in

11.12 Marketing Management

Meaning and Features of Marketing

  1. What is the meaning of marketing?
    1. Marketing is a social process of identifying needs and wants,
    2. Satisfying them through creating market offering by giving something of value to the customer,
    3. With the help of an exchange mechanism?
  2. What are the features of marketing?
    1. Needs and wants
      1. The needs and wants of the target market should be identified
    2. Creating market offering
      1. The product offered should have the required features,
      2. Should be made available at the right place,
      3. Should have the right price and
      4. Should be of requirement to the target market.
    3. Customer value
      1. The customer should get more value in comparison to the price he is ready to pay.
      2. It should be of benefit to her/him.
    4. Exchange mechanism
      1. Seller and buyer need a place (shop, online market) to meet so that one (seller) can give the product in return of the money paid and with the will and freedom involved.
  3. What can be marketed?
    1. Goods,
    2. Services,
    3. Ideas,
    4. People,
    5. Places,
    6. Information,
    7. Property,
    8. Events and
    9. Organization.
  4. What are the differences between marketing concepts and selling concepts?
    1. Marketing Concepts:
      1. Wider concepts
      2. Marketing can start before the product is made and continue after the product is made.
      3. Profit is generated through customer satisfaction,
      4. Marketing involves PULL strategy. Products are made according to the needs of potential (able) customers.
    2. Selling concepts
      1. Narrow concept
      2. Selling can start only after the product is made.
      3. Profit is generated through sales,
      4. Selling involves PUSH strategy. Products are sold through persuasion (force) and selling efforts.
  5. What is market?
    Market is the sum total of all the potential and actual buyers of a product.
  6. Who is a marketer?
    Marketer is a person who takes more active parts in the exchange mechanism. Generally a seller is the marketer but it is not necessarily true as sometimes the buyer makes more efforts in the exchange.

Marketing Management Philosophies

  1. What is production concept?
    1. Starting point of marketing is factory,
    2. Focus of marketing is the quantity of product,
    3. Means of marketing is availability and affordability of product.
    4. The endpoint of marketing is volume of production.
      1. Micromax, RedMi and LAVA phones run on production concept.
  2. What is product concept?
    1. Starting point of marketing is factory,
    2. Focus of marketing is the quality of product
    3. Means of marketing is improvement in the quality of product.
    4. The endpoint of marketing is product quality.
      1. One Plus and Apple iPhone runs on product concept.
  3. What is selling concept?
    1. Starting point of marketing is factory.
    2. Focus of marketing is existing products.
    3. Means of marketing is promotion and selling.
    4. The endpoint of marketing is sales volume.
      1. Oppo and Vivo run on selling concept.
      2. TATA Nano
  4. What is marketing concept?
    1. Starting point of marketing is market and society.
    2. Focus of marketing is customer need.
    3. Means of marketing is integrated marketing.
    4. Endpoint of marketing is customer satisfaction.
      1. Samsung phones run on marketing concept.
      2. Maruti Alto.
  5. What is societal concept?
    1. Starting point of marketing is market.
    2. Focus of marketing is customer needs and societal welfare.
    3. Means of marketing is integrated marketing.
    4. Endpoint of marketing is customer satisfaction and social welfare.
      1. Reliance Jio (initially) ran on societal concept.
      2. Lifebouy Soap.

