Marketing1

MARKETING MANAGEMENT PRESENTED ON BEHALF OF:

SYMBIOSIS CENTRE FOR DISTANCE LEARNING BY: PROF. HIMMAT G. ADISARE

MARKETING ENVIRONMENT & SYSTEM

MARKETING ENVIRONMENT FACTORS  ECONOMIC ENVIRONMENT  COMPETITIVE ENVIRONMENT  TECHNOLOGICAL ENVIRONMENT  SOCIO-CULTURAL ENVIRONMENT  POLITICO-LEGAL ENVIRONMENT  DEMOGRAPHIC ENVIRONMENT  NATURAL ENVIRONMENT

ECONOMIC ENVIRONMENT 

BUSINESS CYCLE:

 PROSPERITY   

  

RECESSION DEPRESSION RECOVERY

INFLATION & DISINFLATION UNEMPLOYMENT HIGH INTEREST RATES

COMPETITIVE ENVIRONMENT        

TYPES OF MARKET STRUCTURES: PURE COMPETITION MONOPOLISTIC COMPETITION OLIGOPOLY PURE MONOPOLY COMPETITIVE STRATEGIES: PRICE COMPETITION NON-PRICE COMPETITION

TECHNOLOGICAL ENVIRONMENT ACCELERATING PACE OF TECHNOLOGICAL CHANGE  UNLIMITED INNOVATION, RESEARCH & DEVELOPMENT OPPORTUNITIES  GOVERNMENT LEGISLATION & REGULATION 

SOCIO-CULTURAL ENVIRONMENT 

PERSISTENCE OF CORE CULTURAL VALUES:



RELIGIOUS RACIAL TRADITIONAL ETC.

 



CHANGES IN SECONDARY VALUES:



MUSIC CLOTHES EATING HABITS ETC.

 

POLITICO-LEGAL ENVIRONMENT 

Legislation For Environment Protection



Legislation For Protection Of Consumers



Legislation For Protection Of Industries from each other



MRTP, FDA, PCBs ETC.

DEMOGRAPHIC ENVIRONMENT POPULATION EXPLOSION  SLOWDOWN IN BIRTHRATE  CHANGING TRENDS IN HOUSEHOLDS  CHANGING ETHNIC & RACIAL POPULATIONS  BETTER EDUCATED POPULATION  SHIFT FROM MASS TO MICROMARKETS 

NATURAL ENVIRONMENT  DEPLETION OF NATURAL

RESOURCES  INCREASING COST OF ENERGY & POWER  EFFLUENTS & ENVIRONMENTAL POLLUTION  RENEWABLE & NON-RENEWABLE RESOURCES

MARKET-ORIENTED STRATEGIC PLANNING

THE BCG MATRIX (ASSIGNING RESOURCES TO SBUs) 

QUESTION MARKS



STARS



CASH COWS



DOGS

THE BCG MATRIX (CONTD) RELATIVE MKT SHARE 25%

STARS

MKT GROWTH

QUESTION MARKS

10% DOGS

0% CASH COWS 10x

1x

0.1x

THE BCG MARIX (CONTD)  





QUESTION MARKS: NEW BUSINESSES OF THE COMPANY IN HIGH GROWTH-RATE MARKETS STARS: SUCCESSFUL Q-MARK BUSINESSES BECOME STARS THAT GAIN MARKET SHARE AND GENERATE PROFITS FOR THE COMPANY CASH COWS: STAR BUSINESSES THAT REMAIN SUCCESSFUL. MARKET-GROWTH RATE SLOWS DOWN AS COMPETITORS ENTER THE SEGMENT, BUT CASH COWS CONTINUE TO GENERATE STEADY PROFITS. THESE PROFITS IN TURN ARE USED TO SUSTAIN STAR BUSINESSES AND FUND NEW QUESTION MARK BUSINESSES

DOGS: THESE ARE BUSINESSES IN DECLINE AND THE COMPANY HAS THE OPTION TO “HARVEST” OR “DIVEST”

ANALYZING CONSUMER BEHAVIOR

ANALYZING CONSUMER BEHAVIOR 

FACTORS INFLUENCING CONSUMER BEHAVIOR



BUYING ROLES



TYPES OF BUYING BEHAVIOR



THE BUYING DECISION PROCESS

FACTORS INFLUENCING CONSUMER BEHAVIOR 

CULTURAL FACTORS:

 Culture  



Sub-culture Social Class

SOCIAL FACTORS:

 REFERENCE GROUPS  

FAMILY ROLES & STATUSES

FACTORS INFLUENCING CONSUMER BEHAVIOR(2) 

PERSONAL FACTORS



Age and Life-Cycle Stage Occupation Economic Circumstances Lifestyle Personality & Self-concept

