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Marketing

Marketing may be defined as an economic process by which goods and services are exchanged and the values is determined in terms of money prices. The American Marketing Association has defined Marketing As ³ the performance of business activities that direct the flow of goods and services through producers to consumers or users. Marketing is the business process by which products are match with the markets and through which transfers of ownership are effected.

Marketing is a social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Marketing concepts
The Marketing concepts may be defined as ³ a management orientation that holds that the key task of the organization is to determine the needs, wants, and values of a Targeted market and to adapt the organization to delivering the desired satisfactions more effectively and efficiently than its competitors. Marketing concept is a philosophy, an attitude, or a course of business thinking. It holds that satisfaction of the wants of the consumer is the economic and social justification of a company¶s existence. Marketing concepts is based upon three fundamental beliefs. 1. All company¶s planning , policies, and operations should be customer¶s oriented. 2. Profitable sales volume should be the goal of the Company. 3. All Marketing activities should be organizationally integrated and co ± ordinated.

Core Marketing concepts
Markets

Exchange, Transactions, and relationships

NEEDS , WANTS, AND DEMANDS

Value and satisfaction

Marketing offers (product, services, experience)

for example a Man needs food but wants to have chicken Mc grill burger with soft drink.Human wants that are backed by buying power .Needs. Consumer satisfactions:. People demand products with benefits that add up to the most value and satisfaction.It is depends upon how well the purchase product µs performance lives up to the consumer¶s expectations. Market offer:.It is the difference between the values the consumer gain from owning and using a product and the cost of obtaining the product. . wants. The form taken by a human needs as shaped by a culture and individual personality.Some combinations of product s . services.The act of obtaining a desired object from someone by offering something in return. information or experiences offered to a market to satisfy a need or want. Consumer value:. Market :. Exchange :. Demands Need :Want:Human needs are states of felt deprivation.The set of all actual and potential buyers of a product or service. Demands:.

sleep etc. recognition) Belongingness and Love Needs ( Family. Air. stability.) . shelter . etc. status . Affection .Maslow hierarchy of Human needs Need for self-actualization (Personal growth & fulfillment Level of income Esteem Needs (Achievement . Relationship etc. Food. dignity. drink . protection.) Biological and physiological Needs ( Basic life needs.) Safety Needs ( Security.

Elements of a modern marketing system Company (marketer) Marketing intermediaries (Whole-sellers . Retailers ) Rivals Manufacturer Exporter End users Environment .

and Growing customers through creating. . keeping. directing and controlling the Activities related to the marketing of goods and services to satisfy the customer¶s needs. Marketing Management deals with planning. organizing. This involves getting . delivering and communicating superior customer value.Marketing Managements Marketing Management as the art and science of choosing target markets and building profitable relationship with them.

Marketing functions Functions of R&D 1. Promotion (advertisement. & branding. Financing 4. Buying and Assembling. publicity). 4. 1. Marketing research 2. 2. Risk-taking . Pricing 3. Selling 3. Functions of Physical treatment Standardization. 2. grading. Product planning and development Functions of exchange 1. 2. Packaging Storing Transportation Miscellaneous Functions 1.

Starting Point Existing products Means Ends Factory through sale Existing products Selling and promotion Profits The Selling Point Market Customer needs Integrated Marketing Profits through customer satisfaction The Marketing Concept Selling and Marketing concepts .

Marketing Mix represents a blending of decisions in four areas- 1.Marketing Mix Marketing Mix is the term used to describe the combination of the four inputs which Constitute the core of a company¶s marketing system. Price. Every business firm has to determine its Marketing Mix for the satisfaction of needs of the customers. Product Price Place Promotion These four elements of Marketing mix are inter-related in such a way that decisions taken in one area usually affect actions in others. 4. . It is a dynamic state of affairs of the marketing system of a business firm. promotional activities and the distribution system. the Marketing Mix will also be changed. It concentrates on how to satisfy the needs of the customers. the Product. 2. If the needs of the consumers change.structure. 3.

