SYLLABUS: MARKETING MANAGEMENT

Unit I Nature and Scope of Marketing, Selling v/s Marketing, Basic concepts and
approaches. Marketing Management Philosophies. Concepts of Holistic
Marketing.
Unit II Market Segmentation, Targeting and Positioning, Marketing Mix,
Marketing Environment, Marketing System, Marketing Information System and
Marketing Research.
Unit III Product strategy, Product classification and product mix, Branding and
Packaging decision, Integrated marketing communication. Promotion mix:
advertising, publicity, selling, sales promotion and public relations.
Unit IV Pricing decision, Methods of setting prices, Pricing strategies, Product
promotion. Consumer behaviour and decision making.
Unit V Channels of Distribution, Factors affecting choice of channel, Types of
intermediaries and their roles. Types of Retailing. Retail Management, Internet
Marketing, Service and Non Profit Marketing
 REFERENCE BOOKS

 MARKETING MANAGEMENT by Philip Kotler,

 PRINCIPLES OF MARKETING by R L Nolakha,
 MODERN MARKETING by R S N Pillai & Bagavathi,
 MARKETING MANAGEMENT by Dr C N Sontakki,
 PRINCIPLES OF MARKETING by Kazmi S H H & Mahajan J P,
 MARKETING MANAGEMENT by Dutta Bholanath,
 MARKETING MANAGEMENT by Panda Tapan K,
 MARKETING MANAGEMENT by Rajan Saxena
 KEY TERMS

 MARKET, MARKETING, CUSTOMER, CONSUMER,

NEEDS, WANTS, DEMAND, CUSTOMER SATISFACTION,
CONSUMER DELIGHT, PRODUCT, PRICE, PLACE,
PROMOTION, ADVERTISING, SELLING,
SEGMENTATION, TARGETTING, POSITIONING,
INTEGRATED MARKETING, CONSUMERISM,
CONSUMER MOTIVATION, RETAILING
 PRODUCT MIX
 Product mix, also known as product assortment, refers to the total number of product
lines a company offers to its customers. A product mix is the group of everything a
company sells. However, the product line is a subset of the product mix. A product line
refers to a unique product a company offers.
 For example, Patanjali deals in different categories of products which include shampoo,
flour, toothpaste, etc. These different products are different product lines for the company
and together constitute the mix of the company.
 The four dimensions to a company's product mix include width, length, depth and consistency.
 Coca-Cola has product brands like Minute Maid, Sprite, Fanta, Thumbs up, etc. under its name. These constitute
the width of the product mix. There are a total of 3500 products handled by the Coca-Cola brand. These constitute
the length. Minute Maid juice has different variants like apple juice, mixed fruit, etc. They constitute the depth of
the product line ‘Minute Maid’. Coca-Cola deals majorly with drinking beverage products and hence has
more product mix consistency.
 PRODUCT MIX

Product Mix depends on many factors like

Company Age
Financial Standing
Area of Operation
Brand Identity, etc.
 FACTORS INFLUENCING PRODUCT MIX

 Marketing strategy and corporate strategy. Does a product fit these strategy.

 Resources and strengths of a company. Does the product fit them?

 Competitor’s strategy. Does the product match the competitor s strategy?

 Overall impact of profit. Does the product improve the profit of the company?

 Effect on other products. Does the product adversely affect the sales of other products?

