A Hand Note for Department of Finance
Augmented Product Delivery and Credit
Demographic Forces
After Sale Service
Actual Product Brand Name
Cultural Forces
Features
Core Benefit
Quality Level
Marketing
Design Political Forces
Packaging Installation
Sales and 5Profits
Economic Forces
Warranty
Natural Forces
Technological Forces
Product Life-Cycle Strategies
4 3 2
Prepared By
1 0 -1 -2
Product Introduction Development
Growth
Decline
Time Profit
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Maturity
Sales
Department of Finance
Md. Mazharul Islam (Jony) ID no:091541, 3rd Batch. Department of Finance. Jagannath University.
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Principles of Marketing Marketing: Marketing is dynamic, challenging, rewarding and contemporary field. Generally it is a process by which company creates value for customer and builds strong relationship in order to capture value from customer in return. In a broad sense, Marketing is the anticipation, stimulation, facilitation, regulation and satisfaction of customer and publics‘ demand for products, services, organization, people, places and ideas through the exchange process. ―The aim of marketing is to make selling unnecessary‖ - Peter Drucker At last it can be finalized here that marketing has a role to play in improving the quality of life. It‘s a total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets to achieve organizational objectives. [Note: Anticipation requires the firm to research consumer‘s desire. Stimulation arouses consumer to want the product. Facilitation makes it easy for consumers to buy. Regulation spreads demands through the year. Satisfaction fulfills consumers‘ expectation.]
Core Marketing Concept: Marketing management wants to design strategies that will build profitable relationships with target customers. There are five alternative concepts under which organization design and carry out their marketing strategies: The production, product, selling, marketing and societal marketing concept. The Production Concept: The idea that consumers will favor products that are highly available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency. For example, Nokia Company dominates the highly competitive price sensitive Chinese mobile market through low labor cost, high production efficiency and mass distribution. The Product Concept: The idea that consumers will favor products that offer the most quality, performance and features and that the organization should therefore devote its energy to making continuous product improveness. For example, some manufacturers believe that if they can build a better mousetrap, the world will beat a path to their door. The Selling Concept: The idea that consumers will not buy enough of the firm‘s products unless it undertakes a large-scale selling and promotion effort. Starting Point
Selling Concept:
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Factory
Focus Existing products
Means Selling and promoting
End Profit through sales volume
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The Marketing Concept: The marketing management philosophy that achieving organizational goal depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. Starting Point
The Marketing Concept:
Market
Focus Customer needs
Means Integrated marketing
End Profit through customer satisfaction
The Societal Marketing Concept: The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer‘s and society‘s well being. A principle of enlightened marketing that holds that a company should make good marketing decisions by considering consumers‘ wants the company‘s long-run interests and society‘s long-run interests. Society (Human welfare)
Societal Marketing Concept Consumers (Want satisfaction)
Company (Profits)
Selling Concept Vs Marketing Concept. The marketing concept points up shortly the following contrasts between marketing and selling. Selling Concept 1. Emphasis is on the product. 2. Company first makes the product and then figures out how to sell it profitably. 3. Internal, Company orientation. 4. Emphasizes company (seller‘s) need.
Marketing Concept 1. Emphasis is on customers‘ want. 2. Company first determines what the customers want and then the firm figures out how to profitably make and deliver a product to satisfy those wants 3. External, market orientation. 4. Emphasizes market (buyer‘s) needs.
Core Marketing Concepts To have more clear view about the marketing and to understand the marketing process first we should discuss the some basic concepts, which we will be discussing in the coming Lessons and what is the main essence of the marketing process and we can say that the marketing revolves around these concepts. A. Needs, wants, and demands Needs: Human needs are the most basic concept underlying marketing. A human need is a state of felt deprivation. 1). Humans have many complex needs. a). Basic, physical needs for food, clothing, warmth, and safety. b). Social needs for belonging and affection. JONY
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c). Individual needs for knowledge and self expression. 2). These needs are part of the basic human makeup. Wants A human want is the form that a human need takes as shaped by culture and individual personality. Demands are human wants that are backed by buying power. 1). Consumers view products as bundles of benefits and choose products that give them the best bundle for their money. 2). People demand products with the benefits that add up to the most satisfaction. Outstanding marketing companies go to great lengths to learn about and understand their customer‘s needs, wants, and demands. The outstanding company strives to stay close to the customer. B. Products and Services A product is anything that can be offered to a market to satisfy a need or want. A service is an activity or benefit offered for sale that is essentially intangible and does not result in the ownership of anything. 1). The concept of product is not limited to physical objects and can include experiences, persons, places, organizations, information, and ideas. 2). Be careful of paying attention to the product and not the benefit being satisfied. 3). ―Marketing myopia‖ is caused by shortsightedness or losing sight of underlying customer needs by only focusing on existing wants. C. Value, satisfaction, and quality Customer value is the difference between the values that the customer gains from owning and using a product and the costs of obtaining the product. Customers do not often judge product values and costs accurately or objectively--they act on perceived value. Customer satisfaction depends on a product‘s perceived performance in delivering value relative to a buyer‘s expectations. If performance exceeds expectations, the buyer is delighted (certainly a worthy goal of the marketing company). 1). Smart companies aim to delight customers by promising only what they can deliver, then delivering more than they promise. 2). The aim of successful companies today is total customer satisfaction. 3). Customer delight creates an emotional affinity for a product or service, not just a rational preference, and this creates high customer loyalty. 4). Quality has a direct impact on product or service performance. Quality is defined in terms of customer satisfaction. Total quality management (TQM): The term total quality management (TQM) is an approach in which all the company‘s people are involved in constantly improving the quality of products, services, and marketing processes. 1). In the narrowest sense, quality can be defined as ―freedom from defects.‖ 2). Quality has a direct impact on product or service performance. Quality is defined in terms of customer satisfaction. 3). The fundamental aim of today‘s total quality movement has become total customer satisfaction. JONY
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D. Exchange, transactions, and relationships Marketing occurs when people decide to satisfy needs and wants through exchange. Exchange is the act of obtaining a desired object from someone by offering something in return. Exchange is only one of many ways to obtain a desired object. Exchange is the core concept of marketing. Conditions of exchange include: 1. At least two parties must participate. 2. Each must have something of value to the other. 3. Each must want to deal with the other party. Each must be free to accept or reject the other's offer Whereas exchange is a core concept of marketing, a transaction (a trade of values between two parties) is marketing‘s unit of measurement. Most involve money, a response, and action. Transaction marketing is part of a larger idea of relationship marketing. E. Markets The concepts of exchange and relationships lead to the concept of a market. A market is the set of actual and potential buyers of a product. 1). Originally a market was a place where buyers and sellers gathered to exchange goods (such as a village square). 2). Economists use the term to designate a collection of buyers and sellers who transact in a particular product class (as in the housing market). 3). Marketers see buyers as constituting a market and sellers constituting an industry. 4). Modern economies operate on the principle of division of labor, where each person specializes in producing something, receives payment, and buys needed things with this money. Thus, modern economies abound in markets. 5). Marketers are keenly interested in markets.