Component of Marketing Mix Customer .

packing. and other features.Product :In the production of a product (or service) the marketing manager should reckon the fact that his product indeed satisfies a need of the society. . colors. It should also emphasis on its proper Branding. and producing the right type of products and services to be marketed by the business firm.          Quality of the product Size of the product Design of the product Volume of the production Product range Branding Packaging Warranties and after sale services Product testing etc. In other words production planning and development involves decision about . Product component of Marketing Mix involves planning . developing.

Price:- Another important component of Marketing Mix is the pricing of the product . . Pricing decisions and policies have direct influence on the sales volume and the profit of the firm. Actual cost of the product Potential competition Government rules and regulations. he decide the price in such a way that the firm is able to sell its products successfully. Pricing also involves establishing policies regarding credit and Discount. A marketing manager has to do a lot of exercise to determine the price. Below are other variables which considered while pricing a product ( or Service)     Demand for the product. Therefore right price can be determined through pricing research and by adopting test marketing techniques.

role of personal selling by the salesman. and other sales techniques. . magazines. procedure of giving free articles for purchase of the particular commodities. and consist of direct person to person interaction between salesman and consumer.Promotion:- Promotion deals with informing and persuading the consumer regarding the firm¶s product It involves decisions about advertising . Advertising is a tool marketing manager uses to communicate a message to consumers through newspaper. televisions etc. Personal selling is another means of communicating to the consumer . conducting contest.

. It is management¶s responsibility and to select and manage trade channels through which the product will reach the right customer at the right time and to develop a physical distribution system for handling and transporting the products through these channels.Physical distribution:This aspect of Marketing Mix includes decisions about wholesale and retail channels of distribution and the place at which the products should be displayed and made available to the consumers.

what philosophy should guide these marketing efforts ? There are five alternative concepts under which organizations conduct their marketing activities. (a) when the demand of the product is higher than its supply. It is useful philosophy in two type of situations. (b) when the products cost is too higher and improved productivity is needed to bring it down.Marketing philosophies:As marketing management carrying out task to build profitable relationship with target consumers.  The production  The product  The selling  The marketing  The social marketing The production concepts:The production concept holds that consumers will favor products that are available and highly affordable. Thus the management should focus on improving production and distribution efficiency . (Henry Ford ) .

Most firms practice the selling concept when they face over capacity .The product concept:The product concept holds that consumer will favor products that offer the most in quality . This concept is typically practiced with unsought goods and services like insurance etc. Selling concepts:The selling concepts which hold that consumers will not buy enough of the firm¶s product unless it undertakes a large ±scale selling and promotion efforts. and interest of the target market and deliver the desired satisfaction more effectively and efficiently than do competitors in a way that maintains or improves the consumer¶s and society¶s well being. . wants. their aim is to sell what they make rather than make what market wants. performance and features that the organization should therefore devote its energy to make continuous product improvements. The social Marketing concepts :The social marketing concepts holds that the organization should determine the needs .

The company identifies different ways to segment the market and develop profiles of the resulting marketing segments. rather try to compete in an entire market. sometimes against superior competitors . too widely scattered .Market segmentation As a business firm can not appeal to all the buyers in the market. . or behavior who might require separate products or marketing mix.distinctive and desirable place relative to competing products in the mind of the target consumer. Moreover . and too varied in their buying and practices. Market positioning :- Arranging for a product to occupy a clear . characteristics . the companies themselves vary widely in their abilities to serve different segment of the market . each company must identify the parts of the market that it can serve best and most profitably. as buyers are too numerous . Target Marketing :- The process of evaluating each market segment¶s attractiveness and selecting one or more of the market segments to enter. Market segmentation :- Dividing a market into smaller groups of buyers with distinct needs .

