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MARKETING MANAGEMENT
A THEORITICAL AND PRACTICAL
PERSPECTIVE
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Definitions of MARKETING
The performance of business activities that direct theflow of goods and services from producer toconsumer.
Getting the right goods , to the right people in theright place , at the right time , at the right price , withthe right level of communication profitably.
Identifying the needs, wants , desires of consumersand fulfilling them in such a way that the customer isdelighted and the company objectives are metprofitably.
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Difference Between Marketing & Sales
Marketing Sales1. Focus on customer Focus on seller (product)
2. Is about profit this year is about revenue this week
3. Delighting the customer converting product into cash4. Both new and repeat New customers is a priority,
customers important not bothered much about
with focus on repeat customers repeat customers.
5. Long term vision Short Term Outlook (week/
month)
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Large companies up to 4 organisation levels
Corporate Level
Division Level
Business Level
Product Level
Corporate Strategic Planning
Planning Activities
Corporate Mission
Establishing Strategic Business Units
Assigning Resources
Planning New Business
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The 10 Ps
PRODUCT
PLACE
PRICE
PROMOTION
PACE
PACKAGING
PROCESS
PLANNING PEOPLE
POSITIONING
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BOSTON CONSULTING GROUPS GROWTH
SHARE MATRIX.
GE MODEL
ANSOFFS PRODUCT/MARKET EXPANSION
GRID
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IGOR ANSOFFS PRODUCT/MARKET
EXPANSION GRID
Current Product New Product
Current
Market
New
Market
Market
Penetration
Market
Development
Product Development
Diversification
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IGOR ANSOFFS PRODUCT/MARKET
EXPANSION GRID
Market Penetration:
Encourage current customers to buy more.
Attract competitors customers to switch to its brand
Convince non users who resemble current users to start usingthe companys product.
Market Development
Geographical expansion
Channel expansion : If only present in consumer market, thenlook at institutional sales also.
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IGOR ANSOFFS PRODUCT/MARKET
EXPANSION GRID
Product development Strategy :
Introduce products with new features
Introduce different quality versionsAlternative product forms
Diversification Strategy
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Business Mission SWOT Analysis Goal Formulation
Strategy
Formulation
Program
Formulation
Implementation
Feedback &
Control
B
usiness-Strategic Planning Process
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GOAL FORMULATION
Objective in Quantitative Terms
e.g- To increase market share to 15% in 2 years.
Strategy Formulation
Michael Porter 3 generic strategies
- Goals indicate what a business unit wants to achieve- Strategy answers how to get there.
1. Overall cost Leadership :- Texas Instruments, Bajaj Auto
2. Differentiation : Achieving Superior Performance in an important customer benefitarea
e.g. : Quality Leader : Sundaram Fasteners
Style Leader : Porsche Sports Car
Technology Leader : Infosys3. Focus: One or more narrow market segments, product line , geographical region etc.
Understand the wants and pursue either cost or differentiation
e.g. Arrow Shirts
Beware of Marketing Myopia
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MARKETING RESEARCH
Defn:- Systematic design , collection, analysis andreportingofdataandfindings relevanttoa specificmarketing situationfacingthe company.
e.g. :- 1) Product-conceptdevelopmentandtesting2)Testmarketing
3)Effectiveness ofadvertising
4) Brandimage study
5) Demandanalysis
6) Features/trend Analysis
7) Brandawareness analysis
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MARKETING RESEARCH
Why Research
1) Toascertainthe customers realneeds
2) Tofindnewapplications orwhatis theexisting
product being usedfor (Punjab- w/m)
3) Tofind solutiontoexistingproblems
4) Tofindwhy competitionis doingwell
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MARKETING RESEARCH
YO FROOTI
Definethe situation: Willgivingthe ripand zipeffecthelp broadenthemarket?
Researchobjectives:1) Tofindwhat kindofcustomers wouldpreferdrinking straight:-
teenagers, executives.
2) Tofindhowmanyarelikelyto switchtothis packagingatdifferentpricing.
