marketing managemnet module 1

8/3/2019 marketing managemnet module 1

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MARKETING CONCEPT

MODULE 1 (3 Hours)Introduction: Nature and scope of Marketing, Evolution, Various Marketingorientations, Marketing Vs Selling concept, Consumer Need, Wants andDemand concepts.

DEFNITION

The Marketing concept is a point of view on business. It enumerates that any business is essentially a need satisfying process. It also enunciates that all the goals of the organization including profit be realized three customer orientation.Integrated management action and generation of customer satisfaction.

CONCEPTS OF MARKETING.

THE EXCHANGE CONCEPT

The exchange concept of marketing, as the very name indicates ,holds that the exchange of a product between the seller & the buyer is the central idea of marketing. While exchange does form a significant part of marketing as a mere exchangeprocess would amount to a gross undermining of the essence of marketing. A proper scrutiny of the marketing process would readily reveal that marketing is much

broader than exchange. Exchange, at best, covers the distribution aspect and the price mechanism involved in marketing. The important aspects of marketing, such as concern for customer, generation of value satisfaction creative selling & integrated action for serving the customer, get completely overshadowed in the exchange concept of marketing.

THE PRODUCTION CONCEPT

It is one of the oldest concepts of business. The production concept holds thatconsumers will prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, mass-distribution. They assume that consumers are primarily

interested in product availability and low prices. This orientation makes sensein developing countries, where consumers are more interested in obtaining the product than in its features. It is also used when a company wants to expand themarket.

Some service organizations also operate on production concept. Many medical & dental practices are organized on assembly-line principles, as are some government agencies. Although this mgt orientation can handle many cases per hour, it isopen to charges of impersonal and poor-quality service.

THE PRODUCT CONCEPT

The product concept is somewhat different from the production concept. Whereas t


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he production concept seeks to win markets & profits via high volume of production and low unit costs, the product concept seeks to achieve the same result viaproduct excellence- improved products, new products and ideally designed & engineered products. It also emphasis on quality assurance. Managers in these organizations focus on making superior products & improving them overtime. They assumethat buyers admire well-made products and can evaluate quality & performance. Mgt might commit the Better-mousetrap fallacy, believing that it will lead people

to beat a path to its door.Example:- web T V

THE SELLING CONCEPT

The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers typically show buying inertia or resistance & must be coaxed into buying. It also assumes that the co. has a whole battery of effective selling

and promotion tools to stimulate more buying.

The selling concept is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias, and funeral plots. It is also practiced in non-profit area by fund raisers, college admission offices, & political parties.

THE MARKETING CONCEPT

This concept emerged in mid-1950 and challenged the preceding concepts. The MARKETING concept was born out of the awareness that marketing starts with determination of consumer wants & ends with the satisfaction of those wants. The conceptputs the customer at both the beginning and the end of business. It stipulates that the company should be organized totally around the marketing function, anticipating, stimulating & meeting customers requirements.

The concept rests on the realization that a business cannot succeedby supplying products and services that ae not properly designed to serve theirneeds. Every depart. & every worker and every manager will THINK CUSTOMER &ACT CUSTOMER. Evidently, the concept represent a radically new approach to business.Marketing concept represents essentially a change in orientation on the part ofmgt towards business.

The marketing concept rests on four pillars:1. Target market- EX:TERRA LYCOS2. Customer needs-EX:NOKIA & SONY ERRICSON3. Integrated marketing-

4. Profitability-EX:DISNEY, WALL-MART


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THE CUSTOMER CONCEPT

The ability of a company to deal with customers one at a time has become practical as a result of advances in factory customization, computers, the internet, &database mktg software. In this concept the companies hope to achieve profitable

growth through capturing a larger share of each customers expenditures by building high customer loyalty & focusing on customer lifetime value. The required information collection hardware, and software may exceed payout. It works for bestco. that normally collect a great deal of individual customer information, carrya lot of products that can be cross-sold, carry products that need periodic replacement or upgrading, & selling products of high value.

THE SOCIETAL MARKETING CONCEPT

... make marketing decisions by considering consumers wants, the companys requirements, consumers long-run interests and societys long-run interests.Principles of Marketing by Kotler/Armstrong, Prentice Halls

Societal marketing blends social, company and customers wants.

The Societal Marketing Concept. This concept holds that the organizations task isto determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors (thisis the original Marketing Concept). Additionally, it holds that this all mustbe done in a way that preserves or enhances the consumers and the societys well-being.

Unfortunately, satisfying customers short-term needs may not be compatiblewith societys needs. For instance, your customers may prefer large automobiles, disposable diapers, hamburgers, no-deposit bottles, etc. Society is better off ifwe drive small cars, use cloth diapers, and eat soy burgers. Should a firm worry about its customers short-term needs, or consider what is best for society?.

The modern time is the time of information, peoples are more aware of sensitive issues which the earlier generations did not know, like shortage of resources, health issues, environmental deterioration.And the reason of this well learned society is ubiquity of information, throughthe means of electronic media and print media, and internet now is playing veryimportant part in providing up to date information at the rate of just one click. So this generation have developed the ability to judge any marketing strategy,whether it is correct or not?

The societal marketing concept calls upon marketers to build social & eth

ical considerations into their mktg practices. They must balance and juggle theoften conflicting criteria of company profits, consumer want satisfaction, & public interest.


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This orientation arose as some questioned whether the Marketing Concept

is an appropriate philosophy in an age of environmental deterioration, resourceshortages, explosive population growth, world hunger and poverty, and neglectedsocial services.Are companies that do an excellent job of satisfying consumer wants necessarily

acting in the best long-run interests of consumers and society?

The marketing concept possibily sidesteps the potential conflicts amongconsumer wants, consumer interests, and long-run societal welfare.::

EXAMPLE:The fast-food hamburger industry offers tasty but unhealthy food. The hamburgershave a high fat content, and the restaurants promote fries and pies, two products high in starch and fat. The products are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these restaurants may behurting consumer health and causing environmental problems.

Societal marketing, argues Kotler, P. (1972, p. 837) should generate consumer satisfaction as well as the long term well-being of the consumer, society and their ecology. As Christians this is a definition that fits well within our ethic, and within the Christian mission. So marketing can accept the Church why has theChurch not embraced marketing management as the basis of its missionary strategy?

Extending the Principles of Marketing

As noted above, the principles of marketing are being extended to such areas asthe marketing of ideas, political marketing, and even marketing the volunteer army. Whenever there is some type of exchange, it is important to understand marketing. Politicians, for instance, understand that they must segment voters andselect a target market(s). A good politician does research to learn what voterswant (jobs, increase in social security, homeland security, health insurance, strengthening the traditional family, etc.). Direct mail and Internet marketingwith different messages for different groups is one tool being used by shrewd politicians. One interesting fact that is being studied after the 2004 Presidential election is the fact that 97 out of 100 of the fastest growing counties mainlyexurbs voted Republican. Exurbs are too far from urban areas to be considered suburbs but too large to be considered rural.

Even libraries have started using marketing. Libraries are being defined as a place to find information, not only books. (If they define themselves solely as aplace to borrow books they are suffering from marketing myopia.) This is why libraries have numerous computers and wireless networks so that anyone with a laptop can access the Internet. Libraries also have DVDs since they are almost as important as books. Incidentally, there is a revolution in the area of book publishing, a new kind of book is the eBook. Libraries are also places where youngchildren whose mothers work can do their homework after school.Colleges are also using sophisticated marketing tools to attract students. Thisis becoming a hot area since colleges find themselves competing for students. Research shows that students choose schools based on reputation, convenience, andcourse offerings. Hospitals are also becoming marketing-oriented. Patient satis

faction is becoming very important to hospitals. Customer satisfaction is veryimportant in marketing (indeed, that is what the marketing concept is all about). Today, hospitals and colleges are learning about the importance of satisfying


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patients and students, respectively. Do you think this college has done a goodjob satisfying you?

