MARKETING MANAGEMENT

JNTUK-MBA-R16-2ND SEMESTER
UNIT 1: Introduction to Marketing: difference between wants and demand is
Needs - Wants – Demands - Products - desire. Consequently, for people, who
Exchange - Transactions - Concept of can afford a desirable product are
Market and Marketing - Product and transforming their wants into demands.
Production Concept - Sales and In other words, if a customer is willing
Marketing Concept - Societal and able to buy a need or a want, it
Marketing Concept - Indian means that they have a demand for that
Marketing Environment – Marketing need or a want.
Intelligence system - Marketing Products: product is anything that can
decision system. be offered to a market that might satisfy
a want or need. In retailing, products are
Needs: A driver of human action which called merchandise. In manufacturing,
marketers try to identify, emphasize, and products are bought as raw materials and
satisfy, and around which promotional sold as finished goods. A service is
efforts are organized. another common product type.
Wants : This is quite different from Exchange: Open, organized marketplace
needs. Wants aren’t permanent and it (such as a stock exchange) where buyers
regularly changes. As time passes, and sellers negotiate prices. Exchanges
people and location change, wants require an almost instant (real time) bid
change accordingly. Wants aren’t and ask matching mechanism, settlement
essential for humans to survive, but it’s and clearing, and market wide price
associated with needs. For example, if communication and determination.
we always manage to satisfy our wants, Transactions: Exchange of goods or
it transforms into a need. services between a buyer and a seller.
Demands: Let’s discard the boring Every transaction has three components:
explanation process and start with an (1) transfer of good/service and money,
example. There are two options; you (2) transfer of title which may or may not
either buy a Samsung’s or Apple’s be accompanied by a transfer of
product. Though, the prices possession, and (3) transfer of exchange
are really different. The Samsung’s rights.
phone costs $150 and the Apple’s iPhone Definition of 'Markets'
$780.We’d prefer to purchase the Apple A market is defined as the sum total of
product, but the question is, can we? If all the buyers and sellers in the area or
we, financially, are strong enough and region under consideration. The area
can allow ourselves to buy a $780 may be the earth, or countries, regions,
iPhone, it means that we’ve transformed states, or cities.
our want/need into a demand. So, the key

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The value, cost and price of items traded 4) Marketing Concept: Focuses on
are as per forces of supply and demand needs/wants of target markets &
in a market. The market may be a delivering value better than competitors.
physical entity, or may be virtual. It may The marketing concept believes in the
be local or global, perfect and imperfect. pull strategy and says that you need to
CONCEPTS OF MARKETING: make your brand so strong that
Marketing is the study and management customers themselves prefer your brand
of exchange relationships. Marketing is over every other competitor. This can be
used to create, keep and satisfy the achieved through marketing.
customer. With the customer as the focus 5) Societal Marketing concept: Focuses
of its activities, it can be concluded that on needs / wants of target markets &
Marketing is one of the premier delivering value better than competitors
components of Business Management - that preserves the consumer’s and
the other being innovation. society’s well-being.
There are 5 different concepts of INDIAN MARKETING
marketing, each of which vary in the ENVIRONMENT: According to Philip
function that they deal with Kotler, marketing environment refers to
1) Production Concept: Consumers “external factors and forces that affect
prefer products that are widely available the company’s ability to develop and
and inexpensive. The production concept maintain successful transactions and
is more operations oriented than any relationships with its target customers”.
other concept. The marketing environment is made
2) Product Concept: Consumers favor up of:
products that offer the most quality, 1. Micro-environment and
performance, or innovative features. The 2. Macro-environment.
product concept believes in the consumer 1. Micro-environment:
and it says the consumers are more likely The micro-environment of the company
to be loyal if they have more options of consists of various forces in its
products or they get more benefits from immediate environment that affects its
the product of the company. ability to operate effectively in its chosen
3) Selling Concept: Consumers will buy markets.
products only if the company This includes the following:
aggressively promotes or sells these (a) The company
products. Off course, in this era of (b) Company’s Suppliers
marketing, we know that selling is not (c) Marketing Intermediaries
the only tactic to sell your product. You (d) Customers
have to focus on marketing as well. (e) Competitors

