Marketing (balaji)
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Marketing (balaji) as PDF for free.
More details
- Words: 4,445
- Pages: 113
MARKETING MANAGEMENT
July-August 2005
DILIP M. SARWATE Ph. D. CMC
July- August 2005
Dilip M. Sarwate Ph.D.
1
Section One Understanding Marketing Management
July- August 2005
Dilip M. Sarwate Ph.D.
2
WHAT IS HAPPENING ON MARKETING FRONT ? n n
n n n n
MARKETING IS BECOMING ALL PERVASIVE ENVIRONMENTS AT GLOBAL, MACRO & MICRO LEVEL CHANGING CUSTOMERS ARE BECOMING DEMANDING COMPETITION IS BECOMING FIERCER TECHNOLOGY IS RAPIDLY CHANGING MARKETING COSTS ARE ON THE RISE
July- August 2005
Dilip M. Sarwate Ph.D.
3
WHAT IS MARKETING ? n
MARKETING IS A PROCESS OF EXCHANGES TO SATISFY NEEDS & WANTS TO GENERATE CUSTOMER SATISFACTION AND FULFILLING THE ORGANISATIONAL OBJECTIVES
July- August 2005
Dilip M. Sarwate Ph.D.
4
Type of Exchanges n n n n
B2B B2C C2C C2B
July- August 2005
Dilip M. Sarwate Ph.D.
5
WHAT IS MARKETING MANAGEMENT ? n n n n n n n
ANALYSING MARKETING OPPORTUNITIES RESEARCHING AND SELECTING TARGET MARKETS UNDERSTANDING CUSTOMER EXPECTATIONS COMPETITIVE POSITIONING DESIGNING MARKETING STRATEGIES PLANNING MARKETING PROGRAMMES ORGANISING, IMPLEMENTING AND CONTROLLING MARKETING EFFORTS
July- August 2005
Dilip M. Sarwate Ph.D.
6
MARKETING AS A FUNCTION n n n n n n n n
MARKETING RESEARCH/INTELLIGENCE MARKETING COMMUNICATION SALES MANAGEMENT MARKET LOGISTICS SERVICE MARKETING ADMINISTRATION MARKETING FINANCE MARKETING INNOVATION
July- August 2005
Dilip M. Sarwate Ph.D.
7
MARKETING AS A CONCEPT MANAGEMENT ORIENTATION n
n
PRODUCTION CONCEPT- CONSUMERS WILL
FAVOUR AVAILABILTY AND LOW COST. CONCENTRATION ON PRODUCTION EFFICIENCY AND WIDE DISTRIBUTION PRODUCT CONCEPT- CONSUMERS WILL FAVOUR QUALITY, PERFORMANCE AND INNOVATIVE FEATURES. CONCENTRATION ON MAKING SUPERIOR PRODUCTS AND IMPROVEMENTS REGULARLY
July- August 2005
Dilip M. Sarwate Ph.D.
8
MARKETING AS A CONCEPT (CONTINUED) n
SELLING CONCEPT- AGGRESSIVE SELLING
AND PROMOTIONAL EFFORTS ARE REQUIRED TO CONVINCE CUSTOMERS n
MARKETING CONCEPT- THE KEY TO
FULFILLING THE ORGANISATIONAL OBJECTIVES CONSISTS OF SUPERIORITY OVER COMPETITORS IN INTEGRATING MARKETING ACTIVITIES TOWARDS DETERMINING AND SATISFYING THE NEEDS AND WANTS OF TARGET MARKETS
July- August 2005
Dilip M. Sarwate Ph.D.
9
LANDMARKS IN THE DEVELOPMENT OF MARKETING CONCEPTS n n n n
n n
1950’s 1960’s 1970’s 1980’s
CUSTOMER ORIENTATION DRUCKER MARKETING MYOPIA LEVITT POSITIONING RIES & TROUT SERVICE NICHE KOTLER MARKETING WARFARE RIES & TROUT 1990’s GLOBAL MARKETING LEVITT 2000’s RELATIONSHIP MARKETING (CRM) COMPETITIVE INTELLIGENCE KNOWLEDGE MANAGEMENT
July- August 2005
Dilip M. Sarwate Ph.D.
10
Pr od uc tio n
EVOLVING ROLE OF MARKETING
Production Marketing
Finance
H.R.D
PRODUCTION DOMINANT
July- August 2005
Dilip M. Sarwate Ph.D.
Marketing
Finance
D R. . H
ALL FUNCTIONS EQUAL
11
EVOLVING ROLE OF MARKETING Production
Production Finance
RD
Marketing
MARKETING IMPORTANT
July- August 2005
H
HRD
Dilip M. Sarwate Ph.D.
e c n a Fin
MARKETING MAJOR
12
Pr od uc tio n
EVOLVING ROLE OF MARKETING Production
Fin an ce
Marketing
M ark eti ng
H
RD
CUSTOMER CONTROL July- August 2005
Customer Fi na nc e
HRD
Customer
CUSTOMER FOCUS/INTEGRATED MARKETING
Dilip M. Sarwate Ph.D.
13
Customer Value n
n
n
Total customer value: Product value, services value, personnel value and image value Total customer cost: Monetary cost,time cost, energy cost and psychic cost Customer perceived value: Difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives
July- August 2005
Dilip M. Sarwate Ph.D.
14
Customer satisfaction n
n • • • •
Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance in relation to his or her expectations Measuring customer satisfaction Customer satisfaction surveys Complaint and suggestion system Ghost shopping Lost order analysis
July- August 2005
Dilip M. Sarwate Ph.D.
15
Stakeholders as customers n n n n n n n n n
Consumers Customers Employees Suppliers Dealers Shareholders Financial institutions Government Society
July- August 2005
Dilip M. Sarwate Ph.D.
16
Value chain n
n
Tool for identifying ways to create more customer value Primary activities
•
Inbound logistics Outbound logistics Service
§
Support activities
• •
• • • •
* Operations * Marketing and sales
Procurement Technology development Human resource management Firm infrastructure
July- August 2005
Dilip M. Sarwate Ph.D.
17
Attracting and retaining customers n
Three types of customers
•
Firm’s customers Competitors’ customers
•
Non-users
•
n n
Retention of customers Attracting the customers
July- August 2005
Dilip M. Sarwate Ph.D.
18
Customer relationship management (CRM) n
n • • •
• •
Establishing long term relationship with key customers to produce high customer equity, that is loyal customers Alternatives Basic marketing : Simply sell the product Reactive marketing: Encourage feedback Accountable marketing: Follow-up, suggestions on improvements Proactive marketing: Anticipating future needs of customers Partnership (Back) marketing: Helps customer to succeed
July- August 2005
Dilip M. Sarwate Ph.D.
19
WHY WE SHOULD SATISFY THE CUSTOMER? n n n n n
BUYS AGAIN TALKS FAVOURABLY TO OTHERS REMAINS A LOYAL CUSTOMER BUYS NEW PRODUCTS OF THE COMPANY INCREASES PROFITABILITY CUSTOMER RETENTION MORE CRITICAL THAN CUSTOMER ATTRACTION. FROM CUSTOMER SATISFACTION TO DELIGHTING THE CUSTOMER.
July- August 2005
Dilip M. Sarwate Ph.D.
20
HOW DO WE DO IT BETTER THAN OUR COMPETITORS? n n n n n n
CUSTOMER FEEDBACK CUSTOMER SATISFACTION RELATIONSHIP MARKETING CUSTOMER CARE AND SERVICE NICHE EFFICIENT COMPLAINT HANDLING BACK ( PARTNERSHIP) MARKETING
July- August 2005
Dilip M. Sarwate Ph.D.
21
BACK MARKETING n n
n
n n n
KNOW THE BUSINESS OF YOUR CLIENT USE INFORMATION IN SPOTTING OPPORTUNITIES PROVIDE GUIDANCE ON ENTERPRISE MANAGEMENT HELP THE CLIENT SUCCEED DEVELOP LOYAL CUSTOMERS INCREASE YOUR OWN BUSINESS
July- August 2005
Dilip M. Sarwate Ph.D.