 Management competence. Does the product get the necessary manage­ment competence and
experience?
 Cost of production. Can a by-product or other allied systems or products be developed at a
low cost of production?
 Quantity of production. Does the addition of one more item to the existing product line offer
economics of large scale production?
 Full utilisation of marketing network. Does the addition of a product contribute towards
 ELEMENTS OF PRODUCT MIX
Width: Number of Product Lines
 The width, or breadth, of a company's product mix pertains to the number of product lines the
company sells. 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.
 Small and upstart businesses will usually not have a wide product mix. It is more practical to start with
some basic products and build market share. Later on, the company's technology may allow the
company to diversify into other industries and build the width of the product mix.
Length: Total Products
 The product mix length is the total number of products or items in your company's product 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].
 ELEMENTS OF PRODUCT MIX
Depth: Product Variations
 Depth of a product mix pertains to the total number of variations for each product. Variations can
include size, flavour and any other distinguishing characteristic. For example, if your company sells
three sizes and two flavours of toothpaste, that particular line of toothpaste has a depth of six. Colgate
has different variants under the same product line like Colgate advanced, Colgate active salt, etc.
Consistency is Relationship
 Product mix consistency describes how closely related product lines are to one another – in terms of
use, production and distribution. Your company's product mix may be consistent in distribution but
vastly different in use. For example, a dairy company has two product lines milk and yogurt. Both the
lines have same users and distribution channels. Due to low product variation and high product mix
consistency. Take another example of Philips Electronics with 7 product lines having high production
mix variation and low consistency.
 PRODUCT STRATEGY
 A Product Strategy outlines a company's strategic vision for
its product offerings by stating where the products are going,
how they will get there and why they will succeed. The product
strategy enables you to focus on a specific target market and
feature set, instead of trying to be everything to everyone.
 Product Mix Decisions refers to the decisions regarding
adding a new or eliminating any existing product from the
product mix, adding a new product line, lengthening any
existing line, or bringing new variants of a brand to expand the
business.
 PRODUCT MIX DECISION

 Product Line Decision - Product line managers takes product line decisions considering the
sales and profit of each items in the line and comparing their product line with the competitors'
product lines in the same markets. Marketing managers have to decide the optimal length of
the product line by adding new items or dropping existing items from the line.
 Line Stretching Decision - Line stretching means lengthening a product line beyond its
current range. An organisation can stretch its product line downward, upward, or both way.
1. Downward Stretching means adding low-end items in the product line, for example in Indian
car market, watching the success of Maruti-Suzuki in small car segment, Toyota and Honda
also entered the segment.
2. Upward Stretching means adding high-end items in the product line, for example Maruti-Suzuki
initially entered small car segment, but later entered higher end segment.
3. Two-way Stretching means stretching the line in both directions if an organisation is in the
middle range of the market.
 Line Filling Decision - It means adding more items within the present range of the product
line. Line filling can be done to reach for incremental profits, or to utilise excess capacity.
 PRODUCT MIX STRATEGIES

Expansion of product mix implies increasing the number of product lines. New lines
may be related or unrelated to the present products. For example, Bajaj Company adds
car (unrelated expansion) in its product mix or may add new varieties in two wheelers and
three wheelers. When company finds it difficult to stand in market with existing product
lines, it may decide to expand its product mix.
For example, Hindustan Unilever Limited has various products in its product mix such as:
(1) Toilet soaps, detergent cakes, washing powders, etc.
(2) Cosmetic products,
(3) Edible items,
(4) Shaving creams and blades,
(5) Pesticides, etc.
If company adds soft drink as a new product line, it is the example of expansion of product
mix.
 PRODUCT MIX STRATEGIES

Contraction of Product Mix

Sometimes, a company contracts its product mix. Contraction consists of
dropping or eliminating one or more product lines or product items. Here, fat
product lines are made thin. Some models or varieties, which are not
profitable, are eliminated. This strategy results into more profits from fewer
products. If Hindustan Unilever Limited decides to eliminate particular brand
of toilet shop from the toilet shop product line, it is example of contraction.
Deepening Product Mix Depth
Here, a company will not add new product lines, but expands one or more
excising product lines. Here, some product lines become fat from thin. For
example, Hindustan Unilever Limited offering ten varieties in its editable
items decides to add four more varieties.
 PRODUCT MIX STRATEGIES

