Marketing Management

PALVIELA PG COLLEGE, PALIVELA , KOTHAPETA -533229, PHONE NO:08855-244771/774
Marketing management
Unit – I Importance and Scope of Marketing: Concepts of Marketing; Marketing

Management Tasks; Marketing Environment; Marketing and Customer Value - Industrial
Marketing, Services Marketing, Global Marketing.
Unit –II: Marketing Information System and Marketing Research; Consumer Behavior
and Buying Decision Process – Organization Buyer Behavior – Market Segmentation and
Targeting.
Unit – III: Development of Marketing Offerings Strategy – New Product Development–

Product line and Decisions–Product-mix–Product Differentiation – Product Life Cycle
Management - Brand Management - Packaging.
Unit – IV: Pricing Strategies and Programs; Setting the Price – Adapting the Price –
Initiating Response to Price Changes - Delivering Value: Designing and Managing Value
Networks – Channels of Distribution.
Unit – V : Communicating Value: Designing and Managing Marketing Communications –

Advertising – Direct Marketing and Personal Selling – Sales Promotion – Events and
Public Relations and Public Relations : Competitive Marketing Strategies- Emerging
Trends in Marketing: Networking Marketing-Viral Marketing-Ambush/Guerilla Marketing-
Green Marketing-Direct Marketing etc.
1|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

Unit – I Importance and Scope of Marketing: Concepts of Marketing; Marketing

Management Tasks; Marketing Environment; Marketing and Customer Value - Industrial
Marketing, Services Marketing, Global Marketing.
Imp questions:
1. Importance and Scope of Marketing

2. Concepts of Marketing; Marketing Management Tasks
3. Industrial Marketing, Services Marketing, Global Marketing
Marketing
The term of marketing is derived from the word market, which refers to a group
of sellers and buyers that co-operate to exchange goods and services. The modern
concepts of marketing evolved during the and after the industrial revolution in the 19 th
and 20th centuries.
The management process through which goods and services move from
concept to the customer. It includes the coordination of four elements called the 4p’s of
marketing:
1. Identification, selection and development of a product.
2. Determination of its price.
3. Selection of a distribution channel to reach the customer’s place.
4. Development and implementation of a promotional strategy.
Marketing definition
According to the American Marketing Association (AMA) Board of

Directors, Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large.
Importance and Scope of Marketing
Everything you need to know about the importance and significance of

marketing. Marketing is recognized as the most important or significant activity in our
society.
Marketing has achieved social importance because it is entrus ted with the task of
creation and delivery of standard of living to society.
1. Business

2. Consumers
3 Society
4. Developing Economy
5. Individuals
6. Business Firms
7. Individual Business Enterprises
8. Developing Countries.
1.Importance of Marketing for Business:

Marketing is important to the business, consumer as well as the society.
 Marketing helps business to keep pace with the changing tastes, fashions and
preferences of the customers..
 Marketing plays an important role in the development of the economy.
Various functions and sub-functions of marketing like advertising, personal
selling, packaging, transportation, etc.,
 Marketing helps the business in increasing its sales volume, generating
revenue and ensuring its success in the long run.
2.Importance of Marketing for Customers:
 Marketing promotes product awareness to the public. Marketing creates a win-

win situation for both, customers and the company. With the help of marketing,
product/service awareness is generated among people thus making them
capable of identifying their needs and satisfying them.
 By the process of new product development marketing managers identify the

needs of customers thereby finding ways to cater to them.
3.Importance of Marketing for Society:
 Due to various marketing activities like advertising, personal selling, packaging,

transportation etc., a large number of employment opportunities are generated.
 Marketing helps to increase the national income by increasing the sales volume,
thus generating revenue.
4.Importance of Marketing Developing Economy
The broad infrastructure contributions of marketing to developing economies are:
 Technological contribution.

 Physical distribution contribution.
 Mass communication contribution.
 Cultural contribution.
 Government and Government agency contribution, and
 Contribution of coordinated production and marketing.
5,6 Importance of Marketing to Individual/Business Firms:
 Marketing Generates Revenue to Firms
 Marketing Acts as a Basis for Making Decisions
 Marketing Helps the Top Management to Manage Innovations and

Changes:
7.Importance of Marketing to Individual Business Enterprises
Marketing plays an important role in the success of a business enterprise.

Marketing is primarily concerned with movement of goods and services from the
producer to the consumers in order to satisfy their needs. Marketing contributes directly
to keep the wheels of the organization moving on the path to progress and prosperity.
8.Importance of Marketing to Developing Countries.
The major importance of marketing in developing countries is given as under:
 Improved Quality of Life
 Development of Small-Scale Industries
 Development of Managers and Entrepreneurs
 Industrial Development
 Provide Job Opportunities
 Marketing Impact on People
 Acceleration of Economic Growth

Scope of marketing
Market
 Market is a place where buyers and sellers are meet for exchanging of goods
and services by transfer of money.
 The market is an aggregate of forces or conditions within whish buyers and
seller make decisions which results in transfer of goods or services.
 It is a place where there is an exchange process across the market is equal to
group of sellers and buyers in an area.
Offers
 An offer is a proposal by the sellers to sell a product /property /may not is a

accepted by the buyer.
 The offers include every phase to encourage or discourage his purchase.
 It also includes product /service and various conditions.
 It comprises what, when, who, why to through whom the purchase is made.
 It is a proposal by a seller to sell product/service.

 It may be accepted by the buyer/may not be accepted by the sellers
System
 It is concerned with the flow of goods &services from the point of production to
the point of consumption.
 It is a systematic arrangement of functions of marketing to make goods the
selection of channels of distribution, nature of market segmentation in the
system which enables creation of time utility and plan utility.
 Marketing will identify needs of the consumers.
Information------ need ---------production--------supply of goods--------CRM
 Marketing will identify needs of the consumers

 They will produce production
Forces
 Forces include environment factors which are affecting the marketing system
 The environment forces contribute to marketing network. Demand, supply,
competition, status, Government rules, consumer goods market conditions are
the various forces which act upon marketing
Concepts of Marketing
Marketing concepts relate to the philosophy a business use to identify and

fulfill the needs of its customers, benefiting both the customer and the company. Same
philosophy cannot result in a gain to every business, hence different businesses use
different marketing concepts (also called marketing management philosophies).
The ‘marketing concept’ proposes that in order to satisfy the organizational

objectives, an organization should anticipate the needs and wants of consumers and
satisfy these more effectively than competitors. This concept originated from Adam
Smith’s book The Wealth of Nations, but would not become widely used until nearly 200
years later.

1.Production Concept
The idea of production concept – “Consumers will favor products that are available
and highly affordable”. This concept is one of the oldest Marketing management
orientations that guide sellers.
Companies adopting this orientation run a major risk of focusing too narrowly on
their own operations and losing sight of the real objective.
2.Product Concept
The product concept holds that the consumers will favor products that offer the most in
quality, performance and innovative features. Marketing strategies are focused on
making continuous product improvements.
Product quality and improvement are important parts of marketing strategies,

sometimes the only part. Targeting only on the company’s products could also lead to
marketing myopia.
3.Selling Concept
The selling concept holds the idea- “consumers will not buy enough of the firm’s
products unless it undertakes a large-scale selling and promotion effort”.
Here the management focuses on creating sales transactions rather than on

building long-term, profitable customer relationships.
4.Marketing Concept
The marketing concept holds- “achieving organizational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better than
competitors do”.

Under the marketing concept, customer focus and value are the routes to
achieve sales and profits.
The marketing concept is a customer-centered “sense and responds”

philosophy. The job is not to find the right customers for your product but to find the
right products for your customers.
5.Societal marketing concept
Societal marketing concept questions whether the pure marketing concept overlooks
possible conflicts between consumer short-run wants and consumer long-run welfare.
The societal marketing concept holds “marketing strategy should deliver value to
customers in a way that maintains or improves both the consumer’s and society’s well-
being”.
Marketing Management Tasks
Phillo kotler in his article “ The major tasks of marketing management has
listed various levels of demand and the corresponding tasks of a marketer.
Marketing management has to do a set of tasks necessary for success in

marketing. The basic tasks of marketing are as follows:
1. Develop marketing strategies and plans
The first and foremost tasks of marketing are to develop marketing strategies and
plans. They consist of following tasks:
 Determining the strategies consist of identifying the marketing objectives or
goals of the organization, their determination, and modification as well as
determination of specific resources to achieve objectives or goals set. They are
concerned with product, price, channel, promotion, competitors, etc.
 Marketing plans involve mangers by which the marketing goals can be achieved.
They involve deciding policy, strategy, tactics, procedures, rules and regulations
and marketing programs, budgets and schedules to achieve the long-term as
well as short-term goals.
 Marketing strategies and plans allocate economic, physical

and managerial resources of the organization for future.
 They assess and analyze strength and weakness, opportunities and threats
(SWOT).
2. Creating marketing information system

It is concerned with understanding what is happening inside and outside the company.
Simply there are four components of marketing information. They are Internal Record

System, Marketing Intelligence System, Marketing Research and Decision Support

System.
3. Build customer relationship

Marketing needs to build customer relationship. Building customer relationship is a very
effective way to increase satisfaction and sustain in market. The relationships can be
built by using the emerging concepts such as relationship marketing and customer
relationship management.
4. Build strong brands

Marketing needs to build strong brand. It is also a major task of marketing. Strong
brand helps in promotion, value creating, image development, product positioning,
brand loyalty and expansion of product lines.
5. Determine marketing mix

Marketing needs to create and determine and effective marketing mix to satisfy needs
of target markets. It is the combination of four inputs such as the product, the price,
the place and the promotional activities. Different marketing mix is essential for
different groups of customers.
6. Deliver value
Marketing needs to deliver value to the target customers. Value is the ratio between
what the customers pay and what they receive. Marketing must determine how to
properly deliver the value embodied by the products and services to the target market.
Customers’ product choice is guided by value. So, marketing should add maximum
value to the customers.
7. Communicate value
Marketing needs to communicate value to target markets. It has to develop an
integrated marketing communication program that maximizes the individual
and collective contribution of all communication activities by which firm attempts to
inform, persuade, remain and reassure consumers about the brands. For this,
marketing has to set up mass communication programs consisting of advertising,
personal selling, sales promotion, public relations and publicity.
8. Create long-term growth

Marketing must take a long-term view of its products and brands and how its profits
should be grown. Based on its positioning, it must initiate new-product development,
testing and launching.
9. Implementation and control

Marketing must organize its marketing resources and implement and control the
marketing plans. It must build a marketing organization that is capable of implementing
marketing plans and strategies. Similarly, it must find out any deviations between
achieved performances against planned or budgeted performance using predetermined
standards. It provides feedback about marketing planning and strategies.
Marketing Environment
Marketing Environment is the combination of external and internal factors and

forces which affect the company’s ability to establish a relationship and serve its
customers.
The marketing environment of a business consists of an internal and an external

environment. The internal environment is company-specific and includes owners,
workers, machines, materials etc. The external environment is further divided into two
components: micro & macro.
Internal Environment
The internal environment of the business includes all the forces and factors inside the
organisation which affect its marketing operations. These components are:
 Men
 Money
 Machinery
 Materials
 Markets
The internal environment is under the control of the marketer and can be
changed with the changing external environment. Nevertheless, the internal marketing
environment is as important for the business as the external marketing environment.
This environment includes the sales department, marketing department, the
manufacturing unit, the human resource department, etc.
External Environment
10 | P a g e : PALIVELA PG COLLEGE (ICET CODE : SSSK)