22
BEFORE SALES SERVICE n n n n n n n n n
MARKETING COMMUNICATION HELP IN SELCTION RELIABILITY TRAINING GUARANTEES FINANCING TESTING CHOICE PERIPHERAL
July- August 2005
Dilip M. Sarwate Ph.D.
23
AFTER SALES SERVICE n n n n n n n
WARANTEES SUPPLY OF SPARES TROUBLE SHOOTING QUALITY AUDITS TRADE IN ALLOWANCE REPLACEMENTS PUBLIC RELATIONS
July- August 2005
Dilip M. Sarwate Ph.D.
24
CHANGING PARADIGMS n
TURBO MARKETING
§
FASTER INNOVATIONS MANUFACTURING EFFICIENCY EFFECTIVE LOGISTICS RETAILING
v
OTHERS
• • •
• • • •
USE OF COMPETITIVE INTELLIGENCE CUSTOMER PROFITABILITY TOTAL QUALITY MANAGEMENT (TQM) RETURN ON MARKETING (USE OF MARKETING RATIOS)
July- August 2005
Dilip M. Sarwate Ph.D.
25
WHAT IS A CUSTOMER? n
n
n
n
A CUSTOMER IS THE MOST IMPORTANT PERSON IN OUR BUSINESS, IN PERSON IN OUR OFFICE , SHOP, ON TELEPHONE OR BY MAIL. A CUSTOMER IS NOT DEPENDENT ON US … WE ARE DEPENDENT ON HIM/HER. A CUSTOMER IS NOT AN INTERRUPTION TO OUR WORK … HE/SHE IS THE PURPOSE OF IT. WE ARE NOT DOING A FAVOUR BY SERVING HIM/HER … HE/SHE IS DOING US AFAVOUR BY GIVING US THE OPPORTUNITY TO DO SO.
July- August 2005
Dilip M. Sarwate Ph.D.
26
WHAT IS A CUSTOMER ? n n
n
n
A CUSTOMER IS RIGHT. HE/SHE IS ALWAYS RIGHT. NOBODY HAS EVER WON AN ARGUMENT WITH A CUSTOMER. CUSTOMER BRINGS NEEDS AND WANTS. OUR JOB IS TO FULFILL THEM. PROFITABLY FOR BOTH OF US. A CUSTOMER IS THE KING(QUEEN ) --
July- August 2005
MAHATMA GANDHI
Dilip M. Sarwate Ph.D.
27
Section Two Analyzing Marketing Opportunities
July- August 2005
Dilip M. Sarwate Ph.D.
28
Scanning the marketing environment n
Macro environments
•
Economy Technology Polity Culture
§
Micro environments
• • •
•
Market Task
§
SWOT analysis
•
July- August 2005
Dilip M. Sarwate Ph.D.
29
Market information n
Marketing information system
•
Internal record system Marketing intelligence system Marketing research system Analytical system Marketing decision support system
§
Market size estimation
• • • •
• •
Present demand Forecasting
July- August 2005
Dilip M. Sarwate Ph.D.
30
Major Schools n n n
Industrial Marketing Consumer Marketing Services Marketing
July- August 2005
Dilip M. Sarwate Ph.D.
31
Understanding the Markets 7 O’s of Markets • • • • • • •
Objects Objectives Organization Operations Occupants Occasions Outlets
4 P’s of Marketing Mix • • • •
Product Price Place Promotion
July- August 2005
Dilip M. Sarwate Ph.D.
32
Consumer markets and buyer behavior n
n
n
n
Buyer’s characteristics: Cultural, social,personal and psychological Social factors: Reference groups (family members, neighbors, relatives, colleagues and others) Buying roles: Initiators, influencers, deciders, purchasers and users Personal factors: Age, occupation, economic status, life style
July- August 2005
Dilip M. Sarwate Ph.D.
33
Consumer markets and buyer behavior (Cont.) n
n
n
Psychological factors: Motivational theories of Moslow’s hierarchy of needs, Freud’s, Pavlov, Herzberg’s satisfiers/dissatisfiers) Post purchase behavior: Cognitive dissonance Share of heart, share of mind and share of market
July- August 2005
Dilip M. Sarwate Ph.D.
34
Business markets and behavior n
n n n
Producer’s market: Industrial goods, consumer goods, original equipments, finished goods, components Institutional markets Resellers market: For all types of goods Government market: For all types of goods
July- August 2005
Dilip M. Sarwate Ph.D.
35
WHAT DOES THE CUSTOMER WANT ? n
-
INDUSTRIAL CUSTOMERS TECHNICAL CAPABILITY DELIVERY QUALITY PRICE PERFORMANCE HISTORY PRODUCTION FACILITIES REPUTATION FINANCIAL POSITION PROGRESS COMMUNICATION MANAGEMENT AND ORGANIZATION
July- August 2005
Dilip M. Sarwate Ph.D.
36
DIFFERENCE WITH CONSUMER MARKETING n
n n n n n
n n
NUMBER OF CUSTOMERS ARE SMALL, LARGE BUYERS GEOGRAPHICAL CONCENTRATION NON-HOMOGENUITY DERIVED DEMAND BUYING OBJECTIVES BUYING OPERATIONS- CLOSE SUPPLIER RELATIONSHIP DIFFERENCE IN MARKETING MIX COMPETITION
July- August 2005
Dilip M. Sarwate Ph.D.
37
Type of marketing n n n n
OE marketing Spares marketing Systems marketing Turnkey projects
July- August 2005
Dilip M. Sarwate Ph.D.
38
Market segmentation n
Definition: Subdividing the total market on the basis of certain common characteristics
n • • • • •
Segmentation variables Geography Demography End use basis Psychography Buyer behavior
July- August 2005
Dilip M. Sarwate Ph.D.
39
Benefits of segmentation n n n n n n
Identifies all types of markets Comparison of the relative benefits Identifying the competition in each segment Understanding the requirements of customers Defining the target markets Refining the marketing mix
July- August 2005
Dilip M. Sarwate Ph.D.
40
Essentials for segmentation
n n n
Substantiality Accessibility Measurability
July- August 2005
Dilip M. Sarwate Ph.D.
41
Target marketing strategies n n n n n n
Single segment concentration Product specialization Market specialization Selective specialization Full market coverage STP (Segmenting, targeting & positioning)
July- August 2005
Dilip M. Sarwate Ph.D.
42
Section Three Developing marketing strategies
July- August 2005
Dilip M. Sarwate Ph.D.
43
Product life cycle strategies n • • • •
§
§
Stages Introduction Growth Maturity Decline
Analyzing each stage: With respect to sales volume, market share, marketing expenses, competition, customer size Strategies: With respect to 4 P’s
July- August 2005
Dilip M. Sarwate Ph.D.
44
Developing new products n
Why new products?
•
Changing customer tastes Product obsolescence Increased competition Resource limitations Governmental controls
§
Innovation versus imitation
§
Innovation: High cost of R & D, long gestation, high
• • • •
marketing costs, risks §
Imitation: Low R&D cost, low risk
July- August 2005
Dilip M. Sarwate Ph.D.
45
Stages in new product development n
Idea generation:
n
Screening: Present line, market opportunities, policies with
Customers, dealers, suppliers, competitors, R&D people, top management respect to investment, return on investment, pay back period. Go error versus no-go error
n n n n n
Concept testing Feasibility studies: Legal, marketing, technical, financial Product development Test marketing Commercialization
July- August 2005
Dilip M. Sarwate Ph.D.
46
Competitive marketing n
Type of players
•
Market leader Market challenger Market follower Market nicher
§
Competitive Intelligence
• • •
§ § §
Competitor reconnaissance Early warning system Counter intelligence
July- August 2005
Dilip M. Sarwate Ph.D.
47
Competitive strategies (cont) n n n n n
§
Alternatives Defending the market share Expanding the market share Marketing warfare Mergers & acquisitions
Developing the right amalgam of customer and competition orientation
July- August 2005
Dilip M. Sarwate Ph.D.
