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MARKETING RESEARCH
AND MARKETING
MANAGEMENT
(22CB302)
Department: CSBS
Batch/Year: II YEAR / IV SEM
Created by: Dr.S.D. Uma Mageswari
[Link]
Dr. [Link] Pillai
 1. CONTENTS

S. Page
Contents
No No
1 Course Objectives 5

2 Pre Requisites 6

3 Syllabus 7

4 Course outcomes 9

5 CO- PO/PSO Mapping 10

6 Activity based learning 11

7 Lecture Notes 12

8 Assignments 67

9 Part A Questions & Answers 68

10 Part B Questions 70

11 Supportive online Certification courses 72

12 Real time Applications 73

13 Contents beyond the Syllabus 75

14 Assessment Schedule 79

15 Prescribed Text Books & Reference Books 80

16 Mini Project Suggestions 81

5
 2. COURSE OBJECTIVES

The Course will enable learners to:

I. Understand basic marketing concepts

II. Comprehend the dynamics of marketing.
III. Leverage marketing concepts for effective decision making
IV. Understand basic concepts and application of statistical tools in
Marketing research
V. Apply Internet marketing strategies.

6
 3. PRE REQUISITES
• Pre-requisite Chart

MARKETING RESEARCH AND

MARKETING MANAGEMENT
(22CB302)

22CB302 FUNDAMENTALS OF ECONOMICS

7
 20CB406 MARKETING RESEARCH AND L T P C
/ MARKETING MANAGEMENT
21CB406
Curriculum And Syllabus
3 0 0 3
UNIT I INTRODUCTION 9
Marketing Concepts and Applications: Introduction to Marketing &
Core Concepts, Marketing of Services, Importance of marketing in
service sector. Marketing Planning & Environment: Elements of
Marketing Mix, analyzing needs & trends in Environment - Macro,
Economic, Political, Technical & Social Understanding the consumer:
Determinants of consumer behavior, Factors influencing consumer
behavior
UNIT II MARKET SEGMENTATION AND PRODUCTION MANAGEMENT 9
Market Segmentation: Meaning & Concept, Basis of segmentation,
selection of segments, Market Segmentation strategies, Target
Marketing, Product Positioning Product Management: Product Life
cycle concept, New Product development & strategy, Stages in New
Product development, Product decision and strategies, Branding &
packaging
UNIT III PRICING, PROMOTION AND DISTRIBUTION STRATEGY 9
Pricing, Promotion and Distribution Strategy: Policies & Practices –
Pricing Methods & Price determination Policies. Marketing
Communication – The promotion mix, Advertising & Publicity, 5 M’s of
Advertising Management. Marketing Channels, Retailing, Marketing
Communication, Advertising.
UNIT IV MARKETING RESEARCH 9
Marketing Research: Introduction, Type of Market Research, Scope,
Objectives & Limitations Marketing Research Techniques, Survey
Questionnaire design & drafting, Pricing Research, Media Research,
Qualitative Research Data Analysis: Use of various statistical tools –
Descriptive & Inference Statistics, Statistical Hypothesis Testing,
Multivariate Analysis - Discriminant Analysis, Cluster Analysis,
Segmenting and Positioning, Factor Analysis
UNIT V INTERNET MARKETING 9
Internet Marketing: Introduction to Internet Marketing. Mapping
fundamental concepts of Marketing (7Ps, STP); Strategy and Planning
for Internet Marketing Business to Business Marketing: Fundamental of
business markets. Organizational buying process. Business buyer needs.
Market and sales potential. Product in business markets. Price in
business markets. Place in business markets. Promotion in business
markets. Relationship, networks and customer relationship
management. Business to Business marketing strategy.
COURSE OUTCOMES

Upon completion of the course, the students will be able to:

• CO1: Understand the marketing concepts and its evolution
• CO2: Analyze the market based on segmentation, targeting and
positioning
• CO3: Leverage marketing concepts for decision making on product,
price, promotion mix and distribution
• CO4: Apply the concepts of market research and analyse data using
statistical tools
•
CO5: Apply internet marketing strategies for businesses
 6. CO - PO / PSO MAPPING

PROGRAM OUTCOMES PSO

K3, PSO PSO PSO
CO HKL K3 K4 K5 K5 K4, A3 A2 A3 A3 A3 A3 A2 1 2 3
K5
PO PO PO PO PO PO PO PO PO PO PO PO
-1 -2 -3 -4 -5 -6 -7 -8 -9 -10 -11 -12

CO1 K1 3 2 1 - - - - 1 1 1 - 1 2 - -

K3 3 2 1 - - - - 1 1 1 - 1 2 - -
CO2
K2 3 2 1 - - - - 1 1 1 - 1 2 - -
CO3
K3 3 2 1 - - - - 1 1 1 - 1 2 - -
CO4
K3 3 2 1 - - - - 1 1 1 - 1 2 - -
CO5

• Correlation Level - 1. Slight (Low) 2. Moderate (Medium)

3. Substantial (High) , If there is no correlation, put “-“.

10
 Activity based learning

Activity Topic Outcome

CASE STUDY MARKETING Students took one

PRESENTATION SEGMENTATION concern and explained
about their marketing
segmentation
techniques

SEMINAR LIFE CYCLE OF A Students took seminar

PRESENTATION PRDUCT and said how a
product is
differentiated as
stages of
development.
 LECTURE NOTES: UNIT II
The segmentation, targeting, positioning
(STP) marketing model
the STP marketing model (Segmentation, Targeting, Positioning) is a
familiar strategic approach in modern marketing. It is one of the most
commonly applied marketing models in practice, with marketing leaders
crediting it for efficient, streamlined communications practice.
STP marketing focuses on commercial effectiveness, selecting the most valuable
segments for a business and then developing a marketing mix and
product positioning strategy for each segment.

Moreover, segmentation, targeting, and positioning is an audience-focused

rather than product-focused approach to marketing communications which helps
deliver more relevant messages to commercially appealing audiences.
Market Segmentation?
Market segmentation is the process of creating customer groups based on
common behavioral and consumption patterns. In fact, demographic,
psychographic,
behavioral, and geographic similarities cluster customers. Specifically, these four
segments break into subcategories to optimize marketing strategy.

Relationship between Market Segmentation, Target Marketing

and Positioning
Market segmentation, target marketing and positioning is a chain of events that
result in a well-rounded marketing strategy. All three rely on each other to perform a
perfect marketing masterstroke. Marketing segmentation categorizes a customer
base according to their interests. This helps marketers target potential
customers with relevant products. This, in turn, optimizes their marketing strategy.
Once marketers have the relevant data on customers and their requirements,
they can position a product in a way that ticks all the boxes for the user. This
way, marketers can position a product or a service effectively and improve
conversion rates on their leads.

Benefits of Market Segmentation

The importance of market segmentation is that it makes it easier to
focus marketing efforts and resources on reaching the most valuable audiences
and achieving business goals.

Market segmentation allows you to get to know your customers, identify what
is needed in your market segment, and determine how you can best meet
those needs with your product or service. This helps you design and execute
better marketing strategies from top to bottom.

1. Create stronger marketing messages

Knowing customers facilitate the development of stronger marketing messages.
Generic and vague language can be avoided. Instead, direct messaging that
speaks to the needs, wants, and unique characteristics of the target audience
can be used.
2. Identify the most effective marketing tactics
With dozens of marketing tactics available, it can be difficult to know what will
attract the ideal audience. It helps in devising the best suitable
marketing strategies that will work best.

3. Design hyper-targeted ads

On digital ad services, audiences by their age, location, purchasing habits,
interests etc may be targeted. Market segmentation will define the audience, and
help in creating more effective, targeted digital ad campaigns.

4. Attract (and convert) quality leads

When the marketing messages are clear, direct, and targeted they attract the
right people. Ideal prospects may be defined and are more likely to convert
potential customers into buyers.

5. Differentiate your brand from competitors

Being more specific about the value propositions and messaging also allows the
business to stand out from competitors. Instead of blending in with
other brands, brands can be differentiated by focusing on specific customer
needs and characteristics.

6. Build deeper customer affinity

When the customers‘ want and need are known, offerings that uniquely serve
the audience can be delivered and communicated. This distinct value
and messaging leads to stronger bonds between brands and
customers and creates lasting brand affinity.

7. Identify niche market opportunities

Niche marketing is the process of identifying segments of industries and verticals that
have a large audience that can be served in new ways.

8. Stay focused
Targeting in marketing keeps the messaging and marketing objectives on track.
It helps in the identification of new marketing opportunities and
avoid distractions that will lead you away from your target market.
Market Segmentation Process

[Link] Audience / Market and The Size of The Market

Identifying the market and the target audience is the foundation for any

marketing campaign. It helps the marketers study the type of consumers included in

the target audience section and set expectations according to their needs. It

helps organize and plan their marketing strategies as per the size of the target

audience‘s market and taste.

[Link] Expectations for the Targeted Audience

Once the target audience and size of the targeted audience are identified, it is

necessary to review the needs and requirements of the consumers to meet the

demands and expectations of the consumers.

[Link] the Categories and The Subcategories of Products
Based on the demographic factors of classification of the consumers, it is necessary
for the marketers to subcategorize the products so that the products fit in the
requirements for different age groups, different gender and so on.

