ms-06 marketing management

An ISO 9001:2008 Certified Organization

MS-06

MARKETING MANAGEMENT

© Copyright PCTI Group 2009

Marketing Definition

• Activities necessary for: – Planning and executing the– conception (product), pricing, promotion and

distribution (place)– of ideas, goods and services to– create exchanges – that satisfy individual and organizational

objectives


Marketing Mgmt. Philosophies

1. Production

2. Sales

3. Marketing

4. Societal marketing orientations


1. Production Orientation

• Focuses on internal capabilities of firm.• “ Field of Dreams” strategy

– “If we build it, they will come”

• Best used when – competition is weak – demand exceeds supply– generic products competing solely on price

• Problem is that they don’t understand wants/needs of marketplace.


2. Sales Orientation

• People will buy more goods/services if aggressive sales techniques are used.

• High sales will result in high profits.• Used with unsought products

– life insurance– encyclopedias

• Problem is that they don’t understand wants/needs of marketplace.


3. Marketing Orientation

Marketing concept: The social and economic justification for an organization’s existence is the satisfaction of

customer wants and needs, while meeting organizational objectives.


3. Marketing Orientation . . .

• Focusing on customer wants so the organization can distinguish its products from competitors’ .

• Integrating all the organization’s activities, including promotion, to satisfy these wants.

• Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly.


3. Marketing Orientation . . .

• Requires:– Top management leadership– A customer focus– Competitor intelligence

• strengths• weaknesses

– Interfunctional coordination to meet customer wants/needs and deliver superior values.


4. Societal Marketing Orientation

• Organization exists not only to satisfy customer wants/needs and to meet organizational objectives, but also to preserve and enhance individuals’ and society’s long-term best interests.

• Extends marketing concept to serve one more customer - society as a whole.


Differences between Sales & Marketing Orientations

Sales Focus• Organization’s needs• Selling goods/services

• Everybody

• Profit through max. sales volume

• Intensive promotion

Marketing Focus• Customer’s needs• Satisfying customer

wants/needs• Specific groups of people• Profit through customer

satisfaction• Coordinated mktg.

activities (4 p’s)


Relationship Marketing

• Forging long-term partnerships with customers and contributing to their success.

• Companies benefit from– repeat sales/referrals that lead to increases

in sales, market share and profits, and– decreased costs - it’s less expensive to serve

existing customers than attract new ones.


3. Relationship Marketing. . .

• Keeping a customer costs 1/4 of what it costs to attract new customer.

• Probability of keeping current customer = 60%.

• Probability of gaining new customer < 30%.


3. Relationship Marketing. . .

• Customers benefit from:– stable relationships with suppliers (especially

in business-to-business)– greater value and satisfaction– discounts, perks (frequent flyer programs,

shopper clubs, etc.)– sense of well-being/bonding (doctor, hair

stylist, etc.)


3. Relationship Marketing . . .

• Successful relationship marketers have:– customer-oriented personnel– effective training programs– employees with authority to make decisions

and solve problems – teamwork


The Marketing Process1. Understand the org.’s mission & the role

mktg. plays in fulfilling that mission.2. Set the marketing objectives.3. Gather, analyze and interpret the org.’s

situation - “SWOT” analysis. Strengths Weaknesses Opportunities Threats


The Marketing Process . . .

4. Develop marketing strategy– target market– marketing mix

5. Implement marketing strategy.

6. Design performance measures.

7. Periodically evaluate marketing efforts and make changes, if needed.


The 7 p’s

• Price

• Product

• Promotion

• Place

• People

• Packaging

• Process


Objectives To Recognize the Importance of Environmental Scanning

and Analysis To Become Familiar With How Competitive and Economic

Factors Affect Organizations’ Ability to Compete and Customers’ Ability and Willingness to Buy Products

To Identify the Types of Political Forces in the Marketing Environment

To Understand How Laws, Government Regulations, and Self-Regulatory Agencies Affect Marketing Activities

To Explore the Effects of New Technology on Society and on Marketing Activities

To Be Able to Analyze Socio-cultural Issues That Marketers Must Deal With As They Make Decisions


Examining and Responding to the Marketing Environment

• EnvironmentalScanning


• EnvironmentalScanning

• EnvironmentalAnalysis



• Reactive Response



• Reactive Response

• ProactiveResponse



Competitive Forces• Types of Competition

– Competition Defined– Brand Competitors– Product Competitors– Generic Competitors– Total Budget Competitors

• Types of Competitive Structures


Competitive Forces

Type Number ofType Number of Ease of Entry ProductEase of Entry Product CompetitorsCompetitors into Market into Market

MonopolyMonopoly

OligopolyOligopoly

MonopolisticMonopolisticCompetitionCompetition

Pure Pure CompetitionCompetition

•OneOne

•FewFew

•ManyMany

•UnlimitedUnlimited

•Many BarriersMany Barriers

•Some BarriersSome Barriers

•Few BarriersFew Barriers

•No BarriersNo Barriers

•Almost NoAlmost No SubstitutesSubstitutes•Homogeneous orHomogeneous or DifferentiatedDifferentiated•Product Differ-Product Differ- entiation, with entiation, with Many SubstitutesMany Substitutes•HomogeneousHomogeneous ProductsProducts

Selected Characteristics of Competitive Selected Characteristics of Competitive StructuresStructures


Competitive Forces

• Types of Competition– Competition Defined– Brand Competitors– Product Competitors– Generic Competitors– Total Budget Competitors

• Types of Competitive Structures• Monitoring Competition


Business Cycle Prosperity

Economic Forces


Business Cycle Prosperity Recession Depression

Economic Forces


Economic Forces

Business Cycle Prosperity Recession Depression Recovery


Buying Power– Disposable

Income

Economic Forces


Economic Forces

Buying Power– Disposable

Income– Discretionary

Income– Wealth


Economic Forces Buying Power

– Disposable Income

– Discretionary Income

– Wealth Willingness to

Spend


Political Forces

Relationshipto Legal andRegulatoryForces


Legal and Regulatory Forces• Sherman Antitrust Act (1890)• Clayton Act (1914)• Federal Trade

Commission (1914) • Robinson-Patman Act (1936)• Wheeler-Lea Act (1938) • Lanham Act (1946) • Celler-Kefauver Act (1950) • Fair Packaging and Labeling Act (1966)


• Magnuson-Moss Warranty (FTC) Act (1975)• Consumer Goods Pricing Act (1975)• Trademark Counterfeiting Act (1980)• Trademark Law Revision Act (1988)• Nutrition Labeling and

Education Act (1990)• Telephone Consumer

Protection Act (1991)• Children’s Online Privacy

Act (1998)

Legal and Regulatory Forces


• Procompetitive Legislation• Consumer Protection Legislation• Encouraging Compliance with

Laws and Regulations• Regulatory Agencies

– Federal Trade Commission (FTC)



• Self-Regulatory Forces– Better Business Bureau– National Advertising Review Board

(NARB)



Technological Forces

• Impact of Technology

• Adoption and Use of Technology


Socio-cultural Forces

• Demographic Diversity and Characteristics



• Cultural Values



• Consumerism

Ralph Nader


TYPES OF MARKETING ENVIRONMENT

• MICRO: The environmental forces that are relevant to the firm. It includes organization’s internal environment, suppliers, marketing intermediaries, customers and competitors.

