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    MARKETING MANAGEMENT

    NTRODUCTION

    Marketing is everywhere and it affects our day- to-day life in every possible manner. Formally orformally people and organizations engage in a vast number of activities that could be called as

    arketing. Good marketing is no accident, but a result of careful planning and execution. t is both an art

    nd science. !et"s discuss various concepts and issues in marketing.

    DEFINITION

    Marketing management is the art and science of choosing target markets and getting, keeping androwing customers through creating, delivering and communicating superior customer value.

    n short Marketing is #Meeting needs profitably$. Marketing has been defined by different

    uthors in different ways which can be broadly classified into three

    Product Oriented Definition

    he emphasis is given on products.

    n&'() *M* redefined marketing as #Marketing is the process of planning and executing the conception,ricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual

    nd organizational goals.$Customer- Oriented Definition

    ere the emphasis is on customers and their satisfaction.n the words of hilip otler #Marketing is the human activity directed at satisfying needs and wants

    rough an exchange process.$Value Oriented Definition (Modern Definition)

    n //0 the *merican Marketing *ssociation defined #Marketing is an organizational function and a setf processes for creating, communicating and delivering value to customers and for managing customer

    lationships in ways that benefit the organization and its stakeholders.$

    !at is mar"eted#

    Marketing people market &/ types of entities1 let"s take a 2uick look at these1

    OOD%physical goods constitute the bulk of most countries production and marketing efforts.

    ERVICE% services include the work of airlines, hotels, cars rental firms, barber and beauticians,aintenance and repair people, and accountants, bankers, lawyers ,engineers doctors, software

    rogrammers, and management consultants.

    VENT% marketers promote time-based events, such as ma3or trade shows, artistic performances, andompany anniversaries. Global sporting events such as the 4lympics and the 5orld cup are promoted

    ggressively to both companies and fans.

    &PERIENCE%by orchestrating several services and goods, a firm can create, stage and marketxperiences. 6eega land, 7lack %hunder etc represents this kind of experiential marketing.

    ER%ON% celebrity marketing is a ma3or business, *rtists, Musicians, 894s, physicians, high- profile

    wyers and financiers, and other professionals all get help from celebrity marketers.

    'CE% cities, states, regions, and whole nations compete actively to attract tourists, factories, company

    ead2uarters, and new residents. lace marketers include economic development specialists, real estategents, commercial banks, local business associations, and advertising and public relations agencies.

    ROPERTIE%properties are intangible rights of ownership of either real property :real estate; ornancial property :stocks and bonds;. roperties are bought and sold, and these exchanges re2uire

    arketing.

    R$NITION% organizations actively work to build a strong, favorable, and uni2ue image in theinds of their target publics.

    NFORMTION information is essentially what books, schools, and universities produce, market, and

    stribute at a price to parents, students, and communities.

    DE% 9very market offering includes a basic idea.

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    !o mar"ets#

    MR*ETER% ND PRO%PECT%

    marketer is someone who seeks a response- attention, a purchase, a vote, a donation > from

    nother party, called theprospect. f two parties are seeking to sell something to each other, we call them

    oth marketers.

    MPORTNCE OF MR*ETIN$

    Marketing is important not only for organizations but for individuals, society and economy as ahole. Financial success often depends on marketing ability. Finance, operations, and other business

    unctions will not really matter if there isn"t sufficient demand for products and services so the company

    an make a profit. %here must be top line for there to be a bottom line. Many companies have now created8hief Marketing 4fficer, or 8M4, position to put marketing on a e2ual footing with other 8-levelxecutives, such as the 8hief 9xecutive 4fficer :894; and 8hief Financial 4fficer :8F4;.

    lso marketing steps its foot in every walk of life.

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    ,E PRODUCT CONCEPT

    proposes that consumers favor products that offer the most 2uality, performance, or innovativeatures. Managers in these organizations focus on making superior products and improving them

    vertime.

    ,E %E''IN$ CONCEPT

    holds that consumers and businesses, if left alone, won"t buy enough of the organization"s

    roduct. %he organization must therefore undertake an aggressive selling and promotion effort.

    ,EMR*ETIN$ CONCEPT

    emerged in mid-&')/s, instead of a product- centered, make- and >sell philosophy, business

    hifted to a customer- centered, sense-and-respond philosophy.he marketing concept holds that the key to achieving organizational goals is being effective than

    ompetitors in creating, delivering, and communicating superior customer value to your chosen target markets.heodore !evitt of +arward drew a perceptive contrast between the selling and marketing

    oncepts.

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    he various important elements of marketing mix are briefly discussed as follows1

    RODUCT? t is the thing possessing utility. t is the bundle of value the marketer offers to potentialustomers. %oday manufacturers are realizing that customer expects more than 3ust the basic product.

    herefore the product must satisfy the consumers needs. %he manufacturer first understands the consumer

    eeds and then decides the type, shape, design ,brand, package etc. of the goods to be produced. %heroduct is a marketer"s primary vehicle for delivering customer satisfaction.