Can marketing help a church expand its membership? Read "The Soul of the New Exurb" by Jonathan Mahler (New York Times Magazine, March 27, 2005, pp. 30-50) tolearn how Pastor Lee McFarland built a mega-church (weekly attendance of 2,000+)in the exurb of Surprise, Arizona; weekly attendance is 5,000. Before building

the church, McFarland did some marketing research and asked only two questions:"What

s your favorite radio station?" "Why do you think people don

t go to church?" What he found was that the people living in Surprise liked rock music; they did not go to church because they did not own fancy clothing, did not like to be asked for money, and felt that the church sermons they heard in the past were not relevant to their lives. His church has no crosses or other religious icons; no stained glass and it looks like a mall. Krispy Kreme doughnuts are served ($16,000 a year spent on the doughnuts), the dress code is lax, and Pastor McFarland wears a T-shirt and jeans. Half of each service is devoted to Christianrock. McFarland

s "sermons" deal with what he calls "successful principles of living." People are attracted to the church for various reasons including aerobics classes, child care, counseling, financial planning, etc. Radiant has small g

roups for all kinds of people: widows, divorced, etc. This is known as gettingpeople in through the side door (going to church for Sunday sermon = front door). Small groups allow people to share their pains and hopes. Outdoor advertisement for the church: "Isn

t It Time You Laughed Again?" with a picture of happyfamily.The church has a branch of Celebrate Recovery, a Christian program for recovering addicts that is similar to the 12-step program of Alcoholics Anonymous. Recovering addicts can feel comfortable talking about their Christian beliefs at theCelebrate Recovery meetings.

CASE STUDYPROBLEM STATEMENT :In order for McDonalds to reach its goal of "par excellence", it must use the ful

l meaning and definition of marketing. Marketing is giving the target market what they want, when and where they want it, at a price they are willing to pay forit.

REFLECTION / OPINIONFor McDonalds to achieve its "par excellence", they must focus on the fact that there is an ever changing market and that the wants and needs of consumers are constantly changing. Since McDonalds has been around for forty-one years, it is safe to say that they are the father of the fast food industry and that they have set an example for others to follow.When Ray Kroc bought the first McDonalds in 1955, he focused on what people wanted. With this focus came the utilization of Mr. Krocs theory of QSC ( quality, service, and cleanliness ).QSC successfully got McDonalds off the ground, but as times changed, the companysaw many more market segments and opportunities. In the 1970s and 1980s once againMcDonalds lead the way in the fast food industry. The changes we saw included, for example, the fact that women were now a major part of the work force and dualincome families were becoming a more common occurrence. McDonalds became a mastermind of marketing toward specific markets by pioneering ideas such as breakfastmenus, healthier choices and alternatives, and "adult" foods. McDonalds has truly evolved into a world power by paying attention to the needs and wants of the changing market and adjusting to these needs.LINKING THEORY :Ray Kroc saw early on what needed to be done. He changed what was at one time aproduct orientation, into a marketing orientation. Back in 1955, this was still

a new type of management. From the beginning, Kroc was already in the forefrontof marketing.Marketing orientation focuses on the customer and what they want in a product, r


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ather than product orientation which focuses on the product itself. McDonalds hastaken every aspect of marketing orientation and utilized the philosophy to itsfullest. McDonalds has focused in on the customer needs and wants, sometimes evenputting the ideas into the consumers mind before they even knew what they wantedor expected. McDonalds could deliver! They have done extensive market analysis and product development based on this analysis. They have packaged their food andpriced it exactly to the market segment which they have targeted.

Showing McDonalds innovations in marketing even further, is its early adaptationof societal marketing. Societal marketing takes into account the overall concerns of the target market, the environment, for example. McDonalds got rid of theirone time innovative styrofoam packaging and replaced it with more environmentally sound paper packaging. They stress the fact that they are environmentally aware, by reminding us not to litter, etc., on their various forms of packaging. Another example if societal marketing is the Ronald McDonald House. This is probably McDonalds largest community service project. It demonstrates the way that McDonalds is willing to give something back to the very communities that support the company. These examples as well as the various events that McDonalds promotes, such as the Olympic Games, puts their name worldwide. This makes it difficult for us ever to forget of the existence of McDonalds.

McDonalds also uses a theory referred to as relationship marketing. Relationshipmarketing is defined as marketing to protect the customer base. The customer isviewed as an asset and the companys marketing goal is to attract, maintain, and enhance customer relationships.There are five main criteria that must be met for a successful relationship marketing strategy and they are as follows :1) There needs to be an ongoing and periodic desire for the product or service by the customer.2) The service customer controls the selection of the service supplier.3) There are alternative suppliers of the service.4) Customer loyalty is weak and switching is common and easy.5) Word of mouth is an especially potent form of communication about the product.

All of these criteria are met by the fast food industry, and McDonalds has generally had a very successful relationship marketing strategy, especially through the implementation of the QSC program.McDonalds has definitely exceeded the definition of success. How many other businesses can say they have served billions and billions? McDonalds has done an incredible job taking an intangible product and virtually dissipating any perceptionof risk associated with service products. Whether someone orders a burger, McNuggets, or a fish fillet, they know that their expectations will be met every time.

SOLUTION :A clear solution for McDonalds to continue its success is to stay focused. For years, McDonalds has had the unique ability to adapt to the changing market, and that, along with their QSC program and innovative product development, has kept them on top. As long as McDonalds seems to make our lives easier, by giving us a consistent, valued product, the company will always be in existence.

Example: 1Proctor & Gamble Pakistan has introduced the brand of fat free oil to prevent thegrowing ratio of heart disease. Various automobile manufacturers are focusing more on producing CNG cars that is not only environmental friendly but it is alsovery economical. So this trend is getting popular very quickly. One can verify it by observing the increasing number of CNG stations. There are various companiesthat are favoring the use of recycled paper to aid more life to trees.

But, Pakistan is an under develop country, there are 35% Pakistanis that are living below the poverty line, Availability of Clean water, High Standard Education,Pollution are the big concerns for Pakistan consumers.


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White collar person in Pakistani society can not buy a bottle of mineral water for its supper unless it is in his economical range. Virtual University could not be successful if it had a same fee criteria as that of others institutions. Peoplewould not use CNG cars if it was expansive.

EXAMPLE-2

PATAGONIA world-class climber yvon chouinard founded Patagonia in 1966 by selling rock climbing hardware from the trunk of his car. By the time the company changed its focus to selling soft goods & apparel in mid-1970, Patagonia was committed to two main goals: providing the highest quality gear for outdoor enthusiasts, & implement[ing] solutions to the environmental crisis. The co. gave an earth tax of one percent of sales or ten percent of pre tax profits (whichever is greater) to activists who take radical and strategic steps to protect habitat, wilderness, & biodiversity. however, as Patagonia expanded, many aspects of its operations contributed to the environmental pollution the company worked so hard to count

er. After an internal study in 1990s the company sought to use materials & fabrics that would minimize its impact on the environment, such as synchilla fleece made from recycled plastic bottles and the 100 percent organic cotton used in every cotton product. The corporate culture avidly supports activism, as evidenced by a company program through which employees receive pay to work up to two monthsin an organization. Patagonia sent 70 of its 900 employees abroad on such tripsin 1999.

Patagonia is practicing a form of the societal marketing concept called cause-related marketing.

EXAMPLE-3A FAST FOOD restaurant offers tasty but unhealthy food. These foods have fat con

tent & the restaurant promotes fried stuff. These are high in fat. The productsare wrapped in convenient packaging. In satisfying consumer wants, these restaurants may be hurting the consumer health.

Companies see cause-related marketing as an opportunity to enhance their corporate reputation, raise brand awareness, customer loyalty, build sales,& increase press coverage. They believe that customers will increasingly look for signs of good corporate citizenship that go beyond supplying rational & emotional benefits.

Concepts for the NinetiesPhilip Kotler Lean Marketingo Prestige Marketing - More for Moreo Value marketing - More for the sameo Supervalue marketing - More for lesse.g.,Walmart, Dell, LexusConcepts Customized marketingo Segmentso Niche

o Customized e.g., Schwinn Bicycles, Bank ServicesConcepts


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Relationship Marketingo The product is all you geto We provide a hotline if you want to reach uso We want to create continuous value for you

BENEFITS OF MARKETING CONCEPT

CONCEPT BENEFITS IN THE ORGN:

Concept enables the organization to deep abreast of changes.