Shortcuts: The marketing process involves five steps. The first four steps create value for customers. a) First marketers need to understand the market place and customer needs and wants. b) Second marketers design a customer-driven marketing strategy with the goal of getting, keeping and growing target customers. c) In the third step, marketers construct a marketing program that actually delivers superior value. d) All of these steps from the basis for the forth step, building profitable customer relationships and creating customer delight. e) In final step, the company reaps the rewards of strong customer relationships by capturing value from the customer.
Prepared by Md. Mazharul Islam (Jony). Roll no: 091541, 3rd Batch. Department of Finance. Jagannath University.
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Marketing Environment Marketing Environment: Marketing environment consists of the actors and forces outside marketing that affect marketing management‘s ability to build and maintain successful relationships with target customers. Successful marketing depends largely on a company‘s ability to manage its marketing programs within its environment. The marketing environment is made up of a micro environment/influences and macro environment/influences.
Micro Environment/Influences: The micro environment/influence consists of the actors close to the company that affect its ability to serve its customers – the company, suppliers, marketing intermediaries, customer markets, competitors and publics. A brief discussion is given belowThe Company: In designing marketing plans, marketing management takes other company groups into account – groups such as to management finance, research and development (R&D), purchasing, operations and accounting. These entire interrelated groups from the internal environment. Suppliers: Suppliers form an important link in the company‘s overall customer value delivery system. They provide the resources needed by the company to produce its goods and services. Marketing Intermediaries: Marketing intermediaries help the company to promote sell and distribute its products to final buyers. They include resellers, physical distribution firms, marketing services agencies and final intermediaries. For example: Retailers, Wholesalers etc. Customers: The Company need to five types of customers markets closely. The customer markets consist of consumer, business, reseller, Government and International market. Competitors: The marketing concept states that to be successful, a company must provide greater customer value and satisfaction than its competitors do. Thus, marketers must do more than simply adapt value to the needs of target consumers. They also must gain strategic advantages by positioning their offering strongly against competitors‘ offerings in the minds of consumers. Publics: The Company‘s marketing environment also includes various publics. A public is any group that has an actual on potential interest in on impact on an organization‘s ability to achieve its objectives. The Company Public
Suppliers
Marketing
Market Intermed iaries
Competitor
Customer
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A Company can prepare marketing plans for these major publics as well as for its customer markets.
Macro Environment/Influences: The ultimate constraining environment within which marketing, the organization and the other environments must operate is called macro environment. The macro environment/influences consists of the larger societal forces that affect the micro environment – demographic, economic, natural, technological, political and cultural forces. Demographic Environment: Demographic environment of marketing environment are the many quantifiable bits of information such as origin, age, size, gender, race, educational level, occupation and other statistics about the population. Marketers keep close track of demographic trends and developments in their markets both at home and abroad. Economic Environment: The economic environment consists of factors that affect consumer purchasing power and spending patterns. The economic environment is characterized by more consumer concern for value and shifting consumer spending patterns. A marketing program is affected especially by such economic factors as the current and anticipated stage of the business cycle as well as inflation and interest rate. Demographic Forces
Cultural Forces
Economic Forces
Marketing
Political Forces
Natural Forces
Technological Forces
Natural Environment: The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Marketers should be aware of several trends such as shortage of raw materials, increased pollution, increased government intervention in the natural environment. Technological Environment: Technology is a major environmental influence on marketing because it has such an effect on consumers‘ life-style, consumption patterns and our economic well being. Technological environment changes rapidly. New technologies create new markets and opportunities. Political Environment: Marketing decisions are strongly affected by developments in the political environment. The political environment consists of laws, government agencies and pressure groups that influence or limit various organizations and individuals in a given society. The JONY
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political environment has undergone three changes that affect marketing worldwide: increasing legislation regulating business, strong government agency enforcement and greater emphasis on ethics and socially responsible actions. Cultural Environment: The cultural environment is made up of institutions and forces that affect a society‘s values, perceptions, preferences and behaviors. The environment shows trends toward digital ―cocooning‖ a lessening trust of institutions, increasing patriotism, greater appreciation for nature, a new spiritualism and the search for more meaningful and enduring values. The above discussed environments influence marketing in different perspectives. According to the different situations, marketing is influenced by macro environment.
Responding or Reacting to the Marketing Environment: Many companies view the marketing environment as an uncontrollable element to which they must react and adapt. They passively accept the marketing environment and do not try to change it. They analyze the environment forces and design strategies that will help the company to avoid the threats and to take advantage of the opportunities, the environment provides. Other companies take a proactive stance toward the marketing environment. Rather than simply watching and reacting, these firms take aggressive actions to affect the public‘s and forces in their marketing environment. Such companies hire lobbyists to influence legislation affecting their industries and stage media events to gain favorable press coverage. They run advertorials to shape public opinion. By taking action companies can often overcome seemingly uncontrollable environment events. Marketing management cannot always control environmental forces. In many cases, it must settle for simply watching and reacting to the environment. But whenever possible, smart marketing managers will take a proactive rather than reactive approach to the marketing environment.
Types of customer The company needs to study five types of customers markets closely. Customer markets consist of individuals and household that buys goods and services for personal consumption. Business markets buy goods and services for further processing or for use in their production process. Whereas reseller markets buy goods and services to resell at a profit. Government markets are made up of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them. Finally international markets consist of these buyers in other countries, including consumers, producers, resellers‘ and government. Each market type has special characteristics that call for careful study by the seller.
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Types of Public The Company‘s marketing environment also includes various publics. A public is any group that has an actual on potential interest in on impact on an organization‘s ability to achieve its objectives. We can identify seven types of publics. 1. Financial publics influence the company‘s ability to obtain funds. Bank‘s investment houses and stock holders are the major financial publics. 2. Media publics carry news features and editorial opinions. They include newspapers magazines and radio and television stations. 3. Government publics, management must take government developments into account. Markets must often consult the company‘s lawyers on issues of product safety truth in advertising and other matters. 4. Citizen action publics, a company‘s marketing decisions may be questioned by consumer organizations, environmental groups, minority groups and others. It‘s public relations department can help it stay in touch with consumer and citizen group. 5. Local publics include neighborhood residents and community organizations. Large companies usually appoint a community relations officer to deal with the community, attend meetings answer questions and contribute to worthwhile causes. 6. General public, a company needs to be concerned about the general public‘s attitude toward its products and activities. The public‘s image of the company effects its buying. 7. Internal publics include workers, managers, volunteers and the board of directors. Large companies use newsletters and other means to inform and motivate their internal publics. When employees feel good about their company, this positive attitude spills over to external publics. A Company can prepare marketing plans for these major publics.