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(f) Public Information from Outside Suppliers
Macro Environment: Customer Feedback System
The macro-environment consists of MARKETING DECISION SYSTEM
broader forces that not only affect the Marketing decision support systems
company and the industry, but also other (MDSS) are valuable tools to assist in
factors in the micro-environment. making marketing decisions to do just
The components of a macro- that! MDSS can be used to support,
environment are: rather than replace, decision makers in
(a) Demographic Environment the complex, semi or unstructured
(b) Economic Environment situations which are common in
(c) Physical Environment marketing problems. They incorporate
(d) Technological Environment the personal judgement and experience
(e) Political Environment of the user to improve the effectiveness,
(f) Legal Environment rather than the efficiency of decision
(g) Social and Cultural Environment making. This means that managers will
MARKETING INTELLIGENCE have more “quality” time to spend on
SYSTEM analysis and planning for the future,
A Market Intelligence system focuses on rather than merely reflecting on the past.
the systematic collection and processing Discusses different types of DSS within
of information from all the relevant an environment where there are
sources to ascertain the changing trends discrepancies over definition, jargon and
in the marketing environment. In simple suppliers’ claims.
words, the marketer gathers data from all
the available sources and process these UNIT 2
into meaningful information that can be Market Segmentation and Targeting:
used to make critical business decisions. Identification of Market Segments -
Every business tries to inculcate the Consumer and Institutional/corporate
market intelligence in its employees, and Clientele - Segmenting Consumer
this can be done by following several Markets - Segmentation Basis - Selecting
steps given below: Target Markets – Role of Segmentation
Training and Motivation Programs and Targeting in Strategy Formulation -
for Sales Force Developing and Communicating a
Encouraging Distributors and Positioning Strategy.
Retailers to seek Market Intelligence
Keeping a check on the Competitors IDENTIFICATION OF MARKET
Customer Suggestion Panel SEGMENTS:
Government Data Resources

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Market segmentation is the process of • Initiator • Influencer • Decider • Buyer
dividing a broad consumer or business • User Behavioral Variables • Occasions
market, normally consisting of existing • Benefits • User Status • Usage Rate •
and potential customers, into sub-groups Buyer-Readiness • Loyalty Status •
of consumers (known as segments) based Attitude
on some type of shared characteristics. Consumer and Institutional/corporate
Segmenting Consumer Markets Clientele
1. Geographic Segmentation: Dividing Institutional customers are a term used in
market into geographical units .Can be the financial services industry to
divided into nations, states, regions, differentiate retail customers and
countries, cities or neighborhoods. corporate customers from other financial
2. Demographic Segmentation: Age and institutions such as banks, insurance
Life Cycle, Life Stage, Gender, Income companies and investment management
Generation, Social Class. Demographic companies. In several jurisdictions
Segmentation Market divided into financial institutions may be able to enter
groups based on variables such as age, transactions under a more lax regulatory
family size, family life cycle, gender, environment than the other customer
income, occupation, education, religion, categories.
etc. Examples: •Dove’s Campaign for SELECTING TARGET MARKETS:
Real Beauty •Pond’s Age Defying Serum Target marketing contrasts with mass
•Age-specific specialization (Pediatrics, marketing, which offers a single product
Geriatrics,etc.) Gender specific to the entire market. Two important
specialization (OB-Gynae, Urology, etc.) factors to consider when selecting a
3. Psychographic Segmentation target market segment are the
Psychographics is the science of using attractiveness of the segment and the fit
psychology and demographics to better between the segment and the firm's
understand consumers. Market is divided objectives, resources, and capabilities.
into different groups on the basis of To select a target market, it is essential
psychological/personal traits, lifestyle, or for the organizations to study the
values following factors:
4. Behavioral Segmentation Divide  Understand the lifestyle of the
market into groups on the basis of their consumers
knowledge of, attitude toward, use of, or  Age group of the individuals
response to a product ,i.e based on  Income of the consumers
decision roles and behavioral variables.  Spending capacity of the
Behavioral Segmentation Decision Roles consumers

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 Education and Profession of the Critique your identity against
people competitors
 Gender Outline your existing market
 Mentality and thought process of position
the consumers Understand the conditions of the
 Social Status marketplace
 Kind of environment individuals Develop a unique market position
are exposed to Qualitative and quantitative
testing of your market
positioning.