   

ANALYZING CONSUMER BEHAVIOR (CONTD) 

PSYCHOLOGICAL FACTORS

Motivation  Learning  Perception  Beliefs & Attitudes 

BUYING ROLES   

 

INITIATOR: THE FIRST PERSON TO SUGGEST THE IDEA OF BUYING INFLUENCER: A PERSON WHOSE VIEWS IMPACT THE BUYING DECISION DECIDER: THE PERSON WHO DECIDES ON WHAT, WHEN & WHERE TO BUY THE PRODUCT OR SERVICE BUYER: THE ACTUAL PURCHASER USER: THE PERSON WHO USES/CONSUMES THE PRODUCT OR SERVICE

TYPES OF BUYING BEHAVIOR 

COMPLEX BUYING BEHAVIOR: HIGH INVOLVEMENT, VERY EXPENSIVE, INFREQUENTLY PURCHASED,VERY RISKY, SELFEXPRESSIVE PRODUCTS (DESIGNER JEWELLERY, CUSTOM-DESIGNED SPORTS CARS, HOUSING)



DISSONANCE REDUCING BUYING BEHAVIOR: HIGH INVOLVEMENT, EXPENSIVE, INFREQUENTLY PURCHASED, SELF-EXPRESSIVE PRODUCTS (FURNITURE, WHITE GOODS, PCs)

TYPES OF BUYING BEHAVIOR (CONTD) 



VARIETY SEEKING BUYING BEHAVIOR: LOW INVOLVEMENT, FREQUENTLY PURCHASED, INEXPENSIVE PRODUCTS (PASTRIES, BISCUITS, SNACKS) HABITUAL BUYING BEHAVIOR: LOW INVOLVEMENT, FREQUENTLY PURCHASED, INEXPENSIVE PRODUCTS (SUGAR, SALT, FLOUR, FOODGRAINS)

THE BUYING DECISION PROCESS 

Problem/need Recognition



Information Search



Evaluation Of Alternatives



Purchase Decision



Postpurchase Behavior

PROBLEM/NEED RECOGNITION    

    

From Internal Stimuli: Hunger Thirst Fear From External Stimuli: Neighbor’s Purchases Advertisements Window Shopping Newspapers & Magazines

INFORMATION SEARCH

From Personal Sources:  Family Family  Friends  Neighbors  Acquaintances 

 Friends

INFORMATION SEARCH (CONTD) From Commercial Sources  Advertisements  Dealers  Salespersons  Packaging  Displays 

INFORMATION SEARCH (CONTD) 

From Public Sources



Mass Media



Chambers of Commerce



Consumer Rating Magazines

INFORMATION SEARCH (CONTD) 

From Experiential Sources



Handling the Product



Examining the Product



Using the Product

EVALUATION OF ALTERNATIVES 

Successive Sets in Consumer Decision-Making



Total Set Awareness Set Consideration Set Choice Set Buying Decision

   

PURCHASE DECISION Interfering Factors  Attitudes of Others: Opposing and intense opinions of family members, close friends and acquaintances  Unanticipated situational factors: Changes in income, job transfer, loss of employment, change of priority e.g. sudden payment of educational fees etc. 

POSTPURCHASE BEHAVIOR Post purchase Satisfaction  Keep the Product  Store the Product  Convert to a Second Use  Post purchase Dissatisfaction  Try to return the product/take legal recourse  Rent it  Get rid of it/Throw it 

BUSINESS MARKETS VERSUS CONSUMER MARKETS    





Business Markets Fewer Buyers Larger Buyers Close SupplierCustomer Relationship Geographically Concentrated Buyers Inelastic Demand

     

Derived Demand Professional Purchasing Multiple Buying Influences Direct Purchasing Reciprocity Leasing

MARKET SEGMENTATION

MARKET SEGMENTATION 

Strategies for Identifying Target Markets

 The Mass Market Strategy  The Segment Concentration Strategy  The Multi-Segment Strategy

MARKET SEGMENTATION (CONTD) Strategies for Market Targeting (Contd)  Single Segment Concentration  Selective Specialization  Product Specialization  Market Specialization  Full Market Coverage 

