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Mantras of Marketing - Essay Example

Explain the concept marketing management. Discuss the nature and objectives of marketing management. NAS_ Marketing management Is a business discipline which is focused on the practical application of marketing techniques and the management of a firm’s marketing resources and activities. Marketing Management focuses on strategic marketing issues that marketing managers face every day. Rapidly emerging forces of globalization have led firms to market beyond the borders of their home countries, making international marketing highly significant and an integral part of a firm’s marketing strategy.

Marketing managers are often responsible for influencing the level, timing, and composition of customer demand accepted definition of the term. In part, this Is because the role of a marketing manager can vary significantly based on a business’s size, corporate culture, and Industry context. To create an effective, cost-efficient marketing management strategy, firms must possess a detailed, objective understanding of their own business and the market in which they operate. In analyzing these issues, the discipline of marketing management often overlaps with the related discipline of strategic planning.

Marketing management employs various tools from economics and competitive strategy to analyze the industry context in which the firm operates. These include Porter’s five forces, analysis of strategic groups of competitors, value chain analysis and others. In competitor analysis, marketers build detailed profiles of each competitor In the market, focusing especially on their relative competitive strengths and weaknesses using SOOT analysis. Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis.

As such, they often conduct market research to obtain this Information. Marketers employ a variety of techniques to conduct market research, but some of the more common include: * Qualitative marketing research, such as focus groups and various types of interviews * Quantitative marketing research, such as statistical surveys * Experimental techniques such as test markets Observational techniques such as ethnographic (on-site) observation Nature of Marketing Management * It Combines the Fields of Marketing and Management As the name implies, marketing management combines the fields of marketing and management.

Marketing consists of discovering consumer needs and wants, creating he goods and services that meet those needs and wants; and pricing, promoting, and delivering those goods and services. Management is getting things done through other people. Managers engage in five key activities – planning, organizing, staffing, directing, and controlling. Marketing management implies the integration of these concepts. * Marketing Management is a Business Process Marketing management is a business process, to manage marketing activities in profit seeking and non-profit organizations at different levels of management, I. . Supervisory, middle-management, and executive levels. Marketing management decisions are based on strong knowledge of marketing functions and clear understanding and application of supervisory and managerial techniques. * “Marketing management is an art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value. ” Objectives of Marketing Management * Corporate growth. Companies need to grow, but it must be profitable growth.

Too many companies go on acquisition binges or geographical expansions only to grow their top lines at a terrible cost to their bottom lines. They are buying growth rather than earning it. * Market share. Too many companies aim to collect as many customers as possible. But more market share often means picking up more unreliable customers. These companies would be smarter to focus on nurturing loyal customers, getting to know them better, and finding more goods and services they may need or want. * Return on sales.

Some companies focus on achieving or maintaining a certain margin. But the margin is meaningless without matching it to the sales volume generated per dollar of assets (asset turnover). * Earnings per share growth. Companies set targets for their earnings per share (PEPS). But PEPS does not necessarily reflect the return on capital because companies can raise PEPS by buying back shares, writing off certain costs, and employing various creative accounting measures. * Reputation. Companies should strive for a good reputation.

A company’s main reputation goals should be fourfold: to be (1) the supplier of choice to customers, (2) the employer of choice to employees, (3) the partner of choice to distributors, and (4) the company of choice to investors. Its reputation capital will contribute to its primary goal, earning a higher return than he cost of capital. 3. What is pricing? Discuss its role and objectives in marketing of product. NAS. Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product.

Pricing is also a key variable in microeconomic price allocation theory. Pricing is a fundamental aspect of financial modeling and is one of the four As of the marketing mix. The other three aspects are product, promotion, and place. Price is the only revenue generating element amongst he four AS, the rest being cost centers. Pricing is the manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others.

