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MARKETING
First theory regarding marketing was given by Abraham Marchelo. This theory is known as
Big Hierarchy theory.
XY Theory – This is given by Mack Greger. This theory is also known as theory of
motivation.
Theory ‘x’ says that no any employee in the organization wants to work.
Theory ‘x’ says that we can motivate them to perform better.
* Philip Kotler is considered as the father of marketing. According to him “Marketing is a
social process by which individual obtain what they need and wants throu gh creating offering and
freely exchange of product and services of value with others.” tt should maintain a social
responsibility too.
* Market is a place where buyers and sellers are gathered together for the exchange of goods
and services.
Market is used in terms of :
(a) Consumer market
(b) Industrial market
(c) Wholesale market
(d) Geographical market - National and International market.
(e) Product market - Share market, gold market, cotton market etc.
Concepts of marketing
(i) Production concept
(ii) Product concept
(iii) Selling concept
(iv) Marketing concept
(v) Social concept
Production Concept : According to this concept sell of the product depends upon the number
of production that means sell of the product can be maintained by providin g adequate number of
goods in the market.
Product Concept : According to this concept the sell of the production be maintained by
providing superiorquality goods in the market.
Selling Concept : According to this concept the sell of the product can be increased by
informing about the product to the customer which is back supported by production and superior
quality goods .
Marketing Concept : According to this concept sell of the product can be maintained by a
person planning in which an individu al or group satisfied their needs and wants.
Social Concept : This concept emphasize on providing or manufacturing those types of
product which is beneficial for the whole society.
Difference between Marketing and Selling :
(i)
Marketing is a bigger process in which selling is its part.
(ii) Marketing is pre and post production activity both while selling is a post productio n
activity exclusively,
(iii) In marketing, customer got highest priority while in selling manufacturer considered on
everything.
(iv) In marketing there is main emphasis on customer satisfaction while in selling it is on
sell.
Types of Custo mer
(i) Prospect : An individual which shows intention to buy the product. e.g. - If a person
visits different shop or outlets of di fferent mobile companies to buy a handset then he is
considered as prospect for each companies.
(ii) Lead : If individual or target customer shows more intention to buy the product, then he
is considered as lead for each companies. e.g. - If an individual decided to buy a single handset
from a single company, then he will be considered as lead for a single company.
Call : It is a type at present calling to the prospective customer which i s most effective
because it can handle the objections and provides complete information regarding the product. It
convert prospect customer into lead.
Actual buyer : Those individuals who are purchasing the product single long time and
considered as actual buyer.
Potential buyer : Those individualswhich is generally new buyers are considered as potential
buyer.
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Important feature of Marketing :
(i)
Satisfying needs and wants
(iii) Superior customer value
(ii)
(iv)
Creating offering from the market,
Exchange mechanism
Activities related with Marketing
(i)
Market research and analysis
(ii)
Deciding strategy
(iii)
Implementation of planning
Market research and Analysis : For market research a Marketer focus on target market (a
place within a limited geographical -boundaries where a marketer expect its market). It mainly
emphasize on customer analysis, company analysis, analysis and competitor analysis.
Customer Analysis : The main objective of customer analysis is to develop market
segmentation (It is the process to divide different types of target market into a homogeneous
group).
It is generally of five types :
(i) Demographic
(ii) Geographic
(iii) Phy
(iv) Behavioural
(v) Needs Benefit
Demographic : If segmentation is done on the basis of age, gender, income, occupation,
education, family, size, family, family cycle relation.
Geographic : If market segmentation is done on the basis of region, climate weather locality
then it is considered as geograp hic market segmentation.
If market segmentation is done on the basis of social class, personality, life style, buying
motives, interest then it is considered as market segmentation.
Behavioural : If market segmentation is done on the basis of user status, user rate brand
loyalty then it is considered as behavioural market segmentation.
Company analysis : It is for analyzing the company position with respect to -the competitors
against the company’s cost structure and company’s cost position. IT also analyse the profit made
by the company from its different product line.
