Transcript Marketing Applications and Practices

Marketing for Managers
Rubina D’Mello
Contents
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Marketing an Its Applications
Marketing planning and Organisation
Understanding Consumers
Product Management
Pricing an Promotion Strategy
Distribution and Public Policy
Block 1
Marketing and its Applications
Chapter 1
Introduction to Marketing
The Meaning of Marketing
Marketing is the performance of business
activities that directs the flow of goods and
services from producer to consumer or user
CONSUMER
Need
PRODUCER
Product
Marketing activities
The Marketing Mix
Product
Promotion
C
Price
Place
Marketing Strategy
Needed to create and retain a satisfied
customers
Strategies
 STDP Strategies
 Marketing Mix Strategies
STPD Strategies
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Segmentation
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Aggregating process – A cluster of people with
similar needs.
A Homogeneous group of customer who will
respond to a marketing mix in a similar way.
Targeting
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Once the market segment is defined, it has to
decide how many and which one to target.
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Differentiation
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Product Differentiation
Service Differentiation
Channel Differentiation
Personnel differentiation
Positioning
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It’s a perception about your offering in the
minds of the consumer.
Product Mix Strategies
What is Product Mix
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Set of all products offered by an
organisation to its customers
Consists of
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Width
Length
Depth
Consistency
Case Study
Product-Mix Width and Product-Line Length for PepsiCo India
Product-Mix Width
Product-line
Length
Beverages
Juice
Snacks
Pepsi
Mountain Dew
Aquafina
Mirinda
7-Up
Dukes Soda
Dukes Mangola
Slice
Tropicana
 Orange
 Nature Sweet
 Apple
 Grape
 Pineapple
 Tomato
 Mixed Fruit
Lays
Cheetos
Lehar
Numkeens
Nutyumz
Kurkure
Strategy of Product Mix
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Expansion of product mix
Contraction of product mix
Altering existing products
Positioning the product
Place
Is concerned with all the decisions involved in the getting right product to
the target market’s place.
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Distribution Channels –
any series of firms that
participate in the flow of products from producer to its final
consumers.
Manufactures or producer
Toyota
Raymond's
Nestle
Wholesaler
Wholesaler
Wholesaler
Retailer
Retailer
Consumer
Retailer
Promotion Mix Strategy
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Push Strategy
 directing communications to channel
members
Pull Strategy
 directing communications to end users
Factors
 type of product/market
 buyer readiness stage
 product life-cycle stage
Chapter 2
Marketing in a Developing Economy
Marketing functions performed at
different levels of development
Relevance of Marketing in a
developing economy
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Marketing and planned economic growth
How to view the marketing effort
Significance of macro and micro marketing
General role of marketing
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Stimulates potential aggregate demand and thus
enlarge the size of the market
It helps in the discover of entrepreneurial talent
Areas of Relevance
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Marketing in agriculture, basic industries, mining
and plantation
Intermediate industrial goods
Semi-industrial products
Export trade & services like tourism and banking
The Relevance of Social Marketing
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4 P’s
Social Marketing planning system
Chapter 3
Marketing of services
The service sector
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The services sector has been growing
at a rate of 8% per annum in recent
years
More than half of our GDP is accounted
for from the services sector
This sector dominates with the best
jobs, best talent and best incomes
“There are no such thing as
service industries.There are only
industries whose service
components are greater or less
than those of other industries.
Everybody is in service.”
-Theodore Levitt-
What is services?
It is the part of the product or the
full product for which the customer
is willing to see value and pay for it.
Growing Importance of
Services
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Economic well being increases the
demand of services
Changing lifestyle
Complexity of the product
Characteristics of Services
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Intangibility
Perishability
Inseparability
Variability
Client relationships
Right of owner-ship
Intangibility
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Hard to grasp, concept is abstract
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Dramatization often necessary for concept
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Hard to separate the service provider and the
service
Perishability
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Services cannot be stored or held in
inventory.
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If not used when available, they “go to
waste”.
Inseparability
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Outlet accessibility can limit the area covered
by the service.
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Image is important: Image affects the
perception of the service.
Variability
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Service quality tends to vary
considerably.
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Haircut from your hair dresser vs.
“Javed Habib”
Client Relationships
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Relationships between service organizations
and customers are often close
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Potential for loyalty longterm
Right of owner-ship
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It is not taken to the service, we merely
experience it.
e.g. Services of a doctor, lawyer, teacher,
mechanic, etc..
