Naveen Imp

7/28/2019 Naveen Imp

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.WHAT IS MARKETING?

2.BASIC MARKETING CONCEPTS

3. BASIC MARKETING MANAGEMENT GUIDELINES

4.CONNECTION BETWEEN MARKETING AND SALES MANAGEMENT

5.STEPS IN THE MARKETING MANAGEMENT PROCESS

6.BUYING BEHAVIOR

7.MARKETING INFORMATION AND RESEARCH

8. STRATEGIC MARKETING FACTORS

9.EXISTING POSITION IN THE MARKETPLACE

10.MARKETING OBJECTIVES

11.TARGET MARKETING

12.MARKET MEASUREMENT AND FORECASTING

13.MARKETING STRATEGIES

14.MARKETING MIX STRATEGIES

15.PRODUCT STRATEGIES

16.PRICING STRATEGIES

17.PROMOTIONAL STRATEGIES

18.DISTRIBUTION STRATEGIES

19.DIRECT MARKETING
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20.MARKETING PLANNING

21.THE MARKETING BUDGET

22. IMPLEMENTATION AND CONTROL OF MARKETING ACTIVITIES

23.THE AMERICAN MARKETING ASSOCIATION CODE OF ETHICS

24.U.S. LEGISLATION WHICH MAY AFFECT MARKETING PRACTICES

25.FOR SERIOUS BUSINESS OWNERS ONLY

26.THE LATEST INFORMATION ONLINE

1. WHAT IS MARKETING?

DEFINITION OF MARKETING

Business owners and marketing managers must understand various

rinciples of marketing management which represents one of the mostcritical functions in many organizations.According to the American Marketing Association:

"Marketing is the process of planning and executing the conception, pricing,promotion, and distribution of ideas, goods, and services to create exchangesthat satisfy individual and organizational objectives."(1)

Marketing Managemententails analysis, planning, implementation, andcontrol of activities designed to develop and maintain a beneficial exchange o

ideas, products, and services in the marketplace to meet personal andcorporate goals.

One of the most notable experts on marketing management, Philip Kotler,defines Marketingas:

Marketing is the delivery of customer satisfaction at a profit and"A socialand managerial process by which individuals and groups obtain what they

need and want through creating and exchanging products and value with

others". (2)In simplified terms, illustrated below, the Marketing Process may bepresented as a flow of products and services from product and service

providers through market intermediaries to the end-users, in exchange formoney.
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THE FLOW OF PRODUCTS AND SERVICES IN THE MARKETPLACE

Product And Service Providers

Market Intermediaries

End-Users

2. BASIC MARKETING CONCEPTS

Some of the Basic Marketing Concepts are summarized below.(3)BASIC MARKETING CONCEPTS

A Market.

A market is represented by individuals and organizations, who are or may

become buyers for specific products and services. A Marketplace.

A marketplace is a specified geographic location which contains a number ofexisting and potential buyers of products and services. Needs.

These include basic physical needs for water, food, shelter, closing, safety;

social needs for recognition, belonging to a group, affection; individual needsfor self-expression and achievement; organizational needs expressed by

groups of people or businesses. Wants.

Wants may be expressed by products or services which may be desirable by

individuals or organizations to meet their specific individual or organizationalneeds. Demands.

Demand for products or services may be expressed by an individual, a group of

a individuals or organizations, backed by their respective buying power in themarketplace. Products And Services.

Products and services are designed to satisfy the needs, wants, and demands

of broad range of individuals and organizations in the marketplace. Customer Value.

A customer value is the difference between the value the customer receives byowning and using a particular product or service and the actual cost of

purchasing such product or service. Customer Satisfaction.

Customer satisfaction is expressed by the buyer of a product or service based

on the degree to which such product or service meets the customer's

expectations. Exchange.

Exchange is the act of obtaining a required product or service from someone
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and offering something of value in return. Transaction.

A transaction is an exchange or trade of a product or a service between a

buyer and a seller, based on mutually agreed terms and conditions, includingprice, method of delivery, terms of payment, and warranty. Relationship Marketing.

Relationship marketing is a process of continuous development, maintenanceand improvement of profitable and mutually beneficial relationships with

customers, distributors, dealers, and suppliers. Marketing Network.

A marketing network consists of the company, its employees, customers,distributors, dealers, suppliers, and all organizations with whom the company

is developing the relationship marketing. The Operational Concept.