    RICE? it is the amount of money asked in exchange for product. t must be reasonable so as to enable the

    onsumer to pay for the product. 5hile fixing the price of a product, the management considers certainctors such as cost, ability of the consumers, competition, discount, allowances, margin of profit etc.

    'CE (P,+%IC' DI%TRIUTION;? t is the delivery of products at the right time and at the right place. t

    the combination of decision regarding channel of distribution :wholesalers, retailers etc. ;,ansportation, warehousing and inventory control.ROMOTION? t consist of all activities aimed at inducing and motivating customers to buy the product.

    he selection of alternatives determine the success of marketing efforts.

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    U%TOMER% t refers to consumer markets, industrial markets, reseller markets, international markets

    nd govt. markets having its own characteristics.

    U'IC %he marketing decisions considerably influenced by public relations, govt. policies, the press,

    e legislatures and the general public.

    CRO- ENVIRONMENT VRI'E%

    Macro-environment consist of forces affecting the entire society or economy at large. Macroenvironment

    fluences entire industry as a whole.%he various variables of Macro-environment are as

    nder

    emographic environment.

    ocial-8ultural environment.

    conomic environment.

    thical environment.olitical environment.

    hysical environment.

    echnological environment.

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    EMO$RP,IC ENVIRONMENT

    includes factors such as population growth, change in age-group, marriages, family sizes,ovement of people from big cities to rural or sub urban areas, literacy etc. t is essential for the market

    understand the demographic forces in a country which helps him frame optimal marketing-mix.

    OCIO-CU'TUR' ENVIRONMENT

    %ociolo.ical Factors 8onsumers being social animal and their life style is deeply influenced by the social set up

    is found to have deep influence on consumer taste, temperament, life and living. %he needs, desires, hopes and

    pirations of the consumers are necessary to be understood.Ps/c!olo.ical %he study about the behaviour, attitude, temperament, mentality and personality is must

    nd how there wants and needs can be best satisfiedCnt!ro0olo.ical these factors are vital in noting the national and regional characters, cultures and sub

    ultures and the pattern of living.

    CONOMIC ENVIRONMENT

    comprises of economic system of the country, affects the demand structure of any industryD product.

    hanges in economic conditions provides marketers with new challenges and threats. 6arious economic factors

    hich directly affect the Marketing strategies are discussed below.Role of $o1t2 Marketing in greatly influenced by the role of govt. through fiscal policies, industrial

    gulations, economic controls, import-export policies etc. Monetary and Eon-Monetary policies ofe Govt. also determine the tempo of economic development.Consumers2 8onsumer welfare and interest should be taken into consideration while preparing

    arketing programme. %he marketer is to make available 2uality products at reasonable prices, in

    ufficient 2ualities, at re2uired time interval.Com0etition2 +ealthy competition is always in the interest of customers whereas unhealthy

    ompetition is harmful and leads toward increasing cost and waste.Price2 t is determinant of the fate of any business. f the rice is too high, reduces the consumer and

    onsumption and if too low, the producers and marketers are left in the lurch.

    T,IC' ENVIRONMENT

    n the race of earning more and more profits, business people disintegrate the ethical values from

    e business. %his leads to adulteration, limitation etc. resulting in socio-economic pollution of minds andlations.

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    O'ITIC'3 'E$'ENVIRONMENT

    he legal environment for marketing decision is characterized by various laws passed by 8entral or #* customer is the most

    mportant visitor on our premises. +e is not dependent on us. 5e are dependent on him. +e is not an

    terruption on our work. +e is the purpose of it and not an outsider on our premises. +e is the part of it.

    5e are not doing a favour by serving him. +e is doing us a favour by giving us the opportunity to do so$.hough this statement was not made in the marketing concept, there is a lot of wisdom and insight into

    Mahatma"s words.oday all the firms are engaged in the process of creating a life time value andlationship with their customers. %his chapter deals with studying consumer behavior as a related field of

    arketing.

    U+ER4 CU%TOMER ND CON%UMER

    ON%UMER E,VIOUR

    ehaviour is the interaction with the ambient surrounding environment, inherent in living

    eatures and mediated by their external and inner activeness. %hus consumer behaviour is actions of

    onsumers in the market place and the underlying motives for those actions. Marketers expect that by

    nderstanding what causes consumers to buy particular goods and services, they will be able to determinehich products are needed in the market place, which are obsolete and how best to present those goods to

    e consumer.

    he study of consumer behaviour is the study of how individuals make decisions topend their available resources : time, money, effort ; on consumption related items.

    n the words of 5alters and aul # consumer behaviour is the process whereby

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    dividuals decide what, when, where, how and from whom to purchase goods and services.

