Marketing Management

By: Megha Gaur

Assistant Professor
MBA Department
 syllabus
Unit I
Introduction to Marketing: Meaning and Scope of Marketing; Marketing
Philosophies; Marketing Management Process-An Overview; Concept of
Marketing Mix; Understanding Marketing Environment; Consumer and
Organization Buyer Behavior; Demand Forecasting; MARKET
Segmentation, Targeting and Positioning.
Unit II
Product and Pricing Decisions: Product Concept; Types of Products;
Product Levels; Major Product Decisions; Brand Management; Product Life
Cycle, New Product Development Process; Pricing Decisions:
Determinants of Price; Pricing Process, Policies and Strategies.
Unit III
Promotion and Distribution Decisions: Communication Process; Promotion
Tools-Advertising, Personal Selling, Publicity and Sales Promotion;
Emerging Channels of Distribution, Distribution Channel Decisions-Types
and Functions of Intermediaries; Channel Design; Selection and
Management of Intermediaries.
Unit IV
Emerging Trends and Issues in Marketing: Consumerism, Rural Marketing,
Social Marketing; Direct Marketing; Online Marketing, Green Marketing.
Communication Process
 Marketing communications is essentially a part of the marketing mix.
The marketing mix defines the 4Ps of marketing and Promotion is what
marketing communications is all about.
 It is the message an organization is going to convey to its market.
Marketing communications process consist of integrated activities in
which the targeted audience is identified and a well coordinated
promotional program is prepared to generate the desired response
from the audience. 
 Marketing communication aims at conveying a firm’s message as
effectively and accurately as possible.
 The basic process of marketing communication, involves the following
constituents:
 1) Sender:
 It refers to the marketing firm which is conveying the message.
 2) Encoding:
 Before a message can be sent, it has to be encoded. Putting thoughts,
ideas, or information into a symbolic form is termed as encoding.
Encoding ensures the correct interpretation of message by the
receiver, who is often the ultimate customer.
Communication Process
 3) Message:
 A message may be verbal or non-verbal, oral, written, or symbolic. A
message contains all the information or meaning that the sender aims
to convey. A message is put into a transmittable form depending upon
the channels of communication.
 4) Medium:
 The channel used to convey the encoded message to the
intended receiver is termed as medium. The medium can be
categorized in the following manner:
 i) Personal:
 It involves direct interpersonal (face-to-face) contact with the target
group.
 ii) Non-Personal:
 These are channels which convey message without any interpersonal
contact between the sender and the receiver.
 5) Decoding:
 It is the process of transforming the sender’s message back into
thought. Decoding is highly influenced by the self-reference criteria
(SRC), which is unintended reference to one’s own culture.
Communication Process
 6) Receiver:
 It is the target audience or customers who receive the message by way
of reading, hearing, or seeing. A number of factors influence how the
message is received. These include the clarity of message, the interest
generated, the translation, the sound of words, and the visuals used in
the message.
 7) Noise:
 The unplanned distortions or interference of die message is termed as
‘noise.’ A message is subjected to a variety of external factors that
distort or interfere, its reception.
 8) Feedback:
 In order to assess the effectiveness of the marketing communication
process, feedback from the customers is crucial. The time needed to
assess the communication impact depends upon the type of promotion
used. For instance, an immediate feedback can be obtained by
personal selling, whereas it takes much longer time to assess the
communication effectiveness in case of advertisements.
Communication Process
 There are certain steps that should be involved in the effective
marketing communication process. The marketing and promotional
activities should focus on these steps in order to attract a huge portion
of long run customers.

 Following are the steps that make communication process effective.

 Identification of the Target audience

 Determination of the communication objectives
 Designing of Message
 Message Content
 Message Structure & Format
 Choosing Media
 Collecting Feedback
Promotion Tools-
Advertising
 Advertising is defined as any form of paid communication or
promotion for product, service and idea. Advertisement is not only
used by companies but in many cases by museum, government and
charitable organizations. However, the treatment meted out to
advertisement defers from an organization to an organization.
 Advertising development involves a decision across five M’s Mission,
Money, Message, Media and Measurement.
 Mission looks at setting objectives for advertising. The objectives
could be to inform, persuade, remind or reinforce. Objective has to
follow the marketing strategy set by the company.
 Money or budget decision for advertising should look at stage of
product life cycle, market share and consumer base, competition,
advertising frequency and product substitutability.
 Message’s development further is divided into four steps, message
generation, message evaluation and selection, message execution,
and social responsibility review.
Promotion Tools-
Advertising
 Once the message is decided the next step is finalizing the media
for delivering the message. The choice depends on reach of media,
frequency of transmission and potential impact on customer.
