Marketing Management

Module IV
 What is Market
A Market is a :
• Social arrangement
• It allows buyers and sellers to
discover information
• on the basis of need’s and
Wants
• and carry out a voluntary
exchange of goods or services.
 Introduction of Marketing

Marketing deals with identifying and meeting

human and social needs. One of the shortest

definition of marketing is “Meeting needs

profitably”.
 Marketing is an organizational function and
set of processes for creating, communicating
and delivering value to customer and for
managing customer relationship in ways that
benefit the organizational and its stakeholder.
(American Marketing Association )
 Importance of Marketing
Marketing is an important component of
businesses. It satisfies human needs and
wants and also serves as an instrument for
economic growth and social welfare.
1. Satisfies human wants
2. Generate Employment
3. Improve standard of living
4. Introduction of new products
5. Achieves objectives
6. Widen markets
7. Facilitates specialization and division of labor
8. Economic growth
• Satisfies human wants :- It identifies unfulfilled human
needs, convert them into business opportunities and as it
involves in production and distribution process.
• Generates Employment :- Marketing involves in various
functions like production, distribution, promotion etc. Thus
people gets work for their hands.
• Improves standard of living :- Marketing facilitates
introduction of new and better products and also as per
needs of consumers.
• Introduction of new products Marketing functions like
research, product development etc. facilitate introduction of
new products.
• Achieves objectives :- With the help of the marketing
activities, business firms can earn good amount of profit.
• Widens Markets :- Marketing widens market through large-scale
movement of goods throughout the country.
• Facilitates specialization and division of labor :- Marketing gives
basic ideas about customers needs and requirements, business
can arrange and allocate resources accordingly which leads to
division of labor.
• Economic growth :- Marketing brings industrial and economic
growth as it creates new demands for goods and thereby
encourages production activities.
 Scope of Marketing

• The scope of marketing is very wider to understand

in nature that to prepare to be a marketers, what is
marketing, how it works , what is marketed and who
does the marketing.
1. Marketing Research
2. Product planning and development
3. Pricing
4. Packaging
5. Branding and Labeling
6. After sales service
7. Advertising and publicity
• Marketing Research :- It covers the study of marketing problems
faced by organization. Detailed and reliable information of
different aspects of marketing is available through research work.

• Product planning and Development :- A marketing company

has to bring suitable modification in its existing products from
time to time as the product is the base of entire marketing activity.
• Packaging :- It must be attractive and agreeable to consumer
periodical changes in the package design, color combination, size
etc. is necessary in order to maintain interest of consumers in the
product. Packaging is within the scope of marketing.
• Pricing :- A minor change in price may leads to major, positive or
negative effect on the firm so it has to be fixed with consultation or
consideration of market competition, market demand, consumers‘
psychology, availability of substitutes etc.
• Branding and labeling :- Branding means giving suitable
name or symbol to the product. Label is attached to a product
and gives useful information to purchasers. It makes product
popular and promote sales.

• After sales service :- After-sale-service means providing

services in the form of repairs, maintenance, installation and
replacement of defective components.
• Advertising and publicity :- A marketing firm has to give
publicity to its products through suitable advertising and
public relations.
Philosophies of marketing management
 Under the marketing management philosophy, There are
following five concept:
• Production Concept –According to Kotler (2010), Producers
believe that if the product or services are good or reasonable
priced so it would be automatically popular even there is not
any special marketing . It was oldest philosophy of business
firms.
• Example – Banking products, Hospitals products, and
convenience products like fast food industry.
• Product concept – Although, it is similar to the production
concept but company believe to provide consumer’s
favorable product. They change to offer the most quality
performance and features. They try to satisfy the customer
need on existing products.

Example – Electronics products, computer , Laptops and

Mobiles.
• Selling concept – Keeping in view on this concept,
companies concentrate their marketing efforts towards
educating and attracting the customers. This approach is
applicable in the cases of. These industries are seen having a
strong network of sales force.

Example –unsought goods like life insurance, vacuum

cleaner, fire fighting equipments including fire extinguishers
Insurance, Restaurants and Hotels
• Marketing concept – The marketing concept holds that
achieving organizational goals depends on determining the
needs and wants of target markets and delivering the desired
satisfactions more effectively and efficiently than competitors
do. Surprisingly, this concept is a relatively recent business
philosophy.

• Procter & Gamble, Mc Donald's and Pizza hut follow it

faithfully. Toyota, the highly successful Japanese car
manufacturer, is also a prime example of an organization that
takes a customer- and marketing-oriented view of its
business.
• Societal Marketing Concepts – this concepts stresses not
only the customer satisfaction but also gives importance to
consumer welfare/ societal welfare.
• This concept is almost a step further than the marketing
concept. Under this concept, it is believed that mere
satisfaction would not help and the welfare of the whole
society has to be kept in mind.