    EED OR IMPORTNCE OF %TUD+ OF CON%UMER E,VIOUR

    he modern marketing management tries to solve the basic problems of consumers in the

    ea of consumption. %o survive in the market, a firm has to be constantly innovating and understand the

    test consumer needs and tastes. t will be extremely useful in exploiting marketing opportunities and in

    eeting the challenges that the ndian market offers. t is important for the marketers to understand theuyer behaviour due to the following reasons.%he study of consumer behaviour for any product is of vital importance to marketers in shaping the

    rtunes of their organisations.

    t is significant for regulating consumption of goods and thereby maintaining economic stability.t is useful in developing ways for the more efficient utilisation of resources of marketing. t also

    elps in solving marketing management problems in more effective manner.%oday consumers give more importance on environment friendly products. %hey are concerned about

    ealth, hygiene and fitness. %hey prefer natural products. +ence detailed study on upcoming groups ofonsumers is essential for any firm.%he growth of consumer protection movement has created an urgent need to understand how

    onsumers make their consumption and buying decision.8onsumers tastes and preferences are ever changing.

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    formation from friends, family, media, sales people etc. it is only through this information search that

    e can identify the means of satisfying our need.V'UTION OF 'TERNTIVE%?

    y collecting information during the second stage, an individual comes to know about the brands and

    eir features. Eow he compares the alternative products or brands in terms of their attributes such as price,uality, durability etc. during the evaluation stage he may consider the opinion of others such as wife, relatives

    nd friends. %hen he selects the brand that will give him the maximum utility :or that he thinks the best;.

    URC,%E DECI%ION?

    nally the consumer arrives at a purchase decision. urchase decision can be one of the three,

    amely no buying, buying later and buying now. f he has decided to buy now, he will decide the shopdealer; to buy it from, when to buy it, how much money to spend etc. *fter deciding these, he will go to

    e shop chosen and buy the product of the brand chosen.O%T PURC,%E E,VIOUR?

    refers to the behaviour of a consumer after purchasing a product. *fter the consumer has

    ctually purchased the productDbrand he will be satisfied or dissatisfied with it. f he is satisfied with the

    roduct he would regularly buy the brand and develop a loyalty. +e recommends the brand to his friendsnd relatives. %he negative feeling which arises after purchase causing inner tension is known as

    ognitive Dissonance :or ost urchase =issonance;. %he post purchase dissonance is also calledBuyers

    emorse.

    CTOR% INF'UENCIN$ CON%UMER E,VIOUR3 U+IN$ DECI%ION%DETERMINNT% OF CON%UMER E,VIOUR)

    ll factors which determine the buying or consumer behaviour are broadly classified into six.

    sychological factors,

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    ulture determines and regulates our general behaviour. %he ma3or cultural factors are as follows?

    Culture2 8ulture simply refers to values and beliefs in which one is born and brought up. t is a set ofdeas, 8ustoms, 6alues, *rt and 7elief that are produced or shaped by a society and passed on from

    eneration to generation. 8ulture influence what we eat and wear, how we relax and where we live etc.

    %u6-Culture? t is based on religion, language, geographic region, nationality, age etc. t is a segmentithin a large culture that shares a set of beliefs, values or activities that differ in certain respects from

    ose of the main or overall culture. %he food habits are different in different parts of ndia.

    %ocial Class2 * social class is a group of people with similar values, interest and behaviour within aociety. 8onsumers buying behaviour is determined by the social class to which they belong rather

    an by their income alone. %he social class is based on income, education, occupation, family history,

    ealth, lifestyle, area of residence etc.ersonal Factors

    ersonal factors are uni2ue to a particular person. %hese factors include demographic factors and are as

    llows.

    .e2Eeed and wants are determined by age.

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    haracteristics of the consumers and their motivations. *ttitudes, cognitions.personalities and perceptions

    an help to discover new market opportunities, clear and specific market segmentation. *ll markets areade up of segments and these segments are made up of sub-segments.

    MENIN$ ND DEFINITION

    egmentation is a consumer oriented marketing strategy. t is a process of dividing the market one basis of interest, need and motive of the consumer. Market segmentation simply means dividing

    arket or grouping of consumers. t refers to grouping of consumers according to such characteristics as

    come, age, race, education, sex, geographic location etc.%herefore market segmentation is the strategyat subdivides the target market into sub-groups of consumers with distinct and homogenous

    haracteristics with a view to develop and follow a distinct and differentiated marketing programmes for

    ach sub-group in order to enhance satisfaction to consumers and profit to the marketer.ccording to hilip otler, # Market segmentation is the sub-dividing of a market intoomogenous sub-sects of consumers where any sub-sects may conceivably be selected as a market target

    be reached, 5ith a distinct marketing mix.$

    C,RCTERI%TIC% OR CRITERI% OF EFFECTIVE %E$MENTTION

    he main criteria"s of effective segmentation are

    Measurability

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    +igher markets share.

