chapter 2,3,4,5

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` As the name shows it is the combination of different elements. These elements are product,price, place, promotion and. These four elements

are also cumulatively known as the four Ps of marketing.

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product

CH APTER:2

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A product is a set of tangible and intangibleattributes, which may include packaging, color,

price, quality, and brand, plus the seller¶s servicesand reputation.

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the total product

Selle r¶ss e rvic e s

Selle r¶ss e rvic e s

Productqua lity

Productqua lity Physica l

charact e risticsof goods

Physica l

charact e risticsof goods

Pric e

Pric e

B rand

B rand

De sign

De sign

Packaging

PackagingProductwarranty

Productwarranty

Selle r¶sr e putation

Selle r¶sr e putation

Co lour

Co lour

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` W e divide all the products into two categories:C onsumer ProductsBusiness Products

` Then we will subdivide each category

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` C onsumer goods are further classified as

C onvenience Goods

Shopping GoodsSpecialty GoodsUnsought Goods

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` Those items which are usually purchased fromshops on a regular basis e.g. fresh food, cleaningmaterial, newspaper, sweets, matches, soap,

drink, ketchup, tooth paste and etc.

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Shopping goods are usually high risk productswhere consumers like to shop and compare avariety of attributes including quality, price,

suitability and style for that productE.g. freezers, washing machines, furniture,automobile and fashionable clothing, hotel andairline services

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` A tangible product for which a consumer has a strongbrand preference and is willing to expend time ,moneyand effort locating the desired brand

` Are pre-selected by the consumer ` H ave no close substitutes or alternatives` C onsumer rarely buys them` Are available in a limited number of retail outlets` Examples: expensive men¶s suits, health foods, designer

clothes, BM W , Sony, and Addidas.

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` A sought good is a new product that the consumer is aware of but does not want right now or do notwant one after learning about it

` purchased to solve a sudden problem` Major new innovations

e.g. electric car, solar cars.

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` W e separate business goods into five categories:Raw MaterialsFabricating Materials and PartsInstallationsAccessory equipmentOperating supplies

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1 . Raw Materialx

Business goods that become part of another tangible product prior tobeing processed

x Raw material include: Goods found

in their natural state, such asminerals, land, and products of theforests and the seas e.g. water, andAgricultural products, such ascotton, fruits, grains, and animalproducts, including eggs and rawmilk

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2. Fabricating Materials and Parts Business goods that become part of the finished

product after having been processed to some extent ,Fabricating parts are assembled with no further changes in form; they include such products aszippers in clothing, computer chips etc.

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3 . Installations

Manufactured products that are an organization¶smajor, expensive, and long-lived equipment

Examples are very large machines, a factorybuilding, Office buildings, warehouses , blastfurnaces for a steel mill

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4 . Accessory Equipment

Equipment used in production or office

activities This category of business goods neither becomes

an actual part of a finished product nor has asignificant impact on the organization¶s scale of operationse. g : File cabinets, office desks, small motors,calculators, and tools

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5 . Operating Supplies Business goods that are characterized by low moneyvalue per unit and a short life and that contribute to anorganization¶s operations without becoming part of the

finished product Examples are oil, pencils and stationery, and heatingfuel.

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` A new-product strategy is a statement identifyingthe role a new product is expected to play inachieving and marketing goals

` E.g. to protect market share, to establish aposition in market, or to maintain the company¶sreputation for innovation or social responsibility

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Stages in the Development Process

Id e ntifyth e strat e gicro le of n e wproduct,th e n ...

1.Id e ag e n e ration

2 .S cr ee ningof id e as

3 .B usin e ssana lysis

4 . Prototyp e

d e vel opm e nt

5 .M ark e tTe sts

6 .

Comm e r-cia lization

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There are five stages of any product namely Introduction, Growth, Maturity, Declineand Abandonment.

` In the introduction stage the product is simply in its initial stages recognized byhigh cost, low sales volume,low product recognition and firm bear loses.

` W ith the passage of time the sales tend to improve and the product reaches itsgrowth stage. costs reduced due to economies of scale,sales volume increases significantly and profit rate increase.

` After this phase the maturity stage starts. H ere the company is running in fullvolumes. costs are very low as you are well established in market & no need for publicity is required,sales volume is on peaks but prices tend to drop due to theproliferation of competing products.

` After the completion of this stage the decline stage starts. In this phase salestend to go on a decline,costs become counter-optimal

profitability diminishes and product become unattractive to the compony.` Afer the completion of this stage the company is left with no any other option

but to go for abandonment.The product life cycle holds much resemblance with humans¶ life stages of earlychildhood, growth, maturity, Old age and finally death.

