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BA7203 Marketing Management
UNIT – I Par t A 1. Differen Differentiat tiatee between between Selling Selling an an Marketin Marketing g !Ma" # $%ne $%ne 200&' 200&' Marketing Focuses on customer needs Customer enjoys supreme importance conve onverrting cust custo omer ne needs into nto pr produc oductt Profits th through cu customer sa satisfaction Princip ciple of of cave aveat ven vend dor is foll ollowed
Selling Focuses on seller needs Product enjoys supreme Importance Conve onverrting produc oductt in into cas cash h Profits th through ssaales v vo olume princ inciple ple of cavea veat em empto ptor is is foll ollowed
2. ()at ()at * "*% "*% mean mean b" marke marketin ting g +r*, +r*,e-e-- (MAY/!"# $%%&'
It is a process that a firm should find a way to discover unfulfilled customer needs and ring to mar)et products that satisfy those needs* +he process of doing so can e modeled in a se,uence of steps which includes situational analysis- mar)eting strategymar)eting mi. elements and implementation and control* 3. () ()at at i- mar marke keti ting ng (N/#D 200&'
Mar)eting is a social and managerial function that attempts to create- e.pand and maintain a collection of customers* It attempts to deliver demand satisfying output through profitale e.changes* Mar)eting is the process of raising the standards of living- y identifying the e.isting prolems and unsatisfied unsatis fied needs of people and then satisfying that tha t need with a product/service that delivers value to t o the customer* . ()at are are t)e t)e fa,t*rfa,t*r- affe,t affe,ting ing marketi marketing ng en4ir* en4ir*nment nment (N/#D 200&' i0e and 1rowth • Profitaility • Cost structure • 2istriution systems • Mar)et trends • 3ey uccess factors • 5. ()at i- gl*bal en4ir*nment !MA !MA6 6#$UN #$UN 2007 2007''
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1loal firms plan- operate and coordinate their activities on a worldwide asi a si s- for fo r whic wh ich h they th ey need ne ed to stud st udy y glo gl oal al envi en viro ronm nmen en t* 1lo 1l o al envi en viro ronm nmen entt has ha s such factors as political- legal- social- cultural and economic forces that fundamentally affect the strategic usiness positions at gloal level* &. Define intr*%,ti*n -tage *f P. !MA !MA6 6#$UN #$UN 2007 2007''
Introduction is the early stage- when product is introduced in mar)et- sales revenue egins to grow ut the rate of growth is very slow*Profits may may not e there as there is low sales volume- large production and distriution costs* It may re,uire heavy advertising and sales promotion* Products are rought cautiously on a trail asis* 7. ()at are t)e -*,i*8e,*n*mi, -*,i*8e,*n*mi, fa,t*rfa,t*r- in -egmentati*n -egmentati*n (MA6#$UN 2007'
ocio4economic factors in segmentation include social class- lifestyleoccupation- income- density- and family life cycle and investment trends of u yers ye rs5 5 9. Define Define t)e t)e :Marke :Marketing ting *n,e+t: *n,e+t:.. !N/#D !N/#D 2007' 2007'
Mar)eting is a societal process that is needed to discern consumers6 wants7 focusing on a product/service to those wants- and to mould the consumers towards the products/services* products/services * Mar)eting is fundamental to any usinesses growth* g rowth* +he mar)eting teams (Mar)eters' have the tas) to create the consumer awareness of the products/services through mar)eting techni,ues7 te chni,ues7 if a usiness usin ess does not pay attention attentio n to their products/services and their consumers6 demographics- the usiness would not e ale to endure longevity* ;. ()at i- Marketing !Ma" # $%ne 2009'
8efer 9uestion "umer : !N*4 # De, De, 200&' 10. ()at i- +r*%,ti*n +r*%,ti*n ,*n,e+t ,*n,e+t !N/#D !N/#D 2009'
+he production concept is the philosophy that consumers will favor products that are availale and highly affordale*+his philosophy states that any amount of goods produced will sell if it is availale a vailale and affordale to customers*;hen firms adopt this concept- generally they produce goods on a mass production level- to e ale to produce large ,uantities- therefore ma)e it more availale7 investing in technology is essential- to
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reduce the costs of production and ma)e it more affordale*+he management is re,uired to focus mostly on improving the production and distriution of a part 11. 11. ()at i- -elling ,*n,e+t ,*n,e+t !N/#D 2009'
elling concept6s aim is to convert the product into cash*Firms adopting this philosophy do not n ot produce goods and services in line with people6s peop le6s need and wants ecause they try to create c reate demand for that particular par ticular product themselves*+he themselv es*+he management should concentrate on finding ways to increase production* Also firms adopting this concept must invest a lot financially- in conducting research and in uilding relationships with their customers*+he achievement of sales and mar)eting ojectives of the firm y the salesperson y providing services and solutions to customers6 prolems in addition to ta)ing orders 12. ()at i- a market ()at are t)e t)e t"+e- *f market !MA6#$ !MA6#$UN8 UN8 200;'
In mar)eting- the term market refers refers to the group of consumers or organi0ations that is interested in the product- has the resources to purchase the product- and is permitted y law and other oth er regulations to ac,uire ac,u ire the product*A pulic place where uyers and sellers ma)e transactions- directly or via intermediaries* Also sometimes means the stoc) mar)et* T"+e- *f Market<
"iche mar)et Farm mar)et toc) mar)et Commodity mar)et Currency mar)et
=+he process of planning and e.ecuting conception- pricing- promotion and
distriution of ideas- goods and services to create e.changes that satisfy individual and organi0ational goals*= 4 +he American Mar)eting Association 1. 1 . ()at are t)e fa,t*rfa,t*r- affe,ting marketing marketing en4ir*nment en4ir*nment !$%ne 2010' Mi,r*8n4ir*nment<
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+he micro4environment of an organi0ation can est e understood as comprising all those >ther organi0ations and individuals who directly or indirectly affect the activities of the >rgani0ation* +he following )ey groups can e identified? > Customers
@ Intermediaries @ uppliers @ >ther sta)eholders Ma,r*8n4ir*nment
+he macro4environment comprises general trends and forces which may not immediately affect the relationships that a company has with its customers- suppliers and intermediaries ut sooner or later- macro4environmental change will alter the nature of these relationships* •
+he Political #nvironment
•
+he ocial and Cultural #nvironment
•
+he 2emographic #nvironment*
•
+he +echnological #nvironment
15. ()at are *b?e,ti4e- *f Marketing !$%ne 2011' * +o satisfy the customer$* +o achieve organi0ational goals and ojectives :* 2elivering the desired satisfactions* B* Anticipate the needs and wants of consumers and * +o satisfy these more effectively than competitors* 1&. ()at i- meant b" Mi,r* en4ir*nment !$%ne 2011' Mi,r*8n4ir*nment<
+he micro4environment of an organi0ation can est e understood as comprising all those >ther organi0ations and individuals who directly or indirectly affect the activities of the >rgani0ation* +he following )ey groups can e identified? @ Customers @ Intermediaries
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@ uppliers @ >ther sta)eholders 17. i-t an" tw* ifferen,e between ,*n-%mer an in%-trial market ,)ara,teri-ti,-!N*4 # De, 2010'
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In%-trial Market
*n-%mer Market
"umer of uyers are Few and limited*
"umer of uyers are large
Mar)et research is more useful and
Mar)et research is not reliale in
reliale in the pricing of the industrial
analy0ing the price of the goods*
goods Define Ma-- ,%-t*mi@ati*n.
It is the aility of the company to prepare on a mass asis individually designed products- services- programs and communications* (2e
A )ios) is a small uilding or structure that might house a selling or information unit* It descries newsstands- refreshment standing catrs- computer lin)ed vending machines 20. ()at i- -"n,)r*marketing
It is to find ways to alter the pattern of demand through fle.ile pricing- promotion and other incentives*
Part B 1. ()" i- it ne,e--ar" f*r a marketer t* -t%" t)e marketing en4ir*nment. ()at ar, t)e en4ir*nmental 4ariable- t* be taken int* ,*n-ierati*n (MAY/!"#
$%%&'* Mar)eting does not occur in a vacuum* +he mar)eting environment consists of e.ternal forces that directly and/or indirectly impact the organi0ation* Changes in the environment create opportunities and threats for the organi0ations* +o trac) these e.ternal forces a company uses environmental scanning* Continual monitoring of what is going on* #nvironmental scanning collects information aout e.ternal forces* It is conducted through the Mar)eting Information ystem*
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#nvironmental analysis determines environmental changes and predicts future changes in the environment* +he mar)eting manager should e ale to determine possile threats and opportunities from the changing environment7 +his will help avoid crisis management Si n4ir*nmental *r,e• •
• • •
ocietal 8egulatory Political o Degal o 8egulatory o Competitive +echnology "atural
n4ir*nmental 4ariable-<
+he Internal Analysis of strengths and wea)nesses focuses on internal factors that give an organi0ation certain advantages and disadvantages in meeting the needs of its target mar)et* trengths refer to core competencies that give the firm an advantage in meeting the needs of its target mar)ets*Any analysis of company strengths should e mar)et oriented/ customer focused ecause strengths are only meaningful when they assist the firm in meeting customer needs* ;ea)nesses refer to any limitations a company faces in developing or implementing a strategy* ;ea)nesses should also e e.amined from a customer perspective ecause customers often perceive wea)nesses that a company cannot see*
nly those strengths that relate to satisfying a customer need should e considered true core competencies* +he following area analyses are used to loo) at all internal factors affecting a company? • •
%-t*mer anal"-i-< egments- motivations- unmet needs *m+etiti4e anal"-i-< Identify completely- put in strategic groups- evaluate
performance- image- their ojectives- strategies- culture- cost structure- strengthswea)ness
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•
Market anal"-i-< >verall si0e- projected growth- profitaility- entry arriers- cost
•
structure- distriution system- trends- )ey success factors n4ir*nmental anal"-i-< +echnological- governmental- economic- cultural-
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demographic- scenarios- information4need areas C*al< +o identify e.ternal opportunities- threats- trends- and strategic uncertainties
An environmental analysis is the four dimension of the #.ternal Analysis* +he interest is in environmental trends and events that have the potential to affect strategy* +his analysis should identify such trends and events and the estimate their li)elihood and impact* ;hen conducting this type of analysis- it is easy to get ogged down in an e.tensive- road survey of trends* It is necessary to restrict the analysis to those areas relevant enough to have significant impact on strategy*+his analysis is divided into five areas? economic- technological- political4legal- socio4cultural- and future*
2. )**-e a ,*m+an" *f "*%r ,)*i,e an e+lain )*w mi,r* en4ir*nmental fa,t*raffe,ting it- *+erati*n-. (N/#D 200&' Mi,r* n4ir*nmental a,t*r-<
+hese are internal factors close to the company that have a direct impact on the organi0ations strategy* +hese factors include? %-t*mer-
>rgani0ations survive on the asis of meeting the needs- wants and providing enefits for their customers* Failure to do so will result in a failed usiness strategy* m+l*"ee-
#mploying the correct staff and )eeping these staff motivated is an essential part of the strategic planning process of an organi0ation* +raining and development plays an essential role particular in service sector mar)eting in4order to gain a competitive edge* +his is clearly apparent in the airline industry* S%++lier-
Increase in raw material prices will have a )noc) on affect on the mar)eting mi. strategy of an organi0ation* Prices may e forced up as a result* Closer supplier relationships are one way of ensuring competitive and ,uality products for an organi0ation*
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S)are)*ler-
As organi0ation re,uire greater inward investment for growth they face increasing pressure to move from private ownership to pulic* Eowever this movement unleashes the forces of shareholder pressure on the strategy of organi0ations* atisfying shareholder needs may result in a change in tactics employed y an organi0ation* Many internet companies who share prices roc)eted in and early $%%% have seen the share price tumle as they face pressures I mm shareholders to turn in a profit* In a mar)et which has very ,uic)ly ecome overcrowded many will fall*
Meia
Positive or adverse media attention on an organi0ations product or service can in some cases ma)es or rea)s organi0ations* In the !3 the adverse pulicity the Millennium 2ome has received has had impact on projected sales figures* ;harf dale who recently entered the 2G2 mar)et has received many awards from industry maga0ine resulting in an increased demand for this product and most importantly an increased awareness of the ;harf dale rand* Consumer programmes on +G li)e the <
+he name of the game in mar)eting is differentiation* ;hat enefit can the organi0ation offer which is etter then their competitorsH Can they sustain this differentiation over a period of time from their competitorsH Competitor analysis and monitoring is crucial if an organi0ation is to maintain its position within the mar)et* 3. Di-,%-- t)e r*le an im+*rtan,e *f marketing e+artment wit) *t)er f%n,ti*nal area- in an *rgani@ati*n. (N/#D 200&'
+he mar)eting department must act as a guide and lead the company6s other departments in developing- producing- fulfilling- and servicing products or services for their customers* Communication is vital* +he mar)eting department typically has a etter understanding of the mar)et and customer needs- ut should not act independently of
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product development or customer service* Mar)eting should e involved- and there should e a meeting of the minds- whenever discussions are held regarding new product development or any customer4related function of the company* It is very important that the mar)eting department get input from many people within the company* "ot only does providing input help the rest of the company understand and support the mar)eting efforts- it also provides some invaluale insights into what customers want and new ideas that may have slipped past the rest of the company* perations will need to use sales forecasts produced y the mar)eting department to plan their production schedules*ales forecasts will also e an important part of the udgets produced y the finance department- as well as the deployment of laor for the human resources department*A research and development department will need to wor) very closely with the mar)eting department to understand the needs of the customers and to test outputs of the 82 section* . +lain marketing ,*n,e+t an ,*m+are wit) -elling ,*n,e+t. Ci4e eam+le-. (MA6#$UN 2007'
+he mar)eting concepts holds that the )ey to achieving organi0ationalJ goals consists of the company eing more effective than competitors j in creatingdelivering- and communicating superior customer value to it s chosen target mar)ets* +he asic difference etween mar)eting *and selling lies in the attitude towards usiness* +he selling concept hi)es an in-ie8*%t perspective*
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It starts with the factory- focuses on the company6s e.isting products- *and calls for heavy selling and promoting to produce profitale sales* +he mar)eting concept ta)es an *%t-ie8in perspective* It starts with n well4defined mar)et- focuses on customer needs-
coordinates all the activities that will affect customers- and produces profits through Creating customer satisfaction*
Marketing Focuses on customer needs Customer enjoys supreme importance converting customer needs into product Profits through customer satisfaction Principle of caveat vendor is followed
Selling Focuses on seller needs Product enjoys suprem Importance Converting product into cash Profits through sales volume principle of caveat emptor is followed
5. Di-,%-- marketing en4ir*nment *n t*a"- ,*m+etiti4e w*rl. (MA6#$UN 2007'
+he organi0ation operates within the larger framewor) of the e.ternal environment that shapes opportunities and poses threats to the >rgani0ation* +he e.ternal environment is a set of comple.- rapidly changing and significant interacting institutions and forces that affect the organi0ation6s aility to serve its customers* #.ternal forces are uncontrolled y an organi0ation- ut they may e influenced or it fleeted y that organi0ation* It is necessary for organi0ations to understand the environmental conditions ecause they interact with trategy decisions* +he e.ternal environment has a major impact on the determination of mar)eting decisions* uccessful organi0ations can in their e.ternal environment so that they can respond profitaly id unmet needs and trends in the targeted mar)ets*>rgani0ations closely monitor their customer mar)ets in order to adjust to changing tastes and preferences* A mar)et is people or organi0ations with wants to satisfy- money to spend- and the willingness to spend it* #ach target mar)et has distinct needs- which need to e monitored* It is imperative for an organi0ation to )now their customers- how to reach them and when customers6 needs change in order to adjust its mar)eting efforts accordingly* +he mar)et is the focal point for all mar)eting decisions in an organi0ation* Consumer mar)ets are individuals and households that uy goods and services for personal consumption*
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resell them at a profit* 1overnment mar)ets are agencies that uy goods and services in order to produce pulic services or transfer them to those that need them* +he federal government is the largest uyer in the !nited tates* International mar)ets consist of uyers in other countries* +he mar)eting environment surrounds and impacts upon the organi0ation* +here are three )ey perspectives on the mar)eting environment- namely the 6macro4 environment-6 the 6microenvironment6 and the 6internal environment6* T)e mi,r*8en4ir*nment
+his environment influences the organi0ation directly* It includes suppliers that deal directly or indirectly- consumers and customers- and other local sta)eholders* Micro tends to suggest small- ut this can e misleading* In this conte.t- micro descries the relationship etween firms and the driving forces that control this relationship* It is a more local relationship- and the firm may e.ercise a degree of influence* T)e ma,r*8en4ir*nment
+his includes all factors that can influence and organi0ation- ut that are out of their direct control* A company does not generally influence any laws (although it is accepted that they could loy or e part of +rade organi0ation'* It is continuously changing- and the company needs to e fle.ile to adapt* +here may e aggressive competition and rivalry in a mar)et* 1loali0ation means that there is always the lineal of sustitute products and new entrants* +he wider environment is also ever changing- and the mar)eter needs to compensate for changes in culture- politics- economics and technology* T)e internal en4ir*nment
All factors that are internal to the organi0ation are )nown as the 6internal environment6* +hey are generally audited y applying the Five Ms6 which are MenMoney- Machinery- Materials and Mar)ets* +he internal environment is as important for managing change as +he e.ternal* As mar)eters we call the process of managing internal change 6internal mar)eting* #ssentially we use mar)eting approaches to aid communication and change management* +he e.ternal environment can e audited in more detail using other approaches such as ;>+ Analysis- Michael Porter6s Five Forces Analysis or P#+ Analysis*
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&. a,t*r- ,*n-iere %ner en4ir*nment anal"-i- t* a b%-ine--. !N/#D 2007'
8efer to 9uestion "umer (May/ un $%%&' 7. +lain marketing en4ir*nment f*r t)e b%-ine-- enter+ri-e *f ,*n-%mer g**-. !MA6#$UN 2009' 8efer to 9uestion "umer (May/ un $%%&' 9. E*w *e- t)e -%b?e,t marketing )a- interfa,e wit) *t)er f%n,ti*nal area- !MA6#$UN 2009' •
+he relationship etween mar)eting and other functional areas of the usiness is important for everyone to understand in order to facilitate the coordination of
•
firmKs usiness* For non4mar)eting people the understanding is important to ensure the
•
interactions flow smoothly and effectively* In the finan,ial area- decisions made on credit- accounts receivales and accounts
•
payale have an effect on the scope of mar)eting* +he engineering area similarly ma)es strategic decisions affecting mar)eting* +he
•
,uality of the final product is of course directly related to engineering decisions* Mar)eting may also wor) with +er-*nnel department particularly in areas as estalishing appropriate jo descriptions and communicating the firms need to the
•
people most ,ualified to fill positions* Mar)eting and legal departments must interact on issues as the price of the product- terms of sale- content of advertising messages- wording of patents and warranties*
;.
=T)e Market +la,e i-n:t w)at it %-e t* be = – Di-,%-- ("ov / 2ec $%%L' A Mar)et place is the space- actual or metaphorical in which a mar)et operates the
term is also used in a trademar) law conte.t to denote the actual consumer environment* i*e the real world in which products and services are provided and consumed*A Mar)etplace is a location where goods and services are e.changed* +he traditional mar)et s,uare is a city s,uare where traders set up stalls and uyers rowse the merchandise* +his )ind of mar)et is very old and countless such mar)ets are still in operation around the whole world*
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suppliers from this new community* ;or)ings closely with the memers of the new community companies get every chance to increase their usiness dramatically* *r b%"er +arti,i+ant- a market+la,e *ffer-<
•
Dower transaction costs streamlined processing Access to new suppliers Mar)etplace participants removes geographical arriers
•
and provides access to new suppliers +ime avings provides for faster approval - ordering processes and delivery
•
trac)ing* *r S%++lier•
8educed inventory cost4Clearer visiility and forecasting aility allow companies
•
consideraly reduce inventory cost Access to new uyers and mar)ets 4 Mar)etplace provides new sales channel
•
which opens up many new opportunities for suppliers Increased sales4;ider Mar)et indicates Increase in ales* ;hich results in
• • •
increased revenue* 8educed overhead costs 8educed order processing cost 8educed sales and support costs
10. +lain t)e Marketing n4ir*nment in etail 8efer to 9uestion "umer (May /
une $%%&' 11. Marketing +lanning an ,*ntr*l ,an be ,*n-iere a- t)e ner4e ,enter f*r Marketing Management.: lab*rate. !MA6#$UN8 200;'
+he process of defining the action steps- priorities and schedules y which the mar)eting strategy will e implemented and ma)ing * sure that the company is achieving the ojectives that are stated in the mar)eting plan within the determined udget* +he following steps and activities of Mar)eting planning and control can e distinguished and considered most important for Mar)eting Management* Fe-ear,) *f marketing mi an ,*ntr*l<
Di)e the strategic mar)eting planning process- this process also egins with research and analysis of the mar)eting and consumer environment*
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n the revenue side it shows forecasted sales volume and average reali0ed price- on the e.pense side it shows the forecasted cost of production- physical distriution and mar)eting* +he difference is the e.pected profit* /b?e,ti4e- -etting<
+he annual ojectives can e stated for the one year strategy (for e.ample- increase mar)et share y .N or improve rand awareness y yN in that year' as well as for specific statements concerning mar)eting activities* An e.ample of a specific statement is? decrease cost of sales force as a percentage of sales- improve advertising awareness or improving company image* +hese statements have to e ,uantified and a time hori0on has to e set* Marketing -trateg" an a,ti*n +r*gram<
;hen the ojectives have een set- the mar)eting managers have to refine the strategic mar)eting plan to the annual mar)eting plan* pecific mar)eting tactics have to e developed esides the action programs* +he action programs contain the marching orders in response to the ,uestion OEow will we get thereH=- and the actual steps y which strategies will e implemented to reach the estalished ojectives* *ntr*l
+he last step of the mar)eting planning control process is control- which forms a distinct process itself* +he control of the annual mar)eting plan will e handled y the management of the PMC* +o implement the marketing -trateg"G mar)eting management has to decide what level of mar)eting e.penditures is necessary to achieve the mar)eting ojectives* +he total udget has to e allocated among the several mar)eting activities and tools in the mar)eting mi.* 2uring the implementation of activities- the company has to review the process of mar)eting and sales activities regularly throughout the year* +hese reviews provide an opportunity to listen to wea) signals and to redirect any parts of the planned action program that are off target* 12. )**-e a ,*m+an" *f "*%r ,)*i,e an e+lain )*w internal en4ir*nmental fa,t*r- affe,t t)e marketing *+erati*n-. (une $%%'
8efer to ,uestion "umer (May/ une $%%&'
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13. +lain t)e *re *n,e+t *f Marketing !$%ne 2011' /F /NPTS / MAFHTINC
"eeds- wants- and demands7 products (goods- services and ideas'7 value- cost and satisfaction? e.change and transaction? relationships and networ)s? mar)ets? and mar)eters and prospects* a' Nee-
2escrie asic human re,uirements such as food- air- water- clothing- and shelter* b' (ant
"eeds ecome wants when they are directed to specific ojects that might satisfy the need*
,' Deman
Are wants for specific products ac)ed y an aility to pay* ' Pr*%,t
Is any offering that can satisfy a need or want- such as one of the % asic offerings of goods- services- e.periences- events- persons- places- properties- organi0ationsinformation- and ideas* e' al%e
As a ratio etween what the customer gets and what he gives. +he customer gets benefits and assumes costs, as shown in this e,uation? Galue
Costs
4444444444
Functional enefits Q emotional enefits 44444444444444444444444444444444444444444444444444444444444444444444444444444444444 Monetary costs Q time costs Q energy costs Q psychic costs
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' ,)ange
@
#.changes are carried out y usiness firms- and also y no usiness organi0ations and even individuals*
@
Four conditions must e.ist for an e.change to e ale to occur?