Competitor analysis : It is for analyzing competitor position strength, weakness by SWOT
(Strength, Weakness, opportunity, threat) In this technique marketer examine each company’s cost
structure, sources iof profit, resources, competitive position in the market and role of the
competitor to develop the market.
• (SWOT for only competitor analysis; strategy decision - SWOT)
Price skimming : It is the pricing strategy in which a product is lau nched or introduced at
very higher price to maximize the gain within short period of time.
Price penetration : It is the reverse process of skimming in which products are launched or
introduced in the market at very low price. The main objective at this pr icing technique is to
increase the market base.
Deciding strategy - After research and analysis of target market; company has to decide its
objective such as long term and short term profitability revenue growth, market share etc. To
achieve all these thin gs marketer identify one or more target or market segment.
Implementation of Planning - When market analysis and marketing strategy plan then there
is need to implement all there planning which is done through 4P’s of marketing (Product, Price,
Place, Promotion). There all 4P’s are included in marketing mix.
Marketing mix set at tools and activities which is needed for marketing purpose/which
includes product, price, place, promotion.
Product mix
Price mix
Place mix
Promotion mix
Product - Anything which can satisfy the needs & wants of particular individual group and
society are called product.
Product are of two types :
1) Consumer product
2) Industrial product
• Consumer product are categorized into
(A) On the basis of time and effort :
(a) Convenient product : Those products which doesn’t require time and does not consume
effort before buying are known as convenient or convenience product. eg - FMCG- Fast Moving
Consumer Goods.
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(b) Shopping goods : These are goods which requires extra tim e and effort, i.e. an individual
visit different shops and compare the price of the product from another shop and also tried to
bargain, then these goods are called shopping products.
(c) Specialty product or specialty goods - These products require specia l attention, i.e. before having an individual has to spend money and special time.
(B) On the basis of touchability :
(a) Tangible Product : Those product which can be touchable by hand are known as tangible
product.
(b) Intangible Product - These product can’t be touchable by hand and individual can only
feel the existence of product, e.g. -Services
Industrial Product - Those product which is used in industries or business purpose activities
are kno wn as industrial product.
Characteristics of Industrial p roduct
1) Limited number of buyers.
2)
It follows one level channel of
distribution.
3) Geographic concentration is confined.
4) Learning out process is done.
5) Reciprocal buying.
Reciprocal buying - It is the buying process in which one compa ny provide the product
inspite of money while is buying process. For example If MRF (tyre manufacturing companies) provides tyres to Ashok Leyland (Truck
manufacturing company) and Ashok Leyland provides truck to the MRF inspite of providing
money is kno wn as Reciprocal buying.
Expected Product - those products which fulfill the expectations of a customer is considered
as expected product.
Aug mented product - If extra features and qualities added in the expected products are
considered as augmented produc t.
Care product - Those products without which the existence of (a) Bigger product is
negligible such as bed in a hotel teachers in school or educational institute.
Generic name - It is the actual name of the product such as book, soap, wrist watch, camera
etc.
Branding - It is the process in which a company provides sign mark, logo, name, symbol,
design etc to identify the product from its competitor products.
Brand name - It is the verbal component of any product i.e. it can oe pronounceu. Brand
mark - It can only be recognized and cann’t be pronounced.
Trade mark - It is the part of brand having legal protection and used for business process
activities.
Advantage of Branding 1. Helps in product differentiation.
2. Helps in product promotion.
Packaging - It provides the protective cover to the manufactures products. It is of three types
:
i) Primary Packaging
ii) Secondary Packaging
iii) Transportation Packaging
Labeling - It is useful in providing detailed information., about the product such as
manufacturing date, contents, place of production, price etc.
Product mix - Composite of product includes all the offers that are available for sale, they
may be in mass production and carried routinely in line ti which product is manufactured and sold
only on receipt of an order.
Product line - If there is some modification such as change in the quality, taste, design in the
present product then it is considered as product line, such as Hero Honda Splendour have product
lines Splendour +, Super Splendour.
Product width - No. of product line Available in the company is known as pr oduct width.
Product depth - Average number of products or items offered by the company is known as
product depth such as Lux, Lux International, Liril, Rexona.