Role of Segmentation and Targeting in

Strategy Formulation
Accessibility
Identifiable Characteristics
Substantial Characteristics UNIT 3
Affordability Pricing Strategy: Objectives of Pricing -
Developing and Communicating a Methods of Pricing - Selecting the Final
Positioning Strategy price - Adopting price - Initiating the
Positioning: A marketing strategy that price cuts - Imitating price increases -
aims to make a brand occupy a distinct Responding to Competitor’s price
position, relative to competing brands, in changes.
the mind of the customer. Companies
apply this strategy either by emphasizing PRICING: Method adopted by a firm to
the distinguishing features of their brand set its selling price. It usually depends on
(what it is, what it does and how, etc.) or the firm's average costs, and on the
they may try to create a suitable image customer's perceived value of the
(inexpensive or premium, utilitarian or product in comparison to his or her
luxurious, entry-level or high-end, etc.) perceived value of the competing
through advertising. Once a brand is products. Different pricing methods
positioned, it is very difficult to place varying degree of emphasis on
reposition it without destroying its selection, estimation, and evaluation of
credibility. Also called product costs, comparative analysis, and market
positioning. situation.
Positioning Strategy: PRICING OBJECTIVES:
Pen a positioning statement 1. Profits-related Objectives

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i. Maximum Current Profit ensure their marketing efforts, the
ii. Target Return on Investment product’s packaging and the store’s
2. Sales-related Objectives décor all combine to support the
i. Sales Growth premium price.
ii. Target Market Share 2. Pricing for Market Penetration
iii. Increase in Market Share Penetration strategies aim to attract
3. Competition-related Objectives buyers by offering lower prices on goods
i. To Face Competition and services. While many new
ii. To Keep Competitors Away companies use this technique to draw
iii. To Achieve Quality Leadership by attention away from their competition,
Pricing penetration pricing does tend to result in
iv. To Remove Competitors from the an initial loss of income for the business.
Market Over time, however, the increase in
4. Customer-related Objectives awareness can drive profits and help
i. To Win Confidence of Customers small businesses to stand out from the
ii. To Satisfy Customers crowd. In the long run, after sufficiently
5. Other Objectives penetrating a market, companies often
i. Market Penetration wind up raising their prices to better
ii. Promoting a New Product reflect the state of their position within
iii. Maintaining Image and Reputation in the market.
the Market 3. Economy Pricing
iv. To Skim the Cream from the Market Used by a wide range of businesses
v. Price Stability including generic food suppliers and
vi. Survival and Growth discount retailers, economy pricing aims
PRICING METHODS to attract the most price-conscious of
1. Pricing at a Premium consumers. With this strategy, businesses
With premium pricing, businesses set minimize the costs associated with
costs higher than their competitors. marketing and production in order to
Premium pricing is often most effective keep product prices down. As a result,
in the early days of a product’s life cycle, customers can purchase the products
and ideal for small businesses that sell they need without frills.
unique goods. While economy pricing is incredibly
Because customers need to perceive effective for large companies like Wal-
products as being worth the higher price Mart and Target, the technique can be
tag, a business must work hard to create dangerous for small businesses. Because
a value perception. Along with creating a small businesses lack the sales volume of
high-quality product, owners should larger companies, they may struggle to

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generate a sufficient profit when prices the last. The goal of psychology pricing
are too low. Still, selectively tailoring is to increase demand by creating an
discounts to your most loyal customers illusion of enhanced value for the
can be a great way to guarantee their consumer.
patronage for years to come. 6. Bundle Pricing
4. Price Skimming With bundle pricing, small businesses
Designed to help businesses maximize sell multiple products for a lower rate
sales on new products and services, price than consumers would face if they
skimming involves setting rates high purchased each item individually. Not
during the introductory phase. The only is bundling goods an effective way
company then lowers prices gradually as of moving unsold items that are taking
competitor goods appear on the market. up space in your facility, but it can also
One of the benefits of price skimming is increase the value perception in the eyes
that it allows businesses to maximize of your customers, since you’re
profits on early adopters before dropping essentially giving them something for
prices to attract more price-sensitive free.
consumers. Not only does price Bundle pricing is more effective for
skimming help a small business recoup companies that sell complimentary
its development costs, but it also creates products. For example, a restaurant can
an illusion of quality and exclusivity take advantage of bundle pricing by
when your item is first introduced to the including dessert with every entrée sold
marketplace. on a particular day of the week. Small
5. Psychology Pricing businesses should keep in mind that the
With the economy still limping back to profits they earn on the higher-value
full health, price remains a major items must make up for the losses they
concern for American consumers. take on the lower-value product.
Psychology pricing refers to techniques Pricing strategies are important, but it’s
that marketers use to encourage also important to not lose sight of the
customers to respond on emotional levels price itself. Here are five things to
rather than logical ones. consider, alongside your strategy, when
For example, setting the price of a watch pricing your products.
at $199 is proven to attract more SELECTING THE FINAL PRICE
consumers than setting it at $200, even Pricing methods help business to find out
though the true difference here is quite the final price. Other factors that help to
small. One explanation for this trend is set the final price are:
that consumers tend to put more attention Psychological pricing
on the first number on a price tag than