 Based on this, choice of media types are made from newspaper,
television, direct mail, radio, magazine and the internet. After which
timing of broadcast of the message is essential as to grab attention
of the target audience.
 Checking on the effectiveness of communication is essential to
company’s strategy. There are two types of research communication
effect research and sales effect research.
Promotion Tools-Personal Selling
 Personal selling is promotional presentation by the firm’s sales
force conducted on a person-to-person basis with the buyer for the
purpose of making sales and building customer relationships.
 Personal selling is the oldest form of promotion. This direct form of
promotion may be conducted face-to-face, over the telephone,
through videoconferencing, or through interactive computer links
between the buyer and the seller.
 This direct contact with the customer gives the salesperson the
opportunity to be flexible and modify the sales message to coincide
with the customer’s needs.
 Generally, a personal sales effort is more important when a firm
engages in a push strategy, in which the goal is to push the product
through the distribution channel so that it is available to consumers.
 Personal selling also is likely to be crucial in B2B contexts when
direct interaction with upper-level management is required to
secure an important sale—and often when intense price
negotiations occur before the sale is made.
Promotion Tools-Personal Selling
 In addition, inexperienced buyers may need the hands-on
assistance that a professional salesperson can provide.
 Firms selling products that consumers buy infrequently, such as
computers, college educations etc often rely heavily on personal
selling, as do firms selling complex or very expensive products that
need a salesperson to explain, justify, and sell them.
 Personal selling is one of the oldest forms of promotion, but its
image has been tarnished by smooth-talking pitchmen who have
sometimes said anything to make a sale. In more recent years,
personal selling has begun to redeem itself as a profession and has
moved from a transactional, hard-sell technique to a relationship
marketing approach.
  Transactional Marketing
 The hard sell is a high-pressure process. Hard-sell tactics are a form
of transactional selling, a form of personal selling that focuses on
making an immediate sale with little or no attempt to develop a
relationship with the customer. As customers, the hard sell makes
us feel manipulated and resentful. This technique also contributes
to the negative image many of us have of obnoxious salespeople.
Promotion Tools-Personal Selling
 Relationship Marketing
 Today’s professional salesperson is more likely to
practice relationship selling, a form of personal selling in which
the salesperson seeks to develop a mutually satisfying relationship
with the consumer. Relationship selling involves winning, keeping,
and developing customers. Winning a customer means converting
an interested prospect into someone who is convinced that the
product holds value for him or her. 
 Keeping a customer means ensuring that the customer gets what he
or she paid for. 
 Developing a customer means satisfying the customer so that he or
she will be counted on to provide future business.
 The professional salesperson who genuinely adheres to the
principles of relationship marketing is a relationship builder and a
customer problem solver.
Promotion Tools- Publicity and Sales
Promotion
 Publicity is unpaid communication about an organization that appears
in the mass media. Public relations may consist of writing press
releases, holding special events, conducting and publishing consumer
surveys about a product or the company, and efforts to put a positive
spin on negative company news.
 Unlike sales promotions, public relations activities do not usually seek
a short-term increase in sales. Instead, they try to craft a long-term
positive image for the product or the organization.
 Compared with personal selling, advertising, and sales promotions,
expenditures for public relations are usually low in most organizations.
 Since companies do not pay for publicity, they have less control over
the publication of good or bad company news.
 But this often means that consumers find this type of news source
more believable than if the information were disseminated directly by
the company.
 Marketing and Non-marketing Public Relations:
  The basic rule of public relations is to do something good and then
talk about it. Public relations is crucial to an organization’s ability to
establish and maintain a favorable image.
Promotion Tools- Publicity and Sales
Promotion
 Non-marketing public relations refer to a company’s messages
about general management issues.
 When a company makes a decision that affects any of its public, input
from public relations specialists can help to smooth its dealings with
those public.
 A company, for example, that decides to close a plant would need
advice on how to deal with the local community. Other examples
include a company’s attempts to gain favorable public opinion during a
long strike.
  Marketing public relations refer to narrowly focused public
relations activities that directly support marketing goals.
 Marketing public relations involves an organization’s relationships with
consumers or other groups about marketing concerns and can be
either proactive or reactive.
 With proactive marketing public relations, the marketer takes the
initiative and seeks out opportunities for promoting the firm’s
products, often including distribution of press releases and feature
articles.  
 Reactive marketing public relations responds to an external situation
Promotion Tools- Publicity and Sales
Promotion
 Sales Promotion is the use of short-term incentives to encourage the
purchase or sale of a product. Sales promotions are programs such as
contests, coupons, displays, trade shows, samples, premiums, product
demonstrations, or other incentives that marketers design to build
interest in or encourage purchase of a product during a specified time
period.