• MACRO: Large societal forces which exert influence on firm’s marketing system. It includes demographic, economic, natural, technological, political, legal and cultural forces.


– Marketing must consider other parts of the organization including finance, R&D, purchasing, operations and accounting

– Marketing decisions must relate to broader company goals and strategies

Microenvironment

ActorsActors

• The company• Suppliers• Marketing

intermediaries• Customers• Competitors• Publics


– Marketers must watch supply availability and pricing

– Effective partnership relationship management with suppliers is essential

Microenvironment

ActorsActors

1. The company

2. Suppliers

3. Marketing intermediaries

4. Customers

5. Competitors

6. Publics


– Help to promote, sell and distribute goods to final buyers

– Include resellers, physical distribution firms, marketing services agencies and financial intermediaries

– Effective partner relationship management is essential

Microenvironment

ActorsActors

1. The company

2. Suppliers


4. Customers

5. Competitors

6. Publics


– The five types of customer markets

• Consumer• Business• Reseller• Government• International

Microenvironment

ActorsActors

1. The company

2. Suppliers


4. Customers

5. Competitors

6. Publics


– Conducting competitor analysis is critical for success of the firm

– A marketer must monitor its competitors’ offerings to create strategic advantage

Microenvironment

ActorsActors

1. The company2. Suppliers3. Marketing

intermediaries

4. Customers5. Competitors6. Publics


– A group that has an actual or potential interest in or impact on an organization

– Seven publics include:• Financial• Media• Government• Citizen-action• Local• General• Internal

Microenvironment

ActorsActors

1. The company2. Suppliers3. Marketing

intermediaries4. Customers5. Competitors6. Publics


GOVERNMENT REGULATIONS AFFECTING MARKETING

1. The Indian Contract Act, 18722. Sales of Goods Act, 19303. The Industries (development & regulation) Act, 19514. The Prevention of food adulteration Act, 19545. The Drugs and Magic Remedies (objectionable

advertisement) Act, 19546. The Essential commodities Act, 19557. The Companies Act, 19568. The Trade marks Act, 19999. The Monopolies and restrictive Trade Practices Act,

196910. The Patent Act, 1970


GOVERNMENT REGULATIONS AFFECTING MARKETING

11. The Standards of weights and measures Act, 1976

12. The Consumer Protection Act, 1986

13. The Environment Protection Act, 1986

14. The Bureau of Indian Standards Act, 1986

15. The Agricultural Produce Grading and marketing Act (AGMARK), 1937


Recognize the Importance of Environmental Scanning and Analysis

Know How Competitive and Economic Factors Affect Organizations’ Ability to Compete and Customers’ Ability and Willingness to Buy Products

Be Able to Identify the Types of Political Forces in the Marketing Environment

Understand How Laws, Government Regulations, and Self-Regulatory Agencies Affect Marketing Activities

Know the Effects of New Technology on Society and on Marketing Activities

Be Able to Analyze Socio-cultural Issues That Marketers Must Deal With As They Make Decisions

BY NOW, YOU SHOULD . . .


Functional information systemsFunctional information systems

Marketinginformation

system

Manufacturinginformation

system

Financeinformation

system

Human resourceinformation

system

Marketingfunction

Manufacturingfunction

Financefunction

Humanresourcesfunction

Physical system of the firmPhysical system of the firm

Functional Information Systems Functional Information Systems RepresentRepresent

Functional Physical SystemsFunctional Physical Systems

Information resource

informationsystem

Information Servicesfunction


The Marketing Information System (MKIS)

• Kotler's marketing nerve center

• 3 information flows– Internal– Intelligence (from environment)– Communications (to environment)


FirmEnviron-ment

Marketing intelligence

Marketing communications

Internalmarketinginformation

Kotler’s Information FlowsKotler’s Information Flows


Marketing Information System (MKIS) Definition

A computer-based system that works in conjunction with other functional information systems to support the firm's management in solving problems that relate to marketing the firm's products.


An MKIS Model

• Output– product– place– promotion– price– integrated mix

• Database• Input

– AIS– marketing research– marketing intelligence


Input subsystemsOutput subsystems

DD

AA

TT

AA

BB

AA

SS

EE

Accounting information

system

Marketing research

subsystem

Marketing intelligence subsystem

Internal sources

Environmental sources

Product subsystem

Place subsystem

Promotion subsystem

Price subsystem

Integrated-mix

subsystem

Users

DataData InformationInformationMarketing Information System Marketing Information System ModelModel


Accounting Information System

• Sales order data is input.

• AIS provides data for – Periodic reports– Special reports– Mathematical models and knowledge-

based models


Primary versus Secondary Data

• Primary data are collected by the firm

• Examples of primary data– Survey– In-depth interview– Observation– Controlled experiment


Primary versus Secondary Data (continued)

• Secondary data– Mailing lists– Retail sales statistics– Video retrieval systems

• Some secondary must be bought and some is free


Marketing Research Software

• Graphics packages (print maps)

• CATI (computer-aided telephone interviewing) where the computer displays the next question to ask

• Statistical analysis


Marketing Intelligence Subsystem

• Ethical activities aimed at gathering information about competitors

• Each functional information system has an intelligence responsibility


Product Subsystem

• Product life cycle; introduction, growth, maturity, and decline

• Information answers 3 key questions:1.Introduce?

2.Change strategy?

3.Delete?


SalesSalesVolumeVolume

STAGESSTAGES

Introduction Growth Maturity Decline

Should theproduct beintroduced

Should the product strategy be changed

Should theproduct be

deleted

The Product Life Cycle and Related The Product Life Cycle and Related DecisionsDecisions


New Product Evaluation Model

• New product committee

• Explicitly considers production as well as marketing

• Lists decision criteria and their weight


Place Subsystem

• Channel of distribution may be short or long

• Material, money, and information flow through the distribution channel– Resource flows– Feed forward information– EDI fits in here


Material, Money, and Material, Money, and Information FlowInformation Flow

Two-way information flow

SupplierSupplierManu-Manu-

facturerfacturerWhole-Whole-salersaler RetailerRetailer ConsumerConsumerMaterial MaterialMaterialMaterial

MoneyMoney MoneyMoneyMoneyMoneyMoneyMoney


Promotion Subsystem Includes:

(1) advertising

(2) personal selling

(3) sales promotion


What is Research ?