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The influence of other Marketing- How will distributors and dealers feel
Mix elements about it?
Company pricing policies Will the sales force be willing to sell
Impact of price on other parties. at that price?
Let us discuss each of them one by one. How will competitors react?
i.Psychological Pricing Will suppliers raise their prices when
Many consumers feel high priced they see the company's price?
product offers high quality. If a Will the government intervene and
consumer knows about the quality prevent this price from being
features of a product, price plays a less charged? - In this case the marketers
significant role in comparison to quality. should know the laws regulating
When a consumer thinks of buying a prices.
product they keep some budget in the ADOPTING PRICE
mind which is decided by the past prices, Price adaptation is the ability of a
current prices, or the buying situation. business to change its pricing models to
Mostly high priced product is thought of suit different geographic areas, consumer
to have a high quality. So at times demands and prevailing incomes.
increasing the rates of a product The more adaptability a business has, the
increases the sales also. better chance it has of appealing to more
ii. The influence of other Marketing consumers.
Mix Elements 1. Geographic Pricing and Marketing
The final price of a product depends on Geographic pricing relates to how a
the other marketing mix elements also business chooses to price its products
like the advertising, brand name etc. within different regions. This can mean
iii. Company Pricing Policies different parts of a particular state,
The price of any product set should be country or even around the globe. In
decided according to the company's selecting its product prices for different
pricing policies. In many companies a regions, a business also adapts its
pricing department is set up to make sure marketing strategies to fit those pricing
that product price should be reasonable models. For example, a company may
for the customers, and that should give increase its product prices in areas where
profit to the company also. median income among consumers is
iv. Impact of Prices on Other Parties high, and reduce its prices in areas where
According to Kotler, Management must median income is low. A business may
also consider the reactions of other also keep prices low as a means of
parties to the contemplated price. generating product interest in areas of the
country outside its normal target market

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areas. This allows a company to spread stimulate consumer interest, including
interest for its products across wider pricing points and attractive features.
geographic areas and ultimately increase
sales. 4. Marketing Product Lines
2. Offering Product Discounts Creating product lines composed of
Adapting pricing models to include items with different features and target
product discounts is a marketing strategy audiences provides a business with a
used to attract bargain hunting wide range of price adaptability. The
consumers and to fend off new business can create an item to fit each
competitors attempting to enter target target market area and assign a price to
market areas. Product discounts allow match the median incomes in those
marketing management to create short areas. Marketing managers within the
advertising campaigns to stimulate business can develop promotional
excitement over a company's brands and campaigns to emphasize the different
individual product offerings. Business strengths of these products to various
marketers can also use discounts to target consumer groups. For example,
create consumer interest in market areas emphasizing the durability of items
with traditionally lower median incomes. within a product line can appeal to
This allows those consumers to try consumers who search for bargains,
products they might not otherwise be while pushing the high end features of
able to afford on a regular basis. products can attract consumers who
3. Managing Cost and Demand always purchase products from industry
The cost to create a company's products leaders.
plays an integral part in how much INITIATING THE PRICE CUTS
adaptability the business has with its The company may also cut prices in a
product pricing. Usually, goods with low drive to dominate the market through
production costs have the largest price lower costs. Either the company starts
flexibility because the organization can with lower costs than its competitors, or
accept discounted retail prices and still it cuts prices in the hope of gaining
turn a profit. Higher production costs market share that will further cut costs
leave less room for a business to adjust through larger volume
its retail price and still recoup costs. To WHY PRICE CUTS
help with price flexibility, marketing Excess plant capacity
managers create advertising campaigns Declining market share
designed to stimulate demand for a Drive to dominate market thru
company's products. These campaigns low costs
emphasize a variety of product aspects to