Difference between physical
goods and services
Physical goods
Services
tangible
intangible
homogeneous
heterogeneous
Production and distribution are
separated from consumption
Production, distribution and
consumption are simultaneous
processes
A thing
An activity or process
Core value processed in factory
Core value produced in the buyerseller interaction
Customers do not participate in
the production process
Customers participate in
production
Can be kept in stock
Cannot be kept in stock
Transfer of ownership
No transfer of ownership
SERVICES MARKETING MIX
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Product
Place
Prize
Promotion
People
Physical Evidence
Process
In services, the last
experience remains uppermost
in your mind. Therefore, it is
not enough to be good, you
have to be consistently good
Service quality is directly
proportional to employee
satisfaction
Block 2
Marketing Planning and Organisation
Chapter 4
Planning Marketing Mix
The Elements of Marketing Mix
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Product activities
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Pricing activities
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Target customers, cost, competition, the law, social
responsibility
Promotional activities
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Quality, features, style, brand name, packaging, sizes,
services, warranties, returns
Advertising, personal selling, sales promotion, publicity and
public relations
Place or Distribution related activities
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Physical distribution
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Transportation, warehosuing and storage, Order processing,
Inventory control, Location
Channels of distribution
The Place of the Marketing Mix in
Marketing planning
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Current Marketing Situation
Identification of Problems and Opportunities
Defining Objectives
Designing the Marketing Strategy
Developing the marketing programme
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The Relationship between Marketing Mix
and Marketing Strategy
The concept of Optimum Marketing Mix
Marketing Mix and some specific Situation
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New product development and
marketing mix
Product life cycle and marketing mix
Role of Advertising in marketing mix
Role of price in marketing mix
The
Product
Life Cycle
Chapter 5
Market Segmentation
The Concept of Market
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In respect of the network of institutions like
wholesalers and brokers dealing in a product
To refer to the nature of demand for the
product, as when we speak of the market for
soap
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The concept of segmentation
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Relationship of a segment to a market
Market Segmentation versus product
development
Benefits and doubts about segmentation
What is grouped in forming segments
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What, how, where, when, why, who
Bases for Segmentation
Geographic
Region, City or Metro
Size, Density, Climate
Demographic
Age, Gender, Family size
and Life cycle, Race,
Occupation, or Income ...
Psychographic
Lifestyle or Personality
Behavioral
Occasions, Benefits,
Uses, or Attitudes
Segmenting Business Markets…Contd.
Personal
Characteristics
Situational
Factors
Demographics
Bases
for Segmenting
Business
Markets
Purchasing
Approaches
Operating
Characteristics
How is the basis for segmentation selected?
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Methods that companies use
Logical division
Perceptual mapping technique
Considerations in using perceptual maps
Selection of Segments
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General factors
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Company trust
Size & growth potential
Investment needed
Profitability
Risk
Competition
Specific Segmentation factors
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Segment durability
Mobility
Visibility
accessibility
Chapter 6
Marketing Organisation
Principles of Designing an Organisation
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Specialisation
Departmentalisation
Standardisation
Formalisation
Centralisation
Evaluation
Structure
Marketing Organisation
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The changing role of Marketing Organisation
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Simple sales department
Sales department with some marketing function
Separate marketing department
Integrated marketing department
Marketing oriented organisation
Considerations involved in designing the marketing organisation
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Statement of objective and goals of the firm
Nature of the product/Line of activity
Areas of operation
Nature of Industry
Computerisation & up-gradation of information system
External environment & Government intervention.