+wo or more people or organi0ations must e involved*
+he parties must e involved voluntarily*
#ach party must have something of value to e.change- and the parties must elieve they will each enefit from the e.change*
+he parties must e ale to communicate with each other*
g' Marketing )annel-<
+o reach a target mar)et- the mar)eter uses three )inds of mar)eting channels* *mm%ni,ati*n ,)annel- deliver messages to and receive messages from target
uyers*+hey include newspapers- maga0ines- radio- television- mail- telephone illoards-posters- fliers- C2s- audiotapes- and the Internet*
only the distriutors and retailers ut also the an)s and insurance companies that facilitate transactions* Mar)eters clearly face a design prolem in choosing the est mi. of communication- distriution- and selling channels for their offerings* )' S%++l" )ain
;hereas mar)eting channels connect the mar)eter to the target uyers- the supply chain descries a longer channel stretching from raw materials to components to final products that are carried to final uyers* For e.ample- the supply chain for womenKs
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purses starts with hides- tanning operations- cutting operations- manufacturing- and the mar)eting channels that ring products to customers* +his supply chain represents a value delivery system* #ach company captures only a certain percentage of the total value generated y the supply chain* ;hen a company ac,uires competitors or moves upstream or downstream- its aim is to capture a higher percentage of supply chain value*
i' *m+etiti*n
Competition- a critical factor in mar)eting management- includes all of the actual and potential rival offerings and sustitutes that a uyer might consider* * Brand competition: A company sees its competitors as other companies that offer similar products and services to the same customers at similar prices* Gol)swagen might see its major competitors as +oyota- Eonda- and other manufacturers of medium price automoiles- rather than Mercedes or Eyundai* 2. Industry competition: A company sees its competitors as all companies that ma)e the
same product or class of products* +hus- Gol)swagen would e competing against all other car manufacturers* 3. Form competition: A company sees its competitors as all companies that manufacture
products that supply the same service* Gol)swagen would see itself competing against manufacturers of all vehicles- such as motorcycles- icycles- and truc)s*
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B* Generic competition: A company sees its competitors as all companies that compete for the same consumer dollars* Gol)swagen would see itself competing with companies that sell major consumer durales- foreign vacations- and new homes* 5. Marketing M"*+ia < ellers who concentrate their thin)ing on the physical product
instead of the customerKs need are said to suffer* &. /++*rt%nit" *-t< +he productKs value and price efore ma)ing a choice* According to
2erose- value is Othe satisfaction of customer re,uirements at the lowest possile cost of ac,uisition- ownership- and use=* 1. riti,all" anal"-e t)e im+*rtan,e *f marketing e+artment relati*n-)i+- wit) *t)er f%n,ti*nal e+artment- in t)e *rgani@ati*n. !$%ne 2010' MAFHTINC AND /TEF UNTI/NS
All mar)eting decisions whether related to products- pricing- distriution- or promotion are affected y other usiness functions* imilarly- most other usiness decisions ( 82- Production' and the overall corporate strategy are strongly influenced y a variety of mar)eting consideration and inputs* A comprehensive understanding of the we of interrelationships etween mar)eting and the other usiness re,uires predominantly a recognition of the importance of identifying and understanding the nature and magnitude of these sets of interrelationships* inan,e Marketing
All well conceived mar)eting plans include major financial dimensions* Cost and profit history for the usiness (a rand- a product- product line' and a financial statement and udgets of each usiness and its related mar)eting strategies are components of any mar)eting plan* Profitaility analysis udgeting are )ey aspects of mar)et planning* Mar)eting decisions to e viewed as Investment decisions* Financial concepts and tools are integral part of mar)eting programs (Credit sales' +he finance function of the usiness usually controls the cost- money going in and out of the usiness* +hey would )eep a record of cost going out the usiness- and calculate whether the usiness is ma)ing a profit or loss* +he finance department is responsile for sending invoices to customersclearing Che,ue which is received- and also preparing payrolls so they can pay staff salaries* Anything to do with money is dealt y the finance department in any organi0ation* +he finance department wor) with the mar)eting department to help them with their finances* +he finance department allocates the udget to support various
19
activities of the mar)eting department carry out o for e.ample- if the mar)eting department at +escoKs want to carry out a promotion through direct mail- they would as) the finance department first7 from there the finance department will decide if they are ale to fund this type of direct mail promotion. +escoKs would not e ale to carry out this activity without consulting the finance department- ecause the money only goes in and out of the finance department* Furthermore when the mar)eting departments need money for researching and development to design new products to attract potential customersthey would again consult the finance department who would allocate suitale funds- so that the mar)eting department can carry out this activity efficiently* +he mar)eting department at +escoKs may also need money if they want to distriute materials such as posters with special offers- if they donKt consult the finance department aout this activitythen the mar)eting department at +escoKs could e losing money * Mar)eting approach to financial documents offers a new perspective often lac)ing in the financial community* For e.ample * !tili0ation of the annual report and other financial for mar)eting $* Measurement of management tradeoff etween ris) and e.pected return utili0ing conjoint analysis :* Assessment of the mar)et response functions to changes in prices- mode of payment - type and level of discount and credit* B* Application of financial performance measures to relevant mar)et segments and products* * Impact of mar)eting activities on investors e.pectations Pr*%,ti*n Marketing
Production capailities determine the numer and type of products to e mar)eted Accurate sales forecast is also possile* ;hen uncertainties fluctuations are predicted •
Change the current production capacity
•
Influence the nature- level or timing of demand
+he strategy can e achieved y appropriate use of mar)eting strategies such as advertising- consumer and trade promotion and deals and deletion or addition of products*
20
+he interdependency is evident in the development of new products* +he si0e of new production facilities- depends on mar)eting research ased estimates of the demand for the new products and the li)ely time and space distriution* It is important to identify the asic conflicts etween the two functions* Production strives for efficient production runs which imply long runs- few models- relatively simple- model to produce- and reasonale ,uality control* Mar)eting would see shorter production runs with many models- they are less concerned aout the ease of production and would li)e to minimi0e the possiility of any product failure* %-t*mer Ser4i,e Marketing
Customer and industrial products re,uire pre post purchase services* ervice department is often address for customer complaints- "umer and type of complaints are important inputs for mar)eting strategies- product modification- and new product development * 8egular #.plicit communication should e estalished etween servicemar)eting and other relevant functions* Pr*,%rement Marketing
Procurement is the roader functions of materials management* Many firms have een modifying their products to sustitute scarce raw materials with more availalecheaper or legally acceptale ones* Mar)eting research on customer6s acceptaility for the sustituted products is vital for input for procurement planning* Procurement research aimed at the identification and evaluation of new mar)eting research* Mar)eting plan re,uire input from procurement plans to introduce new materials or anticipated changes in production output due to changes in the supply of various raw materials* FD an Marketing
+he primary 82 and Mar)eting interface centre around new product development effort of the firm* "ew product development stages right from idea generation to final product development re,uires close interaction* 8ealistic e.pectations and >rgani0ational climate encourages which encourage the interface etween these two functions and stimulates innovation are essential ingredients for successful new product development* Per-*nnel Marketing
21
Personnel Eiring- training and management of appropriate mar)eting personnel* Mar)eting need to collaorate with personnel in developing jo descriptions- screening candidates designing training programs and incentive systems* Management Inf*rmati*n S"-tem
ince the major implication of the independencies etween mar)eting and the other usiness functions are with respect to the re,uired information and its role in the firmKs decisions ma)ing process- the design of mar)eting information systems should e underta)en as in integral part of a roader user oriented management information system* uch a system incorporates the mar)eting information ( eg slaes- share- consensusattitudes etc' with other relevant information ( company sales- cash flow needsmacroeconomic projections- etc' providing a single organi0ed and timely source of information to the relevant decision ma)ers* +o +o the e.tent that the firmKs management information system includes information and models of competitive ehavior- mar)eting can provide the necessary vehicles for the gathering- analysis and interpretation UNIT – II
Part A 1. ()at i-8e8mar i-8e8marketin keting g !MA !MA6 6#$UN 200&' 200&'
2e4mar)e 2e4mar)eting ting aimed aimed at limitin limiting g growth7 growth7 practic practiceded- for e.amplee.ample- y governm governments ents to conserve natural resources- or y companies unale to serve ade,uately the needs of all potential customers*Mar)eters attempt to reduce the demand for a product when the demand for the product is greater than the manufacturer6s aility to produce it* 2e4 mar)eting strategies involve raising prices- reducing advertising or promotion activitiesor eliminating product enefits* 2e4mar)eting does not aim to destroy the demand ut only to lower it to ma)e it level with the aility to produce the product* 2. ()at are are t)e -te+-te+- *f ,*n-%me ,*n-%merr e,i-i*n e,i-i*n making making !MA !MA6#$UN 6#$UN 200&' 200&' Become Aware of a Problem or Opportunity: +he consumer ecomes aware of an
unfulfilled need- such as replacing a regularly purchased item such as toothpaste or uying a new !G (sports utility vehicle' to reach remote areas 4 and perhaps gain peer approval* information from various sources in order to ma)e a Search for Information: 1athering information etter4informed decision* For e.ample- the !G uyer may consult with others who own
22
one and conduct research on the ;e ;e (manufacturer (manufacturer sites- online automoile automoile maga0inesmaga0inesetc*'* Ealuate Alternaties: Alternaties: >nce the choices have een narrowed- the consumer compares
them ased on the criteria that matter most* Continuing with the !G e.ample- the consumer may decide that the !G must e oth comfortale on the highway and agile in the ac) country- e pleasing to loo) at and convenient for loading mountain i)es and other gear* !ecide on what to buy and then purchase it" At this stage- the !G uyer may loo) for
the est dealer- ased on such factors as service- location and price* #eassess the purchase" +he igger the purchase- the more the consumer will reconsider
whether or not the decision was correct* +he !G uyer may periodically thin) aout his or her satisfaction with the vehicle- compare it to other !Gs while driving- and tune in to passenger comments 3. ()at * "*% "*% %ner-t %ner-tan an b" b" t)e ter term m +r*%,t +r*%,t mi (MA6#$UN 200&'
+he product is the most important aspect of the mar)eting mi.* +he product can e a service or even a holiday destination* Products have oth tangile and intangile enefits* +angile enefits include enefits which can e measured such as the top speed of a car* Intangile enefits are enefits that cannot e measured such as the enjoyment the customer will get from the product* It is important that the product is changed as necessary to ring it up to date and prevent it from eing overta)en y competitors . () ()at at are are t)e t)e i-t i-tin ing% g%ii-)i )ing ng ,)ar ,)ara, a,te teri ri-t -ti, i,-- *f -er4 -er4i, i,ee- 4i-8 4i-8a8 a84i 4i-- +r* +r*%, %,tt- !MA6#$UN 200&' Intangibilit" the service cannot e touched or viewed- so it is difficult for clients •
•
to tell in advance what they will e getting7 In-e+arabilit" *f +r*%,ti*n an ,*n-%m+ti*n the service is eing produced at the same time that the client is receiving it (eg during an online search- or a
•
legalRconsultation'7 Peri-)iliilit" unused capacity cannot e stored for future use* For e.ample- spare seats on one aero plane cannot he transferred to the ne.t flight- and ,uery lire
•
time4- ii tin4 iclcience des) cannot e saved up until there is n li *y period services es invol involve ve people people-- and and peopl peoplee are are all all Eeter Eet er*g *gene eneit" it" !*r 4ariab 4ariabili ilit"' t"'<< servic different* +here is a strong possiility that the same en,uiry would e answered slightly differently y different people (or even y the same person at different
23
times' times'** It is impor importa tant nt to minim minimi0e i0e the diff differ erenc ences es in perfor performa mance nce (thro (through ugh training- standard4setting and ,uality assurance'*
5. () ()at at ii- -er4 -er4i,e i,e mar marke ketin ting g (MA6#$UN 2007'
ervices are separately identifiale- intangile activities which provide want satisfactions when mar)eted to consumers and industrial users and which are not necessarily tied to the sale of p roduct or another service* +he following are the mar)eting tools used in service mar)eting4place- peop le- e,uipmentcommunication- materials- symols and price* &. E*w *e*e- :ran,)i:ran,)i-ing: ing: )el+ in -er4i,e -er4i,e marketi marketing ng !N/#D !N/#D 2007' 2007'
Franchising has ecome a popular way to e.pand delivery of an effective service concept to multiple sites without the level of investment capital that would e needed for rapid e.pansion of company4owned and managed sites* Franchises can often e.pand faster than company operated outlets6 not only for financial reasons ut also ecause locally ased franchisers usually have estalished usiness networ)s and e.perience in dealing with government officials* 7. () ()* * ii- a ,%-t ,%-t*m *meer !MA6#$UN 2009'
A customer- also client- uyer or purchaser is the uyer or user of the paid products of an individual or organi0ation- mostly called the supplier or seller* +his is typically through purchasing or renting ren ting goods or services* services * 9. ()* ii- a -ati-f -ati-fie ie ,%-t* ,%-t*mer mer !MA6 !MA6#$UN 2009' 2009'
A delighted customer is a satisfied customer* atisfied customer is more li)ely to ac,uire additional product/ services- and therefore ecome a profitale customer* atisfied customer is also more li)ely to maintain and group the relationship over an e.tended period of time* ;. State State STP -trat -trateg" eg".. !N/#D !N/#D 2009' 2009'
+o identify groups or segments of potential customers (individuals- organi0ations uying centers- etc*' whose wh ose desired values from fr om products and services service s within groups are similar and whose values etween groups are different*+o select one or more groups as a target segment who respond favoraly to a current or prospective mar)eting offering*+o
24
achieve a desired positioning in the minds of potential segment customers (defined roadly- as aove' with a profitale mar)eting program* 10. Define referen,e gr*%+-. !N/#D 2009'
A reference group is a sociological concept referring to a group to which another group is compared* 8eference groups are used in order to evaluate and determine the nature of a given individual or other group6s characteristics and sociological attriutes* 8eference groups provide the enchmar)s and contrast needed for comparison and evaluation of group and personal characteristics*8eference groups act as a frame of reference to which people always refer to evaluate their achievements- their role performance- aspirations and amitions* A reference group can e either from a memership group or non4 memership group* 11. Di-ting%i-) am*ng fi4e t"+e- *f ,%-t*mer nee-. !MA6#$UN8 200;' %n,ti*nal nee-< +hose needs which satisfy a physical / functional purpose e*g* •
• •
• •
oap S*,ial nee-< "eeds that allow identification with desired group e*g* Dogos m*ti*nal nee-< +hose needs which- create appropriate emotions- e*g* oy on getting gift +i-temi, nee-< +he need for )nowledge / information e*g* "ewspaper Sit%ati*nal nee-< +he needs- which are contingent on time / place e*g*
#mergency repairs 12. ()at i- t)e ifferen,e between ,*m+an" eman an a ,*m+an" -ale- f*re,a-t !MA6#$UN8 200;'
Company demand is the companyKs share of mar)et demand*+his can e e.pressed as a formula? Company 2emand Mar)et 2emand / CompanyKs Mar)et hare A companyKs share of mar)et demand depends on how its products- services prices- rands and so on are perceived relative to the competitors* All other things eing e,ual- the companyKs mar)et share will depend on the si0e and effectiveness of its mar)eting spending relative to competitors*+he *m+an" Sale- *re,a-t is the e.pected level of company sales ased on a chosen mar)eting plan and an assumed mar)eting environment*
13. +lain ,%-t*mer +er,ei4e 4al%e !P'. !MA6#$UN8 200;'
25
al%e of a product within the conte.t of mar)eting means the relationship
etween the customerKs e.pectations of product ,uality to the actual amount paid for it* It is often e.pressed as the e,uation? Galue
+he pull strategy relies on the manufacturer to spend a large amount of cash on advertising and promotion- whereas the push strategy shares some of that urden with retailers* A push strategy in mar)eting is used when there has een a development or improvement on a new product which is un)nown to the consumer* As there is no consumer demand in the product launch- the product and the information are “pushed” to the consumer y distriution and promotion* In a Opull= system the consumer re,uests the product and Opulls= it through the delivery channel* 15. ()at are t)e element- *f +r*m*ti*n mi 15 !N*4 # De, 2010'
a* Advertising * Pulic 8elations c* Personal elling d* ales Promotion 1&. ()at i- ,*n-%meri-m !N*4 # De, 2010'
It is a movement or a set of policies aimed at regulating the products- servicesmethods- and standards of manufacturers- sellers- and advertisers in the interests of the uyer* SconsumerismS is used to refer to the consumerists movement- consumer protection or consumer activism* 17. Menti*n t)e fa,t*r- in4*l4e in Mi,)ael..+*rter m*el f*r ,*m+etiti4e anal"-i-. !$%ne 2010'
26
19. S%gge-t an" f*%r -trategie- f*r -er4i,e- marketing !$%ne 2010 ' Ser4i,e Mi< •
+angiles to e associated with intangiles
•
ervice Product is to e e,uated with the service provider
•
Dong term4 relationship
Marketing mi f*r -er4i,e•
Mar)eting should occur at all levels
•
#stalish direct contact with the customers
•
!se high4,uality personnel for mar)eting jo
•
Creation of loyalty
•
#nsure ,uic) resolving of prolems
•
•
Provision of improved services at lower cost
1;. Menti*n t)e t**l- in -er4i,e- Marketing Mi!$%ne 2011'
+he service mar)eting mi. comprises of T pKs* @ Product @ Price
27
@ Place @ Promotion @ People @ Process @ Physical evidence* $%* ()at * "*% mean b" r*ntal Atta,k +his strategy is used when the challenger masses its competitive forces right up against those of the opponent y attac)ing its competitorKs strengths rather than its wea)ness* For this to succeed- the challenger needs a strength advantage over the opponent* 21. ()at * "*% mean b" lank Atta,k
+his strategy is used when the challenger sets its sights on its targetKs wea)est points* 22. ()at * "*% mean b" n,ir,lement Atta,k
It is used only y well financed firms* It involves an attempt to capture a wide slice of the competitorsK mar)et through a grand offensive on several road fronts* $:* ()at * "*% mean b" B"+a-- Atta,k It avoids any elligerent move directed against competitorsK territory* It involves ypassing competitors and attac)ing easier mar)ets* $B.()at * "*% mean b" C%erilla Atta,k It involves ma)ing small- intermittent attac)s on different territories of the opponent* A guerilla attac)er uses oth conventional and unconventional means of attac)ing the opponent* +hese might include reflective price cuts- intense promotional ursts and occasional legal actions*
Part B 1. ()at ke" -trategi, i--%e- are fa,e b" traiti*nal Jbri,k-8an8m*rtarJ retailer -%,) a- (al8MartG Hmart an /ffi,e De+*t w)en t)e" g* *nline t* -ell +r*%,t- !N/#D 200&'
It is essential that different firms in the same usiness not attempt to compete on e.actly the same variales* If they do- competition will invarialy degenerate into price4 there is nothing else that would differentiate the firms*
28
+here are many ostacles these companies need to face when they go on4line for selling their products* +he following ostacles need to e avoided and accordingly proper strategic planning need to e adopted** • • • • • • • •
8each Concerns aout privacy #ducational issues Costs Danguage 1overnment Danguage Cultural >stacles Payment Issues
2eveloping a proper wesite is also a must for online mar)eters efore they launch a product across orders* +he various strategic issues need to e )eep in mind are? • • •
peed vs* aesthetics 3eeping users on the site Information collection
+he Companies need to uild and construct an effective channel structure and memership issues so that ail the products manufactured y these companies would e reached safety to the consumer6s on4 time without any damage and discrepancies* +his is also a major strategic issue the companies need to )eep in mind* • • • • • •
Paths to the consumer Potential channel structures Criteria in selecting channel memers Piggy4ac)ing strategy Parallel distriution #valuating channel performance
ii' Pr*4iing ,%-t*mer -er4i,e a++ear- t* be *ne *f t)e +rimar" ,)allengef*r Internet marketer-. ()at im+li,ati*n- *e- t)i- )a4e f*r t)eir Jbri,k-8 an8 m*rtarJ ,*m+anie- (N/#D 200&' • • • • • • • •
!se technology to create an immediate- tangile enefit for the consumer Ma)e the technology easy to use #.ecution matters? prototype- test- and refine* 8ecogni0e that customers6 response to technology varies*
29
•
!se technology to tailor mar)eting programs to individual customers6
•
re,uirements
2. ()at are t)e i-tin,ti4e ,)ara,teri-ti,- *f -er4i,e- a- *++*-e t* g**- +lain t)e aiti*nal t)ree marketing mi element- in -er4i,e- marketing. (N/#D 200&'
2istinctive characteristics of services as opposed to goods? •
Intangiility the service cannot e touched or viewed- so it is difficult for clients
•
to tell in advance what they will e getting7 Inseparaility of production and consumption the service is eing produced at the same time that the client is receiving it (eg during an online search- or a legal
•
consultation'7 Perishiility unused capacity cannot e stored for future use* For e.ample- spare seats on one aero plane cannot e transferred to the ne.t flight- and ,uery4free
•
times at the reference des) cannot e saved up until there is a usy period* Eeterogeneity (or variaility'? services involve people- and people are all different* +here is a strong possiility that the same en,uiry would e answered slightly differently y different people (or even y the same person at different times'* It is important to minimi0e the differences in performance (through training- standard4setting and ,uality assurance'*
Aiti*nal marketing mi element- in -er4i,e- marketing<
+he mar)eting mi. is the comination of mar)eting activities that an organi0ation engages in so as to est meet the needs of its targeted mar)et* +he mar)eting mi. thus consists of four main elements? • • • •
Product Price Place Promotion
In addition to the traditional four Ps it is now customary to add some more Ps to the mi. to give us even Ps* +he additional Ps have een added ecause today mar)eting is far more customer oriented than ever efore- and ecause the service sector of the economy has come to dominate economic activity in this country* +hese : e.tra Ps are particularly relevant to this new e.tended service mi.*
30
+he services mar)eting mi. is an e.tension of the BPs framewor)* +he essential elements of product- promotion- price and place remain ut : additional elements 4 people- physical evidence and process are included to the TPs mi.* +he need for the e.tension is due to the high degree of direct contact etween service providers and its customers- the highly visile nature of the service process- and the simultaneity of the production and consumption* Pe*+le 4 ecause of the simultaneity of production and consumption in services the
company6s staff occupy the )ey position in influencing customer6s perceptions of product ,uality* In fact the service ,uality is inseparale from the ,uality of service provider* An important mar)eting tas) is to set standards to improve ,uality of services provided y employees and monitor their performance* ;ithout training and control employees tend to e variale in their performance leading to variale service ,uality* +raining is crucial so that employees understand the appropriate forms of ehavior and trainees adopt the est practices* P)"-i,al e4ien,e 4 this is the environment in which the service is delivered and any
tangile goods that facilitate the performance and communication of the service* Customers loo) for clues to the li)ely ,uality of a service also y inspecting the tangile evidence* For e.ample- prospective customers may loo) to the design of learning materials- the appearance of facilities- staff- etc* Pr*,e-- 4 this means procedures- mechanism and flow of activities y which a service
is ac,uired* Process decisions radically affect how a service is delivered to customers* +he service in organi0ations includes several processes e*g* first contact with customersadministrative procedure regarding delivery- preparation and evaluation of service offerings* 9uestion "umer : ("ov / 2ec $%%T' 3. Di-,%-- -er4i,e marketing wit) +arti,%lar referen,e t* ,*mmer,ial bank-.
