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Marketing Management

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Marketing Management

  1. 1. MARKETING MANAGEMENT A. ANANDA KUMAR Department of Management Studies, Christ College of Engg. & Tech., Puducherry, India. Mobile: +91 99443 42433 E-mail: searchanandu@gmail.com
  2. 2. MARKETING  flow of goods & services from producers to customers.  consists of those activities involved in the flow of goods & services from the point of production to the point of consumption.  finding out what people wants & creating products, services or ideas that match those needs.
  3. 3. DEFINITION OF MARKETING An American Marketing Association as defined, “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives”. Kotler has defined “marketing as a social and managerial process by which individuals and groups obtain what they need and what through creating and exchanging products and value with others”.
  4. 4. OBJECTIVES OF MARKETING 1. To analyse marketing problems and suggest suitable solutions. 2. To develop policies and their implementation for a good result. 3. To derive intelligent appreciation of modern marketing practices. 4. To develop successful distribution. 5. To analyse existing marketing function and remove unnecessary procedures.
  5. 5. MARKETING FUNCTIONS Marketing Functions Functions of Exchange Functions of Facilities Functions of Physical Distribution Buying Assembling Selling Financing Risk taking After Sales Services Transportation Material HandlingWarehousingInventory
  6. 6. MARKET & MARKETING total demand of potential buyers all activities aimed consumer satisfaction place or area (covers exchange functions) where buying & selling take place other facilitating functions (financing, risk bearing, after sales services etc.)
  7. 7. SELLING & MARKETING Starting Focus Means Objectives point Selling Concept Market -ing Concept Factory Product Selling & Profit through Promotion Sale Volume Target Customer Integrated Profit through market needs marketing customer satisfaction
  8. 8. SELLING & MARKETING Sl. No SELLING MARKETING 1. Selling begins with the seller and the emphasis is on the product. Marketing starts with the consumer and the emphasis is on the needs of the customers. 2. Narrow in scope. Considers business as a consumer satisfying process. 3. Considers business as a goods producing process Considers business as a consumer satisfying process. 4. The product that is to be offered is determined by the seller. The product that is to be offered determined by the buyer. 5. Packaging is considered as a mere protection or a mere container for the goods. Packaging is designed to provide the maximum satisfaction and convenience to the customer.
  9. 9. Sl. No SELLING MARKETING 6 Price is determined on the basis of cost. Price is determined by the consumer. 7 Production is the central function and sales is a secondary function. Marketing is the central function. The whole concern is organized around the marketing function. 8 Internal, company orientation External, marketing orientation.
  10. 10. CONCEPTS OF MARKETING 1. The Exchange Concept 2. The Production Concept 3. The Product Concept 4. The Selling Concept 5. The Marketing Concept 6. The Societal Marketing Concept
  11. 11. Concepts of Philosophies Stage 1 Stage 2 Stage 3 Result of Stage 1-3 Profits Production Concept Vague idea about customer wants Mass Production Mass Production Product availability at a low price Profit through mass standardiza tion Product Concept Vague idea about customer needs Superior product by R & D Distribution without proper marketing mix Superior performanc e product availability Profit through marketing myopia Selling Concept Vague idea about customer needs Mass production and distribution Maximum use of selling technique Product availability buyer inertia Profit through hard-sell Marketing Concept Analyses target market Know what customer needs Integrated marketing Product as per customer requirement s Profit through customer satisfaction
  12. 12. The Marketing Mix
  13. 13. The Marketing Mix • The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives • 4Ps –Product, Price, Place and Promotion
  14. 14. MARKETING MIX – 4 P’S Product PlacePromotion Price Marketing Mix
  15. 15. The Marketing Mix
  16. 16. The 4 Ps & 4Cs Marketing Mix Product Price Promotion Place Customer Solution Customer Cost Communication Convenience
  17. 17. PRODUCT 1. Brand 2. Style 3. Color 4. Design 5. Product Line 6. Package 7. Warranty 8. Service
  18. 18. PRICE 1. Price Strategy 2. Pricing Policy 3. Basic Price 4. Terms of Credit 5. Discount 6. Allowances
  19. 19. PLACE 1) Distribution Channels 1. Wholesalers 2. Retailers 3. Mercantile Agents 2) Physical Distribution 1. Transport 2. Warehouse 3. Inventory
  20. 20. PROMOTION 1. Personal Selling 2. Advertising 3. Publicity 4. Sales Promotion
  21. 21. OLD CONCEPT or PRODUCT ORIENTED CONCEPT “Marketing is the performance of business activities that direct the flow of goods and services from the producer to consumer or user.” - American Marketing Association “Marketing comprises both buying and selling activities.” - Prof. J.F. Pyle
  22. 22. OLD CONCEPTS OF MARKETING Goods and Services Sales Profit through Sales
  23. 23. NEW or MODERN or CUSTOMER ORIENTED CONCEPT “Marketing is the delivery of standard of living to the society”. - Prof. Paul Manure Marketing is the process of discovering and translating consumer needs and wants into product and service specifications, creating demand for these products and services and then in turn expanding this. - Prof. Malcolm, McNair
  24. 24. NEW CONCEPTS OF MARKETING Discovery of Consumer Needs Creation of Demands Sales Production of Goods & Services After Sales Service Profit through Customer Satisfaction
  25. 25. MARKETING ENVIRONMENT 
  26. 26. (A) Micro Environment 1. Company 2. Suppliers 3. Marketing Intermediaries 4. Customer Markets 5. Competitors
  27. 27. 1. Company • Interrelated groups • Company objectives, strategies & policies • Marketing manager makes decisions within plans
  28. 28. 2. Suppliers • Provide resources to produces goods & services • Must watch supply availability • Supply storage or delay affects sales
  29. 29. 3. Marketing Intermediaries • Middlemen (includes wholesalers & retailers) • Selecting the right middlemen is difficult • Transportation • Market research • Financial intermediaries
  30. 30. 4. Customer Market 1. Consumer markets 2. Business markets 3. Reseller markets 4. Government market 5. International market
  31. 31. 5. Competitors • Satisfy the needs & wants better than competitors • Different types of competitive strategy has to be adopted. • Best strategy
  32. 32. (B) Macro Environment 1. Demographic Environment 2. Economic Environment 3. Natural Environment 4. Technological Environment 5. Political Environment 6. Cultural Environment
  33. 33. 1. Demographic Environment • Population
  34. 34. 2. Economic Environment • Market requires consumers purchasing power and spending patterns • Upper class consumers – luxury goods • Middle class consumers – some what careful • Working class consumers – excluded food, clothing & shelter • Under class consumers – included food, clothing & shelter
  35. 35. 3. Natural Environment • It refers to the natural resources which are needed as inputs by marketers or that they are affected by marketing activities
  36. 36. 4. Technological Environment • Every new technology replaces an older technology. • New technologies create new markets and opportunities
  37. 37. 5. Political Environment • Marketing decisions are strongly influenced by the political environment. • The political environment comprises laws, govt. agencies and pressure groups. • Every marketing activity is subject to laws and regulations. • Laws affecting business has increased over the years mainly for protecting the consumers from unfair business practices.