The external environment constitutes factors and forces which are external to the
business and on which the marketer has little or no control. The external environment is
of two types:
Micro Environment
The micro-component of the external environment is also known as the task
environment. It comprises of external forces and factors that are directly related to the
business. These include suppliers, market intermediaries, customers, partners,
competitors and the public
 Suppliers include all the parties which provide resources needed by the

organization.
 Market intermediaries include parties involved in distributing the product or
service of the organization.
 Partners are all the separate entities like advertising agencies, market research
organizations, banking and insurance companies, transportation companies,
brokers, etc. which conduct business with the organization.
 Customers comprise of the target group of the organization.
 Competitors are the players in the same market who targets similar customers
as that of the organization.
 Public is made up of any other group that has an actual or potential interest or
affects the company’s ability to serve its customers.
Macro Environment
The macro component of the marketing environment is also known as the broad
environment. It constitutes the external factors and forces which affect the industry as

a whole but don’t have a direct effect on the business. The macro-environment can be
divided into 6 parts.
Demographic Environment
The demographic environment is made up of the people who constitute the
market. It is characterised as the factual investigation and segregation of the population
according to their size, density, location, age, gender, race, and occupation.
Economic Environment
The economic environment constitutes factors which influence customers’
purchasing power and spending patterns. These factors include the GDP, GNP, interest
rates, inflation, income distribution, government funding and subsidies, and other major
economic variables.
Physical Environment
The physical environment includes the natural environment in which the business
operates. This includes the climatic conditions, environmental change, accessibility to
water and raw materials, natural disasters, pollution etc.
Technological Environment
The technological environment constitutes innovation, research and development
in technology, technological alternatives, innovation inducements also technological
barriers to smooth operation. Technology is one of the biggest sources of threats and
opportunities for the organisation and it is very dynamic.
Political-Legal Environment
The political & Legal environment includes laws and government’s policies
prevailing in the country. It also includes other pressure groups and agencies which
influence or limit the working of the industry and/or the business in the society.

Social-Cultural Environment
The social-cultural aspect of the macro-environment is made up of the lifestyle,
values, culture, prejudice and beliefs of the people. This differs in different regions.
Customer value
Customer value is the satisfaction the customer experiences (or expects to

experience) by taking a given action relative to the cost of that action.
Customer Value is the incremental benefit which a customer derives from

consuming a product after paying in return. The term value signifies the benefits that a
customer gets from a product. It is the difference between the benefits (sum of
tangible and intangible benefits) and the cost. Customer value is dependent on the
three factors – Quality, Service and Price. Hence, these three together form the
‘Customer Value Triad’. The value of a product increases with its quality and service, as
the benefits increase. On the other hand, the value decreases with increase in price
because of the increase in costs increase in this case.
Benefits of customer value
 Delighted customer
 Bench marketing against the competitors
 Identifying the right things
 Team work by committed employees
 Enhanced market share
 Gaining competitive Edge
 Enables competitive strategic planning
Industrial Marketing
Industrial Marketing is also referred to as business to business, marketing or

business, marketing or organizational marketing. Industrial Marketing is the marketing
of products and services to business organization. Business organization include
manufacturing companies, educational institutions, hospital, distribution and dealers.

Classifications of industrials product
Industrial products and services are classified into three broad groups.
1.material and parts
These goods enter the product directly
 Raw material
 Manufactured items
 Components parts
 Subassemblies
2.capital items
A capital is a durable goods that is used in production of goods and services. These
goods are used in production process.
 1.light equipment
 2.installation or heavy equipment
 3.plant and building
3.supplies and services
The goods and services supports the operations
1. supplies :These are operating expenses maintenances supplies like fuels,

packaging materials etc.
2. services: companies need a wide range of services like legal, auditing,
advertising etc
features of industrials Marketing
1. The involvement in this type of marketing is done by highly professional and experts.
Even sometimes, more than two decision makers are required to make plans and
strategies in industrial marketing. The purchase plan is made and the decision makers
do their researches and comes on an appropriate decision.
2. The nature of this type of marketing is one-to-one. There is presence of only one
buyer and on seller and no mediator. It is moreover easy for the buyer as well as the
seller to identify each other and the seller finds the prospective customer for
themselves and their products. There is a face to face relation in this type of marketing.
3. The processing in industrial marketing is quite lengthy and complex. There are many
stages for doing a successful transaction. The steps include request for proposal,
request for tender, selection process, awarding of tender, contract negotiations and
finally the signing of final contract and delivery.

Services Marketing
Service marketing is marketing based on relationship and value. It may be used

to market a service or a product. With the increasing prominence of services in the
global economy, service marketing has become a subject that needs to be studied
separately. Marketing services is different from marketing goods because of the unique
characteristics of services namely, intangibility, heterogeneity, perishability and
inseparability.
Features of Services:
1. Intangibility:
A physical product is visible and concrete. Services are intangible. The service
cannot be touched or viewed, so it is difficult for clients to tell in advance what they will
be getting. For example, banks promote the sale of credit cards by emphasizing the
conveniences and advantages derived from possessing a credit card.
2. Inseparability:
Personal services cannot be separated from the individual. Services are created
and consumed simultaneously. The service is being produced at the same time that the
client is receiving it; for example, during an online search or a legal consultation.
Dentist, musicians, dancers, etc. create and offer services at the same time.
3. Heterogeneity (or variability):

Services involve people, and people are all different. There is a strong possibility
that the same enquiry would be answered slightly differently by different people (or
even by the same person at different times). It is important to minimize the differences
in performance (through training, standard setting and quality assurance). The quality
of services offered by firms can never be standardized.
4. Perishability:
Services have a high degree of perishability. Unused capacity cannot be stored for
future use. If services are not used today, it is lost forever.
5. Changing demand:
The demand for services has wide fluctuations and may be seasonal. Demand for
tourism is seasonal, other services such as demand for public transport, cricket field and
golf courses have fluctuations in demand.
6. Pricing of services:
Quality of services cannot be standardized. The pricing of services are usu ally
determined on the basis of demand and competition. For example, room rents in tourist

spots fluctuate as per demand and season and many of the service providers give off-
season discounts.
7. Direct channel:
Usually, services are directly provided to the customer. The customer goes directly to
the service provider to get services such as bank, hotel, doctor, and so on.
Global marketing
Global marketing involves planning, producing, placing, and promoting a

business’ products or services in the worldwide market.
Globalization means integrating the economy of a country with the Global/World

Economy. It means our economy is open to foreign direct investment by providing
facilities to foreign companies to invest in different fields of Indian industry/commerce.
MNCs have freedom to import foreign capital.
According to Warren J Keegan, “Globalization is the process of focusing the

resources i.e. people, money and physical assets and objectives of an organization on
global market opportunities and threats”
Features of Global marketing
The basic principles and techniques of marketing are the same in domestic and global
marketing. Global markets have special features which have to be considered while
preparing global marketing strategies.
1. Multiple currencies differing in stability and real value.
2. Diverse, changing policies and procedures.
3. Political factors play a major role.
4. Exchange controls and tariffs obstacles.
5. Payment and credit risks
6. Changing business environments.
7. Markets are diverse and fragmented.
8. Marketing research is expensive and many not give accurate information.
Global marketing 3 elements
a. Product

b. Price
c. Placement
d. Promotion
Advantages:
a. Economies of scale in production and distribution
b. Lower marketing costs
c. Power and scope
d. Consistency in brand image
e. Ability to leverage good ideas quickly and efficiently
f. Uniformity of marketing practices
g. Helps to establish relationships outside of the “political arena”
h. Helps to encourage ancillary industries to be set up to cater for the needs of the
global player
i. Benefits of e-Marketing over traditional marketing

Unit –II: Marketing Information System and Marketing Research; Consumer Behavior
and Buying Decision Process – Organization Buyer Behavior – Market Segmentation and
Targeting.
Imp question:
1.Marketing Research, Consumer Behavior and Buying Decision Process
2. Organization Buyer Behavior
3. Market Segmentation and Targeting.
Marketing Information System
The Marketing Information System refers to the systematic collection,

analysis, interpretation, storage and dissemination of the market information, from both
the internal and external sources, to the marketers on a regular, continuous basis.
Meaning:
Marketing information system is defined as a set of procedures and methods for the
regular and planed collection analysis and presentation of information in marketing
decisions
____K.Cox and Good

1.Source:
Consists of the physical activities and objects which are relevant to the enterprise, like
the retail outlet.
2. Data:
Observation, Measurement, and the recording of data from a source audit and
information system to record information on sales by product class.
3. Predications and Interferences:
Generation conclusions and predictions of the future. The decision maker

generalizes on brands and consumer preferences.
4.Values and choice
What are the goals, alternative and choices of the choices of the organization? What
should the firm do to counter competition reduce price, introduce new products new
products or invest in merchandising and store promotions
5.Action:Take a course of action.
Components of Marketing Information System
The Top four components of marketing information system are as follows:
1. Internal record
2. Marketing intelligence system
3. Marketing decision support system
4. Marketing research.
1. Internal record:
Marketing managers rely on internal reports related to customer orders, sales,
price levels, cost, inventory levels, receivable and payables. The heart of the internal
record system is the order-to-payment cycle. Customers send orders to the firms.
2. Marketing intelligence system:

The marketing intelligence system is a set of procedures and sources used by the
managers to obtain everyday information about marketing environment.

3. Marketing decision support system:

A growing number of organizations are using marketing decision support system to
help the managers in taking better decisions. It is a system supported by software and
hardware to gather information from business and environment.
4. Marketing research:
It acts as a tool for accurate decision-making in marketing. It is useful for studying
and solving different marketing problems. Marketing research techniques are used by
manufacturers, exporters, distributors and service organizations. Marketing research is
an applied knowledge. Hence, it provides alternative solutions to deal with a specific
problem.
Marketing Research
It is very important to understand at the outset that the, modern concept of

marketing revolves around the customer. Satisfaction of customer is the main aim of
marketing. For achieving this goal, marketing research is undertaken.
In fact, marketing management is nothing but marketing research. With

the expansion of business, marketing management becomes complex. It has to rely
heavily on marketing research for solving problems in the field of marketing.
Definitions
“ The systematic gathering, recording and analysis of data about problems relating
to the marketing of goods and services” —The American Marketing Association.
Importance of Marketing Research

The most important task of a marketer is to get the right product at the right
place with the right price to the right person. Besides, it was also necessary to go back
and find whether consumer is getting optimum satisfaction, so that consumer remains
loyal. These aspects made it imperative for the marketers to conduct marketing
research.
1. Identifying problem and opportunities in the market
2. Formulating market strategies.
3. Determining consumer needs and wants
4. For effective communication mix
5. Improving selling activities
6. For sales forecasting

7. To revitalize brands
8. To facilitate smooth introduction of new products
1. Identification and Defining the Problem:

The market research process begins with the identification “of a problem faced by the
company. The clear-cut statement of problem may not be possible at the very outset of
research process because often only the symptoms of the problems are apparent at
that stage.