3) What kindofflavors theywouldprefer
4) Whatotherliquids canthis container contain5) Whenwill consumers normallydrinkthis
6) Willthis packageenable switchingfrom Pepsis Mirandaorothernon-carbonateddrink.
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Demand Forecasting
Techniques usedinforecastingmarketpotential
A) Extrapolation Techniques:
1) Persistence Model: 80 pieces in Feb, 100 pieces in
March,---pieces inapril.
2) TimeSeries decomposition:
O=T*C*S*I
Where O= Originaldata, C=Cyclical component
S=Seasonal , I= Irregular component, T=Trend.
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Demand Forecasting
E.g.:
Washing Machines sold= Jan-Dec2003=12000
Estimationforyear2004
T=5% Growth:- 12000*(1.05)=12600, C=BusinessRecessionexpected (conservativeestimates, 10%drop)=90%*12600=11340
Ifsales are sameeverymonth, thenaveragepermonth=945.
Add seasonal (S) componentforfestivals like Diwali ,Durga Pooja, Pongal
S= Seasonal Index:- 1.2 , Oct, Dec= 945*1.2=1134
Total O= 1134*2+945*10=11718
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Demand Forecasting
B) Polling Techniques: Delphi Technique
C) Historical Analogy:Sales experienceofanearlier
similarproductis sometimes usedas basis forforecastingsales ofanewproduct. e.g. B/W:- CTV
D) Econometric :
E) Experimental: Test Marketing:newproducts.
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SEGMENTATION
Segmentation Base
A) Geographic Region
City Size
Climate
B) Psychographic Lifestyle
Personality
Variables
North South, East, West
Major Metros, Sub Metros, Town
Hot, cold, humid
Conservative, Status Seekers
Extrovert, Introvert, Aggressive
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SEGMENTATION
C) Demographic
Age
Sex
Family Size
Education
Occupation
Income
Religion
0-11,12-19,20-34 etc.
Male, Female
1-2,3-4,5+school, Graduate, PG
Farmer, Professional,
Housewife, Retired
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SEGMENTATION
D) Behavioral Benefit
Use Related
1) Usage Rate:
2) Awareness Status
3) Brand Loyalty
Use-Situational
Time/Objective
Quality, Service, Economy, Speed,Prestige.
Heavy, Medium , Light users
Unaware, aware, interested
enthusiastic.
Strong, Medium , None
Leisure, work, Morning, Night
Gift, Fun , Achievement
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Porters 5 Forces- Determining Segment
Structural Attractiveness
Industry Competitors Buyers(Buyer Power)
Suppliers
(Supplier Power)
Substitutes
(Threat of substitutes)
Potential Entrants
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Positioning
Positioning starts withtheproduct. But Positioningis notwhatyou doto aproduct. Positioningis whatyou dotothemindoftheprospect.
Easiestwaytogetintothemind- Be First
KODAK- Photography
Xerox -- Copier
Hertz --- Rent-a car
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Positioning
6 STEPS IN POSITIONING PROGRAM
Whatpositiondoyou own
Whatpositiondoyou wanttoown? Whommustyou outgun
Doyou haveenoughmoney.
Canyou sustain .
Doyou matchyourposition.
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Some Important Marketing Laws-Trout & Ries
1. Law of Leadership : The first desktop laser printer was
introduced by HP-> Even today its
the leader.
2. Law of Category : f you cant be the first in a category, set up a new category , you can be
first in.
IBM::- First in mainframe
DEC :- First in minicomputer
DELL :- PC thru Direct Marketing
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3. Law of Mind : Better to be first in the
mind then to be first
in the market place.Worlds first PC:- MITS ALTAIR 8800
in the mind :- APPLE
Worlds first Mainframe : Remington Rand
in the mind : IBM
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Some Important Marketing Laws-Trout
& Ries
4.) Law of Perception: Marketing is not a battle of products , its a battle
of perceptions.
e.g. :- 3 largest selling Japanese imported cars inUSA are Honda, Toyota, Nissan
But in Japan , Toyota outsells Honda
Because : In Japan Honda stands for motorcycle whereas in USA Hondais Motorcar. So in Japan , the perception is how can a motorcycle companymake great motorcars.
