MARKETING MANAGEMENT
MARKETING MANAGEMENT

PRODUCT:
Meaning
Goods & Services
Product Mix
Levels of Product
PLC- Managing PLC
MARKETING MANAGEMENT

NEW PRODUCT DEVELOPMENT
Types of new product
Test marketing a new product
Portfolio analysis
Branding- Definition,
Purpose & significance and
Branding Decisions
Packaging and labelingPurpose ,types and new trends
in packaging
MARKETING MANAGEMENT

PRICE
Meaning
Importance
Pricing Objectives
Factors influencing Pricing
decisions
Approaches to Pricing
Setting the price and managing the
price changes
MARKETING MANAGEMENT

PLACE
Importance
Functions of Distribution Channels
Introduction to various channels of
distributions
Designing of Marketing Channels
Introduction of Wholesaling,
Retailing, Franchising
Direct Marketing
Impact of technology & internet on
Distribution
MARKETING MANAGEMENT


PROMOTION
Concept and role in Marketing
Promotional Mix-Advertising,
Sales Promotion , Personal Selling,
Public Relations
Impact of technology internet on
Promotion
EXTENDED P’S OF MARKETING
People, Process & Physical Evidence
PRODUCT

PRODUCT:
Anything that can be offered to market for
attention ,acquisition use ,or consumption
that might satisfy a want or need
Bundle of physical ,Service and symbolic
attributes designed to satisfy a customer’s
wants and needs.
PRODUCT
Classification
Consumer Products(B2C)

Products, which are purchased by
the ultimate consumers or users for satisfying their
personal needs and desires are referred to as
consumer products. For example, soap, edible oil,
eatables, textiles, toothpaste, fans, etc. which we use
for our personal and non business use are consumer
goods.
Destined for use by ultimate consumer
INDUSTRIAL/ORGANIZATIONAL/B2B PRODUCTS
Industrial products are those products, which are used
as inputs in producing other products. The examples
of such products are raw materials, engines,
lubricants, machines, tools, etc.
Industrial products are meant for non personal and
business use for producing other products.
The market for industrial products consists of
manufacturers, transport agencies, banks and
insurance companies, mining companies and public
utilities.
Consumer Products(B2C)

Depending upon shopping efforts Consumer
products are further classified as
1.Convenience Products
2. Shopping Products
3. Specialty Products
4. Unsought Products
Consumer Products(B2C)
Convenience Products
Goods and services that
consumer wants to purchase
frequently immediately and
with minimal effort. Easily
available
e.g Toothpaste, Magazines,
 Specialty Products
Strong brand preference and
loyalty, special purchase
efforts, little comparison of
brands, low price sensitivity
e.g luxury cars, Tax Attorney

Shopping Products
After comparing competing
offerings on price, quality
and style
e.g Television, Furniture
Clothing

Unsought products
Little product knowledge or if
aware little or even negative
interest
e.g Pre-needed Funeral plans

Convenience Products

CHARCTERISTICS
a) These products are purchased at convenient locations, with least
efforts and time
(b) Convenience products have a regular and continuous demand,as
these generally come under the category of essential products
(c) These products have small unit of purchase and low prices. For
example the eggs are sold at Rs.28 per dozen and the customers purchase them
in small numbers
(d) Convenience products have standardised price as most of these
products are branded products;
(e) The competition in these products is high as the supply is greater
than the demand. The marketers have, therefore, to heavily advertise for these
products
f) Sales promotion schemes or short term incentives such as sales
contests, discount offers, etc play an important role in the marketing of such
products
Convenience Products

Classification:
(a) Staples
Most frequent and most routinely purchased e.g
Milk, Dry cleaning
(b) Impulse
Totally unplanned .Exposure to the product triggers
want e.g Savvy magazines and chocolates
(c) Emergency
Purchases result from urgent and compelling needs
e.g Emergency room visit, Asthma inhalers
Shopping Products