 Sales promotions are intended to stimulate immediate action, often in
the form of a purchase, rather than to build long-term loyalty.  Whereas
advertising and personal selling offer reasons to buy a product, sales
promotion offers reasons to buy now.
 Sales promotion objectives differ widely:
  Increase Short-Term Sales (consumer promotion)
 Build Long-Term Market Share (consumer promotion)
 Encourage Retailers to Carry New Items and Additional Inventory
(trade promotion)
 Encourage Retailers to Advertise and Provide More Shelf Space (trade
promotion)
 Encourage Retailers to Buy Ahead (trade promotion)
 Increase Sales Force Support (sales force promotion)
Emerging Channels of Distribution
 Our industry is one of constant change.  Several marketing channels
are used to distribute products from the primary producers to the
ultimate users.
 1. Direct Channel:
 No middlemen are involved. Company sells its products directly to
consumers. It is, as its name suggests, a direct mode of distribution.
 There are four types of direct channel:
 i. Distribution from factory gate
 ii. Distribution via showroom and retail outlets
 iii. Distribution by salesmen
 iv. Online marketing/cyber marketing
 2. Indirect Channel:
 Here, middlemen, such as wholesalers, retailers, agents, etc., are
involved in distribution of products.
 There are four types of indirect channel:
 i. One-Level Channel:
 Company – retailers – consumers
 ii. Two-Level Channel:
 Company – wholesalers and retailers – consumers
Emerging Channels of Distribution
 iii. Three-Level Channel:
 Company – agents, wholesalers, and retailers – consumers
 iv. Multilevel Channel:
 Company – number of middlemen – consumers
 3. Network Marketing:
 Here, products are distributed via members. Members are both
sellers and users. They buy directly from the company. They can
earn commission on their own consumption as well as consumption
of other members working under them. A network is prepared to
distribute products in the market.
Distribution Channel Decisions
 As consumers, we generally take for granted the role of marketing
intermediaries or channel members.
 If we want a six-pack of soda or a box of detergent, we can buy it at
a supermarket, a convenience store, or even a drugstore.
Manufacturers understand the value and importance of these
intermediaries.
 One of the marketer's most important marketing decisions involves
the way it makes its products and services available for purchase.
 A firm can have an excellent product at a great price, but it will be of
little value unless it is available where the customer wants it, when
the customer wants it, and with the proper support and service. 
 Marketing channels, the place element of the marketing mix, are
"sets of interdependent organizations involved in the process of
making a product or service available for use or consumption.“
 Channel decisions involve selecting, managing, and motivating
intermediaries such as wholesalers, distributors, brokers, and
retailers that help a firm make a product or service available to
customers. These intermediaries, sometimes called resellers, are
critical to the success of a company's marketing program.
Distribution Channel Decisions
 A company can choose not to use any channel intermediaries but,
rather, to sell to its customers through direct channels. This type of
channel arrangement is sometimes used in the consumer market by
firms using direct-selling programs, such as Avon, Tupperware or
firms that use direct-response advertising or telemarketing to sell
their products.
 Direct channels are also frequently used by manufacturers of
industrial products and services, which are often selling expensive
and complex products that require extensive negotiations and sales
efforts, as well as service and follow-up calls after the sale.
 Most consumer-product companies distribute through indirect
channels, usually using a network of wholesalers (institutions that
sell to other resellers) and/or retailers (which sell primarily to the
final consumer).
Decisions-Types and Functions of
Intermediaries
 Marketing intermediaries, also known as middlemen or distribution
intermediaries, are an important part of the product distribution
channel.
 Intermediaries are individuals or businesses that make it possible for
the product to make it from the manufacturer to the end user,
essentially facilitating the sales process.
 According to Business Dictionary, the four basic types of marketing
intermediaries are agents, wholesalers, distributors and retailers.

 Agents
 The agent as a marketing intermediary is an independent individual
or company whose main function is to act as the primary selling arm
of the producer and represent the producer to users. Agents take
possession of products but do not actually own them. Agents usually
make profits from commissions or fees paid for the services they
provide to the producer and users.
Decisions-Types and Functions of
Intermediaries
 Wholesalers
 Wholesalers are independently owned firms that take title to the
merchandise they handle. In other words, the wholesalers own the
products they sell. Wholesalers purchase product in bulk and store it
until they can resell it. Wholesalers generally sell the products they
have purchased to other intermediaries, usually retailers, for a profit.
 Distributors
 Distributors are similar to wholesalers, but with one key difference.
Wholesalers will carry a variety of competing products, for instance
Pepsi and Coke products, whereas distributors only carry
complementary product lines, either Pepsi or Coke products.