The operational concept suggests that customers will favor high quality

products and services, which are available at affordable prices. Managementstask, therefore, is to ensure continuous improvement of operational efficiencyand reduction of costs. The Internet.

The Internet represents a unique electronic media and the largest marketplace

in the world, which allows marketers and sellers to offer their products andservices directly to potential buyers, re-sellers, and end-users for mutual

benefit.

3. BASIC MARKETING MANAGEMENT GUIDELINES

IMPORTANCE OF THE BASIC MARKETING MANAGEMENT GUIDELINES

It is important to adhere to the Basic Marketing ManagementGuidelines designed to ensure mutual satisfaction and positive results for

both - the marketing organizations and the customers alike. Some of the basic

marketing management guidelines for marketing organizations are outlinedbelow. (4)

BASIC MARKETING MANAGEMENT GUIDELINES

1. To Provide The Producers And Consumers With A Freedom Of Choice.

The western-type market economy is driven by a dynamic market demand and

is regulated by the principle of supply and demandin the marketplace. Thecornerstone of this principle is thefreedom of choice which may be exercised by

marketers and consumers alike. Marketers, therefore, should remember thatboth parties are free to act in their best interests to achieve their

organizational or individual objectives.2. To Satisfy The Basic Needs Of Marketing Organizations And Consumers.

Marketing organizations and consumers have a broad range of specific needsthat must be identified, evaluated, and fulfilled in the free-market economy.

Marketers, therefore, should be aware of the importance of satisfying their
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respective basic needs, since a long-term business relationship cannot succeed

without a short-term mutual satisfaction.3. To Avoid Any Discrimination In The Marketing Process.

The marketing organizations should not discriminate against consumers forany reason. Marketers should offer their products and services on an equal

basis to all consumers, irrespective of their status, religion, race, gender,buying power, or any other unrelated characteristic. Marketers should

remember, that only a discrimination-free market environment will secure asteady and profitable business performance in the long run.4. To Provide Cost-Effective Products And Services To Consumers.

The marketing system aims at supplying products and services to customers in

the marketplace, based on high quality and competitive price. A free economyrelies on active competition and informed buyers who stimulate the market

efficiency. Marketers should, therefore, offer their products and services toconsumers on a cost-effective basis to ensure long-term commercial success in

a customer-driven environment.5. To Offer Product And Service Innovation To Consumers.

The competitive market environment stimulates the producers to develop newproducts and services which are better and more efficient in their performance.

At the same time, this process also stimulates a continuous reduction ofvarious related costs, such as costs of raw materials, manufacturing,

packaging, assembly, or distribution. Marketers, therefore, should be preparedto improve the features and quality of their products and services and at the

same time to reduce costs to ensure long-term commercial success.6. To Educate And Inform The Consumers.

The competitive marketing environment also stimulates a continuous

educational process of consumers in the marketplace with an objective tosecure long-term effective use of products and services and overall customersatisfaction. Marketers, therefore, should be prepared to educate and inform

the consumers on a continuous basis to secure long-term viability of theirproducts and services.7. To Offer Continuous Product And Service Protection To Consumers.

There is a trend in the modern marketing environment toward maximizing

consumer protection in terms of possible harm which may be caused byvarious products and services supplied by marketers. In addition, there are

various laws and regulations, imposed by the government to maximize productsafety and to prevent deceptive marketing and sales practices. Marketers,

therefore, should be prepared to spend additional funds to maximize theconsumer protection in the marketplace and to minimize the potential harm to

consumers.

4. CONNECTION BETWEEN MARKETING AND SALES MANAGEMENT


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CONNECTION BETWEEN MARKETING AND SALES MANAGEMENT

Many business practitioners often confuse MarketingManagement with Sales Management. Although these two functions are

strongly interrelated, they do differ in purpose and description.Harvard professor Theodore Levitt defines the difference between these two

functions as follows:"Selling focuses on the need of the seller; marketing on the needs o

the buyer. Selling is preoccupied with the seller's need to convert hisproduct into cash; marketing with the idea of satisfying the needs of the

customer by means of the product and the whole cluster of things associatedwith the creating, delivering and finally consuming it". (5)

A well-known management expert, Peter F. Drucker, suggests that:

"Selling and marketing are antithetical rather than synonymous or evencomplementary. There will always, one can assume, be a need for some

selling, but the aim of marketing is to make selling superfluous. The aim omarketing is to know and understand the customer so well the product oservice fits him and sells itself."(6)