Research is simply the process of thoroughly studying and analysing the situational factors surrounding a problem in order to seek out solutions to it.


Types of Business Research

• Applied – done with the intention of applying results to specific problems in the business

• Basic – to enhance the understanding of problems that commonly occur across a range of organisations


Redefining Marketing Research

The American Marketing Association (AMA) redefined Marketing Research as:

The function which links the consumer, the

customer, and public to the marketer

through INFORMATION


Used to identify and define market opportunities and problemsGenerate, refine, and evaluate marketing performance

Monitor marketing performance

Improve understanding of marketing as a process

Redefining Marketing Research


Definition of Marketing Research

Marketing research is the systematic and objective

identification collection analysis dissemination and use of information

for the purpose of improving decision making related to the

identification and solution of problems and opportunities in marketing.


Market Research

• Specifies the information necessary to address these issues

• Manages and implements the data collection process

• Analyzes the results• Communicates the findings and their

implications


Classification of Marketing Research

Problem Identification Research• Research undertaken to help identify problems which

are not necessarily apparent on the surface and yet exist or are likely to arise in the future. Examples: market potential, market share, image, market characteristics, sales analysis, forecasting, and trends research.

Problem Solving Research• Research undertaken to help solve specific marketing

problems. Examples: segmentation, product, pricing, promotion, and distribution research.


A Classification of Marketing Research

Marketing Research

Problem Identification Research

Problem Solving Research

Market Potential ResearchMarket Share ResearchMarket Characteristics ResearchSales Analysis ResearchForecasting ResearchBusiness Trends Research

Segmentation Research

Product Research

Promotion Research

Distribution Research


Problem Solving Research

Determine the basis of segmentation

Establish market potential and responsiveness for various segments

Select target markets

Create lifestyle profiles: demography, media, and product image characteristics

SEGMENTATION RESEARCH

Test concept

Determine optimal product design

Package tests

Product modification

Brand positioning and repositioning

Test marketing

Control score tests

PRODUCT RESEARCH


Research Process

• Seven inter-related steps1. Specifying research objectives2. Preparing a list of needed information3. Designing the data collection project4. Selecting a sample type5. Determining sample size6. Organizing & carrying out the field work7. Analyzing the collected data & report the

findings


Research Process & Problems in Achieving Scientific Method

• To achieve Validity & Reliability, Marketing Research should be conducted as a proper Scientific Method

• At each of the seven steps let us analyze A. Problems in achieving Scientific Method

B. Steps to minimize the potential sources of errors


1. Specifying Research Objectives

A. Problems in achieving Scientific Methoda. Manager’s Expectations of research results

B. Minimizing potential sources of errorsa. Write research objectives

b. Manager & researcher must discuss the objective statements & if necessary modify


2. Preparing a list of needed information

• Problems in achieving Scientific Methoda. Due to busy schedule manager may not get

adequately involved

b. May think researcher knows what to do

• Minimizing potential sources of errorsa. Manager & researcher should develop ‘List of

needed information’ together & evaluate usefulness

Research is not needed if manager is forced to select a particular course of action irrespective of research findings


3. Designing data collection project

• Problems in achieving Scientific Methoda. Using inappropriate research design

b. Wrong selection of respondents

c. Asking unclear or ambiguous questions

d. Using large scale study instead of small scale & vice versa

e. Using poor experimental design


• Minimizing potential sources of errorsFive important issues that must be addressed:– Should the research be exploratory or conclusive?– Who should be interviewed & how?– Should only few cases be studied or large samples?– How well experiments be incorporated?– How should data collection form be designed?

3. Designing data collection project


4. Selecting a sample type

Why samples? Probability Vs. Non Probability• Problems in achieving Scientific Method

a. Sample not representative of the population

• Minimizing potential sources of errorsa. Define sampling frame carefullyb. Select proper sampling method – Simple

Random


5. Determining Sample size• Problems in achieving Scientific Method

a. Sample size depends uponi. Nature of the problemii. Budgetiii. Accuracy needed

b. Small sample – Lower reliabilityLarge sample – Likely to give higher reliability

• Minimizing potential sources of errorsa. Use Sampling Statistics to calculate sample size for a given

accuracy (Confidence Interval)b. Care exercised in determining sample size & sample type

will minimize errors


6. Organizing & Carrying out field work

• Field work: Selecting, Training, Controlling & Evaluating field force

• Involves substantial portion of budget • Potential source of errors through lack of Validity &

Reliability

• Problems in achieving Scientific Methoda.Varying skills of field workersb.Forms filled without interviewc.May not follow instructiond.Investigator’s biase.Respondents’ bias


• Minimizing potential sources of errorsa.Follow good practices in selection, training,

controlling & evaluating field workers

b.Incorporate Back Checks & Spot Checks

c.Motivate supervisors

d.Deploy adequate field force – release time pressure

6. Organizing & Carrying out field work


7. Analyzing Data & Report Preparation

• Problems in achieving Scientific Methoda.Care & precaution not taken during editing,

coding & data entryb.List of needed information not prepared properlyc. Research objectives not established correctly

• Minimizing potential sources of errorsa.Editing & Coding done carefullyb. Incorporate extensive validity checksc. Inferences to be drawn based on factual data &

not based upon researcher’s personal understanding


The Role of Marketing Research

ControllableMarketing

•Product

•Pricing

•Promotion

•Distribution

Variables

Marketing Research

MarketingDecisionMaking

ProvidingInformation

AssessingInformationNeeds

Marketing Managers

• Market Segmentation

• Performance & Control

• Target Market Selection• Marketing Programs

UncontrollableEnvironmentalFactors

•Economy

•Technology

•Laws & Regulations

•Social & Cultural Factors

•Political Factors

Customer Groups

• Employees• Shareholders

Suppliers•

• Consumers


When is marketing research not needed?

– The information is already available.

– Decisions must be made now.

– We can’t afford research.

– Costs outweigh the value of marketing research.


• A brand is a collection of images and ideas representing an economic producer; more specifically, it refers to the descriptive verbal attributes and concrete symbols such as a name, logo, slogan, and design scheme that convey the essence of a company, product or service.

• Brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relating to its use, and through the influence of advertising, design, and media commentary.

• A brand is a symbolic embodiment of all the information connected to a company, product or service.

• A brand serves to create associations and expectations among products made by a producer.

• A brand often includes an explicit logo, fonts, color schemes, symbols and sound which may be developed to represent implicit values, ideas, and even personality.

The key objective is to create a relationship of trust.


Brand as a legal Instrument

• The brand name is often used interchangeably with "brand", although it is more correctly used to specifically denote written or spoken linguistic elements of a brand. In this context a "brand name" constitutes a type of trademark, if the brand name exclusively identifies the brand owner as the commercial source of products or services.