(MA6#$UN 2007' ervice companies can try to demonstrate their service ,uality through physical evidence and presentation* uppose a commercial an) wants to position itself as the SfastS an)* It could ma)e this positioning strategy tangile a numer of mar)eting tools? Pla,e< +he e.terior and interior should have clean lines* +he waiting lines should not get
overly long* +he layout of the des)s and the traffic flow should e planned carefully*
31
Pe*+le< Personnel should e usy* +here should e a sufficient numer of employees to
manage the wor)load* K%i+ment< Computers- copying machines- des)s should e state of art* *mm%ni,ati*n material< Printed materials should suggest efficiency and speed* S"mb*l-< +he name and symol should suggest fast service* Pri,e< +he an) could advertise that it will deposit 8s* % in the account of any customer
who waits in line for more than five minutes* . ()at are t)e i-tin,ti4e ,)ara,teri-ti,- *f -er4i,e- a- *++*-e t* g**- +lain t)e aiti*nal t)ree marketing mi element- in -er4i,e- marketing.!N/#D 2007' Di-tin,ti4e ,)ara,teri-ti,- *f -er4i,e- a- *++*-e t* g**-< •
Intangibilit" the service cannot e touched or viewed- so it is difficult for clients
•
to tell in advance what they will e getting7 In-e+arabilit" *f +r*%,ti*n an ,*n-%m+ti*n the service is eing produced at the same time that the client is receiving it (eg during an online search- or a legal
•
consultation'7 Peri-)ibilit" unused capacity cannot e stored for future use* For e.ample- spare seats on one aero plane cannot & transferred to the ne.t flight- and ,uery4free
•
times at the reference des) cannot e saved up until there is a usy period* Eeter*geneit" !*r 4ariabilit"'< services involve people- and people are all different* +here is a strong possiility that the same en,uiry would e answered slightly differently y different people (or even y the same person at different times'* It is important to minimi0e the differences in performance (through training- standard4setting and ,uality assurance'*
Aiti*nal marketing mi element- in -er4i,e- marketing<
+he mar)eting mi. is the comination of mar)eting activities that an organi0ation engages in so as to est meet the needs of its targeted mar)et* T)e marketing mi t)%- ,*n-i-t- *f f*%r main element-<
@ Product
@ Price
Place @ Promotion
32
In addition to the traditional four Ps it is now customary to add some more Ps to the mi. to give us even Ps* +he additional Ps have een added ecause today mar)eting is far more customer oriented than ever efore- and ecause the service sector of the economy has come to dominate economic activity in this country* +hese : e.tra Ps are particularly relevant to this new e.tended service mi.* +he services mar)eting mi. is an e.tension of the BPs framewor)* +he essential elements of product- promotion- price and place remain ut : additional elements 4 people- physical evidence and process are included to the TPs mi.* +he need for the e.tension is due to the high degree of direct contact etween service providers and its customers- the highly visile nature of the service process- and the simultaneity of the production and consumption* People 4 ecause of the simultaneity of production and consumption in services
the company6s staff occupy the )ey position in influencing customer6s perceptions of product ,uality* In fact the service ,uality is inseparale from the ,uality of service provider* An important mar)eting tas) is to* set standards to improve ,uality of services provided y employees and monitor their performance* ;ithout training and control employees tend to e variale in their performance leading to variale service ,uality* +raining is crucial so that employees understand the appropriate forms of ehavior and trainees adopt the est practices* Physical eidence 4 this is the environment in which the service is delivered and
any tangile goods that facilitate the performance and communication of the service* Customers loo) for clues to the li)ely ,uality of a service also y inspecting the tangile evidence* For e.ample- prospective customers may loo) to the design of learning materials- the appearance of facilities- staff- etc* Process 4 this means procedures- mechanism and flow of activities y which a service
is ac,uired* Process decisions radically affect how a service is delivered to customers* +he service in organi0ations includes several processes e*g* first contact with customersadministrative procedure regarding delivery- preparation and evaluation of service offerings* 5. +lain bran management. !MA6#$UN 2009' Bran management is the application of mar)eting techni,ues to a specific product-
product line- or rand* It see)s to increase the product6s perceived value to the customer and therey increase rand franchise and rand e,uity*
33
Mar)eters see a rand as an implied promise that the level of ,uality people have come to e.pect from a rand will continue with future purchases of the same product* +his may increase sales y ma)ing a comparison with competing products more favorale* It may also enale the manufacturer to charge more for the product* +he value of the rand is determined y the amount of profit it generates for the manufacturer*+his can result from a comination of increased sales and increased price- and/or reduced C>1 (cost of goods sold'- and/ or reduced or more efficient mar)eting investment*All of these enhancements may improve the profitaility of a rand- and thus- S
+he rand management process is defined as involving four main steps? Identifying and estalishing rand positioning and values Planning and implementing rand mar)eting programs Measuring and interpreting rand performance 1rowing and sustaining rand e,uity
E*w *e- marketing *f -er4i,e- a--%me great -ignifi,an,e in b%-ine--
34
!MA6#$UN 2009'
Mar)eting of services is the diametrically opposed non4material counterpiece of a physical good* A service provision comprises a se,uence of activities that does not result in ownership of the outcome- and this is what fundamentally differentiates it from furnishing someone with physical goods* ervice provision is a process that creates predetermined enefits y effectuating either a change of service consumers- a change in their physical possessions or a change in their (in'tangile assets*Mar)eting a service4ase usiness is different from mar)eting a goods4ase usiness* +here are several major differences- including? • • • •
+he uyer purchases are intangile +he service may e ased on the reputation of a single person It6s more difficult to compare the ,uality of similar services +he uyer cannot return the service
Mar)eting of service is a set of singular and perishale enefits @ delivered from the accountale service provider- mostly in close coaction with his service suppliers•
generated y functions of technical systems and/or y distinct activities of
•
individuals- respectivelycommissioned according to the needs of his service consumers y the service
•
customer from the accountale service providerrendered individually to an authori0ed service consumer at his/her dedicated
•
re,uestand- finally- consumed and utili0ed y the re,uesting service consumer for e.ecuting and/or supporting his/her day4to4day usiness tas)s or private activities
Mar)eting of service is one of the most important ingredients of the mar)eting mi. for products and services* Eigh ,uality customer service helps to create customer loyalty* Customers today are not only interested in the product they are eing offered ut all the additional elements of service that they receive from the greeting they receive when they enter a retail outlet- to the refund and help that they receive when they have a complaint aout a faulty product that they have paid for* Performance of the service is not seen as a primary responsiility of mar)eting- ut given the importance of reputation- referrals and repeat usiness- the mar)eting function cannot ignore this stage* uccessful companies attach great importance to monitoring service
35
provision with customer satisfaction reporting system which measures customer satisfaction* +he reporting system should include oth completion review and review of satisfaction while delivery is in process 7. Di-,%-- +r*%,t +lanning!MA6#$UN 2009'
+he product planning process is one of the most controversial within any company* #veryone wants a hand in new product definition and almost everyone will have contriutions that will ma)e a new product successful* ;ith all these interested partiesyou are going to need a system to help you through the product planning process and a way to decide which ideas have the most merit* +his system also needs to incorporate customer feedac)- assure that important new product ideas are approved- and that development of them initiated immediately* ;hat follows is a product planning system that wor)s well for most companies*
+he steps are important ecause they allow you to gather input from all possile resources- evaluate the potential of each idea and gather input from all involved parties aout which ideas will wor) and their ease of implementation* In+%t
+here should e no shortage of new product ideas* If you are doing regular customer councils and customer surveys- you should have a long list* You will also have ideas from sales- engineering- technical support- and management* +he iggest jo is narrowing down the list* A regular poll of sales- tech support- engineering- and customers for product ideas may help you prioriti0e* ften times the tech support organi0ation has a uni,ue insight to customer re,uirements ecause they are in contact with customers who need help daily ut no one ever others to as) them* ;hen you need to narrow the list further- run it y your customer council* You can as) them to vote on the product ideas they thin) are most valuale*
36
Competitive analysis is also an important part of product planning* Your customers- sales channels- and prospects evaluating your product will tell you where you fall short competitively* Additionally you may want to ta)e an e.isting strength that you have over your competitors and lengthen your lead with improvements to that strength* 8ememer that a competitor won6t release a feature that is just on par with your productthey will e trying to e.ceed your strength* Also understand where your competitors are going and what products they have in the wor)s* You won6t get this information directly from them- ut you may hear rumors or see press on their strategic directions* Additionally listen to your prospects when they are as)ing you aout your product features and directions* >ften times they are parroting ac) information that your competitor6s have given them* +he ;orld ;ide ;e is also an e.cellent place to gather competitive information* >ften times competitors will pulish their strategic directions and- for software companies- actually have eta versions of their new software releases availale* Pr*%,t Iea- Fefine
After narrowing down the list of potential new products or features enhancements for an e.isting product- you will want to refine some of the more promising ideas*
>nce you have gathered the aove information for you product proposals- you need to get the- project approved* It allows you to present all the appropriate information to everyone at once* It is also a great forum for discussion of the merits of the product* In some companies- you may need a full mar)et re,uirements document efore the project is approved* Market FeK%irement- Fefine
>nce the product is approved you can refine the mar)et re,uirements- adding more detail on the desired features of the product and how the customers will use the product* +here will e two types of M82s- one for new products and a second for new releases of a current product* +he new product M82 will re,uire
37
De4el*+ment Initiate
>nce the M82 is complete- the developers can start to wor) on a functional specification and prototypes* ome companies comine the M82 and Functional pecification into one document to help them decrease time to mar)et* +o do this- you must wor) very closely with engineering to ma)e sure that the functional design of the product will indeed meet customer re,uirements*
F%nning a S%,,e--f%l Pr*%,t Planning Meeting
+he meeting gives you a forum to formally add and remove products and projects to the approved projects list and to ma)e sure that everyone involved is clear on the priorities* It also gives giv es them visiility to why the priorities are what they are* are * +his process may seem li)e a lot of wor)- and fran)ly it is*
supplied y a company meet or surpass customer e.pectation* It is seen as a )ey performance indicator indica tor within usiness and is part of the four perspectives persp ectives of a
38
satisfaction is asically a psychological state- care should e ta)en in the effort of ,uantitative measurement- although a large ,uantity of research in this area has recently een developed* #.ceptional customer service results in greater customer retention- which in turn results in higher profitaility* Customer loyalty is a major contriutor to sustainale profit growth* +o achieve success- you must ma)e superior service second nature of your organi0ation* A seamless integration of all components in the service4profit chain 4 employee satisfaction- value creation- customer satisfaction- customer loyalty- and profit and growth 4 lin)s all the critical dynamics of top customer service* adly- mature companies often forget or forsa)e the thing that made them successful in the first place? a customer4centric usiness model* +hey lose focus on the customer and start focusing on the ottom line and ,uarterly results* +hey loo) for ways to cut costs or increase revenues- often at the e.pense of the customer* +hey forget that satisfying customer needs and continuous value innovation is the only path to sustainale growth* +his creates opportunities for new- smaller companies to emulate and improve upon what made their igger competitors successful in the first place and steal their customers* ;. +lain +lain t)e ,*m+*nent ,*m+*nent-- *f t)e t)e marketi marketing ng mi in in etail. etail. ("ov / 2ec $%%L'
+he mar)eting mi. is proaly the most famous mar)eting term* Its elements are the asic- tactical components componen ts of a mar)eting plan* plan * Also Also )nown as the Four P6s- the mar)eting mi. elements are price- place- product- and promotion* 8ead on for more details on the mar)eting mi.* Pri,e
+here are many ways to price a product* Det6s have a loo) at some of them and try to understand the est policy/strategy in various situations* Premi%m Pri,ing.
!se a high price where there is a uni,ueness aout the product or service* +his approach is used where a sustantial competitive advantage e.ists* uch high prices are charge for lu.uries such as Cunard Cruises- avoy Eotel rooms- and Concorde flights* Penetrati*n Pri,ing.
39
+he price charged for products and services is set artificially low in order to gain mar)et share* >nce this is achieved- the price is increased* +his approach was used y France +elecom and )y +G* +G* ,*n*m" Pri,ing.
+his is a no frills low price* +he cost of mar)eting and manufacture are )ept at a minimum* upermar)ets often have economy rands for soups- spaghetti- etc* Pri,e Skimming.
Charge a high price ecause you have a sustantial competitive advantage* Eowever- the advantage is not sustainale* +he high price tends to attract new competitors into the mar)et- and the price inevitaly falls due to increased supply* Manufacturers of digital watches used a s)imming approach in the T%s* >nce other manufacturers were tempted into the mar)et and the watches were produced at a lower unit cost- other mar)eting strategies and pricing approaches are implemented* Premium pricing- penetration pricing- economy pricing- and price s)imming are the four main pricing policies/strategies* +hey form the ases for the e.ercise* Eowever there are other important approaches to pricing* P-",)*l*gi,al Pri,ing.
+his approach is used when the mar)eter wants the consumer to respond on an emotional- rather than rational asis* For e.ample 6price point perspective6 cents not one dollar* Pr*%,t ine Pri,ing.
;here there is a range of product or services the pricing reflect the enefits of parts of the range* For e.ample e.a mple car washes*
Companies will attempt to increase the amount customer spend once they start to uy* >ptional 6e.tras6 increase the overall price p rice of the product or service* s ervice* For e.ample airlines will charge for optional e.tras such as guaranteeing a window seat or reserving a row of seats ne.t to each other* a+ti4e Pr*%,t Pri,ing
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;here products have complements- companies will charge a premium price where the consumer is captured* For e.ample a ra0or manufacturer will charge a low price and recoup its margin (and more' from the sale of the only design of lades which fit the ra0or* Pr*%,t B%nle Pri,ing.
Eere sellers comine several products in the same pac)age* +his also serves to move old stoc)* Gideos and C2s are often sold using the undle approach* Pr*m*ti*nal Pri,ing.
Pricing to promote a product is a very common application* +here- are many e.amples of promotional pricing including approaches such as <>1>F (ne 1et >ne Free'* Ce*gra+)i,al Pri,ing.
1eographical pricing is evident where there are variations in price in different parts of the world*4For e.ample rarity value- or where shipping costs increase price* al%e Pri,ing.
+his approach is used where e.ternal factors such as recession or increased competition force companies to provide 6value6 products and services to retain sales e*g* value meals at Mc2onalds* Pla,e
Another element of "eil E*
• • • •
2o we use direct or indirect channelsH (e*g* 6direct6 to a consumer- 6indirect6 via a wholesaler'* ingle or multiple channels* Cumulative length of the multiple channels* +ypes of intermediary (see later'* "umer of intermediaries at each level (e*g* how many retailers in outhern pain'*
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•
;hich companies as intermediaries to avoid 6intrachannel conflict6 (i*e* infighting etween local distriutors'*
Sele,ti*n *n-ierati*n 8 )*w * we e,ie %+*n a i-trib%t*r •
Mar)et segment 4 the distriutor must e familiar with your target consumer and
•
segment* Changes during the product life cycle 4 different channels can e e.ploited at different points in the PDC e*g* Foldaway scooters are now availale everywhere*
•
>nce they were sold via a few specific stores* Producer 4 distriutor fit 4 Is there a match etween their polices- strategies-
•
image- and yoursH Doo) for 6synergy6* 9ualification assessment 4 estalish the e.perience and trac) record of your
•
intermediary* Eow much training and support will your distriutor re,uireH
T"+e- *f )annel Intermeiarie-.
+here are many types of intermediaries such as wholesalers- agents- retailers- the Internet- overseas distriutors- direct mar)eting (from manufacturer to user without an intermediary'- and many others* +he main modes of distriution will e loo)ed at in more detail* )annel Intermeiarie- 8 ()*le-aler-
•
+hey rea) down 6ul)6 into smaller pac)ages for resale y a retailer* +hey uy from producers and resell to retailers* +hey ta)e ownership or Ktitle to
•
goods whereas agents do not (see elow'* +hey provide storage facilities* For e.ample- cheese manufacturers seldom wait
•
for their product to mature* +hey sell on to a wholesaler that will store it and •
eventually resell to a retailer* ;holesalers offer reduce the physical contact cost etween the producer and consumer e*g* customer service costs- or sales force costs* A wholesaler will often ta)e on the some of the mar)eting responsiilities* Many
produce their own rochures and use their own telesales operations )annel Intermeiarie- 8 Agent•
Agents are mainly used in international mar)ets*
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•
An agent will typically secure an order for a producer and will ta)e a commission* +hey do not tend to ta)e title to the goods* +his means that capital is not tied up in goods* Eowever- a 6stoc)ist agent6 will hold consignment stoc) (i*e* will store the stoc)- ut the title will remain with the producer* +his approach is used where
•
goods need to get into a mar)et soon after the order is placed e*g* foodstuffs'* Agents can e very e.pensive to train* +hey are difficult to )eep control of due to the physical distances involved* +hey are difficult to motivate*
)annel Intermeiarie- 8 Fetailer• •
•
• • •
8etailers will have a much stronger personal relationship with the consumer* +he retailer will hold several other rands and products* A consumer will e.pect to e e.posed to many products* 8etailers will often offer credit to the customer e*g* electrical wholesalers- or travel agents* Products and services are promoted and merchandised y the retailer* +he retailer will give the final selling price to the product* 8etailers often have a strong 6rand6 themselves e*g* 8oss and ;all4Mart in the !A- and Alisuper- Modelo- and umo in Portugal*
. )annel Intermeiarie- 8 Internet • •
• • •
+he Internet has a geographically disperse mar)et* +he main enefit of the Internet is that niche products reach a wider audience e*g* cottish almon direct from an Inverness fishery* +here are low arriers low arriers to entry as set up costs are low* !se e4commerce technology (for payment- shopping software- etc' +here is a paradigm shift in commerce and consumption which enefits distriution via the Internet
Pr*m*ti*n
Another one of the BP6s is promotion* +his includes all of the tools availale to the mar)eter for 6mar)eting communication6* As with "eil E*
Personal elling* ales Promotion*
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• • • • •
Pulic 8elations* 2irect Mail* +rade Fairs and #.hiitions* Advertising* ponsorship*
+he elements of the promotions mi. are integrated to form a coherent campaign* As with all forms of communication* +he message from the mar)eter follows the 6communications process6 as illustrated aove* For e.ample- a radio advert is made for a car manufacturer* +he car manufacturer (sender' pays for a specific advert with contains a message specific to a target audience (encoding'* It is transmitted during a set of commercials from a radio station (Message / media'* +he message is decoded y a car radio (decoding' and the target consumer interprets the message (receiver'* Ee or she might visit a dealership or see) further information from a we site (8esponse'* +he consumer might uy a car or e.press an interest or disli)e (feedac)'* +his information will inform future elements of an integrated promotional campaign* Perhaps a direct mail campaign would push the consumer to the point of purchase* "oise represent the thousand of mar)eting communications that a consumer is e.posed to everyday- all competing for attention* PE6SIA IDN
Physical #vidence is the material part of a service* trictly spea)ing there are no physical attriutes to a service- so a consumer tends to rely on material cues* +here are many e.amples of physical evidence- including some of the following? • • • • • • • • • •
Pac)aging* V Internet/we pages* Paperwor) (such as invoices- tic)ets and despatch notes'*
P/P
People are the most important element of any service or e.perience* ervices tend to e produced and consumed at the same moment- and aspects of the customer
44
e.perience are altered to meet the 6individual needs6 of the person consuming it* Most of us can thin) of a situation where the personal service offered y individuals has made or tainted a tour- vacation or restaurant meal* 8ememer- people uy from people that they li)e- so the attitude- s)ills and appearance of all rtaff need to e first class*
PF/SS
Process is another element of the e.tended mar)eting mi.- or TP6s*+here are a numer of perceptions of the concept of process within the usiness and mar)eting literature* ome see processes as a means to achieve an outcome- for e.ample 4 to achieve a :%N mar)et share a company implements a mar)eting planning process* Another view is that mar)eting has a numer of processes that integrate together to create an overall mar)eting process- for e.ample 4 telemar)eting and Internet mar)eting can e integrated* A further view is that mar)eting processes are used to control the mar)eting mi.- i*e* processes that measure the achievement mar)eting ojectives* All views are understandale- ut not particularly customer focused* For the purposes of the mar)eting mi.- process is an element of service that sees the customer e.periencing an organisation6s offering* It6s est viewed as something that your customer participates in at different points in time* Eere are some e.amples to help your uild a picture of mar)eting process- from the customer6sKpoint of view* 1oing on a cruise 4 from the moment that you arrive at the doc)side- you are greeted7 your aggage is ta)en to your room* You have two wee)s of services from restaurants and evening entertainment- to casinos and shopping* Finally- you arrive at your destinationand your aggage is delivered to you* +his is a highly focused mar)eting process* 10. +lain t)e ifferent ,ateg*rie- *f -er4i,e mi in etail. !N/#D 2009'
A service is the action of doing something for someone or something* It is largely intangile (i*e* not material'* A product is tangile (i*e* material' since you can touch it and own it* A service tends to e an e.perience that is consumed at the point where it is purchased- and cannot e owned since is ,uic)ly perishes* A person could go to a cafe one day and have e.cellent service- and then return the ne.t day and have a poor e.perience* o often mar)eters tal) aout the nature of a service as?
45
In-e+arable 4 from the point where it is consumed- and from the provider of the
service* For e.ample- you cannot ta)e a live theatre performance home to consume it (a 2G2 of the same performance would e a product- not a service'* Intangible 4 and cannot have a real- physical presence as does a product* For
e.ample- motor insurance may have a certificate- ut the financial service itself cannot e touched i*e* it is intangile* Peri-)able 4 in that once it has occurred it cannot e repeated in e.actly the same
way* For e.ample- once a %% metres >lympic final has een run- there will e not other for B more years- and even then it will e staged in a different place with many different finalists* ariabilit"8 since the human involvement6of service provision means that no two
services will e completely identical* For e.ample- returning to the same garage time and time again for a service on your car might see different levels of customer satisfaction- or speediness of wor)* Fig)t *f *wner-)i+ 4 is not ta)en to the service- since you merely e.perience it* For
e.ample- an engineer may service your air4 conditioning- ut you do not own the servicethe engineer or his e,uipment* You cannot sell it on once it has een consumed- and do not ta)e ownership of it* 11. +lain Marketing Mi. *mment in brief %+*n it- ingreient-. !MA6#$UN8 200;'
+he mar)eting mi.- earlier )nown as the B pKs- (ut now has a few more'- is a vital part of any mar)eting strategy* +his is a tool wherey the mar)eter ta)es decisions on what and how a product should e- where it can e sold- how it should e priced- how it will e promoted- how to e,uip the people who are responsile for selling the product*** and so on* 1etting the mar)eting mi. right is e,ually important for the large corporation and the small usiness owner* Det us ta)e a closer loo) at the most important elements*
Pr*%,t< A lot of thought and effort goes into designing a product offering* +he most
important ,uestion that you- as a mar)eter- need to as) is whether there is a need for your type of product and how your own product satisfies that need etter than those of your competitors* +his will force you to thin) of why your product is uni,ue- and therey help you evolve your productKs !ni,ue elling Proposition* At the same time- you will need to
46
analy0e your companyKs strengths and wea)nesses and the opportunities and threats posed y the mar)et- to understand how you are positioned versus the competition* Pri,e< +his element of the mar)eting mi. can e many a strategyKs undoing* A
complete understanding of the financial that drive a usiness is essential efore deciding a pricing strategy*
complete change in definition* +raditional trading and distriution models have given way to remote or virtual channels* ;hile reaching the customer may have ecome simpleryour jo as a decision ma)er has ecome that much more comple.* You now have a plethora of options to choose from 4 do you go for ric) and mortar or direct mailing- use the phone or sell door to doorH +his decision should- first and foremost- e driven y customer preference and then y other considerations li)e logistics and economics* Indeed most usinesses rely on a multi distriution channel strategy* Pr*m*ti*n< In a commodity industry- this is what ma)es the essential difference*
Possily no other mar)eting mi. element draws as much attention from strategy ma)ers* Again- let consumer needs drive your efforts* 2oes your mar)eting communication address a specific need of the target audienceH Is the message memoraleH 2oes it spur actionH Eere again- the entire landscape has changed from what it was a few years ago* Promotion has gone way eyond mere advertising and pulic relations 4 it is now a highly evolved process- ranging from live events to Internet mar)eting* In these times of information overload- promotion strategies must pac) sufficient punch to cut through the clutter* Pe*+le< Although a later entrant to the mar)eting mi. family- the people decision is
no less important* Indeed- in service oriented usinesses- it may well e the )ey determinant of success* "o strategy is complete unless the people who are in charge of implementing it have the wherewithal to do so* +his means investing in sales force training- ensuring a customer relationship management system is in place and uilding a customer centric culture throughout the organi0ation*
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12. +lain t)e ,*n,e+t *f bran eK%it". !MA6#$UN8 200;'
ne way to measure rand e,uity is to determine the price premium that a
rand commands over a generic product* For e.ample- if consumers are willing to pay U%% more for a randed television over the same unranded television- this premium provides important information aout the value of the rand* Eowever- e.penses such as promotional costs must e ta)en into account when using this method in measure rand e,uity* Bran eten-i*n- 4 A successful rand can e used as a platform to launch related
products* +he enefits of rand e.tensions are the leveraging of e.isting rand awareness thus reducing advertising e.penditures- and a lower ris) from the perspective of the consumer* Furthermore- appropriate rand e.tensions can enhance the core rand* Eowever- the value of rand e.tensions is more difficult to ,uantify than are direct financial measures of rand e,uity* *n-%mer8ba-e 4 A strong rand increases the consumerKs attitude strength toward
the product associated with the rand* Attitude strength is uilt y e.perience with a product* +his importance of actual e.perience y the customer implies that trial samples are more effective than advertising in the early stages of uilding a strong rand* +he consumerKs awareness and associations lead to perceived ,uality- inferred attriutes- and eventually- rand loyalty* trong rand e,uity provides the following enefits? • •
Facilitates a m*re +rei,table in,*me stream* In,rea-e- ,a-) fl*w y increasing mar)et share- reducing promotional costs- and allowing premium pricing*
48
Bran eK%it" i- an a--et that can e sold or leased*Eowever- rand e,uity is not
always positive in value* ome rands ac,uire a ad reputation that results in negative rand e,uity* "egative rand e,uity can e measured y surveys in which consumers indicate that a discount is needed to purchase the rand over a generic product* Alternati4e Mean- t* Bran K%it"
2ifferent companies have opted for different rand strategies for multiple products* +hese strategies are? •
Single bran ientit" 4 a separate rand for each product* For e.ample- in
laundry detergents Procter 1amle offers uni,uely positioned rands such as •
+ide- Cheer-
•
different product4categories under its rand* M%lti8bran ,ateg*rie- 4 2ifferent rands for different product categories* Campell oup Company uses CampellKs for soups- Pepperidge Farm for a)ed
•
goods- and GL for juices* amil" *f name- 4 2ifferent rands having a common name stem* "estle uses "escafe- "es,ui)- and "estea for everages*
multi4product randing strategies* 13. A new tren in marketing i- t*war- ,%-t*meri@ati*n. De-,ribe w)at ,%-t*meri@ati*n i- an )*w marketer- are %-ing it. !MA6#$UN8 200;'
Customeri0ation allows firms to adapt one4to4one mar)eting and personali0ation strategies to the digital environment* In a sense- a firm ecomes an agent of the customer WKKrenting= out to customers pieces of its manufacturing- logistics- and other resourcesthus allowing them to find- choose- design- and use what they need* uch strategies often
49
re,uire little prior information aout customers- and the product itself can e manufactured after customers tell the mar)eters what they want to uy* In developing customeri0ation strategies- however- mar)eters face a numer of challenges* +hese include otaining information from customers- identifying intangile factors that may e crucial to customers- dealing with enhanced customer e.pectationslimiting the comple.ity of options- and pricing customi0ed offerings* In addition- while technology ma)es the implementation of customeri0ation strategies easier and cheaper- strategic and* organi0ational decisions are more comple. and e.pensive- as the mar)eter determines what is the right information to send to each customer* +o e truly successful at customeri0ation- a mar)eter must ring together the value chains of the supply and demand sides of the mar)et* In some cases- the entire company might e reorgani0ed around a new order generation and fulfillment process as part of a customer4driven- integrated gloal supply chain* Finally- mar)eters face critical decisions aout where and when to customeri0e and how to integrate this strategy with other mar)eting strategies* +hey must determine the optimal portfolio of mass mar)eting- direct mar)eting to target segments- and interactive customi0ed mar)eting* In this new realm- success will depend on finesseWthe aility to deploy effort into areas that generate higher customer- value than the cost of adding that valueWrather than on massive resources* ;here should a mar)eter egin in implementing a customeri0ation strategyH First- y increasing the digital content of its offerings and of the customerKs shopping and consumption e.perience- and second- y positioning the firm to ecome the customeri0er of the entire industry* 1. +lain t)e b%-ine-- %nit -trategi, +lanning +r*,e--!$%ne 2011'
In today6s highly competitive usiness environment- udget4oriented planning or forecast4ased planning methods are insufficient for a large corporation to survive and prosper* +he firm must engage in -trategi, +lanning that clearly defines ojectives and assesses oth the internal and e.ternal situation to formulate strategy- implement the strategy- evaluate the progress- and ma)e adjustments as necessary to stay on trac)* A simplified view of the strategic planning process is shown y the following diagram?
50
T)e Strategi, Planning Pr*,e--
Mi--i*n
/b?e,ti4e-
n4ir*nmental S,anning
Strateg" *rm%lati*n
Strateg" Im+lementati*n
4al%ati*n *ntr*l
Mi--i*n an /b?e,ti4e-
+he mission statement descries the company6s usiness vision- including the unchanging values and purpose of the firm and forward4loo)ing visionary goals that guide the pursuit of future opportunities* 1uided y the usiness vision- the firm6s leaders can define measurale financial and strategic ojectives* Financial ojectives involve measures such as sales targets and earnings growth* trategic ojectives are related to the firm6s usiness position- and may include measures such as mar)et share and reputation* n4ir*nmental S,an
+he environmental scan includes the following components?