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    EMO$RP,IC %E$MENTTION2 =emos means people and graphein means to measure or toudy. n =emography means study of people or population. n =emographic segmentation, the market is

    egmented on the basis of demographic variables such as age, sex, family size, family life cycle, income,

    ccupation, education etc. =emographic variables or characteristics are the most popular bases for

    egmenting the market.

    ; .e2 *ge is an important factor for segmenting the market. %his is because demand and brand choicef people change with age. 4n the basis of age, a market can be divided into four- 8hildren,

    eenagers, *dults and Grown-ups. For consumers of different age groups, different types of products

    e produced. ohnson and ohnson cater to the needs of children below years by presenting babyowders, baby soaps, oils etc.

    ) %e52

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    references, interests, choices etc, of men are different from that of women. For instance, women are

    ore fond of cosmetics and other fancy articles. Marketers use gender differences for marketingarments, personal care products, bikes, cosmetics and magazines.

    ; Famil/ 'ife C/cle2 t refers to the important stages in the life of an ordinary family. 7roadly

    vided into the following stages.tage &? 8hildhood.

    tage ? 7achelorhood :unmarried;.

    tage I? +oneymooners- Joung married couple.tage 0? arenthood- :a; 8ouple with children. :b; 8ouple with grown up children.

    tage )? ost- parenthood- 4lder married couple with children living away from arents :due to

    b or marriage of sons and daughters;.tage ? =issolution- 4ne of the partners is dead.

    5ants, tastes, interests, buying habits etc vary over different life cycles stages.

    d;Reli.ion2 @eligious differences have important effect on marketing. %he male folk among the muslims

    ave a demand for striped lungis and the woman folk for pardhas.; Income2 ncome segmentation is used for automobiles, clothing, cosmetics, travel, financial services

    c. For example, 7M5 :car manufacturer concentrates on high income segment;

    ; Occu0ation2 Market segmentation is done also on the basis of occupation of consumers. For instance,octors may demand

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    ; Volume %e.mentation2 %he market is segmented on the basis of volume or 2uality of purchase. %he

    uyers are grouped into categories like bulk buyers, moderate buyers, and small buyers. +eavy buyerse often small percentage of the market but account for a high percentage of total consumption.

    Marketers prefer to attract one heavy buyer rather than several small buyers.

    ) 'o/alt/ %e.mentation2 8onsumers have varying degree of loyality to specific brands. 4n the basis ofrand loyality, buyers can be divided into the following five groups. :&; +ard-core loyals :;

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    mage for a product in the minds of targeted customers is known as product positioning. 8lose-up tooth

    aste is looked upon by the consumers more as a mouth wash than a teeth cleaner, while Kpepsodent" haseated an impression of germ killer in the consumers minds.

    TEP% IN PRODUCT PO%ITIONIN$

    dentifying potential competitive advantages? 8onsumers generally choose products and services which

    ve them greatest value.%he key to winning and keeping customers is to understand their needs anduying processes far better than the competitors do and deliver more values.

    dentifying the competitors position? 5hen the firm understands how its customers view its brand relative

    competitors, it must study how those same competitors position themselves.

    8hoosing the right competitive advantages? t refers to an advantage over competitors gained by offeringonsumers greater value either through lower price or by providing more benefits.

    8ommunicating the competitive advantage? %he company should take specific steps to advertise theompetitive advantage it has chosen so that it can impress upon the minds of consumers about the

    uperiority claimed in respect of the product over its competing brands.

    Monitoring the positioning strategy? Markets are not stagnant. %hey keep on changing. 8onsumer tastes

    hift and competitors react to those shifts. *fter a desired position is developed, the marketer shouldontinue to monitor its position through brand tracking and monitoring.

    'EMENT% OF PO%ITIONIN$

    is concerned with the following four elements. %he roduct? =esign, special feature, attributes, 2uality, package etc. of product create its own

    mage in the minds of the consumers. Material ingredient of a product is also important in therocess of product positioning. %he 8ompany? %he goodwill of a company lends an aura to its brand. For example, %ata, Godre3,

    a3a3 etc have very good reputation in the market

    %he 8ompetitors? roduct image is build in consumers mind in relation to the competing product.hus a careful study of competition is re2uired.

    %he 8onsumer? Altimate aim of positioning policy is to create a place for the product in consumers

    inds. %herefore, it becomes necessary to study the consumer behaviour towards the product.

    EC,NI:UE% OF PRODUCT PO%ITIONIN$

    ollowing techni2ue are used in positioning a product in the market?

    ositioning by 8orporate dentity? %he companies that have become a tried and trusted householdame.For example, %ata,