Prepared by Md. Mazharul Islam (Jony). Roll no: 091541, 3rd Batch. Department of Finance. Jagannath University.
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Marketing information System (MIS) Marketing: Marketing information system (MIS) consists of people, equipment and producers to gather, sort, analyze, evaluate and distribute needed timely and accurate information to marketing decision makers. ―To manage a business well is to manage its future and to manage the future to manage information.‖ -Marion Harper At last we can say that, A marketing information system (MIS) is an interacting, continuing futureoriented structure of persons, machines and procedures, designed to generate, process, store and later retrieve a continues updated information flow to aid decision making in a company‘s marketing programs.
Developing Marketing Information System: Developing marketing information system is systematic processes that are given below. Assessing Information Needs: A good marketing information system balances the information managers would like to have against what they really need and what is feasible to offer. The company begins by interviewing managers to find out what information they would like. The MIS must watch the marketing environment in order to provide decision makers with information they should have to make key marketing decisions. Developing Information: The information needed by marketing managers can be obtained from internal data, marketing intelligence and marketing research. The information analysis system then processes this information to make it more useful for managers. Internal Data: Many companies build extensive internal databases, computerized collections of information obtained from data sources within the company. Marketing managers can readily access and work with information in the database to identify marketing opportunities and problems, plan programs and evaluate performance. Marketing Intelligence: Marketing intelligence is the systematic collection and analysis of publicity available information about competitors and developments in the marketing environment. A marketing intelligence system gathers, analyzes and distributes information about the company‘s competitive, technological, customer, economic, social and political environment. It‘s goal is to improve strategic decision making, access and track competitors‘ actions and provide early warning of opportunities and threats.
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Marketing Information System (MIS) Marketing Managers and Other Information Users Planning Implementation
Analysis
Control
Marketing Information System
Assessing Information Needs
Target Market
Internal Database
Information Analysis
Marketing Intelligence
Marketing research
Marketing Environment Marketing Channels Competitor
Publics
Distributing and Using Information
Macro Environment
Information analysis: Information often requires more analysis and sometimes managers may need more help to apply the information to their marketing problems and decisions. This help may include advanced statistical analysis. Such analysis allows managers to go beyond means and standard deviations in the data and to answer questions about markets, marketing activities and outcomes. Distributing Information: Marketing information has no value until managers use it to make better marketing decisions. The information gathered through marketing intelligence and marketing research must be distributed to the right marketing managers at the right time. By following the steps a marketing information system can be developed.
Marketing Research: Marketing research is the systemic design, collection, analysis and reporting of data and finding relevant to a specific marketing situation facing the company. In Market research – research into a particular market – is just one component of marketing research. In conclusion, the systematic gathering, recording and analyzing of data about problems relating to marking of goods and services, is known as marketing research.
Classification of marketing research: A marketing research project might have one of three objects. 1. Exploratory research: Exploratory research is to gather preliminary information that will help define problem and suggest hypothesis. 2. Descriptive research: Descriptive research is to better describe marketing problems, situations or markets such as the market potential for a product or the demographics. JONY
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3. Casual research: Casual research is to test hypothesis about cause and effect relationship.
The Marketing Research Process: The marketing research process is the steps involved in conducting marketing research study. The steps are described belowa) Defining the problem and research objectives: The first step calls for the marketing manager and marketing researcher to define the problem carefully and agree on the research objectives. b) Developing the research plan for collecting information: A key element in the problem formulation for development of the research plan is the statement of one or more hypotheses. A hypothesis is a conjectural statement of the relationship between two or more variables. For hypothesis two types of data are available. Primary data are observed and recorded directly from respondents. Secondary data are those that have been previously gathered for purposes other than solving the current problem under investigation. c) Implementing the research plan: The researcher next puts the marketing research plan into action. This involves collecting, processing and analyzing the information. Data collection can be carried out by the company‘s marketing research staff or by outside firms. Researchers must process and analyze the collected data to isolate important information and finding by using tabulation and other statistical measures. d) Interpreting and reporting the findings: After collecting data to test their hypotheses, the final steps in a research project are to analyze the data, interpret the findings and submit a written report or disseminate their implications to the appropriate audience. The major criteria in writing a research report are completeness, accuracy, clarity and conciseness. Marketing Research Process Defining the problem & research objectives
Developing the research plan for collectimg information
Implementation the research plan
Interpreting and reporting the findings
By following the aforesaid process the marketing research is run and gained its goal. Prepared by Md. Mazharul Islam (Jony). Roll no: 091541, 3rd Batch. Department of Finance. Jagannath University.
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Selecting Target Market Market Segmentation: Market Segmentation is a customer-oriented philosophy. It is the act of dividing a market into smaller groups of buyers with distinct needs, characteristics or behaviors who might require separate products or marketing mixes. The company indentifies different ways to segment the market and develops profiles of the resulting market segments. At last we can say that market segmentation is the process of dividing large heterogeneous markets into smaller, homogeneous subsets of people or businesses with similar needs and representatives to marketing mix offerings.
Segmenting Consumer Markets: There is no single way to segment a market. A market has to try different segmentation variables, alone and in combination to find the best way to view the market structure. Here we look at the major variables, 1. Geographic Segmentation: Geographic segmentation calls for dividing the market into different geographical units such as nations, regions, states, countries, cities or even neighborhoods. 2. Demographic Segmentation: Demographic segmentation divides the market into groups based on variables such as age, gender, family life cycle, income, occupation, education, religion, race, generation and nationality. Demographic factors are the most popular bases for segmenting customer groups. 3. Age and Life Cycle Segmentation: Consumer needs and wants change with age. Age and life cycle segmentation divides the market into different age and life-cycle groups offering different products or using different marketing approaches for different age and life-cycle groups. 4. Gender Segmentation: Gender segmentation divides a market into different groups based on gender. It has long been used in clothing, cosmetics, toiletries and magazines. 5. Income Segmentation: Income segmentation divides a market into different income groups. It has long been used by the marketers of products and services such as automobiles, financial services and travel. 6. Psychographic Segmentation: Psychographic segmentation divides buyers into different groups based on social class, lifestyle or personality characteristics.