Develop a marketing mix for each segment. and positioning Market segmentation 1. . 4.Steps in market segmentation. Select target segments . Identify bases for segmenting the market. 3. Market Positioning 5. Targeting. 6. 2. Target Marketing Develop measure of segment attractiveness . Develop positioning for target segments. Develop segment profiles.

.Segmenting consumer market Followings are the major variables that might be used in segmenting consumer market. states . single. cities. . 12-19. 4. married with child.under 6. Demographic segmentation. 3.. home-makers. 6... 2.... 5. 2.1-2. A company may decide to operate in one or a few geographical areas. $10000-$25000. 20-34. Psychographic segmentation. Dividing the market into groups based on demographic variables such as Age.. Family size«««««. officials. Female. $ 25000-$50000. etc. or neighborhoods. no child... ««. 4. 3-4.professional. Demographic segmentation :1. Geographic segmentation. or to operate in all the areas but pay attention to geographical differences in need and want. unemployed etc. 6-11. Geographic segmentation :Dividing a market into different geographical units such as nations... etc Occupation«««««. 1.. Income «««««««under $ 10000. young married. $50000-100000. regions.Male .. Behavioral segmentation. 5+ Family life cycle «««. 3.«. «««««««.young. Gender.

positive.«««««. gen y . Nationality««««««America. lower-middle. use. 9. secondary. 4. collage. Loyalty status:------none. or personality characteristics. Lifestyle:-----. Occasions . negative.lower-lower. potential user.enthusiastic. Social class:-.catholic. lower ±upper. 3. attitude.. sr. Behavioral segmentation:Dividing a market into groups based on consumer knowledge. Buddhist. 1. medium. UK.---------Regular. User status:---------non-user. or response to A product. Education :-««««« primary . Australia. Attitude towards product:.compulsive. Hindu. 2. User rates:-----------light user.7. People in the same demographic group can have very different psychographic make-up. Japan. absolute. medium user. 1. Personality:--. Europe. ambitious. 10. strivers. Lifestyle. heavy user. Generation:-«««««.Gen x. 3.Achievers. indifferent. middle-upper. 2. . 8. strong. Psychographic segmentation:Dividing a market into different groups based on social class. protestant. special occasion. Religion :. secondary. 5. ex-user. Muslim . regular user.. strugglers. upper -Upper.

UCB . Pepsi. Coke. Mercedes-Benz target the worlds well to do. Adidas are the few companies that actively target world teens. Nike. For example . .Inter-market segmentation :Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries. MTV targets the teenagers.

Existence of actual or potential substitute products.Target Marketing Market segmentation reveals the firm¶s market segment opportunities. strong buyers power ( strong bargaining power. ) . ( Rivals ). Segment structural attractiveness :The company also needs to examine major structural factors that affect long run segment attractiveness. Company¶s objectives and resources. 2. 1. growth rates. It will be interesting in segment that have the right size and growth characteristics. and expected Profitability for various segments. 3. For example a segment is less attractive if it is already contain many strong and aggressive competitors. Now firm has to evaluate the various segments and decide how many and which ones to target. Segment structural attractiveness. Segment size and growth :The company must first collect and analyze data on current segment sale . Segment size and growth. a firm must look at three factors.in evaluating different marketing segments. Evaluating marketing segments.

the company¶ Must consider its own objectives and resources in relation to that segment. A Target market consist of a set of buyers who share common needs or characteristics that company decide to serve. Selecting target market segments:After evaluating different market segments . the company must now decide which and how many segments it will target. Target marketing strategies Undifferentiated (Mass Marketing) Differentiated ( segmented market) Concentrated ( niche ) marketing Micro marketing ( Local or individual marketing) Targeting broadly Targeting narrowly .Company·s objective and resources:Even if a segment has the right size and growth and structurally attractive .

