literature reivew.docx
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LITERATURE REIVEW
MARKETING
The American Marketing Association (AMA) defines marketing as an
organizational function and a set of process for creating, communicating and delivering
value of customers and for managing customer relationship in ways that benefits the
organization and its stock holders.
MARKETING STRATEGY
The marketing concepts of building an organization around the profitable
satisfaction of customer needs has helped firms to achieve success in high-growth,
moderately competitive markets. However, to be successful in markets in which
economic growth has leveled and in which there existing many competitors who follow
the marketing concepts a well developed marketing strategy is required. Such a
strategy; considers a portfolio of product and take into account the anticipated moves of
competitors in the market.
FORMULATING THE MARKETING STRATEGY
Marketing strategy is a board concept of low resources is to be deployed to
achieve market success marketing competition, segmentation, pricing, promotion and
distribution.
Basically formulation of marketing strategy consists of two main steps:
1. Selecting the target market.2. Assembling the marketing mix.
SELECTING THE TARGET MARKET
When the right target market for the firm is selected half of the job is over. In
effect, target market selection boils down to deciding what part of the market are going
to serve? What pert of the market we choose not to serve? And, what is the logic of
selecting a particular segment? Careful selection of a target market is necessary for an
organization to achieve its marketing objectives many businesses have failed becausethey did not adequately identify the target market.
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ASSEMBLING THE MARKETING MIX
Marketing mix is a popular usage in the study of marketing. The basic
components of marketing mix are product, price, place and promotion. It is also known
as 4 ps of marketing. The marketing strategies of a firm revolve around these fourelements. The varying mix of these four ingredients of influences the demand for a
product and customer satisfaction. A firm has to prepare mix of right product, right
price, right place and right promotion to attain success in marketing.
The3 effective mix of these 4 ps, the marketing can be a great success.
MARKETING STRATEGIES THROUGHOUT THE PLC
Just too biological cycles progress from birth through growth and decline, soda
product life cycles. A product life cycle has four major stages: INTRODUCTION,
GROWTH and MATURITY AND DECLINE. Each stage of the product life cycles
(PLC) calls for different marketing strategies. As a product moves through its cycle, the
strategies relating to competition, promotion distribution pricing and market
information must be periodically evaluated and possibly changed. We shall examine
now in brief the strategies adopted at each stage.
STRATEGY AT THE INTRODUCTION STAGE
During the introduction stage, also called the pioneering stage, a product is
launched into the market in a full-scale marketing programmed. It has gone through
product development, including idea screening and market test. Introduction stage is
marked by slow growth and minimum profits as the product is pushed into distribution.
Price tends tube high because cost is high. The whole product maybe new or it may be
an improved version of an existing product. While launching a new product, marketing
management can set a high or low level for each marketing variable. The pioneer
should analyze the profit potential of each product market singly and combination anddecide on a market expansion path. Because consumers are unfamiliar with innovative
product, a pioneering firm promotional programmed is designed to stimulate demand
for the entire product category, rather than a single brand. Introduction is most risky and
expensive stage.
One of the crucial decisions to be taken in the marketing pioneering stage is the
pricing strategy tube adopted for the product.
Following are the pricing strategies:-
1. Market skimming
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2. Market penetrationThe skimming strategy will involve high price, taking advantages of early entry and
the relative novelty of the product in the market pioneering stage.
The penetration pricing strategy will involve low price with a view to having a
good market coverage and an eventually by mass market for the product. It also aims at
keeping the completion out.
The kind of pricing strategy a firm will adopt in the pioneering stage may vary,
depending on the characteristics of the product, the market characteristics and
objectives of the firm.
STRATEGY IN GROWTH STAGE
This is the market acceptance stage. It is marked by rapid sales growth and
increasing profits. The goals are to establish and fortify the products market position by
encourages brand loyalty. Competitors enter the market of tern in large number if the
profit outlook is particularly attractive. During this stage the firm uses several strategies
to sustain rapid market growth as long as possible. The strategies have the following
elements;
1. Product quality is improved. New features are incorporated2.New models are introduced.3.New market segments are tapped.4. Brand building promotion is resorted to.5. Price may be lowered to attract the next layer of price sensitive buyers.6. It shifted from product awareness advertising to product preference advertising.
STRATEGIES AT MATURITY STAGE
Most products are maturity stage of the life cycle therefore most of marketing
management deals with mature products. Several companies think of give up the
product once it turns weaker committing resources in this way o either more profitable
products or new products. Still what is needed is to explore the untapped potential of
the old product. There are strategies of market modification, product modification and
marketing mix modification available to the marketers. A market can be expended by
increasing either or both of these contributory factors. Product modification strategy can
be adopted in following quality improvements; feature improvements; and style
improvements; The marketer may try to improve sale though altering one or more
elements of the marketing mix like price distribution, and promotion alternative as
required by the demand of the environment.
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STRATEGIES DURING THE DECLINE STAGE
Most of the products show a decline in sales ultimately, primarily because of a
number of new products begin their own life cycle and replace the old product. The
decline may come fast in the case of fashion products or consumer electronic goods. Inorder to deal with the aging products, a company has to take a number of decisions. In
this stages marketer must determine whether to eliminate the product or try to
reposition it to extend its life. The companys task during this stage is to recognize the
decline and to decide whether it should maintain, harvest or drop the product.