Transcript Marketing function

Marketing function
• What is marketing ???
• Various concept of marketing
Production
concept
Marketing
concept
various
concept
Selling
concept
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Product
concept
The production concept
• The production concept holds that consumers
will favor products that are available and
highly affordable. Therefore, management
should focus on improving production and
distribution efficiency. This concept is one of
the oldest concept. E.g. Lenovo using this
concept, that dominates the highly
competitive, price sensitivity Chinese PC
maker through low labor cost, high product
efficiency, and mass distribution.
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The product concept
• The product concept holds that consumer will
favor products that offer the most in quality,
performance, and innovative features. Under
this concept, marketing strategy focuses on
making continuous product improvement.
• Product quality and improvement are
important parts of most marketing strategy.
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The selling concept
• Many companies follow the selling concept,
which holds consumers will not buy enough of
the firm’s products unless it undertakes a large
scale selling and promotion effort.
• The selling concept is typically practiced with
unsought goods – those that buyers do not
normally think of buying, such as insurance or
blood donations.
• It focuses on creating sales transactions rather
than on building long term, profitable customer
relationships.
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Contd.
• The aim is to sell what the company makes
rather than making what the market wants.
• Here it assumes that if consumer don’t like it,
they will possibly forget their disappointment
and buy it again later.
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The marketing concept
• This concept holds that achieving organisational
goals depends on knowing the needs and wants
of target markets and delivering the desired
satisfaction better than competitors do.
• Instead of a product-centered “make and sell”
philosophy, the marketing concept is a customercentered “sense and respond” philosophy.
• The job is not to find the right customer for your
product but to find the right products for your
customers.
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Contd.
• Selling concept:
Factory
Existing
products
Selling and
promoting
Profit
through sales
volume
• Marketing concept:
Market
Customer
needs
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Integrated
marketing
Profit through
customer
satisfaction
Societal marketing concept
• This concept reflects that whether the pure
marketing concept overlooks possible conflicts
between consumer short run wants and
consumer long run welfare.
• The social marketing concepts holds that
marketing strategy should deliver value to
customers in a way that maintains or improves
both the consumer’s and society’s well being.
• E.g. bottled water industry
• Levi’s jeans mfg.
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Society
{human
welfare}
Social
marketing
concept
Consumers
{satisfaction}
Company
{profit}
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Holistic concept
• Without question, the trends and forces
defining the 21st century are leading business
firms to a new set of beliefs and practices.
• Holistic marketing recognizes that “everything
that matters” in marketing and that a broad,
integrated perspective is often necessary.
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Product
Variety
Quality
Design
Brand name
Packaging
services
Promotion
Price
Advertising
List price
Personal selling
Sales promotion
Target
customer
Public relation
Discounts
Payment period
Credit terms
Place
Channels
Assortments
Locations
Transportation
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Logistics A
The 4Ps in marketing
• Product: means the goods and services
combination the company offers to the target
market. Thus, TATA Indigo consist of nuts and
bolts, pistons, headlights, and the thousands
of other parts. It offers several indigo models
and dozens of optional features. It comes with
fully serviced and warranty period.
• Price: price is the amount of money customer
must pay to obtain the product.
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Contd.
• Place: it includes company activities that make
the product available to target consumers.
• Promotion: activities that communicate the
merits of the product and persuade target
customers to buy it.
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Method of Demand forecasting
• Estimating future demand in India normally use some
variant of time series method for estimating future
demand.
• This involves a three stage process of preparing a
macroeconomic forecast first, followed by industry
forecast and then a company sales forecast.
• All forecast are built on one of the three information
bases: what people say, what people do, or what
people have done.
• Following are the various method of sales forecasting
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Survey of buyer’ intention
• Forecasting is the art of anticipating what
buyers are likely to do under given set of
conditions. Because buyer behavior is so
important, buyers should be surveyed.
• For major consumer durables several research
organisations conduct periodic surveys of
consumer buying intention.
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Composite of sales force opinions
• When buyer interviewing is impractical, the
company may ask its sales representatives to
estimates their future sales. Each sales
representative estimates hoe much each
current and prospective customer will buy of
each of the company’s products.
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Expert opinion
• Companies can also obtain forecast from experts,
including
dealers,
distributors,
suppliers,
marketing consultants and trade association.
• Occasionally, companies will invite a group of
experts to prepare a forecast. The experts
exchange views and produce a group estimate or
an analyst combines them into single estimate.
• Further rounds of estimating and refining follow.