Characteristics
(a) The shopping products are generally of durable nature, i.e.,
they normally survive many uses
(b) The unit price as well as profit margin of shopping products
is generally high;
(c) As these products have high unitprice, customers compare
the products of different companies before making selection;
(d) Purchases of shopping products are generally pre-planned
and there is little degree of impulse buying in these products
(e) Retailers generally play an important role in the sale of
shopping products as lot of persuasive effort is needed to
convince the buyers to purchase them.
Shopping Products

Classification
(a) Homogeneous: All products are
considered similar
Shopping focus mainly on price
comparisons e.g Airplane flights/T.V
(b) Heterogeneous: Shopping focus on
quality comparisons e.g Child Care, Selection
of flat/Appt
Specialty Products

Characteristics
(a) The demand for speciality products is limited as
relatively small number of people buy these products;
(b) These products are generally costly and their unit
price is
very high;
(c) These products are available for sale at few places
as the
number of customers is small and are willing to
take extra efforts in the purchase of these products;
(d) An aggressive promotion is required for the sale of
speciality products, in order to inform people about their
availability,
features, etc.
(e) After sales services are very important for many of
the speciality products.
Durability of Products

On the basis of their durability, the consumer
products have been classified into three
categories”
(a) Durable Products
(b) Non-durable Products
(c) Services.
Durable Products


These goods are generally used for a
longer period, command a higher per
unit margin, require greater personalselling efforts, guarantees and after
sales services, on the part of the
seller.
E.g Refrigerator, Radio, Bicycle,
Sewing machine and kitchen gadgets
Non-durable Products
The consumer products which are
normally consumed in one or few uses
e.g Toothpaste, Detergents, Bathing soap
and Stationary products etc
 From the marketing point of view, these
products generally command a small
margin, should be made available in
many locations and need to be heavily
advertised.

Services


The durable and nondurable goods are tangible
in the sense that these have a physical
existence and can be seen and touched.
Services are intangible in form. By services we
mean those activities, benefits or satisfactions,
which are offered for sale, e.g., dry cleaning,
watch repairs, hair cutting, postal services,
services offered by a doctor, an architect and a
lawyer.
Distinguishing characteristics of services
:
(a) By their very nature, services are intangible, i.e., we
can not see, feel or touch them;
(b) A service is inseparable from its source. That means
we cannot separate the service from the person
providing the service;
(c) The services cannot be stored. They are highly
perishable. For example, if a tailor does not work for
one week, the services he would have provided
during such period go waste;
(d) Services are highly variable as their type and quality
depends on the person providing them. That is why,
there is a difference in the extent of satisfaction we
get from the services provided by different people.
Classification of Product
Depending upon
Durability basis
shopping efforts involved
Durable
Convenience
Product
Shopping
product
Homogeneous
Staples
Impulsive
Heterogonous
Eonegency
Non durable
Specialty
product
Service
Unsought
Product
INDUSTRIAL/ORGANIZATIONAL/B2B PRODUCTS
The important characteristics of industrial products are given below:
1.
Number of Buyers: As compared to the consumer products,
the numbers of buyers of industrial products are limited. For
example, sugarcane is purchased by few producers of sugar,
but sugar, which is a consumer product, is purchased by crores
of people in our country.
2. Channel Levels: Because of limited number of buyers, the
sale of industrial products is generally made with the help of
shorter channels of distribution, i.e., direct selling or one level
channel.
3. Geographic Concentration: Because of location of industries
at certain points or regions, industrial markets are highly
concentrated, geographically. For instance, the demand for
power loom comes from Bombay, Sholapur, Bangalore, etc
where the textile industry is concentrated in our country.
characteristics of industrial products
4.Derived Demand: The demand for industrial products is
derived from the demand for consumer products. For example,
the demand for leather will be derived from demand for shoes
and other leather products in the market.
5. Role of Technical Considerations:
Technical considerations assume greater significance in the
purchase of industrial products because these products are
complex products, bought for use in business operations.
6. Reciprocal Buying: Some big companies from basic
industries like oil, steel, rubber, and medicines resort to the
practice of reciprocal buying. For example, Ashok Leyland
may buy tyres and tubes from MRF, which in turn may buy
trucks from Leyland, whenever it feels the need for the same.
7. Leasing Out: A growing trend in industrial product market
is to lease out rather than to purchase the products on outright
basis because of the heavy price of these products.
CLASSIFICATION OF INDUSTRIAL GOODS