5) Law of Focus :The most powerful concept in marketing
Owning a word in the mind of the consumer.
CREST :-- CAVITIES
VOLVO :-- SAFETY
MERCEDES :-- ENGINEERING
PEPSI :---- YOUTH
BMW :----- DRIVING
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6) Law of Exclusivity: Two companies cannot own thesame word in the consumers mind.
e.g. : DURACELL owns the long lasting word .
Evereadys Energizer just cannot own long lasting.Asian paints vs. NEROLAC EXCEL(YAMRAJ AD.)
7) Law of Ladder : The strategy to use depends on whichrung you occupy on the ladder.
Hertz:- Leader in car rental.
AVIS: Avis is only no.2 in RENT-A-CARS. So whygo with us? WE TRY HARDER.
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8) LawofDivision :Overtimea categorywilldivideand becometwoormore categories.
Computers
Mainframes(IBM) MINIS(DEC)
Super (CRAY)Fault Tolerant
(Tandem)
Workstations(SUN) PC (Apple,
Compaq)
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PRODUCT
Defn:A product is anything that can be offered to a market forattention, acquisition, use or consumption that might satisfy awant or need.
e.g. :- Physical Goods :-- Cars, W/M
Services :- Training
Persons :- Michael Jackson
Ideas : - Family Planning
Five Levels of Product
Level 1 : Core Benefit : Fundamental benefit that thecustomer is buying . E.g. :- Hotel :-Rest, CTV :-Entertainment
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Product
Level 2:- Generic Benefit : Basic version of the product.
e.g. : Hotel : consists of a building with rooms.
W/M : Metal/plastic body with console
panel
Level 3 : Expected Product : A set of attributes and conditionsthat buyers normally expect and agree when they purchase theproduct.
e.g. : Hotel : Clean Bed, soap, towels, telephone
CTV : Tuning on remote, cable ready.
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Product
Level 4 : Augmented Product : includes additionalservices and benefits that distinguishes the companys
offer from competitors offers.e.g. : Hotel : Complimentary breakfast, Flat
CTV,
24 Hrs checkout, etc.
Level 5: Potential Product: All augmentations andtransformations that the product might ultimatelyundergo in the future.
e.g. : Computer compatible TV (which can operateat room temperatures)
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Eight Stages of New Product Development
Idea Generation
IdeaScreening
Concept Development & Testing MarketingStrategy
Business Analysis
Product Development
Market Testing
Commercialization
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EightStages
1) Idea Generation :Source of New Product Ideas:-
Customers , Employees, Competitors Products and services ,
sales team
Idea Generating Techniques :
Brain Storming , Need/Problem Identification , Problem/Need
Identification
2) Idea Screening:Drop Error
Go Error
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3) Concept Development & Testing:A product concept is an elaborated version of the idea
expressed in meaningful consumer terms.
4) Marketing Strategy Development :
a) Describes the size , structure of the target market,
Positioning, sales, Market share in the first few years.
b) Product, Price, Place, Distribution strategy.
c) Long run sales and profit goals.
5) Business Analysis:
Actual costs to R&D, MFG. ,Marketing cost and Profit Projection
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6) Product Development:
1) Develop Prototype
2) Functional & Consumer Tests
7) Market Testing :
Testing in select outlets with actual brand name and
packaging
8) Commercialization :When to enter the market
How to enter the market
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Product width : Different Product categories the company is in
Product Length :In each product category how many products
are available
Product depth : Variants that are offered for each product.
Product Strategies
1) Downward Stretch
2) Upward Stretch
3) Two-way Stretch
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BRANDING
Products dont sell , Brands sell
The ultimate aim of product manager must be toconvert the product into a successful brand.
Japanese Name : TOKYO TSHUSIN KOGYO
KABUSHIKI KAISHA
English name : Tokyo Telecommunications
Engineering company
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BRANDING
CITIBANK: The citinever sleeps.
HSBC: Theworlds local bank. Canara Bank: Growingto serve. Servingtogrow.
LOREAL: Becauseyoureworthit.
Maybelline: May be shes bornwithit. May beits Maybelline.