Pricing - Some of the factors which affect the fixation of price of the product
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(i) Demand
(ii) Extent or range of competition in the
market
(iii) Government and legal procedures
(iv) Marketing method used
(v) Long term - & short term objectives
(vi) Production cost
Costing is of three types:
(i) Fixed Cost
(ii) Variable Cost
(iii)Semivariable Cost
• Fixed Cost - These are the cost which is generally fixed for certain period of time such as
rent, salaries of employees.
•
Variable Cost - These are the costs which changes due to change in the price of the
product and the market condition such as raw material, labour casting, machineries.
• Semivariable Cost - These are the cost which is generally fixed for certain period of time
but changes, due to change in the efficiency of work and uses rate. Eg:- Incentives, Commission,
Electricity bill
•
Price Variable - The price variables include leased price, discount credit terms,
installment. There all are includes in price mix.
•
Place Mix - It is the third most important element of marketing mix which helps in
distribution of product from point of manufacture” or production to the point of sale. It is
generally done through channels of distribution or directly.
• Distribution Channel :
Two types of distribution channel :
(i) Direct Channel of Distribution
(ii) Indirect Channel of Distribution
•
Direct Channel - It is also called Zero level Channel of distribution in which products
are delivered to the consumers directly from the manufactures without any intermediaries. Eg:McDonalds, Internet selling, Eureica fasbes intermediar ies to move goods from point of
consumption.
•
One Level Channel of Distribution - It is also called manufacturer ,retailer and
consumer type of distribution channel. e.g- Maruti car sell through authorized retailers, Bata
shoes, Industrial goods
•
Two Level Channel of Distribution - It is also called manufacturer wholesailer, retailer
consumer type of distribution channel. For example - FMCG (Fast moving consumer goods)
Three level channel of distribution - It is also called manufactures agent whole salier
retailer consumer type of distribution channel.
In this channel manufactures employees agent to contact with wholesaler and then to retailers
to get the feed back of sell and prospect of increasing the sells. It is done when a manufacturers
having limited product line and has to cover a wide area of market.
Functions of distribution channel :
• Order processing i.e. delivering the product on time and at right place
• Transportation
• Ware housing (storage)
• Inventory control
• Sorting
• Accumulation
• Allocation
• Product promotion
• Risk taking
Marketing activities directed on channel the manufacturers.
Push strategy - In this strategy manufactures use aggressive personal selling and trade
advertizing and their sells promotio n techniques. Thus the product is pushed in the market through
the motivation to the intermediaries. Push.
Pull Strategy - In this strategy manufactures directly emphasity on the consumer to induce
them to process the order from the intermediaries.
Promotion - It is one of the tools of marketing mire in which a marketing use different type
of communications medium to inform about goods and services available by the company and
encourage to buy them. It is generally done through promotion wire. It includes :
1. Advertisement
2. Publicity
3. Personal selling
4.
Sales
promotion
Advertisement Characteristics of Advertisement (Merit and Demerit)
1. It is paid form of promotion.
2. Impersonal in nature.
3. Identified sponsor.
4. Mass reach.
5. May confuse the customer.
6. Less forceful.
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7. Lack of feedback.
8. Lo w effeteness.
Publicity - It is the rion paid form of promotion i.e. money does not spent in promotio n
process.
1. Identification
2. Qualifying
3. Reproach call appointment target customer. 4. Approach process
5. Convince
6. Closing customer agree
7. Follow
up
Sales promotion - It is one of the tools o f promotion mix in which promotion is carried out
through samples, coupons, cash refund offer, quiz, contest, game discount, allowance etc.
Personal selling and its process - it is a type of selling in which seller directly contact with
the target customer .
Process
Merit
1. Identification
2. Qualifying
3. Pre approach
4. Presentation and demonstration
5. Handling objections
6. Closing follo w up
Elimination
Induction
Decline
Growth
Shake Out
Maturity or Saturation
PRODUCT LIFE CYCLE
PRODUCT LIFE CYCLE - It is the evaluation of a product as measured by its sates. It is
generally categorized into 4 stages.