Distributors usually maintain close relationships with their suppliers
and customers. Distributors will take title to products and store them
until they are sold.
 Retailers
 A retailer takes title to, or purchases, products from other market
intermediaries. Retailers can be independently owned and operated,
like small “mom and pop” stores, or they can be part of a large
chain, like Walmart. The retailer will sell the products it has
Decisions-Types and Functions of
Intermediaries
 Functions of a Distribution Channel 
 The primary function of a distribution channel is to bridge the gap
between production and consumption.
 A close study of the market is extremely essential. A sound
marketing plan depends upon thorough market study.
 The distribution channel is also responsible for promoting the
product. Awareness regarding products and other offers should be
created among the consumers.
 Creating contacts or prospective buyers and maintaining liaison with
existing ones.
 Understanding the customer's needs and adjusting the offer
accordingly.
 Negotiate price and other offers related to the product as per the
customer demand.
 Storage and distribution of goods
 Catering to the financial requirements for the smooth working of the
distribution chain.
 Risk taking for example by stock holding
Channel Design
 Designing a marketing channel system involves analyzing customer
needs, establishing channel objectives, identifying major channel
alternatives, and evaluating major channel alternatives.
 In designing the marketing channel, the marketer must understand
this service output levels desired by target customers. Channels
produce five service outputs:
 (a) Lot size : The number of units the channels permits typical
customer to purchase on one occasion. 
 (b) Waiting and delivery time : The average time customers of that
channel wait for receipt of the goods. Customers increasingly prefer
faster and faster delivery channels.
 (c) Spatial convenience : The degree to which the marketing channel
makes it easy for customers to purchase the product.
 (d) Product variety : The assortment breadth provided by the
marketing channel. Normally, customers prefer a greater assortment
because more choices increase the chance of finding what they
need.
 (e) Service backup : the add-on services (credit, delivery,
installation, repairs) provided by the channel. The greater the
Channel Design
 Establishing Objectives and Constraints:
 Channel objectives should be stated in terms of targeted service
output levels.
 Under competitive conditions, channel institutions should arrange
their functional tasks to minimize total channel costs and still
provide desired levels of service outputs.
 Usually, planners can identify several market segments that want
different service levels. Effective planning requires determining
which segments to serve and the best channels for each.
 Channel objectives vary with product characteristics.
 Perishable products require more direct marketing.
 Bulky products, such as building materials, require channels that
minimize the shipping distance and the amount of handling.
 Nonstandard products, such as custom-built machinery and
specialized business forms, are sold directly by company sales
representatives.
 Products requiring installation or maintenance services, such as
heating and cooling systems, are usually sold and maintained by the
company or by franchised dealers. High-unit-value products such as
Channel Design
 Establishing Objectives and Constraints:
 Channel objectives should be stated in terms of targeted service
output levels.
 Under competitive conditions, channel institutions should arrange
their functional tasks to minimize total channel costs and still
provide desired levels of service outputs.
 Usually, planners can identify several market segments that want
different service levels. Effective planning requires determining
which segments to serve and the best channels for each.
 Channel objectives vary with product characteristics.
 Perishable products require more direct marketing.
 Bulky products, such as building materials, require channels that
minimize the shipping distance and the amount of handling.
 Nonstandard products, such as custom-built machinery and
specialized business forms, are sold directly by company sales
representatives.
 Products requiring installation or maintenance services, such as
heating and cooling systems, are usually sold and maintained by the
company or by franchised dealers. High-unit-value products such as
Selection and Management of
Intermediaries
 Identifying Major Channel Alternatives:
 Companies can choose from a wide variety of channels for reaching
customers from sales forces to agents, distributors, dealers, direct
mail, telemarketing, and the internet.
 Each channel has unique strengths as well as weaknesses. Sales
forces can handle complex products and transactions, but they are
expensive.
 The internet is much less expensive, but it cannot handle complex
product. Distributors can create sales, but the company loses direct
contact with customers.
 A channel alternative is described by three elements:
 the types of available business intermediaries,
 the number of intermediaries needed, and
 the terms and responsibilities of each channel member.
Selection and Management of
Intermediaries
 Evaluating the Major Channel Alternatives
 Each alternative needs to be evaluated against three criteria.
 Economic Criteria
• The first step is to determine whether a company sales force or a
sales agency will produce more sales.
• The next step is to estimate the costs of selling different volumes
through each channel.
• The final step is comparing sales & costs.
 Each channel will produce a different level of sales & costs.
 Control Criteria
The agents may concentrate on other customers’ products or they
may lack the skills to handle our products.
 Adaptive Criteria
The channel members must make some degree of commitment to
each other for a specified period of time.