51
•
Internal analysis of the firm
•
Analysis of the firm6s industry (tas) environment'
•
#.ternal macroenvironment (P#+ Analysis'
+he internal analysis can identify the firm6s strengths and wea)nesses and the e.ternal analysis reveals opportunities and threats* A profile of the strengths- wea)nessesopportunities- and threats is generated y means of a ;>+ analysis*An industry analysis can e performed using a framewor) developed y Michael Porter )nown asPorterKs five forces* +his framewor) evaluates entry arriers- suppliers- customers- sustitute productsand industry rivalry* Strateg" *rm%lati*n
1iven the information from the environmental scan- the firm should match its strengths to the opportunities that it has identified- while addressing its wea)nesses and e.ternal threats*+o attain superior profitaility- the firm see)s to develop a competitive advantage over its rivals* A competitive advantage can e ased on cost or differentiation* Michael Porter identified three industry4independent generic strategies from which the firm can choose* Strateg" Im+lementati*n
+he selected strategy is implemented y means of programs- udgets- and procedures* Implementation involves organi0ation of the firm6s resources and motivation of the staff to achieve ojectives*+he way in which the strategy is implemented can have a significant impact on whether it will e successful* In a large company- those who implement the strategy li)ely will e different people from those who formulated it* For this reason- care must e ta)en to communicate the strategy and the reasoning ehind it* >therwise- the implementation might not succeed if the strategy is misunderstood or if lower4level managers resist its implementation ecause they do not understand why the particular strategy was selected* 4al%ati*n *ntr*l
+he implementation of the strategy must e monitored and adjustments made as needed*#valuation and control consists of the following steps? * 2efine parameters to e measured
52
$* 2efine target values for those parameters :* Perform measurements B* Compare measured results to the pre4defined standard * Ma)e necessary changes 15. 2ifferentiate service mar)eting from product mar)eting* uggest additional mar)eting
mi. for services* (une $%%' 8efer to 9*"o % "ov/2ec $%%L and 9*"o* May/ une $%%
UNIT – III Part A 1.+lain t)e ,*n,e+t *f re+*-iti*ning. !MA6#$UN 200&'
Product positioning is not limited to new products alone* It is relevant for occasional face lifting of the e.isting products of almost all )inds such as toilet soapsshampoos- cosmetics- tooth pastes- etc* 8epositioning does not mean total change* It sometimes entails strengthening and clarifying an e.isting identity* 8epositioning does not always hold the )ey to success* In case a product has got into a very ad shape due to prolonged neglect- repositioning effort may turn out to e an e.ercise in futility* In such cases it would always e etter to drop the product* 2. ()en i- +enetrati*n +ri,ing a g** *+ti*n !MA6#$UN 200&'
Penetration pricing involves the setting of lower- rather than higher prices in order to achieve a large- if not dominant mar)et share* +his strategy is most often used usinesses wishing to enter a new mar)et or uild on a relatively small mar)et share* +his
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will only e possile where demand for the product is elieved to e highly elastic- i*e* demand is price4sensitive and either new uyer will e attracted- or e.isting uyers will uy more of the product as a result of a low price* A penetration pricing strategy may also promote complimentary and captive products* +he main product may e priced with a low mar)up to attract sales (it may even e a loss4leader'* Customers are then sold accessories (which often only fit the manufacturer6s main product' which are sold at higher mar)4ups* 3. ()at i- Pr*m*ti*n Mi Menti*n +r*m*ti*n mi element-. (N/#D 200&'
Promotion involves disseminating information aout a product- product line- rand- or company* It comprises of four elements which includes? • • • •
Advertising Personal elling ales Promotion Pulicity and Pulic relations
. Define Bran. (N/#D 200&'
A rand is a collection of images and ideas representing an economic producer7 more specifically- it refers to the concrete symols such as a name- logo- slogan- and design scheme 5. ()at i- +r*%,t ,*n,e+ t !MA6#$UN 2007'
+he product concept holds that the consumers will favor those products that offer the most ,u ality- performance- or innovative features* +herefore managers in these organi0ations focus on ma)ing su perior products and improving them over time* &.Define intr*%,ti*n -tage *f P. !MA6#$UN 2007'
Introduction is the early stage- when product is introduced in mar)et- sales revenue egins to grow ut the rate of growth is very slow* Profits may not e there as there is low sales volume- large production and distriution costs* It may re,uire heavy advertising and sales promotion* Products are rought cautiously on a trail asis* 7.Define :Bran +*-iti*ning:. !N/#D 2007'
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6relative competitive comparison6 their product occupies in a given mar)et as perceived y the target mar)et* 9. ()at i- +r*%,t !MA6#$UN 2009' •
a product is anything that can e offered to a mar)et that might satisfy a want or need
•
a thing produced y laor or effort In manufacturing- products are purchased as raw materials and sold as finished goods*+he end result of the manufacturing process- to e offered to the mar)etplace to satisfy a need or want*
;.()at i- Bran +*-iti*ning !MA6#$UN 2009'
Positioning is how a rand appears in relation to other rands in the mar)et* It is influenced y the e.periences customers have with a rand6s products- servicesadvertising and promotional material- and representatives over time* +he development of a randKs position in the mar)et y heightening customer perception of the rand6s superiority over other rands of a similar nature*
Mar)et testing is a geographic region or demographic group used to gauge the viaility of a product or service in the mass mar)et prior to a wide scale roll4out* +he criteria used to judge the acceptaility of a mar)et region or group which includes?
a population that is demographically similar to the proposed target mar)et7 and
relative isolation from densely populated media mar)ets so that advertising to the test audience can e efficient and economical
11. State STP -trateg". !N/#D 2009' •
+o identify groups or segments of potential customers (individuals- organi0ations uying centers- etc*' whose desired values from products and services within groups are similar and whose values etween groups are different*
•
+o select one or more groups as a target segment who respond favoraly to a current or prospective mar)eting offering*
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•
+o achieve a desired positioning in the minds of potential segment customers (defined roadly- as aove' with a profitale mar)eting program*
12. Define -er4i,e. !MA6#$UN 2009'
A service is the diametrically opposed non4material counterpiece of a physical good* A service provision comprises a se,uence of activities that does not result in ownership of the outcome- and this is what fundamentally differentiates it from furnishing someone with physical goods* ervice provision is a process that creates predetermined enefits y effectuating either a change of service consumers- a change in their physical possessions or a change in their (in'tangile assets* 13. Define 4al%e ,)ain. !MA6#$UN8 200;'
A value chain is a chain of activities* Products pass through all activities of the chain in order and at each activity the product gains some value* +he chain of activities gives the products more added value than the sum of added values of all activities* It is important not to mi. the concept of the value chain with the costs occurring throughout the activities* 1. Define Pr*%,t P*-iti*ning. !MA6#$UN8 200;' Pr*%,t P*-iti*ning has come to mean the process y which mar)eters try to
create an image or identity in the minds of their target mar)et for its product- rand or organi0ation* It is the Xrelative competitive comparisonK their product occupies in a given mar)et as perceived y the target mar)et* Product positioning involves creating a uni,ue- consistent- and recogni0ed customer perception aout a firmKs offering and image* A product or service may e positioned on the asis of an attitude or enefit- use or application- user- class- price- or level of ,uality* It targets a product for specific mar)et segments and product needs at specific prices* 15. +lain *-t8+l%- Pri,ing. !MA6#$UN8 200;'
Cost4plus pricing is a pricing method used y companies* It is used primarily ecause it is easy to calculate and re,uires little information* +here are several varieties ut the common thread in all of them is that one first calculates the cost of the productthen includes an additional amount to represent profit* Cost4plus pricing is often used on government contracts- and has een critici0ed as promoting wasteful e.penditures* +he method determines the price of a product or service that uses direct costs- indirect costs-
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and fi.ed costs whether related to the production and sale of the product or service or not* +hese 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* 1&. Define t)e ,*n,e+t *f re8+*-iti*ning mi !N*4 # De, 2010'
Changing in randKs status in comparison to that of the competing rands* 8epositioning is effected usually through changing the mar)eting mi. in response to changes in the mar)et place- or due to a failure to reach the rand6s mar)eting ojectives 17.Menti*n t)e +ri,ing -trategie- f*r t)e intr*%,ti*n -tage *f P ! $%ne 2010'
+here are three pricing strategies for new product namely Pre-tige Pri,ing
4 etting high prices to position a product at the upper or lu.ury end of mar)et 4 Producing a high ,uality and charging the highest price* 4 For e.ample- Mercedes
4 etting high prices at the launch stage and lowering slowly as the product ecomes mature* 4 Most product are in high demand in the early stage of the life cycle* 4 +hat is why using Mar)et )imming may lead to profit ma.imi0ation* 4 For e.ample- Eandphones Market Penetrati*n
4 etting at lower price to get ma.imum sales and mar)et share* 4 Increase price slightly in the future*
19.()at are benefit- *f -egmentati*n !N*4 # De, 2010'
a* Adjustment of product and mar)eting appeals *
1;. ()en i- t)e +ri,e -kimming a g** *+ti*n !N*4# De, 2010'
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Pri,e -kimming is a pricing strategy in which a mar)eter sets a relatively high
price for a product or service at first - a new- innovative- or much4improved product is launched onto a mar)et* +he ojective with s)imming is to Os)im= off customers who are willing to pay more to have the product sooner7 prices are lowered later when demand from the Oearly adopters= falls* Mention any two asis for classification of product 1. *n-%mer C**a* Convenience Products * hopping Products c* pecialty Products d* !nsought Products 2. In%-trial C**a* Materials and parts * Capital items c* upplies usiness services 20. ()at i- meant b" Market Segmentati*n ! $%ne 2011'
A market -egment is a su4set of a mar)et made up of people or organi0ations with one or more characteristics that cause them to demand similar product and/or services ased on ,ualities of those products such as price or function #.amples? •
1ender
•
Price
•
Interests
•
Docation
•
8eligion
•
Income
•
i0e of Eousehold Part B
1. +lain t)e ,*n,e+t *f +r*%,t life ,",le. !MA6#$UN 200&'
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+he Pr*%,t ife ",le refers to the succession of stages a product goes through* Pr*%,t ife ",le Management is the succession of strategies used y management as
a product goes through its life cycle* +he product lifecycle goes though many phases and involves many professional disciplines and re,uires many s)ills- tools and processes* Product life cycle (PDC' is to do with the life of a product in the mar)et with respect to usiness/commercial costs and sales measures7 whereas Product Difecycle Management (PDM' is more to do with managing descriptions and properties of a product through its development and useful life- mainly from a usiness/engineering point of view* Products tend to go through five stages? 1. New +r*%,t e4el*+ment -tage
a* very e.pensive * no sales revenue c* losses 2. Market intr*%,ti*n -tage
a* cost high * sales volume low c* no/little competition 4 competitive manufacturers watch for acceptance/segment growth d* losses 3. Cr*wt) -tage
a* costs reduced due to economies of scale * sales volume increases significantly c* profitaility d* pulic awareness e* competition egins to increase with a few new players in estalishing mar)et f* prices to ma.imi0e mar)et share . Mat%re -tage
a* costs are very low as you are well estalished in mar)et no need for pulicity*
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* sales volume pea)s c* increase in competitive offerings d* prices tend to drop due to the proliferation of competing products e* rand differentiation- feature diversification- as each player see)s to differentiate from competition with Show much productS is offered f* very profitale 5. De,line *r Stabilit" -tage
costs ecome counter4optimal
sales volume decline or staili0e
prices- profitaility diminish
profit ecomes more a challenge of production/distriution efficiency than increased sales*
2. E*w * marketing -trateg" an marketing mi -trateg" ,)ange a,r*-- t)e P -tage- !MA6#$UN 200&'
Mar)eting strategies and mar)eting mi. changes across the PDC tages are given elow? Intr*%,ti*n Stage<
Product 4 >ffer a asic product
Price 4 !se cost4plus asis to set
2istriution 4
Advertising 4
ales Promotion 4 Eeavy e.penditures to create trial
Cr*wt) Stage<
Product 4 >ffer product e.tensions- service- warranty
Price 4 Penetration pricing
2istriution 4
Advertising 4
ales Promotion 4 8educe e.penditures to ta)e advantage of consumer demand
Mat%rit" Stage<
Product 4 2iversify rand and models
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Price 4 et to match or eat competition
2istriution 4
Advertising 4 tress rand differences and enefits
ales Promotion 4 Increase to encourage rand switching
De,line Stage<
Product 4 Phase out wea) items
Price 4 Cut price
2istriution 4 !se selective distriution? phase out unprofitale outlets
Advertising 4 8educe to level needed to retain hard4core loyalists
ales Promotion 4 8educe to minimal level
3. /%tline t)e -tage- in new +r*%,t e4el*+ment. !MA6#$UN 200&'
In usiness and engineering- new +r*%,t e4el*+ment ("P2' is the term used to descrie the complete process of ringing a new product or service to mar)et* +here are two parallel paths involved in the "P2 process ? one involves the idea generation product design- and detail engineering 7 the other involves mar)et research and mar)eting analysis* Companies typically see new product development as the first stage in generating and commerciali0ing new products within the overall strategic process of product life cycle management used to maintain or grow their mar)et share* +here are several stages in the new product development process***not always followed in order? Iea Cenerati*n
Ideas for new products can e otained from customers (employing user innovation'- the company6s 82 department competitors- focus groups- employeessalespeople- corporate spys- trade shows- or through a policy of >pen Innovation formal idea generating techni,ues include attriute listing- forced relationships- rainstormingmorphological analysis- prolem analysis Iea S,reening
the oject is to eliminate unsound concepts prior to devoting resources to them*
the screeners must as) at least three ,uestions?
will the customer in the target mar)et enefit from the productH
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is it technically feasile to manufacture the productH
will the product e profitale when manufactured and delivered to the customer at the target priceH
*n,e+t De4el*+ment an Te-ting
develop the mar)eting and engineering details
who is the target mar)et and who is the decision ma)er in the purchasing processH
what product features must the product incorporateH
what enefits will the product provideH
how will consumers react to the productH
how will the product e produced most cost effectivelyH
prove feasiility through virtual computer aided rendering- and rapid prototyping what will it cost to produce itH
B%-ine-- Anal"-i
estimate li)ely selling price ased upon competition and customer feedac)
estimate sales volume ased upon si0e of mar)et
estimate profitaility and rea)even point
Beta Te-ting an Market Te-ting
produce a physical prototype or moc)4up
test the product in typical usage situations
conduct focus group customer interviews or introduce at trade show
ma)e adjustments where necessary
produce an initial run of the product and sell it in a test mar)et area to determine customer acceptance
Te,)ni,al Im+lementati*n
"ew program initiation
8esource estimation
8e,uirement pulication
#ngineering operations planning
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2epartment scheduling
upplier collaoration
8esource plan pulication
Program review and monitoring
Contingencies4 what4if planning
*mmer,iali@ati*n
launch the product produce and place advertisements and other promotions
fill the distriution pipeline with product
critical path analysis is most useful at this stage
. +lain Market Segmentati*nG targeting an +*-iti*ning wit) a real life eam+le. !MA6#$UN 200&'
+he strategic mar)eting planning process flows from a mission and vision statement to the selection of target mar)ets- and the formulation of specific mar)eting mi. and positioning ojective for each product or service the organi0ation will offer* +he formula 4 -egmentati*nG targetingG +*-iti*ning !STP' 4 is the essence of strategic mar)eting*S
egmentation is a form of critical evaluation rather than a prescried process or system- and hence no two mar)ets are defined and segmented in the same way* Eowever there are a numer of underpinning criteria that assist with segmentation? Is the segment vialeH Is there a profit to e hadH Is the segment accessileH Eow easy is it to get into the segmentH Is the segment measuraleH Is realistic data availale considering its potentialH +here are many ways that a segment can e considered* For e.ample- the auto mar)et could e segmented y? driver age- engine si0e- model type- cost- and so on* Eowever the more general ases include?
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A company will evaluate each segment ased upon potential usiness success* >pportunities will depend upon factors such as? the potential growth of the segment the state of competitive rivalry within the segment how much profit the segment will deliver how ig the segment is how the segment fits with the current direction of the Company and its vision*
Targeting
After the mar)et has een separated into its segments- the mar)eter will select a segment or series of segments as a target* 8esources and effort will e targeted at the segment* In this case- the mar)eter targets a single product offering at a single segment in a mar)et with many segments* In the second instance- the mar)eter ignores the differences in the segments- and chooses to aim a single product at all segments i*e* the whole mar)et* +his is typical in 6mass mar)eting6 or where differentiation is less important than cost* In the multi4segment approach the mar)eter will target a variety of different segments with a series of differentiated products* +his is typical in the motor industry* P*-iti*ning
After segmenting a mar)et and then targeting a consumer- one proceeds to position a product within that mar)et* Positioning is all aout 6perception6* As perception differs from person to person- so do the results of the positioning e.erciseH For e.amplewhat you perceive as ,uality- value for money- etc- is different to someone else6s perception* Products or services are +*-iti*ning ma+. +his allows them to e compared and contrasted in relation to each other* Mar)eters decide upon a competitive position which enales them to distinguish their own products from the offerings of their competition (hence the term 6positioning strategyK* 5. +lain t)e ,)annel e-ign +r*,e-- an -%gge-t wa"- t* re-*l4e ,)annel ,*nfli,t-. !MA6#$UN 200&' Di-trib%ti*n is one of the four aspects of mar)eting* A distriutor is I the
middleman etween the manufacturer and retailer* After a product is manufactured it is typically shipped (and typically sold' to a distriutor* +he distriutor then sells the product to retailers or customers*
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+he other three parts of the mar)eting mi. are product management- pricing- and promotion* T)e i-trib%ti*n ,)annel
Fre,uently there may e a chain of intermediaries7 each passing the product down the chain to the ne.t organi0ation- efore it finally reaches the consumer or end4user* +his process is )nown as the 6distriution chain6 or the 6channel*6 #ach of the elements in these chains will have their own specific needs- which the producer must ta)e into accountalong with those of the all4important end4user )annel-
A numer of alternate 6channels6 of distriution may e availale*
elling direct- such as via mail order- Internet and telephone sales*
Agent- who typically sells direct on ehalf of the producer
2istriutor (also called wholesaler'- who sells to retailers
8etailer (also called dealer'- who sells to end customers
2istriution channels may not e restricted to physical products* +hey may e just as important for moving a service from producer to consumer in certain sectors- since oth direct and indirect channels may e used* Eotels- for e.ample- may sell their services (typically rooms' directly or through travel agents- tour operators- airlines- tourist oardscentrali0ed reservation systems- etc* +here have also een some innovations in the distriution of services* For e.amplethere has een an increase in franchising and in rental services 4 the latter offering anything from televisions through tools* +here has also een some evidence of service integration- with services lin)ing together- particularly in the travel and tourism sectors* For e.ample- lin)s now e.ist etween airlines- hotels and car rental services* In additionthere has een a significant increase in retail outlets for the service sector* >utlets such as estate agencies and uilding society offices are crowding out traditional grocers from major shopping areas* )annel member-
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2istriution channels can thus have a numer of levels* 3otler defined the simplest level- that of direct contact with no intermediaries involved- as the 60ero4level6 channel* +he ne.t level- the 6one4level6 channel- features just one intermediary7 in consumer goods a retailer- for industrial goods a distriutor- say* In small mar)ets (such as small countries' it is practical to reach the whole mar)et using just one4 and 0ero4level channels* In large mar)ets (such as larger countries' a second level- a wholesaler for e.ample- is now mainly used to e.tend distriution to the large numer of smallneighorhood retailers* In apan the chain of distriution is often comple. and further levels are usedeven for the simplest of consumer goods* )annel -tr%,t%re
+o the various levels6 of distriution- which they refer to as the channel length6Dancaster and Massingham also added another structural element- the relationship etween its memers?
Conventional or free4flow 4 +his is the usual- widely recogni0ed- channel with a range of middle4men6 passing the goods on to the end4user* XChannel6 may e set up for one transaction7 for e.ample- the sale of property or a specific civil engineering project* +his does not share many characteristics with other channel transactions- each one eing uni,ue*
Gertical mar)eting system (GM' 4 In this form- the elements of distriution are integrated*
)annel management
+he channel decision is very important* In theory at least- there is a form of trade4 off? the cost of using intermediaries to achieve wider distriution is supposedly lower* Indeed- most consumer goods manufacturerH could never justify the cost of selling direct to their consumers- e.cept y mail order* In practice- if the producer is large enough- the use of intermediaries (particularly at the agent and wholesaler level' can sometimes cost more than going direct*
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Many of the theoretical arguments aout channels therefore revolve around cost* >n the other hand- most of the practical decisions are concerned with control of the consumer* +he small company has no alternative ut to use intermediaries- often several layers of them- ut large companies 6do6 have the choice* Eowever- many suppliers seem to assume that once their product has een sold into the channel- into the eginning of the distriution chain- their jo is finished* Yet that distriution chain is merely assuming a part of the supplier6s responsiility7 and- if he has any aspirations to e mar)et4oriented- his jo should really e e.tended- to managingaleit very indirectly- all the processes involved in that chain- until the product or service arrives with the end4user* +his may involve a numer of decisions on the part of the supplier?
Channel memership
Channel motivation
Monitoring and managing channels
()at ,a%-e- ,*nfli,t
Conflict occurs when the actions of either a manufacturer or distriutor are perceived as a threat or arrier to the accomplishment of the other party6s goals* *r eam+le- when a manufacturer estalishes a direct sales relationship with a customer
in a distriutor6s territory- that distriutor will more than li)ely perceive this action as a threat to the accomplishment of its goals* >n the other hand- when a distriutor joins a uying group or ta)es on a competitive product line- a manufacturer will perceive this action as a threat to- the accomplishment of its goals* In a recently completed survey of T% manufacturers and %% distriutorsIndustrial Performance 1roup discovered that e.cess distriution as a result of ineffective territory management is a major concern for distriutors* >n the other hand- manufacturers are concerned that distriutors lac) commitment to their products ecause distriutors carry a numer of competing product lines* +here are three primary causes of conflict etween manufacturers and distriutors*
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1' In,*m+atible g*al-.
Manufacturers and distriutors have two entirely different usiness focuses* Manufacturing is volume4focused* Manufacturers reap financial rewards for producing large volumes of goods* Increases in volume ring aout greater efficiencies- ,uality improvements and cost reductions*
Conflict is sure to occur in any wor)ing relationship where the roles and responsiilities of the manufacturer and its distriutors have not een clearly defined* ;hen roles and responsiilities are not clearly def ine d- uncertainty and amiguity ,uic)ly lead to redundancies and inefficiencies- which drive costs up and overall performance down* Clearly defined roles and responsiilities allow manufacturers and distriutors to effectively allocate resources (time- money and people' in l lu4 activities they must perform in order to achieve the goals they have defined for the wor)ing relationship* +o avoid this common source of conflict- manufacturers must clearly ilrlme what is e.pected of their distriutors and what distriutors viiii e.pect in return* 3' N* ,*nfli,t re-*l%ti*n +r*,e--.