and steiner optical captures 80% of the military¶s binocular markets.Undifferentiated (Mass ) marketing:A market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. For example tetra sells 80% of the world¶s tropical fish food. corporate cards. A niche marketing is especially appealing when company resources are limited. Differentiated marketing:A market coverage strategy in which a firm decide to target several market segments and design separate offers for each. Company design a product and a marketing program that will appeal to the large number of buyers. bicycling to baseball. golf. from running. This mass marketing strategy focuses on what is common in the needs of the consumers rather than on what is different. For example Nike offers athletic shoes for a dozen or more different sports . fencing. It relies on mass distribution and mass advertising. or even a black card called the centurion. And American express offers not only its traditional green cards but also gold cards. . Concentrated ( niche) marketing :A marketing.coverage strategy in which a firm goes after a large share of one or a few segments or niches.

niches are smaller and may attract only one or few competitors. company achieves a strong position because of its greater knowledge of consumer needs in the niches it serves and the special reputation it acquires.In niche marketing segments are fairly large and normally attracts several competitors. Companies that rely on one or few segments for all their business if that segments tuned sour. Concentrated marketing can be highly profitable . Micro marketing :The practice of tailoring products and marketing programs to the needs and wants of the specific individuals and local consumer groups ---------include local marketing and individual marketing. . It involves higher than normal risk .

and companies into categories and ³position them in their minds. consumer organize products. To simplify the buying process. Ivory snow is positioned as the gentle detergent for fine washable and baby clothes. A product ¶s position is the way the product is defined by the consumers on important attributes----the place the product occupies in the consumer¶ s minds relative to competing products. For example TIDE is positioned as a powerful. . A product¶s position is the complex set of perceptions. services. and feelings that consumers have for the product compared with competing products. all purpose family detergent . Positioning involves implanting the brand¶s unique benefits and differentiation in customer¶s mind. the company must decide what positions it wants to occupy in those segments. impression.Positioning for competitive advantage After selecting and deciding which segments of the market it will target .

convenient. or careful delivery. Competitive advantages:An advantage over competitors gained by offering consumer greater value. Product differentiation with its services differentiation i. Companies can differentiate their products on such attributes as consistency. or reparability. speedy. Choosing the right competitive advantages:A company has to choose the ones ( differentiations) on which it will build its positioning strategy. 3. . reliability.e. It must decide how many differences to promote and which ones. 2. customer training. Identifying a set of possible competitive advantages upon which to build a position. consulting services. Choosing the right competitive advantages. Thus positioning begins with actually differentiating the company s marketing offer so that it will give more value that competitor s offers do. durability. Selecting an overall positioning strategy. either through lower prices or by providing more benefits that justify higher prices. advising services etc.Choosing a positioning strategy:The positioning consist three steps:1.

buyers can afford to pay for the difference. or the company can offer it in a more distinctive way.competitors do not offer the difference.the difference is communicable and visible to the buyers. Important :. Affordable: . 2. Distinctive:.1. Superior: . Preemptive:. Which differences to promote ? The company must carefully select the ways in which it will distinguish itself from competitors.the differences delivers a highly valued benefit to target buyers.the difference is superior to other ways that consumer might obtain the same benefit . How many differences to promote ? One or two or more. ‡ ‡ ‡ ‡ ‡ ‡ ‡ . Communicable :. Profitable:.competitors cannot easily copy the difference.the company can introduce the difference profitability.

It is the answer to the consumer question ´ why should I buy your brand ? Developing a positioning statement:A statement that summarizes company or brand positioning --.the full mix of benefits upon which the brand is positioned.it takes this form: To ( target segment and need ) our ( brand) is (concept) that ( point of difference) . Thus marketers want to position their brand on the key benefits that they offer relative to competing brands. The full positioning of a brand is called the brand¶s value proposition---.Selecting an overall positioning strategy:Consumers typically choose products and services that give them the greatest value.

