
• Competitors’ costs, – High-price high-margin
prices, and offers strategies attract competition
• Benchmarking costs against the
• Other competition is recommended
environmental
Factors to Consider When Setting Price

External
Factors
• Economic conditions
• Nature of market – Affect production costs
and demand – Affect buyer perceptions of
price and value
• Competitors’ costs, • Government may restrict or
prices, and offers limit pricing options
• Other
environmental
GENERAL PRICING APPROACHES
1. Cost-Based Pricing
2. Value-Based Pricing (Buyer-based approach)
3. Competition-Based Pricing (going-rate and
sealed-bid pricing)
1. Cost-Based Pricing
 Cost-plus pricing – Adding a standard markup to
the cost of the product.
 Break-even Analysis and Target Profit Pricing –
Setting price to break even on the costs of making and
marketing a product; or setting price to make a target
profit.
2. Value-Based Pricing (Buyer-based approach)
 Value-based pricing – Setting price based on
buyers’ perceptions of value rather than on the
seller’s cost.
 Value pricing – Offering just the right combination
of quality and good service at a fair price.
3. Competition-Based Pricing (going-rate and
sealed-bid pricing)
 Competition-based pricing – Setting prices based
on the prices that competitors charge for similar
products.
 Physical Distribution
Those activities that involve the movement of products
through marketing channels from manufacturer to
customer, including:
• Transportation: shipping goods to customers by rail, air, truck,
water, and pipeline
• Warehousing: the receiving, storing, and shipping activities
involved in the physical distribution of goods
• Order Processing: the receipt and preparation of an order for
shipment
• Material Handling: the physical handling of products during
transportation and warehousing
Basic Channels of Distribution
Manufacturers/products

Agents/brokers

Wholesalers/distributors

Retailers Retailers

Consumers and organizational end users


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