Marketing Organisation
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Methods of designing the Marketing Organisation
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Functional Organisation
Product Management Organisation
Market Centered Organisation
Organisation of Corporate Marketing
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No corporate marketing support
Minimal corporate marketing support
moderate corporate marketing
Strong corporate marketing
Chapter 7
Marketing Research & Its Applications
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The Context of Marketing Decisions
Definition of Marketing Research
Purpose of Marketing Research
Scope of Marketing Research
Marketing Research Procedure
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Problem Definition
Research design
Field Work
Data Analysis
Report presentation and implementation
Marketing Research in India
Problems of conducting marketing research
Application of Marketing Research
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Sales & Market Analysis
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Determination of market potential
Determination of market share
Sales forecasting
Design of market segmentation studies
Target market
Distribution channel studies
Determination of market characteristics
Determination of competitive information
Product Research
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Evaluation of new product ideas
Testing for new product acceptance
Evaluating the need for change in product information
Testing package design
Testing of product positioning
Application of Marketing Research
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Business Economics and corporate research
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Studies of business trends
Pricing studies
Diversification studies
Product mix studies
Plant & warehouse location studies
Advertising Research
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Audience Measurement
Determining the most cost effective media plan
Copy Testing
Determining advertising effectiveness
Consumer behaviour research
Block 3
Understanding Consumers
Chapter 8
Determinants of Consumer Behaviour
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Importance of consumer behaviour for
marketers
Types of consumers
Buyers v/s Users
Figure 16.2 A Simple Model of Consumer Decision Making
External Influences
Input
Firm’s Marketing Efforts
1. Product
2. Promotion
3. Price
4. Channels of distribution
Sociocultural Environment
1. Family
2. Informal sources
3. Other noncommercial sources
4. Social class
5. Subculture and culture
Consumer Decision Making
Need Recognition
Process
Prepurchase Search
Evaluation of Alternatives
Psychological Field
1. Motivation
2. Perception
3. Learning
4. Personality
5. Attitudes
Experience
Postdecision Behavior
Output
Purchase
1. Trial
2. Repeat purchase
Postpurchase Evaluation
Factors influencing consumer behaviour
External Environment
Individual Determinants
culture
Problem
Recognition
others
Information
search
learning
perception
Purchasing
decision
family
personality
Postpurchase
behaviour
subculture
motivation
attitudes
social group
social class
Chapter 9
Models of Consumer Behaviour
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What is a decision?
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Process of decision making
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Involvement
Alternative differentiation
Time pressure
Types of Consumer Decision
Making
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What to buy
How much to buy
Where to buy
When to buy
How to buy
Levels of Consumer Decision
Making
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Buying Roles
Buying Behaviour
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Extensive problem solving
Routinized buying behaviour
Variety seeking behaviour
Stages in the Buyer Decision Process
Identify the
problem
recognition
Gather
information
about the
product
and brands
Purchase
decision/
buying the
product
Evaluate
the
alternative
s and
select the
best
possible
alternative
Post
purchase
Evaluation
• Post purchase use
and disposal
Models of Buyer Behaviour
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Horward-Seth Model
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Engel-Kollat-Bloackwell Model
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Information processing
Central control unit
Decision process
Environmental influences
Model of family decision making
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Inputs
Perceptual & learning constructs
Outputs
Exogenous or external variable
Influencers
Gatekeepers
Deciders
Preparers
Buyers
users
Model of industrial buyer behaviour
Chapter 10
Indian Consumer Environment
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Demographic Characteristics
Income and consumption characteristics
Characteristics of organisational consumers
Geographic characteristics
Market potential
Socio cultural characteristics
Block 4
Product Management
Chapter 11
Product decision and strategies
Product
Anything that can be offered to a market to satisfy a want or need
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Physical goods
Services
Experiences
Events
Persons
Places
Properties
Organizations
Information
Ideas
Product
Levels
Marketer has to turn core benefit
into basic product
Bank accounts like savings account,
current account
Encompasses all possible
augmentation and transformations
The the
fundamental
service
or
product might
undergo
in future
product
the
customer
is
buying
Anywhere banking, ATM sharing, CRM
In a priority
bank thebanking,
customerportfolio
is looking
for
management
security of his money
A product that exceeds customer
expectations
A set of attributes and conditions the buyers
A bank can offer facilities like ATM/Debit expect when they buy the product
cards, Telebanking, Internet Banking and The bank customer would expect a cheque book,
also other financial services
locker and other deposit products like FD, RD
Product Mix
Product mix has a certain…
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Width
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Length
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Depth
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Consistency
Case Study
Product-Mix Width and Product-Line Length for PepsiCo India
Product-Mix Width
Product-line
Length
Beverages
Juice
Snacks
Pepsi
Mountain Dew
Aquafina
Mirinda
7-Up
Dukes Soda
Dukes Mangola
Slice
Tropicana
 Orange
 Nature Sweet
 Apple
 Grape
 Pineapple
 Tomato
 Mixed Fruit
Lays
Cheetos
Lehar
Numkeens
Nutyumz
Kurkure
Case Study
The Times Group
Print
Net
Entertainment
Retail
The Times Group contd..