It is also known as Delphi method.
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Past sales analysis
• Sales forecasts can be developed on the basis of past
sales. Time series analysis consists of breaking down
past time series into four components[trend, cycle,
seasonal, erratic].
• Exponential smoothing consists of projecting the next
period’s sales by combining an average of past sales
and the most recent sales, giving more weight to the
latter.
• Statistical demand analysis consists of measuring the
impact level of each of set of causal factors[income,
mkt. exp., price] on the sales.
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Market test method
• When buyers do not plan their purchases
carefully or experts are not available or
reliable, a direct marketing test is desirable.
• A direct market test is especially desirable in
forecasting new product sales or established
product sales in a new distribution channel or
territory.
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Market segmentation
• Consumer can be grouped and served in
various ways based on geographic,
demographic, psychographic, and behavioral
factors.
• The process dividing a market into distinct
group of buyers who have different needs,
characteristics, or behaviors, and who might
require separate products or
marketing
programs is called market segmentation.
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Contd.
• The starting point for discussing segmentation
is mass marketing. In mass marketing, the
seller engages in the mass production, mass
distribution, and mass promotion of one
product for all buyers. E.g. Henry Ford offer
the model-T ford in only black color. Coca-cola
also conducting mass marketing.
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Basis of consumer segmenting
• The major segmentation variables –
geographic, demographic, psychographic and
behavioural segmentation are summarized.
• GEOGRAPHIC SEGMENTATION = calls for
dividing market into different geographically
units such as nations, states, region, countries.
The company can operate in one or few
geographic areas or operate in all but pay
attention to local variations. E.g.mc’d
Contd.
• Demographic segmentation = in this market is
divided into groups on the basis of variables such
as age, family size, family lifecycle, gender,
income, occupation, education, religion, race,
generation, nationality, and social class.
• One reason is that consumer wants, preference,
and usage rates are often associated with
demographic variables. Another is that
demographic variables are easier to measure.
• Here is how certain demographic variables have
been used to segment markets.
Contd.
• Age and lifecycle stage = consumer wants and abilities
change with age. Age become poor predictor of timing of
life events sometimes. E.g. mm book.
• life stage = persons in the same part of life cycle may differ
in their life stage. Life stage defines a person’s major con
concern, such as going through a divorce, going into a
second marriage, deciding to buy a new home and so on.
• Gender = men and women tend to have different
attitudinal and behavioral orientation.
• Income = however income does not always predict the best
customer for a given product. Eg. Blue-collar worker may
first purchase color tv sets; it was cheaper for them to buy
these tvs than to go to movies and restaurants.
Contd.
• Generation = each generation is profoundly influenced
by the times in which it grows up- the music, movies,
politics, and defining events of that period.
• Social class = social class has a strong influence on
preference in cars, clothing, home furnishing, reading
habits, and retailers.
• PSYCHOGRAPHIC SEGMENTATION = in this buyers are
divided into different groups on the basis of lifestyles
or personality or values.
• Lifestyles =people differ in attitudes, interest, and
activities and these affect the goods and services they
consume.
Contd.
• Personality = marketers have used personality
variables to segment markets. A brand may wish
to
appear
sincere[
Apple
computer],
exciting[Nike],
competent[HP],
sophisticated[Lexus], or rugged[CAT].
• Values
• BEHAVIORAL SEGMENTATION = following are the
basis of segmentation.
• Occasions = buyers can be distinguished
according to the occasions when they develop a
need, purchase a product or use a product.
Contd.
• Benefits = buyers can be classified according to
the benefits they seek from the same product.
• User status = markets can be segmented into
nonusers, ex-users, potential users, first-time
users and regular users of product.
• Usage rate = markets can be segmented into
light, medium, and heavy products users.
E.g.heavy beer drinkers account for 87% of the
beer consumed- almost seven times as much
as the light beer drinks.
Contd.
• Loyalty status = buyers can be divided into 4
groups according to brand loyalty status.
1) Hard-core loyals : consumers who buy one
brands all the times.
2) Split loyals : who are loyal to two or three
brands.
3) Shifting loyals : who shift from one brand to
another.
4) Switcher : who show no loyalty to any brand.
Contd.
• Buyer-readiness stage = a market consist of
people in different stages of readiness to buy
a product. Some are unaware of the product,
some are aware, some are informed, some are
interested, some desire the product, and
some intend to buy.
• Attitude = 5 attitude groups can be found in a
market : enthusiastic, positive, indifferent,
negative, and hostile.