Materials and Parts

Capital Items

Supplies and Business Services
Materials and Parts
These include goods that enter the manufacture’s
products completely
(a) Raw material:
Farm products like cotton, sugar cane, oil seed and
natural products such as minerals (say crude petroleum,
iron ore), fish and lumber
(b) Manufactured material and parts.
These are again of two types –
(I) Component materials : glass, iron, plastic and
component parts such as tyre, electric bulb, steering, and
battery
CAPITAL ITEMS
(II)Capital Items: These are such goods that
are used in the production of finished goods
These include:
(a) Installations like elevators, mainframe
Computers,
(b)Equipments like Hand Tools,Personal
Computer, Fax Machines, etc.
Supplies and Business Services

These are short lasting goods and services that
facilitate developing or managing the finished
product.
(a) Maintenance and repair items: Paint,
Nails, etc
(b) Operating supplies : Lubricant, Computer
Stationary, Writing Paper, etc.
BUSINESS SERVICES
(a)


(b)
Maintenance & Repair Services
Usually supplied under contract by
small producers
Available from the manufacturer of
original equipment
e.g. Window cleaning, Copier repair
Business advisory Services:
e.g. Legal ,Management Consultancy,
advertising
Industrial Goods
Material & parts
Raw material
Form
product
Capital items
Manufactured Installation
material
& parts
Equipment Maintenance
& repair
items
Natural
products
Component
material
Supplier & Business
Services
Component
material
Operating &
Suppliers
Product mix/Product Assortment

Complete set of all Products offered for sale
by a company

The number of products carried by the firm at
a given point of time
HUL Product Line
HUL
Food Brands
Home care Brands
Personal Care Brand
Water
Red Label
Active Wheel
Aviance
Pure it
Brooke Bond
Cif
Axe
Taj Mahal
Domex
Clinic Plus
Lipton
Rin
Close up
Bru
Sunlight
Pepsodent
Annapurna
Surf Excel
Sunsilk
Knorr
Vim
Vaseline
Kwality Walls
Ayush
Breeze
Dove
Hamam
Lifebuoy
Pears
Rexsona
Dabur
Health Care
Personal Care
Foods
Health Supplements
Dabur Chyawanprash
Dabur Chyawanprakash
Dabur Chywan Junior
Glucose-D
Honey
Hair Care
Real Fruit Juices
Real Activ (No Added Sugar)
Burrst(Light and Refreshing Fruit Beverage)
Hommade
Cooking Paste
Tomato Puree
Coconut Milk
Hair oil
Dabur Amla
Dabur Amla Flower Magic
Vatika Enriched Coconut oil
Vatika Enriched Almond Hair oil
Oral Care
Dabur Red Tooth Paste
Babool tooth Paste
Meswak Tooth paste
Promise tooth Paste
Lal Dant Manjan
Babool Mint Fresh Gel
Shampoo
Vatika Smooth And Silky
Vatika Root Strengthening
Black Shine
Vatika Danddruff Control
Dabur Total Protect
Digestives
Hajmola Tablets
Hajmola Candy
Conditioner
Vatika Smooth And Silky Conditioner
Vatika Root Strengthening Conditioner
Skin Care
Uveda Range
Complete Fairness Range
Moisturiser Face Wash
Clarifiying Face Wash
Dabur Gulabari
Health Care
Personal Care
Foods
Health Supplements
Dabur Chyawanprash
Hair Care
Real Fruit Juices
Real Activ (No Added Sugar)
Dabur Chyawanprakash
Dabur Chywan Junior
Glucose-D
Honey
Hair oil
Dabur Amla
Dabur Amla Flower Magic
Vatika Enriched Coconut oil
Vatika Enriched Almond Hair oil
Oral Care
Dabur Red Tooth Paste
Babool tooth Paste
Meswak Tooth paste
Promise tooth Paste
Lal Dant Manjan
Babool Mint Fresh Gel
Shampoo
Vatika Smooth And Silky
Vatika Root Strengthening
Black Shine
Vatika Danddruff Control
Dabur Total Protect
Digestives
Hajmola Tablets
Hajmola Candy
Conditioner
Vatika Smooth And Silky Conditioner
Vatika Root Strengthening Conditioner
Skin Care
Uveda Range
Complete Fairness Range
Moisturiser Face Wash
Clarifiying Face Wash
Dabur Gulabari
Burrst(Light and Refreshing Fruit
Beverage)
Hommade
Cooking Paste
Tomato Puree
Coconut Milk
Product Line