• A brand owner may seek to protect proprietary rights in relation to a brand name through trademark registration. Advertising spokespersons have also become part of some brands, for example: Mr. Whipple of Charmin toilet tissue and Tony the Tiger of Kellogg's.

• The act of associating a product or service with a brand has become part of pop culture. Most products have some kind of brand identity, from common table salt to designer clothes.


What Is A Brand?

Asset that drives premium pricing and future cash flows

Signal of quality and a trust markRelationshipA set of rational and emotional associations that

identify and differentiate a company or its offer

A form of self expression


• A good brand name should:• be protected (or at least protect able) under trademark

law • be easy to pronounce • be easy to remember • be easy to recognize • be easy to translate into all languages in the markets

where the brand will be used • attract attention • suggest product benefits (e.g.: Easy-Off) or suggest usage

(note the tradeoff with strong trademark protection) • suggest the company or product image • distinguish the product's positioning relative to the

competition. • be attractive • stand out among a group of other brands


Challenges or limitations of Branding:

• here are several challenges associated with setting objectives for a brand or product category.

• Brand managers sometimes limit themselves to setting financial and market performance objectives. They may not question strategic objectives if they feel this is the responsibility of senior management.

• Most product level or brand managers limit themselves to setting short term objectives because their compensation packages are designed to reward short term behavior. Short term objectives should be seen as milestones towards long term objectives.

• It is sometimes difficult to translate corporate level objectives into brand or product level objectives. Changes in shareholders' equity are easy for a company to calculate. It is not so easy to calculate the change in shareholders' equity that can be attributed to a product or category. More complex metrics like changes in the net present value of shareholders' equity are even more difficult for the product manager to assess.


• In a diversified company, the objectives of some brands may conflict with those of other brands. Or worse, corporate objectives may conflict with the specific needs of your brand. This is particularly true in regard to the trade-off between stability and riskiness. Only when these conflicts and tradeoffs are made explicit, is it possible for all levels of objectives to fit together in a coherent and mutually supportive manner.

• Brand managers sometimes set objectives that optimize the performance of their unit rather than optimize overall corporate performance. This is particularly true where compensation is based primarily on unit performance. Managers tend to ignore potential synergies and inter-unit joint processes.

• Often product level managers are not given enough information to construct strategic objectives.


Brand development• In terms of existing products, brands may be developed

in a number of ways:Brand extension• The existing strong brand name can be used as a

vehicle for new or modified products; for example, many fashion and designer companies extended brands into fragrances, shoes and accessories, home textile, home decor, luggage, (sun-) glasses, furniture, hotels, etc.

• Mars extended its brand to ice cream, Caterpillar to shoes and watches, Michelin to a restaurant guide, Adidas and Puma to personal hygiene.

• There is a difference between brand extension and line extension. When Coca-Cola launched "Diet Coke" and "Cherry Coke" they stayed within the originating product category: non-alcoholic carbonated beverages. Procter & Gamble (P&G) did likewise extending its strong lines (such as Fairy Soap) into neighboring products (Fairy Liquid and Fairy Automatic) within the same category, dish washing detergents.


LABELING• A label is a piece of paper, polymer,

cloth, metal, or other material affixed to a container or article, on which is printed a legend, information concerning the product, addresses, etc. A label may also be printed directly on the container or article.

• Labels have many uses: product identification, name tags, advertising, warnings, and other communication.


Application and use• Labels can be supplied:• separately • on a roll • on a sheet • Many labels are pre-printed by the

manufacturer. Other have printing applied manually or automatically at the time of application.

• Some labels have protective overcoats, laminates, or tape to cover them after the final print is applied. This is sometimes before application and sometimes after.

• Specialized high speed application equipment is available for certain uses.


LABEL provides:

• Picture of the product, accurate as to size, color & appearance

• Description of raw products used along with methods of processing

• Directions for use, including cautions against misuse

• Possible adverse effects, and• Brand name


PACKAGING• Packaging is the science, art and

technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of design, evaluation, and production of packages.

• Packaging can be described as a coordinated system of preparing goods for transport, warehousing, logistics, sale, and end use. Packaging contains, protects. preserves, transports, informs, and sells. .

• It is fully integrated into government, business, institutional, industry, and personal use.


The purposes of packaging and package labels

• Physical protection • Containment or agglomeration • Information transmission • Marketing • Security • Convenience


Packaging types• Primary packaging is the material that first

envelops the product and holds it. This usually is the smallest unit of distribution or use and is the package which is in direct contact with the contents.

• Secondary packaging is outside the primary packaging – perhaps used to group primary packages together.

• Tertiary packaging is used for bulk handling, warehouse storage and transport shipping. The most common form is a palletized unit load that packs tightly into containers.


Packaging Strategies or Techniques

• Discount pack• Coupon pack• Premium pack• Prime packing• Self-liquidator• Re-designing of the package• Odd size packaging• Packaging the product line• Bundle packaging• Packaging in perishables


PRICING• Pricing is one of the four p's of the

marketing mix. The other three aspects are product, promotion, and place.

• It is also a key variable in microeconomic price allocation theory. Price is the only revenue generating element amongst the 4ps,the rest being cost centers.

• Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others.

• Automated systems require more setup and maintenance but may prevent pricing errors.


Objectives of Pricing

• A well chosen price should do three things :• achieve the financial goals of the company (eg.:

profitability) • fit the realities of the marketplace (will customers buy at

that price?) • support a product's positioning and be consistent with the

other variables in the marketing mix • price is influenced by the type of distribution channel

used, the type of promotions used, and the quality of the product

• price will usually need to be relatively high if manufacturing is expensive, distribution is exclusive, and the product is supported by extensive advertising and promotional campaigns

• a low price can be a viable substitute for product quality, effective promotions, or an energetic selling effort by distributors


Factors Influencing Price Determination

The “value” of the product, as perceived by the buyer

Product costsCompetitionCompany’s policiesGovernment regulationsOther elements of marketing (i.e.

decisions, customer preferences, quality etc.)


Pricing Methods

• Cost based pricing• Buyer based pricing• Competition based pricing


PRICING DECISIONS

Pricing does not end once the basic price of a product has been arrived. In fact the job has only begun.

The company has to decide as to how it is going to recover the costs incurred in transporting the product from the production point to each one of the customers.


WHY PRICE ADJUSTMENTS?

Price adjustments may be brought about as part of a deliberate marketing strategy or due to factors beyond the control of the company.

• Competition• Increase/decrease in cost• Repositioning of the product• Incentives to intermediaries• Trade- In (promotional activity)• Product mix


DISCOUNT & ALLOWANCES• CASH DISCOUNT: It refers to the reduction in

price when bills are settled promptly i.e. payments are made immediately.

• QUANTITY DISCOUNT: Discount given on the basis of the number of units of the products purchased. “buy one get one free”, “3 for 2” & “buy one & get 50% off on second”.