Functions of Marketing

  1. Gathering and analyzing market information | Eat India Company is sending Mr. Kevin to gather information about the demand for its new product – “EatWise Cakes” which is 100% chemical free. Kevin has to gather/collect information about the following things:
    1. Will it sell?
    2. Where will it sell?
    3. What are the threats – Competition from other companies
    4. What are its opportunities – At present there is a lot of demand for chemical-free cakes.
    5. What are the strengths of the product – It is 100% chemical-free.
    6. What are its weaknesses – Gets damaged due to poor warehousing.
  2. Marketing Planning | Mr. Kevin will submit a report to the company stating all the above aspects. From this time, the company will make a marketing planning which will include the following:
    1. How to increase production level.
    2. Plans for promotion.
    3. Where to sell?
    4. When to sell?
    5. Home delivery?
    6. Online sale?
    7. Special offers?
    8. Will people buy?
    9. What price?
    10. What size?
    11. Who will buy – children? Of what age?
  3. Product Designing and Development
    1. Product name? “Summer Delicacy!”
    2. Size, color and shape? 8 cm high, chocolate, grey, round.
  4. Standardization and Grading | Do not make weird products. They will confuse the consumer.
    1. Standardization – Producing goods of predetermined specifications to achieve uniformity and consistency in the output.
      1. Designing an oval shaped mobile phone is against standardization.
    2. Grading – Grading is the process of classification of products into different groups on the basis of some of its important characteristics such as quality, size, etc.
      1. iPhone 6, iPhone 6S, iPhone 6S Plus
      2. TATA Agni, TATA Gold, TATA Premium.
  5. Packaging and Labeling
    1. Packaging
    2. Labeling
  6. Branding
  7. Customer Support Services
  8. Pricing of Products
    1. Consumers are highly price sensitive so it affects the success and failure of a product.
    2. Demand for a product is relative to its price – lower the price, higher the demand; higher the price, lower the demand.
    3. How to decide price?
      1. Total cost incurred in production +
      2. Demand for the product +
      3. Price of the competitor’s product +
      4. Government policies.
    4. Question – Eat India Company has produced is new Cake – “EatWise”. Its competitor product EatMore sells at $10. There is high demand for EatMore these days. The GST for cakes has recently slashed from 22% to 6%. How will you price EatWise?
    5. Answer – I will keep the price of “EatWise” lower than $10 because the demand for “EatMore” is higher these days. Since the GST has slashed drastically, it is right time to keep my product-price lower than the competitor’s price. I can keep the price something around $4 or $6 considering the total cost of production/unit which is less than $1.5.
  9. Promotion – Promotion refers to all such activities which intend to inform customers about the products of the company and persuade them to buy these products.
    1. The four tools for promotion are:
      1. Advertising,
      2. Personal selling,
      3. Sales promotion and
      4. Public Relation.
  10. Advertising
    1. What are the features of advertising?
      1. Paid form
      2. Impersonality
      3. Identified sponsor
    2. What is the role of advertisement?
      1. Mass reach
      2. Enhancing customer satisfaction and confidence
      3. Expressiveness
      4. Economy
    3. What are the objections to advertising?
      1. Adds to cost
      2. Undermines social values
      3. Confuses the buyers
  11. Physical Distribution – Distributing of products from place of production to place of consumption.
    1. The two major decision are:
      1. Decision regarding channels of distribution
      2. Decision regarding physical movement of products.
    2. Important decision areas of physical distribution:
      1. Managing inventory (stock)
      2. Managing storage
      3. Managing warehousing
      4. Managing transportation of products from one place to another.
  12. Transportation
    1. How to decide transportation needs?
      1. Nature of the product
      2. Cost of the product
      3. Location of market
    2. Question – Eat India Company has a new problem. It ships 50% of its EatWise Cakes to Seoul, South Korea where each 1kg pack is sold for $12. Now, there is a new demand from Beijing, China for the same for a larger amount if the company slashes its price. The time taken to reach Beijing is 6 hours and to reach Seoul is 7 hours, where should the company sell its cakes? Why?
    3. Answer –
  13. Storage and Warehouse

Elements of Marketing MIX

  1. What is marketing mix?
    Marketing mix refers to a set of marketing tools that a firm uses to pursue its marketing objectives in a target market.
  2. What are the elements of marketing mix?
    1. Product mix
    2. Price mix
    3. Place mix
    4. Promotion mix