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Introductionstag e

G rowthS tag e

M aturityS tag e

De c lin e S tag e

Ab ondm e ntS tag e

Time

M

oney

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pricing

chapter 3

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There are defferent types of pricing strategies thatcomponies use for positioning there products.premium pricing strategy

economy pricingGood value strategyovercharging strategy

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it means producing the highest quality product andcharging the highest price for it.

economy pricingproducing a low quality product but charging low for

it.

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These two strategies can co exist in the same

market as long as the market consist of two typesof buyers.

` Those who seek quality`

Those who seek lower prices

For example: Rolex pursues a premium pricingstrategy by selling very high quality watches at ahigh price. In contrast TIMEX offers lower qualitywatches at a more affordable price.

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Good value strategyGood value strategy represents a way to attack thepremium pricing strategy, It says ³ W e have highquality, but at a lower price´,If this really is true, and quality sensitive buyersbelieve that good value pricer, they will sensibly buy

the product and save money.overcharging strategyBy using an overcharging strategy, the companyover prices the product in relation to its quality.componies tries to avoid this strategy becoz thecustomers will stop buying your product.

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Chapter

4

promotion

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PR MO TION M IX

Promotion mix is also known as marketingcommunication mix. Promotion mix consists of advertising , personal selling , sales promotion ,public relations and direct marketing tools that thecompany uses to pursue its marketing objectives.

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A DVERT IS ING:

³Any paid form of non personal presentation andpromotion of ideas, goods, or services by anidentified sponsor´.Advertising includes Print, TV, radio, Newspapers,magazines, transit vehicles, out door displays,calendars, diaries and other novelties.

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A dv e rtising` It is selling through media`

It is paid form` It is non-personal as consumers(target audience)are large in number

` H ere we may not have feed back (people meters)` There is non- personal communication of ideas,

goods, products or services by an identifiedsponsor. For Example If Pepsi has anadvertisement, we know it¶s for Pepsi.

` Almost all advertisements are psychologicallypersuasive Like Ab bi Dew Na kiya Tu Kiya Jiya ,Yeh Dil Mangey More , Subh Bakhair zindagi,Maan Ke pyaar ki tarha Khalis .

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Importanc e of adv e rtising

` People come to know about your product.` Message reaches to a large number of customer.` Influences behavior. ³ Ammi aj se´ by Rafhan

Pudding Mix.` It creates competition. It can bring/ reduce prices.

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³Short term incentives to encourage the purchase or sale of a product or service´.

sales promotion includes POP displays, premiums,discounts, coupons, demonstration, contests,sweepstakes, tradeshows, dealer aids etc.

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(a) S amp le s

these are the Items of less unit cost taht are often distributed by firms. These itemsare not for sale ,e.g; sample given to doctors to check the efficacy of a drug,or seeds to theformers etc.

(b ) Cont e stsFor example beauty contests, cooking contests etc.Firms often try to engage their customers in contests and try to develop a

relationship with them.

(c) Pr e miumsThese are goods offered either free or at a low cost as an incentive to buyer of theproduct.A premium may come inside the package (In-pack) outside package (on pack)If reusable the package itself may serve as a premium. Such as a decorative tin.

(d) CouponsC oupons are certificates that give buyers a saving when they purchase a specifiedproduct. C oupons can stimulate sales,Major companies are following this technique for example paints and emulsionsthere is a coupon worth 300 rupees for carpenters..

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Personal presentation by the firm¶s sales force for thepurpose making sales and building customer relationship.In simple words it is a way of communicating withpresent and potential customers with the aid of salesforce employed for this particular job.e.g: the activities of the sale force of ³Ariel surf´ in theearly days.

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Publicity is unpaid form of promotion of a product.Its also non personalPublicity may be positive and negative

e.g: Negative word of mouth or positive word of mouth. It is here worth mentioning that in Ka b u l

word of mouth publicity is instrumental for success.

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DIRECT MA RKET ING

Direct communication with carefully targetedindividual consumers to obtain an immediateresponse.The use of mail, telephone, cell phones,fax, email, internet spamming etc, to communicate directlywith specific consumers in order to get animediate responce.

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C hapter 5

Distri b utionchann el

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Definition:

a distribution channel consists of

the set of people and firms involved in the transfer of a product moves from producer to ultimateconsumer or business user.

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A. Physical distribution

B. Matching (making available the assortment of goods from different suppliers wanted by thechannel¶s customers).

C . Time and place utility (ensuring the assortment isavailable where and when wanted).