48
Strategies for global markets n n n • • • • • •
Overseas market research Global environment scanning Evaluating competitive advantage (Porter’s model Factor conditions ( Manufacturing capacity, productivity) Supporting industries (Ancillary, services- banking, insurance) Demand (Local and global, growth) Organization, structure, rivalry Government help Risk taking
July- August 2005
Dilip M. Sarwate Ph.D.
49
Alternatives of entry n n
Exports: Direct, indirect and deemed Joint venturing
•
Licensing Subcontracting/outsourcing Management contracting Technology transfer Equity participation
§
Multi-national marketing
• • • •
• • •
Global manufacturing facilities Direct foreign investment Mergers& acquisitions
July- August 2005
Dilip M. Sarwate Ph.D.
50
Section Four Designing Marketing Program
July- August 2005
Dilip M. Sarwate Ph.D.
51
Product strategies n
Product levels
n
Generic product Basic product Expected product Augmented product
§
Product hierarchy
n n n
• • • • •
Need family Product line Product class Product type Brand
July- August 2005
Dilip M. Sarwate Ph.D.
52
Brand decisions n
Six levels of meaning of brand
•
Attributes Benefits Values Culture Personality User
§
Building brand equity
• • • • •
• • •
Brand awareness: Through name, logo, colours Brand effectiveness: Through recall Brand loyalty: Through customer satisfaction
July- August 2005
Dilip M. Sarwate Ph.D.
53
Brand naming Alternatives
n
Short, simple and easy to remember Giving product features, colours, design Giving product benefits Association with people, places, events Distinctly different
n
Decisions
n n n n
• • •
Individual names Blanket/ separate family names Corporate names
July- August 2005
Dilip M. Sarwate Ph.D.
54
Packaging decisions n
Purpose of packaging
•
Protection Promotion Brand identity Economy Legal requirement
§
Alternatives
• • • •
• • •
Materials to be used Design Labeling
July- August 2005
Dilip M. Sarwate Ph.D.
55
Services marketing
July- August 2005
Dilip M. Sarwate Ph.D.
56
What is a Service? n
A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.
July- August 2005
Dilip M. Sarwate Ph.D.
57
Importance of Services Contribution to GDP Sector
India
Agriculture Manufacturing Service
27 22 51
July- August 2005
Dilip M. Sarwate Ph.D.
USA 4 24 72 58
Service Mix n
n
n
Pure tangible good: Soap, toothpaste, shampoo and other FMCG products. No services accompany the product Tangible good with accompanying service: Automobiles, white goods, computers, engineering goods and others. Many types of services are attached to them Hybrid: Offering includes equal parts of good and services. Restaurants, cinema and others
July- August 2005
Dilip M. Sarwate Ph.D.
59
Service Mix (cont.) n
n
n
Major service with accompanying minor goods and services: Airlines, Railways, Bus and others. The service requires a capital intensive good but the primary item is a service Pure service: Banking, Insurance, Baby sitting, management consultancy, teaching and others. Offer primarily consists of a service Clients presence required: Surgery, beauty treatment and others require client’s presence. Car repair, banking and others may not require client’s presence.
July- August 2005
Dilip M. Sarwate Ph.D.
60
Type of Services n
n
Equipment based: Vending machine, automated car washing and others People based: They could be skilled, unskilled or professional. Driving, welding, painting are in the first category, newspaper delivery, waiter, window cleaning in the second category and legal, medical accounting in the third category.
July- August 2005
Dilip M. Sarwate Ph.D.
61
Types of Services (cont.) n
n
Needs differentiation: Whether the needs are Personal like hair cutting, beauty treatment, health care or Business like recruitment, advertising and others. Some like banking, insurance can satisfy both types of needs. Objectives: They could be Profit like airlines, banking and others or Non-Profit like social work (Rotary, Lions), NGO’s others. It can also differ on the basis of Ownership which could be private or public.
July- August 2005
Dilip M. Sarwate Ph.D.
62
Characteristics of Services n
§ § § § § §
Intangibility: Services cannot be heard, seen, tasted, felt or smelled before they are bought. Service provider’s task is to Manage Evidence and Tangibilize the Intangibles. Marketing tools, Place People Equipments Communication material Symbols Price
July- August 2005
Dilip M. Sarwate Ph.D.
63
Characteristics of Services (cont.) n
n
Inseparability: Services are typically produced and consumed simultaneously unlike for physical goods. Variability: The requirements of customers as well as service providers can vary in nature. For example, you can fly economy, business class or first class on airlines. The hospitals can provide general wards, special and deluxe suites.
July- August 2005
Dilip M. Sarwate Ph.D.
64
Characteristics of Services (cont.) n
Perishability: Services cannot be stored. Strategies emerge in relation to Demand and Supply conditions as explained below:
Demand side n n
Differential pricing Complimentary services
Non peak demand Reservation system
Supply side n n n
Part time employees Increase consumer participation Facilities for future expansion
July- August 2005
Peak time efficiency Shared services
Dilip M. Sarwate Ph.D.
65
Marketing Strategies for Service Firms Traditional marketing mix n n n n
Product Price Place Promotion
Additional mix for services n n n
People Physical evidence Process
July- August 2005
Dilip M. Sarwate Ph.D.
66
Marketing in Service Industries n
Internal marketing: Between the company and its employees
n
Interactive marketing: Between employees and customers
n
External marketing: Between the company and the customers
July- August 2005
Dilip M. Sarwate Ph.D.
67
Service Quality Model ( Parasuraman, Zeithmal and Berry)
Five gaps that cause unsuccessful delivery n Gap between consumer expectations and management perception n Gap between management perception and service quality specification n Gap between service quality specification and service delivery n Gap between service delivery and external communication n Gap between perceived service and expected service Refer to the Service Quality Model July- August 2005
Dilip M. Sarwate Ph.D.
68
Determinants of Service Quality n n n n n
Reliability Responsiveness Assurance Empathy Tangibles
July- August 2005
Dilip M. Sarwate Ph.D.
69
Monitoring System n n n n n n
Customer feedback Customer satisfiers Customer dissatisfiers Complaint handling system Customer relation ship management Internal marketing
July- August 2005
Dilip M. Sarwate Ph.D.
70
Managing Productivity Objectives are to keep costs down and increase productivity. Alternatives are, n n n n
n n
Skilful workers through better selection and training Handling more volume by giving less time to consumers Increased efficiency through automation, technology Reduce or make obsolete the need for a service through products like wash & wear Design a more effective service like Para-legal, Para-medical Offer incentives to customers
July- August 2005
Dilip M. Sarwate Ph.D.
71
Pricing decisions
July- August 2005
Dilip M. Sarwate Ph.D.
72
Setting pricing policy n
Pricing objectives
n
Market entry Price wars Profit maximization
•
Determining demand
n n
• • • •
Target customer Market size Price sensitivity Price elasticity of demand
July- August 2005
Dilip M. Sarwate Ph.D.
73
Setting pricing policy (cont.) n • • • •
•
• • •
Estimating costs Fixed costs Variable costs Marginal costing Break even pricing
Analyzing competitors’ costs, prices and offers Pricing decisions In theory In practice
July- August 2005
Dilip M. Sarwate Ph.D.
74
Price setting n
In theory
n
Market penetration pricing Market skimming pricing Multi brand pricing Multi level pricing
n
In practice
n n n
n n n n n
Cost plus (Mark up pricing) Target return pricing Competitive parity pricing Demand oriented pricing Sealed bid pricing
July- August 2005
Dilip M. Sarwate Ph.D.
75
Selecting the final price n
n n n n n
Target customer: AU, OEM, Reseller, Government Geographical locations Payment terms Price discounts and allowances Invitation and incentives Responding to price changes by the competitors
July- August 2005
Dilip M. Sarwate Ph.D.
76
Market logistics
July- August 2005
Dilip M. Sarwate Ph.D.
77
Market Logistics decisions n n n n n n n
Physical distribution Alternatives in physical distribution Warehousing Modes of transportation Inventory management Order processing Supply chain management
July- August 2005
Dilip M. Sarwate Ph.D.