2. Statement of Research Objectives:

After identifying and defining the problem with or without explanatory research, the
researcher must take a formal statement of research objectives. Such objectives may
be stated in qualitative or quantitative terms and expressed as research questions,
statement or hypothesis..
3. Planning the Research Design or Designing the Research Study:

After defining the research problem and deciding the objectives, the research design
must be developed. A research design is a master plan specifying the procedure for
collecting and analysing the needed information.
4. Planning the Sample:

Sampling involves procedures that use a small number of items or parts of the
‘population’ (total items) to make conclusion regarding the ‘population’. Important
questions in this regard are— who is to be sampled as a rightly representative lot?
Which is the target ‘population’? What should be the sample size—how large or how
small? How to select the various units to make up the sample?
5. Data Collection:
The collection of data relates to the gathering of facts to be used in solving the
problem. Hence, methods of market research are essentially methods of data collection.
Data can be secondary, i.e., collected from concerned reports, magazines and other
periodicals, especially written articles, government publications, company publications,
books, etc.
6. Data Processing and Analysis:

Once data have been collected, these have to be converted into a format that will
suggest answers to the initially identified and defined problem. Data processing begins
with the editing of data and its coding. Editing involves inspecting the data-collection
forms for omission, legibility, and consistency in classification.
7. Formulating Conclusion, Preparing and Presenting the Report:

The final stage in the marketing research process is that of interpreting the information
and drawing conclusion for use in managerial decision. The research report should
clearly and effectively communicate the research findings and need not include
complicated statement about the technical aspect of the study and research methods.
Consumer behaviour
Meaning and Definition:

Consumer behaviour is the study of how individual customers, groups or
organizations select, buy, use, and dispose ideas, goods, and services to satisfy their
needs and wants. It refers to the actions of the consumers in the marketplace and the
underlying motives for those actions.
Marketers expect that by understanding what causes the consumers to buy

particular goods and services, they will be able to determine—which products are
needed in the marketplace, which are obsolete, and how best to present the goods to
the consumers.
A) Cultural Factors:
Cultural factors have the broadest and deepest impact on consumer behaviour. This set
of factors mainly includes broad culture, sub-culture, and culture of social classes.
1. Broad Culture:
Culture is a powerful and dominant determinant of personal needs and wants. Every
culture has its values, customs, traditions, and beliefs, which determine needs,
preference, and overall behaviour.
2. Subcultures:
Each culture consists of smaller subcultures. Each subculture provides more specific
identification of members belong to it. Product and marketing programme should be
prepared in light of subcultures to tailor their needs.
3. Culture of Social Classes:

Social classes reflect differences in income, occupation, education, their roles in society,
and so on. Social classes differ in their dress, speech patterns, recreational preferences,
social status, value orientation, etc
(B) Social Factors:

Here, we examine the effect of social factors on consumer needs and preferences
(behaviour). Social factors affect consumer behaviour
1. Family:
Family is one of the most powerful social factors affecting consumer behaviour. This is
more significant where there is joint family system, in which children use to live with
family for longer time. Values, traditions, and preferences are transmitted from parents
to children inherently.
2. Reference Groups:
Philip Kotler states: “A person’s reference group consists of all the groups that have a
direct (face-to-face) or indirect influence on the person’s attitudes or behaviour.”
Groups having a direct influence on the person are called membership groups.
3. Roles and Statuses:

A person plays various roles in many groups throughout his life. He has to play different
roles in family, club, office, or social organisation.
4. Social Customs and Traditions:

Social customs, beliefs or traditions can be associated with religion, caste, or economic
aspects. Such customs determine needs and preference of products in different
occasions and, hence, affect consumer behavior.
5. Income Level:
Income affects needs and wants of consumers. Preference of the rich consumers and
the poor consumers differ notably. In case of quality, brand image, novelty, and costs .
(C) Personal Factors:

Along with cultural and social factors, personal factors also affect one’s buying decision.
Personal factors are related to the buyer himself.
i. Age and Stage in Life Cycle:

A man passes through various stages of his life cycle, such as infant, child, teenager,
young, adult, and old. Need and preference vary as one passes through different stages
of life cycle
ii. Occupation:
Buying and using pattern of consumer, to a large extent, is affected by a person’s
occupation. For example, industrialist, teacher, artist, scientist, manager, doctor,
supervisor, worker, trader, etc

iii. Economic Circumstances:

Product preference, frequency of buying, quality, and quantity are largely affected by
consumers’ economic circumstances. Economic circumstances consist of spendable
income, income stability.
iv. Life Style:

People with the same culture, social class, and occupation may differ in term of their life
style.“Life style is the person’s pattern of living in the world as expressed in the
person’s activities, interest, and opinions.”
v. Personality:
Personality is a distinguished set of physical and psychotically characteristics that lead
to relatively consistent and enduring response to one’s environment. Personality
characteristics, such as individualism, difference, self-confidence, courage, firmness,
sociability, mental balance, patience, etc.,
vi. Self-concept:
It is also referred as self-image. It is what person believes of him. There can be actual
self-concept, how he views himself; ideal self-concept, how he would like to view
himself; and others-self-concept, how he thinks other see him.
vii. Gender:
Gender or sex affects buying behaviour. Some products are male-dominated while some
are female-dominated. Male customers react to those products which are closely suit
their needs and styles. Cosmetics products are more closely related to female
customers than male. Marketer must be aware of gender-effect on buying behaviour of
the market.
viii. Education:
Education makes the difference. Highly educated, moderately educated, less educated,
and illiterates differ considerably in terms of their needs and preferences. In the same
way, stage of education (like primary, secondary, college, etc.) affects buyers’
behaviour.
D) Psychological Factors:
Buying behaviour is influenced by several psychological factors. The dominants among
them include motivation, perception, learning, and beliefs and attitudes. It is difficult to
measure the impact of psychological factors as they are internal, but are much powerful
to control persons’ buying choice. Manager must try to understand probable role the
factors play in making buying decisions.

i. Motivation:
It has a significant impact on consumer behaviour. Motivation is closely related to
human needs. One has many needs at a given time. Some needs are biogenic or
physiological in nature arising from physiological states of tension, such as hunger,
thirst, or discomfort.
ii. Perception:
Person’s motivation to act depends on his perception of situation. It is one of the
strongest factors affecting behaviour. The stimuli – product, advertising appeal,
incentives, or anything .
iii. Learning:
Most human behaviour is learned. Learning is basically concerned with experience of an
individual. Learning can be defined as: Relatively permanent changes arising from
experience
iv. Beliefs:
People hold beliefs about company, company’s goods or services, and they act
accordingly. Beliefs of the buyers affect product and brand image.
v. Attitudes:
An attitude is a person’s enduring favourable or unfavorable evaluations, emotional
feelings, and action tendencies toward some object or idea. These emotional feelings
are usually evaluative in nature. People hold attitudes toward almost everything, such
as religion, politics, clothes, music, food, product, company, and so on.
Buying decision process
Buyer decision process (or customer buying process) helps markets to identify
how consumers complete the journey from knowing about a product to making the
purchase decision.
The buyer decision process will enable to set a marketing plan that convinces
them to purchase the product or service for fulfilling the buyer’s or consumer’s problem.
Consumers go through 5 stages in taking the decision to purchase any goods or
services.

1. Need or Problem Recognition
During need or problem recognition, the consumer recognizes a problem or need that
could be satisfied by a product or service in the market.
At this stage, the consumer recognizes a need or problem. The buyer feels a
difference between his or her actual state and some desired state.
2. Information Search
Once the need is recognized, the consumer is aroused to seek more information
and moves into the information search stage.
After the recognition of needs, the consumers try to find goods for satisfying such
needs. They search for information about the goods they want.
3. Evaluation of Alternatives
With the information in hand, the consumer proceeds to alternative evaluation,

during which the information is used to evaluate” brands in the choice set.
Evaluation of alternatives is the third stage of the buying process. Various points of
information collected from different sources are used in evaluating different alternatives
and their attractiveness.
4. Purchase Decision
After the alternatives have been evaluated, consumers take the decision to
purchase products and services. They decide to buy the best brand.But their decision is
influenced by others’ attitudes and situational factors.

5. Post-Purchase Evaluation
In the final stage of the buyer decision process, postpurchase behavior, the
consumer takes action based on satisfaction or dissatisfaction.
In this stage, the consumer determines if they are satisfied or dissatisfied with the
purchasing outcome. Here is where cognitive dissonance occurs, “Did I make the right
decision.”
Organization Buyer Behavior
Organization buying is the decision-making process by which formal

organizations establish the need for purchased products and services and
identify,evaluate,and choose among alternative brands and suppliers.
Characteristics
1. Consumer market is a huge market in millions of consumers Where organizational

buyers are limited in number for most of the products.
2.The purchases are in large quantities.
3.Close relationship and service are required.
4.Demand is derived from the production and sales of buyers.
5.Demand fluctuation are high as purchase from business buyers magnity fluctuation in
demand for the their products.
6.The organizational buyers are trained professionals in purchasing.
7.Several persons in organization influence purchase.
8.Lot of buying occurs in direct dealing with manufacturers.

Factors influencing organizational Behaviour:
Industrial buyers are subjects to many influences When their buying decisions. These
influences can be classified ino four main groups. They are:
Environmen
t factors
Indivdual Organization
factors factors
Interpersonal
factors
1.Environment factors:
Expected demand for the product that the buying organization is

selling, expected shortages for the item ,expected changes in technology related to the
item etc,are the environment factors that will have an effect.
2.Organization factors:
Changes in purchasing department organization like centralized

purchasing, decentralized purchasing and changes in purchasing practices like long

term contracts, relationship purchasing, Zero-based pricing, vendor-performance

evaluation are the organization factors of importance to marketers.
3.Interpersonal Factors:
The buying Centre usually includes several participants with different statuses,
authority, empathy and persuasiveness. The industrial marketer is not likely to know
what kind of group dynamics will take place during the buying process, and information
about personalities involved is useful.
4.Indivdual factors:
Each participants in the buying process brings in personal motives, perception and
preferences. These affected by personal characteristics like age, gender, education
styles, attitudes of the members of the buying Centre.
Market segmentation
Market segmentation is the process of dividing a market of potential

customers into groups, or segments, based on different characteristics. The segments
created are composed of consumers who will respond similarly to marketing strategies
and who share traits such as similar interests, needs, or locations.
Definition
Market segmentation is defined as” heterogeneous markets into homogeneous” that are
view to meet the specifi requirements of each customer group. __ William J Stanson
Basic of segementation
The proess begins with the basis of segmentation a product specifi factors that
reflects differences in customers requirement or responsiveness to marketing variables.
Segementation mainly divided into two types they are
 Consumer markets
 Industrial markets

Geographic Segmentation
Geographic segmentation is the simplest type of market segmentation. It

categorizes customers based on geographic borders.
Geographic Market Segmentation Examples
 ZIP code
 City
 Country
 Radius around a certain location
 Climate
 Urban or rural
Geographic segmentation can refer to a defined geographic boundary

(such as a city or ZIP code) or type of area (such as the size of city or type of
climate).
Demographic Segmentation
Demographic segmentation is one of the most popular and commonly used

types of market segmentation. It refers to statistical data about a group of people.
Demographic Market Segmentation Examples
 Age
 Gender
 Income
 Location
 Family Situation
 Annual Income
 Education

 Ethnicity
Because demographic information is statistical and factual, it is usually

relatively easy to uncover using various sites for market research.
Psychographic Segmentation
Psychographic segmentation categorizes audiences and customers by factors

that relate to their personalities and characteristics.
Psychographic Market Segmentation Examples
 Personality traits
 Values
 Attitudes
 Interests
 Lifestyles
 Psychological influences
 Subconscious and conscious beliefs
 Motivations
 Priorities
Psychographic segmentation factors are slightly more difficult to identify than

demographics because they are subjective. They are not data-focused and require
research to uncover and understand.
Behavioral Segmentation
While demographic and psychographic segmentation focus on who a

customer is, behavioral segmentation focuses on how the customer acts.
Behavioral Market Segmentation Examples
 Purchasing habits
 Spending habits
 User status
 Brand interactions
Behavioral segmentation requires you to know about your customer’s actions.