As stated earlier- conflict is a natural occurrence in all manufacturer/ distriutor wor)ing relationships* >ur research indicates that most manufacturers and distriutors ta)e the traditional approach to conflict ignore it and it will go away* Conflict resolution re,uires a high level of communication and cooperation* Yet we discovered that in most manufacturer/distriutor wor)ing relationships- cooperation levels are very low and two4 way communication is virtually none.istent* &. ()at are t)e *b?e,ti4e- f*r +ri,ing e,i-i*n- ()at met)*- are %-e t* arri4e at +ri,ing e,i-i*n w)en t)e market i- ,*m+etiti4e (N/#D 200&' /b?e,ti4e- f*r +ri,ing e,i-i*n-<
Current Profit ma.imi0ation
Current revenue ma.imi0ation
Ma.imi0e 9uantity
Ma.imi0e profit margin
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9uality Deadership
Partial cost recovery
urvival
tatus 9uo
Met)*- %-e t* arri4e at +ri,ing e,i-i*n w)en t)e market i- ,*m+etiti4e< *-t8+l%- +ri,ing< It is a pricing method commonly used y firms* It is used
primarily ecause it is easy to calculate and re,uires little information* +here are several varieties- ut the common thread in all of them is that you first calculate the cost of the product- then include an additional amount to represent profit* Cost4plus pricing is often used on government contracts- and has een critici0ed as promoting wasteful e.penditures Target ret%rn + ri,ing 4 It is a pricing method used almost e.clusively y
mar)et leaders or monopolists* al%e ba- e +ri,ing 8 A pricing strategy in which a product6s price is actively dependant upon its demand* +his method of pricing allows companies to ta)e advantage of highly demanded products y charging more* A good e.ample is how refreshments generally cost more at sporting events* P-",)*l*gi,al +ri,ing 4 +his pricing drives demand greater than would e e.pected if consumers were perfectly rational* Psychological pricing is one cause of price points* Penetrati*n +ri,ing 4 It is the pricing techni,ue of setting a relatively low initial entry price- a price that is often lower than the eventual mar)et price* +he e.pectation is that the initial low price will secure mar)et acceptance y rea)ing down e.isting rand loyalties* Penetration pricing is most commonly associated with a mar)eting ojective of increasing mar)et share or sales volume- rather than short term profit ma.imi0ation* 7. S%gge-t -%itable -trategie- f*r Cr*wt) an Mat%rit" -tage *f P. (N/#D 200&' Cr*wt) -trategie- 4 In this scheme we as) the ,uestion- SEow should the firm
growHS* +here are a numer of different ways of answering this ,uestion- ut the most common gives four answers? E*ri@*ntal integrati*n< In microeconomics and strategic management- the term
hori0ontal integration descries a type of ownership and control* It is a strategy used y a usiness or corporation that see)s to sell a type of product in numerous mar)ets* +o get this mar)et coverage- several small susidiary companies are created* #ach mar)ets the product to a different mar)et segment or to a different geographical area* +his is
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sometimes referred to as the hori0ontal integration of mar)eting* +he hori0ontal integration of production e.ists when a firm has plants in several locations producing similar products* Eori0ontal integration in mar)eting is much more common than hori0ontal integration in production* erti,al integrati*n< In microeconomics and strategic management- the term
vertical integration descries a style of ownership and control* Gertically integrated companies are united through a hierarchy and share a common owner* !sually each memer of the hierarchy produces a different product or service- and the products comine to satisfy a common need* It is contrasted with hori0ontal integration* Gertical integration is one method of avoiding the hold4up prolem* Di4er-ifi,ati*n !*r ,*ngl*merati*n'< 2iversification is a form of growth
mar)eting strategy for a company* It see)s to increase profitaility through greater sales volume otained from new products and new mar)ets* 2iversification can occur either at the usiness unit or at the corporate level* At the usiness unit level- it is most li)ely to e.pand into a new segment of an industry in which the usiness is already in* At the corporate level- it is generally entering a promising usiness outside of the scope of the e.isting usiness unit* B%-ine-- Mat%rit"
Maturity is a very dangerous time for a usiness* +his is the point at which the owner is comfortale with their achievements* +heir usiness is running smoothly* ;hile sales have started to plateau- their profits may still e increasing- ecause they are getting etter at doing what they do* +he owner has decided that their usiness is at the right si0ethey don6t want it to grow larger* +he owner is in their comfort 0one* +hey see opportunities to increase their profits incrementally- ut they see no need to ma)e significant changes in their usiness* +he reason this is a dangerous time is that the owner has ta)en their foot off the accelerator- and is starting to coast* +he success of usiness is dependent on constant renewal* "ew products and services- new customers- new ways of delivering your service* If the firm doesn6t invest in constantly rejuvenating their usiness- usiness will e in decline* At first it might still appear to grow (fro m the momentum of earlier efforts'*
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9. +lain t)e new +r*%,t e4el*+ment +r*,e-- wit) -%itable eam+le-. (N/#D 200&'
+here are seven stages of new product development* * 1enerating Ideas
$* creening Ideas
:* 2eveloping +esting Ideas
B* Conducting a
* Product 2evelopment
&* +est Mar)et
T* Commerciali0ation Cenerating Iea-
;hen generating ideas you should start y rainstorming ideas and as) ,uestions aout what you want to achieve* Consider products that will fit the company*
Creativity is a )ey point*
8eview the customer6s suggestions*
S,reening Iea-
;hen screening ideas you should start y loo)ing at the grand scheme of the development process*
+hen egin to narrow ideas*
In order to move into development and testing the idea must meet different criteria*
2oes the product fit the overall mission of the companyH
De4el*+ing an Te-ting *n,e+t-
+he company must as) these ,uestions? •
;hy would a customer uy this productH
•
;hat would e the enefit H
•
Eow might this product e used H
+est the usefulness of the new product idea with customers and have an understanding of the product as viewed y the customer* *n%,ting B%-ine-- Anal"-i-
+here should e an analysis on the costs- return of investment- cash flow- fi.ed cost- and variale cost in the long run*tudies have shown that high ris) ideas provide the most successful new products*
71
New Pr*%,t De4el*+ment
In this stage your concepts egin to come together* •
2evelop prototypes*
•
Assign names and rand identity to the new product*
•
Formulate mar)eting mi.*
•
It is critical for research and development- engineering- pac)aging and mar)eting to use teamwor)*
Te-t Marketing
+est mar)eting can e very time consuming- e.pensive and prone to competitive saotage*
Companies must plan carefully during this stage*
*mmer,iali@ati*n •
Companies need to rememer to start small*
•
+hey must also plan for a modest product turnout*
•
Companies should also consult with other people who have gone through similar processes*
* Di-,%-- t)e im+*rtant feat%re- *f -kimming +ri,ing. Ci4e eam+le-. (MA6#$UN 2007' O)imming= refers to setting initially high prices- and slowly lowering them over time to ma.imi0e profits at every price4sensitive layer in the mar)et* As initial sales slow down- and/or as competitors threaten to introduce similar products- the price is lowered just enough to ma)e it worthwhile for the ne.t segment to uy* everal industries use this pricing strategy very effectively* #.amples include? fashion (designer originals and eginning4 of4season sales vs* copycat designs and end4of4 season sales'7 pulishing (hard cover vs* paperac) oo)s'7 and sports e,uipment (new golf clu innovations are slowly reduced in price each season as new models are introduced'* +he ojective is to achieve the highest possile contriution in a short time period* +he product has to e uni,ue and some segment of the mar)et must e willing to pay the high price* As more segments are targeted and the product ecome more availale- the
72
price is lowered* +he success of this techni,ue depends in the aility and speed of competitive reaction* +his techni,ue is used when you offer a uni,ue or scarce product with few or no sustitutes* +he price is set high- resulting in high margins for the seller* ften- price s)imming is a short4term strategy as competitors enter with their own products- ringing prices down* In the case of scarce products- either the need passes (salt during an ice storm- for e.ample' or the shortage is temporary*
For the positive statement strongly agree response gets mar)s- agree response gets B mar)s and so on*
•
For negative statements the scoring order is reversed*
If a particular respondent for a particular rand gets a high score- he has high rand preference and vice4versa*
73
#asy for customers to say- spell and recall (inc* foreigners'
Indicate products major enefits
hould e distinctive
Compatile with all products in product line
!sed and recogni0ed in all types of media
ingle and multiple words
Availaility- already over B%% car Sname platesS- this ma)es it difficult to select a new one*
!se words of no meaning to avoid negative connotation- 3oda)- #..on
Can e created internally y the organi0ation- or y a consultancy
Degal restrictions
ari*%- *+ti*n- in braning ine ten-i*n-? #.isting rand name e.tended to new si0es or flavors in the e.isting product category* Bran ten-i*n-?
12. E*w * +)"-i,al i-trib%ti*n an marketing l*gi-ti,- +ra,ti,e- -%it a -"-tema++r*a,). !N/#D 2007'
Dogistics management is e.pressed as the management of all activities providing the coordination of supply4demand and product movement in order to create the time and place enefits in enterprises* ;hen the logistics management is analy0ed with respect to system approach it is composed of two susystems called physical supply and physical distriution* In oth susystems dataase mar)eting techni,ues is applied and than)s to the electronic communication medium that enterprises are got rid of unnecessary costs and desired distriution service level is accomplished* Physical supply deals with the transportation of the goods from the supplier to the manufacturer and the storage of raw material used for wor) in progress*Physical distriution is concerned with transportation and storage of the finished goods from the
74
manufacturer to the customer- Cost is an important aspect in the logistics function* #very su4function of logistics is associated with some cost and the logistics function as a whole proves to e effective only when its total cost is minimi0ed* +his is the concept ehind the application of the total cost approach to logistics* Customer service plays an important role in the overall fulfillment of the logistics function* #lements of customer service in logistics include lead time- inventory availaility- order fill rate- and order status information* 7 Physical distriution system in logistics management is analy0ed with regard to the relations etween production and customers* Physical distriution su4system defined as the activities carried out after the production stage of goods till to the deliveries of goods ensures the harmony of production and consumption in an electronic mar)et medium* ystematic
information
concept
in
logistics
management
e.plains
the
communications etween the parties implementing logistics functions in the managementmar)et and industry data level* ystematic information is a cornerstone of logistics as a result of logistics activities that involve the efforts providing place and time utility in enterprises- for the aim of products eing presented in the right place- at the right time and in the right amount* An integrated systems approach would help in managing and coordinating the logistics function* Many firms find it difficult to manage logistics on their own and outsource the function to other third party and fourth party service providers* 13. +lain t)e -tage- in t)e Pr*%,t ife ",le. !MA6#$UN8 200;'
8efer to 9*"o? May/une $%%& 1.+lain t)e ,*n,e+t *f bran eK%it". !MA6#$UN8 200;'
75
ne way to measure rand e,uity is to determine the price premium
that a rand commands over a generic product* For e.ample- if consumers are willing to pay U%% more for a randed television over the same unranded television- this premium provides important information aout the value of the rand* Eowever- e.penses such as promotional costs must e ta)en into account when using this method in measure rand e,uity* Bran eten-i*n- 4 A successful rand can e used as a platform to launch related
products* +he enefits of rand e.tensions are the leveraging of e.isting rand awareness thus reducing advertising e.penditures- and a lower ris) from the perspective of the consumer* Furthermore- appropriate rand e.tensions can enhance the core rand* Eowever- the value of rand e.tensions is more difficult to ,uantify than are direct financial measures of rand e,uity* *n-%mer8ba-e 4 A strong rand increases the consumerKs attitude strength
toward the product associated with the rand* Attitude strength is uilt y e.perience with a product* +his importance of actual e.perience y the customer implies that trial samples are more effective than advertising in the early stages of uilding a strong rand* +he consumerKs awareness and associations lead to perceived ,uality- inferred attriutes- and eventually- rand loyalty* trong rand e,uity provides the following enefits?
Facilitates a m*re +rei,table in,*me stream*
In,rea-e- ,a-) fl*w y increasing mar)et share- reducing promotional costs- and
allowing premium pricing*
Bran eK%it" i- an a--et that can e sold or leased*
Eowever- rand e,uity is not always positive in value* ome rands ac,uire a ad reputation that results in negative rand e,uity* "egative rand e,uity can e measured y surveys in which consumers indicate that a discount is needed to purchase the rand over a generic product* Alternati4e Mean- t* Bran K%it"
76
2ifferent companies have opted for different rand strategies for multiple products* +hese strategies are? Single bran ientit" 4 a separate rand for each product* For e.ample- in laundry
detergents Procter 1amle offers uni,uely positioned rands such as +ide- Cheer-
product4categories under its rand* M%lti8bran ,ateg*rie- 4 2ifferent rands for different product categories* Campell
oup Company uses CampellKs for soups- Pepperidge Farm for a)ed goods- and GL for juices* amil" *f name- 4 2ifferent rands having a common name stem* "estle uses "escafe-
"es,ui)- and "estea for everages*
services supplied y a company meet or surpass customer e.pectation* It is seen as a )ey performance indicator within usiness and is part of the four perspectives of a
77
usiness strategy* +here is a sustantial ody of empirical literature that estalishes the enefits of customer satisfaction for firms* Customer satisfaction is an amiguous and astract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service* +he state of satisfaction depends on a numer of oth psychological and physical variales which correlate with satisfaction ehaviors such as return and recommend rate* +he level of satisfaction can also vary depending on other options the customer may have and other products against which the customer
product- product line- or rand* It see)s to increase the product6s perceived value to the customer and therey increase rand franchise and rand e,uity* Mar)eters see a rand as an implied promise that the level of ,uality people have come to e.pect from a rand will continue with future purchases of the same product*
78
+his may increase sales y ma)ing a comparison with competing products more favorale* It may also enale the manufacturer to charge more for the product* +he value of the rand is determined y the amount of profit it generates for the manufacturer* +his can result from a comination of increased sales and increased price- and/or reduced C>1 (cost of goods sold'- and/ or reduced or more efficient mar)eting investment* All of these enhancements may improve the profitaility of a rand- and thusS
79
elasticity* uccessful rand enales e.panding the rand on other products and prestige creation- as well as the legal protection of uni,ue product characteristics* 17. (rite -)*rt n*te- *n t)e f*ll*wing. !N*4#De, 2009' a. ()at i- Bran K%it"
approaches are at
the firm level - some at the product level and still others are at the consumer level irm le4el
Firm level approaches measures the rand as an financial asset* For #.ample If you were to ta)e the value of the firm- as derived y its mar)et capitali0ation and then sutract tangile assets and measurale intangile assets the residual would e the
Pr*%,t le4el
+he classic product level rand measurement e.ample is to compare the price of a no name or private lael product to an e,uivalent randed product* +he difference in price assuming all things e,ual is due to e the rand* *n-%mer le4el
+his approach see)s to measure the awareness (recall and recognition' and rand image (the overall associations that the rand has*' b. ()at i- Bran P*rtf*li*
ac) from the crush of daily prolems and chart the course ahead* +here are multiple
80
Bran +*-iti*ning ;hen a new rand appears in the mar)et- the consumer gets ac,uainted with it
and starts collecting information aout it* >n the asis of this information the consumer creates an opinion of the rand and estalishes a rand image* For a stale mar)et position of a rand- consumer awareness of the new rand on the mar)et is not sufficient* +he consumer must prefer a rand and have a positive assessment of it as well as considering it in its purchasing decisions* +he target position means deciding on the target image of a rand and how the consumers should compare it to other competitive rands* +he mar)et position of a rand shows where a specific rand is located* It also shows the relationship to competitive rands* ;e can determine the mar)et position of a rand on the asis of the answers to the following four ,uestions? * ;hy (which enefits and advantages does the new rand ring to the consumer' $* ;hen (determining the opportunities for which the rand is /most suitale' :* For whom (it is aout the determination of the consumer of a rand or target group' B* Against whom (determining the main competitive rand Bran ten-i*n
ne way to measure rand e,uity is to determine the price premium that a
rand commands over a generic product* For e.ample- if consumers are willing to pay U%% more for a randed television over the same unranded television- this premium provides important information aout the value of the rand* Eowever- e.penses such as
81
promotional costs must e ta)en into account when using this method in measure rand e,uity* Bran eten-i*n- 4 A successful rand can e used as a platform to launch related
products* +he enefits of rand e.tensions are the leveraging of e.isting rand awareness thus reducing advertising e.penditures- and a lower ris) from the perspective of the consumer* Furthermore- appropriate rand e.tensions can enhance the core rand* Eowever- the value of rand e.tensions is more difficult to ,uantify than are direct financial measures of rand e,uity* *n-%mer8ba-e 4 A strong rand increases the consumerKs attitude strength toward the
product associated with the rand* Attitude strength is uilt y e.perience with a product* +his importance of actual e.perience y the customer implies that trial samples are more effective than advertising in the early stages of uilding a strong rand* +he consumerKs awareness and associations lead to perceived ,uality- inferred attriutes- and eventually rand loyalty* trong rand e,uity provides the following enefits?
Facilitates a m*re +rei,table in,*me stream*
In,rea-e- ,a-) fl*w y increasing mar)et share- reducing promotional costs- and
allowing premium pricing*
Bran eK%it" i- an a--et that can e sold or leased*
Eowever- rand e,uity is not always positive in value* ome rands ac,uire a ad reputation that results in negative rand e,uity* "egative rand e,uity can e measured y surveys in which consumers indicate that a discount is needed to purchase the rand over a generic product* Alternati4e Mean- t* Bran K%it"
82
2ifferent companies have opted for different rand strategies for multiple products* +hese strategies are? a re? Single bran ientit" 4 a separate rand for each product* For e.ample- in laundry
detergents Procter 1amle offers uni,uely positioned rands such as +ide- Cheer-
product4categories product4categor ies under its rand* rand * M%lti8bran ,ateg*rie- 4 2ifferent rands for different product categories* Campell
oup Company uses CampellKs for soups- Pepperidge Farm for a)ed goods- and GL for juices* amil" *f name- 4 2ifferent rands having a common name stem* "estle uses "escafe-
"es,ui)- and "estea for everages* everages*
83
+he rand on its own demonstrates what the rand owner is offering to its consumers* 1ood mar)eters have learned how to create a rand that has its own characteristics that ma)e it special or uni,ue* I- or return on investment for their mar)eting dollar* Manufacturers ,uic)ly learned to uild their randKs identity and personality such as youthfulness- fun or lu.ury* Manufacturers egan to recogni0e the way in which consumers were developing relationships with their rands in a social/psychological/anthropological sense* 20.Di-,%-- t)e merit- *f %-t*mer relati*n-)i+ marketing. De-,ribe in etail a ,*m+an" w)* i- in b%-ine-- t*a" t)at m*el- relati*n-)i+ marketing. !MA6#$UN8 200;' Merit- *f %-t*mer Felati*n-)i+ Marketing<
a' +o give enterprise enterprise a :&%Z view view of each customer customer for for consistent consistent and unified[ contact with that customer whenever anyone anywhere in the4enterprise deals with that customer* \ 4 ' +his )nowledge increases increase s the opportunities for sales and the effectiveness effectivenes s of customer service*
84
c' +o enale firm firm customers customers to have a consistent consistent view of of your enterpriseenterprise- regardless regardless of the way the customer contacts them* +his improves customer satisfaction and customer retention* d' +o enale front front office office staff to perform sales- service service and mar)eting mar)eting tas)s tas)s more efficiently as a team- increasing e.pertise and reducing costs* e' C8M descri descries es a strateg strategy y used to manage manage and and report report customer customer// prospect/partner/contact prospect/partner /contact interactions interaction s with enterprise contacts con tacts including inside insid e and outside sales- mar)eting- illing- shipping and customer service and support* f' C8M is an enterprise4wide enterprise4wide corporate corporate strategy strategy for presenting presenting a single facesometimes called a unified mar)eting message- to the customer* It responds to issues relating to sharing customer data and providing a seamless contact and fulfillment e.perience for the customer* g' C8M front4end front4end applicat applications ions usually usually integrate integrate with with ac)end ac)end systems systems such as as accounting and manufacturing for a true enterprise4wide cost reduction solution* h' Provide Provide etter etter custome customerr servic servicee i' Incr Increa ease se cust custom omer er reve revenu nues es j' 2iscover new customers )' Cross Cross sell/!p sell/!p ell ell products products more more effect effectivel ively y l' Eelp Eelp sal sales es sta staff ff close close deals deals fas faster ter m' Ma)e call call centers centers more more efficient efficient n' implif implify y mar)et mar)eting ing and and sales sales processe processess M*eling Felati*n-)i+ Marketing in t*a":- b%-ine--<
In todayKs competitive usiness environment- a successful C8M strategy cannot e implemented y only installing in stalling and integrating integra ting a software pac)age designed to support suppo rt C8M processes* A holistic approach to C8M is vital for an effective and efficient C8M policy*
+his approach includes training of employees- a modification of usiness processes ased on customersK needs and an adoption of relevant I+4systems* (including soft4 and maye hardware' and/or usage of I+4 ervices that enale the organi0ation or company to follow its C8M strategy* C8M4ervices can even redundanti0e the ac,uisition of additional hardware or C8M software4licences* +he asic technology compartments of a C8M
85
strategy involve firstly a dataase for customer life4cycle information- including ordersre,uests- complaints and so on* "e.t- customer needs and profitaility projection are made into plans which are then trac)ed through software* Another aspect is usiness modeling of whether goals were met and models of customer segments wor)ed as fore4casted* Dearning systems are put in place that train staff and improve processes to more effectively achieve goals* a' Goice recognition- video pattern matching- statistical analysis are used to determine profitaility of customer relationship policies* ' Profiling tech nology is us ed to fo rm networ)s that allow customers to interact with the usiness- fellow customers- prospective customers- and so on * c' +he ongoing alignment of these asic uilding loc)s distinguishes an elegant seamless4 C8M implementation which successfully uilds mutually valuale relationships* 21 +lain t)e new Pr*%,t e4el*+ment +r*,e-- wit) -%itable eam+le-!$%ne 2010'
8efer to 9*"o : (May/une $%%&' 22. De-,ribe t)e -trategie- -%itable Cr*wt) Mat%rit" -tage *f P !$%ne 2010'
8efer to 9*"o T(May/une $%%&' 23./%tline t)e -tage- *f new Pr*%,t e4el*+ment!N*4 # De, 2010'
8efer to 9*"o* : (MAY/!"# $%%&' 2.+lain t)e ,)annel e-ign +r*,e--. !N*4#De, 2010' EANN MANACMNT
According to Philip 3otler- O #very producer see)s to lin) together the set of mar)eting intermediaries that est fulfill the firmKs ojectives* +his set of mar)eting intermediaries is called the mar)eting channel (also called as trade channel or channel of distriution*' A system of mar)eting institutions that promotes the physical flow of goods and services- along with ownership title- from producers to consumer or usiness user7 also called a distriution channel* For mar)eters the distriution decision is primarily concerned with the supply chainKs front4end or channels of distriution that are designed
86
to move the product (goods or services' from the hands of the company to the hands of the customers )ara,teri-ti,- *f Di-trib%ti*n ,)annel<
' 8oute or pathway? $' Flow? :' Composition? B' Functions? ' 8emuneration? &' +ime !tility? T' Convenience Galue? L' Possession Galue? ' Mar)eting tools? %' upply4demand Din)age?
)annel %n,ti*n-?
' Information Provider $' Price staility* :' Promotion B' Financing ' +itle &' Eelp in Production Function T' Matching demand and supply* 4 Contractual? Finding out uyers and sellers* 4 Merchandising? Producing goods that will satisfy mar)et re,uirements* 4 Pricing? Process of attaching value to the product in monetary terms* 4 Propaganda? ales promotion activities* 4
Physical 2istriution? 2istriution activities*
4 +ermination? ettlement of contract- i*e*- paying the value and receiving the goods* L' Pricing
87
' tandardi0ing +ransactions* %' Matching
*n,e+t- *f )annel Management?
* +he #. Ante phase? +he e. ante phase involves all the activities that are associated with the design and estalishment of the distriution channel actually starts functioning* i' 2esigning channel structure* ii' #stalishing the channel* a' Appointing processing #ntities* ' Infrastructure 2evelopment* c ' Miscellaneous Functions*
$* +he #.4paste Phase? ;hile these activities are just preparatory activities- the main tas) of a channel manager starts only after the channel is set up and starts functioning* It comprises following two set of activities? i' Motivating Channel Memers? ii' 8esolving Conflicts among Channel Memers* T)e F*le *f Marketing )annel- in Marketing Strateg"
88
Channels provide the means y which the firm moves the goods and services it produces to ultimate users
Facilitate the e.change process y cutting the numer of contacts necessary
Adjust for discrepancies in the mar)etKs assortment of goods and services via sorting
tandardi0e e.change transactions
Facilitate searches y oth uyers and sellers
a,t*r- Infl%en,ing )annel De,i-i*n1. Felating t* Pr*%,t )ara,teri-ti,•
Perishaility
•
Industrial / consumer products
•
!nit values
•
tyle osolescence
•
;eight technicality
•
tandardi0ed Products
•
Purchase Fre,uency
•
"ewness Mar)et Acceptance
•
easonally
•
Product
II Felating t* *m+an" )ara,teri-ti,•
Financial trength
•
Mar)eting Policies
•
i0e of the company
•
Past Channel #.perience
•
Product Mi.