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7. Behavioral Segmentation: Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses or responses to a product. Many marketers believe that behavior variables are the best starting point for building market segment. 8. Occasion Segmentation: Occasion segmentation divides the market into groups according to occasions when buyers get the idea to buy, actually make their purchase or use the purchased item. Business marketers use many of same variables to segment their markets. But business markets also can be segmented by business customer demographics, operating characteristics, purchasing approaches, situational factors and personal characteristics.
Targeting: Market targeting is the process of evaluating each market segments attractiveness and select one or more market segments to enter. In other words, A target market is a group of customers at whom the organization specifically intends to aim its marketing efforts. At the end, we can say that a target market consists of a set of buyers who share common needs or characteristics that the company decides to serve.
Target Market Strategies Market targeting can be carried out at several different levels. They are described below, 1) Undifferentiated Marketing:
Using an undifferentiated marketing strategy, a firm might decide to ignore market segment differences and target the whole market with one offer. 2) Differentiated Marketing: Using a differentiated marketing strategy, a firm decides to target several market segments and designs separate offers for each. Target Market Strategy Undifferentiated (Mass) Marketing
Differentiated (Segmented) Marketing
Concentrating (Niche) Marketing
Micro Marketing (Local or Individual) Marketing
3) Concentrated Marketing: Concentrated marketing strategy is especially appealing when company resources are limited. 4) Micro Marketing: Micro marketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and location. a. Local marketing: Local marketing involves tailoring brands and promotions to the needs and wants of local customer groups. JONY
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b. Individual marketing: Individual marketing involves tailoring products and marketing programs to the needs and performance of individual customers. The above discussed points are followed to make target market strategies successful.
Positioning: Market positioning is the process of setting the competitive positioning for the product and creating a detailed marketing mix. In other words, positioning consists of arranging for a market offering to occupy a clear, distinctive and desirable place relative to competing products in the minds of customers. **Note: The target market and marketing mix are developed in relation to the marketing goal.
Differentiation: Differentiation involves actually differentiating the farm‘s market offering to create superior customer value.
Steps in Market Segmentation, Targeting and Positioning The four major steps in designing a customer-driven marketing strategy. In the first two steps, the company selects the customers that it will serve. Market segmentation is the process of dividing large heterogeneous markets into smaller, homogeneous subsets of people or businesses with similar needs and representatives to marketing mix offerings. The company identifies different ways to segment the market and develops profiles of the resulting market segments. A target market is a group of customers at whom the organization specifically intends to aim its marketing efforts. In the final two steps, the company decides on a value preposition on how it will create value for target customers. Market positioning is the process of setting the competitive positioning for the product and creating a detailed marketing mix. Differentiation involves actually differentiating the farm‘s market offering to create superior customer value. Select Customer to Serve
Decide on a value position
Segmentation Divide the total market into smaller segments.
Differentiation Differentiate the market offering to create superior customer value. Positioning Position is the market offering in the minds of target customers.
Target Select the segments segment to enter.
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Create value for targeted Customers
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Market segmentation: Market segmentation dividing a market into smaller groups. Market targeting evaluating each market segment's attractiveness and selecting one or more of the market segments to enter. Market positioning setting the competitive positioning for the product. Geographic segmentation dividing the market into different geographical units. Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality. Behavioral segmentation involves dividing a market into groups based on consumer knowledge, attitudes, uses, or responses to a product. Business Markets: Business Markets: The business market includes firms that buy goods and services in order to produce products and services to sell to others. Major types of business situation: Straight Re-buy the buyer reorders something without any modifications. Modified Re-buy the buyer wants to modify product specifications, prices, terms, or suppliers. New Task Buying A company buying a product or service.
Prepared by Md. Mazharul Islam (Jony). Roll no: 091541, 3rd Batch. Department of Finance. Jagannath University.
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Products & Brand: Products: In a narrow sense, a product is a set of tangible physical attributes assembled in an identifiable form. For example, apple, car, pen etc In other words, a product as anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. In conclusion, a product is everything ( both favorable and unfavorable) that one receives in a exchange; It is a complex of tangible and intangible attributes including functional, social and psychological utilities or benefits, ideas or mixes of all entities.
Services: Services are a form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. Examples are banking, hotel, airline, retail and home repair services. We can only consume or get these services but we cannot achieve ownership of these services.
Levels of Products and Services: Product planners need to think about products and services on three levels. Each level adds more customer value. These three levels are shown by chart below:
Augmented Product Delivery and Credit
After Sale Service
Actual Product Brand Name
Features
Core Benefit
Quality Level
Design Packaging
Installation
Warranty
Core Benefit: The most basic level is the core benefit which addresses the buyers actual or real want. When designing products, marketers must first define the core, problem-solving benefits or services that consumers sick. For example, People who buy a BlackBerry are actually buying freedom and onthe-go connectivity to people.
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Actual Product: At the second level, product planners must turn the core benefit into an actual product. They need to develop product and services features, design, a quality level, a brand name and packaging. For example, The BlackBerry is an actual product. It‘s all attributes have been combined carefully to deliver the core benefit of staying connected. Augmented Product: Finally product planners must build an augmented product around the core benefit and actual product by offering additional services and benefits. For example, when consumers buy a BlackBerry, the company and its dealers also might give buyers a warranty on parts, instructions on how to use etc and these services are augmented product. Lastly we can say that, when developing products marketers first must identify the core consumer needs the product will satisfy. They must then design the actual product and find ways to augment in order to create the bundle that will provide the most satisfying customer experience.
Products and services classification: Products and services full into two broad classes based on the types of consumers that use them, consumer products and industrial products.
Consumer Products: Consumer products are products and services bought by final consumers for personal consumption. Consumer products include, a) Convenience Products: Convenience products are those products which the consumer buys with a minimum of time and effort. Example: Soap, Candy, Newspaper etc. b) Shopping Products: Shopping products are usually purchased only after consumer has compared the price, quality and style for a number of alternatives, often visiting several stores before make a purchase decision. Example: Furniture‘s, Clothing, Hotel and Airline services etc. c) Specialty Products: Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. Example: Specific brand and types of cars, equipment, designer clothes etc. d) Unsought Products: Unsought products are consumer products that the consumer either does not know about or knows about but does not normally think of buying: Example: Life insurance, Blood donations to the Red Cross etc.