These activities may relate to how a customer interacts with your brand or to other
activities that happen away from your brand.
Industrial Markets
1.Type of buying situation:

It is also divided into mainly 3 types they are shown below
 New buy
 Modified buy
 Straight buy
2.Types of customers:
It consisting of so many factors they are
 Agriculture
 Banking
 Mining
 Construction
 Transportation
 Insurance
3.Customized:
It consisting of two factors they are
 Major customers
 Minor customers
Targeting.
A market is segmented using age, gender, income, education, lifecycle, social

status, social class and many more. After identifying segmentation few segments are
selected to reach target customers. This process of evaluating and selecting market
segments is known as market targeting.
Criteria for targeting:
 Current segment size and growth potential

 Potential competition
 Comparability and feasibility
Targeting strategies:
Having segmented the market the firm now has top choose its marketing strategies.
They are strategies to choose from:
1. Standardization
Hare the firm offers same product to different market segments. It uses the same
communication, pricing and distribution strategies.

Ex: soft drinks like coke and Pepsi what retain the same flavor advertising and packing
across segments in different geographical areas.
2. Concerned
Targeting devising a market mix to reach a single segment of the global mix we
can focus on markets mix tools
Select only one market segment and target it with a single brand
Ex : Mont blanc pens
3. Differentiation
Here the firm differentiates its products to suit different needs and expectations.
Ex:The airlines differentiate or hotels differentiate its products into First class, second
class and economy class. Each of these classes is targeted at a specific Segment whose
needs are different from the other.

Unit – III: Development of Marketing Offerings Strategy – New Product Development–

Product line and Decisions–Product-mix–Product Differentiation – Product Life Cycle
Management - Brand Management - Packaging.
IMP QUESTION:
1.New Product Development
2. Product line and Decisions–Product-mix–Product Differentiation
3. Product Life Cycle Management
Development of Marketing Offerings Strategy
The market offering strategies include:
 New product development

 Characteristics of the product
 Levels of the product
 Classification of the products
 Differentiation of the product
 How can a company build and manage its product mix and product line?
 Product life cycle management
 Brand management
 How can companies use packaging, labeling, warranties and guarantees?
New Product Development
New product development (NPD) is the process of bringing a new

product to the marketplace. ... products that your business has never made or sold
before but have been taken to market by others. product innovations created and
brought to the market for the first time.
 New product development is the complete process of bringing a new product or

service to market.
 New product development may be done to develop an item to complete with a
particular product or may be done to improve an already established product.
Examples: This type of development is considered the preliminary step in product or

service development and involves a number of steps that must be completed before the
product can be introduces to the market.
 Fair &lovely.
 Bajaj pulsar.
 Samsung Mobile.
The last five years of the 1990’s saw the introduction of a large number of
new products and services in the Indian market. Most of these were in collaboration
with the MNCS, In some cases the Indian companies got the the license to market MNC
brands in India. Many global brands were also launched in the indian market.
Factors contributing to the new product introduction:
Several factors contribute to new product development, while most are related to
external environment variables, the most important internal product development is the
surplus capacity.
1.Changing Customer preference:
The driving force is new product development is changing customer life

styles,leading towards a change in the customers preferences and expectations. The
changing role of women,growth in the nuclear and stand alone families, increase in
education and income levels, increase in electronic media towards changing customers
expectations and preferences.
2.Technological change:
Another factors is the change in technology in the industry and to

market.Ex: Applications of clups technology to match making industry gave us a Quartz
watch, This change has now made it possible to send text and multi-media message on
the cell phone which is today more a PDA (Personal Digital Assistant)than a phone
3.Government Policies:
Government policies can also encourage or foster new product processes.
Ex:A Government policy encouraging competition and entrepreneurship can motive

firms to launch new products. Hindustan Motors contessa and premlers 118NE were a
results of government policy encouraging competition in automobile sector.

New product development process: The process may vary from one firm to the
other but generally, one can see the stages as below:
1. Idea Generation:
The new product development

starts with the search and
generation of ideas which may arise
from various sources like company’s
R&D department, market and
consumers trends, competitors,
focus groups, employees, sales
people and such other.
2. Idea Screening:
At this stage, the generated ideas

are screened down on the basis of
their feasibility and viability, only practical and workable ideas are developed. The
purpose of screening is to have a critical evaluation of product ideas and drop the poor
ideas.
3. Concept Development and Testing:
The company may have considered the idea to be feasible, but is has to be tested
with the target audience. Here the product idea is converted into meaningful consumer
item and presented to appropriate target consumers to know their reactions. If the
reaction is positive, the company moves to next stage.
4. Market Strategy Development:
After successful concept testing, the marketing manager will develop a preliminary
marketing strategy for introducing the product in the market. The marketing strategy
will highlight the segmentation, targeting and positioning strategy.
5. Business Analysis:
Business analysis is the study of economic feasibility of the new product i.e. whether
the product will be financially worthwhile in long run or not. This stage estimates the
expected future profitability of the new product, i.e. what cash flow product can
generate, what will be the cost of production, what will be the expected life of the
product, share of market product may get etc.
6. Product Development:
Once the product is declared economically feasible, the company gives the product
its physical shape. This stage involves huge investments to be made, as compared to
the pervious stages. The physical product as it would appear is prepared so that it can
be tested.
7. Test Marketing:
Test marketing is a stage where the new product is tested with a particular target
market, to find out whether it is acceptable to the consumers or not. The expectation of
the consumers from the product is tested here. Any improvement or modification
required can be taken care of. Test marketing, thus, help in pretesting of the product
and the marketing plan, before it is launched in the market.
8. Commercialization:
Successful test marketing gives way to actual introduction of the product in the
market place. Here the company has to consider certain factors like when to launch the
product, where and how the product will be launched, which market and which
consumers to target etc. Market entry timing is also very important.
Characteristics of the product:
The characteristics of a product are very different to the characteristics of services.

They are termed as follows:
 Tangible
 Heterogeneity
 Separable
 Perishable
levels of the product :
In planning its market offerings the marketer needs to address 5 product

levels.Each levels adds more customer value and the 5 constitute a customer value
hierarchy.

1. Core Product
This is the basic product and the focus is on the purpose for which the product is
intended. For example, a warm coat will protect you from the cold and the rain. The
more important benefits the product provides, the more that customers need the
product.
2. Generic Product
This represents all the qualities of the product. For a warm coat this is about fit,
material, rain repellent ability, high-quality fasteners, etc.
3. Expected Product
This is about all aspects the consumer expects to get when they purchase a product.
That coat should be really warm and protect from the weather and the wind and be
comfortable when riding a bicycle.
4. Augmented Product
The Augmented Product refers to all additional factors which sets the product apart
from that of the competition. And this particularly involves brand identity and image. Is
that warm coat in style.
5. Potential Product
This is about augmentations and transformations that the product may undergo in the
future. For example, a warm coat that is made of a fabric that is as thin as paper and
therefore light as a feather that allows rain to automatically slide down.
Product line and Decisions

A product line is a group of related products all marketed under a single brand
name that is sold by the same company. Companies sell multiple product lines under
their various brand names, seeking to distinguish them from each other for better
usability for consumers.
Companies often expand their offerings by adding to existing product lines

because consumers are more likely to purchase products from brands with which they
are already familiar.
 Product Line Length

 Expanding the product line
Product Line Length

The primary one of the product line decisions is the product line length. This
means nothing else than the number of items in a product line. Certainly, the product
line is too short if the company could increase profits by adding items to it.
Expanding the product line
Expanding the product line is the second one of the product line decisions. A
company can expand its product line in two ways: Line Filling and Line Stretching
Product mix
A product is an item produced or procured by the business to satisfy the needs of

the customer. It is the actual item which is held for sale in the market. A company
usually sells different types of products. For e.g. Coca-cola has around 3500+ product
brands in its portfolio. These different product brands are also known as product lines.
Combination of all these product lines constitutes the product mix.
Product mix, also known as product assortment, is the total number of product
lines that a company offers to its customers. The product lines may range from one to
many and the company may have many products under the same product line as well.
All of these product lines when grouped together form the product mix of the company.
The product mix is a subset of the marketing mix and is an important part of

the business model of a company. The product mix has the following dimensions
Width
The width of the mix refers to the number of product lines the company has to
offer.

For e.g., If a company produce only soft drinks and juices, this means its mix is two
products wide. Coca-Cola deals in juices, soft drinks, and mineral water and hence the
product mix of Coca-Cola is three products wide.
Length
Length of the product mix refers to the total number of products in the mix. That
is if a company has 5 product lines and 10 products each under those product lines,
the length of the mix will be 50 [5 x 10].
Depth
The depth of the product mix refers to the total number of products within a product
line. There can be variations in the products of the same product line. For example –
Colgate has different variants under the same product line like Colgate advanced,
Colgate active salt, etc.
Consistency
Product mix consistency refers to how closely products are linked to each other.
Less the variation among products more is the consistency. For example, a company
dealing in just dairy products has more consistency than a company dealing in all types
of electronics.
Product Differentiation
Product differentiation is a process used by businesses to distinguish a product

or service from other similar ones available in the market.
The goal of this tactic is to help businesses develop a competitive advantage and
define compelling unique selling propositions (USPs) that set their product apart from
competitors. Organizations with multiple products in their portfolio may use
differentiation to separate their various products from one another and prevent
cannibalization.
Product Differentiation Important
In many industries, the barrier to entry has dropped significantly in recent years.
As a side effect, these industries have seen substantial increases in competitive
products. In increasingly crowded competitive landscapes, differentiation is a critical
prerequisite for a product’s survival.
What does your product or service do/accomplish/offer that the competition does
not? Product differentiation helps your organization answer this question and focus on
the unique value a product brings to its users. If no effort is put into a differentiation
strategy, products risk blending in with a sea of competitors and never getting the
market hold they need to keep going.
Types of Product Differentiation
There are several different factors that can differentiate a product, however, there
are three main categories of product differentiation. Those include horizontal
differentiation, vertical differentiation, and mixed differentiation.
Horizontal Differentiation
Horizontal differentiation refers to any type of differentiation that is not associated with

the product’s quality or price point. These products offer the same thing at the same
price point. When making decisions regarding horizontally differentiated products, it
often boils down to the customer’s personal preference.
Examples of Horizontal Differentiation: Pepsi vs Coca Cola, bottled water brands,

types of dish soap.
Vertical Differentiation
In contrast to horizontal differentiation, vertically differentiated products are extremely

dependent on price. With vertically differentiated products, the price points and marks
of quality are different. And, there is a general understanding that if all the options
were the same price, there would be a clear winner for “the best.”
Examples of Vertical Differentiation: Branded products vs. generics, A basic black

shirt from Hanes vs. a basic black shirt from a top designer, the vehicle makes.
Mixed Differentiation
Also called “simple differentiation,” mixed differentiation refers to differentiation based

on a combination of factors. Often, this type of differentiation gets lumped in with
horizontal differentiation.
Examples of Mixed Differentiation: Vehicles of the same class and similar price

points from two different manufacturers.