• Cumulative & Non-Cumulative• FUNCTIONAL OR TRADE DISCOUNT: discounts

offered to channel members for performing various functions like storing, delivering, distributing etc.

• SEASONAL DISCOUNT: Discount offered from list price during certain seasons, like during off-seasons, festival seasons etc.

• ALLOWANCES: Promotional allowances (display, demonstration, trade fair, exhibitions) & Trade-in allowances.


PRICE CHANGES

Product & price share a special relationship & often adjustments are made in the product to meet some problems cropping up in the pricing area. Some product-price adjustment strategies are:

• Initiate price change: price cuts, price increase, customer reactions to price changes, competitors reactions to price change.

• Respond to price changes by competitors


PRICING A NEW PRODUCT

One of the greatest challenges a company may face relate to the pricing strategy it should adopt when it introduces a “new product” into the market. Two approaches are available as regards pricing a new product:

• Market-skimming pricing strategy: Setting high prices for the product initially is referred as market-skimming pricing strategy. Skimming means creamy segments of the market, generate as much revenue as possible & then, as competition develops, bring out lower priced versions of the product to draw in new segments.


• Market-penetration pricing strategy: It advocates setting as low an initial price in order to penetrate the market as fast and as much as possible. Low price is expected to attract high volume of business which, in turn, will have the effect of lowering the costs further. Low price generally discourage competition & hence gives substantial market share to the company practicing this strategy.


PRODUCT-MIX PRICING STRATEGIES

It is not often that a company manufactures only one product & hence has to formulate pricing strategies taking into account only one set of relevant factors. In a product-mix pricing strategy, the firm has to look for a set of prices that maximizes the profits on the total product mix.

• Product-line pricing: product line means different versions of the same product such as different capacities of refrigerators, various models of cars etc.

• Optional-product pricing: in this buyer is given the option to buy accessory products along with the main product. For eg: TV stand, TV cover with television set.


• Captive-Product pricing: There are certain products, which cannot be used without certain other products. Examples of such products are safety razor with razor blades & shaving cream.

• By-product pricing: In a number of industries, production of main products throws up by-products which also find usage. For eg: number of by-products emerge in petroleum refining.

• Product-bundle pricing: Under this strategy, sellers can combine a number of their products & offer the bundle at attractive price. for eg: like in festive seasons.


Different prices to different customers

• Fixed Price• Flexible Price• Unit pricing


INTRODUCTIONWhile designing pricing strategies it is important for

you to keep in mind the legislative provisions regarding price. Regulation of prices is considered as one of the important means of achieving the socio-economic goals in many countries.

Short supply of goods & services, unreasonable level of prices, unfair trade practices, black marketing, low levels of income of a large number of people etc. requires number of legislations seek to regulate pricing policies & practices. Which includes “Monopolies and Restrictive Trade Practices Act, 1969”. Etc.


Regulation of Prices under the MRP Act

The practices regulated under this Act are:• Resale price maintenance• Price discrimination• Collective price fixing• Predatory pricing• Bargain sale &• Deceptive pricing • Charging of unreasonably high prices.


Regulation of pricing under the Consumer Protection Act

The Consumer Protection Act, 1986 includes two types of pricing practices:

• Excessive Pricing

• Bargain and deceptive Pricing


Regulation Of Pricing Under other Acts

Some other legislations which seek regulation of pricing policies & practices in India include:

• The Essential Commodities Act, 1955• The Drugs (control) Act, 1950• The Industries (development & regulation)

Act, 1951• The Standard of weights & measures

(packaged commodities) rules, 1977


MARKETING COMMUNICATIONIt is the process of systematic and scientific way of

disseminating the relevant marketing information by a company to its target market and other publics by using a mix of media.

…..is a systematic relationship between a business and its market in which the marketer assembles a wide variety of ideas, designs, messages, media, forms and colors, both to communicate ideas to, and to stimulate a particular perception of products and services by individual people who have been aggregated into a target market.


Functions Of Marketing Communication

• Providing Information and persuasion.

• Providing information about a new brand or brand extension

• Building and maintaining Brand loaylity among consumers


Communication Process• The communication process is the guide toward

realizing effective communication. It is through the communication process that the sharing of a common meaning between the sender and the receiver takes place. Individuals that follow the communication process will have the opportunity to become more productive in every aspect of their profession. Effective communication leads to understanding.

• The communication process is made up of four key components. Those components include encoding, medium of transmission, decoding, and feedback. There are also two other factors in the process, and those two factors are present in the form of the sender and the receiver. The communication process begins with the sender and ends with the receiver.


Fields of Experience

The Communications Process

Response Feedback Loop

Channel

MESSAGEDecoding

Receiver /Audience

Source /Sender Encoding

NoiseNoise


MessageMessage&&

ChannelChannel

Receivers/Decoders

Noise

Context

FeedbackFeedback

Frame ofReference

FeedforwardFeedforwardFrames ofReference

Sender/Encoder

The Elements of CommunicationThe Elements of Communication


Six Basic Steps or Elements of Communication Process

1) Develop the idea – is the message worthwhile?

2) Encode the message – writing is different from speaking

3) Transmit – most appropriate channels

4) Receive the message – transfer of initiative

5) Decode the message – interpretation

6) Feedback – “you said…”


Step 1. Identifying the Target Audience

Step 2. Determining the Communication ObjectivesBuyer Readiness Stages

PurchasePurchase

Conviction

Preference

Liking

Knowledge

Awareness

Steps in Developing Effective Communication


Step 3. Designing a Message

Message ContentRational Appeals

Emotional AppealsMoral Appeals

Message StructureDraw ConclusionsArgument TypeArgument Order

Message FormatHeadline, Illustration,

Copy, & ColorBody Language




Step 4. Select the Communication Channels

Personal Communication Channels Face to Face, Telephone, Presentation

Non Personal Communication Channels Print, Broadcast and Display Media

Step 5. Selecting the Message Source

Step 6. Measure the Communication’s Results


Effective Marketing Communication

In developing effective marketing communication, following steps should be taken:

1.Identifying the target audience characteristics

2.Determine the response sought or the Communication objective

3.Designing the effective message: it includes

a) Message content (what to say?)

b) Message structure (how to say it logically?)

c) Message format (how to say it symbolically?)

d) Message source (who should say it?)


4.Selecting the Communication channel:• Advocate channel: in it company

salespeople contacting buyers in the target market.

• Expert channel: it consist of independent experts making statements to target buyers.

• Social channel: consists of neighbors, friends, family members etc. talking to target buyers. “Word-of-mouth”.

5. Measuring the Communication results


Appeal by Marketers

Marketers use 3 basic types of appeals in their marketing communication:

• Rational appeals- show that the product will deliver the claimed benefits.

• Emotional appeals- attempts to stir up either negative or positive emotions that may motivate the target audience to purchase the product or brand of the company.