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D. Transfer of title (ensuring that legal ownershippasses).

E. Risk bearing (sharing some of the risk inherentin business).

F. Research (for customers and what they want).

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G. Promotion and selling.

H . Service

I. Support service (insurance, documentation etc.)

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W holesaler

Intermediary who sells products to other businessesfor resale to final consumers.

Retailer

Intermediary who sells products directly to consumers.

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` Direct Distribution C hannel ± a channel consistingonly of producer and final customer, with nomiddlemen

Direct C hannelDirect C hannelProducer Producer Producer Customer Customer Customer Producer Producer Producer Customer Customer Customer

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Indirect Distribution C hannel ± a channel of producer,final customer, and at least one level of middlemen

Producer Producer Producer Customer Customer Customer IntermediaryIntermediaryIntermediaryProducer Producer Producer Customer Customer Customer IntermediaryIntermediaryIntermediary

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` Intensive Distribution

Uses all available outlets to distribute a product.x

Appropriate for convenience products with highreplacement rates such as W all¶s ice-cream, C oca C ola,C lose Up Toothpaste, etc

x Provides availability and reduces search time.

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` Selective DistributionUses only some available outlets to distribute a productx Appropriate for shopping products and

durable goods with low replacement rates,

such as: clothing, appliances, office equipment.

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` Exclusive DistributionUses a single outlet in a large geographic area todistribute a productx Appropriate for expensive, high-quality products purchased

infrequently

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1 ± first the distributor must above all deliver accessto your target market. Your marketing strategy willhave decided whether you are going for a massmarket, or for limited distribution in exclusiveoutlets to reach the segment , for example. Inindustrial markets, the distributor must cover theindustries, geographical areas and types of firmyou have selected.

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2 ± second the chosen partner must be able to offer the level of service you believe the product needsto support it. In selling personal computers, somesuppliers use distributors big enough to provideback-up advice and service to buyers.

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3 ± third how much profit will you make out of therelationship? In some cases you may trade off margin for volume, but in every case you need tomake a satisfactory level of profit and so does thedistributor.

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These are as under 1 - Market considerationH ere point is to consider target market its need,

structure , and buying behavior.a ± Types of marketThe ultimate consumers behave differently than

business user, so they are reach through

different distribution channel.

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b± Number of potential customers.A manufacturer with few potential customers may

use its own sales force sell directly to ultimateconsumers or business users. For example:Boeing uses this approach in selling its jet aircraft.

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c ± Geographic concentration of themarket:

W hen most of the firms customers are concentratedin few geographic areas, direct sales is practical.

W hen customers are geographically dispersed.Direct sale is likely to be impractical. Because of thehigh travel costs.

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d± order size

W hen either order size or total volume of business islarge, direct distribution is economical. Thus a foodproduct manufacturer would like to sell directly tolarge super markets.

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The factors which involves in the productconsideration are as under.

a ± p e risha b ility :

Some goods, including many agriculture products,physically deteriorate quickly. Other goods, such asclothing, perish in a fashion sense. Service areimperishable because of their intangible nature.

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b ± Technical nature:

A business products that is highly technical is oftendistributed directly to business users. The producerssales force must provide presale and post salesservices, wholesalers normally cannot do.

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3 ± Middlemen considerationThese are:

a± services provided by middlemenEach producer should select those middlemen,

offering those marketing services that the producer either is unable to provide or cannot economicallyperform.

b± Availability of desire middlemenThe middlemen preferred by a producer may not beavailable . They may carry competing products andas a result not want to add another product.

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W hen middlemen are unwilling to join a channelbecause they consider a producer¶s policies to be

unacceptable,or some wholesalers and retailersmay carry those policies that are not acceptablefor the producers.

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a- d e sir e for chann el contro l:

Some producers establish direct channelsbecause they want to control their product¶sdistribution, even direct channel is more costlythan an indirect channel. By controlling thechannel, producers can achieve moreaggressive promotion, assure the freshness of merchandise stocks, and set their product retailprices.

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Some producers make decision about their channels based on the distribution functionsdesired by middlemen.

For example, retail shops will not stock a productunless it is presold through heavy advertising bythe producer.

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The marketing experience and managerial abilityinfluence decisions about which channel to use.Many companies lacking marketing know-how turnthe distribution job over to middlemen.

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A business with the adequate finances canestablish its own sales force, grant credit to itscustomers an warehouse its own products. Afinancially weak firm uses middlemen to providethese services.

chapter 2,3,4,5

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