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Responding to economic number of goods but also because it
recession reduces the costs of increasing prices in
Companies often face situations where terms of consumers' demand fall: to the
they may need to cut or raise prices. extend that demand for one branded
Several situations may lead a firm to cut goods depends on the difference of price.
prices. One reason is excess plant ADVANTAGES
capacity: In this case,the firm needs saving time and attention in decision-
additional business and cannot generate making
it through increased sales effort, product risk aversion for being negatively
improvement, or other measures. It may judged
resort to aggressive pricing, but in Imitation can fasten the diffusion of
initiating a price cut, the company may new goods
trigger a price war. Companies RESPONDING TO COMPETITOR’S
sometimes initiate price cuts in aDrive to PRICE CHANGES
dominate the market through lower costs. In responding to competitors’ price
Either the company starts with lower changes, the company needs to consider
costs than its competitors or it initiates several issues:
price cuts in the hope of gaining market 1) Why did the competitor change the
share and lower costs. price?
A price-cutting strategy involves 2) Was it to take more market share, to
possible traps: meet changing cost conditions, or to lead
• Low- quality trap: an industry-wide price change?
Consumers will assume that the quality 3) Is the price change temporary or
is low. permanent?
• Fragile-market-share trap: 4) What will happen to the company’s
A low price buys market share but not market share and profits if it does not
market loyalty. Thesame customers will respond?
shift to any lower-priced firm that comes 5) What are the other competitors and
along. other firms’ responses likely to be to
•Shallow-pockets trap: each possible reaction?
The higher-priced competitors may cut Market leaders often face aggressive
their prices and may havelonger staying price cutting by smaller firms trying to
power because of deeper cash reserves build market share. When the attacking
IMITATING PRICE INCREASES firms’ product is comparable to the
The imitation of other producers' price leaders, its lower price will cut into the
increase gives rise to inflation, not only leader’s share. The leader at this point
because it spreads the rise across a large has several options:

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1) Maintain price: The leader maintain Its importance in the company’s
its price and profit margin, believing product portfolio,
that: The competitor’s intentions and
a) It would lose too much profit if it resources,
reduced its price. The market price and quality
b) It would not lose too much market sensitivity,
share. The behavior of costs with volume,
c) It could regain market share when and
necessary. The company’s alternative
2) Raise perceived quality: The leader opportunities.
could maintain price but strengthen the 6) Planning ahead for price changes cuts
value of its offer. It could improve its down reaction time. Below figure shows
product, services, and communications. the ways a company might assess and
It could stress the relative quality of its respond to a competitor’s price cut.
product over that of the low-price e) It could reduce its price to match the
competitors. competitor’s price. It may decide the
3) Reduce Price: The leader might drop market is price sensitive and that it
its price to the competitor’s price. When would lose too much market share to the
it believes lower-price competitor.
a) Its cost fall with volume. f) The company could maintain its price
b) It would lose market share because the but raise the perceived value of its offer.
market is price sensitive. It could improve communications,
c) It would be hard to rebuild market stressing the relative quality of its
share one it’s lost. product over that of the lower-price
4) Increase price and improve quality: competitor.
The leader might raise, its price and g) The company might improve quality
introduce new brands to market the and increase price, moving its brand into
attacking brand. a higher-price position.
5) Launch low-price fighter line: One of UNIT 4
the best responses is to add lower-price Marketing Communication:
items to the line or to create a separate Communication Process –
lower-price brand. This is necessary if Communication Mix – Managing
the particular market segment being lost Advertising Sales Promotion - Public
is price sensitive. The best response relations and Direct Marketing - Sales
varies with situation. The company under force - Objectives of Sales force -
attack has to consider: Structure and Size - Sales force
The product’s stage in the life cycle, Compensation.