  38. 38. 6. Cultural Environment • Cultural environment consists of forces that affect society’s basic values, perceptions, preferences and behaviours.
  39. 39. IMPORTANCE OF MARKETING 1. Importance of Marketing to the society 2. Importance of marketing to the company 3. Importance of marketing in developed economy 4. Importance of marketing in underdeveloped or developing economy 5. Importance of marketing in Indian economy
  40. 40. 1. Importance of Marketing to the society i) Delivery of standard of living to the Society ii) Decrease in distribution cost iii) Increasing employment opportunities iv) Protection against business slump v) Increase in national income
  41. 41. 2. Importance of marketing to the company i) Helpful in business planning and decision marketing ii) Increase in the profit iii) Helpful in communication between society and business
  42. 42. 5. Importance of marketing in Indian economy (i) Increases in employment opportunities; (ii) Balanced growth of the country; (iii) Increase in the sale of goods; (iv) Increase in profits; (vi) Development of the means of communication; (vii) Development of the means of transportation (viii) Development of the means of warehousing; (ix) Development of new media of advertisement and sales promotion; (x) Development of banking and insurance industries.
  43. 43. EVOLUTION OF MARKETING CONCEPT 1. Self-sufficient stage 2. Exchange-oriented stage 3. Production-oriented Stage (1869 -1930) 4. Sales-oriented Stage (1930-1950) 5. Marketing-oriented Stage (1950-1960): 6. Consumer-oriented Stage (1960s – present):
  44. 44. Marketing Planning  “Marketing planning is the work of setting up objectives for marketing activity and of determining and scheduling the steps necessary to achieve objectives”.  A written document that acts as a guidebook of marketing activities for the marketing manager
  45. 45. Marketing Planning  Marketing plans typically include a description of: - Market Conditions - Products - Buyers - Sales potential - Contract terms or pricing strategy - Promotion and Distribution ideas - Resources
  46. 46. Features of Marketing Plan  It gives plan to allocate of marketing resources in the best and most economical way.  It gives guidance and direction of marketing activities.  It is future course of marketing activities.  Marketing planning is aim to achieve the goals of the company.  Marketing plan is Blue print of marketing future actions.  Marketing planning is one of the most effective management tools.  Careful planning leads for successful operation.
  47. 47. Importance of Marketing planning  It is very helpful for identification of marketing opportunities and threats.  It focus on objectives.  It is very helpful for identification of future development.  Improve the coordination of all the departments.  Increases the effective actions.  It reduces time and economical factor.  It is very helpful for developing a company profile.  Marketing planning achieves customer satisfaction
  48. 48. Elements/Components of Marketing planning Elements of Marketing Planning Determining the objectives Policies Procedures Programme Schedules Sales Forecast Budgets
  49. 49. STRATEGIC PLANNING  Strategic Planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.  It is a process which involves a set of decisions and actions to achieve the objectives of an organisation.  It is a set of objectives, policies and rules that guide over time firm’s marketing efforts.
  50. 50. STRATEGIC PLANNING Definition “The formulation and implementation of plans and carrying out of activities relating to the matters which are of vital, pervasive or continuing importance to the total organisation”. - Sharplin
  51. 51. Strategic Planning Process Business Mission Formulation of Business Goal Formulation of Business Strategy Formulation of Programs Implementation of the Plan Program Feedback & Control External Environment (Opportunities & Threats Analysis) Internal Environment (Strength / Weakness Analysis) SWOT Analysis
  52. 52. 1. Deciding on the business Mission  the business mission should stem from the overall corporate mission and objective of the firm.  it should essentially express why it is in the business portfolio of the company and what function the corporate expects it to play.  when a company expects the business unit to give more market share in that particular industry segment, it should set the mission statement for the business.
  53. 53. 2. Conducting SWOT analysis  the firm needs to conduct a strength, weakness, opportunity and threat analysis for the business unit.  while strengths and weakness is analysis of internal strength of the firm, opportunity and threat analysis is the analysis of external environment to identity the potential risks and returns opportunities in the business.
  54. 54. 3. Formulating Goals for the Business Unit  these goals are used to describe business objective with respect to marketing expenditure of the firm for a specific period of time.  goals can be explained in terms of market share, sales, profit, profitability in achieving the sale, level of reputation and image desired by the business unit in the industry.
  55. 55. 4. Formulating Business Strategy  Strategies are long-term goal directed actions.  a company deliberately chooses a particular strategy depending upon its strengths and goals set for the business unit.  Companies follow cost strategy when they can produce and distribute goods and services at the lowest possible cost compared to competitors to win a larger market share.
  56. 56. 5. Program Formulation and implementation  once the business unit planning is over, the marketing manager should develop detailed supporting programs.  these programs are purely functional plans to execute the strategies.  marketing managers need to develop a marketing plan, which should include cost estimates, budget allocations on various functional activities and link the investments with the likely returns to decide whether it is worth executing a particular program.
  57. 57. 6. Feedback and Control  for successful business planning and implementation, it is important to monitor and evaluate the execution at different points of time.  firms design milestones and targets to measure the performance and it they find a gap between what was planned and the results of the plan, they need to take corrective actions.  feedback flow also helps in finding out the validity of assumptions on likely market response.
  58. 58. INTEGRATED MARKETING • The marketing manager co-ordinates the activities of all the departments in an organization engaged in manufacture. The policies of all the other departments are adjusted on the direction and suggestion of the Marketing manager. The following are some of the important activities of the marketing management under integrated marketing.
  59. 59. • Collection of necessary data relating to market. • Analyzing the data so collected and drawing conclusions. • Developing the product. • Developing new techniques of marketing. • Framing a detailed marketing programme. • Implementing the marketing programme. • Co-ordinating the wants and satisfaction of the customers.