Industrial Products: Industrial products are those products, purchased for further processing or for use in conducting a business. In other words, Industrial products are that products, which sold for use in producing other products or in rendering services. It includes, a) Materials and Parts: Material and parts include raw material and manufactured materials and parts. Raw materials consist of farm products (wheat, cotton) and natural products (fish, JONY
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lumber). Manufactured materials and parts consist of component materials (iron, cement) and component parts (small motors, tires). b) Capital Items: Capital items are industrial products that aid in the buyer‘s production or operations, including installations and accessory equipment. c) Supplies and Services: Supplies include operating supplies (lubricants, coal, paper) and repair and maintenance items (paint, nails brooms). Business services include maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, advertising). Such services are usually supplied under contract. Classifying products into consumer products and industrial products categories is valuable, but the range of products within each of these categories is still too broad to be of much help to marketers.
Brand: Brand is a name, term, sign, symbol or design or a combination of these that identifies the maker of seller of a product. A brand differentiates one seller‘s products or services from those of competitors. For example: Bata, Samsung, Nokia etc.
Branding: Branding is the procedure a firm follows in researching, developing and implementing its brand.
Brand Equity: Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service. One measure of brand equity is the extent to which customers are willing to pay more for the brand. High brand equity provides a company with many competitive advantages.
Major Brand Strategy: Brand poses challenging decisions to the marketers. The major brand strategy decisions involve brand positioning, brand name selection, brand sponsorship and brand development. Brand Positioning: Marketers need to position their brands clearly in target customer‘s minds. They can position brands at any of three levels. Attributes are the least desirable level for bran positioning. A brand can be better positioned by associating its name with a desirable benefit. The strongest brands go beyond attribute or benefit positioning. They are positioned on strong belief and values. Brand Name Selection: A good name can add greatly to a product‘s success. However finding the best brand name is a difficult task. It begins with A careful review of the product and its benefits, the target market and proposed marketing strategies. JONY
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After that naming a brand becomes part science, part art and a measure of instinct. So the brand name must be protected legally. Brand Positioning • Attributes • Benefits • Beliefs and Values
Brand Name Selection • Selection • Protection
Brand Sponsorship • • • •
Manufacturer Brand Private Brand Licensing Brand Co-Branding
Brand Development • • • •
Line Extension Brand Extension Multi Brand New Brand
Brand Sponsorship: A manufacturer has four sponsorship options. They are, Manufacturer‘s brands have long dominated the retail scene. Private brand is a brand created and owned by a reseller of a product or service. Some companies license names or symbols previously created by other manufacturers, names of well-known celebrities or characters from popular movies. For a fee, any of these can provide an instant and proven brand name. Co-branding is the practice of using the established brand names of two different companies on the same product. Brand Development: A company has four choices when it comes to developing brands. It can introduce line extensions, brand extensions, multi-brands and new brands. Line extensions occur when a company extends existing brand names to new forms, colors, sizes or flavors of an existing product category. A brand extension extends a current brand name to new or modified products in a new category. Multi-branding offers a way to establish different features and appeals to different buying motives. A company might believe that the power of its existing brand name is waning and a new brand name is needed. Or it may create a new brand name when it enters a new product category. According to the aforesaid steps, a brand is developed. All indicated points or strategies must be valued to make a complete and powerful brand. **Desirable qualities for a brand name include the following: 1. 2. 3. 4. 5. 6.
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It should be suggest something about the product‘s benefits and qualities. It should be easy to pronounce, recognize and remember. The brand name should be distinctive. It should be extendable. The name should translate easily into foreign language. It should be capable of registration and legal protection.
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New Product Product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. A new product is a product new to the organization under consideration. Lastly we can say that, Products that are really innovative is considered as a new product.
Product Failure Product failure is defined two ways, absolute and relative product failure. They are noted below, a. Absolute Product Failure: Absolute product failure occurs when a company is unable to recoup its production and marketing costs. It incurs a financial loss. b. Relative Product Failure: Relative product failure occurs when a company is able to make a profit on an item but the product does not attain profit objectives and adversely affects the firm‘s image.
New Product Development Process: The new product planning process includes seven stages that start from idea generation to commercialization. The process of developing new products is described below. 1. Idea Generation: Idea generation is the continuous, systematic search for new product opportunities. It involves delineating the sources of new ideas and methods for generating them. Major sources of new product ideas include internal sources and external sources such as customers, competitors, distributors and suppliers and others. 2. Product Screening: After the firm has identified a set of potential products, it must screen them. In product screening, poor, unsuitable or otherwise unattractive ideas are weeded out from further consideration. 3. Concept Development and Testing: An attractive idea must be developed into a product concept. It is important to distinguish between a product idea, a product concept, and a product image. A product idea is an idea for a possible product that the company can see itself offering to the market. A product concept is a detailed version of the idea stated in meaningful consumer terms. A product image is the way consumers perceive an actual or potential product. Concept development and testing is a quick and inexpensive tool for measuring consumer enthusiasm. It involves asking potential consumers to react to a picture written statement or oral description of a product, thus enabling the firm to determine initial attitude prior to expensive, time consuming prototype development. 4. Marketing strategy Development: The next step is marketing strategy development, designing an initial marketing strategy for introducing this car to the market. The marketing strategy statement consists of three parts. The first part describes the target market; the planned product positioning; and the sales, market share, and profit goals for the first few years. The second part of the marketing strategy statement outlines the product's planned price, distribution, and marketing budget for the first year. The third part of the marketing JONY
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strategy statement describes the planned long-run sales, profit goals, and marketing mix strategy: 5. Business Analysis: Once management has decided on its product concept and marketing strategy, it can evaluate the business attractiveness of the proposal. Business analysis involves a review of the sales, costs, and profit projections for a new product to find out whether they satisfy the company's objectives. If they do, the product can move to the product development stage. 6. Product Development: So far, for many new-product concepts, the product may have existed only as a word description, a drawing, or perhaps a crude mock-up. If the product concept passes the business test, it moves into product development. Here, R&D or engineering develops the product concept into a physical product. The product development step, however, now calls for a large jump in investment. It will show whether the product idea can be turned into a workable product. 7. Test Marketing: If the product passes functional and consumer tests, the next step is test marketing, the stages at which the product and marketing program are introduced into more realistic market settings. Test marketing gives the marketer experience with marketing the product before going to the great expense of full introduction. It lets the company test the product and its entire marketing program—positioning strategy, advertising, distribution, pricing, branding and packaging, and budget levels. 8. Commercialization: Test marketing gives management the information needed to make a final decision about whether to launch the new product. If the company goes ahead with commercialization—introducing the new product into the market—it will face high costs. The company will have to build or rent a manufacturing facility. New Product Development Process
Idea Generation
Commercialization
Idea Screening
Test Marketing
Concept Develpomennt & Testing
Product Development
Marketing Strategy Development
Business Analysis
According to the afore said process a new product is launched in the market. Though it is long term process but it gets success if the whole processes are maintain carefully.