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Communication Process: immediate response and cultivate lasting
The marketing communication process' customer relationships.
sole purpose is to translate the MANAGING ADVERTISING
promotional message effectively to the Advertising management is a planned
end consumer. The communication managerial process designed to oversee
process contains multiple components and control the various
that must be planned and produced with advertising activities involved in a
a message that connects with the target program to communicate with a firm's
market. target market and which is ultimately
COMMUNICATION MIX designed to influence the consumer's
The Marketing Communications Mix is purchase decisions.
the specific mix of advertising, personal Target audience definition: Who do we
selling, sales promotion, public relations, want to talk to?
and direct marketing a company uses to Message (or creative) strategy: What
pursue its advertising and marketing do we want to say to them?
objectives. Media strategy: How will we reach
Definitions: them?
Advertising - Any paid form of Measuring advertising effectiveness:
nonpersonal presentation and promotion How do we know our messages were
of ideas, goods, or services by an received in the form intended and with
identified sponsor. the desired outcomes?
Personal selling - Personal presentation MANAGING SALES PROMOTION
by the firm’s sales force for the purpose A sales promotion is a very specific
of making sales and building customer effort to promote a product or service to
relationships. the masses, including your previous and
Sales promotion - Short-term incentives potential customers. The promotion
to encourage the purchase or sale of a includes an offer to your customers to
product or service. encourage them to purchase and try the
Public relations - Building good product or service.
relationships with the company’s various PUBLIC RELATIONS (PR) is the
publics by obtaining favorable publicity, practice of managing the spread of
building up a good "corporate image", information between an individual or an
and handling or heading off unfavorable organization (such as a business,
rumors, stories, and events. government agency, or a nonprofit
Direct marketing - Direct organization) and the public. ... Public
communications with carefully targeted relations is the idea of creating coverage
individual consumers to obtain an

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for clients for free, rather employed by many hospitality
than marketing or advertising. members.
DIRECT MARKETING is a form Up selling and second-chance selling:
of advertising where organizations Hospitality companies apply up selling
communicate directly by upgrading price and profit margins by
to customers through a variety of media selling higher-priced products such as
including cell phone text messaging, suites. Second chance selling encourages
email, websites, online adverts, database sales people to increase the productivity
marketing, fliers, catalog distribution, of existing resources. For example, sell
promotional letters and targeted airport limousine pickup to the
television, newspaper and magazine customers who had booked the rooms at
advertisements as well as outdoor the hotel.
advertising. Among practitioners, it is Market share or market penetration: The
also known as direct response. management of most hotels is concerned
TYPES OF DIRECT MARKETING primarily with measures such as
Direct mail occupancy, average room rate, yield, and
Telemarketing customer mix. The corporate marketing
Email marketing department of a chain is, however, likely
Text (SMS) marketing to be concerned about market share. It
Leaflet marketing using letterbox requires the sales person to become
drops and handouts accountable for clearly defined
Social media marketing performance standards such as
Direct selling percentage of market share.
SALES FORCE Product specific objectives: May be set
A "sales force" is a group within a to increase responsibility for improved
company that sales volume for specific product lines.
conducts sales. Salesforce.com is a For example, a sales force may be asked
cloud-based CRM system that allows to sell more suites, higher-margin coffee
salespeople to track their sales, support breaks, holiday packages, honeymoon
people to track their cases, and the entire packages, or other product lines.
company's employees to collaborate with Organizational size
each other. Smaller companies do not usually
SALES FORCE OBJECTIVES require a vast sales organization because
Sales Volume: bring in as many most of the tasks are centralized. Larger
customers as possible. Sales volume by companies, on the other hand, need a
selected segments or price/margin mix is more powerful sales framework for their
also viable ways to set objectives and is sales team. A company with a larger

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customer base expects more sales components drive performance aligned
personnel to handle the needs of all their with organizational goals.
customers. Highly specialized 1. Straight Salary
business operations in the same regard Straight salary sales compensation plans
also require a more formal structure like aren’t very common, but they do have a
the line and staff sales organization. place in some organizations. With this
type of structure, you’d pay your sales
people a straight—albeit competitive—
STRUCTURE AND SIZE OF SALES salary like all of your other employees,
ORGANISATION and nothing else. No bonuses, no
commissions, and few, if any, sales
incentives.
2. Salary plus Commission
Salary plus commission sales
compensation plans are possibly the
most common plans used today. They’re
structured in a way that sales people
receive a lower base salary along with
commission pay that makes up the
majority of the total compensation.
3. Commission Only
SALES FORCE COMPENSATION Commission only sales compensation
Sales compensation is the combination plans are exactly what they sound like—
of base salary, commission, and you pay your sales people for the sales
incentives that are used to drive the they bring in and nothing else. There is
performance of a sales organization. A no guarantee of income.
sales compensation plan is the individual 4. Territory Volume
plan for a sales representative within Territory volume sales compensation
your sales organization, and it should be plans are most often used in team-based
designed with specific concepts and corporate cultures. They work through
components in mind, based on their role the calculation of territory volume at the
within the sales cycle, types of sales end a compensation period. The total
engagements, seniority, and more. sales for the territory are then split
Different sales team roles will require equally among all of the sales reps who
plans that are unique to each rep. Sales worked that territory. This plan works
compensation management is the method best when your sales territories are
of overseeing plans and ensuring clearly outlined, when your sales team