  60. 60. SOCIAL MARKETING • Marketing can be used to bring not only products and services but also social cause to the attention of a market. • The efforts make by such organisations to gain the support of the society for a social cause or change is called social marketing. • The social causes include population control, energy conservation, environmental protection and cigarette smoking, drug control etc.
  61. 61. QUESTIONS 1. “Marketing is Business”. Comment 2. “Consumer is King”. Comment on the statement in the light of modern concept of Marketing. 3. How consumer satisfaction leads to better sales? 4. Discuss on the problems of Marketing Management in India. 5. “Marketers can create needs.” Do you agree? Give reasons to support your answer. 6. What are the qualities of a sales manager? 7. Are Middlemen necessary? Discuss
  62. 62. QUESTIONS 8. “The money spends on advertising a product is an investment and is not waste”. Do you agree? Give reasons for your answer. 9. “All advertisement is a social waste” – Discuss. 10. “Good salesmen are born and not made” – Comment on this statement. 11. “Customer relationship is very important for marketing”. Explain. 12. “Marketing begins with consumer and ends with consumer”.
  63. 63. QUESTIONS 13. “Marketing should aim at meeting a given customer’s need rather than selling a given product.” Do you agree with the statement? If so, why? Who benefits from marketing concept and how? 14. “Instead of trying to market what is the easiest for us to make, we must try to find out much more – what is the consumer willing to buy? In other words, we must apply our creativeness more intelligently to people rather than products.” Explain this statement in the context of the modern marketing concept.
  64. 64. BUYER or CONSUMER BEHAVIOUR The modern marketing concept the buyer or consumer is the Fulcrum; he is the life blood; he is the very purpose of the business. He has to be closely followed What he wants? When he wants? Where he wants? How he wants? The answer to those questions can be found through consumer research. The answer of these questions are important to marketers because they plan to strategy of marketing.
  65. 65. CONSUMER BEHAVIOUR  Glenn Wilters defines, “human behaviour refers to the total process by which individuals interact with their environment”. To be specific consumer behaviour refers to the act of consuming a good or service.  According to Webster, “Buyer behaviour is all psychological, social and physical behaviour of potential customers as they become aware of, evaluate, purchase, consume and tell other people about products and services”.
  66. 66. CONSUMER MIND Stimulus Company controlled Product Price Advertising Display Distribution Social Word of mouth Reference group Consumer Mind Response Buy No Buy
  67. 67. Difference between Consumer & Customer  A consumer refers to individuals who buy for themselves or their family, whereas a customer can also mean the retailer or person who buys from the manufacturer, etc. for ultimate sale to others.  The one who buys the product is called a customer and the who uses the product is called a consumer. Every customer is a consumer but not every consumer a customer.
  68. 68. IMPORTANCE OF CONSUMER BEHAVIOUR  To identify consumer needs and wants.  Understanding of consumer behaviour is essential for the long run success of any marketing program.  To design new products and marketing strategies that would fulfill consumer needs.  Consumer behaviour is thus the study of how individuals make consumption decisions.  To achieve consumer satisfaction the marketer should know and understand consumer’s behaviour.
  69. 69. FACTORS INFLUENCING CONSUMER BEHAVIOUR 1. Internal Psychological factors 2. Social factors 3. Cultural factors 4. Economic factors 5. Personal factors
  70. 70. 1. Internal Psychological factors a. Motivation b. Perception c. Learning
  71. 71. 2. Social factors a. Family b. Reference group c. Roles and status
  72. 72. 3. Cultural factors a. Culture b. Sub culture C. Social class
  73. 73. 4. Economic Factors a. Personal Income b. Family Income c. Income expectations d. Savings f. Consumer credit
  74. 74. 5. Personal Factors 1. Age and Stage in Life Cycle 2. Occupation 3. Lifestyle
  75. 75. Stages of the Consumer Buying Process Need Motive Problem Recognition Post Purchase Behavior Purchase Decision Evaluation of Alternatives Information Search Purchase Habit Formation Internal Search External Search Buy Later Do not buy Satisfaction Dissatisfacti on
  76. 76. Problem Yes Recognition No T.V. Show room Information Advertisement Search Stage Friends Family Magazines Price Alternative Clarity & Size Evaluation Model Stage Expert Opinion Purchase buy Decision Stage do not buy Need for a new T.V. Information collection About the T.V. Criteria of Selection Purchase Decision
  77. 77. Economy No luxury version now later dealer A dealer B Post Satisfied Purchase Stage Dissatisfied Timing of Purchase Type of T.V. Where to Purchase Degree of Satisfaction
  78. 78. Consumer Marketing The Marketing activities involved in selling their good to consumers. Manufacturers supply goods directly to retailers. Retailers keep the right good to satisfy the customers. In consumer marketing manufacturers and retailers advertise the products extensively.
  79. 79. Consumer Goods Consumer goods are those goods which are directly consumption by ultimate consumers. For example Car, Television, Radio, Cycle, Shoe, Soap, Toys, Toothpaste.
  80. 80. Classification of Consumer Goods 1. Shopping Goods 2. Convenience Goods 3. Speciality Goods
  81. 81. 1. Shopping Goods Shopping goods are consumers products. These goods are not purchased frequently by the buyers. The cost of goods are high. Examples: T.V. Jewellery, Furniture, Washing Machines, Radio, etc.  This types of goods are not purchased frequently.  This types of goods are high cost.  Brand name is not essential.  Shopping goods are some durable in nature.  Shopping goods are distributed by selected number of retail outlets.  Comparison and evaluation are done by buyers.
  82. 82. 2. Convenience Goods This types of goods are purchase frequently. These goods are purchase daily. Minimum effort is enough for buying such goods. Examples: Soap, Detergent, Toothpaste, Shaving Cream.  This type of good are easily availble.  This type of goods costs are less.  The buyers gives importance to the Brand value.  There is a regular are continuous demand for these goods.  This type of goods are distributed by all the channels.
  83. 83. 3. Speciality Goods This types of goods are know as luxurious goods. The cost of goods are very high. Such goods possess certain special characteristics that attract the buyers. Examples: Cars, Computers, Refrigerators.  These are very high.  Buyers gives importance to the brand value.  Special buying efforts are necessary.  Long time is taken for purchasing.  Marketing channels are very short.
  84. 84. Industrial Market The industrial market is the market consisting of individuals and organisations prepare goods and services to be used in the production of further products. Industrial marketing is defined as the process of marketing industrial goods. Which are used in producing consumer goods.