•
8eputation
89
III a,t*r- relating t* Market *r ,*n-%mer )ara,teri-ti,•
Consumer
•
Docation of the mar)et
• •
"umer of customer i0e of orders
I a,t*r- relating t* mileman ,*n-ierati*n •
ales volume potential
•
Availaility of middleman
•
MiddlemenKs Attitude
•
ervice provided y middlemen
•
Cost of channel
a,t*r- relating t* en4ir*nmental ,)ara,teri-ti,•
#conomic conditions
•
Degal restriction
•
Competitors channel
•
Fiscal structure
)annel- U-ing Marketing Intermeiarie
;holesaler / toc)ist/ 2istriutor
8etailer
ole elling Agent
C F Agents
emi4 ;holesaler
Galue added resellers
T"+e- *f Marketing )annel-
90
E"bri#M%lti#D%al Di-trib%ti*n< "etwor) that moves products to a firmKs target mar)et
through more than one mar)eting channel Fe4er-e )annel-< Channels designed to return goods to their producers Determining Di-trib%ti*n Inten-it"
"umer of intermediaries through which a manufacturer distriutes its goods Inten-i4e i-trib%ti*n< channel policy in which a manufacturer of a convenience
product attempts to saturate the mar)et Sele,ti4e i-trib%ti*n< channel policy in which a firm chooses only a limited numer of
retailers to handle its product line ,l%-i4e i-trib%ti*n< channel policy in which a firm grants e.clusive rights to a single
wholesaler or retailer to sell its products in a particular geographic area )annel Management
91
+he administration of e.isting channels to secure the cooperation of channel memers in achieving the firmKs distriution ojectives* #mergence of distriution channel could e attriuted to the need for facilitating e.changes y speeding up the time consuming matching process etween uyers and sellers* )annel Management De,i-i*n1. Sele,ting )annel Member-
2uring the selection process- producers should determine what characteristics distinguish the etter intermediaries* +hey will want to evaluate numer of years in usiness- other lines carried- growth and profit record- solvency- cooperativeness- and reputation* If the intermediaries are sales agents- producers will want to evaluate the numer and character of other lines carried and the si0e and ,uality of the sales force* 2. Training )annel Member-
Companies need to plan and implement careful training programs for their distriutors and dealers ecause the intermediaries will e viewed as the company y end users* Microsoft- for e.ample- re,uires third4party service engineers who wor) with its software applications to complete a numer of courses and ta)e certification e.ams* +hose who pass are formally recogni0ed as Microsoft Certified Professionals- and they can use this designation to promote usiness* 3. M*ti4ating )annel Member-
+he most successful firms view their channel memers in the same way they view their end users* +his means determining their intermediariesK needs and then tailoring the channel positioning to provide superior value to these intermediaries* +o improve intermediariesK performance- the company should provide training- mar)et research- and other capaility4uilding programs* And the company must constantly reinforce that its intermediaries are partners in the joint effort to satisfy customers*
. 4al%ating )annel Member-
Producers must periodically evaluate intermediariesK performance against such standards as sales4,uota attainment- average inventory levels- customer delivery timetreatment of damaged and lost goods- and cooperation in promotional and training
92
programs* A producer will occasionally discover that it is paying too much to particularintermediaries for what they are actually doing
5. M*if"ing )annel Arrangement-
Channel arrangements must e reviewed periodically and modified when distriution is not wor)ing as planned- consumer uying patterns change- the mar)et e.pands- new competition arises- innovative distriution channels emerge- or the product moves into later stages in the product life cycle*
)annel *nfli,t E*ri@*ntal *nfli,t
Most often- hori0ontal conflict causes spar)s etween different types of mar)eting intermediaries that handle similar products* ometimes results from disagreements among channel memers at the same level* erti,al *nfli,t
Channel memers at different levels find many reasons for disputes #.ample? when retailers develop private rands to compete with producersK rands or when producers estalish their own retail outlets or ;;; ites* M%lti,)annel ,*nfli,t
#.ists when the manufacture has estalished two or more channels that sell to the same mar)et a%-e- *f ,)annel ,*nfli,t •
1oals incompatiility
•
!nclear roles rights
Managing )annel ,*nfli,t •
uper ordinate goals
•
#.change persons
•
Cooptation
•
Mediation
93
•
2iplomacy
25.+lain t)e new Pr*%,t e4el*+ment +r*,e-- wit) -%itable eam+le- !$%ne 2011' Fefer t* .N* 3 !Ma"#$%ne 200&' UNIT – I BU6F BEAI/UF Part A 1. ()at i- ,*n-%meri-m !MA6#$UN 200&' *n-%meri-m is a term used to descrie the effects of e,uating personal
happiness with purchasing material possessions and consumption* It is used to descrie the tendency of people to identify strongly with products or services they consumeespecially those with commercial rand names and ovious status4enhancing appeal* It can also refer to economic policies that place an emphasis on consumption- and- in an astract sense- the elief that the free choice of consumers should dictate the economic structure of a society* 2. ()at are t)e ifferent t"+e- *f b%"ing be)a4i*r Menti*n t)e +arameter %-e t* ,la--if" t)e-e t"+e-. (N/#D 200&'
8outine 8esponse/Programmed
94
3. ()* i- an in%-trial b%"er (MA6#$UN 2007'
An industrial uyer is one who ac,uires goods and services used in +he pr oduction of other products or services that are sold- rented- or supplied to others 9uestion "umer ?B (May / une $%%T' . ()* i- a -ati-fie ,%-t*mer (MA6#$UN 2007'
A satisfied customer is one who e.periences the feeling of pleasure resulting from comparing a product perceived performance in relation to his e.pectations* ;henever the performance matches the e.pectations the customer is satisfied* 5. E*w *e- t)e ,*n,e+t *f :al%e8*-t Ca+: fa,ilitate ,%-t*mer !N/#D 2007'
+here was a growing gap etween cost and value- account for highly leveragale opportunity to e.tract unprecedented value* Adding new usiness functions places a relatively small cost urden on the customer* Much of the infrastructure is in place and a sun) cost- with much of the additional re,uired infrastructure purchases availale at low commodity prices* +he value that can e derived from incremental functionality added to current infrastructure has non4linear multiplier (interaction' effect* +he old- pre4networ)- model of layering mar)eting on isolated systems had a relatively simple- and comparatively small- additive effect on a system6s value* +he current networ) model- however- allows new mar)eting components which leverage the networ) to increase usiness value e.ponentially* &. E*w *e- :Margin8T%rn*4er: framew*rk *+erate in retailing !N/#D 2007'
+his framewor) is ased on the intricate relationship etween retail margin and retail turnovers* Margin is a percentage mar)up at which the inventory in the store is sold- and the turnover is the numer of times the average inventory is sold in a given year* >n the asis of the margin4turnover relationship- retail estalishments can e sudivided into four categories? • • • •
Eigh Margin 4 Eigh turnover Eigh Margin Dow turnover Dow Margin 4 Eigh turnover Dow Margin 4 Dow turnover
95
7. E*w *e- P-",)*anal"ti, m*el e+lain b%"ing be)a4i*r !N/#D 2007'
+his model is well )nown in at least some of its aspects and is widely used y advertisers* Its asic thesis is that the individual human eing is a divided )ingdomwhere ehavior rarely allows of a simple e.planation* +he individual maintains a precarious alance etween emotion and rationality- etween instinctive drives and socially acceptale ehavior* !sing this model- the mar)eter can construct his message so that it appeals to the parts of the psyche which are not accessile to the consciousness ut which are still li)ely to determine ehavior* >ne disadvantage of this model- of course- is that it is difficult to ma)e generali0ations aout any particular mar)et segment* Eowever- very effective advertising campaigns have een devised which appeal to the customer6s private world of hopes- fears and dreams* 9. ()at i- t)e -,*+e *f :,%-t*mer ataba-e: !N/#D 2007' !nderstanding customers • Managing customer service • !nderstand the mar)et • !nderstanding competitors • Managing mar)eting campaigns • ;.Define :b%"ing8*%t bran-. !N/#D 2007'
SutS rands are the rands that will no longer e availale in the mar)et* +his ensures that the uyer6s product will not e sold to another person from that point on* Previous purchases of the product will continue to e honored- ut no future transaction will not e there* 10.()* infl%en,e- ini4i%al b%"er !MA6#$UN 2009' •
An individual uyer is one that is not purchasing goods for their usiness or
•
institution* An individual uyer does not uy according the specifications he or she prepares*
•
operates*
11.()at i- eman e-timati*n !MA6#$UN 2009'
2emand estimation is used for performance planning and in ma)ing policy decisions- managers must have some idea aout the characteristics of the demand for their
96
product(s' in order to attain the ojectives of the firm or even to enale the firm to survive* 12. ()at i- +*-t +%r,)a-e be)a4i*r !N/#D 2009'
Post4purchase ehavior is very significant for first4time users (First time use is defined as consumption not purchase as it is not usually lin)ed with direct purchase y the final user'* +his phenomenon decreases as use ecome more prevalent- though no specific dividing timeline or use could e identified where such evaluation loses significance* 13. ()at are t)e -te+- in ,*n-%mer e,i-i*n making !Ma" # $%ne 200;'
e* Prolem 8ecognition f* Information search g* #valuation of alternatives h* Purchase 2ecision i* Post4purchase ehavior 1. ()at are t)e ifferent t"+e- *f b%"ing be)a4i*r H
15. State t)e ba-e- *f %-t*mer Felati*n-)i+ Management !$%ne 2010'
* to identify and target their est customers- manage mar)eting campaigns and generate ,uality leads for the sales team* $* to improve telesales- account- and sales management y optimi0ing information shared y multiple employees- and streamlining e.isting processes (for e.ampleta)ing orders using moile devices' :* with the aim of improving customer satisfaction and ma.imi0ing profits
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B* information and processes necessary to )now their customers- understand and identify customer needs and effectively uild relationships etween the companyits customer ase- and distriution partners* 1&. ()at i- *n-%meri-m !N*4 #De, 2010'
8efer to 9uestion "umer ? (May / une $%%&'
17. ()at * "*% mean b" ,*n-%mer em*gra+)i,- !$%ne 2011'
+he set of attriutes that descrie a specific population- such as average age- life e.pectancy- and reproductive characteristics so that consumers may e targeted for mar)eting and advertising ased on these characteristics* * $* :* B* * &* T* L*
genderraceagedisailitiesmoilityhome ownershipemployment status- and location
19.()at i- ataba-e marketing
It is the process of uilding- maintaining and using customer dataases and other dataases (products- suppliers- resellers' for the purpose of contacting- transacting and uilding relationships* 1;* ()at i- ,%-t*mer mailing li-t
It is simply a set of names- addresses- and telephone numers- which contains much more information* 20.()* i- a e,ier in b%"ing ,entre r*le >rgani0ational memers who have decision ma)ing power and who decide aout the purchase e*g*- engineer deciding specification or vice4 president finance* 21.()* i- an infl%en,er in b%"ing ,entre r*le Individuals in the organi0ation influence the decision ma)ing process y providing information on criteria for uying consultants* #*g* Inside the organi0ation 82 specialist- outside the organi0ation 4 consultants Part B
1.Di-,%-- t)e fa,t*r- affe,ting t)e ,*n-%mer b%"ing be)a4i*r in Inian ,*ntet. (N/#D 200&'
98
Consumers do not ma)e their decisions in a vacuum* +heir purchases are highly influenced y cultural social- personal- and psychological factors* For the most part- they are Snon controllaleS y the mar)eter ut must e ta)en in to account* ;e want to e.amine the influence of each factor on a uyer6s ehavior* %lt%ral a,t*r-
In a diversified country li)e India cultural factors e.ert the roadest and deepest influence on consumer ehavior7 we will loo) at the role played y the uyer6s culturesuculture- and social class* Culture? Culture is the most fundamental determinant of a person6s wants and ehavior* ;hereas lower creatures are governed y instinct- human ehavior is largely learned* +he child growing up in a society leans a asic set of values- perceptions- preferences and ehaviors through a process of sociali0ation involving the family and other )ey institution *+hus a child growing up in America is e.posed to the following values? Achievement and success- activity- efficiency and practicality- progress- material comfort- individualismfreedom- e.ternal comfort- humanitarianism- and youthfulness* S%b,%lt%re<
#ach culture contain smaller group of suculture that provide more specific identification and sociali0ation for its memers* Four types of suculture can e distinguished *"ationality groups such as the Irish- polish- Italians- and Puerto 8icans are found with in large communities and e.hiits distinct ethnic tastes and ews represent suculture with specific culture preference and taoos* S*,ial la--<
Girtually all human societies e.hiit social stratification* tratification sometimes ta)es the form of a caste system where the memer of different caste is reared for certain roles and cannot change their caste memership *More fre,uently- stratification ta)es the form of social classes* ocial Classes have several characteristics* First- Person with in each social class tend to ehave more ali)e than persons from two different social classes* econd- persons are perceived as occupying inferior or superior positions according to their social class* +hird- a person6s social class is indicated y a numer of variales- such as occupationincome- wealth- education- and value orientation- rather than y any single variale fourth- individuals are ale to move from one social class to another up or down during
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their lifetime* +he #.tent of this moility varies according to the rigidity of social stratification a given society* S*,ial a,t*r-<
A consumer6s ehavior is also influenced y social factors- such as the consumer6s reference group- family- and social roles and statuses* Feferen,e Cr*%+<
A person6s ehavior is strongly influenced y many group *A persons reference group are those groups that have a direct (face to face' or indirect influence on the person6s attitudes or ehavior* 1roup having a direct influence on a person are called memership group- +hese are group to which the person elongs and interacts* ome are primary groups* ;ith which there is fairly continuous interaction- such as family- friendsneighors- and co4wor)ers* Primary group tend to e informal* +he person also elong to secondary group- which tend to e more formal and where there is less continuous interaction? they include religious organi0ations- professional associations- and trade unions* amil" Cr*%+<
Memers of the uyer6s family can e.ercise a strong influence on the uyer6s ehavior* ;e can distinguish etween two families in the uyer6s life* +he family of orientation consists of one6s parents* From parents a persons ac,uires an orientation towards religious- politics- and economics and a sense of personal amitions- self 4worthand love* #ven if the uyer no longer interacts very much with his or her parents- the parents influence on the unconscious ehavior of the uyer can e significant* In countries where parents continue to live with their children- their influence can e sustantial* In case of e.pensive products and services- husand and wives engage in more joint decision ma)ing* +he mar)et needs to determine which memer normally has the greater influence in the purchase of a particular products or services* #ither the husand or the wife - or they have e,ual influence * +he following products and services fall under such? Eusand 4 dominant? life insurance- automoiles- television ;ife 4 dominant? washing machines- carpeting- non 4living 4 room furniture- )itchenware #,ual? Diving 4 room furniture- vacation- Eousing- outside entertainment
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2. +lain FM wit) -%itable eam+le-. ()" i- it im+*rtant in m*ern a" b%-ine-- ,*ntet (N/#D 200&' %-t*mer Felati*n-)i+ Management<
It covers methods and technologies used y companies to manage t h e i r relationships with clients* Information stored on e.isting customers (and potential customers' is analy0ed and used to this end* Automated C8M processes are often used to generate automatic personali0ed mar)eting ased on the customer information stored in the system* /+erati*nal FM
Anal"ti,al FM
Contact Centers
2ata aggregation tools
2ata mining
+ransactional/self4service we sites
Customer tiering strategies
Customer4centric usiness processes
Incentive/loyalty drivers
Measures (cost- cycle time- satisfaction'
+riggers for cross sell up sell
C8M is commonly defined in two road categories? >perational C8M and Analytical C8M* >perational C8M generally refers to those products- services and operational capailities that enale an organi0ation to Sta)e care of its customers*S Contact centers- data aggregation systems and ;e sites are just a few e.amples* Analytical C8M refers to the strategies and tools that drive customer4 centric usiness decisions*
A Smailing listS is now )nown as a SC8M systemS SEome pageS has ecome Se4C8MS +he Scall centerS is now referred to as a SC8M channelS S8esearch and analysisS is now called Sanalytical C8MS
()" FM i- im+*rtant in m*ern a" b%-ine-- ,*ntet (N/#D 200&'
101
•
Providing online access to product information and technical assistance around the
•
cloc)* Identifying what customers value and devising appropriate service strategies for
• • • • • • • •
each customer Providing mechanisms for managing and scheduling follow4up sales calls +rac)ing all contacts with a customer Identifying potential prolems efore they occur Providing a user4friendly mechanism for registering customer complaints Providing a mechanism for handling prolems and complaints Providing a mechanism for correcting service deficiencies toring customer interests in order to target customers selectively Providing mechanisms for managing and scheduling maintenance- repair- and on4 going support
Te,)ni,al *n-ierati*n-
+he following factors need to e considered? S,alabilit"< the system should e highly scalale- a- the volume of data stored in the
system grows over time* *mm%ni,ati*n ,)annel-< C8M can interface with a variety of different channels
(phone- ;AP- Internet etc*' (*rkfl*w 4 a company6s usiness processes need to e represented y the system with
the aility to trac) the individual stages and transfer information etween steps A--ignment 4 the aility to assign re,uests- such as service re,uests- to a person or group* Databa-e 4 the means of storing customer data and histories (in a data warehouse'
Customer privacy considerations- such as data encryption and legislation
Im+r*4ing %-t*mer Felati*n-)i+-
C8M applications often trac) customer interests and re,uirements- as well as their uying haits* +his information can e used to target customers selectively* Furthermorethe products a customer has purchased can e trac)ed throughout the product6s life cycleallowing customers to receive information concerning a product or to target customers with information on alternative products once a product egins to e phased out* repeat purchases rely on customer satisfaction- which in turn comes from a deeper understanding
102
of each customer and their individual needs* C8M is an alternative to the Sone si0e fits all6 approach* In industrial mar)ets- the technology can e used to coordinate the conflicting and changing purchase criteria of the sector* Pri4a," an t)i,al *n,ern-
+he data gathered as part of C8M raises concerns over customer privacy and enales persuasive sales techni,ues* Eowever- C8M does not necessarily involve gathering new data- ut also includes ma)ing etter use of customer information gathered as a result of routine customer interaction* +he privacy deate generally focuses on the customer information stored in the centrali0ed dataase itself- and fears over a company6s handling of this information* For e.ample- there is virtually no way a consumer can determine if the company shares private (personally identifiale' data with third parties* Furthermore- companies may not always accurately declare to the consumer the types of information collected y C8M systems and the specific purposes for which the information is used* 3. +lain Bran management +ra,ti,e- in Inia. (MA6#$UN 2007'
Braning De,i-i*n< •
@ "o
Bran -+*n-*r De,i-i*n< • •
Manufacturer rand Dicensed rand
@ 2istriutor rand
Bran Name De,i-i*n< • • • •
Individual names eparate family name
103
Bran Strateg" De,i-i*n • • • • •
Dine e.tension Multi4rands Co4rands
Bran Fe+*-iti*ning De,i-i*n • •
8epositioning "o 4 8epositioning
.()at are t)e fa,t*r- t)at etermine ,%-t*mer -ati-fa,ti*n +lain. (MA6#$UN 2007'
Customer satisfaction- a usiness term- is a measure of how products and services supplied y a company meet or surpass customer e.pectation* It is seen as a )ey performance indicator within usiness and is part of the four perspectives of a rgani0ations are increasingly interested in retaining e.isting customers while targeting non4customers7 measuring customer satisfaction provides an indication of how successful the organi0ation is at providing products and/or services to the mar)etplace* a,t*r- %-e t* etermine ,%-t*mer -ati-fa,ti*n *n +r*%,t-# Ser4i,e-<
I*Capaility $* !saility :* Performance B*8eliaility * Installaility &* Maintainaility T* 2ocumentation
104
If a company wants to investigate it themselves- loo) at firm specific factors li)e usiness contacts- reputation- advertising- and rand name can help determine customer satisfaction* 5. De-,ribe t)e 4al%e8,reati*n an 4al%e eli4er" +r*,e-- in t)e +re-ent a" ,*ntet. al%e reati*n!N/#D 2007'
Companies create the value that they offer to customers in a five4 stage process that spans offer4mar)et development- demand creation- sales conversion- satisfaction fulfillment- and strategic development* Galue creation thus integrates product development- mar)eting- sales- service- and training* al%e reati*n *n-i-t- *f a i4e8P)a-e Pr*,e-/ffer8Market De4el*+ment
In this stage- the rand firm develops a relevant offering (a product or service that meets a need' and through research identifies a mar)et for it* +he firm also develops the mar)et infrastructure (field sales organi0ation- repair depots- customer help des)s- etc*' necessary to support the offering* +his stage ends and the ne.t stage egins when rand managers have defined a pre4emptive positioning* Deman reati*n
;ith an un4served customer need- a world4eater product- and service now loc)ed and loaded in the randing machine- rand managers must now generate demand* +his generally corresponds to traditional mar)eting and product management activities? pac)aging-
distriution-
advertising-
direct
mail-
pulicity-
point
of
purchase
merchandising- and training of support staff- field operations- and distriution partners*
In this stage- the firm converts demand into sales to paying customers*
105
Sati-fa,ti*n %lfillment
In this stage- the customer transforms the offering into a satisfaction y successfully uying and using it* +he offering meets e.pectations- solves a prolem- or otherwise satisfies the customer* In addition to e.cellent product or service design- ease of use- training- and peer group support play an important role* At this point- it ecomes evident whether or not rand managers have anticipated prolems that might arise and have made appropriate contingency plans* Strategi, De4el*+ment
In this fifth stage of value creation- rand managers must evaluate the future and the rand6s place in it* al%e Deli4er" Pr*,e--
+he delivery process consists of three parts* +he first phase- choosing the valuerepresents the Shomewor) mar)eting must do efore any product e.ists* +he mar)eting staff must segment the mar)et- select the appropriate mar)et target- and develop the offering6s value positioning* +he formula Ssegmentation- targeting- positioning (+P' is the essence of strategic mar)eting* >nce the usiness unit has chosen the value- the second phase is providing the value- Mar)eting must determine specific product features prices- and distriution* +he tas) in the third phase is communicating the value y utili0ing the sales force- sales promotion- advertising and other communication tools to announce and promote the product* #ach of these value phases has cost implications* &. Briefl" e+lain t)e -+e,ialt" in b%-ine-- b%"ing %e t* ,)ara,teri-ti,- *f market#+r*%,t. !N/#D 2007'
For many usiness products- there e.ist only a small numer of users* For e.ample- for a product li)e automoile testing e,uipment- only a few large uyers are there- li)e 1eneral Motors-
106
+he uyers for a given industrial product are not only few in numer- they are also usually concentrated in certain geographic areas* It gives them a special argaining power over the sellers*
Dire,tG /ne8t*8/ne Felati*n-)i+ wit) -eller
In the consumer mar)et- direct contact etween the producer and the consumer is rare- whereas in the usiness mar)et- one4to4one contact etween producer and the uyer is the normal practice- especially when the products involved are special and technology ased* Te,)ni,al S%++*rt f*r B%"ing
+he usiness uyer needs considerale technical service and assistance throughout the purchase process- especially when the purchase involves comple. products* Any error the usiness uyer ma)es can prove to e very costly for his firm* +his ma)es his tas) very responsile as well as sensitive* B%-ine-- B%"er ma" al-* b%" t)r*%g) Intermeiarie-
+hough in most product categories- direct producer4to4user distriution is the practice- there are situation in usiness uying that need intermediaries* ometimes- the uyers are widely distriuted geographically demanding a relatively large sales force- which may e uneconomical for a producer* ome manufacturer may not have enough financial and manpower resources to perform all the distriution tas)s7 such situation re,uires the involvement of middlemen* ometimes- the usiness mar)et is a 6thin6 mar)et from oth geographic and sales angles* In order to save costs- manufacturers use wholesale middlemen* +he middlemen may e handling competing or non4competing lines of products* +here are situations where the usiness uyers place fre,uent orders consisting of many items needing rapid delivery service* uch situations are etter handled y middlemen* ometimes there e.ist large numers of small usiness uyers who place smaller orders more fre,uently* uch situations too are etter left to intermediaries* B%-ine-- B%"ing i- Partnering
107
+oday- usiness uying has ecome a crucial management tas)* For any firm- the sta)es here are ,uite high* +he funds involved are huge- and any savings is precious* From the ,uality and end product performance angle too- it is uying that attracts full attention* +he est raw material- e,uipment and other inputs have to e otained at the most competitive prices* +hat is why supply chain management has emerged as a )ey concept today* Closer relationships etween the uyer and supplier are no longer enough7 it has yielded place to integration of the resources and facilities of the uyer with those of the supplier* +he concept that is in vogue in usiness uying is partnership- i*e* partnering etween the uyer and suppliers*
7. Di-,%-- ab*%t t)e market ba-e an +r*,e-- ba-e met)*- *f a--e--ing ,*m+etiti4e a4antage. !N/#D 2007' Market ba-e met)*- *f a--e--ing ,*m+etiti4e a4antage • • • • • • • • •
66!ni,ue way to meet the needs of a niche mar)et r trade secrets for operations Customi0ed or proprietary software or technology Patents and trademar)s !ni,ue comination of products/services Access to leading or scientific research Eighly s)illed and Creative staff 8eputation for ,uality and innovation
Pr*,e--8ba-e met)*- f*r a,,e--ing *m+etiti4e A4antage
ne 6solution is the development of organi0ational operations ase on the enhancement and integration of usiness processes* Process vationand process4ased >rgani0ation development enhances the speed- transparency arid efficiency of organi0ational6 activities- and provides the possiility of tighter management control* +he firms provide art effective process analysis- usiness impact analysis process development and implementation- with the support of newly developing modeling solutions for attaining competitive advantage* Process management and process redesign are the re,uirements of several I+ implementations- e*g* #8P systems- ut clearly defined processes can e supported y automated wor)flow systems and >ther I+ solutions*
108
9. E*w *e- market8ri4en K%alit" a++r*a,) e4*l4e +lain!N/#D 2007'
Mar)et4driven ,uality (M29' is defined as letting the mar)et- meaning the pricedetermine the ,uality standards a usiness applies to its products* +here are three )ey aspects of a mar)et4driven ,uality approach? *
Capturing the voice of the mar)et Aligning product development and corporate strategy- and #naling visiility into the product planning process
+hat comines to help Companies deliver etter ,uality products to mar)et- faster* a+t%ring t)e *i,e *f t)e Market
>ne of the )ey ways to improve the product design and development process across an entire product portfolio is to incorporate data- gathered from many sources- that clearly highlights mar)et needs and competitive dynamics* +his Svoice of the mar)etS data provides the insight necessary to significantly improve strategic product decision4 ma)ing- and also ma)es it easier to prioriti0e product re,uirements* It touches all audiences with a sta)e in the product or a say in the mar)et Ssales prospects- partners- analysts- competitors- etc* Goice4 of4the4mar)et data also ta)es into account consumer and economic trends that are shaping the mar)et* Aligning *r+*rate Strateg" an Pr*%,t De4el*+ment
Portfolios driven y the demands of the mar)et in comination with alignment to strategic company goals dramatically improve product success in the mar)et* ;hen the needs of each customer are viewed in the larger conte.t of the usinessit6s easier to determine whether the enhancements the product team is uilding are consistent with overall corporate strategic goals and ojectives* It6s also easier to ensure that every development resource is engaged in supporting an identified mar)et6 demand* Product managers and strategists can also ensure strategic alignment y prioriti0ing re,uirements ased on assigned weightings* For instance- you may ase a potential new feature oh a need identified in an industry analyst report7 youKd weight that new feature differently depending on how much influence that analyst wielded* It is also valuale to weight availale development resources against mar)et impact tradeoffs- and performs scenario and alternative planning to see how different
109
cominations of re,uirements est help you address the mar)et trends identified as most significantly affecting the usiness* Caining i-ibilit" int* t)e Pr*%,t De4el*+ment ife,",le
In a mar)et4driven approach to portfolio planning- all product re,uirementsinitiatives- and voice4of4the4mar)et data are stored in a centrali0ed single system of record repository that provides an easily4accessile view into all aspects of product creation* ;ithout such a view- it6s a significant challenge to forecast the effects that an unplanned development change might have on mar)et demand- customer satisfactionhidden dependencies- or overall competitive position* ;ith this visiility- however- across product lines and throughout the product development cycle- development team managers and e.ecutives can prioriti0e and manage comple. re,uirements and interdependencies across the complete portfolio- no matter how diverse the product set* ;ith a mar)et4driven approach- every product re,uirement is traceale all the way through to its underlying attriutes* 2evelopment can define and trace relationships etween multiple levels of hierarchical re,uirements- down to the lowest level of engineering or systems- and ac) up*
;.+lain t)e fa,t*r- infl%en,ing ,*n-%mer be)a4i*r. !N/#D 2009'
8efer to 9*"o * (">G/2#C $%%&'
10.U-ing t)e a%t*m*bile marketG e-,ribe a%t*m*ti4e b%"ing be)a4i*r f*r a< Market Pla,e. !MA6#$UN8 200;'
Consider the purchase an automoile* Consumers generally will not consider different options until some event triggers a need- such as a prolem needing potentially e.pensive repair* >nce this need has put the consumer Oon the mar)et=- and egin to as) their friends for recommendations regarding dealerships and automoile models* After visiting several dealerships- consumer test drive several automoile models and finally decide on a particular model*
110
After pic)ing up new automoile- the consumer have douts on the way homewondering if they can afford the monthly payments- ut then egin to wonder if instead they should have purchased a more e.pensive ut potentially more reliale model* >ver the ne.t five years- the automoile has several une.pected rea)downs that lead them to want to purchase a different rand- ut they have een very happy with the services of the local dealership and decide to again purchase their ne.t automoile there* Market S+a,e
+raditionally- auto manufacturers have tried to e.ert close control over the sales and distriution channels in order to e ale to e.ecute their mar)eting strategiesincluding price policy- and to guarantee a high service level for their customers* +he networ)s of dealers with various contractual relationships (from susidiaries to independent multi4manufacturer dealers' are instrumental in this process and they usually cover a huge array of functions from sales of new and used cars- financing- repairs etc* Eowever- new types of dealership have emerged that are independent from the car companies and try to leverage on loopholes or wea)nesses of the e.isting dealer networ)s* Mercedes4
+he increasing use o f the Internet has given automotive consumers an edge in the vehicle uying process- ma)ing them less dependent on dealers* +his has resulted in a significant shift in the alance of power as dealers fail to )eep pace with the changing consumer dynamics* Automotive companies must gain a etter empirical understanding
111
of consumer ehavior in order to improve the customer/ dealer relationship and in the process drive increased sales and strengthen rand and dealer loyalty* Consumer change has accelerated rapidly- due to consumersK increasingly sophisticated uying ehavior and the availaility of information on the Internet- which is helping to delay their moment of entry into the dealership* Improved customer intelligence was found to e a critical success factor in responding to the changing dynamics of the customer/dealer relationship* ince customer intelligence- and in fact customer ehavior- evolves- itKs critical that automotive companies always )eep their finger on the pulse*
+he new product largely depends on the product ,uality and the mar)eting tactics of the firm- there are many occasions were the product failed miseraly even after using the est technology and ,uality the reason is that the new product is not worth for the customers* +he prime factor for the new product success is 4 customer value* Galue is what the customer thin)s is value* +he major reasons for new product failure are?6 a%lt" +r*%,t iea< +he product often fail ecause faulty of product idea* A good idea
can revolutioni0e the mar)et ut a ad idea may prove itter to the firm or it may ac)fire #g? Polar industries in launched OC>>D CA+= fan 4 decorated with cartoon characters meant primarily for children* +he fan was priced at premium7 the idea was that childrenKs were increasingly ecoming influencer in purchase decisions and to attract the )ids with the cartoon creatures and to position the product e.clusively for )ids* +he product failed miseraly in spite of its huge advertising udget ecause when the fan was put on it didnKt have any color effect and the customer did not justify its premium price*
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Di-trib%ti*n relate +r*blem-< +he new product fails if the product is unale to meet
the channel re,uirements* ;hile developing the product the channel re,uirements must e given ade,uate consideration* #g? when "#+D# launched its new chocolates the product and promotion was >3 ut the product failed in the distriution side ecause the company stipulated the product to e stored in refrigerators* +he product faced two prolems in the distriution side ecause it meant e.cluding a numer of retail outlets as they didnKt have this facility and secondly the chocolate was not pic)ed y the customers as it was not seen upfront in the retail shops* Finally *"estle had to reformulate the product according to channel re,uirements* P**r timing *f la%n,)< +oo early or late entry into the mar)et is a common cause of
failure* 3inetic Merlin was launched in Pune in * It was a : in set consisting of a color television- a stereo with detachale spea)ers and a home computer* +he product was targeted at the Indian consumers who are fond of sophisticated gadgets to immediately adopt such an innovative idea ut in reality the idea was too advanced for the customers to digest at that time ecause they were not e.posed to such type of products efore* Im+r*+er P*-iti*ning< Positioning means putting the product into the predetermined
orit* Improper positioning may affect the product success* #g? +itan +anish, introduced their L carat jewelry and the product was positioned at elite segment ut there was a contradiction as to why these elite segment should go in for a low carat gold ecause the norms for gold in India at that time was $$ carat* +he product failed miseraly in retrospect +itan had to introduce $$4carat jewelry* riti,al f*r,e- infl%en,ing t)e management *f +r*%,t-<
+he failure to effectively launch a product can e a contriuting factor to its failure in the mar)et* If a product has een carefully researched and developed- an effective launch should contriute to its success* +he most successful product launchhowever- cannot rescue a ad product* "ew product launches are a pivotal time for usinesses- and they re,uire meticulous planning* A product launch is the culmination of months or even years of effort- from across the organi0ation- in readying a product for mar)et* It constitutes a high profile activity that can signal corporate success or failure* Product launches also re,uire Wand displayWa considerale amount of investment* +hus- an intensive effort is re,uired to e.ecute the launch program successfully* A product launch progresses through a numer of important stages?