Long term success is assured to an enterprise only if it recognizes that the needs of the market are paramount.

Concept gives great importance to planning, research and innovation and its decisions are no longer based on lunch, but on reliable data relating to the consumers.

It enables the firm to move more quickly to capitalize on market opportunities

Greater attention is given to the product planning and development to that merchandising can become more effective.

Demand side of the equation of exchange is honoured more and supply is adjustedto changing demand. Hence more emphasis is given to research and innovation.

Marketing system based on the marketing concept assures integrated view of busin

ess operations and indicated interdependence of different departments of a business organization.

Interests of the enterprise and society can be harmonized as profit through service is emphasized.

CONCEPT BENEFITS OF CUSTOMER.

Low price, better quality and ready stocks at convenient locations are some of the benefits that accuse to the customers.

He can chose, he can bargain, he can complain and the complaint will be attendedto.

He can buy on cash or on credit or on installments. He can even return it material if he is not satisfied with it.

CONCEPT BENEFITS TO THE SOCIETY

If a guarantee that only products that are required by the consumers are produced there by it ensures that the countrys economic resources are channelized in theright direction.

If acts as a change agent and a value adder is society.It makes economic planning more meaningful and more relevant to the life of the

people.It creates good entrepreneurs and managers in the society and also improves thestandard of living.


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DIFFERENCES BETWEEN SELLING & MARKETING

SELLING MARKETING

Selling is sales oriented. Marketing is customeroriented.

Selling starts with seller. Marketing starts withbuyer &

Focuseson the needs of buyer.

Selling converts product Marketing converts consumer

into cash. needs into product.

Selling has a short term Marketing has a long

term goals.Goals . & strategies

In selling activity produ- In marketing consumersneeds,

ct is the prime concern. Wants & performance is prime

concern.

Selling views business Marketing views business as

as goods producing pro- customer satisfying poce

ss.cess

In selling cost determine- Consumer determines price;

es price. Price determines costs.

Selling views customer as Customer is the very purpose

Last link in business. Of the business.

Selling focuses on sales Marketing focuses on identify-

Volume growth. Ing profit making opportunities.

DISTRIBUTION OF CHANNELSINTRODUCTION

Of the four elements of marketing mix viz., product, price, promotio

n and distribution, distribution [i.e., the channels of distribution and physical distribution] is the most important element. The success or failure of a firmdepends largely upon the efficiency of distribution


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CHANNELS OF DISTRIBUTION

MEANINGThe term channel is derived from the French word canal meaning artifici

al water way for transportation or irrigation so, channel of distribution refers

to the pathway, path or route taken by goods as they flow or move from the point of production to the point of consumption or use.

In the words of Prof. W. Stanton channel of distribution is the route taken by the goods as they move from the producer to the ultimate consumer orindustrial user

According to Philip kotler every producer seeks to link together theset of marketing intermediaries that best fulfill the firms objective. This setof marketing intermediaries is called the marketing channel [also trade channelor channel of distribution]

ROLES OF CHANNELS OF DISTRIBUTIONDistribution channel have a distinctive role in the successful impl

ementation of marketing plans and strategies. These channels perform the following marketing function in the machinery of distribution.1. The searching out of buyer and seller [contacting]2. Matching goods to the requirements of the market [merchandising]3. Offering products in the form of assortments or packages4. Persuading and influencing the prospective buyer to favour a certain product and its maker [personal selling / sales promotion]5. Implementing pricing strategies in such a manner that would be acceptable to the buyers and ensure effective distribution6. Looking after all physical distribution functions7. Participating actively in the creation and establishment of market for anew product8. Offering pre and after-sale services to customers

9. Transferring of new technology to the users along with the supply of products and playing the role of change agents eg. in the agriculture green revolution in our country10. Providing feedback information, marketing intelligence and sales forecasting services for their regions to their supplier11. offering credit to retailers and consumer12. Risk-bearing with reference to stock holding transport

CHANNEL FUNCTION AND FLOWS

A marketing channel performs the work of moving goods from producers to consumers. It over comes the time, place, and possession gaps that separategoods and services from those who need or want them. Members of the marketing channel perform a number of key functions.o They gather information about potential and current customers, competition, and other actors and forces in the marketing environmento They develop and disseminate persuasive communication to stimulate purchasingo They reach agreement on price and other terms so that transfer of ownership or possession can be effectedo They place orders with manufactureso They acquire the funds to finance inventories at different levels in themarketing channelso They assume risks connected with carrying out channel works

o They provide for the successive storage and movement of physical productso They oversee actual transfer of ownership from one organization or perso


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n to another

CONFLICT AND CONTROL IN CHANNELSTo manage distribution channels effectively require an understanding

of both conflict and control, including technique to(1) Decrease conflict, or at least its negative effects, and(2) Increase a firms control within a channel

Channel conflict exists when one channel member perceives another channel memberto be acting in away that prevents the first member from achieving its distribution objectives. Firms in one channel often compete vigourously with firms in other channels; this represents horizontal conflict. Even within the same channel,firms disagree about operating practices and try to gain control over other members actions; this illustrates vertical conflict.

HORIZONTAL CONFLICTHorizontal conflict occurs among firms on the same level of distr

ibution. Basically horizontal conflict is a form of business competition. It mayoccur among:

o Middlemen of the same type: Mary vale hardware (an independent retailer)Versus Freds Friendly Hardware (another independent retailer)o Different types of middlemen on the same level Freds Friendly Hardware (an independent retailer) Versus Lowes points area (a single department in a storewithin a giant chainA primary sources of horizontal conflict is scrambled merchandising, in which middlemen diversify by adding product lines not traditionally carried by their type of business

VERTICAL CONFLICTVertical conflict typically occurs between producer and

wholesaler or between producer and retailer

PRODUCER VERSUS WHOLESALERA producer and a wholesaler may disagree about aspects

of their relationshipWhy do conflicts arise? Basically, manufacturers and wh

olesalers have differing point of view on the one hand, manufacturers think thatwholesalers neither promote products aggressively nor hold sufficient inventories

On the other hand, wholesalers believe that producers either expect too much, such as requiring an extensive inventory of the product,or do not understand the wholesalers primary obligation to customers.

To bypass wholesalers, a producer has two alternativeso Sell directly to consumer: producers may employ door to door, mail-order, or online selling. They may also establish their own distribution centers invarious areas or even their own retail store in major marketso Sell directly to retailers: under certain market and product condition,selling directly to retailers is feasible and advisable. An ideal retail marketfor this option consists of retailers that buy large quantities of a limited line of products

To avoid being bypassed in channels, wholesalers need to improve their competition positiono Improve internal performance: many wholesalers have modernized their operations. Functional, single-story warehouse have been built outside congested down town areas and mechanized materials- handling equipment has been installed

o Provide management assistance to customers: wholesalers have realized that improving customers operation benefits all parties. Thus many of them offer programs to assist their customers in areas such as layout, merchandise selection


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, promotion and inventory controlo Form a voluntary chain: in this form of vertical marketing system a wholesaler contractually agrees to furnish management services and volume buying power to a group of retailers. In turn, the retailers promise to buy all, or almostall, their merchandise from the wholesalero Develop middlemens brands: some large wholesalers have successfully established their own brands. Super value has developed its Favorite brand for grocer

ies and super chill for soft drinks. A voluntary chain of retailers provides a built in market for the wholesalers brands

Producer versus RetailerConflict between manufacturers and retailers- in fact between any two p

arties is likely during tough economic times. Conflict is also bound to occur when producers complete with retailers by selling through producers owned stores or over the internet.