  85. 85. MARKET SEGMENTATION  In total market may differ in their wants, purchasing power, buying attributes and buying practices. A market segment is a meaningful buyer group having similar wants. Segmentation helps in grouping these consumers having similar wants or desires.  “Marketing Segmentation is the process of dividing the total heterogeneous market for a product into several submarkets or segments each of which tends to be homogeneous in all sufficient aspects”.
  86. 86. LUXURY MID SIZE FAMILY ECONOMY Mercedes Benz BMW Toyota Lexus Chevrolet Optra Sonata Honda Civic Toyota Corolla Baleno Accent Indigo Opel Corsa Ford Ikon Esteem Getz, Swift Maruti 800 Zen Alto Santro Market Segmentation & Brand Positioning in Indian Passenger Car Industry
  87. 87. Bases/Methods of Market Segmentation 1. Geographic Segmentation 2. Demographic Segmentation 3. Psychographic Segmentation 4. Behavioural Segmentation 5. Benefit Segmentation
  88. 88. 1. Geographic Segmentation  Region: by continent, country, state, or even neighborhood  Size of metropolitan area: segmented according to size of population  Population density: often classified as urban, suburban, or rural  Climate: according to weather patterns common to certain geographic regions
  89. 89. 2. Demographic Segmentation  Age  Gender  Family size  Income  Occupation  Education  Religion  Social class
  90. 90. 3. Psychographic Segmentation  buyers are divided on the basis of the life style and personality characteristics.  way of living  reflects the person’s living as a combination of his actions, interests and opinions.
  91. 91. 4. Behavioural Segmentation  The market is divided on the basis of purchase decision and product or brand usage made by consumers.  Behavioral segmentation is based on actual customer behavior toward products. Behavioral segmentation has the advantage of using variables that are closely related to the product itself. It is a fairly direct starting point for market segmentation.
  92. 92. 5. Benefit Segmentation  These methods helps in describing the characteristics of different segments rather than finding out what causes these segments to develop.  People suggesting benefit segments ground their idea on assumption that benefits people expect out of the product consumption situation are the basic reason of purchase and customers can be grouped as per the basic reason of their purchase.
  93. 93. Importance of Market Segmentation  Markets have a variety of product needs and preferences.  Marketers can better define customer needs.  Decision makers can define objectives and allocate resources more accurately.
  94. 94.  No Market Segmentation
  95. 95. Segmented by Gender
  96. 96. Segmented by Age
  97. 97. TARGET MARKETING  Market targeting is a process of taking decision regarding the market segments to be served.  Choosing one or more segments for which to design your marketing operations
  98. 98. POSITIONING  The place the product occupies in consumers’ minds relative to competing products.  Typically defined by consumers on the basis of important attributes.  Positioning maps that plot perceptions of brands are commonly used. Example Lux is positioned as beauty soap of Cine Stars Vicks is an ointment for cold etc
  99. 99. why do this ?
  100. 100. Positioning Strategies 1. Positioning on Product Attributes 2. Positioning on Benefits 3. Positioning according to Usage Occasions 4. Positioning the product for certain classes of users
  101. 101. Competitive Advantage  Almost all the firms in the market try to achieve a sustainable competitive advantage.  a firms that offers the consumer the same value as the competitors, but at a lower cost.
  102. 102. PRODUCT  It is a goods, services or idea, including all attributes provided in an exchange between buyer & seller.  “A product is a set of tangible and intangible attributes, including packaging, color, price, manufacturer’s prestige, retailer’s prestige and manufacturer’s and retailer’s services which the buyer may accept as offering want satisfaction.  A product is determined by the needs & desires of the customer.  A product is almost combinations of tangible & intangible.
  103. 103. CLASSIFICATION OF GOODS OR PRODUCTS Products / Goods Convenience Goods Speciality Goods Shopping Goods Equipments & Physical Facilities Management Materials Manufacturing or Services supplies Materials Entering Into the product Consumer Goods Industrial Goods
  104. 104. 1. Convenience Goods: Goods which consumer buys frequently, immediately and with minimum shopping effort are classified as convenience goods. Example: Cigarettes, newspapers, magazines etc. 2. Shopping Goods: Goods which consumer selects and buy only after making comparisons on such bases as suitability, quality, price and style are called as shopping goods. Example: Furniture, ready-made garments, etc.
  105. 105. 3. Speciality Goods: Goods for which significant number of buyers is habitually willing to make a special purchasing effort are known as speciality goods. They should possess unique features or have a high degree of brand identification or both.
  106. 106.
  107. 107. PRODUCT MIX  Is the full list of all products offered for sale by a company.  Product mix is the set of all product lines and items that a particular seller offers for sale to buyers. Example: Kodak’s Cameras, photographic supplies, Chemicals, plastics and fibers. Tata’s hair oil, cosmetics, locomotives, texiles, iron and steel goods etc. Godrej – soaps, office equipments, edible oil, computers and other products.
  108. 108. PRODUCT LINE  a group of related similar products that are considered a unit because of marketing, technical or use similarity.  possessing reasonably similar physical characteristics
  109. 109. PRODUCT ITEM  a specific product  product item is a distinct unit that is distinguishable by size, price, appearance or some other attribute.
  110. 110. DIMENSIONS OF PRODUCT MIX 1. Length 2. Width 3. Depth 4. Consistency
  111. 111. 1. Length: The length of the product mix refers to the total number of items in its product mix. 2. Width: The width of the product mix refers to the number of different product lines the company carries. 3. Depth: Depth refers to how many varieties are offered in each product line. In other words, the depth is measured by assortment of sizes, colours, models, prices and quantity offered within each product line.
  112. 112. 4. Consistency: The consistency of product mix is a measure of how closely related its various product line are to one another. The relationship may be due to the use, production requirements, distribution channels, consumer behaviour and other characteristics.
  113. 113. width   Color Cosmetics Hair Care Skin Care Oral Care Deodoran ts Soaps & Detergent Toilet Soaps Beverage s Lakme Aviance Sunsilk Clinik Fair & Lovely Pond’s Pepsoden t Toothpast e & Tooth brush Close-up Axe Pond’s Rexona Denim Surf Rin Wheel OK 501 Sunlight Ala Vim Liril Lifebuoy Lux Breeze Pears Hamam Rexona Dove Savlon 3 Roses Lipton Yellow lable Lipton Green lable Lipton Ice Tea Red Lable Taj Mahal Brooke Bond Taaza Bru
  114. 114. PRODUCT LINE DECISIONS 1. Changes in Market Demand 2. Competitive Action and Reaction 3. Marketing Influences 4. Product Influences 5. Financial Influences
  115. 115. FACTORS DETERMINING THE PRODUCT MIX 1. Changes in Demand 2. Cost of Production 3. Advertising & Distribution Costs 4. Competitive Action and Reaction
  116. 116. BENEFITS OF PRODUCT MIX 1. Sales Growth 2. Sales Stability 3. Profits
  117. 117. PRODUCT LIFE CYCLE
  118. 118.