Factors of Product Differentiation
Now that we’ve looked at the categories of product differentiation, let’s look at the
specific factors that can differentiate products.
1) Form: A product can be differentiated based on the form of the product. The
physical structure, size and shape of the product can be used to differentiate it from
others. Take an example of any medicine..
2) Features: Any additional features being offered on top of the product becomes a plus
point for the customer. The best example for differentiation based on features is Mobile
phones, handsets or any technology product..
3.Quality: How does the quality, reliability, and ruggedness of your product compare
to others on the market.
4) Durability: In the tough and competitive laptop market, there are some laptops
which stand out. These are the ones made for mountaineers and
harsh environment researcher. Their cost is very high as compared to normal laptops.
But by producing such a product, Kitchen equipment’s, vehicles.
5) Reliability:Buyers normally will pay a premium for more reliable produces.

Reliability is a measure of probability that a product will not malfunction or fail within a
specified time period.
6) Style :Style describes the products look and feel to the buyers, Car buyers pay a
premium for designer because of their extra ordinary look. Style has the advantage of
creating distinctive that is difficult to copy.
Product Life Cycle Management
Product lifecycle management (PLM) refers to the handling of a good as it moves

through the typical stages of its product life: development and introduction, growth,
maturity/stability, and decline. This handling involves both the manufacturing of the
good and the marketing of it. The concept of product life cycle helps inform business
decision-making, from pricing and promotion to expansion or cost-cutting.

Products, like people, have life cycles. This concept is used by management and by
marketing professionals as a factor in deciding when it is appropriate to increase
advertising, reduce prices, expand to new markets, or redesign packaging.
Importance of product life cycle
It includes various points to determine the marketing strategies related to the

particular product. The Importance are:-
1. It works as a forecasting tool,
2. It works as a planning tool,
3. It works as a control tool,
4. It provides for marketing programs,
5. It provides an estimate for profits,
6. It helps in the development of new products.
Stages of the Product Life Cycle

Generally, there are four stages to the product life cycle, from the product's
development to its decline in value and eventual retirement from the market.
1. Introduction stage
Once a product has been developed, the first stage is its introduction stage. In this
stage, the product is being released into the market. When a new product is released, it

is often a high-stakes time in the product's life cycle - although it does not necessarily
make or break the product's eventual success.
During the introduction stage, marketing and promotion are at a high - and the
company often invests the most in promoting the product and getting it into the hands
of consumers. This is perhaps best showcased in Apple's ( famous launch presentations,
which highlight the new features of their newly (or soon to be released) products.
2. Growth stage
By the growth stage, consumers are already taking to the product and increasingly
buying it. The product concept is proven and is becoming more popular - and sales are
increasing.
Other companies become aware of the product and its space in the market, which is
beginning to draw attention and increasingly pull in revenue. If competition for the
product is especially high, the company may still heavily invest in advertising and
promotion of the product to beat out competitors. As a result of the product growing,
the market itself tends to expand. The product in the growth stage is typically tweaked
to improve functions and features.
3. Maturity stage
When a product reaches maturity, its sales tend to slow or even stop - signaling a
largely saturated market. At this point, sales can even start to drop. Pricing at this stage
can tend to get competitive, signaling margin shrinking as prices begin falling due to
the weight of outside pressures like competition or lower demand. Marketing at this
point is targeted at fending off competition, and companies will often develop new or
altered products to reach different market segments.
Given the highly saturated market, it is typically in the maturity stage of a product that
less successful competitors are pushed out of competition - often called the "shake-out
point."
The maturity stage may last a long time or a short time depending on the product. For
some brands, the maturity stage is very drawn out, like Coca-Cola .
4. Decline stage

Although companies will generally attempt to keep the product alive in the maturity
stage as long as possible, decline for every product is inevitable.
In the decline stage, product sales drop significantly and consumer behavior changes
as there is less demand for the product. The company's product loses more and more
market share, and competition tends to cause sales to deteriorate.
Marketing in the decline stage is often minimal or targeted at already loyal customers,
and prices are reduced.
Brand management
A brand is a name,term,sign.symbol or design or a combination of them, which is

intended to identify to identify the goals or services of one seller or another seller and
differentiate them form other mamfactures.
The American Marketing Association defines brand as “a name, term, design,

symbol,or any other feature that identifies one sellers’s good or service as distinct from
those of other sellers. A brand may identify one item,a family of items,or all items of
that selles.”
 Brand equity
 Brand loyalty
Brand management is a function of marketing that uses techniques to increase

the perceived value of a product line or brand over time.
Brand management is a function of marketing that uses techniques to increase

the perceived value of a product line or brand over time. Effective brand management
enables the price of products to go up and builds loyal customers through positive
brand associations and images or a strong awareness of the brand.

Types of brands
1.persoanl brand
The personal brand attached with individual personality. It explains the character of
the particular popular celebrity.
Ex: Abdul kalam
2.Individual brand
Individual branding also called multi branding, This facilitates the position of each
product by allowing a firm to position its brands differently.
3.Family branding
It contrasts with individual product branding. In which each product in a portfolio is

given a unique brand name and identify.

Advantages of Brand management
 Easy to advertise
 Easy to identify the products
 Creation of separate markets
 Easy to expand the product mix
 Impact market value
Packaging
Packaging may be defined as the general group of activities in the planning of a

product. These activities concentrate on formulating a design of the package and
producing an appropriate and attractive container or wrapper for a product. The
container itself can act as a forceful though silent and colorful salesman at the point of
purchase or an effective medium of advertisement encouraging impulse buying.
Many a time, package design itself can act as a registered brand.
Almost every article has to be packed to make a trip to the ultimate consumer. But
packing is merely a physical action and provides a handling convenience, e.g., wheat,
cotton, etc. Packing is necessary to prevent flowing out of such liquids as milk, drinks,
etc. It is essential to maintain freshness and quality, e.g., ghee, sauce, etc. It can
prevent the danger of adulteration, e.g., butter, cheese, spices, edible oil, etc.
Definition
Kotler defines packaging as "all the activities of designing and producing the
container for a product." Packaging can be defined as the wrapping material around a
consumer item that serves to contain, identify, describe, protect, display, promote, and
otherwise make the product marketable and keep it clean.
Importance of packaging in marketing
 Creating customer satisfaction

 Protecting the contents inside
 Communicating the product attributes
 Helping in product handing
 Identifying brand name and seller
 Promoting the product with attractive design and colours
 Keeping cost down

 Information on the ingredients of the products

 Offering customer convenience
Following are the functions of packaging:

a. Containment:
Packaging performs the basic functions of providing a container for a material. For
example- consumer durables like televisions, refrigerators, washing machines, etc. are
packed in cardboard cartons, vegetables, fruits and milk are packed in plastic cover.
Beer and Milkmaid is packed in cans which are easy to open.
b. Protection:
Goods are to be transported from the place of manufacture to the ultimate
consumer. This involves several types of risk. Packaging helps protect the goods from
damage during transport and warehousing. It also removes the hindrance of risk by
keeping goods safe and free from spoilage. Thus packaging helps make the
transporting of goods easier and safer.
c. Identification:
Packaging helps to distinguish from one brand to another. It is mandatory that
packages contain the name of the product, the maker, the ingredients, date of
manufacture, expiry date, etc.
d. Convenience:
Wholesalers, retailers, middlemen, warehouse keepers and consumers demand
convenience in packaging i.e. they should be light-weight and conveniently packed so
as to be carried by hand. For example- Amul
e. Attractiveness:
Packaging enhances the appearance of the product. The design, colour, label,
printed matter, picture etc. all add value to the packaging. For example- chocolates are
always packed in attractive packets and displayed to attract the target group.
f. Promotional Appeal:
Products must sell themselves. This is possible, if they are placed in more
attractive and eye – appealing packages. This has resulted in a number of innovations
which appeal to the consumers. For example- Nescafe, Boost, Horlicks, etc. are now
available in attractive glass jars.
g. Re-Use:
Nowadays several companies aim at providing “re – useable container”, once the
product have been completely used. For example- health drinks like Boost, Horlicks,
Nescafe, Pickles, Jams, etc. are sold in glass bottles that can be used for storing
provisions in the kitchen. If not, they can be sold as scrap.
h. Economy:

Packaging should not create a financial burden for the company. Consumers
prefer economical packaging options, because the packaging cost is included in the cost
price. Hence, the packaging should be made attractive, appealing and economical.

