Unit 1
Unit 1
Unit 1
UNIT I
Marketing Management.
UNIT II
Production Management.
UNIT III
Human Resource Management
UNIT IV
Financial Management
The term ‘market’
originates from Latin noun
‘Marcatus’ which mean “a
place where business is
conducted”.
Market is generally known as
the place where buyers and
sellers meet and enter into
transactions involving transfer
of ownership of goods,
services, securities etc.
It is a place where potential
buyers meet seller to
exchange goods and services
freely.
"Marketing is an
organisational function
and a set of processes
for creating,
communicating and
delivering value to
customers and for
managing customer
relationships in ways
that benefit the
organisation and its
stakeholders."
"Management is the art of
getting things done through
and with people in formally
organised groups."
Serves as a link
The product features, pricing, and place strives to factor in the
expectations of a customer. The promotional aspects give to the
customer what your company proposes to offer and thus position
the products better. Thus a link is being forged between the
consumer and the organization.
Enables proper integration
The designing of the 4 Ps needs critical thinking and
perceptiveness. If they are merged correctly, then your product will
find a unique space in the customer’s mind.
Guides decision
The interdependence and the overarching nature of one element
over another guide you in decision making. For example: if your
product pricing is high, then in your promotional activity, you will
have to target well off customers, and your product design must be
quality based. The channels of distribution and location etc. will
also be guided by this decision.
A product is a good or
service that a business
owner provides for sale to
his target market. When it
comes to developing a
product, the design,
quality, packaging,
features, after-sales
service, and customer
service should be
considered.
Shopping goods
These are those goods where consumers devote considerable time in making
selections before they buy. On the basis of durability, suitability, quality price
and style, the selection and purchasing of the goods takes place. For example,
household furniture, automobiles, refrigerators, sewing machines, jewelleries,
clothing, used cars; arid major appliance, etc.
Specialty goods
These goods possess unique characteristics and brand identification for which
a sufficient number of buyers are willing to make a special purchasing effort.
For example, stereo components, photographic equipment, men’s suits, shoes,
goggles, mobile phones, cloth material, etc.
Unsought goods
These are those goods which the consumer does not know about or does not
normally think of buying. These goods require advertising and personal-selling
support. For example, smoke detectors, kitchen exhaust fans like electric
chimneys, etc. The classic examples of known but unsought goods are life
insurance, cemetery plots, gravestones and encyclopedias, reference books,
etc.
Industrial goods classification
These are those goods that are meant for use
in making other products or for rendering a
service in the operation of business
organization. According to American Marketing
Association (AMA), “Industrial goods are those
goods which are designed to be sold primarily
for use in producing other goods or rendering
services.”
The product life cycle is the process a product goes through
from when it is first introduced into the market until it
declines or is removed from the market. The life cycle has
four stages - introduction, growth, maturity and decline.
BRAND ASSOCIATION
If the organization has positive
association with research and
development or technology than it
becomes easy to build such brand
Positioning:
Creating a unique position in
the marketplace involves the
careful choice of target
market and establishing a
clear differential advantage
in the minds of these
customers. This can be
achieved through brand name
and image, service, design,
guarantees, packaging and
delivery.
Well-balanced
communication:
Brand positioning shapes customer
perceptions. A brand needs to
communicate its positioning to its
target market. Awareness needs to
be built, brand personality
projected and favourable attitudes
built and reinforced among
customers. The brand theme needs
to be reinforced by advertising,
salespeople, sponsorship, public
relations and sales promotion
campaigns.
Being first:
Pioneer brands are more likely to be
successful than follower brands. Being first
gives a brand the opportunity to create a
clear position in the minds of target
customers before competition enters the
market. It gives the pioneer the opportunity
to build customer and distributor loyalty. But
it requires sustained marketing effort and
the strength to withstand competitor
attacks.
Long term perspective:
Capturing huge market share: Many
firms charge low prices for their offerings to
capture greater market share. The reason for
keeping the price low is to have an increased
sales resulting from the Economies of Scale.
Higher sales volume lead to lower production
cost and increased profits in the long run. This
strategy of keeping the price low is also known
as Market Penetration Pricing.
Market Skimming: Market skimming means
charging a high price for the product and
services offered by the firms which are
innovative, and uses modern technology. The
prices are comparatively kept high due to the
high cost of production incurred because of
modern technology. Mobile phones, Electronic
Gadgets are the best examples of skimming
pricing that are launched at a very high cost and
gets cheaper with the span of time.
Product –Quality Leadership: Many firms
keep the price of their goods and services in
accordance with the Quality Perceived by the
customers. Generally, the luxury goods
create their high quality, taste, and status
image in the minds of customers for which
they are willing to pay high prices. Luxury
cars such as BMW, Mercedes, Jaguar, etc.
create the high quality with high-status
image among the customers.
Thus, every firm operates with the ultimate
objective of earning profits and, therefore,
the price of a product must be set keeping in
mind the cost incurred in its production
along with the benefits it offers for which
people are ready to pay extra.
FACTORS AFFECTING PRICING
I nternal Factors
1.Cost – Cost is one of the important factors
affecting price. Cost can be divided as fixed cost
and variable cost. Companies try to recover both
these types of costs. If the cost is high then the
price of product is bound to be more.
2.Profit expected – Profit is directly related to the
expected margin of profit. If the manufacturer
expects a higher profit margin, then he may charge
a higher price for his product.
3.Objectives of the company – If the objective is
to increase return on investment, it may charge
higher profit. If it aims at mass marketing, it may
charge a lower price thereby making the product
affordable to a large number of consumers.
4.PLC – The stage of the product in PLC also
affects pricing. During the introduction
stage, prices are usually less to attract the
customers.
5.