Product Life Cycle The product life cycle is a central concept in marketing management. A typical product life cycle(PLC), the course that a product‘s sales and profits take over its lifetime. The product life cycle has five distinct stages, JONY
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1. Product Development: Product development begins when the company finds and develops a new product idea. During product development, sales are zero and the company‘s investment costs mounts. 2. Introduction: In this stage, the product is brought to market; sales are slow as demand is developed; the product is improved technically and the break-even point has not been reached. 3. Growth: In this stage, the product catches on; sales rise rapidly; the total market expands and profit is usually at its highest point. 4. Maturity: In this segment, growth in sales volume levels off; competitors are well entrenched in the market; many sales are of the replacement type and profit stabilize and begin to decrease. 5. Decline: In this stage, sales fall off as new products enter the market; consumers‘ tastes change; profits are declining or nonexistent.
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Sales and Profits
Product Life-Cycle Strategies
4 3 2 1 0 -1 -2
Product Development
Introduction
Growth
Maturity
Decline
Time Profit
Sales
In conclusion we can say that not all products follow this product life cycle. Some products are introduced and die quickly; others stay in the mature stage for a long, long time. Such venerable brands as Coca-cola, Lux etc. for instance, are still going strong after more than 50 years. Shortcuts New-product development: New-product development: The development of original products, product improvements, product modifications, and new brands through the firm's own R&D efforts. Idea generation: The systematic search for new-product ideas. Idea screening: screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible. Product concept: A detailed version of the new-product idea stated in meaningful consumer terms. Concept testing: Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal. Business analysis: A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives. Product development: A strategy for company growth by offering modified or new products to current market segments. Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product. Commercialization: Introducing a new product into the market. Test marketing: The stage of new-product development in which the product and marketing program are tested in more realistic market settings. JONY
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Pricing Price Price is the value that one puts on the utility that one receives for goods and services. In short,
Utility
Value
Price
Creates Measures as In other words, The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or services. Generally price is expressed in different terms for different exchanges. For instance, Auto insurance companies change a premium for protection, a tutor wants tuition fees for Education etc. At last we can say that a price represents the purchasing power of a product or services of a seller.
Factors Considering When Setting Price The price the company charges will fall somewhere between one that is too high to produce any demand and one that is too low to produce a profit. In setting the price of product between these two extremes the company must consider a number of other internal and external factors. In setting its pricing policy, we will describe a six steps procedure. 1. Selecting the Pricing Objective: The Company first decides where it wants to position its market offering. The clearer a firm‘s objectives, the easier it is to set price. 2. Determining Demand: Demand and price are inversely related: the higher the price, the lower the demand. So while setting price companies should determine what amount of demand the price can fulfill. 3. Estimating Costs: The Company wants to charge a price that covers its cost of producing, distributing and selling the product including a fair return for its effort and risk. 4. Analyzing Competitors’ costs, price and offers: Within the range of possible prices determined by the market demand and company costs, the firm must take competitors‘ costs, prices and possible price reactions into account. 5. Selecting a Pricing Method: Costs set a floor to the price. Competitors‘ prices and the price of substitutes provide an orienting point. Consumers‘ assessment of unique features establishes the price ceiling. Companies select a pricing method that includes one or more of these three considerations. 6. Selecting the Final Price: In selecting final price, the company must consider additional factors including the impact of other marketing activities. Company pricing policies and the impact of price on other parties.
Customer perceptions of value
Other internal and external considerations, Marketing strategy, Objectives and Mix
Products Cost
Nature of the market and demand Competitors strategy and Prices
Price floor No profit below this price
Lastly we can say that, the firm has to consider many factors in setting its products‘ price which are discussed above. JONY
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New Product Pricing Strategies: Companies bringing out a new product face the challenge of setting prices for the first time. They can choose between two broad strategies. They are described below, 1. Market-skimming Pricing: Market-skimming pricing means setting a high price for a new product to skim maximum revenues layer from the segments willing to pay the high price, the company makes fewer but more profitable sales. Market skimming makes sense only under certain condition: First, the product‘s quality and image must support its higher price and enough buyers must want the product at that price. Second, the cost of producing a smaller volume cannot be so high that they cancel the advantage of charging more. Finally, competitors should not be able to enter the market easily and undercut the high price. 2. Market-Penetration Pricing: Market-penetration pricing means setting a low initial price in order to penetrate the market quickly and deeply to attract a large number of buyers quickly and win a large market share. Several conditions must be met for this low price strategy to work: First, the market must be highly price sensitive so that a low-price can produce more market growth. Second, production and distribution costs must fall as sales volume increases. Finally, the low-price must help keep out the competition and the penetration prices must maintain its low-price position otherwise, the price advantage may be only temporary.
Product Mix Pricing: Price setting logic must be modified when the product is part of a product mix. In this case, the firm searches for a set of prices that maximizes the profits on the total product mix. We can distinguish six situations involving product mix pricing. Product Line-Pricing Strategy: A modern business enterprise manufactures and markets a number of product items in a line with differences in quality, design, size and style. Products in a line may be complementary to or competitive with each other. A multiproduct company cannot afford to price one product without giving due consideration to the effect its price products on other products in its line. The pricing strategy of a multiproduct firm should be developed to maximize the profits of the entire organization rather than the profitability of a single product. JONY
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Strategy Product-Line Pricing Optional-Product Pricing Captive-Product Pricing By-Product Pricing Product Bundle Pricing
Product Mix Pricing Strategies Description Setting price steps between product line items. Pricing optional or accessory products sold with the main product. Pricing products that must be used with the main product. Pricing low-value by-product to get rid of them. Pricing bundle of products sold together.
Optional Product Pricing: Many companies use optional product pricing offering to sell optional or accessory product along with their main product. Captive Product Pricing: Some products require the use of ancillary or captive products. Examples of captive products are razor blades (razors are useless without blades) and camera film (cameras are useless without film).
By-Product Pricing: In producing processed meats, petroleum and agricultural products, chemicals and other products, there are often by products. Using by-product pricing, the manufacturer will seek a market for these by-products and should accept any price that covers more than the cost of storing and delivering them. For example: Papermaker MeadWestvaco has turned what was once considered chemical waste into profit-making products. Product Bundle Pricing: Product bundle pricing refers to the inclusion of an extra margin in the price over and above the price of the product as such.
Distribution Channel Marketing Channel A channel of distribution consists of the sequential linkage of organization and relationships through which a product flows from producer to customer. In other words, A marketing channel consists of the set of people and firms involved in the transfer of title to a product moves from producer to ultimate consumer or business user. At last we can say that, A channel of distribution always includes both the producer and the final customer for the product in its present from as well as any middlemen such as retailers and wholesalers.