78
Channel decisions n n n
n n n
Why channels? Wider market coverage Generation of volumes and benefit of economies of scale After sales service Promotion Financial assistance
July- August 2005
Dilip M. Sarwate Ph.D.
79
Channel decisions (cont.) n
Channel flows
n
Physical flows Payment flows Promotion flows
n
Channel design
n n
n n n n n n
* Title flows * Information flows
Product characteristics Customer characteristics Competitive characteristics Organizational characteristics Competitive characteristics Environmental characteristics
July- August 2005
Dilip M. Sarwate Ph.D.
80
Channel decisions (cont.) n
Channel levels
n
Zero level: Direct marketing Multi level
n
Selection of channel members
n
n n n n n n
Location Present line of business Financial resources Manpower resources Reputation Professionalization
July- August 2005
Dilip M. Sarwate Ph.D.
81
Marketing communication decisions
July- August 2005
Dilip M. Sarwate Ph.D.
82
Communication decisions n n n n n n n
Communication objectives Target definition Type of products and services Stage in product lifecycle Communication tools Communication budgets and allocation Measuring the communication effectiveness
July- August 2005
Dilip M. Sarwate Ph.D.
83
Communication objectives n n n n n n n n
Awareness building Comprehension building Legitimacy Lead generation Trade enquiries Informing the changes in the marketing mix Image building Social cause
July- August 2005
Dilip M. Sarwate Ph.D.
84
Target audience n n n n n n n
Consumers Customers Dealers Suppliers Shareholders Employees Society
July- August 2005
Dilip M. Sarwate Ph.D.
85
Types of products
n
Industrial products: OE, Components Consumer durables Consumer no-durables
n
Services: Industrial, consumer
n n
Stage in product life cycle • • • •
Introduction Growth Maturity Decline
July- August 2005
Dilip M. Sarwate Ph.D.
86
Communication tools n
Advertising: Using different media, media
n
cost paid by the sponsors Public relations: Press conference, annual reports, newsletters, lobbying, sponsorship
n
Sales promotion: Point of purchase, samples,
n
Personal selling: Sales presentations sales
n
Direct marketing: Telemarketing, mail order,e-
gifts, exhibitions, demonstrations meetings mail
July- August 2005
Dilip M. Sarwate Ph.D.
87
Communication budgets n n n n
Affordable method Percentage of sales method Competitive parity method Objective and task method
July- August 2005
Dilip M. Sarwate Ph.D.
88
Advertising decisions The five M’s of advertising § Mission § Money § Message § Media § Measurement
July- August 2005
Dilip M. Sarwate Ph.D.
89
Mission n n n n n
Marketing objectives Sales objectives Corporate objectives Social objectives Any others
July- August 2005
Dilip M. Sarwate Ph.D.
90
Money n n n n n n
Stage in PLC Market share Consumer base Competition and clutter Advertising frequency Product substantiality
July- August 2005
Dilip M. Sarwate Ph.D.
91
Message n n n n
Message generation Message evaluation and selection Message execution Social, ethical and legal issues
July- August 2005
Dilip M. Sarwate Ph.D.
92
Media Criterion • • • • •
Reach, frequency and impact Major media types Specific media vehicle Media timing Geographical media allocation
Alternatives • • • • • •
Print Audio Audio-visual Post Outdoor Internet
July- August 2005
Dilip M. Sarwate Ph.D.
93
Measurement n
Communication impact Sales impact
n
Tools
n
•
•
Pre testing: Opinion research, portfolio test, laboratory tests Post testing: Recognition test, recall test (Aided/Unaided)
July- August 2005
Dilip M. Sarwate Ph.D.
94
Sales promotion n
Purpose
•
Invitation Incentive
§
Decisions
•
• • • • • •
Establishing objectives Selecting consumer promotion tools Selecting trade promotion tools Developing the program Pre testing Implementation and control
July- August 2005
Dilip M. Sarwate Ph.D.
95
Public relations n n n n n n
Press publicity Product publicity Corporate communication Lobbying Counseling Use of PR agencies
July- August 2005
Dilip M. Sarwate Ph.D.
96
Direct marketing n
Suitability: No. of customers small, high unit value, after sales service specialization
n
Major channels
•
Face to face selling Direct mail- post office Direct mail- Fax, e-mail, voice mail
§
Steps
• •
• •
Creation of data base Creation of mail material
July- August 2005
Dilip M. Sarwate Ph.D.
97
Sales force decisions
July- August 2005
Dilip M. Sarwate Ph.D.
98
Designing the sales force n n n n n
Sales force objectives Sales force strategy Sales force structure Sales force size Sales force compensation
July- August 2005
Dilip M. Sarwate Ph.D.
99
Managing the sales force n n n n n
Recruitment and selection Training Supervising Motivating Performance evaluation
July- August 2005
Dilip M. Sarwate Ph.D.
100
Personal selling n
n n n
Characteristics of a successful sales person Art of selling Communication skills Negotiation skills
July- August 2005
Dilip M. Sarwate Ph.D.
101
Art of selling n
Use of SELL formula
S E L L
July- August 2005
Salute Excite interest Let go Loop through
Dilip M. Sarwate Ph.D.
102
Marketing organization
July- August 2005
Dilip M. Sarwate Ph.D.
103
Organizing the marketing department n n n n n
Functional basis Territory basis Product basis End use basis Combination
July- August 2005
Dilip M. Sarwate Ph.D.
104
INTERFACE OF MARKETING WITH OTHER DEPARTMENTS DEPARTMENT
THEIR EMPHASIS
R&D
BASIC RESEARCH LONG LEAD TIME FEW MODELS INNOVATION
PRODUCTION
LONG RUNS STANDARD AVG. QC
July- August 2005
Dilip M. Sarwate Ph.D.
MARKETING EMPHASIS APPLIED RESEARCH SHORT LEAD TIME MANY MODELS IMMITATION SHORT RUNS CUSTOM BUILT STRICT QC
105
INTERFACE (CONTINUED) PURCHASE
FEW VENDORS ECONOMIC LOT PRICE FACTOR
FINANCE
July- August 2005
SEVERAL LARGE STOCKING QUALITY FACTOR
STRICT BUDGETING
FLEXIBLE
COST PLUS PRICING
DEMAND ORIENTED FLEXIBLE EASY TERMS EASY
STANDARD TERMS TOUGH CREDIT TOUGH COLLECTION
Dilip M. Sarwate Ph.D.
106
INTERFACE (CONTINUED) n
n
HRD SELECTION BY HRD STANDARD SALARY STANDARD PROMOTION LIMITED TARINING
BY DEPT EXTRA EXTRA REGULAR
WITHIN LAW
SCANT REGARD NOT NECCESSARY
LEGAL
ETHICAL
July- August 2005
Dilip M. Sarwate Ph.D.
107
Section Five Marketing control
July- August 2005
Dilip M. Sarwate Ph.D.
108
Marketing control n
Annual plan control: Sales analysis, market share analysis, marketing expense analysis, financial analysis
n
Profitability control:Profitability by product, territory, customer, segment, order size
n
Efficiency control: Efficiency of sales force, advertising, sales promotion, distribution
n
Strategic control: Marketing effectiveness rating instrument, marketing audit, marketing excellence review, company ethical and social responsibility review
July- August 2005
Dilip M. Sarwate Ph.D.
109
Marketing audit n
n
n n n
Comprehensive, systematic, periodic, independent review of, A company’s marketing environment, planning, strategy, organization to, Identify the problem areas To improve the marketing performance And to improve the profitability
July- August 2005
Dilip M. Sarwate Ph.D.
110
Components of a marketing audit n n n n n n
Marketing environment audit Marketing strategy audit Marketing organization audit Marketing systems audit Marketing productivity audit Marketing function audit
July- August 2005
Dilip M. Sarwate Ph.D.
111
Use of marketing ratio Marketing ratio = (Marketing expense/ Sales)x 100 APPLICATIONS • • • •
Trend analysis Budgeting Comparison with major competitors Comparison with industry
July- August 2005
Dilip M. Sarwate Ph.D.
112
Thank you
July- August 2005
Dilip M. Sarwate Ph.D.