Producer and retailer may also disagree about terms of sale or conditions of the relationship between the two parties. In recent years large retail chains have demanded not only lower price but also more service from suppliers. Producers sometimes find it costly, if not nearly impossible, to comply with the r

etailers new policies

Both producers and retailers have methods to gain more control. Manufacturers can1. Build strong consumer brand loyalty: meeting and surpassing customers expectations is a key in creating such loyalty2. Establish one or more forms of a vertical marketing system: Procter andgamble uses the administered types of VMS whenever possible3. Refuse to sell to uncooperative retailers: this tactic may not be defensible from a legal stand point4. Arrange alternative retailers: squeezed by large retail chains, some producers are building their distribution strategy around smaller specialty store5. Develop store loyalty among consumers: skillful advertising and strong s

tore brands are means of creating loyal customers6. Improve computerized information system: information is power. Knowing what sells and how fast it sells is useful in negotiating with suppliers7. form a retailer co-operation : in this type of vertical marketing system, group of relatively small retailers brands together to establish and operate awholesale warehouse

WHO CONTROLS CHANNELS?Every firm would like to regulate the behavior of the other members in i

ts distribution channel. A company that is able to do this has channel control.Channel power is the ability to influence or determine the behavior of another channel member.

There are various sources of power in distribution channel. They include:o Expertise: for example, possessing vital technical knowledge about theproduct or valuable information about customerso Rewards: providing financial benefits to co-operative channel member.o Sanctions: penalizing un co-operative firms or even removing them from the channel

IMPLEMENTATION OF MARKETING CONCEPT


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Marketing implementation is the process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives.Implementation involves day to day, month to month activities that effectively put the marketing plan to work.

CUSTOMER ORIENTATION

The concept enable the industrial and business firms to understand the nature and the mission of their business form the point of view of customer.

By storing and analyzing data supplied by customers, gathered from third parties, and collected form previous transactions, a marketer is able to better understand a customers needs and preferences.

Marketers have discovered that ensuring relationships are built on trust and mutual commitment, require a lot of time and effort to create and maintain and arenot appropriate for every exchange situation.

A typical description of the importance of the consumer as per the marketing con

cept is seen in the words of Peter F Drucker The purpose of any business is tocreate a customer it is a customer who determines what a business is.

With the adaptation of the marketing concept the consumer became the focal pointof the business

Basically companys sale each period come from 2 group: new customers and repeat customers. It always costs more to attract new customers than to retain current customers.E.g. Motorcycle Company Harley- Davidson has created a club (the Harley owners group) for bike owners. It offers more than 650000 members insurance, travel planning, roadside emergency service, free safety lessons, etc.

INTEGRATED MANAGEMENT ACTION

Integrated management action simply means that all the different management functions in the business must be tightly integrated with one another, keeping marketing as the pivot.

All the activities should lead to a favorable impact on the consumer and for this to happen, all functional areas of the business have to be properly aligned with marketing.

In organization that do not practice integrated management the different functions/depts. of the organization are preoccupied with the optimization of their specific activities often at the cost of optimization of the overall result.

In organizations that practice integrated management marketing, the management insists on absolute coordination of all company actions keeping marketing customer as the focus.E.g. Sony, Honda.

CONSUMER SATISFACTIONThe marketing concept believes that it is not enough if a firm has customer orientation it is essential that such an orientation lead to consumer satisfaction.

The concept believes that it is not enough if a firm markets its products succes

sfully in the short run. It must keep growing, keeping consumer satisfaction asthe foundation of its growth.


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The concept effectively contracts the temptations of short sighted management attitudes by its emphasis on consumer satisfaction.E.g.REALISING ORGANISATIONAL GOALS

If a firm has succeeded in generating customer satisfaction, if basically implies that a firm has given a quality product and company has offered competitive pr

ice and prompt service.

Only when these factors act and interact, complementary and supporting one another, will a product with all the attendant features necessary to satisfy the consumers emerge.

MARKETING CONCEPT

DEFNITION

The Marketing concept is a point of view on business. It enumerates that any business is essentially a need satisfying process. It also enunciates that all the g

oals of the organization including profit be realized three customer orientation.Integrated management action and generation of customer satisfaction.

BENEFITS OF MARKETING CONCEPT

CONCEPT BENEFITS IN THE ORGN:

Concept enables the organization to keep abreast of changes.

Long term success is assured to an enterprise only if it recognizes that the needs of the market are paramount.

Concept gives great importance to planning, research and innovation and its decisions are no longer based on lunch, but on reliable data relating to the consumers.

It enables the firm to move more quickly to capitalize on market opportunities

Greater attention is given to the product planning and development to that merchandising can become more effective.

Demand side of the equation of exchange is honored more and supply is adjusted to changing demand. Hence more emphasis is given to research and innovation.

Marketing system based on the marketing concept assures integrated view of business operations and indicated interdependence of different departments of a business organization.

Interests of the enterprise and society can be harmonized as profit through service is emphasized.

CONCEPT BENEFITS OF CUSTOMER.

Low price, better quality and ready stocks at convenient locations are some of the benefits that accuse to the customers.

He can chose, he can bargain, he can complain and the complaint will be attended

to.

He can buy on cash or on credit or on installments. He can even return it materi


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al if he is not satisfied with it.

CONCEPT BENEFITS TO THE SOCIETY

If a guarantee that only products that are required by the consumers are produced there by it ensures that the countrys economic resources are channelized in the

right direction.

If acts as a change agent and a value adder is society.

It makes economic planning more meaningful and more relevant to the life of thepeople.

It creates good entrepreneurs and managers in the society and also improves thestandard of living.

IMPORTANCE OF MARKETING:

CREATING UTILITY:

A Customer purchases a product because it provides satisfaction. Thewant satisfying power is called its utility. it comes in many forms. It is through marketing that much of a products utility is created. There are different kinds of utilities:-Form utility:

R.M Converted to Finished product. Understand customers

Requirements Form utility is primarily associate with production- the physical or chemical changes that make a product more valuable.Eg: Lumber is made into furniture is an example of form utility.

Place Utility

Channel Distribution Physical Distribution Customer As per customers RequirementPlace utility exists when a product is readily accessible to potential customers. An auction on the net can increase the number of buyers and sellers, but onceproducts are purchased they still have to be delivered quickly and in condition. Physically moving a purchased item to a successful bidder in an essential element of its value.

Time Utility

Warehouse making available goods customer When needed As per customers Requirement

Person Utility:

Marketer Established Contact Customer Understand Customers Requirements

Exchange Utility

Seller Transfer Goods to Buyer as per Customers Requirement


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MARKETING FUNCTIONSThe scope of marketing is very wide. A number of functions are inherent in any marketing on the basis of various utilities like (in II) time and place utility and (III) possession utility.

I FUNCTION 1.Buying FunctionOF EXCHANGE 2.Assembly Function

3.Selling Function.

II FUNCTION OF 1.TransporationPHYSICAL 2.Inventory ManagementDISTRIBUTION 3.Ware Housing

4.Material Handling

III FUNCTION 1.FinancingOF FACILITIES 2.Risk Taking

3.Standardization4.After Sales Service

(I) FUNCTIONS OF EXCHANGE

a) BUYING FUNCTION:A Manufacturer is required to buy raw material for production purposes similarlya wholesaler has to buy good from manufacturer for selling it to retailer. A retailer sell the goods to the customers. The function to buying has to be done atvarious levels. Buying involves transfer of ownership form seller to buyer.

b) ASSEMBLY FUNCTION:Goods purchased form various sources and assembled at one place to suit the requirement of the buyer.

c) Selling Function:Selling function involves sales of goods from seller to buyer. Selling functionis very important to all organizations due to the fact the selling has to be done against severe competition.

II FUNCTION OF PHYSICAL DISTRIBUTION:

a. TRANSPORATION:This include mode of transport selection of transporter or carrier freight consideration like freight paid or to pay routing, scheduling, processing claim in case of transit damage etc.,

b. INVENTROY MANAGEMENT:This includes:1. Short term fore casting2. Product size and location of warehouse3. Just in time4. Push or pull strategy adoption.5.

c. WARE HOUSING:The following functions are included:1. Space requirement

2. Suitability of location3. Layout design4. Physical arrangement


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d. MATERIAL HANDING:This includes:1. Equipment Selection2. Equipment Replacement3. Storage methods

4. Receipts and issue (F I F I or L I F O )

III FUNCTIONS OF FACILITIES:

a. FINANCING :This means extending credit facilities during selling. It an organization has todo this. It must have adequate working capital. Marketer has to plan.

a. Short term financeb. Long term finance

This financiers are provided by

a. Banks like nationalized orb. Financial institutions like ICICI, IDBIc. Credit societiesd. Government agencies like KIDB, KSFC etc.,

b. RISK TAKINGThere are innumerable risk. Which a marketer has to bear while marketing a product. Risk arises due to unforeseen circumstances. Risks can be insured also.Eg. Risks due to fire and accidents.