GO GOA :365days onaholiday. Kerala: Gods own country.
Retreat: cityends. Life begins.
KL : VISION CITY
Malaysia: Truly Asia. Singapore:Singapore Roars
Hong Kong: Liveit up.
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BRANDING
BPL : Believeinthe best.
Videocon: Bringhometheleader
Technologyforhealthand Pleasure.
Sansui :Betterthenthe bestBornin Japan . Entertainingtheworld.
LG :Digitallyyours.
Nokia :Connectingpeople
Motorola : Intelligenceeverywhere. Ceat Tyres : Born Tough.
Femina : Forthewomanofsubstance.
Forgeneration W.
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BRANDING
Orange: Whereveryou go, ournetworkfollows.
Reliance India Mobile: Karlo Duniya Mutthi Mein.
Aaj Tak:Sabse Tej.
Chevroletoptra: Thenewnameforluxury. Santro Xing: The sunshine car.
Tata Indigo:SpoilYourself.
Mitsubishi Lancer: Always in control.
Raymond: Forthe completeman. TataSalt: Desh kanamak.
Louis Philippe: The upper crest.
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BRANDING
Defn:- A name ,symbol, design which is intendedto identify the goods ,services of one company andto differentiate the goods from those ofcompetitors.
BRAND NAME DECISION
Individual Brand Name: P & G :- Ariel, Pantene
A Blanket Family Name: Philips
Company Name combinedwithindividualproductnames:-Britannia50-50
Videocon Bazoomba
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BRANDING
Brand Strategy
Line Extension
Brand Extension
Multi Brand
New Brands
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PRICING
Differential Pricing :Same brandis soldatdifferent
prices/differenttimes to
consumers.
Competitive Pricing : Prices are settoexploit
competitive position.
Product Line Pricing : Related brands are soldatpricesthat exploitmutualdependencies.
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Pricing
DIFFERENTIAL PRICING :
1) Periodic Discounting:- SkimmingStrategy
Catertoearlyadopters ----afterthattheprice reducedtocatertothenextgroupofbuyers.
e.g. : BPL MOBILE/ORANGE.
2) Second Market Discounting:
Dumping--
Firmsselling
Priceinforeignmarketis belowits average costinhome
country. (e.g. dumping by china)
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Pricing
B) COMPETITIVE PRICING :
1) Penetration Pricing: Price substantially belowmain competitors. (AKAI, AMUL)
2) Geographic Pricing: In same countryprices
differenttotakeadvantageofsales tax/transportation savings.
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Pricing Product Line Pricing:
1) Complementary Pricing:
Captive Pricing: Razor & Blades, Cameras & Films , Auto&
Spare Parts, VCD Player & Software.
Two Part Pricing:Service Industry:-
Fixed+variable usagefee (MTNL)
Entryfee+every ride /game/placeseparatepricing:-- SENTOSA ISLAND (SINGAPORE)
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2) PREMIUM PRICING : Basic & DeluxeHotelrooms, Front &
Tear Auditorium seats, Basic & Deluxe cars:-
Firms makeprofit on Premiumversions
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Pricing
Product Line Pricing
3) Product Bundling :Seasonpass cheaperthen dailytickets
Car+accessories , thepriceislesserthen if eachitemisbought separately.
4) Image Pricing : Firms bringoutanidenticalversion
ofits currentproductwithadifferent name/packagingandahigherprice. The intentionis to signalquality.
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Promotion
Advertising
Sales Promotion
PersonalSelling PR
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Salespromotion
Consumer Promotion
(Manufacturerpointofview)
Toincrease sales ofselfbrand
Todivertattentionfrom competition brands. Enables manufacturers toadjusttoperiods oflow
demand.
Induce customers totrynewproducts/brands.
Customerpointofview.
Enables customers tohavea better understandingofrealprices.
Consumers feelgoodthattheygetvalueformoneydeals.
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Sales Promotion
Consumer Promotion Tools:
Samples : Free samples with TOI , Mid-day, Filmfare.
Coupons: FMCG companies: 15%discount couponor
some rupees offforthenextpurchase. Price Packs: Packof2ormoreat reducedprice.