• Moral Appeals- aim to give the audience a sense of what is right and good. Like related to environment, family planning etc.


PROMOTION MIX

• Promotion Mix is careful blending of total array of promotion tools available to the communicator whose major role is persuasive communication.

• Specific combination of promotional methods such as print or broadcast advertising , direct marketing , personal selling , point of sale display , merchandising , etc., used for one product or a family of products .


Strategy that Calls for Spending A Lot on Advertising and Consumer Promotion to Build Up (Pull) Consumer Demand.

Strategy Selected Depends

on:

Type of Product-Market &

Product Life-Cycle

Stage

Strategy that Calls for Using the Salesforce and Trade Promotion to Push the Product Through the Channels.

Factors in Setting Promotion Mix


There are four main aspects of a promotional mix (or communication mix). These are:

• Advertising- Any paid presentation and promotion of ideas, goods, or services by an identified sponsor. Examples: Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, motion pictures, Web pages, banner ads, and emails.

• Personal selling - A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation. Examples: Sales presentations, sales meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing. Can be face-to-face or via telephone.


• Sales promotion- Incentives designed to stimulate the purchase or sale of a product, usually in the short term. Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions.

• Public relations - Non-paid non-personal stimulation of demand for a product, service, or business unit by planting significant news about it or a favorable presentation of it in the media. Examples: Newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising, and seminars.

• Sponsorship is sometimes added as a fifth aspect.


Integrated Marketing Communication (IMC)

The process of using promotional tools in a unified way so that a synergistic communication effect is created.

Integrated Marketing Communications (IMC), according to The American Marketing Association, is “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.”


Integrated Marketing Communications

Personal selling

Public relations

Direct marketing

Sales promotion

Advertising


Affordable Based on What the

Company Can Afford

Objective-and-Task Based on Determining

Objectives & Tasks, Then Estimating Costs

Objective-and-Task Based on Determining

Objectives & Tasks, Then Estimating Costs

Percentage of SalesBased on a Certain Percentageof Current or Forecasted Sales

Percentage of SalesBased on a Certain Percentageof Current or Forecasted Sales

Competitive-ParityBased on the Competitor’s

Promotion Budget

Competitive-ParityBased on the Competitor’s

Promotion Budget

One of the Hardest Marketing Decisions Facing a Company is How Much to Spend on

Promotion.

Setting the Total Promotion Budget


Personal Selling – Defined

Personal selling refers to personalcommunication with a an audiencethrough paid personnel of anorganization or its agents insuch a way that the audienceperceives the communicator’sorganization as being the sourceof the message.


IndustrialRevolution

Post-IndustrialRevolution

War andDepression

ModernEra

1800s1800s 1900s1900s 2000s2000s

Evolution of Personal Selling

Selling function became more

structured

Selling function became more

structured

Peddlers selling door to door . . . served as intermediaries

Peddlers selling door to door . . . served as intermediaries

Business organizations employed salespeopleBusiness organizations employed salespeople

Selling function became more professional

Selling function became more professional

As we begin the 21st century, selling continues to develop,becoming more professional and more relational

As we begin the 21st century, selling continues to develop,becoming more professional and more relational


Contributions of Personal Selling: Salespeople and Society

• Salespeople help stimulate the economy

• Salespeople help with the diffusion of innovation


Contributions of Personal Selling: Salespeople and the Employing Firm

• Salespeople generate revenue

• Salespeople provide market research and customer feedback

• Salespeople become future leaders in the organization


Contributions of Personal Selling: Salespeople and the Customer

• Salespeople provide solutions to problems

• Salespeople provide expertise and serve as information resources

• Salespeople serve as advocates for the customer when dealing with the selling organization


Transaction-Focused vs. Relationship Focused

Transaction-FocusedTransaction-Focused Relationship-FocusedRelationship-Focused• Short term thinking• Making the sale has

priority over most other considerations

• Interaction between buyer and seller is competitive

• Salesperson is self-interest oriented

• Long term thinking• Developing the

relationship takes priority over getting the sale

• Interaction between buyer and seller is collaborative.

• Salesperson is customer-oriented


Classification ofPersonal Selling Approaches

• Stimulus Response Selling

• Mental States Selling• Need Satisfaction Selling• Problem Solving Selling


Stimulus Response Selling

Salesperson Provides

Stimuli

BuyerResponses

Sought

Continue Process until

Purchase Decision


Mental States Selling

Attention Interest Conviction Desire Action


Need Satisfaction Selling

Uncover and Confirm

Buyer Needs

Present Offering to

Satisfy Buyer Needs

Continue Selling until

Purchase Decision


Problem Solving Selling

DefineProblem

GenerateAlternativeSolutions

ContinueSelling

untilPurchaseDecision

EvaluateAlternativeSolutions


Long-term AllyLong-term Ally

Consultative Selling

The process of helping customers reach their

strategic goals by using the products, service, and expertise of the selling organization.

Strategic OrchestratorStrategic Orchestrator

Business ConsultantBusiness Consultant


The Sales Process: An Overview

Developing Customer

Relationships

Initiating Customer

Relationships

Enhancing Customer

Relationships

Selling Foundations

Selling Strategy


The Sales Process: Selling Foundations

In order to be successful in today’s global business environment, salespeople must have a solid relationship building foundation. They must:

Possess Excellent Communication SkillsPossess Excellent Communication Skills

Understand Buyer BehaviorUnderstand Buyer Behavior

Behave EthicallyBehave Ethically

Be TrustworthyBe Trustworthy


The Sales Process: Selling Strategy

In order to be successful in today’s global business environment, salespeople must also think and act strategically. The must develop strategies for:

Their Sales Territories

Each Sales Call

Each Customer

Each strategy is related to the other


Whereas advertising gives a reason to buy, Sales Promotion gives an incentive to buy

It is part of the Marketing spend of all companies and these days SP

spends in many companies exceed that of the ad spends


Why?