But some risks cannot be insured.Eg. Changes due to Govt. policies, risks due to increasedCompetition, technological risks and business cycle risks.

c. STANDARDIZATION:Buyers refer standardized goods. This will prevent the buyer form wasting his time in inspecting or examining the goods. Standardization and growing is a part of marketing function. Standardization is a process of setting up standards to manufacture products which confirms to a set of Specifications. Standardization, Size, shape, dimension colour etc.,

Grading is also a part of standardization. It is a process of sorting our goodsinto a number of graded, according to some characteristics such as quality and size grading is usually necessary for those products over which the producer cannot exercise any control in terms of physical properties.

Example: Food Grains, Fruits etc.,

d. AFTER SALES SERVICEThis is very important in case of industrial products whether final product or an intermediate. Hence, arrangement of after sales service has become an increasingly important function. Therefore, marketer has to plan for after sales service.Eg. Repairs, replacement, maintenance, etc.

OTHER FUNCTIONS OF MARKETING

In addition to the above, marketing has several other functions as follows:

1. Product planning and development2. Packaging3. Pricing


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4. Market Research.5. Promotion etc.,

1.Product Planning:

A Product planning is something which is a business offers to customers. Hence product planning, product improvement, product development, product diversificati

on are all parts of product management, profitability depends on product mix planning. Product planning involves adding dropping a modifying a product. Sometimes product line planning may have to be undertaken by marketer.2. PACKAGING:

Provides protection and improves aesthetic appeal. This enable the marketer to sell more. The two important aspects of packaging are:a. Labelingb. Branding3. PRICING:

Pricing is nothing but the value of the product in terms of money. It is the amo

unt paid by the buyer to the seller. Profitability is decided by the price. Marketer need to formulated pricing strategies.

4. MARKET RESEARCH :

Market research involves systematic gathering recording and analyzing of data about relating to the marketing of goods and services.

However different authors describe marketing function in different ways. Above we have mentioned one of those methods. Another way of classification of marketing function is as follows Mc.Garrv.

Classified marketing function in to 6 categories.

a. Contractual: Buyers Sellers are brought together for marketing transaction.b. Merchandizing: This is concerned with making products acceptable to themarket.c. Pricing :d. Propaganda: Buyers are informed about the activities of organizations.e. Physical distribution: Consisting of transportation storage etc.,f. Termination: This is the end of marketing activity.

MARKETING MANAGEMENT

INTRODUCTION :

The word MARKETING is originated from the Latin noun MORCATUS, which means A place where business is conducted. It is a place where buyers and sellers meet, and exchange goods and services for money.

Evolution of Marketing:

The stage of Barter:

Agriculturists and craftsmen were the main producers of this era. After meeting his own requirements the sulphur were disposed in their immediateneighbors.

There was no elaborate distribution system as the habits and needs of the peopleand the prevailing technology did not demand such a system. Marketing under those conditions meant a task of producing the basic necessities


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of life and exchanging them with known consumer groups in the immediate neighborhood. This represented the stage of barter in the evolution of marketing.

The stage of Money Economy:

In this next stage of evolution money came into picture.

The change was limited to the replacement of the barter system by the money system with the result that pricing became the chief mechanism of marketing.

The stage of Industrial Competition:

Far reaching changes took place in this stage. This stage introduced new products, new systems of manufacture, new modes of transportation and methods of communication. This stage brought about changes in the physical and economic environment of man. Mass production became the order of the day and variety of low-priced goodsbecame available in abundance.

The industrial revolution also generated the income revolution that sustained the mass production and mass distribution unleashed by the industrial revolution.

The Stage of Competition:

The ever increasing number and size of the producing firms generated the phenomenon of competition, which was not known in the agriculture and handicrafts economy or in the early stage of Industrial Evolution.

The main task of the industrial firms was disposal or distribution of whatever they produced. In the subsequent stage, meeting competition became the chief

issue. The situation demanded a conscious effort to face the competitors and the firms had to ensure that their products were accepted in preference to those of their competitors.

The Emergence of Marketing:

After the Second World War there war there was a substantial increase inpopulation. New industrial concerns sprang up rapidly and a great variety of new products and services strengthened the consumer market. Consumer had abundant choices and consumer began to occupy a place of unique importance. The businessmen who got consumers who are well educated and endowed witha good discretionary income realized that it was not enough if they made a onetime sale of their products to the consumers.

They had to make available their products at a price that was advantageous to the consumer. They also had to ensure that complaint from the consumer about the product was attended to promptly and if required after sales servicing had to beprovided and that led to the emergence of marketing.

MARKETING MIX

In marketing Planning we use marketing information to assess the situation. We have to select specific marketing targets in the form of market segments. For eac


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h segment or sub division of the market we have formulate a combination of a number of devices or types of marketing activities that are integrated into singlemarketing programme to reach a particular target or market segment. The combination of these marketing methods or devices is known as the marketing mix.

A successful marketing strategy must have a marketing mix as well as a

target market for whom the marketing mix is prepared. The elements or variablesthat make up a marketing mix are only four:1. Decisions on product or service.2. Decisions on price.3. Decisions on promotion.4. Decisions on distribution.

These four Ingredients are closely interrelated.

In the simplest manner, the basic marketing mix is the blending of four inputs or sub mixes which form the core of the marketing system.

1. Product Mix2. Price Mix3. Distribution Mix4. Promotion Mix.

The outputs are optimum productivity and satisfaction.

PRODUCT MIX PRICE MIX1. BRAND2. COLOUR3. STYLE4. DESIGN5. PRODUCT LINE

6. PACKAGE7. WARRANTY8. SERVICE 1. PRICING STRATEGY2. PRICING POLICY3. BASIC PRICE4. TERMS OF CREDIT5. DICOUNTS6. ALLOWANCES

MARKETING STRATEGYMARKETING MIXFOCUSSED ONTRAGET MARKET

PROMOTION MIX PLACE MIX1. PERSONAL SELLING2. ADVERTISING3. PUBLICITY4. SALES PROMOTION

a) DELERS AIDSb)CONSUMBER AIDS DISTRIBUTION CHANNELS

1. WHOLESALERS2. RETAILERS3. MERCANTILE AGENTS


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PHYSICAL DISTRIBUTION1. TRANSPORT2. WARE HOUSING3. INVENTORY

MARKETING MIX STRATEGY

PROMOTION MIX

SALES PROMOTION

OFFERING MIX ADVERTISING

PRODUCTS DISTRIBUTION TARGET

SERVICES SALES FORCE CHANNELSCONSUMERSPRICES

PUBLIC

RELATIONS

DIRECT MAILTELE MARKETINGAND INTERNET

The above figure shows the company preparing an offering mix of Products, Services, Prices and utilizing a Promotion Mix of Sales Promotion, Advertising, SalesForce, Public Relations, Direct Mail, Tele Marketing and Internet to teach the trade channels and the target customers.

Robert Louterborn suggested that the sellers four Ps correspond to thecustomers four Cs

FOUR Ps FOUR Cs

Product Customer Solution

Price Customer CostPlace ConveniencePromotion Communication.

PRODUCT MIX

A Product Mix (also called Product Assortment) is the set of all products and items that a particular seller offers for sales.


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The word Product Mix is used to describe the assortment of different product typesthat a company produces and markets. The Product line is the number of brands or related Products in each Products type.

Example: Have four major Product Lines: Detergents, Toothpastes, Soaps. For each line there are a number of brands and the number of different brands represents the length of Product Line and the numbers of different lines represents

the width of the Product Mix.

HINDUSTAN LEVER LTD., has a Product Line consisting of Soaps, Detergents, Cosmetics etc.,

PHILIPS has a wide range in audio systems and home appliances.

BRANDS :

A brand is a name, term, sign, symbol or design or a combination of Thom, intended to identity the goods or services of one seller or group of sellers and to di

fferentiate Thom form those of competitors.

