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marketing management

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Information about marketing management
Education

Published on November 19, 2008

Author: sadanand_sukhdan

Source: authorstream.com

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MARKETING MANAGEMENT : MARKETING MANAGEMENT Topics : Topics Introduction to Marketing concept, Evolution of Marketing and Customer orientation Marketing Environment and Evaluation of Market opportunities Market Research & Marketing Information Systems Demand forecasting and Market Potential analysis Consumer buying process & Organizational buying behavior Pillars of Marketing- Target market positioning & Differentiation Marketing Mix Product Decisions- PLC New product development process Distribution decisions- Logistics & channel decisions Promotion Decisions-IMC concept, communication tools Personal selling & sales Management Pricing decisions Marketing Concept : Marketing Concept The Marketing concept arises out of the awareness that a business should start with the determination of consumer wants and end with the satisfaction of those wants. The concept puts the consumer at both the beginning and end of the business cycle. The marketing concept has 4 major distinguishing features: Consumer orientation: Emphasizes on the consumer and his need being the 1st distinguishing feature of the marketing concept Integrated management, with Marketing as the fulcrum: Integrated management means that all the different functions of the business must be tightly integrated with one another, keeping marketing as the pivot Consumer satisfaction: Realization of all organizational goals including profits Selling ad Marketing : Selling ad Marketing Selling Selling starts with seller & is preoccupied all the time with the needs of the seller Emphasizes on saleable surplus available with the company Seeks to convert products in to cash Views business as – goods producing process Selling views the customer as the last link in the business Marketing Marketing starts with the buyer and focuses constantly on the needs of the buyer Emphasizes on identification of market opportunity Seeks to convert customer needs in to products Views business as – a customer satisfying process Marketing views the customer as the very purpose of business Market environment : Market environment Besides the marketing mix variables, one has to tackle another set of variables that lie outside the control of the firm. These relate to the environment. Environmental variables are referred to as the non controllable variables of marketing while the marketing mix are referred to as the controllable variables of marketing. Factors covered under Environment analysis:(Macro environment) a)Demographic envt b) Socio cultural envt c)Economic envt d)Political envt e)Natural envt f)Technology envt g)Legal envt h) Govt policies Environment that is specific to the business: The market/ the demand/ the consumer/ the industry/ the competition/ govt policies specific to the business concerned Market Research & Marketing Information Systems (MIS) : Market Research & Marketing Information Systems (MIS) MIS benefits the company in the following ways: Provides valuable market intelligence Helps quick spotting of changing trends Helps tap opportunities and build defences against threats Helps implement all marketing action programmes Helps deliver customer oriented marketing offers- all ‘Ps’ of marketing mix Helps product innovations Helps reduce product failure Supports channel management, channel choice, channel motivation and multi channel marketing Supports sales promotion Steps involved in designing and developing an MIS : Steps involved in designing and developing an MIS Defining information needs Classifying information appropriately and identifying whether it is for planning, or implementation or control purposes Evaluating the cost of collecting and processing the information and comparing cost v/s benefits Identifying the sources of information Designing the mechanisms & procedures for gathering, processing, storing and retrieval of information Deciding the frequency and timing of collection & supply of information Processing, analyzing and interpreting the information and disseminating it to the right persons at the right time Monitoring, maintaining, reviewing and improving the system Marketing Research : Marketing Research Marketing research is the systematic, objective and exhaustive search for the study of the facts relating to any problem in the field of marketing. It is the research on the manifold problems of marketing. Its purpose is to aid decision making in marketing. It is the systematic gathering and analysis of information. Marketing research jobs can be classified in different ways such as: Routine problem analysis and research on routine problems Research on short term and long term problems Classification based on the actual subject of the research Subjects of Research : Subjects of Research Research on consumer Research on Market and demand Research on product or brand Research on competition Research on distribution Research on price Research on advertising and promotion Research on sales methods Steps involved in the Marketing research process : Steps involved in the Marketing research process Defining the marketing problem and identifying the MR problem involved Specifying the information required Developing the research design and research procedure Gathering the data/ information Analyzing the information and interpreting it in terms of the problems being tackled Summarizing the findings Preparing the research reports Demand forecasting and Market Potential analysis : Demand forecasting and Market Potential analysis Commonly used terms: Market potential or industry potential Company potential or sales potential Market demand or Industry demand Company demand or company sales possibilities Market forecast or Industry forecast Company forecast or sales forecast Consumer buying behavior : Consumer buying behavior Factors influencing buyer behavior: Personal factors: Age, Education, Economic position, status and self esteem Cultural factors: Religion, language, up bringing etc Psychological factors: Beliefs, attitudes, motivation, perception The Buying process : The Buying process Problem or need recognition Awareness Evaluation or comprehension Attitude or feelings towards the product Legitimate the course of action Trial Adoption of the product Post purchase behavior STP : STP Benefits of segmentation to the marketer: Facilitates proper choice of target market Facilitates tapping of