Product Mix

  1. Branding
  2. Packaging
  3. Labeling

Price Mix

  1. What is price Mix?
    1. Product cost (iPhone production cost is higher than VIVO phones)
    2. Utility and demand for the product (iPhone utility is comparatively less than Samsung)
    3. Extent of competition in the market (iPhone doesn’t face as much competition as compared to OPPO)
    4. Government and legal regulations (GST)
  2. Pricing objectives
    1. Maximization of profit (Samsung)
    2. Obtaining market share leadership (Oppo)
    3. Survival in a competitive market (Micromax)
    4. Attaining product quality leadership (iPhone, 1 Plus)
  3. Marketing methods used
    1. Distribution channels
    2. Extent of advertising
    3. Sales promotion efforts
    4. Packaging
    5. After Sale Services

Place Mix

  1. Place Mix (Physical Distribution)
    1. Channel of distribution
      1. Types of Channels
        1. Direct Channels
          1. Manufacturer to the consumer (without intermediaries)
        2. Indirect Channels
          1. One Level Channel – Manufacturer → Retailer → Consumer
          2. Two Level Channel – Manufacturer → Wholesaler → Retailer → Consumer
          3. Three Level Channel – Manufacturer → Agents → Wholesaler → Retailer → Consumer.
  2. What are the advantages of channels of distribution?
    1. They bring economy of efforts by reducing the efforts of producer in distribution and of consumer in shopping.
    1. Physical Movement of Goods

Promotion Mix

Advertising

  1. What is the concept of advertising?
    1. Paid form
    2. Non-personal presentations (impersonality)
    3. Of goods and services
    4. By an identified person.

Role of advertising

  1. Mass reach – Large number of people can get information about the product/service.
  2. Enhancing customer satisfaction and confidence
  3. Expressiveness – Advertisers can create eye-catching graphical ads
  4. Economy – Cost effective

Limitations of advertising

  1. Adds to cost
    1. In favor – Unnecessarily increases the cost of the product.
    2. Against – Advertisement gives awareness about a good product.
  2. Undermines social values
    1. In favor – Turns people’s need to greed. “90% Indians wear PUMA. Do you?”
    2. Against – After buying a PUMA, the customer bought only the same for his whole life.
  3. Confuses the buyer
    1. In favor – “No detergent cleans your clothes better than Areal!” “The best on the Planet – Nirmal!”
    2. Against – Advertisements give wide choices.
  4. Encourages sale of inferior products
    1. In favor
    2. Against
  5. Some ads are in bad tastes
    1. In favor
    2. Against

Personal Selling

  1. What are the qualities of a good salesman?
    1. Physical qualities
    2. Knowledgeable
    3. Mental attributes
    4. Vocational attributes
    5. Courtesy – Polite, sympathetic, courteous to customers.
    6. Tactfulness
    7. Self-confidence
    8. Enthusiastic
    9. Honesty
    10. Persistence
    11. Good communication skills

Sales Promotion

Sales promotion refers to short-term incentives which are offered to encourage the buyers to make immediate purchase of a product or service.

  1. What are the sales promotion techniques?
    1. Rebate
    2. Dicount
    3. Refund
    4. Product combinations
    5. Quantify gifts
    6. Instant draw and assign gifts
    7. Lucky draw
    8. Usable benefits – “Purchase goods worth ₹ 3000 and get a Mauritius Trip Package FREE!”
    9. Full finance at 0% down-payment.
    10. Free Sampling at launch of product
    11. Contests

Public Relation

Public relation refers to the deliberate plan and sustained efforts to establish and maintain mutual understanding between an organization and it customers.

  1. What is the importance of public relations?
    1. To remove negative publicity of a product.
  2. What is the role of public relation?
    1. Press relation
    2. Product publicity
      1. Programs
      2. Exhibition
    3. Corporate Communication
    4. Lobbying – Communicating with government and government officials
    5. Counselling the managers –
    6. Building awareness
    7. Building credibility
    8. Stimulates Sales force
    9. Lowers promotion costs

Written by Biju John

Biju John is an educational writer, educator and the author of OM - The Otherwise Men. He gives live classes on Skype and Facebook. You can attend his 3 Day Classes (English & Business Studies) in Delhi, Bangalore, Qatar and Dubai. His Contact number is 91 9810740061.

March Assignments – 5 Raindrops

For Every Hill I have Had to Climb – L E Thayer