Unit – IV: Pricing Strategies and Programs; Setting the Price – Adapting the Price –
Initiating Response to Price Changes - Delivering Value: Designing and Managing Value
Networks – Channels of Distribution.
IMP QUESTION:
1.Setting the Price – Adapting the Price
2. Initiating Response to Price Changes
3. Designing and Managing Value Networks – Channels of Distribution.
Pricing Strategies and Programs
Price
Price is the sum of all values that consumers exchange for the benefits of having or
having or using the product or service, Price is the only element in the marketing mix
that produces revenue.
Quantity of money received by the seller
Price= ______________________________________
Quantity of goods &services received by the buyer
A pricing strategy is a model or method used to establish the best price for a
product or service. Pricing strategies help you choose prices that maximize profits and
shareholder value while considering consumer and market demand.
Pricing strategies take into account many of your business factors, like revenue
goals, marketing objectives, target audience, brand positioning, and product attributes.
They’re also influenced by external factors like consumer demand, competitor pricing,
and overall market and economic trends.
Pricing strategies
 Competition-Based Pricing
 Cost-Plus Pricing
 Dynamic Pricing
 Ferrmium Pricing
 High-Low Pricing

 Hourly Pricing
 Skimming Pricing
 Penetration Pricing
 Premium Pricing
 Project-Based Pricing
 Value-Based Pricing
Competition-Based Pricing Strategy
Competition-based pricing is also known as competitive pricing or competitor-

based pricing. This pricing strategy focuses on the existing market rate (or going rate)
for a company’s product or service; it doesn’t take into account the cost of their product
or consumer demand.
Cost-Plus Pricing Strategy
A cost-plus pricing strategy focuses solely on the cost of producing your product or

service, or your COGS. It’s also known as markup pricing since businesses who use this
strategy “mark up” their products based on how much they’d like to profit.
Dynamic Pricing Strategy
Dynamic pricing is also known as surge pricing, demand pricing, or time-based

pricing. It’s a flexible pricing strategy where prices fluctuate based on market and
customer demand.
Fermium Pricing Strategy
A combination of the words “free” and “premium,” fermium pricing is when

companies offer a basic version of their product hoping that users will eventually pay to
upgrade or access more features.
High-Low Pricing Strategy
A high-low pricing strategy is when a company initially sells a product at a high

price but lowers that price when the product drops in novelty or relevance. Discounts,
clearance sections, and year-end sales are examples of high-low pricing in action.
Skimming Pricing Strategy
A skimming pricing strategy is when companies charge the highest possible price
for a new product and then lower the price over time as the product becomes less and
less popular. Skimming is different than high-low pricing in that prices are lowered
gradually over time.
Penetration Pricing Strategy

Contrasted with skimming pricing, a penetration pricing strategy is when

companies enter the market with an extremely low price, effectively drawing attention
(and revenue) away from higher-priced competitors. Penetration pricing isn’t
sustainable in the long run, however, and is typically applied for a short time.
Premium Pricing Strategy
Also known as premium pricing and luxury pricing, a prestige pricing strategy is
when companies price their products high to present the image that their products are
high-value, luxury, or premium. Prestige pricing focuses on the perceived value of a
product rather than the actual value or production cost.
Project-Based Pricing Strategy
A project-based pricing strategy is the opposite of hourly pricing — this approach

charges a flat fee per project instead of a direct exchange of money for time. It is also
used by consultants, freelancers, contractors, and other individuals or laborers who
provide business services.
Value-Based Pricing Strategy
A value-based pricing strategy is when companies price their products or services

based on what the customer is willing to pay. Even if they can charge more for a
product, they decide to set their prices based on customer interest and data.
Selecting the Pricing
A Firm must set a price for the first time when it develops a new product, when
it introduces its regular product into new distribution channels or geographical area,
and when it enters bids on new contract work, The firm must decide where to position
its product on quality and price.
Procedure for setting the price:
Now we describe the 6 step procedure:

1.Selecting the Pricing Objective

The company first decides where it wants to position its market offering. The
clearer a firm’s objectives, the easier it is to set price. Five major objectives are:
 Survival
 Maximum current profit
 Maximum market share
 Maximum market skimming
 Product-quality leadership
2.Determining Demand
Each price will lead to a different level of demand and have a different impact on a
company’s marketing objectives. The normally inverse relationship between price and
demand is captured in a demand curve. The higher the price, the lower the demand.
 Surveys
 Price experiments
 Statistical analysis
Inelastic: If demand hardly changes with a small change in price it is inelastic

demand.
Elastic: If demand changes considerably, demand is elastic demand.

3.Estimating Costs
For determination the price of Product Company should estimate the cost of
product.
Variable and Fixed Cost :
Price must cover variable & fixed costs and as production increases costs may
decrease. The firm gains experience, obtains raw materials at lower prices, etc., so
costs should be estimated at different production levels.
Differential Cost in Differential Market :
Firms must also analyze activity-based cost accounting (ABC) instead of standard
cost accounting. ABC takes into account the costs of serving different retailers as the
needs of differ from retailer to retailer.
Target Costing :
Also the firm may attempt Target Costing (TG). TG is when a firm estimates a new
product’s desired functions & determines the price that it could be sold at. From this
price the desired profit margin is calculated
4. Analyzing Competitors’ Costs, Prices, and Offers

The firm should benchmark its price against competitors, learn about the quality of
competitors offering, & learn about competitor’s costs.
5.Selecting a Pricing Method

various pricing methods are available to give various alternatives for pricing.
 Markup Pricing: a 20% markup

 Target Return Pricing: this is based on ROI
 Perceived-Value Pricing: buyers perception of the product is key, not cost so
what is the product worth to consumer sets the price.
 Value Pricing: more for less philosophy
 Going Rate Pricing: charge what everyone else is
 Auction-Type Pricing: companies bid prices to get a job
6.Selecting the Final Price

Pricing methods narrow the range from which the company must select its final price.
In selecting that price, the company must consider additional factors.
 Impact of other marketing activities

 Company pricing policies
 Gain-and-risk-sharing pricing
 Impact of price on other parties
Adapting the Price
Price adaptation is the ability of a business to changes its pricing models to suit

different geographic areas, consumer demands and prevailing incomes. The more
adaptability a business has the better chance it has of appealing to more consumers.
Companies usually do not set a single price but rather a pricing structure that
reflects variations in geographical demand and costs, market segmentation
requirements, purchase timing, order levels,delivery,frequenty,guarnatees,service
contracts and other factors.
Adapting the price
1. Geographical pricing
2. Price discounts and allowances
3. Promotional pricing
4. Differentiated pricing

1. Geographical pricing
 Adjusting an item sales price based on the buyer’s location.

 Sometimes the difference in sales price is based on the cost to ship the item to
that location re what the people are willing to pay.
 Geographic pricing relates to how a business chooses to price its products with in
different regions.
 In selecting its product prices for different regions, a business also adapts its
marketing strategies to fit those pricing models
2. price discounts and allowances
Most of the companies will adjust their price list and give discounts for early
payments volume purchase and off-season buying.
 Cash discounts
 Quantity discount
 Functional discount
 Seasonal discount
 allowance
3. promotional pricing
Companies can use several pricing techniques to stimulate early purchase:
 Loss-leader pricing
 Special-event pricing
 Cash Rebates
 Low –interest financing
 Psychological discounting
These are often Zero-sum game. If they work competitors copy, otherwise they
waste the money that could have been put into marketing tools.
4. Differentiated pricing
Companies often adjust their bases price to accommodate differences in

customers, products locations and so on
 Customer segment pricing

 Product form pricing
 Image pricing
 Channel pricing
 Location pricing

 Time pricing
Initiating Response to Price Changes
Companies are bound to face market situations where they are required to
initiate price changes. It means, either they are to cut the prices or increase the present
prices to survive, maintain status quo or further growth. Initiating price changes
involves two possibilities of price cuts and price increases.
1.Initiating Price Cuts:

There are good many circumstances where a firm is to resort to price cuts.
A price-cuttind strategy involves possible traps:
1. Low-quality trap:
Consumers will assume that quality is low.
2. Fragile-market share trap:
A low price buys market share but not market loyalty. The same customers will shift to
any lower- priced firm that comes along.
1.Initiating Price Increases:

Price increase is a source of maximizing the profit or maintaining it if done carefully.
Say a company earns 3 percent profit on sales, and one percent price increase will
increase profits by 33 per cent if sales volume is not affected.
The price can be increased by at least four ways:

 Delayed quotation pricing
 Unbundling
 Escalator clauses
 Reduction of discounts
2.Reactions to Price Changes:
Naturally any price change provokes response or reaction from customers, competitors,
distributors and suppliers and even the government. Here, we shall touch only the
reactions of consumers and competitors.
Customer Reactions:
Consumers are more interested in knowing the cause or causes of price change.
1. The item or product is about to be replaced by a new model.
2. The item is faulty and it is not selling well.
3. The firm’s financial position is badly affected.

4. The price will come down further.
5. The quality has been reduced.
3.Competitor Reactions:
Competitors are most likely to react when the number of firms is few, the product is
homogeneous, and buyers are highly informed. Competitor reactions can be a special
problem when they have a strong value proposition. The price hike them to take steps
based on objectives of such price hike where they will resort to advertising and product
improving efforts.
1. That the company’s trying to steal the market
2. That the company is doing poorly and trying to boost its sales
3. That company wants the whole industry to reduce prices to stimulate total demand.
Delivering Value
“A satisfied customer is the best business strategy of all.” Delivering value to

customers is important to managers, leaders, and entrepreneurs alike. There are
various interpretations of what is meant by customer value.
 Successful value creation needs successful value delivery.

 Holistic marketers are increasingly taking a value network view of their
businesses.
 Instead of limiting their focus to their immediate suppliers, distributors and
customers, they are examining the whole supply chain that links raw materials,
components and manufactured goods and shows how they move toward the
final consumers.
 The companies are looking at the customer segments and how company
resources can best be organized to meet needs.
 Failure to coordinate the value network properly can have direct consequences.
Companies today must build and manage a continuously evolving value network.
Designing and Managing Value Networks and channels
Marketing Channels and Value Networks
Marketing channel system is the particular set of interdependent organization

involved in the process of making a product or service a available for use or
consumption.

Value network
A value network is a system of a partnership and alliance that a firm creates to

source, augment and deliver its offerings. A value network includes firm’s suppliers and
its suppliers. The value network includes valued relations with others.
Channels of distribution
A channel is a type of social system in which each member is expected to fulfill

certain roles and perform certain functions. Distribution channel is nothing but which
moves the goods or services from the manufacturer to the ultimate consumers in a
perfect condition.
A marketing channels is the series of inter dependent marketing institutions that

facilitate transfer of title to a product and it moves from the producer to the ultimate
consumer or industrial user. The channels bring the suppliers and the buyers together.
Types of channels
The various types of channels generally ues are:
 Whole sellers
 Retailers
 Distributors
 Logistics
 Ware housing
 Franchise
Industrial markets
Functions of channel:
 The functions of a channel are as follows

 Channel performs the work of moving goods from the produces to consumers.
 Overcomes time, place, fill gaps that separate goods and services from those
who need or want them.
 Forward flow flow of activity from the company to customer.
 Back ward flow of activity from the customers to the company
 Information exchange
 Financial supports
 Risk taking
There is absolutely no uniformity in the channels that may be selected by the

producing units. The structure and composition of the channel will depend on the
nature of product and the producing unit strategy. Channel levels are mainly 4 types
they are shown below
 Zero level channel

 One level channel
 Two level channel
 Three level channel
Zero level channel
Sometimes producer directly sells to the consumers but this method is not common for
consumer goods in foreign markets. It are common in domestic trade where producer

sells goods through his own outlets. In foreign markets, selling through post is gaining
momentum.
One level channel
If the producer or the chief importer employs an efficient sales force, he need
not appoint or contact with wholesalers, He will directly contact the retailers through his
sales force.
Two level channel
If agents are appointed, the alternative available is that producr gets directly in touch
with the wholesalers who in turn serve the retailers. The channels will be
Three level channel
The producer may or may not appoint the agents for consumer goods. Appointing an
agent is considered necessary where the producer cannot afford to invest the amount
required to develop a sales force of his own. If he decides to appoint agents he moves
to wholesalers and retailers only through agent.
Channel objectives:
 Place utility
 Time utility
 Form utility
 Information utility
 Creases convenience value
 Manufacturer will be eased with storage problem
 Helps in promoting goods