The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus pricing is very important in marketing. It usually depends on the firm’s average costs, and on he customer’s perceived value of the product in comparison to his or her perceived value of the competing products. A well chosen price should do three things: * achieve the financial goals of the company (e. G. , profitability) * fit the realities of the marketplace (Will customers buy at that price? * support a product’s positioning and be consistent with the other variables in the marketing mix From the marketer’s point of view, an efficient price is a price that is very close to the maximum that customers are prepared to pay. In economic terms, it is a price that shifts most of the consumer surplus to the producer. A good pricing strategy would be the one which could balance between the price floor (the price below which the organization experiences a no demand situation).

Pricing is the most effective profit lever. Pricing can be approached at three levels. The industry, market, and transaction level. 1) Pricing at the industry level focuses on the overall economics of the industry, including supplier price changes and customer demand changes. 2) Pricing at the market level focuses on the competitive position of the price in comparison to the value differential of the product to that of comparative competing products. Pricing at the transaction level focuses on managing the implementation of discounts away from the reference, or list price, which occur both on and off the invoice or receipt? Product Prices perform various functions in the marketing program. Here are the 4 major roles of price in marketing. A. Signal To The Buyer – Price offers a fast and very direct way of communicating with your customers. The price is visible to your buyer and provides a basis of comparison between brands. Price also can be used to position your brand as a high quality product. . Instrument of Competition – Price offers you a way to quickly attack monitors, or alternatively to position your business away from direct competition. C. Improving Financial Performance – Because Prices determine financial performance, pricing strategies will impact a business’s financial statements both in the short and long term. D. Marketing Program Considerations – Prices can also substitute for advertising and sales promotion, in addition to being used to reinforce these activities in the marketing program.

For example, pricing strategy can be used as an incentive to channel members as the focus of promotional strategy and as a signal of value. Pricing objectives or goals give direction to the whole pricing process. Determining what your objectives are is the first step in pricing. When deciding on pricing objectives you must consider: 1) the overall financial, marketing, and strategic objectives of the company; 2) the objectives of your product or brand; 3) consumer price elasticity and price points; and 4) the resources you have available. Maximize long-run profit * maximize short-run profit * increase sales volume (quantity) * increase monetary sales * increase market share * obtain a target rate of return on investment (ROI) * obtain a target rate of return on sales Stabilize market or stabilize market price: an objective to stabilize price means that the marketing manager attempts to keep prices stable in the marketplace and to compete on non-price considerations. Stabilization of margin is basically a cost-plus approach in which the manager attempts to maintain the same margin regardless of changes in cost. Company growth * maintain price leadership * desensitizing customers to price * discourage new entrants into the industry * match competitors prices * encourage the exit of marginal firms from the industry * survival consumer behavior in India. NAS. Consumer behavior is the study of individuals, ropes, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It blends elements from psychology, sociology, social anthropology and economics.

It attempts to understand the decision- making processes of buyers, both individually and in groups. It studies characteristics of individual consumers such as demographics and behavioral variables in an attempt to understand people’s wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, ND society in general. Customer behavior study is based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer. Research has shown that consumer behavior is difficult to predict, even for experts in the field.

Relationship marketing is an influential asset for customer behavior analysis as it has a keen interest in the re-discovery of the true meaning of marketing through the re-affirmation of the importance of the customer or buyer. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and one-to-one marketing. Social unction’s can be categorized into social choice and welfare functions. Each method for vote counting is assumed as social function but if Arrow’s possibility theorem is used for a social function, social welfare function is achieved.

Some specifications of the social functions are decisiveness, neutrality, anonymity, monotonic, unanimity, homogeneity and weak and strong Parent optimality. No social choice function meets these requirements in an ordinal scale simultaneously. The most important characteristic of a social function is identification of the interactive effect of alternatives and creating a logical relation with the ranks. Marketing provides services in order to satisfy customers. With that in mind, the productive system is considered from its beginning at the production level, to the end of the cycle, the consumer (Samurai et al. 2009). There are various other factors influencing the purchases of consumer such as social, cultural, personal and psychological. The explanation of these factors is given below. 1 . Cultural Factors Consumer behavior is deeply influenced by cultural factors such as: buyer culture, subculture, and social class. * Culture Basically, culture is the part of every society and is the important cause of person ants and behavior. The influence of culture on buying behavior varies from country to country therefore marketers have to be very careful in analyzing the culture of different groups, regions or even countries. Subculture Each culture contains different subcultures such as religions, nationalities, geographic regions, racial groups etc. Marketers can use these groups by segmenting the market into various small portions. For example marketers can design products according to the needs of a particular geographic group. * Social Class Every society possesses some form of social class which is important to the marketers cause the buying behavior of people in a given social class is similar. In this way marketing activities could be tailored according to different social classes.