113
July-August 2005
DILIP M. SARWATE Ph. D. CMC
July- August 2005
Dilip M. Sarwate Ph.D.
1
Section One Understanding Marketing Management
July- August 2005
Dilip M. Sarwate Ph.D.
2
WHAT IS HAPPENING ON MARKETING FRONT ? n n
n n n n
MARKETING IS BECOMING ALL PERVASIVE ENVIRONMENTS AT GLOBAL, MACRO & MICRO LEVEL CHANGING CUSTOMERS ARE BECOMING DEMANDING COMPETITION IS BECOMING FIERCER TECHNOLOGY IS RAPIDLY CHANGING MARKETING COSTS ARE ON THE RISE
July- August 2005
Dilip M. Sarwate Ph.D.
3
WHAT IS MARKETING ? n
MARKETING IS A PROCESS OF EXCHANGES TO SATISFY NEEDS & WANTS TO GENERATE CUSTOMER SATISFACTION AND FULFILLING THE ORGANISATIONAL OBJECTIVES
July- August 2005
Dilip M. Sarwate Ph.D.
4
Type of Exchanges n n n n
B2B B2C C2C C2B
July- August 2005
Dilip M. Sarwate Ph.D.
5
WHAT IS MARKETING MANAGEMENT ? n n n n n n n
ANALYSING MARKETING OPPORTUNITIES RESEARCHING AND SELECTING TARGET MARKETS UNDERSTANDING CUSTOMER EXPECTATIONS COMPETITIVE POSITIONING DESIGNING MARKETING STRATEGIES PLANNING MARKETING PROGRAMMES ORGANISING, IMPLEMENTING AND CONTROLLING MARKETING EFFORTS
July- August 2005
Dilip M. Sarwate Ph.D.
6
MARKETING AS A FUNCTION n n n n n n n n
MARKETING RESEARCH/INTELLIGENCE MARKETING COMMUNICATION SALES MANAGEMENT MARKET LOGISTICS SERVICE MARKETING ADMINISTRATION MARKETING FINANCE MARKETING INNOVATION
July- August 2005
Dilip M. Sarwate Ph.D.
7
MARKETING AS A CONCEPT MANAGEMENT ORIENTATION n
n
PRODUCTION CONCEPT- CONSUMERS WILL
FAVOUR AVAILABILTY AND LOW COST. CONCENTRATION ON PRODUCTION EFFICIENCY AND WIDE DISTRIBUTION PRODUCT CONCEPT- CONSUMERS WILL FAVOUR QUALITY, PERFORMANCE AND INNOVATIVE FEATURES. CONCENTRATION ON MAKING SUPERIOR PRODUCTS AND IMPROVEMENTS REGULARLY
July- August 2005
Dilip M. Sarwate Ph.D.
8
MARKETING AS A CONCEPT (CONTINUED) n
SELLING CONCEPT- AGGRESSIVE SELLING
AND PROMOTIONAL EFFORTS ARE REQUIRED TO CONVINCE CUSTOMERS n
MARKETING CONCEPT- THE KEY TO
FULFILLING THE ORGANISATIONAL OBJECTIVES CONSISTS OF SUPERIORITY OVER COMPETITORS IN INTEGRATING MARKETING ACTIVITIES TOWARDS DETERMINING AND SATISFYING THE NEEDS AND WANTS OF TARGET MARKETS
July- August 2005
Dilip M. Sarwate Ph.D.
9
LANDMARKS IN THE DEVELOPMENT OF MARKETING CONCEPTS n n n n
n n
1950’s 1960’s 1970’s 1980’s
CUSTOMER ORIENTATION DRUCKER MARKETING MYOPIA LEVITT POSITIONING RIES & TROUT SERVICE NICHE KOTLER MARKETING WARFARE RIES & TROUT 1990’s GLOBAL MARKETING LEVITT 2000’s RELATIONSHIP MARKETING (CRM) COMPETITIVE INTELLIGENCE KNOWLEDGE MANAGEMENT
July- August 2005
Dilip M. Sarwate Ph.D.
10
Pr od uc tio n
EVOLVING ROLE OF MARKETING
Production Marketing
Finance
H.R.D
PRODUCTION DOMINANT
July- August 2005
Dilip M. Sarwate Ph.D.
Marketing
Finance
D R. . H
ALL FUNCTIONS EQUAL
11
EVOLVING ROLE OF MARKETING Production
Production Finance
RD
Marketing
MARKETING IMPORTANT
July- August 2005
H
HRD
Dilip M. Sarwate Ph.D.
e c n a Fin
MARKETING MAJOR
12
Pr od uc tio n
EVOLVING ROLE OF MARKETING Production
Fin an ce
Marketing
M ark eti ng
H
RD
CUSTOMER CONTROL July- August 2005
Customer Fi na nc e
HRD
Customer
CUSTOMER FOCUS/INTEGRATED MARKETING
Dilip M. Sarwate Ph.D.
13
Customer Value n
n
n
Total customer value: Product value, services value, personnel value and image value Total customer cost: Monetary cost,time cost, energy cost and psychic cost Customer perceived value: Difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives
July- August 2005
Dilip M. Sarwate Ph.D.
14
Customer satisfaction n
n • • • •
Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance in relation to his or her expectations Measuring customer satisfaction Customer satisfaction surveys Complaint and suggestion system Ghost shopping Lost order analysis
July- August 2005
Dilip M. Sarwate Ph.D.
15
Stakeholders as customers n n n n n n n n n
Consumers Customers Employees Suppliers Dealers Shareholders Financial institutions Government Society
July- August 2005
Dilip M. Sarwate Ph.D.
16
Value chain n
n
Tool for identifying ways to create more customer value Primary activities
•
Inbound logistics Outbound logistics Service
§
Support activities
• •
• • • •
* Operations * Marketing and sales
Procurement Technology development Human resource management Firm infrastructure
July- August 2005
Dilip M. Sarwate Ph.D.
17
Attracting and retaining customers n
Three types of customers
•
Firm’s customers Competitors’ customers
•
Non-users
•
n n
Retention of customers Attracting the customers
July- August 2005
Dilip M. Sarwate Ph.D.
18
Customer relationship management (CRM) n
n • • •
• •
Establishing long term relationship with key customers to produce high customer equity, that is loyal customers Alternatives Basic marketing : Simply sell the product Reactive marketing: Encourage feedback Accountable marketing: Follow-up, suggestions on improvements Proactive marketing: Anticipating future needs of customers Partnership (Back) marketing: Helps customer to succeed
July- August 2005
Dilip M. Sarwate Ph.D.
19
WHY WE SHOULD SATISFY THE CUSTOMER? n n n n n
BUYS AGAIN TALKS FAVOURABLY TO OTHERS REMAINS A LOYAL CUSTOMER BUYS NEW PRODUCTS OF THE COMPANY INCREASES PROFITABILITY CUSTOMER RETENTION MORE CRITICAL THAN CUSTOMER ATTRACTION. FROM CUSTOMER SATISFACTION TO DELIGHTING THE CUSTOMER.
July- August 2005
Dilip M. Sarwate Ph.D.
20
HOW DO WE DO IT BETTER THAN OUR COMPETITORS? n n n n n n
CUSTOMER FEEDBACK CUSTOMER SATISFACTION RELATIONSHIP MARKETING CUSTOMER CARE AND SERVICE NICHE EFFICIENT COMPLAINT HANDLING BACK ( PARTNERSHIP) MARKETING
July- August 2005
Dilip M. Sarwate Ph.D.
21
BACK MARKETING n n
n
n n n
KNOW THE BUSINESS OF YOUR CLIENT USE INFORMATION IN SPOTTING OPPORTUNITIES PROVIDE GUIDANCE ON ENTERPRISE MANAGEMENT HELP THE CLIENT SUCCEED DEVELOP LOYAL CUSTOMERS INCREASE YOUR OWN BUSINESS
July- August 2005
Dilip M. Sarwate Ph.D.
22
BEFORE SALES SERVICE n n n n n n n n n
MARKETING COMMUNICATION HELP IN SELCTION RELIABILITY TRAINING GUARANTEES FINANCING TESTING CHOICE PERIPHERAL
July- August 2005
Dilip M. Sarwate Ph.D.