etc. size. HOW A Perceptual map is created ? Choose a product or service and identify three companies who manufacture it. Theses qualitative answers are transferred to a chart (called a perceptual map) using a suitable scale and the results are employed in improving the product or in developing a new one. . Next create two questions about how the peanut butter product is positioned compared to its competitors. Analyze your results. Then identify three peanut butter manufacturers.Perceptual Mapping Marketing research technique in which consumerµs views about a product are traced or plotted (mapped) on a chart. and if needed. Ask six people your questions and plot their answers on your perceptual map. you might choose peanut butter as the product you will study. For example. the other two brands of peanut butter. Respondents are asked questions about their experience with the product in terms of Its performance packaging. do you think the product or service is competing head-on or is avoiding competition?). make recommendations about the positioning of your chosen product. draw conclusions (such as. price. . A perceptual map is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands relative to its own and then take marketing actions.

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. may not be perceived as quality to another. and Twix is plotted one low quality low price brand. Belgium chocolates are plotted as high quality and high price. Once completed the perceptual map could help identify where an organization could launch a new brand perhaps at the medium price and quality range. We must remember that perceptual maps are plotted on the basis of some ones perception and what maybe a quality product to one person.When plotting a perceptual map two dimensions are commonly used. Below is a very basic perceptual map. If we plot the UK chocolate market we can identify those brands which are high price and high quality.

or mix of these entities. acquisition. or consumption that might satisfy a want or need. Broadly defined. Core benefit ( product):It is the fundamental dimension of a product as it represents bundle of benefits to its prospective customers ( buyers) . Formal product ( Actual product) 3. products include physical objects. Core product ( Benefit ) 2. organizations. A product has three dimensions or layer. is buying hope and not a set of chemicals and physical attributes for their own sake. use. ideas. which must be distinguished. . A service may be defined as any activity or benefit that one party can offer to another party that is essentially intangible and does not result in the ownership of anything. Augmented product. services .The core product answer the question : ³what is the buyer buying ??µ For example a women buying a lipstick.Product A product may be defined as anything that can be offered to a market for attention. persons places. 1. events. Products includes more than just tangible goods.

But also the whole set of accompanying services like instructions. A product is a physical object have the following attributes:  Features  Style or Design  Level of quality  A brand name  Packaging Augmented products:It is a broader conception of the product . and nuts and bolts for his own sake. free installations. The augmented product of a TV distributor is not only the TV . Actual products . . It represents the totality of the benefits that a consumer may receive or experience in getting the actual product .. and service and maintenance. heater. This dimension of the product is very important for a firm operating in a competitive market. It is what the target market recognizes as the tangible offer (product) . The firm that develops the right augmented products will be able to attract more consumers and survive in the competitive market.it is the larger packaging of a core product .A person buying a washing machine is buying comfort and not a mere collection of drum. The basic job of a marketer is to sell the core benefits. warranty. free home delivery.

Augmented product Actual products Delivery and credit Brand name After sale services Features Quality level warranty Core benefits Design installation Packaging Three level of product .

These lines includes homecare. Liril. For example Hindustan unilever Ltd is offering bath soaps Lifebuoy.Hamam and Moti soaps. P & G typically carries many brands within each line. beauty care. P & G market a fairly wide range of the product mix consisting of 250 brands organized into many product lines. Depth 4. . health care. Width 2. Product mix length:It refers to the total no of items. Product line depth:It refers to the number of versions offered of each product in the line.Product mix A product mix consists of all the product lines and items that a particular seller offer for sale . and food and beverages products. six hand soaps. baby care. Breeze. Consistency Product mix width:It refers to the number of different product lines the company carries. five shampoos etc. For example it sales six laundry detergents. 1. A company¶s product mix has four important dimensions . one company carries within its product lines. Lux. Length 3. Rexona.

or some other way. Lines are less consistent insofar as they perform different functions for the buyer. etc. . These differences may lead to competitive advantage if customers perceive the difference and have a preference for the difference. Product Differentiation:Product differentiation is a marketing strategy in which busnis firms attempt to create and exploit differences between their products and those offered by competitors. distribution channels. sponsoring of events.Consistency of the product mix:It refers to how closely related the various products lines are in end use. P & G µs product lines are consistent insofar as they are consumer products that go through the same distribution channels. public relations. production requirement. A product differentiation strategy requires that a firm be able to effectively communicate with customers through advertising.