Here we should note that social class is not only determined by income but there are various Social factors also impact the buying behavior of consumers. The important social factors are: reference groups, family, role and status. * Reference Groups Reference groups have potential in forming a person attitude or behavior. The impact of reference groups varies across products and brands. For example if the reduce is visible such as dress, shoes, car etc then the influence of reference groups will be high.

Reference groups also include opinion leader (a person who influences other because of his special skill, knowledge or other characteristics). * Family Buyer behavior is strongly influenced by the member of a family. Therefore marketers are trying to find the roles and influence of the husband, wife and children. If the buying decision of a particular product is influenced by wife then the marketers will try to target the women in their advertisement. Here we should note that buying roles change with change in consumer lifestyles.

Roles and Status Each person possesses different roles and status in the society depending upon the groups, clubs, family, organization etc. To which he belongs. For example a woman is working in an organization as finance manager. Now she is playing two roles, one of finance manager and other of mother. Therefore her buying decisions will be influenced by her role and status. 3. Personal Factors Personal factors can also affect the consumer behavior. Some of the important personal factors that influence the buying behavior are: lifestyle, economic situation, occupation, age, personality and self concept. Age Age and life-cycle have potential impact on the consumer buying behavior. It is obvious that the consumers change the purchase of goods and services with the passage of time. Family life-cycle consists of different stages such young singles, married couples, unmarried couples etc which help marketers to develop appropriate products for each stage. * Occupation The occupation of a person has significant impact on his buying behavior. For example a marketing manager of an organization will try to purchase business suits, whereas a low level worker in the same organization will purchase rugged work clothes. Economic Situation Consumer economic situation has great influence on his buying behavior. If the income and savings of a customer is high then he will purchase more expensive products. On the other hand, a person with low income and savings will purchase inexpensive products. * Lifestyle Lifestyle of customers is another import factor affecting the consumer buying behavior. Lifestyle refers to the way a person lives in a society and is expressed by the things in his/her surroundings. It is determined by customer interests, opinions, activities etc and shapes his whole pattern of acting and interacting in the world. Personality Personality changes from person to person, time to time and place to place. Therefore it can greatly influence the buying behavior of customers. Actually, Personality is not what one wears; rather it is the totality of behavior of a man in different circumstances. It has different characteristics such as: dominance, aggressiveness, self-confidence etc which can be useful to determine the consumer behavior for particular product or service. 4. Psychological Factors behavior. These are: perception, motivation, learning, beliefs and attitudes. Motivation The level of motivation also affects the buying behavior of customers. Every person as different needs such as physiological needs, biological needs, social needs etc. The nature of the needs is that, some of them are most pressing while others are least pressing. Therefore a need becomes a motive when it is more pressing to direct the person to seek satisfaction. * Perception Selecting, organizing and interpreting information in a way to produce a meaningful experience of the world is called perception.

There are three different perceptual processes which are selective attention, selective distortion and selective retention. In case of selective attention, marketers try to attract the customer attention. Whereas, in case of selective distortion, customers try to interpret the information in a way that will support what the customers already believe. Similarly, in case of selective retention, marketers try to retain information that supports their beliefs. * Beliefs and Attitudes Customer possesses specific belief and attitude towards various products.

Since such beliefs and attitudes make up brand image and affect consumer buying behavior therefore marketers are interested in them. Marketers can change the beliefs and attitudes of customers by launching special campaigns in this regard. 5. Explain tit examples the Macro environmental factors what affect the marketing in modern times. 6. What do you mean by marketing segmentation? Discuss different bases of market segmentation. NAS. A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action.

Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. Market segmentation is a marketing strategy that involves dividing a broad target market into subsets f consumers who have common needs, and then designing and implementing strategies to target their needs and desires using media channels and other touch- points that best allow to reach them. Market segments allow companies to create product differentiation strategies to target them.

Generally three criteria can be used to identify different market segments: 1) Homogeneity (common needs within segment) 2) Distinction (unique from other groups) 3) Reaction (similar response to market) For example, an athletic footwear company might have market segments for basketball players and long-distance runners. As distinct groups, basketball players ND long-distance runners will respond to very different advertisements. An ideal market segment meets all of the following criteria: * It is possible to measure. * It must be large enough to earn profit. * It must be stable enough that it does not vanish after some time. It is possible to reach potential customers via the organization’s promotion and distribution channel. * It is internally homogeneous (potential customers in the same segment prefer the same product qualities). * It is externally heterogeneous, that is, responds consistently to a given market stimulus. * It can be reached by market intervention in a cost-effective manner. It is useful in deciding on the marketing mix. There are several ways or methods to segment a market. Such ways or methods depend upon consumer characteristics and their responses to the products or services. . GEOGRAPHIC SEGMENTATION : In geographic segmentation, the market is sub divided on the basis of area. * Region: Regional segmentation is made because regional differences exist in respect of demand for products. For example, buyers from south India are different from the buyers in north. * Urban / Rural: There are differences in buying behavior of urban and rural customers. Locality: Consumer’s buying behavior is also reflected by the locality within a particular City. II. DEMOGRAPHIC SEGMENTATION: Demography refers to study about the different aspects of population.

The various demographic factors are: * Age: The primary method of analyzing markets by age is to divide the total population into age groups and analyze the wants and needs of each group. * Gender: Marketers devote much attention to male and female differences in purchasing. Today, marketers segment female groups into college girls, working women, housewives, etc. * Income: Buying patterns depends on income of the consumers. No two individuals or families spend money in exactly the same way. * Education: Market can be segmented on the basis of education – matriculation or less, under graduates, graduates, post-graduation, etc.

Most studies show that the highly educated people spend more than the poorly educated in respect of housing, clothing, recreation, etc. * Family Size: The consumption patterns of certain products definitely vary with the number of people in the household. Manufacturers of certain products such as ice-cream market family packs. * Family Life Cycle: The market can be segmented as bachelors, newly married couples, married with grown p children, older married couples, etc. For selling tours and vacations, Life Insurance policies etc. , this segmentation is of use. Race and Religion: Consumption patterns of certain products differ on the basis of religion and race, such as alcohol and meat products. Ill. CARTOGRAPHIC SEGMENTATION: The market can be segmented on the basis of sociological factors such as: * Cultural Influences: The marketer must consider cultural influences while segmenting markets. Culture is influenced by our socio-cultural institutions like family, religion, language, education, and so on. * Influence of Social Class: Buying behavior is reflected by the influence of social class to which the consumers belong.

The social class can be segmented as – lower -lower, middle-lower, upper-lower, lower-middle, middle-middle, upper-middle, lower-upper, middle-upper and upper- upper. * Influence of Reference Groups: A reference group may be defined as a group of people who influence a person’s attitudes, values and behavior. Consumer behavior is influenced by the small groups to which they belong or aspire to belong. These groups include family, religious groups, a circle of close friends or neighbors, etc. ‘V. CRYPTOGRAPHIC SEGMENTATION: It refers to individual aspects like life style and personality. Life-style: Sellers study the life-styles of the consumers. For example, a manufacturer of readmes students (more fashionable), office-goers (more sober) and so on. * Personality: Personality characteristics such as leadership, independence, masculine, impulsive, ambitious,-etc. , do influence buying behavior. V. BEHAVIORAL SEGMENTATION : In this case, buyers are divided into groups on the basis of their response to the product – usage rate, user status, loyalty status, buying motives, and so On. * Usage Rate: One possible way to define target market is by product usage.