Banded Pack: Two relatedproducts bandedtogether(toothpastewithtoothbrush, VCD playerwith software.)
Contests : Answerafewquestions, writea slogan.
Free Trials: Freeautodrives.
Warranties:3yr onCTV, 7 yrs on compressor.
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Sales Promotion
Scratch n winoffer:
Money backoffer
Loyaltypromotion: Frequent Flyerprograms
Cross promotion: Two relatedproduct categories
promotingtogether , mostlythe secondproductis free.
Tie-inpromotion: usedin conjunctionwith consumer
durables wherein totalis lowerthenifbought separately.
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Dealerpromotion Tools
AnnualSchemes
Quarterly schemes:
Scratch n win scheme:
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Marketing Warfare
Defensive Warfare
Is what market leaders wage
Offensive Warfare
Is strategy for No.2 or No.3 in a
category
Flanking WarfareSmaller or new players that
are trying to get a foothold
in a category by avoiding
the main battle.
Guerilla Warfare
Is often the land of smaller
companies
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MARKETING WARFARE
SIMPLY THINK OF COMPETITORS AS THE
ENEMY . ATTACK OR FLANK OR KEEP
INNOVATING DEPENDING ON YOUR
POSITION IN THE STRATEGICSQUARE.
NEVERHESITATE TO DESTROY
COMPETITION OR ELSEU WILL BE A PART OF HISTORY.
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Marketing Warfare
Principles of Defensive Marketing Warfare
Only the market leader should consider playing
defensive. The best defensive strategy is the courage to attack
yourself
Strong competitive moves should always be blocked.
e.g : Gillette : The best a man can get.
Owned wet shaving market with Blue and Super BlueBlade.
Launched Trac II (nonadjustable ) and ATRA
(adjustable double bladed razor)
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Marketing Warfare
Launched Good News (inexpensivedisposable razorto
counter BIC (French companywhichlauncheddisposable
razor)
Mach3:- 3 bladed razors
Market shareofover 60%in USA/Europe.
Otherexamples: INTEL (286,386,486,PENTIUM etc.)
J&J ::- Tylenol:- reducedpricefrom $2.85for 100 to
$1.85to beat Bristol Myers Datril.
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Marketing Warfare
Principles ofOffensive Marketing Warfare:
Themain considerationis the strengthoftheleaders
position. Findaweakness intheleaders strengthandattackatthat
point.
Launchtheattackonas narrowafrontas possible.
e.g. : AVIS:-- Rentfrom AVIS . Thelineatour counteris
shorter :- AVISattackedHertz:-- weakness inherentinHertzspositionas thelargest Rent-A-Car company.
XEROX: Out-innovatedtheleader3M (bydevelopinga better copyingprocess-dryinsteadofwet copying)
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Marketing Warfare
Fed Express usedprinciple3 by saying Whenit
absolutely , positivelyhas to bethereovernight (small
packages less then 70 pounds)= challengedtheleader
EMERY.
WallStreet Journalwas theleader (2 Mndaily) for
financialand business information. Thenamepositions it
as afinancialpaper , sothe business side can beattacked
== Business Times , Thedaily business newspaper.
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Marketing Warfare
Principles ofFlanking. A good Flankingmovemust bemadeintoan
uncontestedarea.
Tactical surpriseoughtto beanimportantelementofplan.
Thepursuitis as criticalas theattackitself.
1) Michael Dellflankedthe computerindustryand DirectMarketed:- $ 500 Mn companyin5years.
2) Miller Liteflankedthe beerindustrywith Lite beer.
3) DECflanked IBM (Minicomputers)
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Marketing Warfare
Mercedes-Benz flanked GM (Cadillac cars ) atthehighend.
Volkswagen's Beetleflanked GMs big cars.
Avonflanked cosmetic companies who usedtraditionaldistributionmethods by resortingtodirectdoor-to-door selling.
Tolaunchatrueflankingattackyou must bethefirsttooccupythesegment.
Otherwiseits justanoffensiveattackagainstadefendedposition.