• Internal

• External


Internal reasons

• Top management is more conducive to spending on promotions

• Line managers under greater pressure to achieve targets

• Justification of expenditure is easy


External reasons

• Increase in number of brands

• Consumer is more price savvy

• Greater pressure from trade to liquidate stocks

• Add effectiveness declining owing to rising costs, media clutter and legal constraints


SP is a push strategy

• Since it is at the last point where the consumer is often at the point of buying, the additional incentive makes a last ditch effort to convert the customer on to the incentivised brand


SP is of two types

• Trade

• Consumer


Trade promotion

• Liquidating heavy inventories

• Persuade retailers to carry stock, carry more than usual stock, promote brand franchise


Consumer promotion

• Stimulate purchase

• Induce trial

• Create new users

• Increase repurchase from occasional customers

• Reward loyal customers


Forms of trade promotion

• Bulk discounts

• Free materials

• Display windows

• Shelf hiring

• Lucky draws

• ‘Mystery’ customer

• Redistribution incentives

• Shop salesmen incentives


Forms of consumer promotion

• Free samples

• Free gifts

• Coupons

• In-packs

• Price packs

• Price-offs

• Sweepstakes (kind of lottery or draw)

• Bundling offers


SP spurs action because they are supposed to run for a limited time

While the advertising budgets are controlled by the brand managers, SP budgets usually are controlled by the

sales managers


The more the product’s quality and its advertising persuasiveness fail to meet competition, the greater is the need for promotion to improve the price – value relationship


Promotion at different stages of the PLC

• Introduction – wise to use heavy promotion to induce trials and promote brand franchise

• Growth – promotion should be limited ,if any• Maturity – Higher promotions required since the brand

is under attack from competitors or product quality or advertising effectiveness is tapering off

• Decline – Heavy promotions. Used only to retain a set of loyal customers. Prior to withdrawal of the product, it could be used as a one time stock clearance from the trade


Essential elements for an effective SP programme

• Significant value before promotion is effective• Promotions must be part of an overall plan• Every brand must have a promotion objective and a

strategy statement• A written tactical plan – time frame, costs,

evaluation yardsticks• Factual knowledge must be gathered to plan• Specialized professional skill and knowledge must

be applied to every promotion operations


Final considerations

• Don’t promote if the product is not good• Promotions rarely stop a declining sales curve• It is very easy to lose the promotional gains made

if your promotion has not been effective in retaining new customers. So the product has to speak for itself.

• The objective of the promotion is to wean away users from competition and create new users.

• Excessive promotions lead to diminishing returns and may devalue the brand


Cont’d• Promotions may be used in conjunction with

advertising and other marketing communication tools

• It should be novel and attractive

• Ensure supply lines are good and adequate stock is available right through the promotion

• Cater for contingencies. Have escape routes built into the plan

• Trade has to be handled tactfully

• Reimburse incentives/ rewards/ gifts promptly

• Must be within the legal boundaries


RELATIONSHIP MARKETING

• Relationship marketing is a form of marketing developed from direct response marketing campaigns conducted in the 1960's and 1980's which emphasizes customer retention and continual satisfaction rather than individual transactions and per-case customer resolution.

• Relationship marketing differs from other forms of marketing in that it targets an audience with more directly suited information on products or services which suit retained customer's interests, as opposed to direct or "Intrusion" marketing, which focuses upon acquisition of new clients by targeting majority demographics based upon prospective client lists.


• According to Leonard Berry , relationship marketing can be applied: when there are alternatives to choose from; when the customer makes the selection decision; and when there is an ongoing and periodic desire for the product or service.

• Relationship marketing has been strongly influenced by reengineering. According to reengineering theory, organizations should be structured according to complete tasks and processes rather than functions. That is, cross-functional teams should be responsible for a whole process, from beginning to end, rather than having the work go from one functional department to another.


ELEMENTS OF RELATIONSHIP MARKETING

The three key elements of Relationship management are:

• Identifying and building marketing databases of potential and present customers.

• Deliver differentiated messages to targeted households.

• Track the relationship to make media expenditures more effective and more measurable.


MARKETING OF SERVICES

• Services marketing is marketing based on relationship and value. It may be used to market a service or a product.

• Marketing a service-base business is different from marketing a product-base business.

• There are several major differences, including:• The buyer purchases are intangible • The service may be based on the reputation of a single

person • It's more difficult to compare the quality of similar

services • The buyer cannot return the service • .


MARKETING OF SERVICES• Service Marketing mix adds 3 more p's, i.e. people, physical

evidence, process service and follow-through are keys to a successful venture. The major difference in the education of services marketing versus regular marketing is that instead of the traditional "4 P's," Product, Price, Place, Promotion, there are three additional "P's" consisting of People, Physical evidence, and Process. Service marketing also includes the service scope referring to but not limited to the aesthetic appearance of the business from the outside, the inside, and the general appearance of the employees themselves. Service Marketing has been relatively gaining ground in the overall spectrum of educational marketing as developed economies move farther away from industrial importance to service oriented economies


INTERNET MARKETING

• Internet marketing, also referred to as web marketing, online marketing, Internet advertising, or e-Marketing, is the marketing of products or services over the Internet. When applied to the subset of website-based advertisement placements, Internet marketing is commonly referred to as Web advertising


The Internet has brought many unique benefits to marketing, one of which being lower costs for the distribution of information and media to a global audience. The interactive nature of Internet marketing, both in terms of providing instant response and eliciting responses, is a unique quality of the medium. Internet marketing is sometimes considered to have a broader scope because it refers to digital media such as the Internet, e-mail, and wireless media; however, Internet marketing also includes management of digital customer data and electronic customer relationship management (ECRM) systems.


ADVANTAGES• Internet marketing is relatively inexpensive when

compared to the ratio of cost against the reach of the target audience

• Internet marketers also have the advantage of measuring statistics easily and inexpensively. Nearly all aspects of an Internet marketing campaign can be traced, measured, and tested.

• exposure, response, and overall efficiency of Internet media are easier to track than traditional off-line media

• Internet marketing can offer a greater sense of accountability for advertisers. Marketers and their clients are becoming aware of the need to measure the collaborative effects of marketing


LIMITATIONS• Internet marketing requires customers to use newer

technologies rather than traditional media. • Low-speed Internet connections are another barrier:

If companies build large or overly-complicated websites, individuals connected to the Internet via dial-up connections or mobile devices may experience significant delays in content delivery.

• From the buyer's perspective, the inability of shoppers to touch, smell, taste or "try on" tangible goods before making an online purchase can be limiting.

• insufficient ability to measure impact, lack of internal capability, and difficulty convincing senior management.


GREEN MARKETING• According to the American Marketing Association,

green marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Environmental issues should be balanced with primary customer needs.

• Other similar terms used are Environmental Marketing and Ecological Marketing. Examples: Herbal Products,CNG in Delhi, CFL etc.


‘5’ Possible reasons for Green Marketing• Opportunities: All types of consumers, either individual or

industrial are becoming more concerned & aware about the natural environment.

• Social responsibility: Firms are now realized that they are members of the wider community & therefore must behave in an environmentally responsible fashion.

• Governmental Pressure: Government regulations relating to environmental marketing are designed to protect consumers to reduce production of harmful goods r by-products.

• Competitive pressure: To maintain competitive position. In many cases Firms observe competitors promoting their environmental behaviors & attempt to emulate this behavior.

• Cost & Profit issues: Cost related issues are really complex b’coz

disposing of environmentally harmful by-products becoming increasingly costly & difficult.