SINGLE SEGMENT CONCENTRATION M1

M2

P1

P2

P3 EXAMPLE: VOLKSWAGEN

M3

SELECTIVE SPECIALIZATION M1

M2

M3 STAR MOVIES

P1 P2 P3

STAR NEWS

STAR PLUS

PRODUCT SPECIALIZATION M1

M2

SCHOOL & RESEARCH AND DEV P1 COLLEGE SCIENCE LAB INSTITUTES

M3 INDUSTRY APPLICATION E.G. QC LABS

P2 P3 PRODUCT: MICROSCOPE

MARKET SPECIALIZATION M1

M2 MICROSCOPES

P1 TELESCOPES

P2 STETHOSCOPES

P3

M3

FULL MARKET COVERAGE M1

M2

M3

P1 P2 P3 EXAMPLES: HLL, GODREJ, P&G, COKE

MARKET SEGMENTATION VARIABLES 

Geographic Segmentation



Demographic Segmentation



Psychographic Segmentation



Behavioral Segmentation

SEGMENTATION VARIABLES (CONTD) Geographic Segmentation  By Nations  By Regions  By States  By Cities  By Localities 

SEGMENTATION VARIABLES (CONTD) Demographic Segmentation  By Age  By Gender  By Income  By Education Level  By Religion/Race  By Nationality 

SEGMENTATION VARIABLES (CONTD) 

Psychographic Segmentation

 By

Personality

 By

Lifestyle

 By

Social Class

SEGMENTATION VARIABLES (CONTD) 

Behavioral Segmentation

 By

Usage Pattern  By Occasion  By Loyalty Factor  By Attitude Towards The Product

SALES FORECASTING

SALES FORECASTING METHODS Time Series Analysis  Simple Trend Analysis  Correlation Methods  Break-Even Analysis  Executive Judgment 

Sales Force Composite  Surveys of Buyers Intention  Market Tests  Substitute Method  Delphi Method 

THE MARKETING-MIX

THE MARKETING-MIX (THE 4 Ps) 

Product



Price



Promotion



Place

THE PRODUCT LIFE CYCLE (PLC) INTRODUCTION SALES

MATURITY

SALES CURVE DECLINE

GROWTH

PROFIT CURVE

TIME

PLC: INTRODUCTION STAGE STRATEGIES PROMOTION HIGH HIGH

LOW

RAPID SKIMMING

SLOW SKIMMING

RAPID PENETRATION

SLOW PENETRATION

PRICE LOW

PLC: GROWTH STAGE STRATEGIES     



Style, Quality & Features Improvement Introduce New Models & Flanker Products Enter New Market Segments Enter New Marketing Channels Shift from Awareness to Preference Advertising Bring Price Down to Next Level of PriceSensitive Customers

PLC: MATURITY STAGE STRATEGIES

 PRODUCT MODIFICATION  MARKET MODIFICATION  MARKETING-MIX MODIFICATION

(Please refer to Handout)

PLC: DECLINE STAGE STRATEGIES  Increase the Investment Level  Maintain the Current Status till market

Position Becomes Clear  Disinvest from Unprofitable Businesses  Harvest  Divest

PRICING STRATEGIES PRICE HIGH HIGH PRODUCT QUALITY LOW

M

MEDIUM

1. PREMIUM PRICING

2. HIGH-VALUE STRATEGY

4. OVERCHARGING STRATEGY

5. MEDIUMVALUE

7. RIP-OFF STRATEGY

STRATEGY 8. FALSE ECONOMY STRATEGY

LOW 3. SUPER-VALUE STRATEGY 6. GOOD-VALUE STRATEGY 8. ECONOMY STRATEGY

SETTING PRICING POLICY    

 

1. Selecting the Pricing Objective 2. Determining Demand 3. Estimating Costs 4. Analyzing Competitors’ Costs, Prices, and Offers 5. Selecting a Pricing Method 6. Deciding on the Final Price

PHYSICAL DISTRIBUTION 

Importance of Physical Distribution



Place Utility & Time Utility to Products



Increase in Customer Base



A Highly Promising Activity for Cost Reduction

PHYSICAL DISTRIBUTION (CONTD) 

The FOUR major component functions:



Designing the Physical Distribution System Transportation Warehousing Inventory Management

  

PHYSICAL DISTRIBUTION (CONTD) 

Designing the Physical Distribution System

Analysis of What the Customers Want  Analysis of What the Competitors are Doing  Designing by Unit Specification and Considerations  Optimizing the Cost of the System  Maintaining System Flexibility 

PHYSICAL DISTRBUTION (CONTD) 

Transportation

Assessment of Transportation Requirements  Choosing the Right Transport Mode or Mix of Transport Modes  Routing of the Consignments  Operational Planning  Implementation  Controlling Transportation Costs 

PHYSICAL DISTRIBUTION (CONTD) 

Warehousing



Role and Importance of Warehousing



Designing the Warehousing System



Improving Warehousing Effectiveness

PHYSICAL DISTRIBUTION (CONTD) 

Inventory Decisions



Carrying Inventory is Inescapable



Elements of Inventory Costs



Issues in Inventory Management

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