Flanking skill requires exceptionalforesight becausethereis noestablishedmarketforthenewproductor service.
Indianexamples: Nirma, Close-up.
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Marketing Warfare
Principles ofGuerilla Marketing Warfare. Finda segmentofthemarket smallenoughtodefend.
Nomatterhow successfulyou become , neveractlikea
leader. Bepreparedto bugoutatamoments notice.
e.g.: Rolls-Royce:Highpriced Guerilla:nobody competesbecause
1) existingmarketis small
2) The companyinitiallyhas anenormous advantage.
Indianexamples: 1) Arun Ice-cream: T.N
2) Naturals Ice-cream: Mumbai
3) CrownCTV : Gujarat. (Geographic
Guerillas)
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CONSUMER BEHAVIOUR
Critical Factors For Retail ToSucceed
BUTT BRUSH EFFECT
Shoppers needalanding strip:-
transition zone Keep baskets scattered: Shoppers haveonly2hands.
Seating Arrangements: For companions to siteandwatchsome programs whileothers shop.
DesignShopping carts with coffee /coke cupholders.
Designmainaisleand sub aisles keepinginmindthemotherwith baby strolly.
Parking space.
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CONSUMER BEHAVIOUR
Consumers slowdownwhenthey see reflective surfaces
keepimportantitems nearmirrors.
MostConsumers walktowards their rightwhentheyenter
the showroom/supermarket. CAPTURE RATE :Howmuchofwhatis ondisplayis
seen by shoppers.
Thereis areliable zone inwhich shoppers willprobably
seemerchandise. :-
reliable zone is from slightlyaboveeyeleveldowntoabout kneelevel. :-- so keeponly
largeitems aboveor belowthereliable zone.
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CONSUMER BEHAVIOUR
BOOMERANG RATE: This is themeasureofhowmanytimes shoppers failtowalk completelythroughanaislefromoneendtotheother.
How to get shoppers to the back/end of aisle is achallenge
Keep kiddie stuff at the end.
For drugstore:- keep pharmacy items at the end.
Keep cosmetics at the end with mirrors nearby.
Keep new releases, new products at the end. Keep demos at the end.
Keep changing the look of the store.
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CONSUMER BEHAVIOUR
WHAT WOMEN WANT
Womenoncemadeentirewardrobes forthefamily. Today
thefamily is luckyifshehas timeto stitchevenaloose button. Womenwhoarehousewives generally shopfortimepass :-shoppingtime: 1.00 p.mto 8.00 p.m.
Working Women shopwhenevertheyhave sparetime:preferconvenience stores :- openfrom 7.00 p.m 10.30 p.m
Workingwomenhaveenabledgrowthof manyproductcategories like cosmetics, ready-to-eatfood, clothes, vehiclesetc.
Greatwindow shoppers/searchers with ahighdegreeofpatience.
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CONSUMER BEHAVIOUR
Whentwowomen shoptogether:- theyoftenend up
spendingmoretimeandmoneytheniftheywerealone.
Greatinfluencers for cars and consumerdurables.
Direct buyers for cosmetics, dresses andgroceries.
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CONSUMER BEHAVIOUR
SHOP LIKE A MAN
Mendontlike shopping.
Patient companionforthewomanwhile she shops.
Menalways movefasterthenwomenthru the storesaisle.
Impatient , willnot search, whateveris available:- willdecidequickly.
As per research 65%ofmale shoppers whotried
somethingonboughtit as against25%women. 72%ofmenlookatpricetags as comparedto 86%
women.
Willliketoleavethe showroomas earlyas possible.
Manalmostalways pays.
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CONSUMER BEHAVIOUR
Mangives infasterto childrens demandthenwoman.
Conventionalwisdomis selltowomanand closeto
man.:- Whybecausewhilethemanmaynotlove
shopping , hegets adefinitethrillfromtheexperienceofpaying.
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CONSUMER BEHAVIOUR
WELCOME TO KIDDIELAND
Theywanttofeelandtouchwhatever comes theirwayandiftheylike somethingtheywillpestertheirmom/dadtilloneofthemagrees to buy:-- usuallythedad.