Alteration or Changes in Existing Products

Instead of developing completely a new product, marketer may improve one
or more established products. Improvement or alteration can be more
profitable and less risky compared to completely a new product. For example,
Maruti Udyog Limited decides to improve fuel efficiency of existing models.
Modification is in forms of improvement of qualities or features or both.
Developing New Uses of Existing Products
This product mix strategy concerns with finding and communicating new
uses of products. No attempts are made to disturb product lines and product
items. It is possible in terms of more occasions, more quantity at a time, or
more varied uses of existing product. For example, Coca Cola may convince
to use its soft drink along with lunch.
 PRODUCT MIX STRATEGIES
Trading Up
Trading up consists of adding the high-price-prestige products in its existing product
line. The new product is intended to strengthen the prestige and goodwill of the
company. New prestigious product increases popularity of company and improves
image in the mind of customers. By trading up product mix strategy, demand of its
cheap and ordinary products can be encouraged.
Trading Down
The trading down product mix strategy is quite opposite to trading up strategy. A
company producing and selling costly, prestigious, and premium quality products
decides to add lower- priced items in its costly and prestigious product lines.
Those who cannot afford the original high-priced products can buy less expensive
products of the same company. Trading down strategy leads to attract price-
sensitive customers. Consumers can buy the high status products of famous
company at a low price.
 PRODUCT MIX STRATEGIES

Product Differentiation
 This is a unique product mix strategy. This strategy involves no
change in price, qualities, features, or varieties. In short,
products are not undergone any change. Product differentiation
involves establishing superiority of products over the
competitors.
 By using rigorous advertising, effective salesmanship, strong
sales promotion techniques, and/or publicity, the company tries
to convince consumers that its products can offer more
benefits, services, and superior performance. Company can
communicate the people the distinct benefits of its products.
 PRODUCT INNOVATION

 The development and market introduction of a new, redesigned or

substantially improved good or service.
 Examples of product innovation by a business might include a new
product's invention; technical specification and quality improvements
made to a product; or the inclusion of new components, materials or
desirable functions into an existing product.
 Product innovation involves creating new products or improved versions
of existing products that increase their uses. This innovation can be in the
product's own functionality, or it can take the form of new technology.
 For example, car manufacturers make one new car each year. Cell phone
manufacturers tend to release a new version of their phones every few
years. In doing so, the manufacturer tries to introduce something unique.
 REASONS FOR PRODUCT INNOVATION

1. Business Growth

2. Competition
3. Market Changes
4. Technological Changes
5. To Minimise Risk
6. Saturation or Decline stages in product life cycle
7. Maximum Utilisation of Resources
Other Reasons: 1.To raise the standard of living of consumers. 2. To
impress the consumers 3. To impress the channels of distribution, 4. To
complete the product line, 5. To make the marketing program of the
 NEW PRODUCT DEVELOPMENT

 New product development (NPD) is the process of bringing a new product to the
marketplace. Your business may need to engage in this process due to changes in
consumer preferences, increasing competition and advances in technology or to capitalise
on a new opportunity. Innovative businesses thrive by understanding what their market
wants, making smart product improvements, and developing new products that meet and
exceed their customers' expectations. New products can be:
 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. They may be
completely original products, or existing products that you have modified and improved.
 NPD is not limited to existing businesses. New businesses, sole traders or even freelancers
can forge a place in the market by researching, developing and introducing new or even
one-off products. Similarly, you don't need to be an inventor to master NPD. You can also
consider purchasing new products through licensing or copyright acquisition.
 PRODUCT PLANNING AND DEVELOPMENT

Product Planning & Development embraces all activities which

start with the idea generation and ends with its full-scale
commercialisation in the market, or modification of existing products
to add stability. The seven main steps in product planning and
development are:
1. Generation of New Product Ideas
2. Screening of Ideas
3. Product Concept Development
4. Commercial Feasibility
5. Product Development
6. Test Marketing
7. Commercialisation.
 GENERATION OF NEW PRODUCT IDEAS
 The first step in product planning and development is
generation of ideas for the development of new/innovative
products.
 Ideas may come from internal sources like company’s own
Research and Development (R&D) department, managers,
sales-force personnel etc.; or from external sources like,
customers, dealers, competitors, consultants, scientists
etc.
 At this stage, the intention of management is to generate
more and more new and better product ideas; so that the
most practical and profitable ideas may be screened
 SCREENING OF IDEAS