5. STEPS IN THE MARKETING MANAGEMENT PROCESS

THE MARKETING MANAGEMENT PROCESS

One of the prime responsibilities of every business owner and marketing

manager is to initiate the Marketing Management Process in a customer-driven environmentand to develop aMarketing Department within the

organization. Philp Kotler defines this process as follows:

Marketing management is the analysis, planning, implementation, andcontroof programs designed to create, build, and maintain beneficial exchanges with

target buyers for the purpose of achieving organizational objectives. (7)

The ultimate objective of an effective marketing management process is to

develop, maintain and growprofitable and long-lasting relationships withcustomers. The planning and control of the marketing management process in

various types of organizations entails a number of steps, as outlined below.Obviously, some steps of this process may differ, depending whether this is a

manufacturing, merchandising, service, project, or contract managementcompany.*

EVOLUTION OF THE MARKETING AND SALES MANAGEMENT FUNCTION IN ACOMPANY

No. Details

1. When entrepreneurs start a small business, they usually wear allmanagement hats,including the Marketing And Sales Management


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Hat.

2. When the small business starts to grow, business owners often decide toemploy aMarketing And Sales Manager to manage all marketing and

sales management functions within the company.

3. Upon further growth of the company, business owners may decide to separatethe marketing and sales management functions and employ a Marketing

Manager and aSales Manager to manage their respective departments

* Note:

Service Operations Managementis discussed in detail in Tutorial 4.

Project And Contract Managementis discussed in detail in Tutorial 4.

STEPS IN THE MARKETING MANAGEMENT PROCESS

Step 1: Understand The Fundamentals Of Buying Behavior.

Step 2: Gather Marketing Information And Conduct Market Research.

Step 3: Examine Strategic Marketing Factors.

Step 4: Evaluate The Companys Existing Position In The Marketplace.

Step 5: Formulate The Companys Marketing Objectives.

Step 6: Complete Market Targeting For Your Companys Products and Services.

Step 7: Measure And Forecast The Market Potential.

Step 8: Select Suitable Marketing Strategies.

Step 9: Develop Detailed Marketing Mix Strategies.

9.1

ProductStrategies

9.2

PriceStrategies

9.3

PromotionStrategies

9.4

DistributionStrategies
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Step 10: Develop Direct Marketing Strategies.

Step 11: Prepare A Marketing Plan.

Step 12: Summarize The Marketing Budget.

Step 13: Implement, Evaluate And Control Marketing Activities.

6. BUYING BEHAVIOR

STEP 1: UNDERSTAND THE FUNDAMENTALS OF BUYING BEHAVIOR

The first step in the marketing management process entails the understandingofBuying Behavior in the marketplace. Business owners and marketing and

sales managers must knowhow, why, when, in what quantities, and how

often people and organizations buy products and services. It is essential,therefore, to have solid knowledge about the following types ofBuyersMarkets described below.

BUYERS' MARKETS

THE CONSUMER

MARKET

THE ORGANIZATIONAL

MARKET

The consumer market consists of all

individuals and households that purchaseproducts and services for personal use.

This market includes three main categories:

The Baby Boomers. The Generation X,or GenXers.

The Echo Boomers.

The organizational market consists of all

individuals and organizations that purchaseproducts and services for organizational and

commercial use. This market is sub-divided

into:

The Government Market. The Business Market.

The Business Market is sub-divided into:

The Producer Market.

The Reseller Market.

THE BUYERS' DECISION-MAKING PROCESS

Understanding of buying behavior will help in finding answers regardingdifferent types of people and organizations, who buy various products and

services, their reasons for making Buying Decisions, the volume and
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frequency of purchases, and the timing of making purchasing decisions.

Business owners and marketing managers must also be familiar with the basic

steps in theConsumer Decision-Making Process to ensure a successful

performance of their company in the consumer market. This process isstrongly influenced by a broad range ofConsumer Buying BehaviorFactors, which include strategic marketing factors, consumers individual

factors, social and economic factors.

Moreover, it is essential to understand the basic steps in the OrganizationalDecision-Making Process to ensure the companys successful performance in

the organizational market. This process is influenced by

various Organizational Buying Behavior Factors, including the internalorganizational factors, individual buyers factors, external organizationalfactors and environmental factors.

Buying Behavioris discussed in detail in Tutorial 5.

7. MARKETING INFORMATION AND RESEARCH

STEP 2: GATHER MARKETING INFORMATION AND CONDUCT MARKET RESEARCH

The next step in the marketing management process entails gathering and

collating Marketing Information and conducting Market Research.