[Link] or Research the Needs and Behavior of the Targeted Consumers

The marketing team must review the needs and preferences of the consumers from

each section of society. It will also be easy to come up with a generic

marketing strategy if the requirements of the consumers are studied and reviewed

carefully.
5. Strategize the Marketing Campaign

Once the market research of all the necessary factors has been done, and the

marketers have accumulated the consumer interest and their behavior, the

marketing team, is all set to strategize their campaign for a particular product

or service. Different advertisements and promotions, banners, etc., are included

to promote the product or the service. The promotion should be done in such

a way that it establishes a connection between the consumer and the product

or the service as the connection is very important for the success of the campaign.
Market segmentation has been the cornerstone for all the successful brands in
the
market, whether the company/marketer was a product based company or a
service
provider company. For example, Redmi/Xiaomi has established itself as the
most popular and highest-selling mobile phone brand in the market as they did
their homework correct. They studied their consumers and their expectations
and the sensitivity of the consumers towards the pricing of the phones. After
reviewing the market carefully, they came with a successful launch and promotion of

the product. Market-Segmentation Procedure

Marketers use a three-step procedure for identifying market segments:

1. Survey stage. The researcher conducts exploratory interviews and focus groups to

gain
insight into customer motivations, attitudes, and behavior. Then the researcher
prepares a questionnaire and collects data on attributes and their
importance ratings, brand awareness and brand ratings, product-usage
patterns, attitudes toward the product category, and respondents‘
demographics, geographics, psychographics, and mediagraphics.

[Link] stage. The researcher applies factor analysis to the data to remove

highly correlated variables, then applies cluster analysis to create a specified number

of maximally different segments.

[Link] stage. Each cluster is profiled in terms of its distinguishing

attitudes,behavior, demographics, psychographics, and media patterns, then each
segment is given a name based on its dominant characteristic. In a study of the
leisure market, Andreasen and Belk found six segments:10 passive
homebody, active sports enthusiast, inner-directed self-sufficient, culture
patron, active homebody, and socially active. They found that performing arts
organizations could sell the most tickets by targeting culture patrons as well as
socially active people.
Companies can uncover new segments by researching the hierarchy of attributes that
customers consider when choosing a brand. For instance, car buyers who
first decide on price are price dominant; those who first decide on car type (e.g.,
passenger, sport-utility) are type dominant; those who first decide on brand are
brand dominant. With these segments, customers may have distinct demographics,
psychographics, and mediagraphics to be analyzed and addressed through
marketing programs.

Levels of Market Segmentation

Regardless of whether they serve the consumer market or the business
market— offering either goods or services—companies can apply segmentation at
one of four levels: segments, niches, local areas, and individuals.
Segment Characteristic

Segment markets similar wants, purchasing power, geographical location,

buying attitudes, or buying habits
 Segment marketing allows a firm to create a more
fine- tuned product or service offering and price
it appropriately for the target audience.
niches A niche is a more narrowly defined group, typically a
small market whose needs are not being well served.

Local Markets e tailored to the needs and wants of local customer

groups (trading areas, neighborhoods, even individual
stores).

individuals. ultimate level of segmentation leads to ―segments of

one,‖ ―customized marketing,‖ or ―one-to-one
marketing.‖

Mass customisation

SEGMENT MARKETS

A market segment consists of a large identifiable group within a market, with similar
wants, purchasing power, geographical location, buying attitudes, or buying
habits.

Because the needs, preferences, and behavior of segment members are similar

but not identical, marketers are urged to present flexible market offerings instead of

one standard offering to all members of a segment. A flexible market

offering consists of the product and service elements that all segment members

value, plus options (for an additional charge) that some segment members

value. Segment marketing allows a firm to create a more fine-tuned product or

service offering and price it appropriately for the target audience. The choice of

distribution channels and communications channels becomes much easier, and the

firm may find it faces fewer competitors in certain segments.

Example: Delta Airlines offers all economy passengers a seat, food, and soft
drinks, but it charges extra for alcoholic beverages and earphones.
Niche Marketing
A niche is a more narrowly defined group, typically a small market whose needs are
not being well served. Marketers usually identify niches by dividing a segment
into subsegments or by defining a group seeking a distinctive mix of benefits.
In an attractive niche, customers have a distinct set of needs; they will pay a
premium to the firm that best satisfies their needs; the niche is not likely to
attract other competitors; the nicher gains certain economies through
specialization; and the niche has size, profit, and growth potential.
For example, a tobacco company might identify two subsegments of
heavy smokers: those who are trying to stop smoking, and those who don‘t care.

Local Marketing
Target marketing is leading to some marketing programs that are tailored to
the needs and wants of local customer groups (trading areas, neighborhoods,
even individual stores). Citibank, for instance, adjusts its banking services in each
branch depending on neighborhood demographics.

Those favoring local marketing see national advertising as wasteful because it

fails to address local needs. On the other hand, opponents argue that
local marketing drives up manufacturing and marketing costs by reducing
economies of scale.
Moreover, logistical problems become magnified when companies try to
meet varying local requirements, and a brand‘s overall image might be diluted
if the product and message differ in different localities.

Individual Marketing
The ultimate level of segmentation leads to ―segments of one,‖
―customized marketing,‖ or ―one-to-one marketing.‖6 For centuries, consumers
were served as individuals: The tailor made the suit and the cobbler
designed shoes for the individual. Much businessto-business marketing today
is customized, in that a manufacturer will customize the offer, logistics,
communications, and financial terms for each major account. Now technologies
such as computers, databases, robotic production, intranets and extranets, e-
mail, and fax communication are permitting companies to return to customized
marketing, also called ―mass customization.‖
Mass customization is the ability to prepare individually designed products and
communications on a mass basis to meet each customer‘s requirements.

The Four Types of Market Segmentation

The four bases of market segmentation are:
∙ Demographic segmentation
∙ Psychographic segmentation
∙ Behavioral segmentation
∙ Geographic segmentation
Within each of these types of market segmentation, multiple sub-
categories further classify audiences and customers.

Demographic Segmentation
Demographic segmentation is one of the most popular and commonly used types of
market segmentation. It refers to statistical data about a group of people.

Demographic Market Segmentation Examples

∙ Age

∙ Gender

∙ Income

∙ Location

∙ Family Situation

∙ Annual Income
∙ Education
∙ Ethnicity
Where the above examples are helpful for segmenting B2C audiences, a business
might use the following to classify a B2B audience:

∙ Company size
∙ Industry
∙ Job function
Because demographic information is statistical and factual, it is usually
relatively easy to uncover using various sites for market research.

A simple example of B2C demographic segmentation could be a

vehicle manufacturer that sells a luxury car brand (ex. Maserati). This

company would
likely target an audience that has a higher income.
Another B2B example might be a brand that sells an enterprise
marketing platform. This brand would likely target marketing managers at
larger companies (ex. 500+ employees) who have the ability to make
purchase decisions for their teams.

Psychographic Segmentation

Psychographic segmentation categorizes audiences and customers by

factors that relate to their personalities and characteristics.

Psychographic Market Segmentation Examples
∙ Personality traits
∙ Values
∙ Attitudes
∙ Interests
∙ Lifestyles
∙ Psychological influences
∙ Subconscious and conscious beliefs
∙ Motivations
∙ Priorities
Psychographic segmentation factors are slightly more difficult to identify
than demographics because they are subjective. They are not data-
focused and require research to uncover and understand.
For example, the luxury car brand may choose to focus on customers who
value quality and status. While the B2B enterprise marketing platform may
target marketing managers who are motivated to increase productivity and
show value to their executive team.

Behavioral Segmentation
While demographic and psychographic segmentation focus on who a customer
is, behavioral segmentation focuses on how the customer acts.

Behavioral Market Segmentation Examples

∙ Purchasing habits
∙ Spending habits
∙ User status
∙ Brand interactions
Behavioral segmentation requires you to know about your customer‘s actions.
These activities may relate to how a customer interacts with your brand or to
other activities that happen away from your brand.
A B2C example in this segment may be the luxury car brand choosing to
target customers who have purchased a high-end vehicle in the past three
years. The B2B marketing platform may focus on leads who have signed up for
one of their free webinars.

Geographic Segmentation
Geographic segmentation is the simplest type of market segmentation. It
categorizes customers based on geographic borders.

Geographic Market Segmentation Examples

∙ ZIP code
∙ City

∙ Country

∙ Radius around a certain location

∙ Climate

∙ Urban or rural
Geographic segmentation can refer to a defined geographic boundary (such as
a city or ZIP code) or type of area (such as the size of city or type of climate).
 An example of geographic segmentation may be the luxury car company
choosing to target customers who live in warm climates where vehicles don‘t
need to be equipped for snowy weather. The marketing platform might focus
their marketing efforts around urban, city centers where their target customer
is likely to work.

TARGET MARKETING
Target marketing is the decision to identify the different groups that make up
a market and to develop products and marketing mixes for selected target markets.

Target marketing strategies

Product or Service is designed to suit the needs of the market. At times, the
products appeal to all or a section of the market. The product that appeals to
everyone falls under the mass marketing strategy. Certain products
are manufactured for a particular section of people. This section of people is
known as the ‗target audience‘. The marketing strategies focusing on the target
audience is known as a target marketing strategy.
Based on the response from the market, marketing strategies are designed.
The target marketing strategies vary based on the purchasing power of the
customer, and the geographical location of the market. The types of
target marketing strategies are dependent on multiple factors inclusive of
age group, gender, geographical location to name a few.

Designing a target market strategy aids to focus the time and effort of the marketing
team to increase sales in its target group of customers. The different types of target
markets need different targeting marketing definition. Based on the target marketing
concept, marketing campaigns are designed to catch the customer‘s eye.
The market targeting and positioning of the product are crucial for doing
business. The strategies vary based on the types of target markets.

VARIOUS TARGET MARKETING STRATEGIES

Broadly the target marketing strategies are classified into the following types
∙ Mass Marketing

∙ Segment Marketing

∙ Niche Marketing
∙ Micro Marketing
∙ Local Marketing
Few market targeting examples are:
∙ Nike with sports shoes targeting sports playing audience.
∙ A niche strategy example is Dior. The brand has set itself apart with its
unique designs.

∙ Lego has a mass market with its appeal to children.

A) Mass Marketing
Mass Marketing involves marketing to the entire population with a single strategy.
Mass marketing focuses to reach everyone with maximum exposure to the
product.
An attempt is made to spread the message to everyone with mass media such as
TV, newspaper, and mobile.
Regularly consumed products like toothpaste and toothbrushes, mass marketing is
all that is needed.