Print
The Times Group contd..
Net
GROUP SITES
The Times Group contd..
Entertainment
The Times Group contd..
Retail
Product Line Decisions
B. Product line Length
a. Objectives
b. Cycle
1. Line Stretching
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a. Down market Stretch
b. Up market Stretch
c. Two way stretch
2. Line Filling
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Just-noticeable difference
3. Line Modernization, Featuring and Pruning
Chapter 12
Product Life cycle and New Product
Development
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The Product Life Cycle Concept
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Marketing Mix at different stages
Strategy
Introduction
Growth
Maturity
Decline
1. Objective
Aggressive Entry
Maximize Share
Boast
Profits
Milk
Products
2. Focus
Non- Users
New Segments
Defend
Share
Cut Costs
3.Customer
Targets
Innovators
Early
Adopters
Majority
Laggards
4.Competitor
Few
Growing Number
Many
Declining
5.Differentiated
Advantage
Product
Performance
Brand Image
Price & Service
Price
Marketing MIX
Introduction
Growth
Maturity
Decline
1. Product
Basic
Extension &
Enhancement
Differentiation
& Variety
Rationalize
Range
2. Price
High
Lower
Lower
Stabilizing
3.Promotion
High
High
Falling
Low
4. Advertisement
Forms.
Awareness
Brand
Performance
Loyalty
Selective
5.Distribution
Selective
Intensive
Intensive
Rationalize
New Product Development Strategy
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Stages in new product development
 Ideas generation
 Screening of ideas
 Concept testing
 Product designing and evaluation
 Product testing
 Product launching
Chapter 13
Branding and packaging decison
Branding
Definition: “A brand is a name, Term, Sign, Symbol,
Brand or combination of them intended to identify
the goods or services of one seller or group of
sellers and to differentiate them from those of
competitors.”
-American Marketing Association
•Trademarks – legal right to the exclusive use of that name or mark
Challenges in Branding and
decisions
Branding to be or not to be..
Whether Produce Manufacturer Brands or
Distributor / Private Brands
Which Brand Name/s to use
Whether to use Line extensions, Brand
Extensions, Multi Brands, New Brands or
Cobrands
Brand Name Features
A Brand name should
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suggest something about the product’s
benefits
suggest the product or service category
suggest concrete, “high imagery” qualities
be easy to spell, pronounce, recognize, and
remember
be distinctive
not carry poor meanings in other countries and
languages
Packaging
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What is packaging
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Packaging Industry
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Functions of packaging
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Used materials : Metals, plastics, wood, paper, glass, laminates, polysters,
etc.
Protection,
Appeal
Performance
Offer convenience to the end-users
Cost effective
Legal dimensions of packaging
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Statutory requirements
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Net weight, when packed
Date of manufacture
Date of expiry
Directions of storage
MRP
Directions for use
Block 5
Pricing and Promotion Strategies
Chapter 14
Pricing policies and practices
Price
• Three variables that determine profit:
Sales
Volume
X Price - Cost = Profit
Benefit
Seller
Customer
Price
Determinants of Price
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Demand
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Competition
Setting the Price
Pricing Strategies
Price-Quality Strategies
Price
Higher
Quality
Higher
Lower
Premium
Strategy
(Mercedes,Evian)
Overcharging
Strategy
(Cielo)
Lower
Good-Value
Strategy
(Amul)
Economy
Strategy
(Akai,OK)
Corporate Pricing Objectives
•Survival
•Low Prices to Cover Variable Costs and Some Fixed Costs to Stay
in Business.
•Current Profit Maximization
•Choose the Price that Produces the Maximum Current Profit, Etc.
•Market Share Leadership
•Low as Possible Prices to Become the Market Share Leader.
•Product Quality Leadership
•High Prices to Cover Higher Performance Quality and R & D.
•Market Skimming
•Initially setting up High Prices to Skim the market
Selecting the Price Objective
Survival
(Mobile Operators)
Maximum current
profit
(Aiwa)
Maximum market
share
(Kodak KB)
Maximum market
skimming
(Nokia Handsets / Intel Micro Chips)
Product-quality
leadership
(Maruti)
Estimating Cost
Fixed Costs
(Overhead)
Costs that don’t
vary with sales or
production levels.
Variable Costs
Costs that do vary
directly with the
level of production.