Product Differentiation...is creating products so that customers perceive them as different from competing products .

Form creation A manager µs view

Profit

Idea Acceptance

Demand Estimation

(a) Differentiation through Multiple sources  L&T , the engineering firm , recruits engineers with excellent qualification and engineers with excellent qualification and claims superiority in executing projects.  Modi Xerox with its collaboration with Rank Xerox as its differentiation.  Coke and Pepsi differentiated through brand power. (b) Product Differentiation based on ingredients  HUL¶s Close-up based on gel used Glycerine while others use calcium ± carbonate .  Dabur Vatika with herbal ingredients used by woman for hair care -Coconut oil ,Brahmi¶ , Lime and Mehandi etc. © Product Differentiation through Functional values  Videocon computer controlled fridge,450 lts, 6 door with quick freezing corner and Deodorizer at a touch of with quick freezing corner and Deodorizer at a touch of finger .

(d) Product Differentiation through Additional features  Mega Feature ± BPL , Videocon , ONIDA , Philips Large screen features .  Aristocrat suitcases with wheels , a unique convenience to users. (e) Product Differentiation by Packaging  Frooti in Tetra packs.  Le sancy in see thru pack.  Harpic Toilet cleaner with an application friendly nozzle. (f) Product Differentiation by Design  Product attributes (tangible or intangible tangible or intangible) separate your product from others - Kinetic Honda with electronic ignition and do away with kick start routine , automatic gear shifting especially for women.

The main service differentiators are : Ordering ease Delivery Installations Customer Training Maintenance and Repair Miscellaneous Services .(g) Services Differentiation When Physical cannot easily differentiated . the key to competitive success may lie in adding services and improving their quality.

Domex disinfectant. Liril. Fair and Lovely creams. Lifebuoy. Kissan squashes and jams. Vim dish wash. amamand Moti soaps. Pond's talcs and creams. Rin and Wheel laundry detergents. Rexona 13. Knorr soups & meal makers. 4.Products offered by hindustan unilever Ltd. Pepsodent and Close Up toothpaste and brushes. Ala bleach. 5. 3. Sunsilk and Dove shampoos. Bru coffee. Pureit water purifier. 10. 6. Axe deosprays. 12. and 7. 2. Vaseline lotions. Kwality Wall's ice cream. Lakmé beauty products. Lipton tea. Rexona. Clinic Plus. 8.[3] Some of its brands include 1. Surf.3 million outlets and owns 35 major Indian brands. and 14. . 9. Modern Bread. Brooke bond tea. 11. Clinic All Clear. Lux. The company has a distribution channel of 6. Breeze. Annapurna salt and atta.

10. 17. Oral-B is a brand of toothbrush. Gain is a brand of laundry detergent and fabric softeners. Tide is a brand of laundry detergent. 20. Nice 'n Easy is a hair coloring product. and hair color). 9. 15. 2. TAG is a deodorant and body spray. 12. 8.Products mix of procter and gamble 1. Pampers is a brand of disposable diaper and other baby care products. Soaps and Body wash Ivory is a soap. Olay is a brand of women's skin care products. Head & Shoulders is a brand of shampoo and conditioners. Dawn is a brand of dishwashing detergent Downy/ Lenor is a brand of fabric softener. 18. 11. and oral care products. 6. 3. Puffs is a brand of facial tissue Secret is a brand of antiperspirant and deodorant. 14. Old Spice is a brand of aftershave Deodorants. Ariel is a brand of laundry detergent/liquid available in numerous forms and scents. . 7. Pantene is a brand of hair care products (conditioners/styling aids). Fusion is a brand of men's wet shave razors. conditioner. 22. 19. 5. 16. Whisper is a brand of panty liners sold primarily in Asian markets. Duracell is a brand of batteries and flashlights. Wella is a brand name of hair care products (shampoo. Gillette is a brand of safety razor and male grooming products. 4. 13. styling. 21. Crest is a brand of toothpaste and teeth whitening products.