PACKAGE :

Includes the activities of designing and producing the container for a product.The container is called the package and it might include up to three levels of material, Old Spice after shave lotion is in a bottle that is in a cardboard boxthat is in a corrugated box (shipping Package) containing six dozen of Old Spice.

Example : MAURTHI UDYOG LTD MARUTHI 1000MARUTHI UDYOG LTD., has a product Maruthi 1000 designed to have the following attributes.

Superior Road Grip Added Safety Luxurious Interiors Eco Friendly

PRICE MIX :

Price is an important consideration in buying decisions price also denotes Quality in the consumers mind a Psychological factor. For same products, when many identical brands are competing with each other for consumer preference, the price may be important influencing factor price is the basic vehicle for telling the consumer about the value and associated conditions of a particular product.

Price is an important element of marketing mix. It may be defined as the value of product attributes expressed in monetary terms, which a consumer pays or expected to pay in exchange. Pricing is a marketing function, pricing influences theprofit level, the operational level etc., the following factors determine the price of a product.

Pricing Objectives Demand for a Product or Services Competition Profitability Distribution channels

Example: 1. Price of PEUGEOT 309 The Premier Peugeot Limited plans to use the market based pricing where it well exploit the market fully aiming at charging a price that will be close to Maruthis 1000, which is priced at Rs: 4 lakhs approxima


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tely. The company plans to attack the market of Maruthis 1000 by an after of a better product for a little more.

2. Price of ACCENT The Hyundai Motor Company plans to follow the market penetration pricing, initially pricing the car at lower or same price to attracta larger number of customer, preferably permanent ones. It plans to offer of som

ething more for the same price.Price of ACCENT Rs: 5 lakhs.

PLACE MIX :

The marketer has the responsibility of making his product available near the place of consumption so that the consumers can easily buy it. If the brand preferred by the consumer is not easily available at the convenient lactation, he may buy some other brand. Thus a marketer has to ensure that his product is availableto the target consumers whatever required. There are two major areas in place mix:

1. Marketing channels2. Physical distribution

It is true that channel decisions affect other marketing mix elements, and involve a relatively long-term commitment of resources. It may take a marketer year to build up relations with the intermediaries and sometimes these are contractual. As we know, intermediaries are independent organizations and therefore, theirneeds must be taken into account while evaluating carious channel alternatives.In fact, the success of a companys marketing effort depends to a larger extent onthe soundness of its distribution network, physical distribution involves transportation, warehousing, material handling and bulk packaging among others, sameof theses activities will also be performed between the various links in the channel in order to get the optimum results. For many years, physical distribution

was a neglected area of marketing management, but now companies have become generally conscious of its importance in the overall marketing strategy.

Example : HM-MITSUBISHI CARS IN INDIA.

The company plans to use both one X zero level of channels of distribution. The company launched: LANCER in the four metropolitan cities, viz., Delhi, Mumbai, Calcutta and Chennai besides Cochin also.

The total number of dealers appointed in India is 135. The dealer will be provided training and help under the corporate identity programme.

The present widespread dealer network of the Hindustan Motors will handle sales, services, and spare parts activities.

The dealer and engineers will be trained under the company in house programmers in India as well as abroad.

PROMOTIONAL MIX :

Marketing promotion is a management process through which an organization develops, presents and evaluates a series of messages to an identified audience so, effective promotion depends on :

The nature of communication

The target audience The environment in which it is received The medium used to transmit the message.


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Example :1. OPELASTRA Car in India. The tools and media used.The company will use various strategic tools and media to tap the potential customers and keep the current ones.

Advertising in print media (newspapers, Magazines and dailies), using tele medialike Television, Videotapes and also through outdoor advertising are a few of t

he tools used by the company besides other like exhibits and fairs, demonstration etc.,

The company has a database of 20,000 likely buyers to whom direct mailers have been sent. The company has also conducted Car Clinics for over two months to gauge the custers response in an effort to balance quality and price.

Example :2. Hyundai Motor Company Car in India.The tools and media used.

The company uses massive communication using tools and media like print, T.V. ,Outdoor advertising, Exhibition and fairs, Video tapes etc.,

The global theme used is Commitment of customer satisfaction The Company however may not use newspaper as on advertising media on large scale, except where it is the most popular print media and only way to reach the customer.

PRODUCT MIX:

Product is the thing possessing utility. It has four components:1. Product range 2. Service after Sale 3.Brand 4.Package.

The product management evolves product mix in consultation with marketing manager.

PRICE MIX:

Price is the valuation placed upon the product by the offerer. It has to cover pricing, discounting, allowances and terms of credit. It deals with price competition.

PLACE MIX :

Distribution is the delivery of the product and right to consume it. It includeschannels of distribution, transportation, warehousing and inventory control.

PROMOTION MIX :

Promotion is the persuasive communication about the product by the offerer to the prospect. It covers advertising, personal selling, sales promotion, publicity,public relations, exhibition etc.,

INTEGRATED MARKETING:

When all the companys departments work together to serve the customers interests the result is integrated marketing.

Integrated marketing takes places on two levels.


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First, the various marketing functions- sales force, advertising, customer service, product management, marketing research must work together too often the sales force thinks product managers set prices or

sale quotas :too high, or the advertising campaigns. All these marketing functions must be coordinated form the customers print of view.

Second: marketing must be embraced by the other departments; they must also think

customer marketing is far too important to be left only to the marketing department. Marketing is not a department so much as a company wide orientation. Xeroxgoes so far as to include in every job description an explanation know that customer attitudes are affected by Xerox billing accuracy and promptness in returning calls.

The various marketing functions like sales, advertising, customer service, market research must work together. Secondly other departments like manufacturing, engineering, all departments must work together. Sometimes engineer complains thatsales/marketing people are always protecting the customer and not thinking of companys interest, he went on to blast customer for asking for too much, this feelingshould be removed, if we have to practice integrated marketing. In fact todays m

arketing concepts shown in the diagram.

CUSTOMERSFORNT LINE PEOPLEMIDDLE MANAGEMENT Modern CustomerTOP AMANGEMENT oriented organization chart.

At the top are customer, next in level are the frontline people who meet and satisfy the customer. Under them are the middle managers, whose job is to support the front line people to serve to customers.

NEEDS

Needs are basic satisfaction of human beings. Food , clothing, shelter etc are the basic needs of human needs

MEANING OF MARKET

A market is a physical place where buyer and sellers gathered to exchange goods

Economists describe a market as a collection of buyers and sellers who transactover a particular product or product class.

Business people often use the term market to cover Various Groupings of customers

MEANING OF MARKETING

Marketing is a social and managerial process by which individuals and groups attain what they need and want through creating, offering and exchanging products of value with others

A System of interacting business activities designed to plan, price, promote anddistribute want, satisfying products and services to present and potential customers.


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Marketing is the performance of business activities that directs the flow of goods and services form the producer to the consumer.

Marketing is designed to bring about desired exchange with target audiences for purpose of mutual gain.

MODERN DEFINITION OF MARKETING

A total system of business, an ongoing process of (1) Discovering and transacting consumer needs and desires into products and services (through planning and producing the planned demand)2. Creating demand for these products (through promotion and pricing)3. Serving the consumer demand through planned physical distribution (with the help of marketing channels and then4. Expanding the market even in the face of keen competition.

DEFINITION FOR MARKETING MANAGEMENT

Marketing management is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals.

THE SCOPE OF MARKETING

Marketing is typically seen as the flash of creating promoting, and delivering goods and services to consumers and businesses. In fact marketing people are involved in marketing types of entities goods services, experiences, event, person,places. Properties, organization information and ideas.