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internal communications (or Ointernal launch='- to guarantee high levels of awareness and commitment to the new product7 pre4launch activity- to secure distriution and ensure that the sales channel (including resellers- retailers- etc*' have the s)ills- resources- and )nowledge to
mar)et the product7 launch events at the national- regional- and/or local level7 post4event activity to help the sales force and other channels ma)e the most of the event7 launch advertising and other forms4 of customer communication*
12.+lain *n-%mer B%"ing Be)a4i*r Pr*,e--. !MA6#$UN8 200;'
+he & stages of Consumer
actual condition* 2eficit in assortment of products* EungerWFood* Eunger stimulates your need to eat* Can e stimulated y the mar)eter through product informationWdid not )now you were deficientH I*#*- see a commercial for a new pair of shoes- stimulates your recognition that you need a new pair of shoes* Information search
Internal search- memory* #.ternal search if you need more information* Friends and relatives (word of mouth'* Mar)eter dominated sources7 comparison shopping7 pulic sources etc*
A successful information search leaves a uyer with possile alternatives- the evoked set.
Eungry- want to go out and eat- evo)ed set is
Chinese food @ Indian food urger )ing @ 3londi)e 3ates etc
Ealuation of Alternaties 4 "eed to estalish criteria for evaluation- features the uyer
wants or does not want* 8an)/ weight alternatives or resume search* May decide that you want to eat something spicy- indian gets highest ran) etc** If not satisfied with your choice then return to the search phase* Can you thin) of another restaurantH Doo) in the yellow pages etc* Information from different sources may e treated differently* Mar)eters try to influence y Oframing= alternatives* Purchase decision Choose uying alternative- includes product- pac)age- store- method
of purchase etc*
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Purchase May differ from decision- time lapse etween - product availaility* Post$Purchase
Ealuation o utcome?
atisfaction
or
2issatisfaction* %ognitie
!issonance& have you made the right decision* +his can e reduced y warranties- after
sales communication etc* 13. +lain t)e fa,t*r- infl%en,ing ,*n-%mer be)a4i*r. !$%ne 2010'
8efer to 9uestion "umer ? ("ov / 2ec $%%L'
1.lab*rate t)e fa,t*r- infl%en,ing ,*n-%mer be)a4i*r. +lain t)e b%"er be)a4i*r m*el- !$%ne 2011'
8efer to 9uestion "umer ? ("ov / 2ec $%%L'
15. +lain FM wit) S%itable eam+le- G w)" i- it im+*rtant in m*ern a" b%-ine-- ,*ntet. Di-,%-- !$%ne 2010'
8efer to 9uestion "umer ? $ ("ov / 2ec $%%&'
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1&. +lain FM w)at i- it im+*rtan,e in +re-ent marketing en4ir*nment. !$%ne 2011'
8efer to 9uestion "umer ? $ ("ov / 2ec $%%&'
UNIT – Part A 1. +an MIS an MDSS. (N/#D 200&'
MI 4 Mar)eting Information ystems M2 4 Mar)eting 2ecision upport ystems 2. ()at are t)e a++li,ati*n- *f marketing re-ear,) (N/#D 200&' Advertising testing research•
A worldwide information system is a system for capturing- storing- analy0ing and managing data and associated attriutes which are spatially referenced to the earth* In the strictest sense- it is a computer system capale of integrating- storing- editing- analy0ingsharing- and displaying geographically4referenced information* In a more generic senseworldwide information system is a tool that allows users to create interactive ,ueries (user created searches'- analy0e the spatial information- and edit data* 5. Name an" f*%r ,*m+anie- in4*l4e wit) web8ba-e marketing +r*gramme-.
(N/#D 200&'
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• • • •
Microsoft Yahoo +ime ;arner 8eal "etwor)s
&. ()at i- marketing re-ear,) !Ma" # $%ne 2007'
Mar)et research is the systematic design- collection- analysis and reporting of data and findings relevant to a specific mar)eting situation facing the company 7. ()at i- *n8line marketing (MA6#$UN 2007'
>n4line mar)eting is descried as the company6s effort to inform- communicate pr omot e and sell its prod ucts and services ov er the intern et* 9. ()at i- marketing ,)allenge (MA6#$UN 2007'
+he mar)etplace isn6t what is used to e* It is changing radically as j a result of major societal forces such as technological advances- j gloali0ationheightened competition- customer empowerment and deregulation* +hese major forces have created new ehaviors and challenges ;. ()at are -"ni,ate re-ear,) -er4i,e- !N/#D 2007'
A wide variety of syndicated research services- especially in areas li)e mar)et measurement and media planning* +hey include? • • • • •
+he "ational 8eadership urvey ("8'
10. ()at are t)e ifferent t"+e- *f web8-ite- ,ite in marketing !N/#D 2007' tatic ;esite 2ynamic ;esite Content Managed ;esite #4commerce ;esite Flash ;esite
11. ()at i- inf*rmati*n te,)n*l*g" !MA6#$UN 2009'
In the roadest sense- information technology refers to oth the hardware and software that are used to store- retrieve- and manipulate information* At the lowest level
117
you have the servers with an operating system* Installed on these servers are things li)e dataase and we serving software* +he servers are connected to each other and to users via a networ) infrastructure* And the users accessing these servers have their own hardware- operating system- and software tools* 12. ()at are t)e a4antage- *f web ba-e marketing !MA6#$UN 2009'
;e ased mar)eting is relatively ine.pensive when compared to the ratio of cost against the reach of the target audience*;ith the help of this companies can reach a wide audience for a small fraction of traditional advertising udgets*It allows consumers to research and purchase products and services at their own convenience* 13. ()at i- A8)*, re-ear,) !N/#D 2009'
A single- one4time piece of research designed for a particular purpose- as opposed to continuous- regularly repeated- or syndicated research*Ad4hoc research provides the penetrating analysis needed to address issues of strategy and to ma)e well4informed decisions aout customers- competitors and mar)ets* 1. Define internet marketing. !N/#D 2009'
Internet mar)eting- also referred to as we mar)eting- online mar)eting- or eMar)eting- is the mar)eting of products or services over the Internet*Internet mar)eting is sometimes considered to have a roader scope ecause it refers to digital media such as the Internet- e4 mail- and wireless media7 however- Internet mar)eting also includes management of digital customer data and electronic customer relationship management (#C8M' systems* 15. ()at are B2B e,)ange-!N/#D 2009'
(<$<'
e.changes
or
mar)etplaces
provide
dramatic
opportunities to automate collaorative usiness processes with customers and suppliersgenerate internal efficiencies- and reach new mar)ets at minimal cost*<$< #.change would ma)e it easier for companies to find the goods they needed- to complete transactions- and to save money through the added competition or large amount of goods eing sold or ought* 1&. (rite -)*rt n*te- *n *n8line marketing. !MA6#$UN8 200;'
>n4line mar)eting provides instant response and eliciting responses- is a uni,ue ,uality of the medium*>n4line mar)eting is sometimes considered to have a roader
118
scope ecause it not only refers to digital media such as the Internet- e4mail- and wireless media*>n4line mar)eting also includes management of digital customer data and electronic customer relationship management (#C8M' systems* 17. ()at * "*% mean b" +il*t -t%" !N/#D 2009'
A pilot- or feasiility study- is a small e.periment designed to test logistics and gather information prior to a larger study- in order to improve the latter6s ,uality and efficiency*A pilot study can reveal deficiencies in the design of a proposed e.periment or procedure and these can then e addressed efore time and resources are e.pended on large scale studies*A pilot study is normally small in comparison with the main e.periment and therefore can provide only limited information on the sources and magnitude of variation of response measures*+he pilot study may- however- provide vital information on the severity of proposed procedures or treatments* 19. ()at i- *n8line marketing !N*4#De,8 200;'
8efer to 9*"o? & (MAY/!"#4 $%%' 1;. Eig)lig)t -*me *f t)e *nline marketing tren-!$%ne 2010'
• • • •
2isplay Advertising earch #ngine Mar)eting (#M' earch #ngine >ptimi0ation (#> ocial Media Mar)eting
• • • •
#mail Mar)eting 8eferral Mar)eting Affiliate Mar)eting Content Mar)eting
20. ()at are t)e +ra,ti,al a++li,ati*n- *f marketing re-ear,)!$%ne 2010'
8efer to 9uestion "umer ?$ ("ov / 2ec $%%&'
Part B
* Di-,%-- t)e ,*ntent- *f marketing re-ear,) re+*rt. (MAY/!"# $%%&' Pre+arat*r" Inf*rmati*n Detter of +ransmittal TitlePage Authori0ation tatement #.ecutive ummary +ale of Contents
Intr*%,ti*n Prolem tatement 8esearch >jectives
Met)**l*g"
ampling 2esign
Findings
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8esearch 2esign 2ata Collection
Conclusions ummary Conclusion
2ata Analysis
8ecommendations
Dimitation
8ecommendations
2. +lain t)e ifferent t"+e- *f marketing re-ear,). E*w w*%l "*% ,*m+are ,*n-%mer marketing re-ear,) wit) in%-trial marketing re-ear,) !MA6#$UN 200&' Different t"+e- *f Marketing Fe-ear,) ypes
escr pt on
8eporting
Provides an account or summation of some mar)eting phenomenon
2escriptive
2iscovers and reports the whowhat-when- when or how related to a specific mar)eting decision
#.planatory
Attempts to e.plain the reasons for a mar)eting phenomenon
Predictive
Attempts to forecast a mar)eting phenomenon
*m+ari-*n< Aspect
Industrial (ar)eting #esearch
%onsumer (ar)eting #esearch
Mar)et i0e
Gery large value4wise
Gery large Golume4wise
tructure
>ligopolistic- 1eographically concentrated
Monopolistic 4 1eographically 2ispersed
2emand
2erived- oint- Fluctually demand- price inelastic
Mostly autonomous and price elastic
"ature
+echnical comple.ity Customi0ed
+echnically less comple. standardi0ed
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Motives
8ational / +as) motives
ocio4psychological
Factors
9uality- ervice and Price in that order
Price- 9uality and service are important
Channels Dogistics
Mostly direct- fewer lin)ages- CM for efficient physical distriution
Indirect- Multiple lin)ages- simple planning and lime management
Management
+op management- Closely related to corporate strategy
Functional management- aligned with corporate strategy*
3. Di-,%-- t)e ifferent *nline a4erti-ing *+ti*n- f*r a marketer * ( MA6#$UN 200&'
+h e Inter net is a powerful and far4reaching tool for usiness promotion* Internet advertising gives even small usinesses the opportunity to reach out to customers from all over the world* ;hether you use the Internet to promote your usiness- sell a product or connect with new customers- it is important to understand some of the asic techni,ues used on online advertising and mar)eting* Tet A-
+e.t ads are one of the most common ad types used in online advertising* 1oogleKs Ad;ords program has made te.t advertising *in easy- accessile- and affordale option for many usinesses* >ne of the greatest advantages is that they can e matched to highly sped lie )eywords and appear on sites where they are the most li)ely to reach potential customers*
Banner ABanner ads are large- rectangular advertisements intended to capture the attention
of online viewers* +hese ads often feature images or animations designed to catch the eye and inspire the reader to clic) mi the anner* >ne prolem with this type of online advertising is that it has ecome so prevalent that many users e.perience what lias een called anner lindness- where commonly viewed ads are ignored and disregarded* A4ert*rial-
121
Advertorials are a comination of an editorial and an advertisement* + h i s type of online advertising is common on e4commerce wesites- l46or e.ample- a usiness selling entertainment media might write an advertorial review of a product and then provide an affiliate lin) where the customer can purchase the item* 8mail
#4mail offers an e.cellent opportunity to ma)e direct contact with potential customers* Eowever- customers do not want to e inundated with unwanted e4mail* +he )ey to using e4mail as and online advertising tool is to encourage customers to sign up for a mailing list or newsletter*
>ver the years- different companies have generated a numer of tried and tested advertising techni,ues* +hese methods increase the profile of your usiness on the ;edraw potential customers to your wesite- and increase sales* !se some of these proven and tested mar)eting methods to rev up the companyKs online advertising* Sear,) ngine Marketing !SM'
earch engine mar)eting involves advertising your wesite through search engineoften through search results- paid listings- or pay4per4 clic) campaigns* ' techni,ues- usinesses can achieve top results in search engine results* Many usinesses have found that search mar)eting dramatically improves site traffic and sales* Affiliate Pr*gram-
Allowing other wesites to advertise and promote your product and service is a great way to significantly e.pand your customer ase and increase your online sales* In e.change for mar)eting your usiness- affiliates earn a commission on the sales they produce* Affiliate programs are an ideal solution for product4ased wesites that need to reach out to a targeted audience* Fe,i+r*,al ink-
#.changing lin)s with other wesites is another important Internet advertising tool4* ;hen you place a reciprocal lin) on your wesite- the other usiness will place a corresponding lin) on their side leading ac) to your ;e location* +he advantage of
122
reciprocal lin)s is that they are relatively easy way to reach more customers and improve search engine ran)ings* A potential drawac) of this mar)eting techni,ues is that it can e time consuming and difficult to determine the effectiveness* B /CS
In the current scenario mar)eting changed a tremendous growth in the Connected ;orld y inventing more innovations* A relatively new form of mar)eting uses the Internet and is called internetG marketing or more generally e4mar)eting- affiliate mar)eting or online mar)eting* It typically tries to perfect the segmentation strategy used in traditional mar)eting* It targets its audience more precisely- and is sometimes called personali0ed mar)eting or *ne8t*8*ne marketing. +he purpose of any mar)eting plan is to communicate the vision of the mar)eting department to the rest of the organi0ation while providing a roadmap and compass for the implementation of mar)eting initiatives* An Internet mar)eting plan is similar- ut focuses on the online portion of the organi0ationKs usiness- and while there are no set formulas for the specific contents of an Internet mar)eting plan- or any mar)eting plan- there are useful elements* +hese are discussed riefly elow* e,%ti4e S%mmar"
+he #.ecutive ummary provides a ,uic) review (one or two pages' of the ojectives- strategies and forecasted results of the proposed Internet Mar)eting Plan* It
123
gives others (employees- financers' a concise picture of what you are going to do and how you are going to achieve it* Sit%ati*n Anal"-i-
Provides a historical loo) and current analysis of the companyKs Internet operations- including an analysis of the successes and failures* +he ituation Analysis can contain as many of the following topics as appropriate to your usiness* B%-ine-- Anal"-i-
8eviews the current status of the usiness including an analysis- of e.isting and potential internal and e.ternal internet resources* In%-tr" Anal"-i-. Analyses long term and short term Internet trends that are li)ely to change the online mar)etplace you are doing usiness in* Sale- an Marketing Anal"-i-
+his is an intensive study and review of online product sales strategies and the record of success (or failure' on the Internet* *m+etit*r Anal"-i-
+his section defines the criteria for online competitors- what they are doing online and what will them li)ely doing ne.t* %-t*mer Anal"-i-
Analy0es your current online customers and how they are using your site Planning A--%m+ti*n-
ets out the companyKs assumptions aout the future *re,a-t-
Forecasts of industry and product sales ased on ojective analysis of mar)et research data*
5. +lain
t)e
marketing
re-ear,)
+r*,e--
wit)
-%itable
eam+le-.
(N/#D 200&' +he mar)eting research process includes the systematic identification- collectionanalysis and distriution of information for the purpose of )nowledge development and
124
decision ma)ing* +he reasons and times at which your company or organi0ation might consider performing mar)eting research varies- ut the general purpose of gaining intelligence for decision ma)ing remains constant throughout* As a company or organi0ation- the overwhelming majority of research you are currently considering li)ely revolves around your customers?
Current customers Prospective customers Dost customers Memers Community #mployees (internal customers' hareholders (internal customers'
;hether you are creating a new mar)eting research program or perhaps revising an e.isting mar)eting research program- what are the steps you should ta)eH ;hile there are do0ens of little steps along the way- each of those steps fits into one of the & major steps of the mar)eting research process* +hey are? tep ? Identifying and defining your problem: +his step is always the start of the mar)eting research process* At this point- the prolem will have een recogni0ed y at least one level of management- and internal discussions will have ta)en place* +he most common tools are internal and e.ternal secondary research* econdary research intelligence consists of information that was collected for another purpose- ut can e useful for other purposes* #.amples of internal secondary research are sales revenuessales forecasts- customer demographics- purchase patterns- and other information that has een collected aout the customer* Most e.ternal secondary information is produced via research conducted for other purposes- financial performance data- e.pert opinions and analysis- corporate e.ecutive interviews- legal proceedings- competitive intelligence firms- etc* tep $? Developing your approach: >nce your prolem is etter defined- you can move onto developing your approach- which will generally e around a defined set of ojectives* Clear ojectives developed in tep will lend themselves to etter approach development* 2eveloping your approach should consist of honestly assessing you and your team6s mar)et research s)ills- estalishing a udget- understanding your environment and its influencing factors- developing an analysis model- and formulating hypotheses* tep :? Establishing research design and strategy:
125
apparent* +his step is the most encompassing of all steps in the research processre,uiring the greatest amount of thought- time and e.pertise 4 and is the point at which those less e.perienced with mar)et research will otain assistance from an internal mar)et research e.pert or perhaps partner with an e.ternal mar)eting research provider* 8esearch design includes secondary information analysis- ,ualitative research- methodology selection- ,uestion measurement scale selection- ,uestionnaire design- sample design si0e and determining data analysis to e used* tep B? Collecting the data: >ften called data collection or survey fielding- this is the point at which the finali0ed ,uestionnaire (survey instrument' is used in gathering information among the chosen sample segments* +here are a variety of data collection methodologies to consider such mail survey- internet panel- mail panel- in4home panel etc* Ste+ 5< erforming data analysis: Any ,uestionnaire data analysis will depend on how
the ,uestionnaire was constructed* Dess comple. ,uestionnaire data analysis can e handled with any of a numer of office suite tools- while more comple. ,uestionnaire data analysis u4,uires dedicated mar)et research analysis programs* +ypes of statistical data analysis that might e performed are simple fre,uency distriutions- cross ta analysis- multiple regressions (driver analysis'- cluster analysis- factor analysis perceptual mapping (multidimensional ruling'- structural e,uation modeling and data mining* Ste+ &< !eporting and presentation: Mar)et research reporting mid presentation is easily
the second most important step- if not the first Any usiness critical information and )nowledge that comes from your mar)et research investment will e limited y how it is presented to decision ma)ers* &. +lain t)e ,*ntent- in marketing
re-ear,)
re+*rt
wit)
-%bi4i-i*n-.
(MA6#$UN 2007' 8efer to 9*no ? (May/une $%%&' 7. Di-,%-- *nline marketing +r*,e-- an it- f%t%re in Inia. (MA6#$UN 2007'
Mar)eting can do online mar)eting y creating an?