23
AFTER SALES SERVICE n n n n n n n
WARANTEES SUPPLY OF SPARES TROUBLE SHOOTING QUALITY AUDITS TRADE IN ALLOWANCE REPLACEMENTS PUBLIC RELATIONS
July- August 2005
Dilip M. Sarwate Ph.D.
24
CHANGING PARADIGMS n
TURBO MARKETING
§
FASTER INNOVATIONS MANUFACTURING EFFICIENCY EFFECTIVE LOGISTICS RETAILING
v
OTHERS
• • •
• • • •
USE OF COMPETITIVE INTELLIGENCE CUSTOMER PROFITABILITY TOTAL QUALITY MANAGEMENT (TQM) RETURN ON MARKETING (USE OF MARKETING RATIOS)
July- August 2005
Dilip M. Sarwate Ph.D.
25
WHAT IS A CUSTOMER? n
n
n
n
A CUSTOMER IS THE MOST IMPORTANT PERSON IN OUR BUSINESS, IN PERSON IN OUR OFFICE , SHOP, ON TELEPHONE OR BY MAIL. A CUSTOMER IS NOT DEPENDENT ON US … WE ARE DEPENDENT ON HIM/HER. A CUSTOMER IS NOT AN INTERRUPTION TO OUR WORK … HE/SHE IS THE PURPOSE OF IT. WE ARE NOT DOING A FAVOUR BY SERVING HIM/HER … HE/SHE IS DOING US AFAVOUR BY GIVING US THE OPPORTUNITY TO DO SO.
July- August 2005
Dilip M. Sarwate Ph.D.
26
WHAT IS A CUSTOMER ? n n
n
n
A CUSTOMER IS RIGHT. HE/SHE IS ALWAYS RIGHT. NOBODY HAS EVER WON AN ARGUMENT WITH A CUSTOMER. CUSTOMER BRINGS NEEDS AND WANTS. OUR JOB IS TO FULFILL THEM. PROFITABLY FOR BOTH OF US. A CUSTOMER IS THE KING(QUEEN ) --
July- August 2005
MAHATMA GANDHI
Dilip M. Sarwate Ph.D.
27
Section Two Analyzing Marketing Opportunities
July- August 2005
Dilip M. Sarwate Ph.D.
28
Scanning the marketing environment n
Macro environments
•
Economy Technology Polity Culture
§
Micro environments
• • •
•
Market Task
§
SWOT analysis
•
July- August 2005
Dilip M. Sarwate Ph.D.
29
Market information n
Marketing information system
•
Internal record system Marketing intelligence system Marketing research system Analytical system Marketing decision support system
§
Market size estimation
• • • •
• •
Present demand Forecasting
July- August 2005
Dilip M. Sarwate Ph.D.
30
Major Schools n n n
Industrial Marketing Consumer Marketing Services Marketing
July- August 2005
Dilip M. Sarwate Ph.D.
31
Understanding the Markets 7 O’s of Markets • • • • • • •
Objects Objectives Organization Operations Occupants Occasions Outlets
4 P’s of Marketing Mix • • • •
Product Price Place Promotion
July- August 2005
Dilip M. Sarwate Ph.D.
32
Consumer markets and buyer behavior n
n
n
n
Buyer’s characteristics: Cultural, social,personal and psychological Social factors: Reference groups (family members, neighbors, relatives, colleagues and others) Buying roles: Initiators, influencers, deciders, purchasers and users Personal factors: Age, occupation, economic status, life style
July- August 2005
Dilip M. Sarwate Ph.D.
33
Consumer markets and buyer behavior (Cont.) n
n
n
Psychological factors: Motivational theories of Moslow’s hierarchy of needs, Freud’s, Pavlov, Herzberg’s satisfiers/dissatisfiers) Post purchase behavior: Cognitive dissonance Share of heart, share of mind and share of market
July- August 2005
Dilip M. Sarwate Ph.D.
34
Business markets and behavior n
n n n
Producer’s market: Industrial goods, consumer goods, original equipments, finished goods, components Institutional markets Resellers market: For all types of goods Government market: For all types of goods
July- August 2005
Dilip M. Sarwate Ph.D.
35
WHAT DOES THE CUSTOMER WANT ? n
-
INDUSTRIAL CUSTOMERS TECHNICAL CAPABILITY DELIVERY QUALITY PRICE PERFORMANCE HISTORY PRODUCTION FACILITIES REPUTATION FINANCIAL POSITION PROGRESS COMMUNICATION MANAGEMENT AND ORGANIZATION
July- August 2005
Dilip M. Sarwate Ph.D.
36
DIFFERENCE WITH CONSUMER MARKETING n
n n n n n
n n
NUMBER OF CUSTOMERS ARE SMALL, LARGE BUYERS GEOGRAPHICAL CONCENTRATION NON-HOMOGENUITY DERIVED DEMAND BUYING OBJECTIVES BUYING OPERATIONS- CLOSE SUPPLIER RELATIONSHIP DIFFERENCE IN MARKETING MIX COMPETITION
July- August 2005
Dilip M. Sarwate Ph.D.
37
Type of marketing n n n n
OE marketing Spares marketing Systems marketing Turnkey projects
July- August 2005
Dilip M. Sarwate Ph.D.
38
Market segmentation n
Definition: Subdividing the total market on the basis of certain common characteristics
n • • • • •
Segmentation variables Geography Demography End use basis Psychography Buyer behavior
July- August 2005
Dilip M. Sarwate Ph.D.
39
Benefits of segmentation n n n n n n
Identifies all types of markets Comparison of the relative benefits Identifying the competition in each segment Understanding the requirements of customers Defining the target markets Refining the marketing mix
July- August 2005
Dilip M. Sarwate Ph.D.
40
Essentials for segmentation
n n n
Substantiality Accessibility Measurability
July- August 2005
Dilip M. Sarwate Ph.D.
41
Target marketing strategies n n n n n n
Single segment concentration Product specialization Market specialization Selective specialization Full market coverage STP (Segmenting, targeting & positioning)
July- August 2005
Dilip M. Sarwate Ph.D.
42
Section Three Developing marketing strategies
July- August 2005
Dilip M. Sarwate Ph.D.
43
Product life cycle strategies n • • • •
§
§
Stages Introduction Growth Maturity Decline
Analyzing each stage: With respect to sales volume, market share, marketing expenses, competition, customer size Strategies: With respect to 4 P’s
July- August 2005
Dilip M. Sarwate Ph.D.
44
Developing new products n
Why new products?
•
Changing customer tastes Product obsolescence Increased competition Resource limitations Governmental controls
§
Innovation versus imitation
§
Innovation: High cost of R & D, long gestation, high
• • • •
marketing costs, risks §
Imitation: Low R&D cost, low risk
July- August 2005
Dilip M. Sarwate Ph.D.
45
Stages in new product development n
Idea generation:
n
Screening: Present line, market opportunities, policies with
Customers, dealers, suppliers, competitors, R&D people, top management respect to investment, return on investment, pay back period. Go error versus no-go error
n n n n n
Concept testing Feasibility studies: Legal, marketing, technical, financial Product development Test marketing Commercialization
July- August 2005
Dilip M. Sarwate Ph.D.
46
Competitive marketing n
Type of players
•
Market leader Market challenger Market follower Market nicher
§
Competitive Intelligence
• • •
§ § §
Competitor reconnaissance Early warning system Counter intelligence
July- August 2005
Dilip M. Sarwate Ph.D.
47
Competitive strategies (cont) n n n n n
§
Alternatives Defending the market share Expanding the market share Marketing warfare Mergers & acquisitions
Developing the right amalgam of customer and competition orientation
July- August 2005
Dilip M. Sarwate Ph.D.
48
Strategies for global markets n n n • • • • • •
Overseas market research Global environment scanning Evaluating competitive advantage (Porter’s model Factor conditions ( Manufacturing capacity, productivity) Supporting industries (Ancillary, services- banking, insurance) Demand (Local and global, growth) Organization, structure, rivalry Government help Risk taking
July- August 2005
Dilip M. Sarwate Ph.D.