B) Segment Marketing
Segment Marketing known for its differentiated targeting strategy focuses on a
section of people known as the ‗target audience‘. The target marketing concept is to
attract customers to their products. This segment marketing fetches good results for
new products entering to market with established organizations. This
differentiated marketing is expensive. The differentiated marketing strategy
can be designed

uniquely for the different target audiences.

The company needs to design a unique product for the market segment and
requires unique marketing campaigns and promotional events. The benefits of target
marketing are it enables to manufacture of the products to suit the need
of consumers. The marketing campaigns focus on, selling the products where
the target audience frequently visits and creates suitable promotional campaigns.

C) Niche Marketing
Niche marketing also known as concentrated marketing targets a small section of
the market. The entire campaign is around this small section of the market.
Luxury goods like Rolex and Armani are examples of niche marketing. Niche
marketing yields results for small companies with limited production and sales.
There are advantages and disadvantages to niche marketing.

Advantages of niche market segment are:

∙ Generates high revenues.
∙ Loyal customer base.
∙ Competition is less.
Disadvantages of niche marketing are:
∙ The market is small.
∙ Scope for growth is less.
∙ Less competition so keenness to improve is minimal
D) Micromarketing

Micromarketing focuses on a much smaller section of people than niche marketing.

Micromarketing definition is customized marketing or one-to-one marketing. The

products are customized to the requirements of the customer. The micro

marketing strategies involve customer tastes, whims, and wishes. A good

example of a micromarketing strategy is [Link] that focuses on handmade

goods taking orders from customers with their specific requirements.

Few micromarketing examples are Uber and Red Bull. Uber used a unique local

micromarketing strategy in each city to become visible and expand its

customer base. Reb Bull did not focus on its unique point of being an energy

drink but as a
lifestyle. Red Bull focused on its target audience ‗youth‘ interested in sports.
D) Local Marketing
Local marketing strategy involves nearby and neighborhood areas. The organizations use
this marketing strategy to thrive on local connections and make their presence
felt. Amazon Local is a good example of a local marketing strategy. The online
service providers along with local businesses come up with offers for hotel booking,
spa treatments, and restaurant meals at regular intervals. The local companies earn
good revenue with sales.

Product positioning
Core strategy is at the hub of marketing strategy. It is where the strengths of a company
meet market opportunities. It has two parts:
a) The identification of agroup of customers for whom the firm has
a differential advantage; and

b) Positioning itself in the customer's mind.

Differentiation
Consumers typically choose products and services that give them the greatest value.
Thus the key to winning and keeping customers is to understand their needs and
buying processes better than competitors do, and to deliver morevalue. To the extent
that a company can position itself as providing superior value to selected target
markets, either by offering lower prices than competitors door by providing more
benefits to justify higher prices. It gains competitive advantage. 2. If a company
positionsits product as offering the best quality and service, it must then develop the
promised quality and service. Positioning therefore begins with differentiating the
company's marketing offer, so that it will give consumers more value than
competitors' offers do.

Differentiating Markets
In what specific ways can a company differentiate its offer from those of competitors
V A company or market offer can be differentiated along the lines of product,
services, personnel or image.
Product Differentiation - A company ean differentiate its physical produet.
Companies can also differentiate their products on performance.

Services Differentiation: the firm can also differentiate the services that

accompany the produet. Some companies gain competitive advantage through

speedy, reliable or careful delivery.

Personnel Differentiation: Companies can gain a strong competitive advantage

through hiring and training better people than their competitors do.

Image, Differentiation: Even when competing offers look the same, buyers may

perceive a difference based on company or brand images. Thus companies work to

establish images that differentiate them from competitors.

Positioning:
Product positioning is defined as arranging for a product to occupy a clear,
distinctive and desirable place relative to competing products in the minds
of target consumers and Formulating competitive positioning for a product
and a detailed marketing mix. A product's position is the way the product is
defined by consumers on important attributes - the place the product occupies in
consumers' minds relative to competing products.

Benefits of product positioning

∙ identifying key benefits of a product and matching them with customers‘ needs;

∙ finding a competitive advantage even when the market changes;

∙ meeting customers‘ expectations;

∙ reinforcing brand‘s name and its products;

∙ winning customer loyalty;

∙ creating an effective promotional strategy;

∙ attracting different customers;

∙ improving competitive strength;

∙ launching new products;

∙ presenting new features of existing products.

Perceptual Mapping: Perceptual maps are a valuable aid to product positioning. A

product positioning tool that uses multidimensional scaling of consumers' perceptions
and preferences to portray the psychological distance between products and
segments.

For example: The perceptual map shows how holidaymakers segment, as well as the

possible destinations.
Basic Steps of Product Positioning Process

The positioning process is important to be identified and followed by any

organization which wants to implement its marketing strategy soundly. It is a
difficult task to identify and select a positioning strategy and thereby the correct
positioning process for an organization.

There are 6 main steps in positioning process. In each of the steps, marketing
research techniques can be employed to get the necessary information.
1– Define your target audience

∙ Create a customer profile that describes the company activity. it is

important to attract more customers.
∙ Conduct market research learn about the target audience
through primary and secondary market research.

∙ Reassess the offering and profile. 2- Define your main competitors

Then, list the competitors which make the same industry as yours. There are

three main types of competitors:

∙A direct competitor offers the same products and services aimed at the

same target market and customer base.

∙ Indirect Competitor offers the same products and services. but he seeking to

grow revenue with a different strategy.

∙ Replacement Competitor offers the same products and services that
customers could use instead of choosing your products or services.
3Define product features
List the benefits and usage of the product. listing product features help to introduce it
in a fine way. The marketers must be well aware of the features and benefits
of the products.

4Analyze the Customer

It is the main component of any business plan. Define the target market and decide
how to reach them. Use segmentation of the market. There are various
approaches to segmentation but out of all benefit segmentation is relevant, which
focuses upon the benefits or attributes that a segment believes to be important.

5Make unique selling suggestions

Product should have USP (unique selling propositions) and marketers must know
what best their product can do. To make USP follow these tips:

∙ Describe Your Target Audience.

∙ Explain the Problem You Solve.
∙ List the Biggest Distinctive Benefits.
∙ Define Your Promise.
∙ Combine and Rework.
∙ Cut it Down.
6Promote your brand
You may want to promote your brand and building a fine image for it. you could do it
by using these steps:

∙ Create a brand image, or logo.

∙ Network.
∙ Advertise.
∙ Build business partnerships with other organizations.
∙ Rely on the power of social networks.
∙ Offer freebies.
∙ Develop relationships with your customers.
∙ Encourage customers to talk about their experience using your business.
7Make the positioning Decision
To make positioning decision that helps you in branding your business
and marketing your product we introduce you some steps:

∙ Make economic analysis.

∙ Positioning helps you to implies commitment.
∙ Try to introduce your services and prevent adding services you don‘t have.
∙ Symbols or sets of symbols must be considered.
8Monitoring the position
It is necessary to monitor the position, for that you have the variety of
techniques that can be employed it can be on the basis of some tests and interviews
which will help to monitor any kind of change in the image. step by step you
could improve your business by monitoring your position.
Product positioning strategies

∙ Characteristics-based positioning

∙ Pricing-based positioning

∙ Use or application-based positioning

∙ Quality or prestige-based positioning

∙ Competitor-based positioning

While a lot of time is devoted to product development, only a few companies think
about how consumers will perceive the product when it‘s already in the market.
Product positioning is about understanding the products to introduce to the masses.
That‘s why it‘s critical to pay attention to what your customers think. Let‘s explore
the key strategies that will help you define the position of your product.

∙ Characteristics-based positioning. Brands give certain characteristics to their

products that aim at creating associations. It‘s done to make consumers choose
based on brand image and product characteristics. Let‘s take the automobile
industry, for example. A person who worries about safety will probably choose Volvo
because of the brand‘s positioning. At the same time, another customer who pays
attention to reliability would prefer Toyota.

∙ Pricing-based positioning. This strategy involves associating your company with

competitive pricing. Brands often position themselves as those that offer products or
services at the lowest price. Let‘s take supermarkets, for example. They can afford to
provide customers with products for lower prices because of the lower costs they pay
for shipping and distribution, huge
 turnover, and a large procurement of goods. As a result, many consumers
already know the supermarkets with attractive prices and choose them
without considering other options.

∙ Use or application-based positioning. Companies can also position

themselves by associating with a certain use or application. People who
adhere to a healthy lifestyle create a great demand for products that help
increase performance in the gym. Hence, many businesses offer nutritional
supplements. These brands sell supplements that are high in calories,
vitamins, and minerals.

∙ Quality or prestige-based positioning. The brands we are talking about

now don‘t concentrate on their price point; they focus on their prestige or
high quality instead. Sometimes, it‘s the reputation that makes a brand attract
customers. Let‘s take Rolex, for example. This famous watch brand is
associated with achievement and excellence in sport and is popular among
powerful and wealthy people.

∙ Competitor-based positioning. The strategy involves using competitors‘

alternatives to differentiate products and highlight their advantages. It helps

brands distinguish their products and show their uniqueness.

Errors of product positioning

* Obvious Aspects of the Product Features
* Living in the Future
* Diluting the Positioning Strategy
* Over Positioning
* Short-term Gains
* Doubtful Positioning
* Positioning on the Wrong Attributes
* Over / under / confused / doubtful positioning
 Introduction to Product Development

In this fast-changing world we are experiencing change in our daily life and at
marketplace too. Customer needs, wants, and expectations are changing
more rapidly. Customers are increasingly demanding advance features, appealing
designs, better quality, and reliability in products. To meet the changing
demands of customer, business organisations are investing heavily in research and
development (R&D). Business organisations are updating existing products and
developing new products to satisfy changing customer needs, wants, and
expectations.
The development of competitive new products is a prerequisite for every business
organisation to be successful. Samsung has outperformed Nokia in the global
mobile-phone market and become the global leader. Samsung updates its existing
mobile phones and brings new mobile phones more frequently at competitive low price
with advance features, appealing designs, better quality and reliability. Nokia failed to
satisfy changing customer needs, wants, and expectations, and lost its market position.