1. Goods : physical goods constitute the bulk of most countries productionand marketing effort in developing nations, goods- particularly food, commodities clothing and housing are the mainstay of the economy.2. Services: At economies advance a growing proportion of their activitiesare focused on production of services. The US economy today consists of a 10-30services to good mix. Service include the work of airlines, hotels can rental firms, barbers and beauticians, maintenance and repair people, dog kennels and dogtherapists, as well as professionals working with in or for companies, such asaccounts lawyers, engineers, doctors, software programmers and management consultants.3. Experiences: by orchestrating several services and goods, one can create, stage, and market experiences. There is a market for different experiences, such as spending a week at a base ball camp playing with some retired baseball greats, playing to conduct the Chicago symphony orchestra for five minutes, or climbing mount Everest.4. Events: Marketers promote time based events such as the Olympics, company anniversaries, major trade shows, sports events, and artistic performances, there is a whole profession of meetings planners who work out the details of an event and stage it to come off perfectly.5. Persons: Celebrity marketing has become a major business. Years ago someone seeking same would hire a press agent to plant stories in newspapers and magazines. Today artists, musicians, CEOs, physicians high profile lawyers and financiers, and other professionals are drawing help from celebrity marketers.6. Places : cities, states, regions, whole nations compete actively to attr

act tourists, factories, lump any head quarters and new residents. Ireland has performed as an outstanding place marketer, having attracted more than 500 companies to locate their plants in Ireland.


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7. Properties : Properties are intangible rights of ownership of either real property or financial property. Properties are brought and sold, and this occasions a marketing effort.8. Organizations: Organizations actively work to build a strong, favorableimage in the mind of their publics. We see corporate identity ads by companies seeking more public recognition. Philips puts out ads with the tag line lets make things better. Universities, museum and performing arts organization all lays plan

s to boost their public image to compete more successfully for audiences and funds.9. Information: Information can be produced and marketed as a product. Thisis essentially what schools and universities produce and distribute at a priceto parents, students, and communities. Encyclopedias and most notification books, market information. We buy CDs and visit the internet for information.10. Ideas: Every marketing offering includes a basic idea at its core. marketers search hard for the core need they are trying to satisfy. A church example,must decide whether to market itself as a place of worship or a community center.

NEEDS, WANTS, & DEMAND

NEEDS: NEED is a state of felt deprivation of some basic satisfaction. People require food, clothing, shelter, safety belonging, esteem and a few other things to survival. These NEEDS are not created by their society or by marketers.

WANTS: WANTS are desires for specific satisfiers of these deeper needs.For example: if a person needs a vehical to travel to his office he can go for two wheelers, but if he specifically buys a car or a FOUR WHEELER that becomes awant.

DEMAND: DEMANDS are wants for specific products that are backed up by an ability& willingness to by them.For example: .

PUSH AND PULL STRATEGY: (Kotler)

In managing its intermediaries, the firm must decide how much effort to devote to push versus pull marketing. A Push strategy involves that manufacturer using its sales force and trade promotion money to induce intermediaries to carry, promote and sell the product to end users. Push strategy is appropriate where thereis low brand loyalty in a category, brand choice is made in the store, the product is an impulse item, and product benefits are well understood.

A pull strategy involves the manufacturer using advertising and promotion to induce consumers to ask intermediaries for the product, thus inducing the intermediaries to order it. Pull strategy is appropriate when there is high brand loyaltyand high involvement in the category, when people perceive differences betweenbrands, and when people choose the brand before they go to the store. Companiesin the same industry may differ in their emphasis on push or pull.

Designing a channel system involves four steps:1. analyzing customer needs,

2. establishing channel objectives3. identifying major channel alternatives, and4. Evaluating major channel alternatives.


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Promotion- push and pull strategies"Push or Pull"?Marketing theory distinguishes between two main kinds of promotional strategy -"push" and "pull".

PUSH:A push promotional strategy makes use of a company

s sales force and trade promotion activities to create consumer demand for a product.The producer promotes the product to wholesalers, the wholesalers promote it toretailers, and the retailers promote it to consumers.A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia - for example offering subsidies on thehandsets to encourage retailers to sell higher volumes.A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of

strategy, consumer promotions and advertising are the most likely promotional tools.PULL:A pull selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product.If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.A good example of a pull is the heavy advertising and promotion of children

s toys mainly on television. Consider the recent BBC promotional campaign for its newpre-school programme the Fimbles. Aimed at two to four-year-olds, 130 episodesof Fimbles have been made and are featured everyday on digital children

s channel CBeebies and BBC2.

As part of the promotional campaign, the BBC has agreed a deal with toy maker Fisher-Price to market products based on the show, which it hopes will emulate thepopularity of the Tweenies. Under the terms of the deal, Fisher-Price will develop, manufacture and distribute a range of Fimbles products including soft, plastic and electronic learning toys for the UK and Ireland.In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of 90mfrom its children

s brands and properties last year. The demand created from broadcasting of the Fimbles and a major advertising campaign is likely to pull demand from children and encourage retailers to stock Fimbles toys in the stores forChristmas 2002.PromotionTo sell an offering you must effectively promote and advertise it. There are twobasic promotion strategies, PUSH and PULL. The PUSH STRATEGY maximizes the use of all available channels of distribution to"push" the offering into the marketplace. This usually requires generous discounts to achieve the objective of giving the channels incentive to promote the offering, thus minimizing your need for advertising. The PULL STRATEGY requires direct interface with the end user of the offering. Use of channels of distribution is minimized during the first stages of promotionand a major commitment to advertising is required. The objective is to "pull" the prospects into the various channel outlets creating a demand the channels cannot ignore.Using Push-Pull Strategy In Public RelationsPush-Pull Strategy is not a new concept; it

s been around for a while. Its two components - Push Strategy and Pull Strategy - can be utilized either exclusively

or in combination, and it is probably more useful to discuss each separately, because Push-Pull simply is the combination of the two. Although often thought ofas marketing tools, Both push and pull principles fit very well into the public


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relations model and are used in strategic campaigns to determine the efficacy of persuasive methods.One of the earliest definitions of public relations I learned was, "Public relations is doing good things and talking about it." You could say that Pull Strategy has "doing good things" at its heart, and that Pull Strategy is more concernedwith the "talking about it" element.PULL STRATEGY involves talking directly to your primary audience with the expres

s purpose of persuading them to take a specific action favorable to your organization. It depends on your organization

s ability to "pull" the target audience into the fold, and is most powerful when you have developed a solid reputation asa leader in the field.In other words, an organization

s strength and exemplary actions are used to attract supporters.Consistent, exemplary action leads to people trusting your organization. This earned trust boosts your credibility, and when people can believe you, this in turn solidifies your company

s reputation in society. And, it is this reputation that serves as your operational foundation and determines the image that people have of you. I call this the Action-Image Continuum.All of this smoothes the way for acceptance of your message and your calls for s

upport. In short, exemplary action pulls your potential supporters toward you and makes it easier to persuade them to take action on your behalf. A good examplewould be a member of your organization personally taking a potential member bythe hand and walking him or her through the recruitment process.PUSH STRATEGY uses the benefiting organization

s communications channels and influencing audiences to convince potential supporters that it

s in their best interest to join your organization or support its causes.You generally will be communicating with a large group of potential supporters,and will choose from a gamut of communications tools in Push Strategy. It

s everything from brochures to direct mail, from newsletters to phone calls, from speeches to exhibits, from email to websites.Basically, the purpose of push is to get the word out about your organization orcause.

However, you must give something of value to the audience - something that willpush them, that will nudge them toward you, that will position them to be enlightened by your organization

s good name and image, that will break through the inertia and get them to do something on your behalf. That something of value couldbe entertainment, knowledge, expertise, "how to" or "did you know" tips, perhaps even samples.PUSH-PULL STRATEGY is a combination of the two strategies - planning and timingyour "pull" initiatives with your "push" initiatives. You use persuasive methodsdirectly with your primary audience (pull), while at the same time, you utilizeexisting or new targeted communications tools (push).A good example of "push-pull" would be a college-level pre-professional organization whose members are often "lost in the cracks" before they join the sponsoring professional association. The pre-professional organization can "talk up" and"push" professional membership until their faces turn blue, but once their members leave the fold (graduate), it then becomes the responsibility of the sponsoring association to latch on to them and "pull" them into the professional group.

Question: What are marketers talking about when they say Push vs. Pull?________________________________________Answer: "Push" tactics are typically promotions directed at re-sellers or othermembers of the distribution channel. Again, there are different types, includingtraining programs, trade allowances, cooperative advertising, and the provisionof point-of-purchase displays. These are intended to provide incentives to thechannel to "push" a firms product toward the customer.

A "Pull" strategy is usually advertising directed at the end consumer. It worksto increase end demand, thus "pulling" a product through the distribution channe


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l.