A group of products clubbed together by virtue of
satisfying a particular class of needs ,being used together or
distributed through the same channel or possessing
common physical or technical characteristics
A group of closely related products constitute a product
line
Some terms



Width/Breadth of product mix
The number of Product line it carries
Length/Depth of Product line
Number of items or brand in line
Depth of Product line
Total number of items under each brand in line, in
terms of variants, shades models packs size
Product Mix For HUL
HUL PRODUCT MIX
HOME & PERSONAL CARE
FOODS
WATER
HINDUSTAN UNILEVER NETWORK
EXPORTS
Product Mix Decisions

Adding /Stretching Product line upwards /downwards

Line filling

Line Pruning
Adding /Stretching

(a)
(b)
Is done due to structural changes in the market placethe most important being the customer lifestyles and
demographic characteristics like rising income and lower
proportion of income being spent on food and other
essential items .
Two types:
Stretching down
Stretching up
Stretching down

Initially taken its position in high price slot ,stretches the
line downwards by offering the products in the same line
for lower end markets
HUL
Surf- 40/K.g Nirma
Sunlight-26/k.g
Wheel- 10/k.g
Stretching up

The firm moves up the line from its original posture and
makes higher priced offers from its stable
Philips-
Line filling



The firm introduces more items to the line to plug certain gaps in
its current range of offers.
Intention: Full line company, customers do not go to competitors
for offers/models in particular price slot
Videocon co lour T.V: Initially on launch target was elite market
segment hence introduced premium range
within three years launched 14 ” Private-Yupiee, Bazooka-Top
end, Turbo tough – MI, Budget line-LMI
1995- 11 new offers- 03-14 inch Models, 02-20, 4-21,1-25,1-29.
Line pruning

Conscious decision to reduce the number of items in the
product line ,the company is trying to save the cost and
maximize the efficiencies in production and distribution
and promotion
Marketing is not about providing products or
services it is essentially about providing changing
benefits to the changing needs and demands of the
customer’
When an organization introduces a product into a
market they must ask themselves a number of questions.
Who is the product aimed at?
What benefit will they expect?
How do they plan to position the product within the
market?
What differential advantage will the product offer over
their competitors?
Kotler suggested that a product should be viewed in three levels.
Level 1: Core Product. What is the core benefit your product offers?.
Customers who purchase a camera are buying more then just a camera
they are purchasing memories
.
Level 2 Actual Product: All cameras capture memories. The aim is to
ensure that your potential customers purchase your one. The strategy at
this level involves organizations branding, adding features and benefits to
ensure that their product offers a differential advantage from their
competitors.
Level 3: Augmented product: What additional non-tangible benefits can
you offer? Competition at this level is based around after sales service,
warranties, delivery and so on.
Levels of product
The Core Product