49
Alternatives of entry n n
Exports: Direct, indirect and deemed Joint venturing
•
Licensing Subcontracting/outsourcing Management contracting Technology transfer Equity participation
§
Multi-national marketing
• • • •
• • •
Global manufacturing facilities Direct foreign investment Mergers& acquisitions
July- August 2005
Dilip M. Sarwate Ph.D.
50
Section Four Designing Marketing Program
July- August 2005
Dilip M. Sarwate Ph.D.
51
Product strategies n
Product levels
n
Generic product Basic product Expected product Augmented product
§
Product hierarchy
n n n
• • • • •
Need family Product line Product class Product type Brand
July- August 2005
Dilip M. Sarwate Ph.D.
52
Brand decisions n
Six levels of meaning of brand
•
Attributes Benefits Values Culture Personality User
§
Building brand equity
• • • • •
• • •
Brand awareness: Through name, logo, colours Brand effectiveness: Through recall Brand loyalty: Through customer satisfaction
July- August 2005
Dilip M. Sarwate Ph.D.
53
Brand naming Alternatives
n
Short, simple and easy to remember Giving product features, colours, design Giving product benefits Association with people, places, events Distinctly different
n
Decisions
n n n n
• • •
Individual names Blanket/ separate family names Corporate names
July- August 2005
Dilip M. Sarwate Ph.D.
54
Packaging decisions n
Purpose of packaging
•
Protection Promotion Brand identity Economy Legal requirement
§
Alternatives
• • • •
• • •
Materials to be used Design Labeling
July- August 2005
Dilip M. Sarwate Ph.D.
55
Services marketing
July- August 2005
Dilip M. Sarwate Ph.D.
56
What is a Service? n
A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.
July- August 2005
Dilip M. Sarwate Ph.D.
57
Importance of Services Contribution to GDP Sector
India
Agriculture Manufacturing Service
27 22 51
July- August 2005
Dilip M. Sarwate Ph.D.
USA 4 24 72 58
Service Mix n
n
n
Pure tangible good: Soap, toothpaste, shampoo and other FMCG products. No services accompany the product Tangible good with accompanying service: Automobiles, white goods, computers, engineering goods and others. Many types of services are attached to them Hybrid: Offering includes equal parts of good and services. Restaurants, cinema and others
July- August 2005
Dilip M. Sarwate Ph.D.
59
Service Mix (cont.) n
n
n
Major service with accompanying minor goods and services: Airlines, Railways, Bus and others. The service requires a capital intensive good but the primary item is a service Pure service: Banking, Insurance, Baby sitting, management consultancy, teaching and others. Offer primarily consists of a service Clients presence required: Surgery, beauty treatment and others require client’s presence. Car repair, banking and others may not require client’s presence.
July- August 2005
Dilip M. Sarwate Ph.D.
60
Type of Services n
n
Equipment based: Vending machine, automated car washing and others People based: They could be skilled, unskilled or professional. Driving, welding, painting are in the first category, newspaper delivery, waiter, window cleaning in the second category and legal, medical accounting in the third category.
July- August 2005
Dilip M. Sarwate Ph.D.
61
Types of Services (cont.) n
n
Needs differentiation: Whether the needs are Personal like hair cutting, beauty treatment, health care or Business like recruitment, advertising and others. Some like banking, insurance can satisfy both types of needs. Objectives: They could be Profit like airlines, banking and others or Non-Profit like social work (Rotary, Lions), NGO’s others. It can also differ on the basis of Ownership which could be private or public.
July- August 2005
Dilip M. Sarwate Ph.D.
62
Characteristics of Services n
§ § § § § §
Intangibility: Services cannot be heard, seen, tasted, felt or smelled before they are bought. Service provider’s task is to Manage Evidence and Tangibilize the Intangibles. Marketing tools, Place People Equipments Communication material Symbols Price
July- August 2005
Dilip M. Sarwate Ph.D.
63
Characteristics of Services (cont.) n
n
Inseparability: Services are typically produced and consumed simultaneously unlike for physical goods. Variability: The requirements of customers as well as service providers can vary in nature. For example, you can fly economy, business class or first class on airlines. The hospitals can provide general wards, special and deluxe suites.
July- August 2005
Dilip M. Sarwate Ph.D.
64
Characteristics of Services (cont.) n
Perishability: Services cannot be stored. Strategies emerge in relation to Demand and Supply conditions as explained below:
Demand side n n
Differential pricing Complimentary services
Non peak demand Reservation system
Supply side n n n
Part time employees Increase consumer participation Facilities for future expansion
July- August 2005
Peak time efficiency Shared services
Dilip M. Sarwate Ph.D.
65
Marketing Strategies for Service Firms Traditional marketing mix n n n n
Product Price Place Promotion
Additional mix for services n n n
People Physical evidence Process
July- August 2005
Dilip M. Sarwate Ph.D.
66
Marketing in Service Industries n
Internal marketing: Between the company and its employees
n
Interactive marketing: Between employees and customers
n
External marketing: Between the company and the customers
July- August 2005
Dilip M. Sarwate Ph.D.
67
Service Quality Model ( Parasuraman, Zeithmal and Berry)
Five gaps that cause unsuccessful delivery n Gap between consumer expectations and management perception n Gap between management perception and service quality specification n Gap between service quality specification and service delivery n Gap between service delivery and external communication n Gap between perceived service and expected service Refer to the Service Quality Model July- August 2005
Dilip M. Sarwate Ph.D.
68
Determinants of Service Quality n n n n n
Reliability Responsiveness Assurance Empathy Tangibles
July- August 2005
Dilip M. Sarwate Ph.D.
69
Monitoring System n n n n n n
Customer feedback Customer satisfiers Customer dissatisfiers Complaint handling system Customer relation ship management Internal marketing
July- August 2005
Dilip M. Sarwate Ph.D.
70
Managing Productivity Objectives are to keep costs down and increase productivity. Alternatives are, n n n n
n n
Skilful workers through better selection and training Handling more volume by giving less time to consumers Increased efficiency through automation, technology Reduce or make obsolete the need for a service through products like wash & wear Design a more effective service like Para-legal, Para-medical Offer incentives to customers
July- August 2005
Dilip M. Sarwate Ph.D.
71
Pricing decisions
July- August 2005
Dilip M. Sarwate Ph.D.
72
Setting pricing policy n
Pricing objectives
n
Market entry Price wars Profit maximization
•
Determining demand
n n
• • • •
Target customer Market size Price sensitivity Price elasticity of demand
July- August 2005
Dilip M. Sarwate Ph.D.
73
Setting pricing policy (cont.) n • • • •
•
• • •
Estimating costs Fixed costs Variable costs Marginal costing Break even pricing
Analyzing competitors’ costs, prices and offers Pricing decisions In theory In practice
July- August 2005
Dilip M. Sarwate Ph.D.
74
Price setting n
In theory
n
Market penetration pricing Market skimming pricing Multi brand pricing Multi level pricing
n
In practice
n n n
n n n n n
Cost plus (Mark up pricing) Target return pricing Competitive parity pricing Demand oriented pricing Sealed bid pricing
July- August 2005
Dilip M. Sarwate Ph.D.
75
Selecting the final price n
n n n n n
Target customer: AU, OEM, Reseller, Government Geographical locations Payment terms Price discounts and allowances Invitation and incentives Responding to price changes by the competitors
July- August 2005
Dilip M. Sarwate Ph.D.
76
Market logistics
July- August 2005
Dilip M. Sarwate Ph.D.
77
Market Logistics decisions n n n n n n n
Physical distribution Alternatives in physical distribution Warehousing Modes of transportation Inventory management Order processing Supply chain management
July- August 2005
Dilip M. Sarwate Ph.D.
78
Channel decisions n n n
n n n
Why channels? Wider market coverage Generation of volumes and benefit of economies of scale After sales service Promotion Financial assistance
July- August 2005
Dilip M. Sarwate Ph.D.