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 MARKETING MANAGEMENT
JNTUK-MBA-R16-2ND SEMESTER
supports each other to reach common 2. Sales Department with Ancillary
goals, and when your territories are rich Marketing Function:
enough to support competitive wages. It is applicable in expanding firms. When
5. Profit Margin company expands its operations, it needs
Last but not least, we have profit margin to add certain marketing functions. Sales
sales compensation plans. These plans and distribution remain main tasks, but
compensate sales people based on how other experts are also appointed for
well the company is performing. Profit performing other functions.
margin plans are most often used by 3. Separate Marketing Department:
startups that have a lack of liquidity. It’s Here, a separate and full-fledged
best to use the profit margin plan if you marketing department is created.
know that your sales people are able to Marketing vice-president is the head and
support themselves through your lean other managers perform several
periods, when you can also incorporate marketing functions under him.
long-term incentives such as stock Normally, marketing department
shares, and when you have other includes sales and distribution,
incentives and job benefits to attract marketing research, new product
sales people, such as flex time. development, advertising and sales
UNIT 5 promotion, and sales force functions.
Marketing Organization and Control: 4. Modern Marketing Department:
Evolution of Marketing Department - Marketing department is formed
Organizing the Marketing Department - , according to modern marketing theory
Marketing Implementation - Control of and practice. A full- fledged marketing
Marketing Performance - Annual Plan department considers all crucial issues
Control - Profitability Control - and performs all marketing functions.
Efficiency Control - Strategic Control. Modern marketing department seeks
EVOLUTION OF MARKETING cooperation from other departments to
DEPARTMENT achieve maximum customer satisfaction.
1. Simple Sales Department: All marketing activities are
Normally, small companies follow this systematically integrated to achieve
type of organisation. Here, marketing marketing goals effectively.
manager is called as sales manager and 5. Effective Marketing Company:
his primary work consists of managing Effective marketing company follows
sales and distribution activities. modern marketing philosophy in
Company can hire help from external practice. Effective marketing company is
experts for other marketing functions also known as integrated marketing
like advertising, marketing research, etc. department. A modern marketing

RAMAKRISHNA D, Asst Professor M: 9030233744 MAIL:rkdasiga@rimsmba.org

 MARKETING MANAGEMENT
JNTUK-MBA-R16-2ND SEMESTER
department may fail if it fails to integrate Public Relations activity
efforts of other (finance, personnel, and Mail and e-shots
production) departments. Producing publicity material
6. Process and Outcome Based Organising and attending events
Company: Maintaining and updating the website
This is the advanced theme in designing with new, relevant content
marketing organisation. Many companies Copywriting news and blogs for
concentrate on key processes rather than online and traditional media
department. Here, fundamental business Maintaining your social media
processes are given more importance and presence – including twitter,
attempts are made to remove Facebook, LinkedIn, YouTube
departmental barriers. Main marketing CONTROL OF MARKETING
processes include new product PERFORMANCE
development process, customer creation Philip Kotler considers four types of
and retention process, customer service, marketing control:
etc. For every process, process leaders 1. Annual Plan control
are appointed to achieve specific process Analysis of Different Sales
outcomes. Marketing personnel performs Analysis of Market Share
a key role right from planning to final Analysis of Market Expenses-to-
outcomes. Sales
ORGANIZING THE MARKETING Financial Analysis
DEPARTMENT Analysis of Customer and
Four Steps for Success Stakeholder Attitudes
1. Writing A Marketing Plan 2. Profitability control
2. Drew up a new organization chart Identifying Functional Expenses
3. Made some adjustments to tailor one Assigning Function Expenses to
or two roles to fit key individuals. Marketing Entities
4. Restructured and re-staffed Preparing Profits and Loss
MARKETING IMPLEMENTATION statement
Marketing implementation is the process Taking Action
of executing the marketing strategy by 3. Efficiency Control
creating specific actions that will ensure This control, particularly, concerns with
that the marketing objectives are measuring spending efficiency. While
achieved. profitability control reveals the relative
An experienced Marketing Manager to (in relation to different entities like
deliver certain aspects of the plan which products, territories, channels, etc.)
could include: profits a company is earning, the