Value Delivery Networks: Value delivery network is made up of the company, suppliers, distributors and ultimately customers who ‗partner‘, with each other to improve the performance of the entire system. JONY
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For example: Nokia a leading mobile company who produces mobile devices, manages whole community if suppliers and assemblers of semiconductor components, plastic cases, LCD display, and accessories. Its network also includes offline and online resellers and other complementor who created applications for Nokia. All of these diverse partners must work effectively together to bring superior value to Nokia customer. It is value delivery network.
Types of Marketing Channel Marketing channel can be of two types, such as 1. Direct Channel: A channel consisting only of producer and final customer with no middlemen providing assistance is called direct distribution/channel. Producer
Final Customer
For instance, A service master uses direct approach to sell its building cleaning services to both residential and commercial customer. 2. Indirect Channel: In contrast, a channel of producer, final customer and at least one level of middlemen represent indirect distribution. With indirect channel a producer must determine the types of middlemen that will best serve its needs. Producer
Middlemen
Final Customer
Note: For customer goods, sometimes a channel in which wholesalers are bypassed but retailers are used is termed direct rather than indirect channel.
The Nature and Importance of Marketing Channels: Instead of selling their goods directly to the final users most producers use intermediaries to bring their products to market. They try to forge a marketing channel that helps make a product or service available for use or consumption by the consumer. A company‘s channel decisions directly affect every other marketing decision. The importance of marketing channels is discussed below: 1. Marketing channel represent a substantial opportunity cost. One of the chief roles of marketing channels is to convert potential buyers into profitable orders. Marketing channels must not just serve markets, they must also make markets. 2. The Channels chosen affect all other marketing decisions. The company‘s pricing depends on what type of channel it uses. In addition, channel decisions involve relatively long-term commitments to other firms as well as a set of policies and procedures. 3. In managing it channels, the firm must decide how much effort to devote to push versus pull marketing. A market channel system is the particular set of marketing channels employed by a firm. Decisions about the marketing channel system are among the most critical facing management.
Note: A push strategy involves the manufacturer using its sales force and trade promotion money to induce marketing channels to carry, promote and sell the product to end users. A pull strategy JONY
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involves the manufacturer using advertising and promotion to persuade consumers to ask marketing for the product, thus inducing the intermediaries to order it.
Functions of Marketing Channel A marketing channel performs the work of moving goods from producers to customers. It overcomes the time, Place and possession gaps that separate goods and services from those who need or want them. Members of the marketing channel perform a number of key functions: 1. Information: The collection and dissemination of marketing research information about potential and current customers, competitors and other actors and forces in the marketing environment. 2. Promotion: The development and dissemination of persuasive communications designed to attract customers to the offer. 3. Negotiation: The attempt to reach final agreement on price and other terms so that transfer of ownership or possession can be affected. 4. Ordering: Marketing channel members‘ communication of intentions to buy to the manufacturer. 5. Financing: The acquisition and allocation of funds required to finance inventions at different levels of the marketing channel. 6. Risk Taking: The assumption of risks connected with carrying out the channel work. 7. Physical Possession: The successive storage and movement of physical products from raw materials to the final customers. 8. Payment: Buyers payment of their bills to the sellers through banks and other financial institutions. 9. Title: The actual transfer of ownership from one to another. From production to reach the goods and services to customers, marketing channels have to perform so many functions. Among many functions, the most important functions of marketing channels are discussed here.
Market logistics (Physical Distribution): Logistics and physical distribution both refers to functions aimed at the physical transfer of products. Marketing logistics refers to the tasks involves in planning, implementing and controlling the physical flow of materials, final goods and related information from points of origin to points of consumption to meet customer requirements at a profit. At last we can say that, Marketing logistics involves deliveries to the right place to the right customer, at the right time, and in good condition.
Supply Chain Management: Supply chain management refers to managing upstream and downstream value-added flows of materials, final goods and related information among suppliers, the company, resellers and final consumers. JONY
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PROMOTION The Marketing Communications Modern marketing calls for more than just developing a good product, pricing it attractively, and making it available to target customers. Companies must also communicate with current and prospective customers, and what they communicate should not be left to chance. For most companies, the question is not whether to communicate, but how much to spend and in what ways. All of their communications efforts must be blended into a consistent and coordinated communications program. As shown in the fig, completion of marketing process requires something of value with both producer and customer that should be communicated with each other for performing the exchange process.
The Marketing Communications Mix A company's total marketing communications mix—also called its promotion mix consists of the specific blend of advertising, personal selling, sales promotion, public relations, and direct marketing tools that the company uses to pursue its advertising and marketing objectives. Definitions of the five major promotion tools follow: 1. Advertising: Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. 2. Personal selling: Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships. 3. Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service. 4. Public relations: Building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. 5. Direct marketing: Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships—the use of telephone, mail, fax, e-mail, the Internet, and other tools to communicate directly with specific consumers. Each category involves specific tools. For example, advertising includes print, broadcast, outdoor, and other forms. Personal selling includes sales presentations, trade shows, and incentive programs. Sales promotion includes point-of-purchase displays, premiums, discounts, coupons, specialty advertising, and demonstrations. Direct marketing includes catalogs, telemarketing, fax, kiosks, the Internet, and more. Thanks to technological breakthroughs, people can now communicate through traditional media (newspapers, radio, telephone, television), as well as through newer media forms (fax machines, cellular phones, pagers, and computers). The new technologies have encouraged more companies to move from mass communication to more targeted communication and one-to-one dialogue.