Example : Johnson & Johnson which stresses community and

environmental responsibility.
FOUR P’ S OF
MARKETING

PRODUCT | PLACE | PROMOTIONS | PRICE

TERM : 4 P’ S OF MARKETING

• The 4 p’s of Marketing The term "marketing mix" became

popularized after Neil H Borden published his 1964 article,
• The Concept of the Marketing Mix. Borden began using the
term in his teaching in the late 1940s after James Culliton had
described the marketing manager as a "mixer of ingredients".
The ingredients in Bordens marketing mix included product
planning, pricing, branding, distribution channels, personal
selling, advertising, promotions, packaging, display, servicing,
physical handling, and fact finding and analysis.
• E. Jerome McCarthy later grouped these ingredients into the
four categories that today are known as the 4 Ps of marketing
WHAT IS THE 4 P’ S OF
MARKETING?

• These are the four elements with which the marketer

accomplishes his value delivering task.
• These elements are termed as 4 p’s of marketing i.e.
( Product, Place, Promotion and Price).
• All four P’s work together to achieve customer satisfaction as
well to meet the goal of organization.
• As shown in diagram, there are many sub factors which are
governing 4 P’s, which can be explained as below :
PRODUCT
The term "product" refers to tangible, physical
products as well as services. Here are some
examples of the product decisions to be made :
• Brand name
• Functionality
• Styling
• Quality
• Safety
• Packaging
• Repairs and Support
• Warranty
• Accessories and services
PRICE

Some examples of pricing decisions to be made include:

• Pricing strategy (skim, penetration, etc.)
• Suggested retail price
• Volume discounts and wholesale pricing
• Cash and early payment discounts
• Seasonal pricing
• Bundling
• Price flexibility
• Price discrimination
PLACE
(Place) Decisions Distribution is about getting the products to
the customer. Some examples of distribution decisions include:
• Distribution channels
• Market coverage(inclusive, selective, or exclusive distribution)
• Specific channel members
• Inventory management
• Warehousing
• Distribution centers
• Order processing
• Transportation
• Reverse logistics
PROMOTION

In the context of the marketing mix, promotion represents the various

aspects of marketing communication, that is, the communication of
information about the product with the goal of generating a positive
customer response. Marketing communication decisions include:

• Promotional strategy (push, pull, etc.)

• Advertising
• Personal selling & sales force
• Sales promotions
• Public relations & publicity
• Marketing communications budget
THANK YOU
Product Life Cycle (PLC)

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• Product Life Cycle shows the stages that products go
through from development to withdrawal from
the market.
• The company’s differentiation and positioning
strategies must change as the product,
market, competitors changes over time.

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 Characteristics of PLC
1. Each product may have a different life cycle.

2. PLC determines revenue earned.

3. PLC may help the firm to identify when

a product needs support, redesign, withdrawal, etc.

4. PLC may help in new product development planning.

5. PLC may help in forecasting and managing cash flow.

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 The Stages of the Product Life Cycle

1. Development
Most product life cycle
2. Introduction/Launch
curve take a bell shape
3. Growth
form.
4. Maturity

5. Saturation
Following are the stages of
6. Decline
a standard PLC-
7. Withdrawal
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 Product Life Cycles

Sales
Development Introduction Growth Maturity Saturation Decline

Time

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 1. The Development Stage

• The Development stage of PLC begins when the

company develops a new-product idea. This stage is
characterized by-
– Possibly large number initial ideas

– Zero sales

– High investment costs and

– Negative profits
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• The idea for New product may come from any of the

following –
1. Market research – identifies gaps in the market

2. Monitoring competitors

3. Planned research and development (R&D)

4. Luck or intuition – stumble across ideas?

5. Creative thinking – inventions, hunches?

6. Futures thinking (Ex-what will people be using/wanting/needing

5,10,20 years hence?)