Keepthings below reliable zoneofelders :-- reliable zonefor kids.
Mostparents wanttheir kids tohavethe best:-- hugedemandfortoys, books, clothes, kiddyfood, diapers,
baycots ,strollyetc. Keep kids engrossedinthe store:- toy room , Disney
videos.
Colouring books starringapuppy , kitten & handfulofcrayon:- kids lovethemandparents can shopinpeace.
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CONSUMER BEHAVIOUR
WHAT ABOUT THE OLDIES
Nearly20%oftheworldpopulation >50 years.
Haveeyesightproblem:-butallliteratureforpharma,
manuals for camera, telephonedirectoryare so smallinwritingthatthesepeople cannotdecipher.
Preferred colours :- red, whiteand black.
Theireyes receiveless lightthenyoungpeople, so
stores/restaurants needto be brightlylit. ATMs , Mobilephones, remotes needtohavelarger
buttons.
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CONSUMER BEHAVIOUR
Hugemarketfor shoes , baggyloosepants, opennecked
shirts :- oldies preferthem
Doalotofsight-seeing( vacation)
Skin care, hair care:-- young at heart
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CONSUMER BEHAVIOUR
WhatShoppers Love
Touch: Allgoods
Mirrors Discovery
Recognition:You shopwherethey knowyourname.
Good Bargains
WhatShoppers Hate
Toomanymirrors
Long Lines forpaymentorfortrial.
Rude, slow service
Notproperlyilluminated
trial rooms. Goods outofstock.
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CONSUMER BEHAVIOUR
CYBERSHOPPING
What cyber shopping canprovidethatphysical retailingcannot
Limitless Selection:e.g. : Inthe book category , asuperstore canhouse 1,00,000 titles, whiletheonline
bookstores -2-3milliontitles in stock.
PriceComparison: Usinga searchengineyou caninstantlyfindhundreds ofretailers sellingtheexact
productyou want. This allows for comparison shoppingatafastpace.
Convenience:You can shopfromhome, office. Shopatanytimeoftheday/night. You donthavetoworryaboutparking.
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CONSUMER BEHAVIOUR
Speed:You canenterawebsitewheneveryou wantandmovethru itatyourpace , then zipthru paymentprocedurelikelightning.
Information:on-linelimitless amountofinfo.
Whereinternetis used
1) ONLINE Tr adingofstocks.
2) Buyingairtickets.
3) Books,CDs are boughtonline.
4) Gifts, flowers, wine ,greeting cards.
5) Computerhardwareand software.
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CONSUMER BEHAVIOUR
Reference: Many buyers gotothe realworld stores, findwhattheywant (interms offeatures) andthen shoptheweb for betterprices.
Motivated shoppers :- visit stores :- chooseandthenlogonnetand buyfroma retailerwho keepspricelow bynothavingtopay rent, overheads, labour costetc.
Lets Get Human :
Therearethree bigthings that stores alone canoffer
shoppers Touch, Trialoranyother sensory stimuli.
Immediategratification.
Social Interaction.
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Industrial Marketing
Characteristic Features of Industrial Products
Derived Demand
Limited no. of buyers.
Scale of purchase is greater. Complex nature of products.
Buying is a group process.
Suppliers Reputation
Rational Buying Motive Emphasis is on personal selling
Short Distribution channel.
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DistributionStrategies
EXCLUSIVE DISTRIBUTION : Distributingthrough
companyoutlets orfranchiseee.g. : LG PLAZA,
HONDA Showrooms:- only companyproducts are
available.
INTENSIVE DISTRIBUTION : Placingtheproducts in
as manyoutlets as possible.
Products :Soaps, cigarettes, softdrinks , BPL MOTSetc.( eachoutlethas various brands )
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DistributionStrategies
SELECTIVE DISTRIBUTION :
Here companies selecta combinationofExclusive
distribution (only companys products) & Intensive
Distribution (someimportantoutlets whicharemultibrandoutlets)
e.g. SAMSUNG , VIDEOCON
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Criteriafor choosingChannel Partners
FinancialStrengthofProspectiveChannel Partner:revenue, P& L statement , balance sheetetc.