 Financial help
 Creates possession utility
 Push and full strategies implementation.
Channel designs
Good channel design should proceed with a clarification of channels objectives,

alternatives and likely payoffs. The objectives are contained by the particular
characteristics of customers, products, middlemen, competitors and environment
 Customer characteristics
 Competition
 Communication
 Cost
 Coverage
 Product characteristics
 Distribution culture
 Company objectives
 Control
 Continuity
 Capital
Designing distribution channels

Channel conflict
In carrying out their specialized roles and functions, channel members may
cooperate, conflict and complete with one another. Conflicts can be functional or
dysfunctional: it is important to distinguish between two
1.vertical marketing system

2.horizontal marketing system
Factors effecting pricing
 International marketing objectives

 costs
 Competition
 Product differentiation
 Exchange rate
 Market characteristics
 Image
 Govt factors
 Subsidies
 Taxes
 Govt competition
Approaches to channels strategy
There are three different alternatives to channel strategy
 Gravity Approach
 Push Approach
 Pull Approach
Scope of distribution
 Market considerations
 Selling capabilities
 Product knowledge
 Business image
 Geographic coverage
 Successful track record
 Customer service
 Factors influencing channel selection


Unit – V : Communicating Value: Designing and Managing Marketing

Communications – Advertising – Direct Marketing and Personal Selling –
Sales Promotion – Events and Public Relations and Public Relations :
Competitive Marketing Strategies- Emerging Trends in Marketing:
Networking Marketing-Viral Marketing-Ambush/Guerilla Marketing-Green
Marketing-Direct Marketing etc.
IMP QUESTION:
1.Designing and Managing Marketing Communications
2. Emerging Trends in Marketing, Competitive Marketing Strategies
3. Viral Marketing-Ambush/Guerilla Marketing-Green Marketing
Communicating Value
Many people are aware that improving communication is a worthy objective, yet

they are stymied by how to put practice into action. The value of communication is
based on relevant and timely information. Without such information, there can be no
effective communication.
 Modern marketing calls for more than developing a good product, pricing it
attractively, and making it accessible.
 Companies must also communicate with present and potential stake holders, and
the general public. For most companies the question is not whether to
communicate but rather what to say how to say it to whom and how often.
 But communications get harder and harder as more and more companies decide
to grab the consumers increasingly divided attention
 To reach target markets and build brand equity, marketers are creatively
employing multiple forms of communications.
 Communication is an important task of any organization to inform the target
market about the product.
 The marketing communication delivers results only when all elements are
integrated to deliver brand values to the target markets
 When the marketer needs to take a 360 degree perspective of the brand, in
order to understand the role of integrated marketing communication in the
marketing programme of a company one needs to recognize the value of
comprehensive plan that evaluates the strategic role of each element of
communication

Marketing communication Mix/ Designing and Managing Marketing

Communications
Although advertising is often a central elements of marketing communication

programmer, it is usually not the only one or even the most important one in terms of
building brand equity.
The whole work revolves around the subject of marketing communication mix.
 Considered to be derived from marketing mix.

 Communication mix consists of advertising, personal selling, sales promotion,
direct marketing and PR.
 For I-phones they use caples principle of advertisement.
 Advertising is effective but expensive
 Personal selling is expensive but is considered as cost-effective
 Sales promotion uses pull or push strategy.
 Direct marketing is common way used now days.
 To select right communication mix we should always use product’s life cycle to
determine.
 Should keep a good eye on products sale to find the most effective way for
advertisement
 Characteristic and role of each and every communication mix differ.
Advertising

Advertising is the action of calling public attention to an idea, good, or service

through paid announcements by an identified sponsor.
According to Kotler Advertising is any paid form of non-personal presentation &

promotion of ideas, goods, or services by an identified sponsor.
Benefits of Advertising
1) Introduces a New Product in the Market:

Advertising plays significant role in the introduction of a new product in the market.
It stimulates the people to purchase the product.
(2) Expansion of the Market:

It enables the manufacturer to expand his market. It helps in exploring new
markets for the product and retaining the existing markets. It plays a sheet anchor role
in widening the marketing for the manufacturer’s products even by conveying the
customers living at the far flung and remote areas.
(3) Increased Sales:

Advertisement facilitates mass production to goods and increases the volume of
sales. In other words, sales can be increased with additional expenditure on advertising
with every increase in sale, selling expenses will decrease.
(4) Fights Competition:

Advertising is greatly helpful in meeting the forces of competition prevalent in the
market. Continuous advertising is very essential in order to save the product from the
clutches of the competitors.
(5) Enhances Good-Will:

Advertising is instrumental in increasing goodwill of the concern. It introduces the
manufacturer and his product to the people. Repeated advertising and better quality of
products brings more reputation for the manufacturer and enhances goodwill for the
concern.
(6) Educates The Consumers:

Advertising is educational and dynamic in nature. It familiarizes the customers with
the new products and their diverse uses and also educates them about the new uses of
existing products.
Types of Advertising

Characteristics of Advertising:
1. Tool for Market Promotion
2. Non-personal
3. Paid Form
4. Wide Applicability
5. Varied Objectives
6. Forms of Advertising
7. Use of Media
8. Advertising as an Art
Direct Marketing
A form of advertising in which physical marketing materials are provided to

consumers in order to communicate information about a product or service. Direct
marketing does not involve advertisements placed on the internet, on television or over
the radio. Types of direct marketing materials include catalogs, mailers and fliers.
important tools of direct marketing are as follows:
 Face-to-Face Selling
 Direct Mail
 Telemarketing
 Email Marketing
 Voicemail Marketing
 Couponing
Characteristics

 A Set of Database
 Addressing the Listed Customers
 Direct Action Related
 Specific Emphasis
Personal Selling
Personal Selling is also known as the door to door selling which is face to face
communication between the buyer and the seller. In simple words, It is an art of
persuasion in which the salesperson tries to win the confidence of the customer and
also tries to know the importance of marketing strategies.
Importance of Personal Selling-

 Goal-Oriented Activity
 Consultative Selling-
 Win-Win Approach-
 Helps in Relationship Building-
 Winning the Confidence of Customer-
Features of Personal Selling-

 Face to Face Interaction-
 Two Way Dialogue:-
 Immediate Feedback-
 Art of Persuasion-
 Flexible-
 Satisfaction:
Sales Promotion
Sales promotion includes the short-term incentives offered to middlemen,
salesmen, and/or consumers. Sales promotion implies a wide variety of promotional
activities. In the current marketing practices, the role of sales promotion has increased
tremendously. Companies spare and spend millions of rupees to arrest consumer
attention toward products and to arouse purchase interest. Sales promotional efforts
also improve firm’s competitive position.
Importance (Need or Objectives):

The basic objective of sales promotion is to maintain, increase, or regulate sales.
There may be some other related objectives to carry out sales promotional efforts. In
nutshell, it can be said that sales promotion is aimed at satisfying customers,
encouraging salesmen and middlemen, and achieving sales targets.

We can enlist objectives as under:

1. To introduce new products.
2. To keep consumers satisfied.
3. To attract new customers.
4. To clear stocks of products. To sell out old stocks rapidly.
5. To induce consumers to try and buy certain products
6. To induce present customers to buy more quantity and/or times.
Characteristics:
Special characteristics of sales promotion are listed below:
1. It is a part of market promotion. It involves all the promotional efforts other than
advertising, personal selling, and publicity.
2. The primary purpose is to induce customer for immediate buying or dealer

effectiveness or both.
3. It is optional. Many companies do not practice it.
4. It is directed for multiple objectives, like to maintain sales during off season, to
increase sales, to face competition, to clear stocks, to improve image, to promote new
products, etc.
5. It consists of offering, wide variety of tools/incentives.
6. Sales promotion efforts consist of special selling efforts for the specific time period in
forms of short-term incentives and schemes undertaken at consumer level, dealer level
or at salesmen level.
Event Marketing
The increasing competitive pressures brought on by globalization are forcing

business professionals to find new ways to engage customers. There are many
definitions of event marketing. It is defined as the marketing discipline focused on face-
to-face interaction via live events, trade shows and corporate meetings among other
event types. Others define it as designing or developing a ‘live’ themed activity,
occasion, display, or exhibit (such as a sporting event, music festival, fair, or concert) to
promote a product, cause or organization.
Features of Event Marketing:

 Wide range of events:

 Goal oriented:
 Effective promotion and communication:
 Proper evaluation:
 Feedback from clients
Importance of Event Marketing:

1. It helps in brand building, that is, creating awareness about the launch of new
products/brands.
2. To highlight the added features of the product/services.
3. It helps in rejuvenating brands during different stages of product life cycle.
4. Helping in communicating the repositioning of brands/products.
5. Associating the brand personality of clients with the personality of target market.
6. Creating and maintaining brand identity.
Public Relations
Public relations is a strategic communication process companies, individuals, and

organizations use to build mutually beneficial relationships with the public.
Characteristics of Public Relations
 Wide Range of Activity

 Various Parties
 Continuous Process
 Management Philosophy
 All Level Activity
 Routine Activity
Competitive marketing Strategy
Competitive Strategy is defined as the long term plan of a particular company in

order to gain competitive advantage over its competitors in the industry. It is aimed at
creating defensive position in an industry and generating a superior ROI (Return on
Investment). Such type of strategies play a very important role when industry is very
competitive and consumers are provided with almost similar products. One can take
example of mobile phone market.

Types of competitive strategies by Porter
According to Michael Porter, competitive strategy is devised into 4 types:
1. Cost Leadership
Here, the objective of the firm is to become the lowest cost producer in the
industry and is achieved by producing in large scale which enables the firm to attain
economies of scale. High capacity utilization, good bargaining power, high technology
implementation are some of factors necessary to achieve cost leadership. e.g Micromax
phones
2. Differentiation leadership
Under this strategy, firm maintains unique features of its products in the market
thus creating a differentiating factor. With this differentiation leadership, firms target to
achieve market leadership. And firms charge a premium price for the products (due to
high value added features). Superior brand and quality, major distribution channels,
consistent promotional support etc. are the attributes of such products.E.g. BMW, Apple
3. Cost focus
Under this strategy, firm concentrates on specific market segments and keeps its
products low priced in those segments. Such strategy helps firm to satisfy sufficient
consumers and gain popularity. E.g. Sonata watches

4. Differentiation focus
Under this strategy, firm aims to differentiate itself from one or two competitors,
again in specific segments only. This type of differentiation is made to meet demands of
border customers who refrain from purchasing competitors’ products only due to
missing of small features. It is a clear niche marketing strategy. E.g. Titan watches
Emerging Trends in marketing
A number of important trends and forces are eliciting a new set of beliefs and
practices on the part of business firms. Marketers are fundamentally rethinking their
philosophies, concepts and tools. Here are 14 major shifts in marketing management
that smart companies have been making in the 21 st century. Successful companies will
be those who can keep their marketing changing with the changes in their market place
and market space.
Main Emerging Trends in marketing are
 Re-Engineering-It builds up customer value and delivering value

 Outsourcing- increasing exports and imports to buy more goals and services
from the foreign countries.
 Bench marketing- we will study best practices then we will study our
performance in the market.
 Supplier patterning- we will study best practices then we will study our
performance in the market.
 Customer Patterning-Maintaining healthy relationship with customers and
working, more closely with customers.
 Merging-To gain economies scope and scale and crate brand image of our
product.
 Globalizing-Launching our product in more than two countries
 Flattering- Reducing organization levels (Top level, middle level, lower level)
 Focusing-Main mono of every company is profitability.
 Accelerating-Designing the organization layouts and setting of process to
respond more quickly.
 Empowering-Encouraging personnel and empowering them. Then gain creating
ideas from them.