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 MARKETING MANAGEMENT
JNTUK-MBA-R16-2ND SEMESTER
efficiency control shows the ways to
improve efficiency of various marketing SAMPLE CASE STUDY
entities like sales force, advertising, Sachin and Virag are two enterprising
distribution, sales promotion, and so youth. They have passed out from IIM,
forth. Bangalore. They thought instead of
Sales Force Efficiency Control doing a job, they will launch fresh
Advertising Efficiency Control vegetables in Indian markets. Having
Sales Promotion Efficiency learnt of the future conventional foods,
Control they decided to venture into cultivation
Distribution Efficiency Control of mushrooms.
Marketing Research Efficiency Mushrooms are known to be the best
Control alternative food for vegetarians. For
4. Strategic Control Sachin and Virag fund raising was a
Strategic control implies a critical review serious handicap for mass production.
of overall marketing effectiveness in However, the first trial batch of
relation to broad and long-term mushrooms that they produced was
objectives and firm’s response to bought by Star Hotel in Bangalore.
marketing environment. It deals with Further, the hotel placed orders for
assessing firm’s ability to define and supply of 20 kgs every day. Now
achieve marketing goals, and response mushroom industry is run by small
pattern to environment. entrepreneurs, like Sachin and Virag.
The Marketing Effectiveness Another big player M/s Ashtavinayak
Review Mushrooms, equipped with cold storage
The Marketing Audit facility was more interested in the export
The Marketing Excellence market. Sachin and Virag have set their
Review sights high. They aim to sell mushrooms
The Ethical and Social in a very big way all over India.
Responsibility Review Mushrooms have a great market
CASE STUDY (COMPULSORY) potential and is a perishable food.
Step1: Introduction to Case Questions
Step 2: SWOT Analysis A. How will you advise Sachin and
Step 3: Problem Definition Virag, as how to increase the consumer
Step 4: Generating Alternatives awareness about this new food?
Step 5: Choosing the best Alternative B. What would be your suggestions for
Step 6: Expected Outcome distribution channel for mushrooms?
Step 7: Conclusion
Step 8: Question & Answer

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 MARKETING MANAGEMENT
JNTUK-MBA-R16-2ND SEMESTER
CASE ANALYSIS circulation can be contacted and samples
Follow the steps from 1-7 to be distributed to them (such as 250 gm
A. or 100 gm packs).
• Consumer awareness can be created by • Packaging should be attractive.
test marketing. Through sales persons
and customer response to the product.
• Samples can be distributed in big malls B.
and Variety stores. Distribution network:
• Awareness can also be created through • Product having being perishable,
outdoor publicity such as wall hoardings, company should go for faster and
banners, insertions in news papers etc. effective distribution network having
Targeted Customers: cold storage facility.
Hotels • Distribution through company delivery
Household sector vans in local market and
Restaurants distribution through rail or road transport
Industrial canteens to urban markets.
Brand name of the company along with Network
the product can also be highlighted
to the customer by using the concept of
event marketing.
• For different kinds of selling modes
they can target different customers
Institutional sale: Hotel /
Restaurants/Industrial canteens
Individual sale: Household • Approach to
hotel industry can be made and product
benefit can be shown to convince the
customer. Mushroom related recipe
booklet can be given to them for use.
• Can approach the T.V programs for
Khana Khazana to show different recipes
of Mushrooms in their shows.
• Dealer push through sales promotion
campaign.
• Press meetings can be a way to
consumer awareness. Editors, journalists
of newspapers having maximum

RAMAKRISHNA D, Asst Professor M: 9030233744 MAIL:rkdasiga@rimsmba.org