 Screening of ideas means a close and detailed examination of

ideas, to determine which of the ideas have potential and are
capable of making significant contribution to marketing objectives.
In fact, generation of ideas is not that significant as the system for
screening the generated ideas.
 The ideas should be screened properly; as any idea passing this
stage would cost the firm in terms of time, money and efforts, at
subsequent stages in product planning and development.
PRODUCT CONCEPT DEVELOPMENT/COMMERCIAL FEASIBILITY

 Product Concept Development: Those product ideas which clear

the screening stage must be developed into a product concept –
identifying physical features, benefits, price etc. of the product. At
this stage product idea is transformed into a product concept i.e. a
product which target market will accept.
 Commercial Feasibility: At this stage, the purpose is to determine
whether the proposed product idea is commercially feasible, in
terms of demand potential and the costs of production and
marketing. Management must also ensure that product concept is
compatible with the resources of the organization technological,
human and financial.
 PRODUCT DEVELOPMENT

 Product development encompasses the technical activities of

engineering and design. At this stage, the engineering department
converts the product concept into a concert form of product in view
of the required size, shape, design, weight, colour etc. of the
product concept.
 A model or prototype of the product is manufactured on a limited
scale. Decisions are also made with regard to packaging, brand
name, label etc. of the product.
 TEST MARKETING/ COMMERCIALISATION

 Test Marketing: A sample of the product is tested in a well-chosen

and authentic sales environment; to find out consumers’ reaction. In
view of consumers’ reactions, the product may be improved further.
 Commercialisation: After the management is satisfied with the
results of test marketing, steps are taken to launch a full-fledged
programme for the production, promotion and marketing of the
product. It is the stage where the new product is born; and it enters
it life cycle process.
 NEED OF PPD

(1)To replace the short-lived products,

(2)To arrest a fall in the rate of firm’s growth,
(3)To utilise surplus funds or surplus capacity, and
(4)To modify or improve the existing products with a view to adding
stability to them.
(5)To stay ahead of changing customer requirements and preferences,
(6)To keep pace with fast-moving technology, and
(7)To match the new product entries of competitors.
 ESSENTIAL ELEMENTS OF PPD
(1) Research and Design:
 These include market research, product research, and analysis of the alternative
designs and characteristics for finalising the one that would meet the customer
requirements and be able to capture mass market.
(2) Production Technique:
 This requires examination of the alterna­tive techniques of production, and
choosing the right one that would necess­arily add such attributes to a product
which match the customers’ needs.
(3) Modification and Improvement:
 These include in-depth analysis and final decision-making for modifying and
improving the existing products in terms of specification, quality, novelty,
packaging, etc.
 ESSENTIAL ELEMENTS OF PPD

(4) Product Elimination:

 This requires a decision to drop the unpro­fitable products from the firm’s range of
products so as to divert the resources to profitable products.
(5) Product Pricing:
 This involves a decision on a price to be fixed based on either the competitor’s price
or the cost of production or the market forces of supply and demand.
(6) Co-Ordination:
 This requires constant monitoring and information feedback on the aspects of
finance, accounting, engineering, manufacturing, marketing research and
technology.
(7) Commercialisation:
 This involves determination of marketing out­lets and integrating the new product
 MAIN CAUSES FOR THE FAILURE OF A NEW PRODUCT

(i) Sub­standard design or quality;

(ii) Cut-throat competition;
(iii) Higher costs of production and distribution;
(iv) Inadequate market and marketing rese­arch;
(v) Defective systems of physical distribution;
(vi) Inadequacy of marketing efforts like poor advertising, improper promotional methods,
inexperienced sales personnel, weak channels of distribution;
(vii) Absence of top-flight, outstanding managers in the areas of R&D, and marketing
functions;
(viii) Resultant product not commercially viable;
(ix) Failure of production techniques to apply technology; and
(x) Ill-timing of the products i.e. products are far ahead of the current practice to secure