the market, adapting the product offer to the target Makes the marketing effort more efficient and economic Helps to identify less satisfied segments and concentrate on them Benefits the customer as well Major bases for segmentation : Major bases for segmentation Geographics Demographics Psychographics Buyer behavior Benefits Volume of purchase Marketing Mix : Marketing Mix 4 P’s of marketing: extension of the same Environmental variables are referred to as the non controllable variables of marketing while the marketing mix variables are referred to as the controllable variables of marketing PLC : PLC Stages of PLC Introduction or pioneering stage Growth stage Maturity stage Decline stage BCG matrix: market growth rate / relative market share : BCG matrix: market growth rate / relative market share GE model: market attractiveness/ business strength : GE model: market attractiveness/ business strength Product Decisions : Product Decisions New products are classified in to two groups: New products arising out of technological innovations New products arising out of market – oriented modifications Stages in new product development : Stages in new product development Generating new product ideas Idea screening Concept testing Business/ market analysis Actual product development Market test Commercialization Factors responsible for success and failure of products : Factors responsible for success and failure of products Success rate in new products is correlated to the presence of 3 critical factors: A unique and superior product idea that yields a real benefit to the customer Strong technical and production expertise A strong market orientation on the part of the company. Distribution decisions- Logistics and channel decisions : Distribution decisions- Logistics and channel decisions Physical distribution is the process of delivering the product to the marketing channels and consumers. It encompasses the various activities involved in the physical flow of the product from the product to the consumer. The importance of physical distribution are: Ensures the physical flow of the product from the producer to the consumer. Without this flow, marketing cannot take place. Confers place and time utility on products Helps build clientele Where production locations and markets are distanced, physical distribution becomes all the more crucial A promising area of cost of reduction Component functions of physical distribution : Component functions of physical distribution Planning the overall physical distribution system In plant warehousing Transportation Receiving handling Secondary transportation, secondary handling and sub distribution Inventory management at each level in the chain Order processing and execution Accounting and record keeping communication Steps involved in designing a physical distribution system : Steps involved in designing a physical distribution system Articulating distribution objectives and specifying the minimum service level desired in product delivery Finding out what the customers want in product delivery Finding out what the competitors do Keeping the cost of the system as low as possible, without sacrificing the guaranteed minimum service level Keeping the system sufficiently flexible Managing the Distribution Function : Managing the Distribution Function Marketers realize that if they were to make the brands available in the right size, at the right time and at the right price, the Indian consumer can be motivated to buy it and consume it….. Role of Middlemen or Intermediaries : Role of Middlemen or Intermediaries a) Provide information about the market to the manufacturer b) Maintain price stability in the market c) Promotion of the products in his territory d) Financing by providing the necessary working capital in the form of advance payments for goods and services e) Middlemen also take the title of the goods and services and trade in their own name Channel Level : Channel Level Decisions that a firm must take regarding the number of channel levels appropriate to serve a given market From zero-directly from the manufacturer to the customer- to as high as 4 to 5 levels involved in distribution. Zero level in industrial product marketing, project marketing Slide 29: Firm adopts a one channel level when: a) Number of customers is high b) Customers in specific geographical area c) Order lot size not uniform d) Firm sells goods to wholesaler or a large dealer 2, 3 or even 4 levels in case of: a) Consumer products b) Customers spread across the country c) Market is large Factors Influencing Distribution Decisions : Factors Influencing Distribution Decisions Market Characteristics Company Characteristics Product Characteristics Middlemen Characteristics Intensity of Competition Environmental Characteristics Terms and Responsibilities of Intermediaries : Terms and Responsibilities of Intermediaries a) Price policy-the middlemen have to ensure that everyone involved gets a fair and equitable deal b) Payment terms-the manufacturing firm stipulates the mode and terms of payment c) Returns policy-this indicates the warranty that the manufacturer extends to the intermediary d) Territorial rights-the territorial jurisdiction should be spelt spelt out to avoid territory jumping e) Mutual services and responsibilities-should be spelt out,particularly in case of franchised and exclusive agency channels Sales Promotion : Sales Promotion Importance of sales promotion to a marketer is attributed to the following reasons: Fast growing market Increasing competition among brands The maturing and standardization of products Factors Contributing to Growth of Sales Promotions: : Factors Contributing to Growth of Sales Promotions: (a) Growing consumerism in India and an upwardly mobile Indian market (b) Heightened inter-firm rivalry within the industry (c) Trade’s resistance to invest additional resources in the product mix of different companies (d) Fragmentation of viewers and readers arising out of multiple television channels, newspapers and magazines (e) The mass media cost has been on the rise and most companies find sales promotion as a more cost effective alternative (f) With technologies and products getting standardized, differentiation between firms has got blunted and price wars have now become a reality in most consumer goods Sales Promotion Helps : Sales Promotion Helps Helps in securing trial and defending shelf space against competition; (ii) Smoothens out the manufacturing capacities of firms in such a way that the peaks and the valleys are minimized; (iii) Provides opportunities to manufacturers to reach out to market segments with differing