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 2. Introduction/Launch

• Introduction/Launch stage of PLC is characterized by-

– Low sales

– Negative profits

– High cost per customer acquired

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Characteristics of Introduction Stage

Sales Low sales

Costs High cost per customer

Profits Negative

Create product awareness

Marketing Objectives
and trial

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 3. Growth

• The Growth stage of PLC is characterized by-

– Rapidly rising sales

– Increasing Revenues & Rising profits

– Average cost per customer

– Early adopters are targeted

– Growing competition

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 Characteristics of Growth Stage

Sales Rapidly rising sales

Costs Average cost per customer

Profits Rising profits

Marketing Objectives Maximize market share

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 4. Maturity Stage

• The Maturity stage of PLC is characterized by-

1. Sales reach peak

2. High profits

3. Cost of supporting the product declines

4. Ratio of revenue to cost high

5. Sales growth likely to be low

6. Market share may be high

7. Competition likely to be greater

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Characteristics of Maturity stage

Sales Peak sales

Costs Low cost per customer

Profits High profits

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 5. Saturation

• The saturation stage of PLC is characterised by-

1. Searching out new markets:
1. Linking to changing fashions
2. Seeking new or exploiting market segments
3. Linking to joint ventures – media/music, etc.
2. Developing new uses
3. Focus on adapting the product
4. Re-packaging or format
5. Improving the standard or quality
6. Developing the product range
• New entrants likely to mean market is ‘flooded’.

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 6. Decline and Withdrawal

• The Decline and Withdrawal stage of PLC is characterized

by-
1. Declining sales

2. Low cost per customer

3. Declining profits

4. Laggards are targeted

5. Declining competition

6. Change in Fashion and Technology

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Characteristics of Decline stage of PLC

Sales Declining sales

Costs Low cost per customer

Profits Declining profits

Marketing Objectives Reduce expenditure and milk the brand

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Limitations of the PLC
1. The life cycle concept applies best to product
forms rather than to classes of products or
specific brands.

2. The life cycle concept may lead marketers to think

that a product has a predetermined life, which
may produce problems in interpreting sales and
profits.

3. It is only a descriptive way of looking at the

behavior of a product and the life cycle can not
predict the behavior of a product.
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Dr. Amitabh Mishra 47
PRICING
STRATEGIES
What is Pricing ?
1. Pricing is one of the 4P’s of Marketing Mix
which plays a very Important role .All other
P’s are cost for the company whereas pricing
is revenue for the company
2. Pricing means determining the price of
the product a firm is selling or going to
sell
3. While determining a price it involves various
pricing decisions which are to be taken while
deciding a price of a product
4. The price structure of a firm is a major
determinant
What is Pricing Strategy ?

● It is the activity under which the activities are aimed at

finding the optimum price of a product
● It typically includes the marketing objectives,Consumer
demand,product attributes,competitors price and market and
economic trends
● Finding the right pricing strategy is an important element in
running a successful business.
Objectives of Pricing Strategy

❏ To earn profits
❏ To increase sales volume
❏ Company Growth
❏ To maintain competitive edge
Types of Pricing Strategies
Penetration Pricing

1. It is a pricing strategy used by

business to attract customers to
new product or service
2. The price charged for products and
services is set artificially low in
order to gain market share. Once
this is achieved, the price is
increased.
3. It is to lure the customers away
from competitors
Price 1. Price skimming sees a company
charge a higher price because it has
Skimming a substantial competitive
advantage.
2. The skimming strategy gets its
name from skimming successive
layers of cream, or customer
segments, as prices are lowered
over time.
3. As it starts with high pricing
therefore it attracts new
competitors to enter the market as
due to which the price eventually
fall
Competitive Pricing

1. It is the pricing strategy under

which the companies use the prices
of their competitors
2. As the company thought that the
competitor has set this price by
assuming that the competitors
have thoroughly worked on the
price
3. Therefore, by setting the same
price as its competitors, a newly-
launched firm can avoid the trial
and error costs of the price-setting
process.
Product Line 1. Where there is a range of products
or services the pricing reflects the
Pricing benefits of parts of the range
2. It refers to the practice of reviewing
and setting prices for multiple
products that a company offers in
coordination with one another.
3. Effective product line pricing by a
business will usually involve putting
sufficient price gaps between
categories to inform prospective
buyers of quality differentials. Also
called price lining.
Psychologic 1. It is a pricing as well as marketing
strategy which means that certain
al Pricing prices have a psychological impact
on the customers
2. Retail prices are often expressed as
"odd prices": a little less than a
round number eg Rs. 199 ,99 etc
3. The theory that drives this is that
lower pricing such as this institutes
greater demand than if consumers
were perfectly rational.
Premium 1. It is also known as image pricing or
prestige pricing. It is used when
Pricing there is a unique brand
2. It is a practice of keeping price of a
product artificially high to attract
the favourable perceptions among
buyers
3. This approach is used where a
substantial competitive advantage
exists and the marketer is safe in
the knowledge that they can charge
a relatively higher price.
Optional 1. It is strategy when a company sells
a base product at a relatively low
Pricing price, but sells complementary
accessories at a higher price.
2. Companies will attempt to increase
the amount customers spend once
they start to buy.
3. Optional ‘extras’ increase the
overall price of the product or
service.
Bundle 1. It is a process where companies sell
a package or set of goods or
Pricing services for a lower price than they
would charge if they bought them
separately.
2. It is a strategy where it allows the
company to increase its profits by
giving customers a discount.
3. It is an attempt to capture more of
the consumer’s consumer surplus.
Cost Based 1. It is the pricing method in which
the company add a certain
Pricing percentage in the cost of making
product to get some profit.
2. It uses manufacturing cost as the
basis for coming to the final price
setting of the product.
3. It is a straightforward and simple
strategy.
Cost Plus 1. It is the simplest pricing strategy. It is also
known as mark - up pricing.
Pricing 2. It is nothing else than adding a markup value
to the price of the product. This markup value
is for earning profit.
3. It appears to be simple but it ignores the
demand and competitors price. Therefore it
doesn’t lead to best prices.
THANK YOU
DISTRIBUTION CHANNELS