SOCIAL MARKETING• Social marketing is the systematic application of

marketing along with other concepts and techniques to achieve specific behavioral goals for a social good. Social marketing can be applied to promote, for example, merit goods, make the society avoid demerit goods and thus to promote that considers society's well being as a whole. This may include asking people not to smoke in public areas, for example, ask them to use seat belts, prompting to make them follow speed limits.

• The primary aim of 'social marketing' is 'social good', while in 'commercial marketing' the aim is primarily 'financial'. This does not mean that commercial marketers can not contribute to achievement of social good.


• Social marketers, dealing with goals such as reducing cigarette smoking or encouraging condom use, have more difficult goals: to make potentially difficult and long-term behavioral change in target populations.

• It is sometimes felt that social marketing is restricted to a particular spectrum of client -- the non-profit organization, the health services group, the government agency.

• Kotler and Roberto introduced the subject by writing, “A social change campaign is an organized effort conducted by one group (the change agent) which attempts to persuade others (the target adopters) to accept, modify, or abandon certain ideas, attitudes, practices or behavior."


Components of Social Marketing

• A consumer orientation to realize organizational (social) goals • An emphasis on the voluntary exchanges of goods and services

between providers and consumers • Research in audience analysis and segmentation strategies • The use of formative research in product and message design and

the protesting of these materials • An analysis of distribution (or communication) channels • Use of the marketing mix - utilizing and blending product, price,

place and promotion characteristics in intervention planning and implementation

• A process tracking system with both integrative and control functions

• A management process that involves problem analysis, planning, implementation and feedback functions.


Additional ‘3’ P’s of Marketing1. Public: it involves internal & external groups.

Internal means who are involved in the approval or implementation of the program & external include the target audiences etc.

2. Partnership: There is a need to team up with other organizations in the community to really be effective. So, we need to figure out organizations with similar goals & ways to work together with them.

3. Policy: Policy change is needed to motivate individual behavior change for the long run.


Rural Marketing

• A rural market will represent a community in a rural area with a population of 2500 to 30000.

• Rural marketing involves delivering manufactured or processed inputs or services to rural producers or consumers.

• Also rural market is getting an importance because of the saturation of the urban market. As due to the competition in the urban market, the market is more or so saturated as most of the capacity of the purchasers have been targeted by the marketers. So the marketers are looking for extending their product categories to an unexplored market i.e. the rural market.


Strategies of Rural Market• Client and Location specific promotion involves a strategy designed to

be suitable to the location and the client.

• Joint or co-operative promotion strategy involves participation between the marketing agencies and the client.

• 'Bundling of inputs' denote a marketing strategy, in which several related items are sold to the target client, including arrangements of credit, after-sale service, and so on.

• Management of demand involve continuous market research of buyer’s needs and problems at various levels so that continuous improvements and innovations can be undertaken for a sustainable market performance.

• Developmental marketing refer to taking up marketing programmes keeping the development objective in mind and using various managerial and other inputs of marketing to achieve these objectives.

• Media, both traditional as well as the modern media, is used as a marketing strategy.


• Unique Selling Propositions (USP) involve presenting a theme with the product to attract the client to buy that particular product. For examples, some of famous Indian Farm equipment manufactures have coined catchy themes, which they display along with the products, to attract the target client, that is the farmers. English version of some of such themes would read like:

• The heartbeats of rural India • With new technique for a life time of company • For the sake of progress and prosperity • Extension Services denote, in short, a system of attending

to the missing links and providing the required know-how.• Ethics in Business. form, as usual, an important plank for

rural markets and rural marketing.• Partnership for sustainability involve laying and building a

foundation for continuous and long lasting relationship.


• Challenges: There are significant challenges to the entire process the most important being the capacity building of the rural entrepreneurs. For decades, the entrepreneurs associated with very conventional/traditional knowledge of business, humiliation with government, so they are likely to look at these initiatives with skepticism. Only consistent performance can convince the skeptics. Therefore, the industries must play a catalytic role to cope with this challenge and should also train the entrepreneurs to develop their managerial and IT skills. On the other hand, the products of the existing and popular brand also stand as threat to the rural products. These global giants (brand) may try to suppress the rural products in the markets with its communication hype. Therefore, developing alternative and additional market linkages for these products is an absolute necessity. Moreover, the low volumes of rural products, high operating cots, high attrition, and absence of local know how and relationships may also create problem in the process. Henceforth, it is essential to make a way out to cope with these odds.


ADVERTISING• Advertising is a form of communication that

typically attempts to persuade potential customers to purchase or to consume more of a particular brand of product or service. Many advertisements are designed to generate increased consumption of those products and services through the creation and reinforcement of "brand image" and "brand loyalty". For these purposes, advertisements sometimes embed their persuasive message with factual information


OBJECTIVES OF ADVERTISING

1. Building awareness

2. Creating favorable attitude (persuasion)

3. Maintenance of loyalty (reinforcement)


AIDA MODEL

Attention

Interest

DesireAction


• AIDA is an acronym used in marketing that describes a common list of events that are very often undergone when a person is selling a product or service:

• A - Attention (Awareness): attract the attention of the customer.

• I - Interest: raise customer interest by demonstrating features, advantages, and benefits.

• D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs.

• A - Action: lead customers towards taking action and/or purchasing.

• Nowadays some have added another letter to form AIDA(S):

• S - Satisfaction - satisfy the customer so they become a repeat customer and give referrals to a product.


Lavidge & Steiner ModelThis model give importance to cognitive

evaluations. It take competition into account.Steps of the model:• Awareness• Knowledge• Liking• Preference• Conviction• Purchase


Innovation & Adoption Model

This model has relevance to new product introductions and useful for non-commercial services or practices in developing countries.

Stages of this model:• Awareness• Interest• Evaluation• Trial• Adoption


Limitations of Advertisement

• Advertising is in bad taste

• It insults consumer intelligence

• It appeals mainly to emotions

• It influence media

• It is not productive

• It increases cost

• It leads to monopoly

• It multiplies needs and wants


PUBLICITY• Information that attracts attention to a company,

product, person, or event Publicity is the deliberate attempt to manage the public's perception of a subject. The subjects of publicity include people (for example, politicians and performing artists), goods and services, organizations of all kinds, and works of art or entertainment.

• From a marketing perspective, publicity is one component of promotion.

• The advantages of publicity are low cost, and credibility (particularly if the publicity is aired in between news stories like on evening TV news casts)


• Type of promotion that relies on public relations effect of a news story carried usually free by mass media . The main objective of publicity is not sales promotion , but creation of an image through editorial or 'independent source' commentary. While the publicist can control the content of the story, he or she may not have any control over its placement or interpretation by the media .


Difference b/w Advertising & Publicity

• Advertising you pay for, publicity you pray for. That's because publicity has at least ten times the credibility of advertising.

• Advertising is a content you pay to present. Publicity refers to free content about you that appears in the media - what others say about you

• Advertising is something you get by paying for it. Publicity however, is something you hope you'll get.

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