Brand Image – The image of a brand and
the manufacturer affects its price.
1. Agents
The agent is an independent entity who acts as
an extension of the producer by representing
them to the user. An agent never actually gains
ownership of the product and usually make
money from commissions and fees paid for their
services.
2. Wholesalers
Wholesalers are also independent entities. But they
actually purchase goods from a producer in bulk and
store them in warehouses. These goods are then resold
in smaller amounts at a profit. Wholesalers seldom sell
directly to an end user. Their customers are usually
another intermediary such as a retailer.
3. Distributors
Similar to wholesalers, distributors differ in one regard.
A wholesaler may carry a variety of competition brands
and product types. A distributor however, will only carry
products from a single brand or company. A distributor
may have a close relationship with the producer.
4. Retailers
Wholesalers and distributors will sell the products that
they have acquired to the retailer at a profit. Retailers
will then stock the goods and sell them to the ultimate
end user at a profit.
Therea four ways through which a product
reaches the customers. These are also known
as Channel of distribution.
Marketing Channels - 1
1) Manufacturer to Consumer
This is one of the most simple and effortless
types of the Marketing Channels as the goods
produced reach to the consumers directly from
the house of manufacturer. It works as cost-
effective and profitable for both the parties
involved as there is no further involvement of
the middlemen such as retailer, wholesalers, and
agents that charge their commission increasing
the overall price of the products.
“Promotion includes,
advertising, personal
selling, sales promotion
and other selling tools.”
1) Increasing brand awareness –
Promotions help in creating brand awareness. With
the help of various media like the television,
billboards, radio or local newspaper news, you can
spread across information about your brand and
company, which helps people to find out more about
you and look into your products and make purchases.
2) Segment Identification –
If your promotional and marketing strategy is loosely
structured, it might not be successful in targeting the
“right” audiences. Having a full-proof and well-
thought-out promotional strategy and marketing plan
can help you identify different segments of
consumers in the market and offer suitable solutions
for your clients.
3) Increasing customer traffic –
Promotion also helps in increasing customer
traffic. The more you promote your brand, the
more will the customers know about you and
your company and the more will they be
interested in your products. Promotion can be
done even by giving out free samples which work
wonders for customers! They try your product
and ultimately, come to you and make
purchases.
4)Providing information: Informative promotion
is more common in the early stages of the
product life cycle. An informative promotion may
explain what ingredients (for example, fiber)
will do for a consumer’s health, describe why the
product is better (for example, high-definition
television versus regular television), inform the
customer of a new low price, or explain where
the item may be purchased.
5 )Keeping loyal customers: Promotion is
also used to keep people from switching
brands. Slogans such as Campbell’s soups are
“M’m! M’m! Good!” and “Intel Inside”
remind consumers about the brand.
Marketers also remind users that the brand is
better than the competition. For years, Pepsi
has claimed it has the taste that consumers
prefer. Southwest Airlines brags that
customers’ bags fly free. Such advertising
reminds customers about the quality of the
product or service.
The management must consider the following
factors in determining the promotion mix,
these are:
Nature of Product: The different type of
product requires different promotional tools.
Such as, for the industrial products Viz.
Machinery, equipment or land personal
selling is more appropriate as a great deal of
pre-sale and after-sale services is required to
sell and install such products. On the other
hand, advertising and publicity are more
suitable for the consumer goods, especially
the convenience goods.
Nature of Market: The number and location of
customers greatly influence the promotion mix. In
case the group of potential customers is small and
are concentrated in a particular locality, then
personal selling is more likely to be effective.
Whereas, if the customer base is large and
widespread, then the blend of advertising, personal
selling, and the sales promotion is required to sell
the product.
Stage of Product’s Life: The promotion mix changes
as the product moves along its life cycle. During the
introduction stage, the principal objective of the
promotion is to create the primary demand by
emphasizing the product’s features, utility, etc.
therefore, the blend of advertising and publicity is
required. As the product reaches its maturity stage
the advertising and personal selling is required to
maintain the demand of the customers.
And finally, during the decline stage the expenses on
other promotional activities are cut, and more
emphasis is laid on sales promotion with the intent to
push up the declining sales.
Availability of Funds: The marketing budget also
decides the promotion mix. If the funds available
for the promotion are large, then the blend of
promotional tools can be used, whereas in the
case the funds are limited then the management
must choose the promotional tool wisely.
Nature of Technique: Each element of the
promotional mix has unique features that
significantly influences the purpose of
promotion. Such as, the advertising is an
impersonal mode of communication that reaches
a large group of customers. Its expression can be
amplified with the use of colors and sound that
helps in developing the long lasting brand image
in the minds of the customer.
Promotional Strategy: The promotion mix largely
depends on the company’s promotional strategy,
i.e. whether it accepts
Push Strategy or
Pull Strategy.
In a Push strategy, the manufacturer forces the
dealers to carry the product and promote it to
the customer, i.e. convince the potential buyers
to buy it. Here, personal selling and trade
promotion are likely to be more effective.
In the case of a Pull Strategy, the consumers ask
the dealers to carry the product, i.e. customers
themselves purchase the product. Here,
advertising and consumer promotion are more
appropriate.
Advertising: The advertising is any paid form
of non-personal presentation and promotion
of goods and services by the identified
sponsor in the exchange of a fee. Through
advertising, the marketer tries to build a pull
strategy; wherein the customer is instigated
to try the product at least once.The
complete information along with the
attractive graphics of the product or service
can be shown to the customers that grab
their attention and influences the purchase
decision.
Personal Selling: This is one of the traditional
forms of promotional tool wherein the salesman
interacts with the customer directly by visiting
them. It is a face to face interaction between
the company representative and the customer
with the objective to influence the customer to
purchase the product or services.