DefinitionProductDevelopment In general, the Product Development can be defined

as "creating, innovating, or developing entirely a new product , or presenting an existing
product with enhanced utility, improved features, more appealing design, better quality
and reliability to satisfy the requirements of its end-users

Meaning of Product Development

Product means a good, service, idea or object created as a result of a process and offered to
serve a need or satisfy a want. Development means the act or process of
growing, progressing, or
Product Development
developing. is a process of improving the existing product or to a new
introduce product in the market. It is also referred as New Product Development.
The functions of product development are as follows:

:-
1. Creation of an entirely new product or upgrading an existing product,
2. Innovation of a new or an existing product to deliver better and
enhanced services,

3. Enhancing the utility and improving the features of an existing product,

4. Continuous improvement of a product to satisfy rapidly changing
customer needs and wants.

Product Development Process

Product development process is a crucial process for the success and survival of
any
business. Today, businesses are operating in a highly dynamic and
competitive environment. Business organisations have to continuously
update their products to conform to current trends. The product
development process starts from idea generation and ends with product
development and commercialisation. Following are the steps in the process of
product development.

1. Idea Generation - The first step of product development is Idea Generation

that is identification of new products required to be developed considering
consumer needs and demands. Idea generation is done through research of
market sources like consumer liking, disliking, and competitor policies. Various
methods are available for idea generation like - Brain Storming, Delphi
Method, or Focus Group.
2. Idea Screening - The second step in the process of product development is
Idea Screening that is selecting the best idea among the ideas generated at
the first step. As the resources are limited, so all the ideas are not converted

to products. Most promising idea is kept for the next stage.

3. Concept Development - At this step the selected idea is moved into
development process. For the selected idea different product concepts are
developed. Out of several product concepts the most suitable concept is
selected and introduced to a focus group of customers to understand their
reaction. For example - in auto expos different concept cars are presented,
these models are not the actual product, they are just to describe the concept
say electric, hybrid, sport, fuel efficient, environment friendly, etc.
4. Market Strategy Development - At this step the market strategies are
developed to evaluate market size, product demand, growth potential, and
profit estimation for initial years. Further it includes launch of product,
selection of distribution channel, budgetary requirements, etc.
5. Business Analysis - At this step business analysis for the new product is
done. Business analysis includes - estimation of sales, frequency of
purchases, nature of business, production and distribution related costs and
expenses, and estimation of profit.

6. Product Development - At this step the concept moves to production of

finalised product. Decisions are taken from operational point of view whether

the product is technically and commercially feasible to produce. Here the

research and development department develop a physical product.

7. Test Marketing - Now the product is ready to be launched in market with

brand name, packaging, and pricing. Initially the product is launched in a test

market. Before full scale launching the product is exposed to a carefully

chosen sample of the population, called test market. If the product is found

acceptable in test market the product is ready to be launched in target

market.
8. Commertialisation - Here the product is launched across target market
with a proper market strategy and plan. This is called commercialisation
phase of product development.

New product development

In business , new product development (NPD) is the complete
process of bringing a new product to market.

New product development is described in the literature as the

transformation of a market opportunity into a product available for sale
and it can be tangible (that is, something physical you can touch) or
intangible (like a service, experience, or belief).

NEW PRODUCT PLANNING :

As a firm‘s offerings enter the maturity and decline stages of the product life cycle,
it must add new items to continue to prosper.

–Alternative Product Development Strategies :

IMPORTANCE OF NPD:

(i) To replace obsolete products;

(ii) To maintain and increase the growth rate/sales revenue of the firm;
(iii) To utilise spare capacity;
(iv) To employ surplus funds or borrowing capacity; and
(v) To diversify risks and face competition.

PROCESS : NEW PRODUCT DEVELOPMENT

Step 1: Generating
Utilizing basic internal and external SWOT analyses, as well as current
marketing
trends, one can distance themselves from the competition by generating
ideologies which take affordability, ROI, and widespread distribution costs
into account. Lean, mean and scalable are the key points to keep in mind.
During the NPD process, keep the system nimble and use flexible discretion over
which activities are executed. You may want to develop multiple versions of your
road map scaled to suit different types and risk levels of projects.
Step 2: Screening The Idea
Wichita, possessing more aviation industry than most other states, is seeing
many new innovations stop with Step 2 – screening. Do you go/no go? Set specific
criteria for ideas that should be continued or dropped. Stick to the agreed upon
criteria so early
poor projects can back to
be sent the on.
Because ―prescreening
Wichita, product product ideas,‖ means taking your Top 3 competitors‘
idea-hopper areas
new innovations into account, howcosts
development much market
are share they‘re chomping
like
up, what benefits end consumers being
could expect cut
etc. An interesting
in industry
fact: Aviation industrialists will often compare growth with metals markets; therefore,
when Boeing is idle, never assume that all airplanes are grounded, per se.

Step 3: Testing The Concept

As Gaurav Akrani has said, ―Concept testing is done after idea screening.‖ And

it is important to note, it is different from test

marketing. Aside from patent research, design due diligence, and other legalities

involved with new product development; knowing where the marketing messages

will work best is

often the biggest part of testing the concept. Does the consumer understand, need,

or want the product or service?

Step 4: Business Analytics

During the New Product Development process, build a system of metrics to monitor

progress. Include input metrics, such as average time in each stage, as well as

output metrics that measure the value of launched products, percentage of

new

product sales and other figures that provide valuable feedback. It is important for an

organization to be in agreement for these criteria and

metrics.

Even if an idea doesn‘t turn into product, keep it in the hopper because it can prove to

be a valuable asset for future products and a basis for learning and growth.

Step 5: Beta / Marketability Tests

Arranging private tests groups, launching beta versions, and then forming test
to generate a small amount of buzz. WordPress is becoming synonymous with
beta testing, and it‘s effective; Thousands of programmers contribute code,
millions test it, and finally even more download the completed end-product.

Step 6: Technicalities + Product Development

Provided the technical aspects can be perfected without alterations to post-beta
products, heading towards a smooth step 7 is imminent. According to Akrani, in this
step, ―The production department will make plans to produce the product. The
marketing department will make plans to distribute the product. The
finance department will provide the finance for introducing the new
product‖. As an example; In manufacturing, the process before sending
technical specs to machinery involves printing MSDS sheets, a requirement
for retaining an ISO 9001 certification (the organizational structure, procedures,
processes and resources needed to implement quality
management.) In internet jargon, honing the technicalities after beta
testing involves final database preparations, estimation of server resources, and
planning automated logistics. Be sure to have your technicalities in line when
moving forward.

Step 7: Commercialize

At this stage, your new product developments have gone mainstream,

consumers are purchasing your good or service, and technical support is consistently

monitoring progress. Keeping your distribution pipelines loaded with products is an

integral part of this process too, as one prefers not to give physical (or perpetual)

shelf space to competition. Refreshing advertisements during this stage will keep

your product‘s name firmly supplanted into the minds of those in the

contemplation stages of purchase.

Step 8: Post Launch Review and Perfect Pricing

Review the NPD process efficiency and look for continues improvements. Most

new products are introduced with introductory pricing, in which final prices are

nailed down after consumers have ‗gotten in‘. In this final stage, you‘ll gauge overall

value

relevant to COGS (cost of goods sold), making sure internal costs aren‘t

overshadowing new product profits. You continuously differentiate consumer

 physical, or digital, products are
- being perpetuated. at:
process-perfects-new-product-development/#[Link]
[Link]
See
7/8-step-
Step 1: Generating
more
Utilizing basic internal and external SWOT analyses, as well as current
marketing trends, one can distance themselves from the competition by
generating ideologies which take affordability, ROI, and widespread
distribution costs into account. Lean, mean and scalable are the key points to
keep in mind. During the NPD process, keep the system nimble and use flexible
discretion over which activities are executed. You may want to develop multiple
versions of your road map scaled to suit different types and risk levels of projects.

Step 2: Screening The Idea

Wichita, possessing more aviation industry than most other states, is seeing
many new innovations stop with Step 2 – screening. Do you go/no go? Set specific
criteria for ideas that should be continued or dropped. Stick to the agreed upon
criteria so
poor projects can back to early

be sent the on.

Because ―prescreening
Wichita, product product ideas,‖ means taking your Top 3 competitors‘
idea-hopper areas
new innovations into account, howcosts
development much market
are share they‘re chomping
like
up, what benefits end consumers being
could expect etc. An interesting industry
fact: Aviation industrialists will often compare growthcut
with metals markets;
in therefore,
when Boeing is idle, never assume that all airplanes are grounded, per se.

Step 3: Testing The Concept

As Gaurav Akrani has said, ―Concept testing is done after idea screening.‖ And
it is important to note, it is different from test
marketing. Aside from patent research, design due diligence, and other legalities
involved with new product development; knowing where the marketing messages
will work best is often the biggest part of testing the concept. Does the consumer
understand, need,
or want the product or service?
Step 4: Business Analytics

During the New Product Development process, build a system of metrics to monitor progress.

Include input metrics, such as average time in each stage, as well as output metrics

that measure the value of launched products, percentage of new product sales and other

figures that provide valuable feedback. It is important for an organization to be in

agreement for these criteria and metrics. Even if an idea doesn‘t turn into

product, keep it in the hopper because it can prove to be a valuable asset for future products

and a basis for learning and growth.

Step 5: Beta / Marketability Tests

Arranging private tests groups, launching beta versions, and then forming test panels

after the product or products have been tested will provide you with valuable information

allowing last minute improvements and tweaks. Not to mention helping to generate a

small amount of buzz. WordPress is becoming synonymous with beta testing, and it‘s

effective; Thousands of programmers contribute code, millions test it, and finally even

more download the completed end-product.