price sensitivity; (iv) Adds excitement to the in-store merchandizing of consumer goods; (v) Motivates trade to keep more and push more of those brands that are on promotion Personal selling and Sales Management : Personal selling and Sales Management Personal Selling In today's world marked by complex technologies, and multiple choices, the customer is increasingly becoming dependent on the salesperson The customer wants to be sure that he/she is getting value for his or her money The salesperson provides competitive product information to the customer, and also reassure the customer regarding price and service Personality and Motivation Profile of an Effective Salesperson : Personality and Motivation Profile of an Effective Salesperson The personality traits required by a good salesperson are: Dominance-assures assertiveness Achievers- Effective salesperson are high achievers Affiliation-Effective salesperson show moderate affiliation Creativity-Effective salespeople are creative people Exhibitionism-Involves taking legitimate pride in achievements and sharing experiences with others Problem solving-Effective salespeople have been found high on problem solving Role of Salesperson : Role of Salesperson Diagnostic-salesperson finds cause of a problem Analyst-analyze customer needs and market trends Information provider-Role of an intelligence agent Strategist- Evolve a strategy to emerge as a market leader Tactician-Evolves tactics to win over the customer or enhance dealer satisfaction Change agent-Introduces new product ideas and influences the life styles and consumption patterns Selling Theories : Selling Theories Stimulus Response Theory: some of the stimuli the salesperson has control over are: Self-physical appearance, mannerism, voice modulation, interpersonal skills Price concessions Announcement of price changes Preferential treatment to important buyers Product Oriented Selling: : Product Oriented Selling: It is the responsibility of the salesperson to make the prospect aware of: (a) technological / scientific developments (b) how these can be useful to him/her (c) make the prospect aware of his/her needs Salesperson and Customer Perceptions in a Typical Sales Situation : Salesperson and Customer Perceptions in a Typical Sales Situation Salesperson Objective & Role Objective Hook the customer Process Romanticize the customer Create high expectations Over promise Bulldoze objections if need be Throw weight, if required Quit, if going gets tough Pusher Result Sales order not necessarily with the desired profit margin Post Sales Keep assuring customer Indifferent/ ‘I don’t care’ Justify delays Customer Objectives & Concern Solution to ‘my’ problem Do you understand my needs ? Do you understand my budget constraints ? Can I trust you ? Will you deliver in time ? Will you stay with me in my hour of need ? Evaluate Waiting for order to be delivered Expectant Follow up with salesperson Tension builds up Frustration ‘Given a choice I will never buy from you’ Relationship Intensifier : Relationship Intensifier Initiate contact with the customer Know his business and background Listen empathetically Show appreciation Involve customer in presentation Understand customer’s objection respond immediately to service requests Follow up on customer’s service needs with other concerned individuals and departments in your company Avoid throwing ‘weight’ and ‘jargons’ in your presentation Accept responsibility for failure Plan for future Selling Process and Skills Required : Selling Process and Skills Required The selling process is a five stage process: 1. Opening of a call-effective salesperson is sensitive to verbal and non-verbal message which the prospect gives 2. Need exploration-this requires the use of probing and sensitivity skills 3. Presentation-should be meaningful and convincing 4. Managing objections-these should be perceived as opportunities for creative thinking to nail competition 5. Closing the call-provide the prospect sufficient reason to buy the product. The skills used here are explanatory and probing Role of Integrated Marketing Communications : Role of Integrated Marketing Communications Marketing communications … are the “voice” of the brand and are a means by which it can establish a dialogue and build relationships with consumers. allow marketers to inform, persuade, incent, and remind consumers directly or indirectly can contribute to brand equity by establishing the brand in memory and linking strong, favorable, and unique associations to it. Role of Integrated Marketing Communications (Cont.) : Role of Integrated Marketing Communications (Cont.) Consumers can be told or shown how and why a product is used, by what kind of person, and where and when; Consumers can learn about who makes the product and what the company and brand stand for Consumers be given an incentive or reward for trial or usage Brands can be linked to other … People Places Events Brands Experiences Feelings Things Pricing decisions : Pricing decisions Factors influencing pricing: (Internal factors) Corporate and marketing objectives of the firm The image sought by the firm thru pricing The characteristics of the product Price elasticity of demand of the product The stage of the product in the PLC Use pattern and turnaround rate of the product Costs of manufacturing and marketing Extent of distinctiveness of the product and extent of differentiation practiced Composition of the product line of the firm Slide 46: External factors: Market characteristics( demand, customer and competition) Buyer behavior in respect of the product Bargaining power of major customers Bargaining power of major suppliers Competitors’ pricing policy Govt controls and regulations on pricing Other relevant legal aspects Objectives which Firms seek in pricing : Objectives which Firms seek in pricing Profit maximization in short term Profit optimization in long term A minimum ROI A minimum return on sales turn over achieving particular sales volume Achieving a particular market share Deeper market penetration Enter new markets Keeping competition out or under check Parity with competition Providing commodities affordable by weaker sections Categories of pricing methods : Categories of pricing methods Cost based pricing: under which one can have :a)Mark up pricing or cost plus pricing b)Target Rate of Return pricing Demand based pricing: under which one can have: a) what the traffic can bear pricing b)Skimming pricing c) Penetration pricing Competition oriented pricing Value pricing Tender pricing Affordability based pricing Differentiated pricing

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