Every product provides a basic function that
solves a customer problem
The core benefits or service consist of the
benefits provided with when they purchase and
use a good or service
The core product refers to the use , the benefit
or problem solving services the consumer is
really buying when purchasing the product
The problem solving services or
core benefits that consumers are
really buying when they obtain a
product
Locks and alarm provide security
Cars provide transportation
The Actual Product




That the customer buys
The specific offering aimed at the market
Tangible features associated with the product
Five elements
-Design
-Style
-Feature
-Quality
-Packaging
5 elements of Actual Product
Quality
 Brand
 Features
 Styling
 Packaging






Product Performance
Helps the customer
position and identify
the customer
Combination of product
attributes
Aesthetic aspects
Protects and promotes
the product
Why is it important?



This the way firms have traditionally
differentiated from rivals
Differentiation permits premium pricing and
build customer loyalty
Important in segmentation ,targeting &
position (STP)
The Augmented Product



The additional bundle of benefits purchased
with actual product
Additional Consumer services or benefits
The term covers both
- tangible Features: After Sales, Warranties
-Intangible Features: Brand values
The Augmented Product








After Sales
Delivery
Guarantee
Credit
Repairs
Spare Parts
Advice
Money back Guarantee
Why is it important?




It offers psychological benefits that enhances
the value of core and actual product
Enhances the attractiveness of the product and
is source of competitive advantage
Firms are adding values to the product
Companies wrap additional benefits around
their product in order to differentiate
themselves from rivals
Product life Cycle



This describes the stages of new product goes
through from beginning to end
Every product passes through certain
identifiable stages
A theoretical model which describes the stages
a product goes through
Stages of a Product Life Cycle




Introduction
Growth
Maturity
Decline
Stages in a Life Cycle
SALES
PROFITS
Introduction
Growth
Maturity
Decline
Introduction






competing against older, established
products
Low level of sales
Low capacity utilization
not widely distributed because reluctance to
take an unproven product
price usually high
promotion needs to inform the customer
Strategies at the introduction




Objective to attract trend setters
High Promotional spending to create awreness
and inform people
Either Skimming or penetration strategies
Bought by innovators /trend setters
Growth







Expanding market but arrivals of competitors
features and options must be added
Cash flow becomes positive
The market grows, profits rise but attracts the entry of
new competitors
wider distribution
adjustment in pricing
promotion must attract customers, advantages of the
product
Strategies in Growth stage




Advertising to promote brand awareness
Increase in distribution outlets-intensive
distribution
Improvements in product- New features ,
improved styling
Go for market penetration and if possible price
leadership
Maturity





sales peak, profit begin to decline, customers have the
product and there are many companies in the market,
competition becomes very intense
all products features, option, guarantees/warranties are
similar (so customer service options could be added)
pricing become very competitive
increase availability of the product becomes wider
promotion – why their product is better
Strategies for mature stage






Need to defend position
Competitor based pricing
Enter new segments
Attract new users
Repositioning
Develop New uses
Decline





product is no longer satisfying or they discover
new and better products, sales drop, little or no
profit
try to identify other uses
distribution is reduce
price is usually reduced
more selective and less promotions
Strategies for the decline phase