Step 6: Technicalities + Product Development

Provided the technical aspects can be perfected without alterations to post-beta
products, heading towards a smooth step 7 is imminent. According to Akrani, in this step,
―The production department will make plans to produce the product. The marketing
department will make plans to distribute the product. The finance department will
provide the finance for introducing the new product‖. As an example; In
manufacturing, the process before sending technical specs to machinery involves
printing MSDS sheets, a requirement for retaining an ISO 9001 certification (the
organizational structure, procedures, processes and resources needed to
implement quality management.) In internet jargon, honing the
technicalities after beta testing involves final database preparations, estimation of server
resources, and planning automated logistics. Be sure to have your technicalities in line
when moving forward.

Step 7: Commercialize

At this stage, your new product developments have gone mainstream, consumers are

purchasing your good or service, and technical support is consistently monitoring

progress. Keeping your distribution pipelines loaded with products is an integral part
of this process too, as one prefers not to give physical (or perpetual) shelf space to
competition. Refreshing advertisements during this stage will keep your
product‘s name firmly supplanted into the minds of those in the contemplation
stages of purchase.

Step 8: Post Launch Review and Perfect Pricing

Review the NPD process efficiency and look for continues improvements. Most

new products are introduced with introductory pricing, in which final prices are

nailed

down after consumers have ‗gotten in‘. In this final stage, you‘ll gauge overall value

relevant to COGS (cost of goods sold), making sure internal costs aren‘t

overshadowing new product profits. You continuously differentiate consumer

needs as your products age, forecast profits and improve delivery process
NPD PROCESS
whether physical STRUCTURE
or digital, products are being perpetuated.

The NPD process consists of a series of activities that firms employ in the
complex process of delivering new products to the market. Every new product will
pass through a series of stages from ideation through design, manufacturing and
market introduction. The development process basically has three main phases:

[Link] front-end (FFE) is the set of activities employed before the formal and
well defined NPD or stage-gate process.

[Link] design starts with the development of the new product and it ends at
pre-commercialization analysis stage.

[Link] back-end or commercialization phase represent the action steps where

the production and market launch occur.

NEW PRODUCT DEVELOPMENT

 :

Idea Generation

The first step in the new product development process is idea generation in which a
number of new ideas are searched. Following are some of important sources that are
used to obtain new ideas about the product.

∙ Internal sources (executives, engineers, etc.)

∙ Customers

∙ Suppliers

∙ Competitors

∙ Distributors

∙ Others

In the internal environment, the engineers, executives, salespersons and scientists

(etc.) are motivated to think of getting some new ideas. Communicating with
customers regarding complaints and market surveys are also helpful in the
accumulation of new ideas. In this step different ideas are searched only without
examining their practicability and profitability.
Idea Screening

In this step the accumulated ideas are analyzed in order to pick the best ideas while
dropping the bad ones. It is obvious that for every new idea of a product, certain
costs would definitely be incurred especially in the later steps. Also, it is not
appreciable to search a lot of ideas, but the good thing is that the searched ideas are
profitable one. So in this step the nominated committee evaluates all the searched
ideas on the following criteria to check their relative feasibility.

∙ Is the new product beneficial for the customers and society?

∙ Is it fruitful for the business itself?
∙ Or is it in accordance with the objectives and mission of business?
∙ Does the business possess the required skill employees and technology for
manufacturing it? etc..

Concept Development and Testing

When a business organization selects a potential idea, it converts it into a product

concept to test the feasibility.

A product idea is simply an idea that seems practical to be converted into actual
products.

The product concept is the version of that idea in some practical details. The product

image is the position of the product in the minds of customers.

So the business develops its concept of product and tests its profitability by
conducting surveys in the market. Main concept or rough picture of the new product
is shared with the customers to check its practicability. The detailed physical
presentation of the new product can increase its reliability.
Marketing Strategy

When the product concept of any product ideas is effectively tested, then
a marketing strategy is prepared for it. This marketing strategy contains a
statement divided into three parts.

The first part includes target market, sales, market share, market positioning, and
profit goals for the coming few years. The second part includes strategy about
planned price, budget for the first year and distribution of the new product.

The third part describes estimated sales in the long run along with the profit and the
strategy of the marketing mix.

Business Analysis

When the product concept is passed along with its marketing strategy, the business
analysis is conducted in the overall attractiveness of the proposal. It analyzes the
costs, sales and projected profits of the new product in order to check its feasibility
with the organization‘s objectives. When the new product is passed in this step, it
enters into the stage of product development.

Product Development

Before the product development step of a new product development process, the
product is only in a crude form of concept, picture or words. But in this step the
business takes a big jump of investment and its Research and Development team
starts converting the words or picture into physical reality. For this purpose a sample
prototype is prepared that contains the main features of the product to further check
the practicability in its functions.

Test Marketing

When the sample product passes the functional tests, its test marketing is started, in
which it is marketed to the customers to check its further practical potential before
manufacturing in large scale. For this purpose the business develops a proper
marketing program that takes into account all the practical elements of marketing
mix like pricing, advertising, distribution, budget, Branding and Packaging.

Commercialization

This is the last step of the new product development process in which the new
product is manufactured and offered on a large scale for profit purpose. It is also
important as the business has to incur the high cost and faces real challenges, like
when to launch the new product and where it should be launched? etc.

Product Life cycle Management

A product life cycle is the length of time from a product first being
introduced to consumers until it is removed from the market. A product’s
life cycle is usually broken down into four stages; introduction, growth,
maturity, and decline.

Importance of product life cycle in business includes various points to

determine the marketing strategies related to the particular product. The Importance
are:-

1. It works as a forecasting tool,

2. It works as a planning tool,

2. It works as a control tool,

2. It provides for marketing programs,

2. It provides an estimate for profits,

2. It helps in the development of new products.

Stages of the Product Life Cycle

The four major product life cycle are as
stages of follo
the ws:-

1. Introduction,
2. Growth,
3. Maturity, and
4. Decline.

Introduction Stage
At this stage, the product is new to the market and few potential
customers are aware of the existence of the product. The price is generally
high. The sales of the product are low or may be restricted to early
adopters. Profits are often low or losses are being made, this is because of
the high advertising cost and repayment of developmental cost.
At the introductory stage:-

o The product is unknown,

o The price is generally high,
o The placement is selective, and
o The promotion is informative and personalized.

Growth Stage
At this stage, the product is becoming more widely known and accepted in
the
market. Marketing is done to strengthen the brand and develop an image
for the product. Prices may start to fall as competitors enter the market.
With the increase in sales, profit may start to be earned, but advertising
cost remains high. At the
growth stage:-

o The product is more widely known and consumed,

o The sales volume increases,
o The price began to decline with the entry of new players,
o The placement becomes more widely spread, and
o The promotion is focused on brand development and product image
formation.

Maturity Stage
At this stage, the product is competing with alternatives. Sales and profits are
at their peak. Product range may be extended, by adding both withe and
depth. With the increases in competition, the price reaches its lowest point.
Advertising is done

to reinforce the product image in the consumer's minds to

increase purchases. At maturity Stage:

o The product is competing with alternatives,

o The sales are at their peak,

o The prices reach to its lowest point,
o The placement is intense, and
o The promotion is focused on repeat purchasing.

Decline Stage
At this stage, sales start to fall fast as a result product range is reduced. The product
faces reduced competition as many players have left the market and it is
expected that no new competitor will enter the market. Advertising cost is
also reduced. Concentration is on remaining market niches as some price
stability is expected there. Each product sold could be profitable as
developmental costs have been paid at an earlier stage. With the reduction in sales
volume, overall profit will also reduce.
At decline stage:-
o The product faces reduced competition,
o The sales volume reduces,
o The price is likely to fall,
o The placement is selective, and
o The promotion is focused on
reminding.
PRODUCT DECISIONS
Product related decisions form one of the 4Ps of marketing mix. These decisions include
introduction of new products, Improvement of existing products, planned elimination of
obsolete products and, packaging and branding.

According to Philip Kotler ―A product is anything tangible or intangible that can be

offered to a market for attention, acquisition use or consumption that might satisfy
a need or want‖.

Product Decisions are vital marketing decisions to be made at various levels. These
decisions broadly cover:

∙ New Product Development

∙ Modification or Elimination of existing ones
∙ Variants and Visual elements
∙ Product Mix and Line, etc.

Levels of product

[Link] or Generic Product: It is the raw product that satisfies the customer‘s
primary need. The core product is at its raw form, not bearing any brand name
and remains undifferentiated.

For example: – Wheat is a grain that one can consume.

[Link] Product: The core products differentiated from the rest become the basic
product. It adds some necessary features to the products like Brand Name,
Packaging and Label, etc.

For example: – Fortune Chakki Fresh Atta (wheat flour).

[Link] Product: These products include the key features that customers look
forward to. It also contains standard features that a product should have.

For example: – Chapati is prepared from wheat flour.

[Link] Product: To differentiate products from competitors, companies add
distinctive features to them. These additions depend on the market survey
conducted for the product. They try to create a Unique Selling Proposition (USP) for their
products. For example -Brown Bread and Cookies.
[Link] Product: It refers to all the possible features that a product can have in the
future. These features depend on the market conditions and economic changes.

5 levels of product

Product Classifications

Generally products are classified into two types, on the basis of three
characteristics: durability,

tangibility, and consumer or industrial use, namely

[Link] Products and

[Link] Products.
Consumer convenience goods ∙ usually purchased
goods frequently, immediately, and with a
minimum of effort
i)
∙ Ex. newspapers;
B shopping goods
∙ the customer, in the process
ased
of selection and
o
purchase, characteristically
n shopping
compares on the basis of
Efforts
suitability, quality, price, and style

∙ Ex. furniture
specialty goods ∙ unique characteristics or
brand identification. buyers are
willing to make a special purchasing
effort.