  119. 119. PRODUCT LIFE CYCLE Time Product Develop- ment Introduction Profits Sales Growth Maturity Decline Losses/ Investments ($) Sales and Profits ($)
  120. 120. PRODUCT LIFE CYCLE 1. INTRODUCTION 2. GROWTH 3. MATURITY 4. SATURATION STAGE 5. DECLINE
  121. 121. 1. Introduction  profits are negative or low  volume of sale is less  heavy expenses on distribution  more money is required  promotional expenditure is heavy  highly risk  advertising focus
  122. 122. 2. Growth  refers to a period of rapid market acceptance and increasing profits  competitors are enter  product survival in the market
  123. 123. 3. Maturity  competition becomes more accurate  sales continue to increase but the decreasing rate  producer spend more advertising  capture the market  modification of marketing mix  attract more customers
  124. 124. 4. Saturation Stage  sales of the product reach to the peak  no further possibility increase it  other competitors shall also become popular
  125. 125. 5. Decline  sales decline  sales decline due to technological advances  consumer’s shifts in taste  increased competition  some firms may withdraw from the market
  126. 126. NEW PRODUCT DEVELOPMENT  A product introduce to the market as new – whether they are genuine innovation or slight modifications of the existing products.  In most cases, the newness of the product is the result of combining characteristics of products already in existence.
  127. 127. NEW PRODCT DEVELOPMENT PROCESS / STAGES 1. Idea Generation 2. Idea Screening 3. Concept Testing and Analysis (a) Business Analysis (b) Total Sales Estimation (c) Estimating Cost & Profits 4. Product Development 5. Test Marketing 6. Commercialization
  128. 128. Failure of a Product 1. Inadequate market analysis 2. Product deficiencies 3. Lack of effective marketing effort 4. Higher costs than anticipated 5. Competitive strength or action 6. Improper timing of introduction 7. Technical or production problems
  129. 129. BRANDING The traditional orientation of branding suggests that brand name is a part of the brand consisting of words or letters that form a means to identify and distinguish a firm’s offer. A brand market is the symbol or pictorial diagram that helps in the identification of the product.
  130. 130. PRODUCT PRICING  Pricing means the exchange value of a product or service in terms of money.  Price can decide the success or failure of a concern.  The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.
  131. 131. PRICING OBJECTIVES 1. Target of returns 2. Stability of Price 3. Maintenance of Market Share 4. Meet or Prevent Competition 5. Maximising Profits
  132. 132. FACTORS AFFECTING PRICING DECISIONS Pricing Decision Competition Channels Economical Factor Suppliers Cost of the Product Organisation Consumer Demand Product Demand Government
  133. 133. KINDS OF PRICING 1. Odd Pricing 2. Psychological Pricing 3. Customary Pricing 4. Prestige Pricing 5. Dual Pricing 6. Skimming Pricing 7. Negotiated Pricing 8. Geographical Pricing 9. Monopoly Pricing 10. Expected Pricing
  134. 134. 1. Odd Pricing When the price of a product is an odd number such a pricing method is called odd pricing. Psychological pricing is based on customer price perceptions. It has special appeal in certain target markets. Bata shoe company adopts psychological pricing. They are setting price such as Rs.299.95, Rs.199.99 The buyers feel it in a marked down price. 2. Psychological Pricing
  135. 135. 3. Customary Pricing These prices are fixed by custom. Some products prices are same by different manufacturers. Example: Soap, Toothpaste, Soft Drinks. Many customers judge the quality of a product by its price. Luxury goods are undergo prestige pricing method. Customer may fear that at the low price, it cannot be of good quality. 4. Prestige Pricing
  136. 136. 5. Dual Pricing When a manufacturers sells the same product at two or more different prices. It is called as dual pricing. The same products the prices are different at two places. This pricing policy is followed in railway like First Class, Second Class etc. For same distance travel, same vehicle, the services are sold to passengers at different prices under different classes.
  137. 137. 6. Skimming Pricing A product introduced in the market by high initial price of the product. It gives enormous profits in the initial stage of market period. It is a strategy of recovering rapidly the investment. The market of the product does not respond satisfactorily the price can be lowered.
  138. 138. 7. Geographical Pricing Geographical pricing involves the company in deciding how to price its products to customers in different locations. Added the price of transportation cost to the goods to different regions or zone. The price is fixed by manufacturers who has no competition in the market. It is termed as monopoly pricing. 8. Monopoly Pricing
  139. 139. 9. Expected Pricing This type of price will be accepted by the consumers. The customer response is analyzed and then fix a price of the product.
  140. 140. Process / Stages of Price Determination of a Product Estimating Demand Setting the Price Marketing Policies of the Company Selection of Pricing Strategy Expected Determining Share of Market Anticipate Competition
  141. 141. CHANNEL OF DISTRIBUTION “A Channel of distribution or marketing channel is the structure of intra-company organisation units and extra company agents and dealers, wholesalers and retailers through which a commodity, product or service is marketed”. - American Marketing Association • pathway taken by the goods as they move from the production point to point of consumption • direct or indirect transfer of title of goods • through whole seller, retailer or agencies
  142. 142. CHANNEL DISTRIBUTION Intermedia ries Producer Consumer Distribution Channel
  143. 143. LEVELS OF CHANNELS 1. Direct Marketing Channel/Zero Level Channel 2. Indirect Marketing Channel a. One-Level Channel b. Two-Level Channel c. Three-Level Channel d. Four-Level Channel
  144. 144. 1. Direct Marketing Channel/Zero Level Channel 2. Indirect Marketing Channel a. One-Level Channel b. Two-Level Channel Producer Consumer Producer DistributorProducer ConsumerRetailer Consumer Producer ConsumerRetailer Wholesaler/ Distributor
  145. 145. c. Three-Level Channel: d. Four-Level Channel: Producer ConsumerRetailerWholesalerDistributor Producer RetailerWholesalerDistributorAgent Consumer
  146. 146. FUNCTIONS OF MARKETING CHANNELS 1. Buying 2. Selling 3. Transporting 4. Financing 5. Promoting 6. Negotiating
  147. 147. FACTORS INFLUENCING THE SELECTION OF A CHANNEL Factors influencing the Selection of a Channel Environmental Characteristics Customer Characteristics Middlemen Characteristics Competition Distribution Policy Product Characteristics Cost of Channel Company Characteristics
  148. 148. Channel Design Decisions Analysis of Customer’s Desired Service Output Levels Evaluating the Major Alternatives Identifying Major Channel Alternatives Establishing Channel Objectives
  149. 149. Channel Management Decision Selection of Channel Members Modification of Channel Arrangements Evaluation of Channel Members Motivation of Channel Members Training of Channel Members
  150. 150. DIRECT MARKETING  Direct marketing is also called as channel less retailing.  It uses non-personal communication media i.e., advertising media to make a sale at any location.  Under this method, customers can be contacted through sales personnel, by post namely, mail-order sale, by phone, radio, newspaper, television, magazines, by home computers, etc.