Good market intelligence provides a sound foundation for an effective

marketing plan and helps the companys management to achieve overallbusiness objectives. It is essential, therefore, to develop a strong marketintelligence team and to utilize appropriate Sources Of Marketing

Information. Some of these sources are outlined below.SOURCES OF MARKETING INFORMATION

No. Details

1. Commercial and trade publications.

2. Statistical data.

3. Reports from sales people.

4. Market research bureau.

5. Internet.6. Information provided by the existing customers.

MARKETING INFORMATION SYSTEMS (MIS)

Business owners and marketing managers must develop aneffective Marketing Information System (MIS), designed to collect, sort,


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evaluate, and store relevant information from various sources, and distribute

this information to marketing decision-makers in a timely manner to ensurethe most effective performance of the marketing department.

This system has a wide range of applications within the organization, includingpreparation of the companys sales analysis and sales forecasting reports,development of sales budgets and sales performance ratios by sales person,

determination of sales potential by territory, development of sales quotas per

sales person, maintaining customer profiles and many more.

Market research represents another essential function within the marketing

department. This function is essential in identifying and defining marketing

opportunities and problems, generating and evaluating marketing action,monitoring marketing performance, and improving the understanding andeffectiveness of the marketing process.

Marketing Information And Researchare discussed in detail in Tutorial 5.

8. STRATEGIC MARKETING FACTORS

STEP 3: EXAMINE STRATEGIC MARKETING FACTORS

After gathering and collating marketing information and conducting appropriate

market research, the marketing manager must proceed with the examinationofStrategic Marketing Factors. This includesevaluation

ofInternal and External Marketing Factors, or Marketing Variables,

related to the company's overall business activities in the marketplace.

A thorough examination of internal and external marketing factors plays a vital

role in the development of an effective marketing plan. Several importantinternal and external marketing factors are outlined below.

INTERNAL MARKETING FACTORS

No. Details

1. Company's size, strengths, weaknesses.

2. Company's organizational and management structure.

3. Company's corporate plans and objectives.

4. Company's products or services.

EXTERNAL MARKETING FACTORS

No. Details

1. Current market demand for company's products or services.

2. Influence of competition in the marketplace.


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3. Legal requirements.

4. Technological developments.

5. Economic conditions in the marketplace.

6. Political conditions in the marketplace.

Strategic Marketing Factorsare discussed in detail in Tutorial 5.

9. EXISTING POSITION IN THE MARKETPLACE

STEP 4: EVALUATE THE COMPANYS EXISTING POSITION IN THE MARKETPLACE

After completing the evaluation of internal and external marketing factors, themarketing manager must proceed with identifying the Company's Existing

Position In The Marketplace.

A comprehensive examination of relevant strategic marketing factors will

enable the marketing manager to complete this evaluation in a timely mannerand prepare the Companys Existing Position Status Report. Such an

evaluation plays a highly important role in the overall marketing plandevelopment process.

The evaluation of the company's existing position in the marketplace entails

providing answers to a number of important questions outlined below.THE COMPANY'S POSITION IN THE MARKETPLACE

No. Details

1. How successful is our company in the marketplace in terms of marketpenetration with our products or services at present?

2. How do customers rate our company in terms of the product or service

quality?

3. How popular are our products or services in the marketplace?

4. How strong is the competition in the marketplace?

5. How do we differ from our main competitors?

6. What is the short-term market trend in the area of product or serviceacceptance?

The Companys Position In The Marketplaceis discussed in detail

in Tutorial 5.

10. MARKETING OBJECTIVES

STEP 5: FORMULATE THE COMPANS MARKETING OBJECTIVES

The next step in the marketing management process entails formulation of the
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companysMarketing Objectives for the forthcoming fiscal period.

Upon evaluating the company's position in the marketplace, the marketing

manager will be in a better position to complete the formulation of the

company'smarketing objectives and prepare the Companys MarketingObjectives Report for the next twelve months.

The formulation of the company's marketing objectives entails finding answers

on a number of important questions outlined below.THE COMPANY'S MARKETING OBJECTIVES

No. Details

1. What specifically do we want to accomplish in the marketplace during thenext fiscal period?

2. What new products or services do we need to introduce to maintain our

competitive advantage in the marketplace?

3. What products or service do we need to phase out during the next fiscalperiod?

4. How much additional capital do we need to support our short-term

marketing plan?