shoes.consumer products with unique features or brand identification for which a significant group of buyers is willing to make a special purchase effort. specialty products and unsought products. (c) Speciality products:. types of cars. magazines and newspaper. designer clothes service of medical and legal specialists. Consumer products:. These products include convenience products. cigarettes. luxury watches. These products are non-durable and used and consumed rapidly. (b) Shopping products:.Product classification Product and services can be classified in to two categories : (a) Consumer products (b) Industrial products. These goods are durable and is used up slowly. and other home appliances are the example of shopping goods. (a) Convenience products:. price and style. . shopping products. The consumer has to compare different store¶s offerings and devote considerable time and efforts to take the buying decision. quality. dress. immediately and with minimum shopping efforts. For example specific brands.these products include items which the consumer select and buy after making comparison on such criteria such as suitability.consumer product and services bought by final consumers for personal consumption. TV . refrigerator . Cold drink. Furniture items.these are the items which the consumer buy frequently. drugs and most grocery items are the examples of these products .

pen. Operating supply: these are the convenience goods for industrial products. For example blood donation to Red cross. zipper. unsought products require a lot of advertising. Raw material : Fiber for making yarn. Industrial products:. oil. pencil.are those meant for use in making other products or for rendering a service in the operation of business firm. diesel engine. paper. These can be further classified on the basis of use into five categories. etc . Installations : Heavy machinery . pins. labels. By their very nature . Fabricated material and parts: yarn for knitting / weaving etc. Life insurance. fuel. etc. laces. and other marketing efforts. Accessories equipment : Buttons.(d) Unsought products:consumer products that the consumer either does not know about or knows about but does not normally think of buying. etc. trucks etc for industrial use.

Decline As the product moves through different stages of its life cycle. it must replace the declining products with new ones. Growth 3. This will help in taking sound marketing decisions at different stages of the product life cycle. Introduction 2. not only do profit and sales volume changes from one stage to the other stage but also the management decisions regarding the marketing mix undergoes changes from stage to stage. The product moves through the four stages : 1. . Maturity 4.Product life cycle The concept of product life cycle has gained importance as it indicates that sooner or later all products die and if management wishes to sustains its revenue . The product life cycle concepts is also a useful framework for describing the typical evolution of marketing strategy over the product life cycle. The product life cycle concepts also indicates what can be expected in the market for a new product at various stages.

Product life cycle Sales and Profits ($) Sales Profits TIME Product Development Losses/ Investments ($) Introduction Growth Maturity Decline .

demand for the product starts declining as new product displace it. and distribution is greatly broadened. price fall. and heavy promotional expenditure. and marketing expenditure rise. competition increases. This stage may last for long period as in the case of many products with long run demand characteristics. identification of new segments and product improvements are the strategies are followed in this stage. technology problems.the product enters into maturity stage as competition intensifies further and market grows saturated. The growth in sales volume is at lower rate because of lack of knowledge on the part of consumers and delays in making the product available to the consumer.e. Profits come down because of stiff competition . 2. Price are higher during this stage because of small scale of production. market are limited and rapid improvements are being made in its technology . . it moves into second phase of its life cycle i. under which competition is slight or nonexistent . Product differentiation.as the product grows in popularity. Growth stage :. growth stage in which demand expands rapidly. price are relatively higher. During this stage higher expenditure are to be incurred on advertising and other promotional techniques. It will increase the profit . Introduction stage:The first stage of PLC is the introduction.1. The price are decreased because of competition and technology. The management focuses its attention on improving the market share by deeper penetration into the existing market or entry into the new markets. The promotional expenses remain high although they tend to fall as a ratio to sales volumes. Maturity stage:. 3. But sooner or later .