  151. 151. METHODS OF DIRECT MARKETING 1. Direct Mail 2. Tele Marketing 3. Personal Selling 4. Direct Response Television 5. Direct Response Print Media 6. Online Marketing 7. Mobile Marketing
  152. 152. MARKETING INTERMEDIARY  Marketing intermediary: wholesaler or retailer that operates between producers and consumers or business users; also called a middleman.
  153. 153. CLASSIFICATION OF MIDDLEMEN 1. Agent Middlemen Kinds of Agent Middlemen a. Brokers b. Commission Agents c. Manufacturer’s Agents d. Selling Agent 2. Merchant Middlemen a. Wholesalers b. Retailers
  154. 154. WHOLESALER  Wholesale means marketing of goods in relatively large quantities. The wholesalers are the connecting link between the manufacturers and the retailers. They buy in large quantities and resell them to retailers in smaller lots.
  155. 155. WHOLESELLER Serviced of wholesaler to requirements of manufacturer  He keeps price steady and prevents their fluctuations.  He provides storage facilities for the goods till they are needed by manufacturers.  He takes participate in advertising and sale promotion tasks in the manufacturers.  Wholesaler gives information about the product market, consumer needs and opinions to the manufacturers.
  156. 156. WHOLESELLER Services of Wholesaler to the retailer  He is delivering the goods promptly to the retailer.  He provides credits facilities to the retailers.  The wholesaler offers advice and assist retailer with their operations. Management assistance regarding techniques of stocking, displaying, point of sale promotion and trainings are providing by wholesaler.  He shares the risk involved in marketing.  He provides facilities for concentration and handling of goods.
  157. 157. FUNCTIONS OF THE WHOLESALERS 1. Buying and Assembling 2. Warehousing 3. Transporting 4. Financing 5. Risk-bearing 6. Grading, Packing and Packaging 7. Selling
  158. 158. RETAILING  is the last link in the chain of channel.  is a business enterprise which sells primarily to consumers.  it consists of the activities involved in selling directly to the consumers, producers find it convenient to distribute their goods through the retailers.
  159. 159. FUNCTIONS OF THE RETAILERS 1. Buying and assembling of goods from various producers or wholesalers 2. Storing of the goods 3. Risk-bearing 4. Transportation of goods from the godown of wholesalers. 5. Grading and packaging. 6. Providing market information 7. Extension of credit facilities to the consumers. 8. Selling
  160. 160. RETAILERS TYPES There are many ways retailers can be categorized depending on the characteristics being evaluated. For our purposes we will separate retailers based on six factors directly related to major marketing decisions:  target markets served  product offerings  pricing structure  promotional emphasis  distribution method  service level
  161. 161. Methods of Retailing Method of Retailing a. Independent Stores b. Vending Machines c. Discount Houses Small Scale Large Scale a. Department Stores b. Chair or Multiple Shops c. Mail Order d. Supermarkets e. Hyper Markets
  162. 162. ESSENTIAL REQUISITES FOR SUCCESS IN RETAILING 1. Selection of goods 2. Effective buying 3. Proper location 4. Display of goods 5. Advertising
  163. 163. Channel Design  Channel design includes decisions concerning channel length and channel width  Decisions associated with forming new or altering existing channels.  In a market the number of middlemen i.e., selling agents, few wholesalers, established retailers. Deciding upon the best channel is a important role for successful marketing.
  164. 164. SELECTION OF CHANNEL DESIGN Analyzing of Customer’s desired service output levels Evaluating Channels Identifying the Major Channel Alternatives Establishing Channel Objectives
  165. 165. CHANNEL MANAGEMENT DECISIONS Selection of Channel Members Modification of Channel Arrangements Evaluation of Channel Members Motivation of Channel Members Training of Channel Members
  166. 166. INTEGRATED MARKETING COMMUNICATION  The product’s design, its price, the shape and colour of its package and the stores sell it – all communicate something to buyers.  Manager need to communicate & promote the final product  Communication refers unified message about the product or services of the firm.  20th century idea generate integrated marketing communication
  167. 167. INTEGRATED MARKETING COMMUNICATION PROCESS Sender The Company The Marketing Co. The Intermediaries The Retailer Encoding Message Media Mix Decoding by Self Decoding by others Receiver Feedback Responses Sales Increase Awareness Increase Other Communication Objectives NOISE
  168. 168. PROMOTION MIX 1. Personal Selling 2. Advertising 3. Publicity 4. Sales Promotion
  169. 169. 1. Personal Selling  Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale". 
  170. 170. 2. Advertising  Any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform. The two basic aspects of advertising are the message (what you want your communication to say) and the medium (how you get your message across)
  171. 171. 3. Publicity  It is non-personal stimulation of demand for a product. Business unit by placing commercially significant news about it in a publication or obtaining favourable presentation of it upon radio, T.V. The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly. otherwise known as "public relations" or PR.
  172. 172. 4. Sales Promotion  Providing incentives to customers or to the distribution channel to stimulate demand for a product.
  173. 173. MARKETING RESEARCH  Marketing basically consists of identifying the needs of consumers and satisfying them. Marketing research plays a key role in the area of consumers, competition and marketing environment.  “As the systematic gathering, recording and analysing of data about problem relating to do marketing of goods and services”.  A study of the facts relations to any problem in fixed of marketing.  It is the study of marketing problems, techniques and other related decision making and their implementation.