∙ Ex. Cars
unsought goods ∙ consumers do not know about or
do not normally think of buying

∙ [Link] detectors.
ii) Durable ∙ tangible goods
D
urability
and ∙ survive many uses
Tangibilit
y (such as refrigerators).
∙ require more personal selling and
service,

∙ command a higher margin, and

∙ require more seller guarantees.
∙ Services are intangible, inseparable,
variable, and perishable products (such as
haircuts or cell phone service),

∙ require more quality control, supplier

credibility, and adaptability.

Non durable ∙ tangible goods

∙ normally consumed in one or a few uses

(such as soap).

∙ consumed quickly and

purchased
frequently
∙ availability in many locations,
∙ charge only a small markup, and
∙ advertise heavily to induce trial and build
preference.
Industri Materials and parts ∙ Raw materials , farm products,

al goods natural products

Manufactured materials ∙ component materials (iron)
and parts ∙ component parts (small motors);

∙ price and supplier reliability

are important
Capital items ∙ are long-lasting goods
∙ facilitate developing or managing the
 finished product.
∙ include two
groups: installations
(such as factories) and
equipment (such as trucks and
computers),

∙ sold through personal selling.

∙
∙

Supplies and business are short-lasting goods and services

services that facilitate developing or managing
the finished product.
PRODUCT MIX

A product mix (also called product assortment) is the set of all products and items
that a particular marketer offers for sale.

PRODUCT MIX OF COCA COLA

The product mix of an individual company can be described in terms of width,

length, depth, and consistency.

∙ The width refers to how many different product lines the company carries.
∙ The length refers to the total number of items in the mix.
∙ The depth of a product mix refers to how many variants of each product
are offered.

∙ The consistency of the product mix refers to how closely related the various

product lines

are in end use, production requirements, distribution channels, or some other

way.

These four product-mix dimensions permit the company to expand its business
by (1) adding new product lines, thus widening its product mix; (2) lengthening
each product line; (3) deepening the product mix by adding more variants;
and (4) pursuing more product-line consistency.

Product line

This refers to a range of closely-related products belonging to the same class. They
are sold to the same customers, having identical attributes marketed by the same
distribution channel but for different segments. The product decision relating to a
product line are:
1. Line Stretching: Companies seeking high market share and market growth will
carry longer lines. Ex: Toyota launched Lexus; Nissan launched Infinity; and
Honda launched Acura.
2. Line Filling: the business strategy where the firm plans to increase
the number of products in the existing product line.
Managers must periodically review the entire product line for pruning, identifying weak
items through sales and cost analysis. They may also prune when the company is short of
production capacity or demand is slow.

BRANDING, PACKAGING, AND LABELLING IN MARKETING

Introduction

There are millions of products and services all over the world, each claims to be
the best among their category. But, every product is not equally popular. Consumer
doesn't remember every product, only few products are remembered by their
name, logo, or slogan. Such products generate desired emotions in the mind
of consumer. It is branding that makes product popular and known in the market;
branding is not an activity that can be done overnight, it might takes months and
even years to create a loyal and reputed brand.

Branding gives personality to a product; packaging and labelling put a face on the
product. Effective packaging and labelling work as selling tools that help marketer
sell the product.
Today in this post we'll learn - meaning of branding, types of brand, strategies of
branding, meaning of packaging and labelling, and importance of packaging
and labelling.

Definition of Branding
According to American Marketing Association - Brand is ―A name, term, design,
symbol, or any other feature that identifies one seller‘s good or service as distinct from
those of other sellers. The legal term for brand is trademark. A brand may identify one
item, a family of items, or all items of that seller. If used for the firm as a whole,
the preferred term is trade name.‖

According to Philip Kotler - ―Brand is a name, term, sign, symbol, design, or

a combination of them, intended to identify the goods or services of one seller or
group of sellers and to differentiate them from those of competitors‖

Branding is ―a seller‘s promise to deliver a specific set of features, benefits and

services consistent to the buyers.‖

Meaning of Branding
Branding is a process of creating a unique name and image for a product in the mind of
consumer, mainly through advertising campaigns. A brand is a name, term, symbol,
design or combination of these elements, used to identify a product, a family of
products, or all products of an organisation.

Branding is an important component of product planning process and an important and

powerful tool for marketing and selling products.
Elements of Branding
Brand includes various elements like - brand names, trade names, brand marks,
trade marks, and trade characters. The combination of these elements form a firm's
corporate symbol or name.

oBrand Name - It is also called Product Brand. It can be a word, a group of

words, letters, or numbers to represent a product or service. For example - Pepsi,

iPhone 5, and etc.
oTrade Name - It is also called Corporate Brand. It identifies and promotes a

company or a division of a particular corporation. For example - Dell, Nike, Google,

and etc.

o Brand Mark - It is a unique symbol, colouring, lettering, or other

design element. It is visually recognisable, not necessary to be
pronounced. For example - Apple's apple, or Coca-cola's cursive typeface.

o Trade Mark - It is a word, name, symbol, or combination of these

elements. Trade mark is legally protected by government. For example - NBC
colourful peacock, or McDonald's golden arches. No other organisation can
use these symbols.
 o Trade Characters - Animal, people, animated characters, objects, and the
like that are used to advertise a product or service, that come to be associated
with that product or service. For example - Keebler Elves for Keebler cookies
, Amul Butter

Branding Strategies
There are various branding strategies on which marketing organisations rely to
meet sales and marketing objectives. Some of these strategies are as following :-

oBrand Extension - According to this strategy, an existing brand name is used to

promote a new or an improved product in an organisation's product line. Marketing

organisations uses this strategy to minimise the cost of launching a new product and
the risk of failure of new product. There is risk of brand diluting if a product line is over
extended.
oBrand Licensing - According to this strategy, some organisations allow other

organisations to use their brand name, trade name, or trade character. Such
authorisation is a legal licensing agreement for which the licensing organisation
receives royalty in return for the authorisation. Organisations follow this strategy
to increase revenue sources, enhance organisation image, and sell more of their core
products.
oMixed Branding - This strategy is used by some manufacturers and retailers to sell

products. A manufacturer of a national brand can make a product for sale under
another company's brand. Like this a business can maintain brand loyalty through
its national brand and increase its product mix through private brands. It
 can increase its profits by selling private brands without affecting the
reputation and sales of its national brand.
o Co-Branding - According to this strategy one or more brands are
combined in the manufacture of a product or in the delivery of a service to
capitalise on other companies' products and services to reach new customers and
increase sales for both companies' brands.

What Is Packaging?

Packaging is the act of enclosing or protecting the product using a

container to aid its distribution, identification, storage, promotion, and usage.

In simple terms, packaging refers to designing and developing the wrapping

material or container around a product that helps to

∙ Identify and differentiate the product in the market,

∙ Transport and distribute the product,

∙ Store the product,

∙ Promote the product,

∙ Use the product properly.

Importance Of Packaging

As an essential marketing subset, packaging forms the core distribution,

storage, and sales tool that can be a part of the product itself or an external
container made of varied materials.

Packaging is an essential element both for the seller and the customer. While the
seller use it as a tool to distribute, store, and promote; the customer uses it
as an important identification and usage tool.
Importance Of Packaging For The Seller

∙ Distribution: Good packaging makes it possible for the seller to transport the

product from the manufacturing unit to the final selling point and then to the
customer. The seller uses different packaging for the same – transport packaging to
transport the products and consumer packaging to aid the consumer in consuming
the product.
∙ Storage: Warehousing comes with its own risks of product spoilage, spillage,
and mishandling. Proper packaging helps the seller store and assort the products better.
∙ Promotion: Packaging forms a vital marketing element that the brand uses to

differentiate the product using attractive, colourful, and visually appealing

packages and inform the buyer about the product‘s performance, features, and
benefits.
∙ Safety: Good packaging aids in product safety before it reaches the final
consumer. For example, a Tetra Pak prevents the milk from getting spoilt before its expiry
date.

Importance Of Packaging For The Buyer

∙ Identification: Packaging and labelling help the customers identify the product and

differentiate it from other products in the market.

∙ Usage: Often, packaging, like that of a toothpaste, that forms a part of the

product aids in its usage and consumption.

∙ Safety: It also protects the consumer from the dangers that the product comes with. For

example, an acid bottle protects the user from getting acid burns.

Functions Of Packaging

Packaging plays a crucial role from the time a product is developed to the time a
product is fully consumed. These functions of packaging include:
1. Contains the product: Most products need to be contained either
during transportation, storage, or consumption. Packaging makes sure the
product is contained as and when required.
2. Protects the product: Packaging protects the product and its quality, features,
utility, etc. from being damaged or contaminated during transportation, storage,
and consumption.
3. Aids product handling and usage: Proper packaging aids product
handling and makes it easy to transport, ship, and even use the product.
4. Differentiates the product and makes it stand out: Packaging makes it
easier for the customer to identify and differentiate it from other products.
Moreover, attractive packages have a property to stand out and attract
customers towards it.
5. Forms a part of product marketing strategy: An attractive
and/or informative package makes the product stand out and have a
promotional appeal. Packaging also acts as the final touchpoint that
helps in product promotion and sale.
6. Provides customer convenience: Packaging is also a convenience tool
that makes it convenient for the customer to carry, transport, and use the
product.
7. Acts as a communication medium: Packaging along with labelling
helps communicate the brand identity, brand message, and product and
company information to the customer.
8. Adds to the aesthetic value: Packaging can make a simple product look
attractive or a unique product look ordinary. It‘s an important aesthetic
touchpoint that can make or break a sale.

Types Of Packaging

Usually, packaging can be categorised into three types depending upon its
usage and purpose. These types are:
Primary Packaging

Primary packaging, also referred to as consumer packaging, is in direct contact with the
product and is intended for the customer to identify, gain product knowledge, and
to aid product consumption.

It‘s the base packaging that emphasises both utility and appearance.

It is the primary layer like the plastic pouch, cardboard box, etc. containing the finished
product, that protects and preserves the finished product from contamination and
tampering, while including aesthetic elements that make the product stand out.