Maintain the market share
Harvest by spending little on marketing the
product
Promotion to retain loyal customers
SUMMARY OF PRODUCT LIFE CYCLE
(CHARACTERISTICS)
Characteristics
Introduction
Growth
Maturity
Decline
Sales
Low
Rapidly rising
sales
Peak Sales
Decline
Cost/customer
High cost
Average
Low
Low
Profits
Negative
Rising
High
Decline
Customers
Innovators
Early adaptors
Middle Majority
Laggards
Competitors
Few
Growing
Stable begins to
decline
Declining Number
increases
SUMMARY OF PRODUCT LIFE CYCLE
(Marketing Objective)
Introduction Growth
Maturity
Decline
Create
Maximize Maximize
Reduce the
Product
market
profit
expenditure
Marketing
awareness
share
While
and milk
Objective
& Trial
defending
the brand
market
share
SUMMARY OF PRODUCT LIFE CYCLE
(strategies)
Strategies
Introduction
Growth
Maturity
Decline
Product
Offer a basic
Product
Product
Extension
service
Diversify brand
and models
Phase out weak
items
Price
Use cost plus
Price to
penetrate the
market
Price to match
or beat
competitors
Cut price
Place
Build selective
distribution
Intensive
distribution
Build more
intensive
Go selective
phase out
Unprofitable
outlets
Advertising
Build product
Awareness
among early
adopters
Build
awareness
& interest in
The
mass market
Stress Brand
differences &
benefits
Reduce to level
needed to
Retain
Hard core
Loyal
Sales
Promotion
Heavy
Reduce
Increase to
encourage brand
switching
Reduce to
minimal level
Boston Matrix

The Boston Matrix consulting group
developed this as a tool of portfolio Analysis

It can be applied to the portfolio of products
produced by a firm or the portfolio of business
owned by the company

Portfolio is the collection of businesses or
products that make up a business
The axes of the Matrix


Relative Market Share
-This is expressed not as % but share in
relation to other firms in market
-This is the measure of the firms /Product’s
strength in market
Market Growth
-% rate of growth of sales in the market
-A measure of market atrractiveness
From this we derive four cells as a means of
analyzing the product
Assumptions underlying BM




Market share can be gained by investment in
marketing
Market share gains will always generate cash
surpluses
Cash surpluses can be generated when the
product is in the mature stage
The best opportunity to build a dominant
market position is during the growth phase
Growth-Share Matrix
Boston Consulting Matrix
Question Mark
Low share of rapidly growing
market
 Cash flow is negative
 Has potential but the future is
uncertain
 It could either be a star or a dog

Strategy for Question Mark
Invest to increase the market share
 Substantial investment to achieve
growth at the expense of powerful
competitors
 Invest in promotions
 Build selectively

Stars





High Share of rapidly growing market
Position of leadership in a high growth
market
The product/business is relatively strong
and the market is growing
Although the product generates income it
is countered by high spending
Net cash flow is neutral
Strategy for stars
Investment to sustain growth
 Build sales and market share
 Spend to keep competitors at bay
 Invest to maintain or increase
leadership position
 Repel challenges from competitors

Cash Cows
High share of slowly growing
Market
 Mature stage in PLC
 Little potential for growth
 Large positive cash inflow

Strategy for Cash Cows







Harvest
Defend market share
Aim for short term profits
Little need of investment
Little potential for further growth
Reduce investment in order to maximize short
term cash flow and profits
Use profits from cash cows to invest in new
products
Dogs
Means unattractive
 Low share of a slowly growing Market
 No real potential
 Dogs are either
- Products that have failed
-Products that are in decline phase

Strategy for Dogs
Phase out or sell off (Divest)
 Not worth investing in
 Any profit made has to be re invested
just to maintain market share

Boston Matrix Summary

Star
-High market growth
-High market share
Cash neutral
HOLD

Cash Cow
-Low market growth
-High market share
Cash Generating
Harvest or milk


Question Mark
-High market growth
- Low market share
Cash Absorbing
BUILD
Dog
--Low market growth
-Low market share
Cash Neutral
DIVEST
Criticism




Market growth is inadequate measure of a
markets attractiveness
Market share is an adequate measure of
products ability to generate cash
The focous on market share and market growth
ignores issues such as developing a sustainable
competitive advantage
The product life cycle varies
BCG Matrix for Bharti Airtel
Stars
?
Mobile Services
Retail
Insurance
DTH & IPTV
Broad Band
Cows
Dogs
LOW
• Fixed Line Services
HIGH
LOW