Executive Salaries
Rent
Raw materials
Total Costs
Sum of the Fixed and Variable Costs for a Given
Level of Production
Selecting a Pricing Method
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Markup Pricing
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Target Return Pricing
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Perceived Value Pricing
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Value Pricing
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Going-Rate Pricing
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Sealed-Bid Pricing
Pricing Methods
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Markup price =
unit cost
(1-desired return on sales)
Where unit cost is variable cost + (fixed cost/unit sales)
Target return pricing (target ROI) =
Unit cost +
desired return X invested capital
Unit sales
 Break even volume =
fixed cost
Price – variable cost
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Pricing Methods
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Value-based Pricing
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Pricing strategy reflects the beliefs and
attitudes of the customer.
Perceived price/quality relationship.
Price is based on an understanding of the
value of the product as perceived by the
customer.
Value-Based Pricing
Cost-Based Pricing
Product
Value-Based Pricing
START
Customer
Cost
Value
Price
Price
Value
Cost
Customers
Product
Pricing Methods
Going-Rate
Company Sets Prices Based On What Competitors Are
Charging.
Sealed-Bid
Company Sets Prices Based On What They Think
Competitors Will Charge.
Selecting the Final Price
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Psychological pricing
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Sometimes price is equated to quality
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Reference Price
Influencing of other marketing-mix elements
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Company pricing policies
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The final price must be take in to account the brands quality
and advertising relative to competition
The Price must be consistent with company pricing policies
Impact of price on other parties
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such as dealers and distributors
Geographical Pricing
Adjusting prices to account for the Geographical Location
of Customers
Marketing Management –
Philip Kotler
US Price  $124.67
India Price  Rs. 310
Harry Potter – J. K. Rowling
US Price  $17.99
India Price  Rs. 636
Discount & Allowance
Reducing Prices to Reward
Customer Responses such as
Paying Early or Promoting
the Product.
Cash Discount
Quantity Discount
Functional Discount
Seasonal Discount
Trade-In Allowance
Promotional Allowance
Promotional Pricing
• Reducing Prices to Increase Short-Run Sales
• Reducing Prices to Reward Customer Responses such
as Paying Early or Promoting the Product.
Product mix
Product-Mix Pricing Tactics:
Product-line Pricing
Two-Part Pricing
Optional-feature pricing
By-Product Pricing
Captive-product pricing
Product-Bundle Pricing
Product Mix Pricing Strategies
Optional-Product Pricing
Pricing Optional or Accessory Products
Sold With The Main Product
i.e. Car Options such as a CD player
Captive-Product Pricing
Product
Mix
Pricing
Strategies
Pricing Products That Must Be
Used Along With The Main Product
e.g. Printer cartridges
By-Product Pricing
Pricing Low-Value By-Products To
Get Rid of Them
e.g. Sugarcane
Product-Bundle Pricing
Bundles Of Products Sold
Together at a Reduced Price
e.g. Gillete razor blades & foam
Product Line Pricing
Setting Price Steps Between Product Line Items
Analyzing Competitors ’Cost ,Prices and Offers
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The company needs to benchmark its
costs against its competitors’cost to
learn whether it is operating at a cost
advantage or disadvantage.
The company also needs to learn the
price and quality of competitors’ offers
Assessing & Responding to
Competitor Price Changes
Has Competitor Cut
Price?
Hold Current Price;
Continue to Monitor
Competitor’s Price.
No
Yes
Will Lower Price
Negatively Affect Our
Market Share & Profits?
No
Reduce Price
Yes
Can/ Should Effective
Action be Taken?
Raise Perceived
Quality
No
Yes
Improve Quality
& Increase Price
Launch Low-Price
“Fighting Brand”
Chapter 15
Marketing Communication
The Communication Process
Sender
Encoding
Message
Media
Decoding
Noise
Feedback
Response
Receiver
Marketing Communication
Mix
Sales
Promotion
Advertising
Marketing
Communication
Public
Relations
Personal
Selling
Direct
Marketing
The Promotion Mix
Direct Marketing
Public Relations
Personal Selling
Special Offer
Advertising
Sales Promotion
Advertising
A paid nonpersonal communication
about an organization and its
products transmitted to a
target audience through mass media
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Mass Media
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Newspapers
TV
Radio
Magazines
Billboards
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Eg : Johnson & Johnson
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Sales Promotion
Consists of a diverse collection of
incentive tools, mostly short term,
designed to stimulate quicker or greater
purchase of particular products or
services by consumers or the trade
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Types of sales promotions
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Coupon
Point-of-Purchase
Premium: free/ reduced-price
Trade Show
Contests & More
Britannia Khao World Cup
Jao
Public Relations & Publicity
Promotional tool Identify, establish, and
maintain beneficial relationships between
a company and its stakeholders
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Benefits
 Corporate visibility
 Image Building
 Product Information
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Patni Computers
i-flex solutions
Personal Selling
Promotional tool in which a
salesperson communicates
one-on-one with potential customers
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Advantages
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Immediate response
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Tailored message
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Ability to measure effectiveness
Disadvantages
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Relies on ability of sales rep.