#lectronic presence on the Internet Placing ads on4line Participating in forums- newsgroups- ulletin oards ;e communities #4commerce? e4purchasing- e4mar)eting #4mail and we casting
126
/nline marketing f%t%re in Inia<
>utsourcing #4commerce
9. ()at are t)e emerging *++*rt%nitie- an ,)allenge- t* a marketer *f ,*n-%mer %rable- (MA6#$UN 2007' Changing technology 1loali0ation 2eregulation Privati0ation Customer empowerment Customi0ation Eeightened competition Industry convergence 8etail transformation 2isintermediation ;. ()at are t)e benefit- *f web8marketing Ill%-trate t)e ta-k- in e-tabli-)ing web8 marketing. !N/#D 2007' Benefit- *f web8marketing
Far Cheaper and Much More Fle.ile +han Print Advertising Mar)et #.pansion 2iversify 8evenue treams >ffer Convenience Add Galue and atisfaction tandardi0e ales Performance Improve crediility Promote your Spportunity Cheap Mar)et 8esearch
Ta-k- in e-tabli-)ing web8marketing
+he site needs to e inde.ed y a large search engine such as Yahoo or 1oogle* Advertise on other people6s sites- using the pay per clic) method* If you have a strong command of the #nglish language- and can write great articles- this may e the most eneficial to your site in general* +his will increase the popularity of your site- as well as save you money in the long run y having to hire someone else to write for you*
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2o not confuse or ore a potential client y having long dragged out statements or
even poor grammatical structure to your pages* 3eeps it loo)ing professional and they will in turn give you usiness* +he idea is to e straight forward- and direct with clear understandale flow in your site* +his
eliminates any confusion and generally will ring you repeat usiness* Many times when a site is done well word of mouth in the mar)et starts to flowthe ne.t thing you )now you have a large client ase and the hits just )eep
coming* In ma)ing a great- we page it is always a good idea to incorporate a o. for recourses- this way there are no worries aout plagiarism in your page content* If your wor) is great- there is a good possiility that some one else may want to have
your pieces pulished on their sites too- this will give you great e.posure as well* 1iving someone else the opportunity to generate hits will in turn e sent ac) to you anyways* +his is a ac) scratching process where everyone wins*
10. amine t)e marketing ,)allenge- *f t)e new e,*n*m" t* t)e marketer-. !N/#D 2007' In,rea-e -+e,iali@ati*n *f ,%-t*mer nee-. +he days of mass mar)eting and Sone
si0e fits ailS products and services are long gone* +oday6s consumers want productsservices and information tailored to their specific interests- circumstances and needs* Mar)eters need to alance the cost4enefits achieved through large4scale processes with those achieved only y customi0ed or personali0ed communications* New ,*mm%ni,ati*n ,)annel-. ;hile roadcast television and the !** postal
service remain mar)eting staples- they6ve een augmented- if not replaced- y new modes of communication* +oday6s consumers may tune out national +G or radio stations in favor of more focused programming availale only through satellite or cale stations* Many turn to the internet for news and entertainment- instead of newspapers and maga0ineswhile others favor e4mail or instant messaging over so4called Ssnail mail*S In,rea-e ,*m+etiti*n f*r ,%-t*mer *llar-. +he growing gloal economy and
deregulation have created a flood of new competitors in just aout every industry* Mar)eters have to wor) harder to gain new customers and retain e.isting ones* S)*rter +r*%,t life an -ale- ,",le-. ;ith today6s new technologies and
rea)through discoveries- no sooner does a product hit the mar)et than a new- etter or enhanced version is introduced* Mar)eters must get current materials into prospects6 hands ,uic)ly and relialy*
128
egi-lati*n an reg%lat*r" re-tri,ti*n-. ome regulations- li)e EIPAA (Eealth
Insurance Portaility and Accountaility Act'- affect specific industries4 such as pharmaceutical manufacturers- health insurers and their usiness partners*
Mar)eting research- or mar)et research- is a form of usiness research and is generally divided into two categories? consumer mar)et research and usiness4to4usiness (<$<' mar)et research- which was previously )nown as industrial mar)eting research* Consumer mar)eting research studies the uying haits of individual people while usiness4to4usiness mar)eting research investigates the mar)ets for products sold y one usiness to another* Consumer market re-ear,) is a form of applied sociology that concentrates on understanding the ehaviours- whims and preferences- of consumers in a mar)et4ased economy- and aims to understand the effects and comparative success of mar)eting campaigns*+hus marketing re-ear,) is the systematic and ojective identificationcollection- analysis- and dissemination of information for the purpose of assisting management in decision ma)ing related to the identification and solution of prolems and opportunities in mar)eting* Market Fe-ear,) )ara,teri-ti,-
First- mar)eting research is systematic" +hus systematic planning is re,uired at all the stages of the mar)eting research process* +he procedures followed at each stage are methodologically sound- well documented- and- as much as possile- planned in advance* Mar)eting research uses the scientific method in that data are collected and analy0ed to test prior notions or hypotheses* Mar)eting research is ob*ectie" It attempts to provide accurate information that reflects a true state of affairs* It should e conducted impartially* ;hile research is always influenced y the researcher6s research philosophy- it should e free from the personal or political iases of the researcher or the management* 8esearch which is motivated y personal or political gain involves a reach of professional standards* uch research is
129
delierately iased so as to result in predetermined findings* +he motto of every researcher should e- SFind it and tell it li)e it is*S Mar)eting research involves the identification- collection- analysis- and dissemination of information" #ach phase of this process is important* ;e identify or
define the mar)eting research prolem or opportunity and then determine what information is needed to investigate it*- and inferences are drawn* Finally- the findingsimplications and recommendations are provided in a format that allows the information to e used for management decision ma)ing and to e acted upon directly* It should e emphasi0ed that mar)eting research is conducted to assist management in decision ma)ing and is not? a means or an end in itself* Methodologically- mar)eting research uses the following types of re-ear,) e-ign-< Ba-e *n K%e-ti*ning %alitati4e marketing re-ear,) 4 generally used for e.ploratory purposes 4 small
numer of respondents 4 not generali0ale to the whole population 4 statistical significance and confidence not calculated 4 e.amples include focus groups- in4 depth interviews- and projective techni,ues %antitati4e marketing re-ear,) 4 generally used to draw conclusions 4 tests a
specific hypothesis 4 uses random sampling techni,ues so as to infer from the sample to the population 4 involves a large numer of respondents 4 e.amples include surveys and ,uestionnaires* +echni,ues include choice modelling- ma.imum difference preference scaling- and covariance analysis* Ba-e *n *b-er4ati*n-< t)n*gra+)i, -t%ie- 4- y nature ,ualitative- the researcher oserves social
phenomena in their natural setting 4 oservations can occur cross4sectionally (oservations made at one time' or longitudinally (oservations occur over several time4 periods' 4 e.amples include product4use analysis and computer coo)ie traces* +erimental te,)niK%e- 4- y nature ,uantitative- the researcher creates a ,uasi4
artificial environment to try to control spurious factors- then manipulates at least one of the variales 4 e.amples include purchase laoratories and test mar)ets
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8esearchers often use more than one research design* +hey may start with secondary research to get ac)ground information- then conduct a focus group (,ualitative research design' to e.plore the issues* Finally they might do a full nation4 wide survey (,uantitative research design' in order to devise specific recommendations for the client* 12. Di-,%-- t)e ,*ntent- in a marketing re-ear,) re+*rt. !MA6#$UN 2009' +itle Page +ale of Contents #.ecutive ummary Introduction
name of the writer and date of sumission* Table *f *ntent-< +his details all sections and su4sections of the report with page
numers* e,%ti4e S%mmar" *r Ab-tra,t< +his summari0es the main points and findings*
(+his is not always re,uired- particularly if it is a short report'* An Intr*%,ti*n< +his includes the scope and ac)ground to the wor) including?+he
aims and ojectives and the terms of reference* +he conte.t of the report and its purpose* ometimes included are details of the organi0ation re,uesting the report and the ,uestion(s' they are hoping will e answered* T)e Met)**l*g" 4 how the information presented in the report will e otained and
what procedures will e used- for e.ample? interviews or postal ,uestionnaires* ometimes an e.planation is included e.plaining why a particular investigative approach / methodology was chosen*+he topics covered 4 giving a road outline of content and scope and indicating any limitations of the project* B*" *f t)e Fe+*rt< +his is where information is presented- e.planations provided
and ,uestions answered* It deals with what- how- where and whyH +he findings of the report are ro)en down into discrete sections and su4sections* #ach section and su4 section should have a title/heading- and e numered*
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*n,l%-i*n< +he conclusion sums up the main points raised in the report and arrives
at conclusions- which clearly relate to the ojective(s' of the report* +his is the place to draw together )ey points made in the report * Eowever- nothing new should appear here* Fe,*mmenati*n-< +hese should provide practical and viale proposal(s' and may
offer solutions to prolems investigated in the report* (You will not always e as)ed to include recommendations'* #ach recommendation should e listed and discussed separately* Bibli*gra+)"< +his should detail all? oo)s- articles- journals- wesites- and any other
sources consulted when writing the report* A++eni,e-< +hese should e placed at the end of the report* +hey detail relevant
information- which is too lengthy or detailed to include in the ody of the report* #ach appendi. should contain different information*+hese should refer to within the 8eport (Appendi. ' and so on* 13. +lain t)e feat%re- *f *nline marketing. !MA6#$UN 2009' Internet marketingG also referred to as web marketingG *nline marketingG or eMarketingG is the mar)eting of products or services over the Internet*+he Internet has
rought many uni,ue enefits to mar)eting- one of which eing lower costs for the distriution of information and media to a gloal audience* +he interactive nature of online mar)eting- oth in terms of providing instant response and eliciting responses- is a uni,ue ,uality of the medium* >nline mar)eting is sometimes considered to have a roader scope ecause it refers to digital media such as the Internet- e4mail- and wireless media7 Showever- >nline mar)eting also includes management of digital customer data and electronic customer relationship management (#C8M' systems* >nline mar)eting ties together creative and technical aspects of the Internet- including design- development- advertising- and sales* Internet mar)eting does not simply entail uilding or promoting a wesite- nor does it mean placing a anner ad on another wesite* #ffective online mar)eting re,uires a comprehensive strategy that synergi0es a given company6s usiness model and sales goals with its wesite function and appearancefocusing on its target mar)et through proper choice of advertising type- media- and design* >nline mar)eting is associated with several usiness models?
e4commerce 4 goods are sold directly to consumers or usinesses- *
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pulishing 4 the sale of advertisinglead4ased wesites 4 an organi0ation generates value y ac,uiring sales leads
from its wesite- and affiliate mar)eting 4 a usiness rewards one or more affiliates for each visitor or customer rought aout y the affiliate6s mar)eting efforts*
A4antage- *f *nline Marketing
Your store is open- $B hrs a day- T days a wee)* Further- your customers are
worldwide in reach- and can shop anytime that they want to +he cost of spreading your message is ne.t to nothing* #mailing your suscription
ase is more often cheaper than sending a letter through the mail !pdating your suscriers can e done almost instantly through email* Gisitors to your wesite can get up to the minute information on each visit* If you are having a sale- your customers can start shopping at the discounted prices literally as soon
as they open their email if you have an information sensitive usiness- such as a law firm- newspaper or online maga0ine- you can deliver your products directly to your customers without having to use a courier
Di-a4antage- *f *nline Marketing
>nline mar)eting is not free* +he cost of software- hardware- wed site designmaintenance of your site- online distriution costs and of course- time- all must e
factored into the cost of providing your service or product* lightly over %N of households shop online* ;hile that numer will continue to
grow- you are reaching less than two out of three households* +he internet is still regarded as a source of information gathering for the majority of your customers* >f the numer of visitors to your site- the vast majority of visitors who are motivated to uy will do so in person* Many people prefer the live interaction when they uy* If you have a small usiness with one location- this
may deter customers from uying* easier to have outdated information on your site- thus timing of updates is critical +here is no replacement for good old fashioned customer service* +he majority of
internet mar)eters lac) customer service and in,uiry response programs* As a resultmany online visitors lo your site will already have painted your site as poor service efore
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they have even contacted you* +he majority of wesites also have poor navigation- which ma)es it difficult for your visitor to find what they are loo)ing for* Many sites were created with a mar)eting view- not a customer service point of view*
1. De-,ribe web8ba-e marketing +r*gram-. !MA6#$UN 2009'
An affiliate +r*gramG sometimes referred to as web8ba-e marketing +r*gram-G is a system that allows we site owners to earn residual income- passive income and generate multiple income streams y offering services or products on their we site with no ris)- overhead- inventory- shipping costs- employees- rent or maintenance* +here is no charge to ecome an affiliate? (eb8ba-e marketing +r*gram- provide you an e.cellent opportunity to earn
multiple income streams and residual income* ;hether you are new to internet mar)eting or an e.perienced professional- these web ba-e marketing +r*gram- will provide a win4win situation for you and your customers 4 y delivering super products and services- and provides you the )ig)e-t +a"*%t- *n t)e webO. (eb8ba-e marketing +r*gram- *ffer t)e f*ll*wing in,enti4e-<
uper ,uality products and services with residual income +he highest commission payouts on the internet that offers passive income +wo4tiered commission structure that pays you for each affiliate you recruit who ma)es a sale Dong commission trac)ing period #.cellent training programs to ensure you reach your highest earnings potential possile with multiple income streams
oining we ased mar)eting programs is one of the most profitale ways in earning money online- and a lot of people nowadays have ecome we ased mar)eters since this avenue provides an easy way in generating profit*
>ne of the most profitale affiliate programs you can find today is Card >ffers* Card offers is among the iggest and most trusted programs mainly ecause their niche provides something people consider a necessity? credit cards* ;ith Card >ffers you can
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promote Gisa and Master card towards your audiences- without putting much effort in the mar)eting- since credit cards are a SneedS* Card >ffers can uild you your own wesite through their in house resources* Moreover- you can earn as much as U&% ase commission per sign up* Pe++er $am
Another hip and trendy we ased mar)eting program where you can earn as much as U& CPA is Paper am* In Paper am you will e provided with all the promotional tools you need in mar)eting their site- ranging from te.t lin)s- anners and ads which you can add into your site* ;hat6s great aout Paper am is that it lends with all niche topics hence you don6t have to conform to its suject matter* Also- you get an instant U% sign up onus upon joining the program ink S)are
Meanwhile the third top affiliate program you can ta)e part of nowadays is Din) hare* Din) hare has partnerships with some of the iggest names in usiness and trade such as American #.press- so you won6t have much troule promoting their programs* You will also enefit from the educational tools provided y the site as well as the strategies which you can as) from their research and development team*
If you want to venture on the world of dating- then #asy 2ate is the program you should e part of* Among the enefits of #asy 2ate are customi0ale landing pagesaility to send traffic to multiple different !8Ds- and a variety of payment options* You can earn as much as U&% per sale- or around U per confirmed sign up* 15. De-,ribe t)e ifferent t"+e- *f re-ear,) met)*- in etail. !N/#D 2009' @* %alitati4e marketing re-ear,)< 1enerally used for e.ploratory purposes 4
small numer of respondents 4 non generali0ale to the whole population 4 statistical significance and confidence not calculated 4 e.amples include focus
groups- depth interviews- and projective techni,ues %antitati4e marketing re-ear,)< generally used to draw conclusions 4 tests a specific hypothesis 4 uses random sampling techni,ues so as to infer from the sample to the population 4 involves a large numer of respondents 4 e.amples include surveys and ,uestionnaires
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/b-er4ati*nal te,)niK%e-< the researcher oserves social phenomena in their
natural setting 4 oservations can occur cross4 sectional (oservations made at one time' or longitudinally (oservations occur over several time4periods' 4 e.amples
include product4use analysis and computer coo)ie traces +erimental te,)niK%e-< the researcher creates a ,uasi4 artificial environment to try to control spurious factors- then manipulates at least one of the variales 4 e.amples include purchase laoratories and test mar)ets
1&. +lain t)e ke" element- in re+*rt writing. !N/#D 2009'
8efer to 9*"o?$ (MAY/!"# $%%L' 17. Di-,%-- t)e te,)niK%e- *f a,K%iring t)e ,%-t*mer- *n t)e web. !N/#D 2009'
Mar)eters today are under more pressure than ever to find new customers in our highly competitive mar)etplace* "o longer relying on mass4mar)et efforts alone- smart mar)eters are increasing their online initiatives- using more targeted- measurale strategies that leverage the power of customer data to provide relevant- compelling communications that spea) to consumers one4to4one* After all- winning new customers today means understanding and anticipating their needs- interests and ehaviors- and weaving relevant messaging into multiple media channels to reach them at every availale touch point* +echni,ues of ac,uiring customers on the we?
ocial "etwor)s Pay Per Clic) ptimi0ation Giral Mar)eting
S*,ial Netw*rk-
ocial networ)s ma)e viral mar)eting and word4of4mouth mar)eting much easier than efore* +he est use out of social networ)s is not to ma)e money directly off them ut to harness their mar)eting potential and to use them to mar)et your own usiness* +he main goal of any search engine mar)eter is to drive more traffic to their site* +he est way to do that is to optimi0e your wesite (including the process of lin) uilding' for your target )eywords* >nline social networ)s present an efficient platform for you to use in the
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spread of your mar)eting message* In addition- it is also a great tool for getting tons of visitors and thousands of page views to your site* Pa" +er li,k
Pay per clic) (PPC' is an Internet advertising model used on search enginesadvertising networ)s- and content wesites- such as logs- where advertisers only pay when a user actually clic)s on an advertisement to visit the advertisers6 wesite* ;ith search engines- advertisers typically id on )eyword phrases relevant to their target mar)et* ;hen a user types a )eyword ,uery matching an advertiser6s )eyword list- or views a wepage with relevant content- the advertisements may e displayed* uch advertisements are called sponsored lin)s or sponsored ads- and appear adjacent to or aove the SnaturalS or organic results on search engine results pages- or anywhere a wemaster or logger chooses on a content page* Content wesites commonly charge a fi.ed price for a clic) rather than use a idding mechanism* Bl*g- (iki-
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Instant messaging (IM' is a form of real4time communication etween two or more people ased on typed te.t* +he te.t is conveyed via devices connected over a networ) such as the Internet* Instant messaging (IM' are technologies that create the possiility of real4time te.t4ased communication etween two or more participants over the internet or some form of internal networ)/ intranet* It is important to understand that what separates chat and instant messaging from technologies such as e4mail is the perceived synchronicity of the communication y the user 4 Chat happens in real4time efore your eyes* ome systems allow the sending of messages to people *not currently logged on (offline messages'- thus removing much of the difference etween Instant Messaging and e] mail* C%e-tb**k-
A guestoo) is a place where visitors can leave comments aout your site* 1ood hosting companies have part loaded 1uestoo) software which you can easily add to your account such as the Giper 1uestoo)* 1uestoo) enales you to vet all the new entries efore they are posted* You may find- as we did for one of our sites that this gets to e so arduous that you end up ta)ing the 1uestoo) down* It is a real shame- ut you have to weigh up the amount of e.tra time going through the entries is ta)ing you against the numer of ona fide and useful comments you are getting* *r%m-
1ood we hosting companies allow you to use forum software for free* Forums do not develop overnight* +hey ta)e time* ometime4- it is months efore you get the first few memers*
earch engine optimi0ation (#>' is the process of improving the volume and ,uality of traffic to a we site from search engines via SnaturalS (SorganicS or SalgorithmicS' search results* !sually- the earlier a site is presented in the search resultsor the higher it Sran)s-S the more searchers will visit that site* #> can also target different )inds of search- including image search- local search- and industry4 specific vertical search engines*As an Internet mar)eting strategy- #> considers how search
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engines wor) and what people search for* >ptimi0ing a wesite primarily involves editing its content and E+MD coding to oth increase its relevance to specific )eywords and to remove arriers to the inde.ing activities of search engines* iral Marketing
Giral mar)eting and viral advertising refer to mar)eting techni,ues that use pre4 e.isting social networ)s to produce increases in rand awareness or to achieve other mar)eting ojectives (such as product sales' through self4replicating viral processesanalogous to the spread of pathological and computer viruses* It can e word4of4mouth delivered or enhanced y the networ) effects of the Internet* Giral mar)eting is a mar)eting phenomenon that facilitates and encourages people to pass along a mar)eting message voluntarily* Giral promotions may ta)e the form of video clips- interactive Flash games- advergames- eoo)s- randale software- images- or even te.t messages* +he asic form of viral mar)eting is not infinitely sustainale*It is claimed that a customer tells an average of three people aout a product or service they li)e- and eleven people aout a product or service which they did not li)e* Giral mar)eting is ased on this natural human ehavior* %e-ti*n N%mber <19 !Ma" # $%ne 200;' 19. +lain marketing inf*rmati*n -"-tem. r*m w)at -*%r,e- i- t)e marketing inf*rmati*n -"-tem e4el*+e !MA6#$UN8 200;'
A mar)eting information system is a continuing and interacting structure of peoplee,uipment and procedures to gather- sort- analy0e- evaluate- and distriute pertinenttimely and accurate information for use y mar)eting decision ma)ers to improve their mar)eting planning- implementation- and control* A mar)eting information system (MI' is intended to ring together disparate items of data into a coherent ody of information* An MI is- as will shortly e seen- more than raw data or information suitale for the purposes of decision ma)ing* An MI also provides methods for interpreting the information the MI provides* +he e.planation of this model of an MI egins with a description of each of its four main constituent -*%r,e-<
+he internal reporting systemsMar)eting research systemMar)eting intelligence system and Mar)eting models*
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It is suggested that whilst the MI varies in its degree of sophistication 4 with many in the industriali0ed countries eing computeri0ed and few in the developing countries eing so 4 a fully fledged MI should have these components- the methods (and technologies' of collection- storing- retrieving and processing data notwithstanding* Internal reporting systems? All enterprises which have een in operation for any period of time nave a wealth of information* Eowever- this information often remains under4utili0ed ecause it is compartmentali0ed- either in the form of an individual entrepreneur or in the functional departments of larger usinesses* +hat is- information is usually categori0ed according to its nature so that there are- for e.ample- financial production- manpower- mar)eting- stoc) holding and logistical data* >ften the entrepreneur- or various personnel wor)ing in the functional departments holding these pieces of data- do not see how it could help decision ma)ers in other functional areas* imilarly- decision ma)ers can fail to appreciate how information from other functional areas might help them and therefore do not re,uest it* +he internal records that are of immediate value to mar)eting decisions are? orders received- stoc) holdings and sales invoices* +hese are ut a few of the internal records that can e used y mar)eting managers- ut even this small set of records is capale of generating a great deal of information*
prime X suject of the te.too) and only a little more needs to e added here* Mar)eting research is a proactive search for information* +hat is- the enterprise which commissions these studies does so to solve a perceived mar)eting prolem* In many cases- data is collected in a purposeful way to address a well4 defined prolem (or a prolem which can e defined and solved within the course of the study'* +he other form of mar)eting research centers not around a specific mar)eting prolem ut is an attempt to continuously monitor the mar)eting environment* +hese monitoring or trac)ing e.ercises are continuous mar)eting research studies- often involving panels of farmers- consumers or distriutors from which the same data is collected at regular intervals* ;hilst the ad hoc study and continuous mar)eting research differs in the orientation- yet they are oth proactive* Marketing intelligen,e -"-tem-< ;hereas mar)eting research is focused- mar)et
intelligence is not* A mar)eting intelligence system is a set of procedures and data sources used y mar)eting managers to sift information from the environment that they can use in
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their decision ma)ing*Mar)eting intelligence is the province of entrepreneurs and senior managers within an agriusiness* It involves them in scanning newspaper trade maga0ines- usiness journals and reports- economic forecasts4 and other media* In addition it involves management in tal)ing to producers- suppliers and customers- as well as to competitors* "onetheless- it is a largely informal process of oserving and conversing*ome enterprises will approach mar)eting intelligence gathering in a more delierate fashion and will train its sales force- after4sales personnel and district/area managers to ta)e cognisance of competitorsK actions- customer complaints and re,uests and distriutor prolems* #nterprises with vision will also encourage intermediaries- such as collectors- retailers- traders and other middlemen to e proactive in conveying mar)et intelligence ac) to them*
Marketing m*el-< ;ithin the MI there has to e the means of interpreting
information in order to give direction to decision* +hese models may e computeri0ed or may not* +ypical tools are?
+ime series sales modes GA' models ensitivity analysis 2iscounted cash flow preadsheet Xwhat if models
+hese and similar mathematical- statistical- econometric and financial models are the analytical susystem of the MI* A relatively modest investment in a des)top computer is enough to allow an enterprise to automate the analysis of its data* ome of the models used are stochastic- i*e* those containing a proailistic element whereas others are deterministic models where chance plays no part*
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+he Internet has rought many uni,ue enefits to mar)eting- one of which eing lower costs and greater capailities for the distriution of information and media to a gloal audience* +he interactive nature of Internet mar)eting- oth in terms of providing instant response and eliciting responses- is a uni,ue ,uality of the medium* Internet mar)eting is sometimes considered to have a roader scope ecause it not only refers to digital media such as @ the Internet- e4mail- and wireless media7 however- Internet mar)eting also includes management of digital customer data and electronic customer relationship management (#C8M' systems* Internet mar)eting ties together creative and technical aspects of the Internet- including design- development- advertising- and sale* Internet mar)eting and geo4mar)eting places an emphasis on mar)eting that appeals to a specific ehavior or interest- rather than reaching out to a roadly4defined demographic* O>n4 and >ff4line= mar)eters typically segment their mar)ets according to age group- gender- geography- and other general factors* Mar)eters have the lu.ury of targeting y activity and geolocation* For e.ample- a )aya) company can post advertisements on )aya)ing and canoing wesites with the full )nowledge that the audience has a related interest* Internet mar)eting differs from maga0ine advertisements- where the goal is to appeal to the projected demographic of the periodical?
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From the uyerKs perspective- the inaility of shoppers to touch- smell- taste or Otry on= tangile goods efore ma)ing an on4line purchase can e limiting* Eowever- there is an industry standard for e4commerce vendors to reassure customers y having lieral return policies as well as providing in4store pic)4up services* 20. +lain marketing re-ear,) +r*,e-- in etail wit) -%itable eam+le- !$%ne 2010'
8efer to 9*no * (">G/2#C $%%&' 21. Ea- marketing ,)ange in t)e ,*nne,te w*rl. Di-,%-- t)e -trateg" im+li,ati*n*f t)e internet f*r marketing. !N*4 2010'
8efer to 9uestion "umer ? B (May / une $%%&' 22. Di-,%-- t)e ifferent *nline a4erti-ing *+ti*n- f*r a marketer. !N*4 2010'
8efer to 9uestion "umer ? :(May / une $%%&' 23.()at are t)e et)i,al i--%e- in Marketing re-ear,) !$%ne 2011' t)i,- in marketing< +he American Mar)eting Association commits itself to
promoting the highest standard of professional ethical norms and values for its memers* N*rm-< are estalished standards of conduct that are e.pected and maintained y
society and / or professional organi0ation* al%e- represent the collective conception of what people find desirale-
important and morally proper* ramew*rk *f anal"-i- f*r Marketing t)i,-<
' Galue4oriented Framewor)? It analyses ethical prolems on the asis of the values which they infringe (e*g? Eonesty- autonomy- privacy- transparency'* $' ta)eholder >riented Framewor)? It analyses ethical Prolems on the asis of whom they affect*(e*g? Consumers- competitors*' :' Process4>riented Framewor)? It analyses ethical Prolems in terms of the categories used y mar)eting specialists (e*g? research- price- promotion- and placement*'