Sales Strength:no. ofsalesmenandtheirtechnical
competency Product Lines: 1) Competitiveproducts, 2)
Compatibleproducts 3) Complementaryproducts.
Reputation: 1) leadership2) Well Established3)Levelofexpertise.
Market coverage: Geographic coverage , outlets permarketarea.
Sales Performance.
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Criteriafor choosing channelpartners
Advertising & Sales promotionprograms.
Ordering & Payment Procedures.
Willingness to sharedata:a) customers b) Inventory c)
sales figures. Installation & Repair services .
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Factors Retailers usein choosing companies
Accepts unsoldordamagedmerchandise returns
Has quickandeasyorderingprocedures
Providespromptdelivery
Maintains adequate supply
Good reputation /Brand Name
Has alargeproduct range.
Provides deliveries inlots as desired by retailer.
Promotes brandon a regular basis.
Provides adequatemargins.
Offers good schemes, quantitydiscounts
Extends credit > 30 days.
Has good competent sales team/product/technicalteam.
Ensuresprompt service
Provides good storedisplays (POP)
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Distribution
Retailing :Consists oftheactivities involvedin sellinggoods and services to ultimate consumers. A retail saleis
oneinwhichthe buyeris an ultimate consumerandthe
buyingmotivefora retail saleis always personalorfamily
satisfactionderivedfromthefinal consumptionofitembeingpurchased.
Wholesalers: Wholesalingis concernedwiththeactivities
ofthosepersons orestablishments which sellto retailers
andothermerchants , and/ortoindustrial , institutionaland
commercial users , butwhodont sellin significantamount
to ultimate consumers.
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Functions Performed by
wholesalers/Retailers formanufacturers.
Market coverage:Convenienceto customers
Sales contact: company sales forcewould be callingona
relatively smallnumberofwholesalers/retailers rather
thenthemuchlargernumberofcustomers. InventoryHolding:Stocktheproducts ofthe companies
thatthey represent.They reducethemanufacturers
financial burdenand riskassociatedwithholdinglarge
inventories.
Market Information:
CustomerSupport: service, spareparts.
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Functions Performed by
wholesalers/Retailers forCustomers
Product Availability: readyavailabilityofrangeofproducts.
Assortment,convenience: Brings togetherfromavarietyofmanufacturers anassortmentofproducts that can
greatly simplifythe customers selectionandorderingtasks.
Bulk-Breaking: Distributor buys in bulkandgives tocustomers in unitofone:SKU.
Creditand Financial Assistance Adviceand TechnicalSupport:(installation-->A/C,PC)
CustomerService: Delivery , after sales help .
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Services Marketing
Defn: A serviceis anyactorperformancethatoneparty
canoffertoanotherthatis essentiallyintangibleand
doesn't resultintheownershipofanything . Its
productionmayormaynot betiedtoaphysicalproduct.
E.g: Airlines, hotels,banks,insurance,brokers , realestate
companies,police,postoffice, colleges,hospitals.
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Services Marketing
Automated
ATM'S,
Vending Machines
Operated by semi
skilled people
e.g Dry cleaning,
cinema
Operated by
skilled people
e.g Airlines
Equipment Based
Unskilled
people
watchman
Skilled
people
Mechanics
Professionals
Doctors
C.A
People based
Types of services
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Services Marketing
Characteristics ofservice
Intangibility Inseparability
Perishability
Variability
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Services Marketing
Intangibility :Cannot be seen , tasted,felt, heardorsmelled beforepurchase.
Tangibilize the intangible
e.gHDFC bank
1) People:quick service,courteous,helpful
2) Machinery: stateoftheart ATMs, WAN networketcwill connotemodernandeffective bank.
3) Place: Exterior, Interiorambience: should connote
class.
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Services Marketing
Inseparability:Services aretypicallyproducedand
consumed simultaneously.
Perishability:Services cannot be stored.
Unusedelectric power, idle seats in bus,train represent business whichis lostforever.
Variability:Services arehighlyvariable , sincethey
dependonwhoprovides themandwhenandwheretheyareprovided.