Expensive per contact
JCI
 Franco Indian Pharma
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Direct Marketing & Others
Direct Communications with Carefully
Targeted Individual Consumers to
Obtain an Immediate Response
Online
Marketing
Kiosk
Marketing
Direct-Response
TV Marketing
Tracmail
 Rohini International
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Face-to-Face
Selling
Direct-Mail
Marketing
Catalog
Marketing
Telemarketing
Push & Pull Strategy
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Push Policy
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Promoting a product only to the next institution down the
marketing channel
Pull Policy
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Promoting a product directly to consumers to develop stronger
consumer demand that pulls products through the marketing
channel
Determinants of promotion mix
Type of
product
Nature of
market
Target
Audience
Determinants
Company
Policy
Stage in
the PLC
Budget
Establish the Communication
Budget
After Determining Its Objectives, the Marketer
Must Set the Communications Budget for Each
Product and Market.
Affordable
Percentage of Sales
Based on What the
Company Can Afford
Based on a Certain Percentage
of Current or Forecasted Sales
Objective-and-Task
Competitive-Parity
Based on Determining
Objectives & Tasks, Then
Estimating Costs
Based on the Competitor’s
Promotion Budget
Factors in designing promotion
mix strategies
Chapter 16
Advertising and Publicity
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How advertising works?
Types of advertising
Role of advertising
Advertising expenditure
Advertising management
Setting advertising objective
Developing advtg. Copy and message
Selecting and scheduling media
Measuring advertising effectiveness
Coordinating with ad agency
Publicity
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Use of publicity
Measuring effectiveness of publicity
Chapter 17
Personal Selling and Sales Promotion
Personal Selling
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Role of personal Selling
Types of selling jobs
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Merchandise deliveries
Inside order-taker
Outside order-taker
Missionary salesperson
Sales engineer
Tangible product seller
Intangible product seller
The selling process
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Preparation
Prospecting
Preapproach
Approach
Sales presentation
Handling objectives
Closing the sale
Post-sale follow-up
What is sales promotion?
Sales promotion consists of a diverse
collection of incentive tools, mostly short
term, designed to stimulate quicker and
or greater purchase of particular
products/services by consumers or trade
-Kotler
“Below the line”
What is sales promotion?
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Non personal promotional effort that
are designed to have immediate impact
on sales
Employed for a pre-determined limited
period to increase consumer demand or
stimulate market demand
What is sales promotion?
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Sales promotion offers an incentive to buy
Encompasses everything that is outside of
advertising, PR and DM
Uses advertising, PR and DM to deliver the
sales promotion
Can be planned to increase sales over a long
period and not necessarily about immediate
results (privilege / mileage points)
Why has SP grown so much?
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Results ! - immediate / quick boost to
sales
Results over finite period of time - v/s
advertising or PR
Results are measurable
Easy and inexpensive to implement
Costs & efficiency of mass media /
advertising has risen considerably
….
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Product managers face pressure to
increase sales
Companies face more competition
Consumers have become more deal
oriented
Sales Promotions work!
How does SP work?
Consumer decision making process (except for
low cost, low involvement impulse pur.)
-
Awareness
Information gathering
Pre purchase evaluation
decision
PURCHASE
Post purchase evaluation
-
Awareness
Advt / PR
Information gathering
Pre purchase evaluation Per Sell
Decision
SP
PURCHASE
Post purchase evaluation
SP works because ...