  174. 174. OBJECTIVES OF MARKETING RESEARCH  To evaluate various plans, policies etc.  To define the market for a product.  To forecast the market share and future sales.  To formulate various Marketing strategies, Programmes and Policies.  Marketing research can bring about the right product, right place, right consumers, right price and right sales promotion techniques.  To find out most suitable channel.  To find out most suitable pricing.  To asses the effectiveness of advertising.
  175. 175. IMPORTANCE OF MARKETING RESEARCH  To understand why customers buy a particular product.  To know the marketing opportunity.  To understand marketing problems.  To help in the selection of a right course of action.  To know about customer acceptance of the product.  To understand the distribution network of the product.  To forecast the probable volume of the future sales.  To forecast the expected market share.  To asses competitive strengths & policies.
  176. 176. ADVANTAGES OF MARKETING RESEARCH 1. Marketing research is used to measure market potential, characteristics and share of markets for a particular brand or company. 2. It helps in obtaining information that could lead to the formulation of short and long-range forecasts. 3. Companies can use marketing research to evaluate new product opportunities, and product opportunities, and product acceptance and to test existing products relative to the competitor’s products.
  177. 177. ADVANTAGES OF MARKETING RESEARCH 4. Marketing research helps make better advertising decisions. 5. It also helps to evaluate the effectiveness of marketing activities and draws attention to a potential problem. 6. Marketing research is helpful in planning questionnaires to test comprehension, work norms, memory factors, etc.
  178. 178. SCOPE OF MARKETING RESEARCH 1. Sales Analysis 2. Sales & Distribution Methods & Policies 3. Product Management 4. Advertising Research 5. Media Research 6. Corporate Research 7. Syndicated Research
  179. 179. STEPS IN MARKETING RESEARCH Primary Data Secondary Data Preliminary Section Main Body Reference Section Identifying the Marketing problem its objectives Presentation of Report Analysis of Data Techniques of Data Collection Framing Research Design
  180. 180. IMPORTANT QUESTIONS 1. What is the Product? Explain different concept of a product. 2. Discuss the possible pricing policies for the product of a new manufacturing company. What factors will you take into account in formulating a suitable price strategy? 3. What is the use of discriminating pricing? 4. Explain the concept of Product Mix decision in marketing with examples. 5. Explain the New Product development stages with examples.
  181. 181. IMPORTANT QUESTIONS 6. Describe the pricing strategy that can be followed by Functional organisation. 7. What are the marketing problems and opportunities of a product management structure for an insurance company? 8. Why a new product fails? How to solve the problems of new products failure? 9. Briefly explain the different stages of Product Life Cycle (PLC). 10. What is the Penetration pricing?
  182. 182. IMPORTANT QUESTIONS 11. What is meant by product positioning? How it can be done? 12. Explain the factors contributing to the success and failure of the product. 13. Analyse the reason for the Increasing number of discount sales in the country. 14. When should be company in take a price change? 15. Discuss the Marketing Strategy in the various stages of PLC.
  183. 183. IMPORTANT QUESTIONS 16. What are the functions performed by market intermediaries? 17. What is Promotion Mix? Describe its elements with suitable examples. 18. Differentiate Advertising with Public Sector. 19. Analyse the importance of major decisions in Sales Promotion. 20. Write a short note on Franchisee. 21. Differentiate Advertising with Sales Promotion. 22. Describe different types of Promotional pricing.
  184. 184. IMPORTANT QUESTIONS 23. Explain the factors that influence promotion mix of a company. 24. Explain the role of retailers and wholesalers in the distribution channels. 25. How can Advertiser overcome the problems of literacy in their markets? 26. Explain the reason for channel conflicts in marketing. 27. Give on appropriate promotion mix for a departmental store. 28. Explain the different modes of the marketing mix. 29. Discuss the various steps involved in Developing programme. 30.Discuss the various steps involved in Advertising programme.
  185. 185. INDUSTRIAL MARKETING  is also treated as Business-to-Business Marketing, or Business Marketing, or Organizational Marketing.  Industrial marketing/business marketing is to market the products and services to business organizations: manufacturing companies, government undertakings, private sector organisations, educational institutions, hospitals, distributors, and dealers.  The business organizations, buy products and services to satisfy many objectives like production of goods and services, making profits, reducing costs, and, so on.
  186. 186. Characteristics of Industrial Marketing 1. Market Characteristics a. Size of the Market b. Geographical Concentration 2. Product Characteristics 3. Buyer Behaviour 4. Channel Characteristics 5. Promotional Characteristics 6. Price Characteristics
  187. 187. TYPES OF INDUSTRIAL CUSTOMERS 1. Commercial Enterprises 2. Government Customers 3. Institutional Customers 4. Cooperative Customers
  188. 188. SERVICES MARKETING  regardless of the “product”, there is a services component to the offerings of all firms  in some cases, a service is the principal purpose of the transaction, as in the rental of a car, a haircut, or legal services -- we refer to this as the core service  in others, service is performed in support of the sale of a tangible product -- these are referred to as supplementary services
  189. 189. SERVICE MARKETING  Service is any act or performance that one party can offer to another that is essentially intangible and does not result in any ownership of anything. - PHILIP KOTLER
  190. 190. Canned foods Ready- made clothes Auto- mobiles Draperies, Carpets Rest- aurant meals Repairs: auto, house, landscaping Air travel Insurance, Consulting, Teaching MOSTLY GOODS MOSTLY SERVICES The Goods-Services Continuum
  191. 191. CHARACTERISTICS OF SERVICE MARKETING Service Marketing Perishability Intangibility Variability Inseparability
  192. 192. 1. Intangibility  services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase. 2. Inseparability  difficult to separate services from the service provider; mainly direct sales; staff are essential to the delivery of quality services
  193. 193. 3. Variability  virtually every service is different; very difficult to standardize quality.  it is otherwise called heterogeneity. 4. Perishability  those not sold can not be stored
  194. 194. Some Services Firms 
  195. 195. Rural marketing 
  196. 196. Rural marketing  The companies to create an awareness of their goods and services, vast segments in the rural sectors in Asian Countries, still remain untapped.  Lifebuoy was one of the first soaps with rural areas as the key target market.  The rural market is a fast growing one and has a huge population with a great level of disposable income.  Sometimes, existing products might have to be modified to suit these markets too accordingly.