There can be heavy users, medium users, light users, and nonusers. Targeting on this basis may be useful to the seller who wants to increase consumption by present users and to convince and induce nonusers to become users. * User Status: Market can be segmented on the basis of user status such as: non-user, ex-user, potential user, first-time user, regular-user, ; so on. * Readiness Stage: Market can be segmented on the basis of people’s readiness to buy the product. Some people are well informed and are interested to buy the product. Some other may be well informed but not interested to buy the product. Buying Motives: Buyers buy the product with different buying motives such as economy, convenience, prestige, etc. Accordingly promotional appeals can be directed to the target audience. 7. What do you mean by distribution strategy? Discuss the factors that influence the selection of suitable channel of distribution. 8. Define marketing strategy. State its needs and discuss the steps involved in process of marketing strategy formulation. 9. What do you mean by product development? Discuss various stages in the process of developing a new product. NAS.

In business and engineering, new product development (NYPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). This type of development is considered the preliminary step in product or service development and involves a number of steps that must be completed before the product can be introduced to the market. New product development may be done to develop an item to compete with a particular product/service or may be done to improve an already established reduce.

New product development is essential to any business that must keep up with market trends and changes. There are two parallel paths involved in the NYPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and counterclaiming new product within the overall strategic process of product life cycle management used to maintain or grow their market share. The 8 step process for product development is: 1.

Idea Generation is often called the “NYPD” of the NYPD process. Ideas for new products can be obtained from basic research using a SOOT analysis (Strengths, Weaknesses, Opportunities & Threats). Market and consumer trends, company’s R;D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or these ideas many are implemented. The ideas are generated in many forms.

Many reasons are responsible for generation of an idea. * Idea Generation or Brainstorming of new product, service, or store concepts – idea generation quenches can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step). 2. Idea Screening * The object is to eliminate unsound concepts prior to devoting resources to them. * The screener should ask several questions: * Will the customer in the target market benefit from the product? Is the size and growth forecasts of the market segment / target market? s the current or expected competitive pressure for the product idea? Are the industry sales and market trends the product idea is based on? * What * Is it scenically feasible to manufacture the product? * Will the product be profitable when manufactured and delivered to the customer at the target price? 3. Concept Development and Testing * Develop the marketing and engineering details * Investigate intellectual property issues and search patent databases Who is the target market and who is the decision maker in the purchasing process? What product features must the product incorporate? * What benefits will the product provide? * How will consumers react to the product? * How will the product be produced most cost effectively? * Prove equability through virtual computer aided rendering and rapid prototyping What will it cost to produce it? * Testing the Concept by asking a number of prospective customers what they think of the idea – usually via Choice Modeling. 4.

Business Analysis * Estimate likely selling price based upon competition and customer feedback * Estimate sales volume based upon size of market and such tools as the Fourth- Woodcock equation * Estimate profitability and break-even point 5. Beta Testing and Market Testing * Produce a physical prototype or mock-up * Test the product (and its packaging) in typical usage situations * Conduct Ochs group customer interviews or introduce at trade show * Make adjustments where necessary * Produce an initial run of the product and sell it in a test market area to determine customer acceptance 6.

Technical Implementation * New program initiation * Finalize Quality management system * Resource estimation * Requirement publication * Publish technical communications such as data sheets Engineering operations planning * Department scheduling * Supplier collaboration * Resource plan publication * Program review and monitoring * Contingencies – what-if planning 7. Centralization (often considered post-NYPD) * Launch the product Produce and place advertisements and other promotions * Fill the distribution pipeline with product * Critical path analysis is most useful at this stage 8.

New Product Pricing * Impact of new product on the entire product portfolio (internal ; external) * Competition and alternative competitive technologies segments (price, value and need) * Product Costs (fixed ; variable) * Forecast of unit volumes, revenue, and profit * Value Analysis * Differing value To reduce the time that the NYPD process takes, many companies are completing several steps at the same time (referred to as concurrent engineering or time to racket).