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It alters the price / value relationship
that the product offers the buyer
Lowers price - use of coupons, discounts
Add value - value packs, extra free
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Everybody loves freebies
Consumers have a reason to purchase
the product NOW
Justifies post purchase evaluation
Advantages
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Sales promotions help shape buying patterns
- Annual sales
Attract new audiences - trials for new
products
Increase sales - freebies, buy 1 get 1 free
Increases profits
Helps move stock / liquidate inventory
Increases awareness - reach new buyers
Advantages
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Encourages the consumer to buy more than
usual on a single shopping visit
Reminder of product, especially when a new
product / competitor is about to launch
Improving TOM recall of the brand if promo is
advertised in mass media
Demoralise newly launched brands
Disadvantages
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Can seem like last minute panic measures
and that can signal failure
Can give an impression of hard sell
Greed for sales - promos are often not related
to the strategic elements of the brands mktg.
mix
Often viewed as simple reactionary
techniques to increase sales and profits
Dilutes brand value - discount brands
Sales promotion techniques
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Price deals
Discounts
Price pack deals
Samples
Rebates
Sweepstakes/contests
Frequency rewards
Demos
POP
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Trade allowances
Dealer loader
Trade contests
POP Displays
Training programs
Push money / Spiffs
Exhibitions
‘Samsung pinning toh winning’
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All India promo
Aggressive use of mass media
Consumer gets an assured gift on
purchase of any Samsung product
100 cr worth of prizes on offer
Sms 16 digit pin and the gift u get wl b
sms’d 2 u.
Cash in on Diwali purchases
‘Phod ke dekho’ offer
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Consumer promotion scheme
Packaged as a coconut which cons picks
on purchase of a Samsung product
Breaking the coconut reveals a chance
to win a gift
Strong consumer acceptance helped co
to achieve a growth of 35% in sales
over last year - same period
Test drive and win
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Tata Motors celebrated 50 years
Offer to test drive any Tata car - fill a
form - and lucky winners could win
Prize Indica V2 Petrol
Buzz / Hype / Awareness
Mass media - TV / Press / DM
Helped build / gather data base
Buzz around Petrol
Some historic cases
Developing a Sales Promotion and
Merchandising Plan
Set sales promotion and merchandising
objectives.
What is your target audience?
Establish a tentative sales promotion and
merchandising budget.
Select sales promotion and merchandising
techniques.
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Developing a Sales Promotion and
Merchandising Plan
Select media for distributing promotions.
Decide on timing of sales promotions and
merchandising.
Pretest sales promotions and merchandising.
Prepare final sales promotion and merchandising
plan and budget.
 Measure and evaluate sales promotion and
merchandising success.
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10 commandments of sales
promos
Coordinate
with mktg
Support
brand
image
Specific
objectives
Know
when to
break
Know
Basic
techniques
Creativity
Simplicity
Reinforce
advertising
Be clear
Know
your
target
Attn
grabbing
visuals
Block 6
Distribution and Public Policy
Chapter 18
Sales Forecasting
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What is a sales forecast?
How to prepare a sales forecast?
Product sales determinants
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Consumer non-durable goods
Consumer durable goods
Industrial goods
Approach to sales forecasting
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Breakdown approach
Market build-up approach
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Methods of forecasting
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Executive Judgement
Surveys
Time series analysis
Corelation and regression methods
Market tests
Combining forecast and using judgement
Status of forecasting method usage
The evaluation of forecasts
Computerised sales forecasting
Relating the sales forecast to the sales budget an profit
planning
Chapter 19
Distribution Strategy
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Importance of channel of distribution
Alternative channels of distribution
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Direct selling
Mercantile Agents
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Merchant Middlemen
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Brokers
Commission agent
Wholesalers
Retailers
Functions performed by retailers
Services rendered by the retailers
Effective coordination between wholesaler and retailers
Types of retailers
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Department stores
Co-operative stores
Multiple shops or chain stores
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Role of middlemen in Indian Economy
Selecting an appropriate channel
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Physical distribution tasks
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The type of product
Nature and extent of the marker
Existing channels for comparable products
Buying habits of consumers
Cost involved in distribution
Location of manufacturing facilities
Location of warehouses
Mode and method of transportation
Inventory decisions
Using external distribution agency
Location of fixed facilities
Specific issues relating to maintenance of stocks
Chapter 20
Managing Sales personnel
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Selling and sales management
Recruitment and selection of salesmen
Training of sales personnel
Motivating the sales personnel
Controlling the sales personnel
Chapter 21
Marketing and Public Policy
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Regulatory role of the government
Role of government in marketing in developing
economy
Government control and marketing decision making
process
Impact of government control on product decision
Impact of government control on pricing decision
Impact of government control on promotion decision
Impact of government control on channel and
distribution decision
Chapter 22
Cyber Marketing
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What is cyber marketing
Cyber marketing and conventional marketing
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Interconnectivity
Interactivity
Involvement
Information
Individualisation
integrity
Cyber marketing model
The nature of cyber marketing
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Customer profiling, segmentation and targeting
Product planning
Branding
Pricing decision
Advertising and sales promotion
Distribution
Marketing research
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Limitations of cyber marketing
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Limits of digitisation
Shopping experience
Security issues
Internet access density
Customers used to freebies
Dot.com bust
Attracting traffic to the internet site
What is internet ??