Push-Pull strategy.The business terms push and pull originated in the marketing and advertising world, but are also applicable in the world of electronic content and supply chainmanagement. The push/pull relationship is that between a product or piece of inf

ormation and who is moving it. A customer "pulls" things towards themselves, while a producer "pushes" things toward customers.ContentIn a "push" system the consumer does not request the product to be developed; itis "pushed at" the end-user by promotion. An example of this is a perfume product. Women do not request to smell a fragrance they never smelled before; it is simply "pushed" at them, through the right advertisement.In a "pull" system the consumer requests the product and "pulls" it through thedelivery channel. An example of this is the car manufacturing company Toyota. Toyota only produces cars when they have been ordered by the customers.Supply chainsWith a push-based supply chain, products are pushed through the channel, from th

e production side up to the retailer. The manufacturer sets production at a level in accord with historical ordering patterns from retailers. It takes longer for a push-based supply chain to changes in demand, which can result in overstocking or bottlenecks and delays (the bullwhip effect), unacceptable service levelsand product obsolescence.In a pull-based supply chain, production and distribution are demand driven so that they are coordinated with actual customer orders, rather than forecasted demand.A supply chain is almost always a combination of both push and pull, where the interface between the push-based stages and the pull-based stages is known as thepush-pull boundary. An example of this would be Dell

s build to order supply chain. Inventory levels of individual components are determined by forecasting general demand, but final assembly is in response to a specific customer request. T

he push-pull boundary would then be at the beginning of the assembly line. At this point on the supply chain timeline, it is typically coordinated through a buffer inventory.

Push Then Pull MarketingMarketing is like rowing. You pull hard on the oars to go forward, then lift them out of the water and push them back to finish the stroke and get ready for thenext pull. Once you

ve got the sequence of the stroke right, you and your boatslip forward through the water and build speed and momentum. If you push when you should be pulling, the boat goes backwards, or, even worse, you lose your balance and fall into the bottom of the boat.One of the biggest mistakes people make in marketing their services is to simplyPUSH information about their services and themselves out to prospects and hopethat this will result in attracting prospects. Unless you are already a household name and in such demand that your phone is ringing off the hook, this approachrarely attracts the numbers of new clients you want. The result is that most marketing falls into the bottom of the boat instead of propelling your business forward.An alternative to the typical push and hope approach to marketing is to PULL prospects in and then in the context of a growing relationship, PUSH useful information out to them. If you want prospects to remember your firm when they have a need for your services, start by attracting their interest.Generate interest by focusing on what your potential clients want and the problems they need solved. Use this client centered marketing strategy to pull prospects in so you can push your expertise out to them. Give them ideas they can apply

instead of information about credentials, or past clients. Like rowing your boat, you won

t move very far unless you repeat the sequence again and again.Are you pulling prospects in or just pushing your information out? Review your m


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arketing materials to see if you have the sequence right. Take a look at your web site, brochures, newsletters, correspondence and proposals.PULL TACTICS -

Client

CenteredDo your marketing materials1. Begin with a clear identification of the niche market(s) you work with?2. Lead with client problems and concerns?3. Use the two elements above to create a picture that your target market c

an identify with?4. Provide useful ideas that your target market can use and that demonstrates your expertise?PUSH TACTICS -

You

CenteredDo your marketing materials1. Focus on you, your services and staff?2. Focus on glowing testimonials and your client list?Which works best? Both. The challenge is getting the emphasis and order right. The pull then push marketing sequence that works to move your business forward involves the following:1. Create resources that pull prospects to you and your firm2. Get prospects to give you their contact information (Most firms let over

99% of the people who see their information go away and never follow up)3. Push useful information out to self-selected prospects on a regular basis. (Remember the majority of buyers won

t make a purchase until they

ve had a minimum of 5-6 contacts with your firm.)When your prospects have a compelling need, they will turn to the firm that they

ve had regular communication with, know and trust. At some point prospects willwant more details about your services, credentials and testimonials. But this is often the last information you need to provide.Use the pull then push strategy to get your marketing moving. You

ll be amazed as you watch both your prospect and client lists grow and your business gains momentum.

SERVICE MARKETING:

Definition:

Services are defined as identifiable, intangible, activities that are the main object of a designed to provide want-satisfaction to customers.

For marketing purposes, services are separated into two categories:

Services that are main purpose or object of transaction.Eg: You rent a car from enterprise. The company makes a car available

(A tangible good). But what you are purchasing is accessibility to transportation. Because you are buying the use of the car, not the car itself, this is a service transaction.

Service that support or facilitate the sale of good or any other service.Eg: When you rent a car from enterprise, you can also obtain collis

ion insurance, the use of a cellular phone, and an electronic navigational device. These are called supplementary or support services because you obtain them only in conjunction with renting a car.

NATURE AND IMPORTANCE OF SERVICES:

Services are the major source of employment more than 80% of the non-farm laborforce is employed in service industries. The industries in which job growth willbe the fastest are data and information and management, institutional and in ho

me health care education and financial services. The services account for over one half of consumer expenditures is impressive, but is still grossly understates the economic importance of services. And hence


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spending for business services. And hence spending for business services will continue to grow. As commerce has become increasingly complex and competitive , managers have found that calling on specialized service providers is effective and efficient. Thisis resulting in many tasks formerly performed by regular employees, from research and training to advertising and distribution are increasingly being Outsourcedto specialists.

SCOPE OF SERVICES

Scope of services can be recognized both for Profit and non business services organizations for profit services firms sell to consumers or other business with profitable operations as a primary goal. This category is classified byindustry:

_ Housing & other structures: Rental of offices, warehouses, hotels, motels, apartments,

houses & firms

_ Household operations: House maintenance & repairs, security, landscaping &household cleaning

_ Recreation & Entertainment: Theatres, Spectator sports, amusement parks,participating sports, restaurant meals & resorts.

_ Personal care: Laundry, dry cleaning, spas

_ Medical & Health care: Physical & Mental medicinal services, dental, nursing,

Physiotherapy

_ Private Education: Vocational schools, nursery schools, continuing educationprograms

_ Professional business services: Legal, accounting, advertising, marketing research,

public relations & Management consulting

_ Financial services: Personal & business insurance, banking, credit & loans service,

Brokerage service & investment councelling.

Non business service organizations are of two types. One type is not forprofitService organization which have a profit goal because growth & continued existencedepend on generating revenue in excess. However PROFIT is secondary to the N-F-Psprimary objective. In many cases N-F-Ps operate in a fashion very similar to for-profitbusinesses eg.

_ Educational: Private grade schools, High schools, Colleges & Universities

_ Healthcare: Hospitals, Nursing homes, Health research organizations

_ Professional & Trade: Labor unions, Certificate groups, professional associations,

trade associations & lobbying groups


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_ Social concerns: Organizations dealing with family planning, civil rights, termination

of smoking, environmental concerns.

The second type of non-business organization is a non-profit organization which provides services but does not have a profit or surplus objective, eg.

Federal, State & Local Govt. agencies. The provide services, often charging forthem & may even operate in competition with for-profit businesses, eg.U.S. National part service competes with private forms of outdoor recreation.

CHARACTERISTICS OF SERVICES

There are 4 characteristics that differentiate services from goods. They are:

- Intangibility- Inseparability- Heteroginity

- Perishability

INTANGIBILITY

As services are intangible, it is impossible for prospective customers to sample- feel, see, hear, taste or smell i.e a service before the buy it. Four promotional strategies that may be used to suggest service benefits & reduce the effort of intangibility are:

- Visualizationeg. Carnival cruise lines depicts benefits of cruises

- Association

eg. Connecting service with tangible goods. Prudential Insurance suggests stability & security with its rock of Gibralter. Merrill Lynch

- Physical representationEg. American Express uses colour gold or platinum for the credit card servicesto symbolize wealth & prestige.

Documentation

There are 2 forms of documentation:

i) Past performanceeg. A hospital can document its past performance by pointing out in its ads howmany

babies have been born & cared for in its obstetrics department.

ii) Future capabilityeg. A hospital chooses to stress its capability by highlighting the specia

lizedequipment it has if an emergency arise during th

marketing managemnet module 1

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