Integrated Marketing Communications During the past several decades, companies around the world have perfected the art of mass marketing selling highly standardized products to masses of customers. In the process, they have developed effective mass-media advertising techniques to support their mass-marketing strategies. These companies routinely invest immense amount of money in the mass media, reaching tens of millions of customers with a single advertise. However, as we move into the twenty-first century, marketing managers face some new marketing communications realities. JONY
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Media Selection The communicator now must select channels of communication. There are two broad types of communication channels personal and non-personal. Personal Communication Channels In personal communication channels, two or more people communicate directly with each other. They might communicate face to face, over the telephone, through the mail, or even through an Internet "chat." Personal communication channels are effective because they allow for personal addressing and feedback. Some personal communication channels are controlled directly by the company. For example, company salespeople contact buyers in the target market. But other personal communications about the product may reach buyers through channels not directly controlled by the company. These might include independent experts (consumer advocates, consumer buying guides, and others) making statements to target buyers. Or they might be neighbors, friends, family members, and associates talking to target buyers. This last channel, known as word-of-mouth influence, has considerable effect in many product areas. Personal influence carries great weight for products that are expensive, risky, or highly visible. For example, buyers of automobiles and major appliances often go beyond mass-media sources to seek the opinions of knowledgeable people. Companies can take steps to put personal communication channels to work for them. For example, they can create opinion leaders (people whose opinions are sought by others) by supplying certain people with the product on attractive terms. For instance, they can work through community members such as local radio personalities, class presidents, and heads of local organizations. They can use influential people in their advertisements or develop advertising that has high "conversation value." Non-personal Communication Channels Non-personal communication channels are media that carry messages without personal contact or feedback. They include major media, atmospheres, and events. Major media include print media (newspapers, magazines, direct mail), broadcast media (radio, television), display media (billboards, signs, posters), and online media (online services, Web sites). Atmospheres are designed environments that create or reinforce the buyer's leanings toward buying a product. Thus, lawyers' offices and banks are designed to communicate confidence and other qualities that might be valued by their clients. Events are staged occurrences that communicate messages to target audiences. For example, public relations departments arrange press conferences, grand openings, shows and exhibits, public tours, and other events. Non-personal communication affects buyers directly. In addition, using mass media often affects buyers indirectly by causing more personal communication. Communications first flow from television, magazines, and other mass media to opinion leaders and then from these opinion leaders to others. Thus, opinion leaders step between the mass media and their audiences and carry messages to people who are less exposed to media. This suggests that mass communicators should aim their messages directly at opinion leaders, letting them carry the message to others.
Md. Mazharul Islam (Jony) ID no:091541, 3rd Batch. Department of Finance. Jagannath University. JONY
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Setting the Overall Promotion Mix The company now must divide the total promotion budget among the major promotion tools: advertising, personal selling, sales promotion, public relations, and direct marketing. The concept of integrated marketing communications suggests that it must blend the promotion tools carefully into a coordinated promotion mix. Companies within the same industry differ greatly in the design of their promotion mixes. We now look at factors that influence the marketer's choice of promotion tools.
The Nature of Each Promotion Tool Each promotion tool has unique characteristics and costs. Marketers must understand these characteristics in selecting their tools. 1. Advertising Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times. For example, television advertising can reach huge audiences. Beyond its reach, large-scale advertising says something positive about the seller's size, popularity, and success. Because of advertising's public nature, consumers tend to view advertised products as more legitimate. Advertising is also very expressive—it allows the company to dramatize its products through the artful use of visuals, print, sound, and color. Advertising also has some shortcomings. Although it reaches many people quickly, advertising is impersonal and cannot be as directly persuasive as company salespeople. For the most part, advertising can carry on only a one-way communication with the audience, and the audience does not feel that it has to pay attention or respond. In addition, advertising can be very costly. Although some advertising forms, such as newspaper and radio advertising, can be done on smaller budgets, other forms, such as network TV advertising, require very large budgets. 2. Personal Selling Personal selling is the most effective tool at certain stages of the buying process, particularly in building up buyers' preferences, convictions, and actions. It involves personal interaction between two or more people, so each person can observe the other's needs and characteristics and make quick adjustments. Personal selling also allows all kinds of relationships to spring up, ranging from a matter-of-fact selling relationship to personal friendship. The effective salesperson keeps the customer's interests at heart in order to build a long-term relationship. Finally, with personal selling the buyer usually feels a greater need to listen and respond, even if the response is a polite "no thank you." These unique qualities come at a cost, however. A sales force requires a longer-term commitment than does advertising—advertising can be turned on and off, but sales force size is harder to change. 3. Sales Promotion Sales promotion includes a wide assortment of tools (coupons, contests, cents-off deals, premiums, and others) all of which have many unique qualities. They attract consumer attention, offer strong incentives to purchase, and can be used to dramatize product offers and to boost sagging sales. Sales promotions invite and reward quick response—whereas advertising says, "Buy our product," sales promotion says, "Buy it now." Sales promotion effects are often short lived, however, and often are not as effective as advertising or personal selling in building long-run brand preference.
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4. Public Relations Public relations are very believable—news stories, features, and events seem more real and believable to readers than ads do. Public relations can also reach many prospects who avoid salespeople and advertisements—the message gets to the buyers as "news" rather than as a sales directed communication. As with advertising, public relations can dramatize a company or product. Marketers tend to under use public relations or to use it as an afterthought. Yet a wellthought-out public relations campaign used with other promotion mix elements can be very effective and economical. 5. Direct Marketing Direct marketing consists of direct communication with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting Customer relationships. Direct marketers communicate directly with consumers, often on a one to one, interactive basis. Today, improved databases permit more sophisticated direct marketing and tailoring of marketing efforts. Beyond brand and image building, direct marketers seek a direct, immediate, and measurable consumer response. Although there are many forms of direct marketing (telemarketing, direct mail, electronic marketing, online marketing, and others) they all share four distinctive characteristics. Direct marketing is nonpublic: The message is normally addressed to a specific person. Direct marketing also is immediate and customized: Messages can be prepared very quickly, and they can be tailored to appeal to specific consumers. Finally, direct marketing is interactive: It allows a dialogue between the marketing and the consumer, and messages can be altered depending on the consumer's response. Thus, direct marketing is well suited to highly targeted marketing efforts and to building one tone customer relationships.
Prepared by Md. Mazharul Islam (Jony). Roll no: 091541, 3rd Batch. Department of Finance. Jagannath University.
KEY TERMS
Advertising: Any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times. Personal selling: Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships. Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service. Sales promotion consists of short-term incentives to encourage the purchase or sale of a product or service. Whereas advertising and personal selling offer reasons to buy a product or service, sales promotion offers reasons to buy now. Public relations: Building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Public relations involves building good relations with the company‘s various publics by obtaining JONY
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favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Direct marketing: Direct connection with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships—the use of telephone, mail, fax, e-mail, the Internet, and other tools to communicate directly with specific consumers. Personal Communication Channels: In personal communication channels, two or more people communicate directly with each other. Non-personal Communication Channels: Non personal communication channels are media that carry messages without personal contact or feedback. Publicity Public information is information about a company‘s goods or services appearing in the mass media as a news item. Stimulation of demand for a good, service, place, idea, person, or organization by unpaid placement of commercially significant news or favorable media presentations. Catalog Marketing: Catalog marketing involves selling through catalogs mailed to a select list of customers or made available in stores Kiosk Marketing: Some companies place information and ordering machines (called kiosks) in stores, airports, and other location Database marketing is the process of building, maintaining, and using customer databases and other databases for the purposes of contacting and transacting with customers.
Prepared by Md. Mazharul Islam (Jony). Roll no: 091541, 3rd Batch. Department of Finance. Jagannath University.
Contact no. Md. Mazharul Islam Jony. (+8801719480255) JONY
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