 More Emphasis on Quality, Value, and Customer Satisfaction
 More Emphasis on Relationship Building and Customer Retention

 More Emphasis on Managing Business Processes and Integrated Business
Functions
 More Emphasis on Global Thinking and Local Market Planning
 More Emphasis on Strategic Alliances and Networks
 More Emphasis on Direct and Online Marketing
 More Emphasis on Services Marketing
 More Emphasis on High-tech Industries
 More Emphasis on Ethical Marketing Behaviour
Network marketing
Network marketing is basically a medium of marketing that manufacturers use to

expand their sales. Manufacturers use them when they have to deal with several
distributors to push out their products. Sometimes, these distributors might have sub-
distributors. As a result, this leads to a “network” of distributors that operate at various
levels of the distribution chain.
Structure of Network Marketing
Firstly, manufacturers require several distributors, sub-distributors and dealers

in order to create a network marketing structure. Secondly, These distributors procure
goods from manufacturers themselves at wholesale prices.

They may either use them personally or they may sell them to other distributors for a
profit. This chain continues further. The distributors, thus, will end up marketing goods
until they reach customers or else they may become final customers themselves.
Furthermore, these distributors get an opportunity to make some profits from this
marketing network. They can receive some commission from manufacturers on the basis
of the total volume of goods they buy and sell. Hence, the functioning of these distributors
is similar to that of insurance agents.
Use of Network Marketing
Manufacturers generally use network marketing in business structures that require

multi-level marketing. This is because such business models involve a large network of
distributors and sub-distributors.
It is also of great use for distributors themselves because they can make an earning from
it. Most companies like Amway and Tupperware tie-up with people who put in part-time
work for this. Many women in India also become distributors and actively work with
manufacturers directly.
Advantages of Network Marketing
 There are absolutely no limits on the size of the network marketing structure.
This happens because companies can tie-up with innumerable people to become
distributors. Further, distributors can further c0-ordinate with other sub-distributors
to expand the company’s sales.
 Due to a reliable and robust distribution network that engages customers directly,
companies do not need to rely on advertising to market their goods.
 The structure of distributors also reduces the profit margins of retailers that
companies consider as an expense. These margins get passed on to distributors and
the companies do not have to bear their burden.
 Another advantage is that companies do not need to spend a lot of money on

storage and distribution. This is because distributors end up bearing these expenses
themselves.
 Finally, this structure allows distributors to earn an unlimited income from their
dealings with the company. They can earn an income from their own profits as well
as commissions.
Disadvantages of Network Marketing

 Since manufacturers depend on distributors to determine consumer demand, it

can be difficult to predict production targets. They may end up under or over-
stocking their products.
 In this form of business, it is basically the distributors who facilitate delivery of

goods to final customers. Manufacturers have a limited role in this regard. As a
result, they may find it difficult to control distribution and sales.
viral marketing
Viral marketing or viral advertising is a business strategy that uses existing social

networks to promote a product. ... Viral advertising is personal and, while coming from
an identified sponsor, it does not mean businesses pay for its distribution.
Advantages of viral marketing
 Low cost. What characterizes viral campaigns is that the users do a significant
part of the work for the brand, which drastically cuts down the costs of dispersion.
It is unnecessary to buy advertising or media space.
 Potential of great reach. A viral video on the Internet has the ability to
reach a huge international audience without having to invest a ton of money or
make any extra effort. Due to this, a small company or even a private individual
can go extremely viral.
 It is not invasive. In viral marketing, the social media user is the one making
the decision to participate and share content, so it lessens the possibility of the
brand coming across as invasive. Like this, the perception of the brand and the
interaction are significantly better, compared to more classical forms of
advertising.
 It helps build up your brand. If we really hit the bull’s-eye in terms of

creativity, we are creating content so incredible that users themselves decide to
share it and, hence create a personal connection with your brand. It is without a
doubt an extremely powerful tool when it comes to branding and awareness.
Ambush/Guerilla Marketing
Ambush marketing is a form of associative marketing, used by an organization

to capitalize upon the awareness, attention, goodwill, and other benefits, generated by
having an association with an event or property, without that organization having an
official or direct connection to that event or property.

Guerrilla Marketing is a creative content marketing strategy that prides itself on

being unconventional. In your daily life, you may encounter examples of other
business' guerilla marketing tactics, without even realizing it. Examples include the use
of publicity stunts, viral videos, stencil graffiti.
The mainstay of Guerrilla marketing is using assets such as energy, imagination

and innovation, not just money, to achieve goals like:
 Brand recall
 Positive feedback
 Referrals
 Enjoyment
 Profits
 An undeniable Unique Selling Proposition (USP)
Green marketing
Here, term ‘green’ is indicative of purity. Green means pure in quality and fair or
just in dealing. For example, green advertising means advertising without adverse
impact on society. Green message means matured and neutral facts, free from
exaggeration or ambiguity. Green marketing is highly debated topic for lay people to
highly professional groups.
Growth in marketing activities resulted into rapid economic growth, mass

production with the use of advanced technology, comfortable and luxurious life, style,
severe competition, use of unhealthy marketing tactics and techniques to attract
customers, exaggeration in advertising, liberalization and globalization, creation of
multinational companies, retailing and distribution by giant MNCs, etc., created many
problems.
Basically, green marketing concerns with three aspects:

1. Promotion of production and consummation of pure/quality products,
2. Fair and just dealing with customers and society, and
3. Protection of ecological environment.
Importance of Green Marketing:

1. Now, people are insisting pure products – edible items, fruits, and vegetables based
on organic farming. The number of people seeking vegetarian food is on rise.
2. Reducing use of plastics and plastic-based products.
3. Increased consumption of herbal products instead of processed products.
4. Recommending use of leaves instead of plastic pieces; jute and cloth bags instead of
plastic carrying bag.
5. Increasing use of bio-fertilizers (made of agro-wastes and wormy-composed) instead

of chemical fertilizers (i.e. organic farming), and minimum use of pesticides.
6. Worldwide efforts to recycle wastes of consumer and industrial products.
7. Increased use of herbal medicines, natural therapy, and Yoga.
8. Strict provisions to protect forests, flora and fauna, protection of the rivers, lakes and
seas from pollutions.
9. Global restrictions on production and use of harmful weapons, atomic tests, etc.
Direct marketing
Direct marketing is a type of advertising campaign that seeks to bring an

action in a selected group of consumers (such as an order, visit the store or the
website of the mark or a request for information) in response a communication by
the marketer. This communication can take many different formats, such as postal
mail, telemarketing, point of sale.
An essential aspect of direct marketing is that the consumer response is

measurable: for example, if you offer a discount for an online store, you should
include some kind of cookie or pixel to let you know if the user has made use of the
code.
Benefits of direct marketing
Direct marketing allows you to promote your product or service directly

to your target people most in need and measure results quickly, but there is more.
These are some of the benefits the digital direct marketing can bring to your brand:
 Take the segmentation and targeting. One of the great advantages of this

type of marketing is that you can reach your specific audience segments with

personalized messages. If you want to succeed, you should invest time in research
to identify consumers most likely to convert and thus direct your efforts to actions
that really work.
 Optimize your marketing budget. Addressing online direct marketing to a

specific audience allows you to set realistic goals and improve your sales on a
tight budget. If you optimize and properly direct your campaign, you will achieve
results with only a small percentage of the cost of traditional advertising.
 Increase your sales with current and former clients. Digital direct

marketing lets you communicate with your current customers to keep alive the
relationship bringing value, but also back in touch with old customers and
generate new sales opportunities.
 Upgrade your loyalty strategies. Direct contact with your customers allows
you to customize your promotions, emails and offers to create an instant bond. To
maximize results, you can combine your direct marketing methods your loyalty
program.
 Create new business opportunities. Direct marketing allows you to adapt

to market demands at all times and respond more effectively.
 Tests and analyzes the results. Direct response campaigns give you the
opportunity to directly measure your results. Take the opportunity to squeeze the
most of your tests and make decisions in real time.

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PALVIELA PG COLLEGE, PALIVELA , KOTHAPETA -533229, PHONE NO:08855-244771/774

Unit – I Importance and Scope of Marketing: Concepts of Marketing; Marketing

Unit – III: Development of Marketing Offerings Strategy – New Product Development–

Unit – V : Communicating Value: Designing and Managing Marketing Communications –

1|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

Unit – I Importance and Scope of Marketing: Concepts of Marketing; Marketing

1. Importance and Scope of Marketing

1. Identification, selection and development of a product.

2. Determination of its price.

3. Selection of a distribution channel to reach the customer’s place.

4. Development and implementation of a promotional strategy.

According to the American Marketing Association (AMA) Board of

Importance and Scope of Marketing

Everything you need to know about the importance and significance of

2|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

7. Individual Business Enterprises

1.Importance of Marketing for Business:

2.Importance of Marketing for Customers:

 Marketing promotes product awareness to the public. Marketing creates a win-

 By the process of new product development marketing managers identify the

3.Importance of Marketing for Society:

 Due to various marketing activities like advertising, personal selling, packaging,

4.Importance of Marketing Developing Economy

The broad infrastructure contributions of marketing to developing economies are:

3|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

 Physical distribution contribution.

 Mass communication contribution.

 Government and Government agency contribution, and

 Contribution of coordinated production and marketing.

5,6 Importance of Marketing to Individual/Business Firms:

 Marketing Generates Revenue to Firms

 Marketing Acts as a Basis for Making Decisions

 Marketing Helps the Top Management to Manage Innovations and

7.Importance of Marketing to Individual Business Enterprises

Marketing plays an important role in the success of a business enterprise.

8.Importance of Marketing to Developing Countries.

The major importance of marketing in developing countries is given as under:

 Improved Quality of Life

 Development of Small-Scale Industries

 Development of Managers and Entrepreneurs

 Provide Job Opportunities

 Marketing Impact on People

 Acceleration of Economic Growth

4|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

 An offer is a proposal by the sellers to sell a product /property /may not is a

 It is a proposal by a seller to sell product/service.

Information------ need ---------production--------supply of goods--------CRM

 Marketing will identify needs of the consumers

Marketing concepts relate to the philosophy a business use to identify and

The ‘marketing concept’ proposes that in order to satisfy the organizational

6|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

Product quality and improvement are important parts of marketing strategies,

Here the management focuses on creating sales transactions rather than on

7|Page : PALIVELA PG COLLEGE (ICET CODE : SSSK)

The marketing concept is a customer-centered “sense and responds”

5.Societal marketing concept

Marketing Management Tasks

Marketing management has to do a set of tasks necessary for success in

 Marketing strategies and plans allocate economic, physical