Prashansa Khandelwal

Nisarg Vyas

A webinar by PR Cell, IIM Rohtak for Preparation for WAT-PI process, Admissions-2014

WHAT IS MARKETING & MARKETING MANAGEMENT?

Marketing is identifying and meeting customers

needs profitably

Example: CCD

Marketing Management: It is all about creating

superior customer value

Example: Flipkart’s cash on delivery payment

method

What all is Marketed?

Goods

Services

Events

Experiences

Persons

Places

Properties

Organizations

Information

Ideas

DIFFERENCE BETWEEN SALES AND MARKETING

Selling is the ultimate result of marketing. It is short term concept that fulfills sales volume objectives whereas marketing is a long term concept built around identifying and fulfilling customer needs.

Marketing shows how to reach to the Customers and build long lasting relationship while selling is matching customer demands with the firm’s product.

7 Ps of Marketing

Product

Price

Promotion

Place People

Process

Physical Environment

PRODUCT

5 Levels of Product

Example: Hotels

Core Benefit: The service or benefit

the customer is really buying. The

customer is buying rest and sleep

Basic Product: The room includes a

bed, bathroom, towels, desk, dresser

and closet

Expected Product: What customers

minimally expect? Clean bed, fresh

towels, working lamps

Augmented Product: Exceeds

Customer Expectations

Potential Product: Encompasses all

possible augmentations and

transformations the product or

offering might undergo in the future

PRODUCT ASSORTMENT

The Product mix is the total variety of products a firm. For example

Samsung's product mix includes mobile phones, netbooks, tablets,

televisions, fridges, microwaves, printers and memory cards.

A Product line is a number of products grouped together based

on similar characteristics. The characteristic used to split

products, will depend on the firm and its product strategy.

The Product Line Length shows the number of different products

in a product line. A long product line has lots of different products

in it and a short product line has a small number of different

products.

Product Line Depth - Some of the product types in a product line

may be split again into groups, the product line depth shows how

many subgroups the product line contains.

The Product mix width is the number of product lines in the

product mix. A wide product mix increases the type of customers

a firm can target.

PRICE

Matching product benefits with cost

Sound pricing decisions are crucial to a successful business and should be considered at both long-term strategic and short-term tactical levels.

Pricing Strategies depends on the objectives of the company.

Maximum Market Share: Penetration Pricing

Maximum Market Skimming: Price Skimming

PLACE

To make the product conveniently available to

the target market consistent with their

purchasing pattern

Distribution Network, Supply Chain, Logistics

At what Price you will offer your product to the consumer. Some of the pricing strategies widely

used are:-

Price Skimming – Charge a high price because you have a substantial competitive

advantage. However, the advantage is not sustainable. The high price tends to attract new

competitors into the market, and the price inevitably falls due to increased supply.

Penetration pricing – It is a pricing strategy where the price of a product is initially set at a

price lower than the eventual market price, to attract new customers. The strategy works on

the expectation that customers will switch to the new brand because of the lower price.

Premium Pricing – Use a high price where there is uniqueness about the product or service.

This approach is used where a substantial competitive advantage exists. Such high prices

are charge for luxury goods.

Psychological Pricing – This approach is used when the marketer wants the consumer to

respond on an emotional, rather than rational basis. For example 'price point perspective' 99

cents not one dollar.

Cost Plus–Cost-plus pricing - The method determines the price of a product or service that

uses direct costs, indirect costs, and fixed costs whether related to the production and sale

of the product or service or not. These costs are converted to per unit costs for the product

and then a predetermined percentage of these costs is added to provide a profit margin.

Loss Leader –Loss leader or leader is a product sold at a low price (at cost or below cost) to

stimulate other, profitable sales.

PRICING

PROMOTION

A promotional mix specifies how much

attention to pay to each of the elements and

how much money to budget for each.

A promotional plan can have one or more of the

following objectives: sales increases, new

product acceptance, creation of brand

equity, positioning, competitive retaliations, or

creation of a corporate image.

Advertising

Personal Selling

Any Paid Form of Non-personal Communication.

Sales Promotion Short-term Incentives to Encourage Sales.

Public Relations Building Good Relations with Public by Obtaining Favorable Unpaid Publicity.

Direct Marketing Direct Communications With Individuals to Obtain an Immediate Response.

Personal Presentations by a firm’s Sales Force.

ELEMENTS OF PROMOTION MIX:

STP- SEGMENTATION, TARGETING & POSITIONING

Market Segmentation

• Dividing the market into subsets of consumers who share a similar set of needs and wants.

• Geographic, Demographic, Psychographic

Target Market

• A group of customers towards which a business has decided to aim its marketing efforts and ultimately its products and services.

• E.g. Women in age group 18-40 for a cosmetics brand

Product Positioning

• The way by which the marketers attempt to create a distinct impression in the customer's mind

• E.g. BMW positioned itself as an automobile that offered both luxury and performance

MARKETING STRATEGY PLANNING PROCESS

PRODUCT LIFE CYCLE

STAGES OF PLC

The PLC is a model that illustrates the different stages (six in total) that a

product or service will pass through. Each stage has its own attributes

and will vary in length (time) with different products and services. The

time that it takes for your product/service to move through the PLC will

largely be determined by how effective your marketing plan is.

Stage 1: Development - As soon as you put pen to paper, this is where

the PLC of the product/service begins. This is the time where you will

design and develop your product/service with all the direct costs that

may be incurred such as wages, materials for prototypes, research,

etc.

Stage 2: Introduction - This is the time when the product/service is

new in the market and a high degree of marketing will be needed such

as promotions and advertising to increase commercial awareness.

Stage 3: Growth - Once your product/service has become established in

the market, you can expect the number of sales to increase rapidly and

marketing expenditure may now be used for brand building. This is the

stage where you will benefit from high profits but this is also the stage

where your profits will peak.

Stage 4: Maturity - The stage of maturity begins when the product/service

sales peak and become stable mainly due to the introduction of

competitors during the end of the growth stage (influencing the move into

the maturity stage).

Stage 5: Saturation - The saturation stage is sometimes overlooked in

many PLC models but is seen as the first sign of product/service decline.

At this point, the product/service has no future for profits because there

are too many competitors or the product/service is no longer popular.

Stage 6: Decline - The product/service moves into the decline stage when

sales start to drop continuously and will be a result of the issues that

moved the product through maturity and saturation

STAGES OF PLC (CONTD.)

BRAND, BRANDING, BRAND-EQUITY

Brand

•Any name, sign, symbol, design to identify goods or services and differentiate from competitors

•CCD, LV, McDonalds

Branding

•Endowing products and services with the power of brand

•Creates mental structure that helps consumers organize their knowledge about products or services, aiding decision making

Brand Equity

•It is the value of your brand

•Reflected in the prices, market share and profitability the brand commands