79
Channel decisions (cont.) n
Channel flows
n
Physical flows Payment flows Promotion flows
n
Channel design
n n
n n n n n n
* Title flows * Information flows
Product characteristics Customer characteristics Competitive characteristics Organizational characteristics Competitive characteristics Environmental characteristics
July- August 2005
Dilip M. Sarwate Ph.D.
80
Channel decisions (cont.) n
Channel levels
n
Zero level: Direct marketing Multi level
n
Selection of channel members
n
n n n n n n
Location Present line of business Financial resources Manpower resources Reputation Professionalization
July- August 2005
Dilip M. Sarwate Ph.D.
81
Marketing communication decisions
July- August 2005
Dilip M. Sarwate Ph.D.
82
Communication decisions n n n n n n n
Communication objectives Target definition Type of products and services Stage in product lifecycle Communication tools Communication budgets and allocation Measuring the communication effectiveness
July- August 2005
Dilip M. Sarwate Ph.D.
83
Communication objectives n n n n n n n n
Awareness building Comprehension building Legitimacy Lead generation Trade enquiries Informing the changes in the marketing mix Image building Social cause
July- August 2005
Dilip M. Sarwate Ph.D.
84
Target audience n n n n n n n
Consumers Customers Dealers Suppliers Shareholders Employees Society
July- August 2005
Dilip M. Sarwate Ph.D.
85
Types of products
n
Industrial products: OE, Components Consumer durables Consumer no-durables
n
Services: Industrial, consumer
n n
Stage in product life cycle • • • •
Introduction Growth Maturity Decline
July- August 2005
Dilip M. Sarwate Ph.D.
86
Communication tools n
Advertising: Using different media, media
n
cost paid by the sponsors Public relations: Press conference, annual reports, newsletters, lobbying, sponsorship
n
Sales promotion: Point of purchase, samples,
n
Personal selling: Sales presentations sales
n
Direct marketing: Telemarketing, mail order,e-
gifts, exhibitions, demonstrations meetings mail
July- August 2005
Dilip M. Sarwate Ph.D.
87
Communication budgets n n n n
Affordable method Percentage of sales method Competitive parity method Objective and task method
July- August 2005
Dilip M. Sarwate Ph.D.
88
Advertising decisions The five M’s of advertising § Mission § Money § Message § Media § Measurement
July- August 2005
Dilip M. Sarwate Ph.D.
89
Mission n n n n n
Marketing objectives Sales objectives Corporate objectives Social objectives Any others
July- August 2005
Dilip M. Sarwate Ph.D.
90
Money n n n n n n
Stage in PLC Market share Consumer base Competition and clutter Advertising frequency Product substantiality
July- August 2005
Dilip M. Sarwate Ph.D.
91
Message n n n n
Message generation Message evaluation and selection Message execution Social, ethical and legal issues
July- August 2005
Dilip M. Sarwate Ph.D.
92
Media Criterion • • • • •
Reach, frequency and impact Major media types Specific media vehicle Media timing Geographical media allocation
Alternatives • • • • • •
Print Audio Audio-visual Post Outdoor Internet
July- August 2005
Dilip M. Sarwate Ph.D.
93
Measurement n
Communication impact Sales impact
n
Tools
n
•
•
Pre testing: Opinion research, portfolio test, laboratory tests Post testing: Recognition test, recall test (Aided/Unaided)
July- August 2005
Dilip M. Sarwate Ph.D.
94
Sales promotion n
Purpose
•
Invitation Incentive
§
Decisions
•
• • • • • •
Establishing objectives Selecting consumer promotion tools Selecting trade promotion tools Developing the program Pre testing Implementation and control
July- August 2005
Dilip M. Sarwate Ph.D.
95
Public relations n n n n n n
Press publicity Product publicity Corporate communication Lobbying Counseling Use of PR agencies
July- August 2005
Dilip M. Sarwate Ph.D.
96
Direct marketing n
Suitability: No. of customers small, high unit value, after sales service specialization
n
Major channels
•
Face to face selling Direct mail- post office Direct mail- Fax, e-mail, voice mail
§
Steps
• •
• •
Creation of data base Creation of mail material
July- August 2005
Dilip M. Sarwate Ph.D.
97
Sales force decisions
July- August 2005
Dilip M. Sarwate Ph.D.
98
Designing the sales force n n n n n
Sales force objectives Sales force strategy Sales force structure Sales force size Sales force compensation
July- August 2005
Dilip M. Sarwate Ph.D.
99
Managing the sales force n n n n n
Recruitment and selection Training Supervising Motivating Performance evaluation
July- August 2005
Dilip M. Sarwate Ph.D.
100
Personal selling n
n n n
Characteristics of a successful sales person Art of selling Communication skills Negotiation skills
July- August 2005
Dilip M. Sarwate Ph.D.
101
Art of selling n
Use of SELL formula
S E L L
July- August 2005
Salute Excite interest Let go Loop through
Dilip M. Sarwate Ph.D.
102
Marketing organization
July- August 2005
Dilip M. Sarwate Ph.D.
103
Organizing the marketing department n n n n n
Functional basis Territory basis Product basis End use basis Combination
July- August 2005
Dilip M. Sarwate Ph.D.
104
INTERFACE OF MARKETING WITH OTHER DEPARTMENTS DEPARTMENT
THEIR EMPHASIS
R&D
BASIC RESEARCH LONG LEAD TIME FEW MODELS INNOVATION
PRODUCTION
LONG RUNS STANDARD AVG. QC
July- August 2005
Dilip M. Sarwate Ph.D.
MARKETING EMPHASIS APPLIED RESEARCH SHORT LEAD TIME MANY MODELS IMMITATION SHORT RUNS CUSTOM BUILT STRICT QC
105
INTERFACE (CONTINUED) PURCHASE
FEW VENDORS ECONOMIC LOT PRICE FACTOR
FINANCE
July- August 2005
SEVERAL LARGE STOCKING QUALITY FACTOR
STRICT BUDGETING
FLEXIBLE
COST PLUS PRICING
DEMAND ORIENTED FLEXIBLE EASY TERMS EASY
STANDARD TERMS TOUGH CREDIT TOUGH COLLECTION
Dilip M. Sarwate Ph.D.
106
INTERFACE (CONTINUED) n
n
HRD SELECTION BY HRD STANDARD SALARY STANDARD PROMOTION LIMITED TARINING
BY DEPT EXTRA EXTRA REGULAR
WITHIN LAW
SCANT REGARD NOT NECCESSARY
LEGAL
ETHICAL
July- August 2005
Dilip M. Sarwate Ph.D.
107
Section Five Marketing control
July- August 2005
Dilip M. Sarwate Ph.D.
108
Marketing control n
Annual plan control: Sales analysis, market share analysis, marketing expense analysis, financial analysis
n
Profitability control:Profitability by product, territory, customer, segment, order size
n
Efficiency control: Efficiency of sales force, advertising, sales promotion, distribution
n
Strategic control: Marketing effectiveness rating instrument, marketing audit, marketing excellence review, company ethical and social responsibility review
July- August 2005
Dilip M. Sarwate Ph.D.
109
Marketing audit n
n
n n n
Comprehensive, systematic, periodic, independent review of, A company’s marketing environment, planning, strategy, organization to, Identify the problem areas To improve the marketing performance And to improve the profitability
July- August 2005
Dilip M. Sarwate Ph.D.
110
Components of a marketing audit n n n n n n
Marketing environment audit Marketing strategy audit Marketing organization audit Marketing systems audit Marketing productivity audit Marketing function audit
July- August 2005
Dilip M. Sarwate Ph.D.
111
Use of marketing ratio Marketing ratio = (Marketing expense/ Sales)x 100 APPLICATIONS • • • •
Trend analysis Budgeting Comparison with major competitors Comparison with industry
July- August 2005
Dilip M. Sarwate Ph.D.
112
Thank you
July- August 2005
Dilip M. Sarwate Ph.D.
113
Related Documents
Marketing (balaji)
November 2019 11
Balaji
June 2020 5
Balaji
November 2019 14
Balaji
May 2020 5
Balaji
May 2020 8