  197. 197. INDIAN RURAL MARKET  The urban metro products and marketing products can be implemented in rural markets with some or no change.  The rural marketing required the separate skills and techniques from its urban counter part.  Low priced products can be more successful in rural markets because the low purchasing, purchasing powers in rural markets.  Rural consumers have mostly homogeneous group with similar needs, economic conditions and problems.
  198. 198. OPPORTUNITIES IN RURAL MARKETS 1. Untapped Potential 2. Market Size and Potential 3. Current Consumption 4. Increasing Income 5. Accessibility of Markets 6. Competition in Urban Areas
  199. 199. RURAL CONSUMER BEHAVIOUR 1. Social and Behavioral Influences 2. Cultural and social Practices 3. Influence of Perception 4. Attitude to Quality and Price 5. Brand Preference and Loyalty
  200. 200. INTERNATIONAL MARKETING  International business is the activity of engaging in business operations across national boundaries/borders.  International business is the field of study that concerns itself with the development, strategy and management of multinational enterprises in the global context of complex and dynamic business environments.  Actually the complete gamut of the whole context and interest in international business lies in multinational enterprises, culture and communications-as also the special skills that are required to operate in global business environment.
  201. 201. REASONS FOR GLOBALIZATION 1. Bulk Sales 2. Relative Profitability 3. Insufficiency of Domestic Demand 4. Reducing Business Risks 5. Legal Restrictions for Internal Growth 6. Obtaining Imported Inputs 7. Social Responsibility 8. Increased Productivity 9. Technological Improvement
  202. 202. NON-PROFIT MARKETING  It is the marketing of a product or service in which the offer itself is not intended to make a monetary profit for the marketers.
  203. 203. CLASSIFICATION of NON-PROFIT MARKETING 1. Classification by Degree of Tangibility 2. Classification by Organization Structure 3. Classification by Objectives of the Organization
  204. 204. 1. Classification by Degree of Tangibility 
  205. 205. 2. Classification by Organization Structure 
  206. 206. 3. Classification by Objectives of the Organization 
  207. 207. MARKETING PROCESS • Formulation of marketing strategy • Marketing planning • Marketing programming, allocating and budgeting • Marketing implementation • Monitoring and auditing • Analysis and research • Schematic of marketing process
  208. 208. Marketing Planning Strategy Formulation Programming, Allocating & Budgeting Implementation Analysis & Research Monitoring & Auditing
  209. 209. The Environment for Marketing Decisions Competitive Environment Internal Organizatio nal processes Legal Environment Economic Environment Demographical Environment Cultural Environment Technological Environment Social Environment
  210. 210. MARKET ENTRY DECISIONS  If we are in Business Should we Compete ? How should we compete ? In what Product- Market Should we compete? If yes
  211. 211. OBJECTIVES OF PRICING DECISIONS 1. Ensuring Target returns 2. Market share 3. Preventing Competition 4. Maximizing the Profit 5. Ability of the customers 6. Stabilizing the price
  212. 212. Internal Factors Pricing Decisions External Factors Factors to Consider when Setting Prices
  213. 213. Factors to Consider When Setting Price • Marketing objectives • Marketing mix strategies • Costs • Organizational considerations • Market positioning influences pricing strategy • Other pricing objectives: – Survival – Current profit maximization – Market share leadership – Product quality leadership • Not-for-profit objectives: – Partial or full cost recovery – Social pricing Internal Factors
  214. 214. Factors to Consider When Setting Price • Marketing objectives • Marketing mix strategies • Costs • Organizational considerations • Pricing must be carefully coordinated with the other marketing mix elements • Target costing is often used to support product positioning strategies based on price • Nonprice positioning can also be used Internal Factors
  215. 215. Factors to Consider When Setting Price • Marketing objectives • Marketing mix strategies • Costs • Organizational considerations • Types of costs: – Variable – Fixed – Total costs • How costs vary at different production levels will influence price setting • Experience (learning) curve effects on price Internal Factors
  216. 216. Factors to Consider When Setting Price • Marketing objectives • Marketing mix strategies • Costs • Organizational considerations • Who sets the price? – Small companies: CEO or top management – Large companies: Divisional or product line managers • Price negotiation is common in industrial settings • Some industries have pricing departments Internal Factors
  217. 217. Factors to Consider When Setting Price • Nature of market and demand • Competitors’ costs, prices, and offers • Other environmental elements • Types of markets – Pure competition – Monopolistic competition – Oligopolistic competition – Pure monopoly • Consumer perceptions of price and value • Price-demand relationship – Demand curve – Price elasticity of demand External Factors
  218. 218. Factors to Consider When Setting Price • Nature of market and demand • Competitors’ costs, prices, and offers • Other environmental elements • Consider competitors’ costs, prices, and possible reactions when developing a pricing strategy • Pricing strategy influences the nature of competition – Low-price low-margin strategies inhibit competition – High-price high-margin strategies attract competition • Benchmarking costs against the competition is recommended External Factors
  219. 219. Factors to Consider When Setting Price • Nature of market and demand • Competitors’ costs, prices, and offers • Other environmental elements • Economic conditions – Affect production costs – Affect buyer perceptions of price and value • Government may restrict or limit pricing options External Factors
  220. 220. GENERAL PRICING APPROACHES 1. Cost-Based Pricing 2. Value-Based Pricing (Buyer-based approach) 3. Competition-Based Pricing (going-rate and sealed-bid pricing)
  221. 221. 1. Cost-Based Pricing  Cost-plus pricing – Adding a standard markup to the cost of the product.  Break-even Analysis and Target Profit Pricing – Setting price to break even on the costs of making and marketing a product; or setting price to make a target profit.
  222. 222. 2. Value-Based Pricing (Buyer-based approach)  Value-based pricing – Setting price based on buyers’ perceptions of value rather than on the seller’s cost.  Value pricing – Offering just the right combination of quality and good service at a fair price.
  223. 223. 3. Competition-Based Pricing (going-rate and sealed-bid pricing)  Competition-based pricing – Setting prices based on the prices that competitors charge for similar products.
  224. 224. Physical Distribution Those activities that involve the movement of products through marketing channels from manufacturer to customer, including: • Transportation: shipping goods to customers by rail, air, truck, water, and pipeline • Warehousing: the receiving, storing, and shipping activities involved in the physical distribution of goods • Order Processing: the receipt and preparation of an order for shipment • Material Handling: the physical handling of products during transportation and warehousing
  225. 225. Basic Channels of Distribution Manufacturers/products Agents/brokers Wholesalers/distributors RetailersRetailers Consumers and organizational end users
  226. 226. THANK YOU

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