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Global network of interconnected networks.
Includes millions of corporate, government,
organizational and private networks.
Types of network forming internet
Intranet
Extranet
Web
What is E- Marketing
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Process of growing & promoting an organization
using online media
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Ties creative and technical aspects of internet.
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Creating, communicating and delivering value to
customers.
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Managing customer relationship.
Objectives of Internet
Marketing
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Create Awareness.
Generate Interest.
Disseminate Information.
Create an Image.
Create a Strong Brand.
Characteristics of Internet
marketing
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Relatively Inexpensive.
Wide reach.
Allows research, purchase of
products and services on convenience.
Quick Response.
Differentiators from offline
Marketing
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One-to-one vs. one-to-many approach
Demographics targeting vs. behavioral
targeting.
Measurability .
Response and immediate results.
Limitations of E- Marketing
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Dependant on technology.
Rigid mindset.
Virtual aspect.
Security Concern.
Maintenance Cost.
Global competition.
SWOT Analysis
Strength
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Your specialist marketing expertise.
A new, innovative product or service.
Location of your business.
Quality processes and procedures.
Any other aspect of your business that
adds value to your product or service.
Weakness
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Lack of marketing expertise.
Undifferentiated products or services.
Location of your business.
Poor quality goods or services.
Damaged reputation.
Opportunity
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A developing market such as the
Internet.
Mergers, joint ventures or strategic
alliances.
Moving into new market segments that
offer improved profits.
A new international market.
A market vacated by an ineffective
competitor
Threat
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A new competitor in your home market.
Price wars with competitors.
A competitor has a new, innovative
product or service.
Competitors have superior access to
channels of distribution.
Taxation is introduced on your product
or service.
Hidden Benefits
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Tax Breaks.
Low Start up Costs.
Low Operating Costs.
High Profit Margin.
Market for little or no money.
You do not need your own Product.
Time Freedom.
Open 24 Hours in every country.
4Ps of Internet Marketing
Product
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Make sure that your product is something
that is useful to your intended customers.
Make sure that the product does what it says.
Ensure Quality.
Packaging.
Brand Consistency.
Good After Sales Service.
Price
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Competitive Pricing.
Customers willingness to pay.
Experimentation with price.
Place
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Placement on Major Search Engines.
Placement of vertical search engines/
guides and local search.
Placement through affiliates.
Promotion
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Promotion
Promotion
Promotion
Promotion
through display advertising.
though search marketing.
through socal media.
through Public Relations.
Strategies of E -Marketing
7 Dimensions to Consider
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Personalization.
Privacy.
Customer Service.
Community.
Site.
Security.
Sales Promotion.
Classification of E-Marketing
Methods of Internet Marketing
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Search engine marketing.
Display Marketing
E-mail Marketing,
Affiliate Marketing
Interactive Marketing
Blog Marketing.
Viral Marketing
Segmentation and Targeting
Segmentation
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Geographic
Demographic (Age, Income, Gender,
Education, Ethnicity)
Psycographic (Activities, Interests,
Opinions, Personality, Values.)
Behaviour (Benefits sort, Usage level,
Brand Loyalty, User Status.)
Behavioral Segmentation
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Simplifiers
Surfers
Connectors
Bargainers
Routiners
Targetting
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Four different approaches
1) Mass Marketing.
2) Multi segment Marketing.
3) Niche Marketing.
4) Micro Marketing.
Differentiation and Positioning
Strategies
Differentiation
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Product.
Service.
Personnel.
Channel.
Image.
Positioning
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Technology.
Benefit.
User Category.
Competitor.
Integrator.