Transcript Principles of Marketing

Principles of
Marketing
Lecture-45
Summary
of
Lecture-44
Review-1
Today’s Topics
Review-2
Individual Product
Decisions
Product Attributes
Branding
Labeling
Packaging
Product Support
Services
New Product
Development
Marketing
Strategy
Concept
Development
and Testing
Idea
Screening
Idea
Generation
Business
Analysis
Product
Development
Test
Marketing
Commercialization
Product Life-Cycle
(PLC)
Sales and
Profits ($)
Sales
Profits
Time
Product
Development
Stage
Introduction
Growth
Maturity
Decline
Sales and Profits Over
the Product’s Life From
Inception to Demise
Price
–The amount of money
charged for a product or
service, or the sum of the
values that consumers
exchange for the benefits
of having or using the
product or service.
Factors
Affecting Price
Decisions
Internal Factors
Positioning
Objectives
Pricing
Decisions
External Factors
Target
Market
Costs
Total Costs
Sum of the Fixed and Variable Costs for a Given
Level of Production
Fixed Costs
(Overhead)
Costs that don’t
vary with sales or
production levels.
Executive Salaries
Rent
Variable Costs
Costs that do vary
directly with the
level of production.
Raw materials
Fixed Costs
Variable Costs
Rent
Raw materials
Depreciation
Component parts
Manager’s salaries
Hourly wages
Property taxes
Packaging & freight
Insurance
Sales commissions
Setting
Pricing Policy
General Pricing
Approaches
Cost-based Pricing
Value-based Pricing
Competition-based
Pricing
Break-even…for
Determining Target
Return Price and Breakeven Volume
1000
Total cost
Rupees (in thousands)
1200
Total revenue
Target profit
800
Break-even point
600
400
Fixed cost
200
0
10
20
30
40
50
Sales volume in units (thousands)
New Product Pricing
Strategies
•Market Skimming
•Market Penetration
Price - Quality
Strategies
Price
Higher
Quality
Higher
Lower
Lower
Premium
Strategy
Good-Value
Strategy
Overcharging
Strategy
Economy
Strategy
Price-Adjustment
Strategies
 Discount
and Allowance
Pricing
 Segmented
Pricing
 Psychological
 Promotional
Pricing
 Geographical
 International
Pricing
Pricing
Pricing
Price Changes
Responding to price
changes
Has Competitor Cut
Price?
Will Lower Price
Negatively Affect Our
Market Share & Profits?
Can/ Should Effective
Action be Taken?
No
Hold Current Price;
Continue to Monitor
Competitor’s Price.
No
Reduce Price
No
Yes
Raise Perceived
Quality
Improve Quality
& Increase Price
Launch Low-Price
“Fighting Brand”
Place….Distribution
Channel….Marketing
Channel
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
20 Contacts
Manufacturer
Customer
Manufacturer
Manufacturer
Customer
Wholesaling
Intermediary
Customer
Manufacturer
Customer
Manufacturer
9 Contacts
Producer
Consumer
Producer
Retailer
Producer
Producer
Wholesaler
Agent/
Broker
Wholesaler
Retailer
Retailer
Consumer
Consumer
Consumer
Channel Management
Decisions
Training
Motivating
Evaluating
FEEDBACK
Selecting
Marketing Logistics
and Supply Chain
Management
Inventory
When
to order?
How much to order?
Just-in-Time
Customer Service
Concept
Right
Place
Right
Cost
Right
Product
Right
Time
Right
Condition
Push Versus Pull
Strategy
Producer
Marketing
activities
Intermediaries
Demand
End users
Demand
Push Strategy
Marketing activities
Producer
Demand
Intermediaries
Demand
End users
Pull Strategy
Retailing
and
Wholesaling
Compete on value (not just
price.)
Save customers time and
energy.
Make shopping fun.
Marketing
Communications
Promotion and
Its Goals
Informs
Builds Relationships
Persuades
Reminds
The Marketing
Communications
Mix
Advertising
Any Paid Form of Nonpersonal Presentation by an
Identified Sponsor.
Personal Selling
Personal Presentations by a
Firm’s Sales Force.
Sales Promotion
Short-term Incentives to
Encourage Sales.
Public Relations
Building Good Relations with
Various Publics by Obtaining
Favorable Unpaid Publicity.
Direct Marketing
Direct Communications With
Individuals to Obtain an
Immediate Response.
Setting the
Promotion Mix
Advertising
A paid form of non-personal
communication about an
organization and/or its
products to a target
audience through a mass
medium.
Personal selling
The direct presentation of a
product to a prospective
customer by a
representative of the
selling organization.
Sales promotion
Demand-stimulating activity
designed to supplement
advertising and facilitate
personal selling.
Public relations
A planned communication effort
by an organization to contribute
to generally favorable attitudes
and opinions toward an
organization and its products.
Direct Marketing
Direct connections with carefully
targeted individual consumers
to obtain an immediate
response and cultivate lasting
customer relationship
Steps in the
Selling Process
Step 1. Prospecting and
Qualifying
Step 2. Preapproach
Step 3. Approach
Step 4. Presentation/
Demonstration
Identifying and Screening For
Qualified Potential
Customers.
Learning As Much As
Possible About a Prospective
Customer Before Making a
Sales Call.
Knowing How to Meet the
Buyer to Get the Relationship
Off to a Good Start.
Telling the Product “Story” to
the Buyer, and Showing the
Product Benefits.
Step 5. Handling Objections
Seeking Out, Clarifying,
and Overcoming
Customer Objections to
Buying.
Step 6. Closing
Asking the Customer
for the Order.
Step 7. Follow-Up
Following Up After the
Sale to Ensure
Customer Satisfaction
and Repeat Business.
Managing the
Sales force
Designing Sales force Strategy and Structure
Recruiting and Selecting Salespeople
Training Salespeople
Compensating Salespeople
Supervising Salespeople
Evaluating Salespeople
Competitive
Strategies
Competitive
Positions

Market Leader

Market Challenger

Market Follower

Market Nicher
Global Village
Global
Marketplace
Global Marketing
Think Globally
Act Locally
e-Marketing
New Tool to Reach
Consumer
Internet
Telephone
Radio
Postal Service
Television
Marketing and
Society
Current Issues
in Marketing
• The current issues and
marketing can be divided
into two major subjects:
–Social responsibility
–Ethics
• The two concepts are very
closely related
Summary – Marketing
Management
DemographicEconomic
Environment
Marketing
Intermediaries
TechnologicalNatural
Environment
Product
Suppliers
Place
Target
Price
Consumers
Publics
Promotion
PoliticalLegal
Environment
Competitors
SocialCultural
Environment
Simple Marketing
System
Communication
Product/Service
Producer/Seller
Money
Feedback
Consumer
Marketing Process
The process of :
Analyzing marketing opportunities
Selecting target markets
Developing the market Mix
Managing the marketing effort
Marketing in Theory and
Practice
Enough for
Marketing. . .
Principles of
Marketing
Lecture-45