5. How should we develop our sales team to meet our marketing planobjectives

Marketing Objectivesare discussed in detail in Tutorial 5.

11. TARGET MARKETING

STEP 6: COMPLETE TARGET MARKETING OF YOUR PRODUCTS AND SERVICES

After formulating marketing objectives, the marketing manager must proceedwith the process ofTarget Marketingof the companys products or services.

This process entails three elements described below.THE TARGET MARKETING PROCESS

1. Market Segmentation.

Market segmentation entails dividing a market into distinctive groups of buyers, or Market

Segments, on the basis of their needs, characteristics, or behavior patterns, who might

require specific products or services.

2. Market Targeting.

Market targeting entails evaluating each market segment in terms of its attractiveness, i.e.

where a company may have a unique Marketing Opportunity to offer its products orservices.
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3. Market Positioning.

Market positioning entails arranging for the companys products or services to occupy a clear,distinctive and desirable place in relation to competing products and services in the minds ofthe target customers.

MARKETING OPPORTUNITY

Marketing Opportunity represents a suitable field of marketing action where

a company may have a potential trading advantage. Each feasible marketingopportunity should be examined more closely to establish a suitable method of

entering into a specific market.

Identification of suitable marketing segments entails finding answers to anumber of important questions, as outlined below. This process will also help

the marketing manager in the overall process of marketing planimplementation and development of an appropriate sales team.

Target Marketing is discussed in detail in Tutorial 5.

12. MARKET MEASUREMENT AND FORECASTING

STEP 7: MEASURE AND FORECAST THE MARKET POTENTIAL

After identifying suitable marketing segments, the marketing manager mustproceed with the process of measuring the market potential of each segment

and preparing realistic forecasts regarding the companys marketingopportunities to sell products or services.

There are many different Market Segments where a company may identify

sound business opportunities. These segments, known as Target Markets,must be classified according to their industrial activity and grouped into

separate target market areas. This will enable the marketing manager tosummarize the most suitable target markets, to complete theMeasurement

And Forecasting Of Market Potential, and to provide answers to a number

of important questions outlined below.

Subsequently, the Sales Potential of each area should be evaluated and themost suitable market opportunities selected in accordance with the company's

capabilities to gain and maintain a marketing advantage.THE MARKET POTENTIAL

No. Details

1. What is the market potential for our products or services in a specifiedmarket segment in the consumer market in terms of units sold?

2. What is the market potential for our products or services in a specified


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market segment in the commercial market in terms of dollar value?

Market Measurement And Forecastingis discussed in detail in Tutorial 5.

13. MARKETING STRATEGIES

STEP 8: SELECT A SUITABLE MARKETING STRATEGY

Once the marketing manager has evaluated the company's existing position,formulated appropriate objectives, and identified and measured target

markets, it is necessary to proceed with the selection of a suitable Marketing

Strategy.

There are five basic marketing strategies that can be selected by a company interms of its overall marketing objectives as illustrated below.

FIVE BASIC MARKETING STRATEGIES The New Venture Strategy.

This strategy directs the company toward introduction of brand new products or services in the

marketplace. The Growth Strategy.

This strategy directs the company toward expanding its current marketing efforts with existingproducts or services.

The Market Development Strategy.

This strategy directs the company toward continuous improvement of the existing product orservice lines. The Market Retention Strategy.

This strategy directs the company toward maintaining its existing position in the marketplace.

The Balancing Strategy.This strategy directs the company toward balancing its current marketing activities to achieve

the desired level of profitability and market share.

Marketing Strategiesare discussed in detail in Tutorial 5.

14. MARKETING MIX STRATEGIES
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STEP 9: DEVELOP DETAILED MARKETING MIX STRATEGIES

Upon selection of a suitable marketing strategy, the marketing manager mustproceed with the development ofDetailed Marketing Mix Strategies.

The Marketing Mix, also known asThe Four P, is a very important

marketing concept and it represents a combination of four essential marketingelements illustrated below.

THE FOUR P" MARKETING MIX

Product

Or ServicePrice Promotion

Place

(Distribution)

The development of a marketing mix strategy will require the marketing manager to

formulate four comprehensive strategies as shown below.

FOUR MARKETING MIX STRATEGIES

Product

Or Service

Strategy

Pricing

Strategy

Promotional

Strategy

Distribution

Strategy

Marketing Mix Strategiesare discussed in detail in Tutorial 5.