Many firm abandon the product in order to put their resources to better use. . The demand of the people change and other innovations come to the market to take place of the abandoned products.4. the sales fall down sharply and the expenditure on promotion has to be cut down drastically . Decline stage:The stage is featured by either the product s gradual displacement by some new products or evolving change in consumer buying behavior.

. and Fad Products Apparel and other consumer products can be classified by the length of their life cycles.Style . Fashion. Fashion . Basic products such as T-shirts and blue jeans are sold for years with few style changes. Businesses selling basic products can count on a long product life cycle with the same customers buying multiple units of the same product at once or over time. Fad Basic. .

Therefore. you will want to have multiple products in line for introduction as each fashion product's cycle runs its course. length. if you are designing a fashion product. even if it is just color. Fashion products have a steep decline once they reach their highest sales.Fashion product life cycles last a shorter time than basic product life cycles. and fad products in order to maximize sales. Apparel products often have a fashion dimension. and collar changes based on the current fashion. . a business may have four styles that have classic styling and colors and are always in the line. Some firms build their lines to include basic. By definition. Styles that a popular celebrity or sports hero is wearing are examples of fashion and fad styles. For example. When it is no longer adopted by many. One or two short-cycle fashion or fad styles based on breaking trends may be introduced once or twice a year. with a sweater line. fashion is a style of the time. fashion. and their life cycles are generally the longest. As fashion features increase in a product. a fashion product life cycle ends. It is typically a style that is adopted by a particular sub-culture or younger demographic group for a short period of time. Four additional styles may be modified every two years to include silhouette. The overall sales of basic products are the highest of the three types of products. The fad has the shortest life cycle. the life cycle will decrease. A large number of people adopt a style at a particular time.

1. a patent. Followings are the main stages in new product development. product improvement. 8. 2. Idea generation Idea screening Concept development and testing Marketing strategy Business analysis Product development Test marketing Commercialization . or a license to produce some one¶s product. Or other through New product development in company¶s on research and development department . 3. 6. 7. and new brand that the firm develops through its own research and development efforts.New product developments A firm can obtain new products in two ways. New product development:. product modification. 5. One it is through ± acquisition ----by buying a whole company.means development of new original product . 4.

Major stages in new product development .

manufacturing staff. Idea Generation The Systematic Search for New Product Ideas Internal sources : From company¶s own executives. Suppliers . designers. Distributors 4. scientists. engineers. Customers 2. External sources : 1. marketing and sales executives etc. Competitors 3.New Product Development Process Step 1.

New Product Development Process Step 2. Idea Screening Process to spot good ideas and drop poor ones Criteria : ‡ ‡ ‡ ‡ ‡ Market size Product price Development time & costs Manufacturing costs Rate of return .

Concept Testing . Develop Product Ideas into Alternative Product Concepts 2.New Product Development Process Step 3. Concept Development & Testing 1. Choose the Best One .Test the Product Concepts with Groups of Target Customers 3.

Overall: Target Market Planned Product Positioning Sales & Profit Goals Market Share Part Two .Short-Term: Product·s Planned Price Distribution Marketing Budget Part Three .New Product Development Process Step 4.Long-Term: Sales & Profit Goals Marketing Mix Strategy . Marketing Strategy Development Marketing Strategy Statement Formulation Part One .

New Product Development Process Step 5. Move to Product Development . Eliminate Product Concept If Yes. Costs. Business Analysis Step 6. Product Development Business Analysis Review of Product Sales. and Profits Projections to See if They Meet Company Objectives If No.

Simulated Test Market Test in a simulated shopping environment to a sample of consumers.New Product Development Process Step 7. . Test Marketing Standard Test Market Full marketing campaign in a small number of representative cities. Controlled Test Market A few stores that have agreed to carry new products for a fee.

Commercialization Introducing a new product into the market .New Product Development Process Step 7.