Besides aiding identification, differentiation, and consumption, primary packaging

also acts as a promotional tool to attract more customers at the point of sale by making
the product look more appealing.

Some examples of primary packaging are:

∙ Laminated pouches for dry fruits

∙ Plastic containers for fruits

∙ Tin cans for soft drinks

∙ Laminated tubes for beauty products

∙ Composite cans for chips

Often, removing the primary packaging of a product affects the product‘s quality or
attribute.

Secondary Packaging

Secondary packaging forms the second packaging layer that the customers
don‘t usually see. Its main use is to group and hold together individual units of the product
to deliver large quantities of that product to the point of sale.

It collates smaller product units into a single pack and aids in inventory
management (grouping and identification) before the product is showcased to the
customer.

Some examples of secondary packaging are:

∙ Plastic ring that holds soda cans together, and

∙ Cardboard box containing multiple individual boxes of cereal, etc. Removing secondary

packaging doesn‘t affect the product‘s quality or attributes.

Tertiary Packaging

Tertiary packaging, also referred to as bulk or transit packaging, is used to group

a large quantity of a particular product to transport it from point A to B.

The main objective of this packaging is to make it easier to transport heavy loads
or large quantities of a product easily and securely, while facilitating easy storage
and handling.

Some examples of tertiary packaging are:

∙ Wooden pallets used in freight shipping

∙ A stretch-wrapped pallet containing a large quantity of secondary packaged goods.
Packaging Advantages

Packaging comes with its own set of advantages. These are:

∙ It protects the product from any physical harm and damage.

∙ It helps increasing sales as it adds to the aesthetic value of the product.

∙ It keeps the product hygiene by preventing adulteration and hampering.

∙ Some specialised packaging also prevents the products from going bad.

Packaging Disadvantages

While packaging forms an important element of a product, it comes with its own
disadvantages. These are:

∙ Packaging can be deceptive and may trick the customer into getting a wrong

perception of the product.

∙ It adds to the cost. Packaging can add to the cost of the product, which the

customer eventually bears.

∙ It adds to the waste that can turn hazardous, especially if it is plastic.
What Constitutes a Product?

Core :

To understand and appreciate a product, we need to perceive it as a fourlayer item. At

the heart of it is the ‗core‘ or ‗generic‘ part. As Levitt puts it, this is the table stakes of
business, or what is needed to play the game of market participation. For a refrigerator
manufacturer, it is the compressor, steel, freon gas, condenser, and various other
electrical or electronic components that need to be assembled. To a five star hotel
management, it is the number of rooms, restaurants, and swimming pools. To an
airlines operator, it is the aircraft.

Formal Product and Augmented Product :

To differentiate its product from all others, the firm names it (branding), packs it, puts
additional features—like laminated top, a stand, or a water tap on the door of the
refrigerator—uses colours and aesthetics to give a distinctive appeal. This makes a ‗core‘
product a ‗formal product‘ or the expectant product

Product Mix One of the realities of business, is that most firms deal with multiple
products. This helps a firm diffuse its risks across different product groups. Also, it
enables the firm to appeal to a much larger group of customers or to different needs of
the same customer group. So when a company, like Samsung entered India with a
diversified product portfolio consisting of television, music systems, washing machines,
refrigerators, microwave ovens and cellphones, it sought to satisfy the aspirations of the
middle and upper middle income group of consumers.
Product Line:
This consists of different products that are closely related to each other, by virtue of satisfying a
particular class of needs, being used together, being distributed through the same channels, or
possessing common physical or technical characteristics. In other words, a product line refers to a
group of products clubbed together, because they have one of the above described characteristics,
in common. The number of product lines carried by a firm at a given point of time is a function of its
resources and competitive position. In many cases, a firm may start as a single product line
company, emerge a winner, ‗harvest the crop‘, and then add other product lines. Nirma, T-Series,
Reliance, and many other new generation entrepreneurs have followed this route. Associated with
product mix are issues like breadth, depth, and consistency. Breadth in product mix refers to the
number of product lines marketed by a firm. Depth refers to the number of product items and
variations (like size, packaging, colours, etc.) offered in each product line. Consistency in product
mix is the degree of similarity between product lines with respect to end use, technology,
production techniques, and distribution channels. This element of consistency is based on the firm‘s
long term objectives, its competitive position in the industry, strengths, and resource position. Some
firms prefer diversity and hence inconsistency is visible in their product mix. An example of this is
the engineering giant Larsen and Toubro (L&T), which has diversified into cement and medical
diagnostics. Likewise, ITC Ltd diversified into hotels, vegetable oils, exports (sea food), financial
services, agro tech, and retail and now in ebusiness. Some firms, on the other hand, have product
lines that are consistent with their main business.
Product Mix Decisions The dynamic market conditions require firms to evaluate the product mix
periodically. The demographic and lifestyle changes in the market are one such factor that
influences the product mix decisions. The fact that Indian market is primarily a young market today
many firms have modified their product mix to include the product that best respond to this market.
Titan is one such example which introduced the range of products under the brand name Fastrack.
As mentioned earlier, the Fastrack is a bouquet of product that includes Sunglasses, spectacle
frames, bags, watches and all the other accessories for the youth market. Titan also launched
watches for the child market. Women lifestyle changes seem to have influenced Titan‘s Raga series
of watches as also that of 18K gold watches under the brand name `Nebula‘. The manner in which
the product is used as also the situation in which the customer uses the product can influence
product modification decisions.
 9. ASSIGNMENT : UNIT – II

1. Case study of any product how it is segmented and how it is positioned in

the market

2. Explain any concern and discuss how the Market STP is been
implemented.

67
 10. PART A : UNIT – II

SNo Questions and Answers CO K

1
What do you mean by STP model of marketing?
2
Define marketing segmentation. Give an example.
K1
3
Define target marketing. Give an example.

4
Define product positioning.

What do you mean by STP model of marketing?

5 K1
Define marketing segmentation. Give an example.

6
Define target marketing. Give an example.
7
Define product positioning.
8
Why product development is considered as lifeblood of
K1
any business unit?
9 CO2
Market segmentation helps decision-makers to more
accurately define marketing objectives and better
K1
allocate resources. Justify.
10
How does PLC facilitate devising a marketing strategy?
11
Distinguish between micromarketing and niche K1
marketing.
K1
List down the criteria for market segmentation.
13 CO2 K2
Maruti Suzuki India positions all its 16 brands in almost
as many ways to serve different wants and desires of
consumers. What is the name of the market
segmentation strategy followed?
14 CO2 K2
What is meant by differentiated marketing strategy? Give
an example.
15 CO2 K1
Mention the stage of PLC of the following products:
Television, VCR, AI products, E-Vehicles.
68
16 CO2 K1
What do you mean by perceptual mapping?
 10. PART A : UNIT – II

17 CO2 K2
Perceptual mapping – a powerful tool for product
positioning? Comment.
18 CO2 K1
Why would product positioning strategies fail?
19 CO2 K2
Distinguish between product motive and consumer
patronage motive.
20 CO2 K1
What is segmentation and targeting?
21 CO2 K1
Write about product mix?
22 CO2 K2
List out advantageous and disadvantageous of new
product
23 CO2 K2
PLC as a tool for marketing strategy?
 11. PART B & C : UNIT – II

SNo Questions and Answers CO K

1
Neinor Homes, a residential development company in Spain, was
having trouble with their sales in one of their development areas in K3
Las Rozas, Madrid – in which they have lots of competitors in the
real estate market.
So, LOVE SEES IT, a branding agency certified by Sortlist, came up
with the proposal to launch a brand positioning project that tugs at
the heartstrings of the people who live in Madrid – position the
brand in a wider scope to reach more audiences.
Their branding campaign is called ―AdiósPrincesa‖ (Goodbye
Princess) which helped their target audience, who have grown so
accustomed to their current neighbourhood, bid goodbye to their
childhood streets and favourite squares; their past – positioning the
brand in a way that appeals to the bittersweet sensation of leaving
a familiar place.
CO
The branding campaign was able to convey that the brand
2
understands how challenging it can be to leave a place full of
pleasant memories, but it‘s good to embrace changes, especially if
it‘s about leading a better life, such as relocating to an even better
place – emphasising the quality brought by the product.
As the video gets widely shared by their target market – organically
– they also directed them to a landing page where clients can
choose to receive a customised farewell letter that they can use to
create their own goodbye to their neighbourhood – helping buyers
add a personal touch as they embark on their new journey.
(i) What was the product positioning strategy used in the case?
(ii) What are the unique features of the strategy used by LOVE
SEES IT?
(iii) According to you, what is the result of the strategy?
2 CO K2
Choose a product of your choice, and explain the life cycle stages of
2
the same. Also explain the STP strategy for the same. 70
 11. PART B & C : UNIT – II

3 Illustrate demographic segmentation with suitable examples. CO K2

2
4 • Describe the four distinct stages of product life cycle and CO K2
illustrate appropriate 2
• marketing strategies during each stage
5
Explain different sources of product ideas with case examples CO K2
2
6
Explain in detail segmentation, targeting and positioning in CO K2
marketing. 2
7
Explain different sources of new product ideas CO K2
2
8
How do you enumerate the marketing strategies for different CO K2
stages of product life cycle? 2

71
 12. Supportive online Certification courses

NPTEL: [Link]
Swayam:[Link]
coursera : [Link]

72 53
 13. REAL TIME APPLICATIONS – CASE STUDY :
UNIT – II

• Neinor Homes, a residential development company in Spain, was having trouble with
their sales in one of their development areas in Las Rozas, Madrid – in which they have
lots of competitors in the real estate market.

• So, LOVE SEES IT, a branding agency certified by Sortlist, came up with the proposal to
launch a brand positioning project that tugs at the heartstrings of the people who live in
Madrid – position the brand in a wider scope to reach more audiences.