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 “A distribution channel is a chain or set of
intermediaries through which a good or service
passes until it reaches the end customer”.

Producer Intermediaries Customer

Distribution Channel

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 Types Of Distribution Channels

One-level
Indirect Two-level
distribution
Disrtibution Three-level
channel
channel
Direct Four-level
distribution
channel Zero- level

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Direct Distribution Channel:- This type of channel does not have
any market intermediaries, the goods go from the producer direct to the
customer.
This is also known as ‘zero-level’ distribution channel.

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Indirect Distribution channels:- In this type of channel there
are intermediaries and the product directly does not go to the
customer. These further can be classified as in the following
categories :

 One- level Distribution Channel

 Two- level Distribution Channel
 Three- level Distribution Channel
 Four- level Distribution Channel

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One- level Channel: There is only one intermediary between the
producer and consumer. The intermediary can be a retailer or a distributor.
Example: tata sells its cars only to its authorized retailers, expensive
watche, etc.

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Two- level Channel: This type of channel has two
intermediaries, namely wholesaler/distributor and retailer.
Example: FMCG

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Three- level Channel: This type of channel has three
intermediaries,namely, distributor, wholesaler and retailer.
Example: sugar

Producer Distributor Wholesaler

customer Retailer

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Four- level Channel: This type of channel has four
intermediaries and is used for consumer durable products also.

Producer Agent Distributor

Customer Retailer Wholesaler

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 Human Resource Management

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 Human Resources Management

 The HRM process

consists of planning,
attracting, developing,
and retaining the
human resources
(employees) of an
organization.

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 Human Resources Management
HR Planning
strategic HR
planning; job design

Retaining
employees Attracting
compensation; employees
maintenance; labor recruiting; selecting
relations; separation

Developing
employees
training &
development;
performance
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appraisal
 HR Planning

 Planning for the future personnel needs of an

organization,
 taking into account both internal activities and
factors in the external environment

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 HR Planning

 Job Design
– usually done prior to recruitment
– the process of describing the work that
needs to be done by an employee and
– specifying the requirements needed in
fulfilling the job

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 Attracting Employees

 Recruitment
– development of a pool of job candidates in
accordance with a human resource plan
– its purpose is to provide mgmt. with enough
candidates from which they can select
qualified employees
– internal versus external

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 Attracting Employees

 Selection
– the mutual process whereby the
organization decides to make a job offer and
the candidate decides whether or not to
accept it.

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 Developing Employees

 Orientation
– a program designed to help employees fit
smoothly into an organization

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 Developing Employees

 Training
– a process designed to maintain or improve
current employee performance
 Development
– a process designed to develop skills and
attitudes necessary for future work

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 Developing Employees

 Performance Appraisal
– process of providing feedback to
subordinates regarding their performance on
the job.
– Informal versus Formal

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 Developing Employees

 A formalized appraisal process

is used for:
– rating work performance
– identifying those deserving
raises or promotions
– identifying those in need of
further training

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 Retaining Employees

Compensation
 the adequate and
equitable
remuneration of
personnel for their
contribution in the
achievement of
organization
objectives.
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 Retaining Employees

Labor relations
 entails recognizing the validity of unions,
negotiating for the collective bargaining
agreement, and being able to handle strikes
and other forms of mass action.

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 Retaining Employees

Maintenance
 the process of providing the
following services to employees:
– career counselling
– safety & health programs
 Also involves the minimization of
absenteeism and tardiness

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 Retaining Employees

Separation
 the process of reintregrating employees to
society; entails the following:
– employees should be terminated for a just
cause
– a retirement plan must be provided for old
employees as an aid when they leave the
company.

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