1. Introduction
2. Growth Stage
3. Maturity or saturation stage
4. Decline stage
1. Introduction stage - it is the time period between the catalogues birth and the actual birth
of the product.
The short time period requires.
1. Aggressive promotional effort and acceptability by the consumers.
2.
Pricing appears to the critical and choose between penetration pricing and skimming
pricing.
Growth stage - the time period between commercial birth and the maximum monthly revenue
earned by the product, virtually all the product reach maximum revenue within 30 months
following the commercial birth. During this stage promotional expenses rare at their peak.
Maturity stage - It is defined as the time period between maximum mo nthly sales decline to
20% of the maximum. The time period is considered as 15 months . during this stage maintenance
marketing lowering the promotional expenses emphasis on high degree product styling, product
modification, introduction at new brand takes place for the existing brands.
Decline stage - The final stage of ‘PLC is defined as the time period between the commercial
death and catalogue death of the product. The time period of this stage is ending larger than the
other 3 stages combinely. In this stage introduction of new production brands new profile for
existing one and consist decision to bring about the product euthanasia (mercy killing).
Two other stages of ‘PLC is shake out stage which is in between maturity and decline stage.
Elimination stage is just come after the decline stage.
Reason for the elimination of the product :
1) Decline in the sales
2) New technology
3) Decline in the
profit
4) Decline in the pricing
5) Effectiveness of product
6) Substitute product.
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Types of Competition
1) Perfect competition
2) Imperfect Competition
1) Perfect Competiton : If no. of buyers are available in the targe; without any mismatch in
sellers and buyers. e.g.: - Vegetable market
It is also called purely competitive type of competition i n which
a) Many buyers many sellers
b) A homogeneous commodity is produce
c) Free entry and exist of the product and services.
Perfectly competitive type of co mpetition
In addition of above
1) All the sellers have perfect knowledge at their market.
2) There is no any deadline for purchase and sellers.
3) No any individual person can influence the market
Imperfect co mpetition
1) Monopoly condition in which one seller and many buyers
2) Oligopoly - Few producers and monopolistic condition i.e. both side havi ng few in
number.
3) Monobrony - It is the form of imperfect competition from the buyers side when there is
only one buyer.
4) Ligprany - When there is few buyers and many sellers. Types of competing firms in the
target market.
Nichers
10%
Follower
20%
Follower
Challenger
Leader
Leader
40%
Challenger
30%
Nichers
Follo wer-20%
Challengers - 30%
Leader - 40%
Nichers-10%
Leader and his strategy - It has dominating position in the target market and well kno wn
consumers as well as the dealers.
Strategy
1) Innovation strategy - Generally leader adopt some modification in the existing product by
change in the shape, size, colours, flavours etc.
2) Multibranding strategy
3) Brand extension strategy
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Market challenges and his strategy
These are small leaders or operators who conduct their business activities on a small scale.
Strategies
1) They have their own policies for marketing purpose.
2) Concentrate on those market which is overlooked by other competing firms.
3) Production capacity is limited.
4) Caters the needs of local people.
New product development & processes
1) Idea concentration
2) Screening
3) Economic analysis
4) Test marketing
5) Product development
6) Commercialization
7) Adoption
(i) idea concentration - There are many sources of new ideas such as their own sales force,
competitors, suppliers, customers, dealless etc and the ideas generated is sent to R & D
department of the company for further process.
(ii) Screening - All the ideas which is collected from different sources are not suitable and
choose those which fulfill the objectives such as lone term and short term activities.
iii) Economic analysis - The screening ideas must be subjected to straight business analysis
and select those which is functional both on economic ground and technical ground.
iv) Product development - this is the stage during which the product ideas takes shape into
actuai product.
A sample or prototype produced in the lab after testing successful laboratory testing. It is
sent to the market for further processes.
v) Test marketing - it means testing the market plans, projection, assumptions and other
aspects of actual marketing by testing in a limited no. of geographical or other segment.
vi) Commercialization - After test marketing the product is approved for the large scale
production for the business purpose activities.