• Their branding campaign is called ―Adiós Princesa‖ (Goodbye Princess) which helped
their target audience, who have grown so accustomed to their current neighbourhood,
bid goodbye to their childhood streets and favourite squares; their past – positioning the
brand in a way that appeals to the bittersweet sensation of leaving a familiar place.

• The branding campaign was able to convey that the brand understands how challenging
it can be to leave a place full of pleasant memories, but it‘s good to embrace changes,
especially if it‘s about leading a better life, such as relocating to an even better place –
emphasising the quality brought by the product.

• As the video gets widely shared by their target market – organically – they also directed
them to a landing page where clients can choose to receive a customised farewell letter
that they can use to create their own goodbye to their neighbourhood – helping buyers
add a personal touch as they embark on their new journey.

•
• What was the product positioning strategy used in the case?

• What are the unique features of the strategy used by LOVE SEES IT?

• According to you, what is the result of the strategy?

 13. REAL TIME APPLICATIONS – CASE STUDY :
UNIT – II

• Read the case carefully and answer the following questions.

• P & G has 9 different brands of washing powder for different segments.

• 1. Tide is 'so powerful, it cleans down to the fibre'. It's the all-purpose family detergent for extra-
tough laundry jobs.

• 2. Cheer with Colour Guard gives 'outstanding cleaning and colour protection. 3. Oxydol contains
bleach. It 'makes your white clothes really white and your coloured clothes really bright.

• 4. Gain, originally P & G's 'enzyme' detergent, was repositioned as the detergent that gives you
clean, fresh-smelling clothes - it 'freshens like sunshine'.

• 5. Bold is the detergent with fabric softener. It 'cleans, softens and controls static'. Bold liquid adds
'the fresh fabrie softener scent*.

• 6. Ivory Snow is 'Ninety-nine and forty-four one hundred ths percentages pure'. It's the 'mild,
gentle soap for diapers and baby clothes'.

• 7. Dreft is also formulated for baby's nappies and clothes. It contains borax, 'nature's natural
sweetener' for 'a clean you can trust'.

• 8. Dash is P & G's value entry. It 'attacks tough dirt', but 'Dash does it for a great low price'.

• 9. Era Plus has 'built-in stain removers'. It 'gets tough stains out and does a great job on your
whole wash too'.

• By segmenting the market and having several detergent brands, P & G has an attractive offering
for customers in all import suit preference groups. All its brands combined hold a market share
much greater than any single brand could obtain.

• 1. Why does P & G spread its marketing effort across so many brands rather than concentrating
on one ?

• 2. When a company like P & G has so many brands, many of them often do not make money. That
being the case, why do you think it keeps the loss-making brands?

• 3. If you were in competition with P & G, would you match it brand for brand, concentrate on
fewer segments or try to find new ones?

• 5. Suggest alternative segments for P & G to enter and suggest how the

• brands for Chat segment should be promoted.

 14. CONTENT BEYOND SYLLABUS : UNIT – II

Tools for Estimating FUTURE MARKET DEMAND

• There are two kinds of tools that one can use to estimate market demand.
One, the qualitative (mainly surveys) and the other, quantitative.

• Let us examine these tools in greater detail.

• Qualitative Tools Qualitative tools involve opinion surveys. Some of the more
prominently used ones are described as follows: Survey of Buying Intention
This involves surveying the buyers, to assess their intentions to buy the
product. This is very useful in estimating the market demand for consumer
durables or even a new product. This method, could also be used to measure
the demand for a product, at a different level of the marketing effort. For
example, change in price and its effect on consumer demand can be studied
through this method. The purchase intention of the buyer can be measured
on a seven-point scale from a ‗definitely buy‘ to a ‗definitely not buy‘. The
response so obtained, constitutes purchase probability for a given product
and hence an index of purchase probability can be made. This method is also
suitable in industrial marketing. Composite of Sales Force Opinion In this
method, the company asks individual sales personnel to estimate sales of the
given product, in his or her territory. These estimates, are then pooled and a
national level forecast of sales is obtained. Very few companies use this tool
as, most often, sales people are believed to underestimate sales in their
territories. The reason is that they would like to show a positive variance of
sales against targets to their top management. It is for this reason, that not
many companies rely on sales force opinion polls. Delphi Technique This
involves constituting a panel of experts and asking them to estimate the
market demand for a given product. They are also asked to mention their
assumption, about the future market environment. Individual experts do not
know who else is on the panel.
 14. CONTENT BEYOND SYLLABUS : UNIT – II

• Since each expert works from his or her office, the chances of him or her
getting influenced by others, does not arise. Once the marketer gets the
estimates, he or she isolates extreme opinions and estimates and reverts
back to the concerned expert, giving them the assumptions, which others
have made. However, the marketer does not reveal the estimate of the other
experts. The objective of sending back extreme opinions is to get a
consensus. But should the extreme opinion holders, choose not to revise their
opinions, the marketer will have to leave it at that. This method can study
different scenarios and is particularly useful in estimating demand for a new
product or technology. A variant of the Delphi technique is the expert opinion
poll in which a firm may interview experts in its industry. These experts could
be dealers, large buyers, marketing consultants, and trade associations.
These polls too, have the same limitations, as that of the consumer survey.
Nevertheless, these polls are commonly used by many firms, for estimating
market demand and the company‘s market share.

• Quantitative Techniques The quantitative techniques could further be

categorised as:

• (a) tools for short-term forecasting

• (b) tools for long-term forecasting

Short-term Forecasting The short term forecast refers to all forecasts, upto a
period of one year. Most often sales managers are interested in this forecast.
Tools commonly used here, are clubbed as extrapolation techniques.
Examples of these, are exponential smoothing, time series decomposition,
and several other models.
 14. CONTENT BEYOND SYLLABUS : UNIT – II

• The most common is the exponential smoothing technique which is a type of

moving average that represents a weighted sum of all past numbers in the
time series, with the heaviest weight placed on the most recent information.
This method involves estimating the value of the ‗smoothing constant‘
(usually designated by the symbol a) and then using it to ‗smooth‘ the raw
sales data. The assumption in this method is that actual sales is a function of
environmental factors and the method helps to ‗smooth‘ out these factors.
The exponential smoothing method can be represented symbolically as St = a
Xt + (1 – a) St – 1 where St refers to smoothed sales in period t a is
smoothing constant with a value between 0 and 1 Xt is actual sales in period t
St – 1 is smoothed sales in period t – 1 A major challenge is that of
estimating the a value. In fact, the problem of assigning a value to a creates
a limitation in the usage of this method. A general principle used here, is that
if the time series changes very slowly, the value of a could be small to keep
the effect of earlier observations. But if the changes are rapid, the a value will
have to be high, to give forecasts responsive to these market changes. In
reality, the value of a is estimated, by trying several values and making
retrospective tests of the associated error function. The a value leading to the
smallest error, is then chosen for future smoothing.

• Long-term Forecasting Long term forecast refers to forecasts for a period of

three years or more.

• The methods used are

• (a) Time Series Analysis

• (b) Correlation

• (c) Econometric models

 14. CONTENT BEYOND SYLLABUS : UNIT – II

• From among these, Time Series Analysis and Correlation are of interest to
decision makers. Time Series Analysis Most firms have their own industry and
sales data from previous years. Decomposing this time series and then
estimating sales for the next time period is called time series analysis. To use
this method, the marketer should have the time series for the past ten years.
Two approaches to decomposing time series, are the additive and
multiplicative approaches. The sales over a time period is a function of trend,
cyclicality, seasonality, and erratic factors. A common functional form
expressing it is: O = T ¥ C ¥ S ¥ I where O refers to observed sales T is trend
component C is cyclical component S is seasonality component I is irregular
or erratic factor In the additive approach, sales is seen as the aggregate
effect of all these variables and is symbolically depicted as O = T + C + S + I
Correlation Method It is commonly believed that sale of a product is a
function of several variables like price, advertising expenditure, distribution
expenditure, personal disposable income, and so on. This relationship is
reflected by the following equation: Y = f (X1, X2, X3, …, Xn) where Y is the
sales in volume or monetary terms X1, X2, X3, …, Xn are independent
demand variables. This method is increasingly being used today. However, a
marketer needs to be wary of problems like too few observations, too much
correlation among independent variables, violation of normal distribution
assumptions, two-way causations, and the emergence of new variables, not
accounted for. Today, with the increasing use of computers, one can achieve
a higher level of sophistication in demand estimation. But, one has to
consider the cost and value of such an estimation in actual decision making.
This is where the probability theory helps the marketer.
 15. ASSESSMENT SCHEDULE

• Tentative schedule for the Assessment

Name of the
[Link] Start Date End Date Portion
Assessment

1 IAT 1 12.02.24 to 12.02.24 to UNIT 1 & 2

17.02.2024 17.02.2024
2 IAT 2 01.04.2024 to 01.04.2024 to UNIT 3 & 4
06.04.24 06.04.24
3 Model 20.04.202 to 20.04.202 to ALL 5 UNITS
30.04.24 30.04.24

79
16. PRESCRIBED TEXT BOOKS & REFERENCE BOOKS

TEXT BOOKS:
Marketing Management (Analysis, Planning, Implementation &
Control) – Philip Kotler
Fundamentals of Marketing – William J. Stanton & Others
Marketing Management – V.S. Ramaswamy and S. Namakumari
Marketing Research – Rajendra Nargundkar
Market Research – G.C. Beri
Market Research, Concepts, & Cases – Cooper Schindler

REFERENCES:
Marketing Management – Rajan Saxena
Marketing Management – S.A. Sherlekar
Service Marketing – S.M. Zha
Journals – The IUP Journal of Marketing Management, Harvard
Business Review
Research for Marketing Decisions by Paul Green, Donald, Tull
Business Statistics, A First Course, David M Levine at al, Pearson
Publication
 17. MINI PROJECT SUGGESTION

Choose a product and perform analysis using AI techniques and

show the result of the prediction of that product life cycle compared
with any other product.

81
 Thank you

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