15. PRODUCT STRATEGIES
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STEP 9.1 : DEVELOP DETAILED PRODUCT STRATEGIES

Productrepresents the firstP in the Marketing Mix concept. Thedevelopment of detailed Product Strategies, therefore, represents the first

step in formulating the Marketing Mix Strategies for the organization.

In order to develop effective product strategies, the marketing manager mustbe familiar with various issues related to products as outlined below.

PRODUCT-RELATED ISSUES

Key Factors In Product Creation And Development.This includes ensuring customer satisfaction, generating profit, providing employment, and

meeting company objectives. Product Development Process.

This entails understanding the six steps in the product development process and how it affectsthe companys performance.

Product Life Cycle.This entails understanding the four stages of the product life cycle and how it affects thecompanys performance.

Product Life Cycle Characteristics, Objectives And Strategies.

This entails understanding various variables related to the product life cycle and how it affectsthe companys performance. Product Branding.

This entails understanding the product branding process.

Product Licensing.This entails understanding the product licensing process. Franchising.

This entails understanding of the franchising process.

Product Strategiesare discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar

procedures in developingService Strategies,and use applicable elements ofthe product strategies, when this is appropriate.


16. PRICING STRATEGIES
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STEP 9.2: DEVELOP DETAILED PRICING STRATEGIES

Pricerepresents thesecondP in the Marketing Mix concept. Thedevelopment of detailed Price Strategies, therefore, represents the second

step in formulating the Marketing Mix Strategies for the organization.

In order to develop effective pricing strategies, the marketing manager mustbe familiar with various issues related to price, as outlined below.

PRICE-RELATED ISSUES

Price-Setting Factors.This entails an understanding of product or service costs, demand, and competition.

Basic Classification Of Costs.This entails an understanding of direct and indirect costs for various types of companies.

Price-Setting Methods.This entails an understanding of various methods used in determining the selling price for the

companys products and services. Basic Pricing Strategies.This entails an understanding of three main strategies: penetration pricing, meet-the-

competition pricing, and price skimming.

Discounts.This entails an understanding of trade discounts, quantity discounts, cash discounts, andpromotional discounts.

Price Change Management Process.

This entails an understanding of specific steps related to the process of price change andadjustment to meet new conditions in the marketplace.

Pricing Strategiesare discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similarprocedures in developingService Pricing Strategies,and use applicable

elements of the product pricing strategies, when this is appropriate.


17. PROMOTIONAL STRATEGIES

STEP 9.3: DEVELOP DETAILED PROMOTIONAL STRATEGIES

Promotionrepresents the thirdP in the Marketing Mix concept. Thedevelopment of detailed Promotional Strategies, therefore, represents the

third step in formulating theMarketing Mix Strategies for the organization.

In order to develop effective promotional strategies the marketing manager

must be familiar with the Promotional Strategy DevelopmentProcess outlined below.

PROMOTIONAL STRATEGY DEVELOPMENT PROCESS

No. Details

1. Evaluate the promotional strategy factors.


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2. Establish the overall direction for the promotional strategy.

3. Analyze the existing situation in the marketplace.

4. Establish promotional objectives.

5. Prepare the promotional budget.

6. Develop effective communication mix.7. Formulate the communication message.

8. Evaluate and control the communication mix.

The marketing manager must also have a good understanding of various elements

of theCommunication Mix.

COMMUNICATION MIX

AdvertisingPersonal

SellingPackaging Public

Relations

Sales

Promotions

Promotional Strategiesare discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar proceduresin developingService Promotional Strategies,and use applicable elements of theproduct promotional strategies, when this is appropriate.

Service Operations Managementis discussed in detail in Tutorial 4

18. DISTRIBUTION STRATEGIES

STEP 9.4: DEVELOP DETAILED DISTRIBUTION STRATEGIES

Placeor Distributionrepresents the fourth P in the MarketingMix concept. The development of detailed Distribution Strategies, therefore,

represents the fourth step in formulating the Marketing Mix Strategies forthe organization.

In order to develop effective distribution strategies the marketing manager

must be familiar with various issues related to distribution outlined below.DISTRIBUTION-RELATED ISSUES

Marketing Intermediaries.This entails understanding the functions of retailers, wholesalers, industrial distributors,

manufacturers agents, sales agents, rack jobbers, and facilitating agents.

Supply Chain Management.
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This entails understanding of specific steps in the supply chain management process for

manufacturing, merchandising, service, project, and contract management companies. Distribution Channels.This entails understanding the advantages and disadvantages of various options which are

available through two specific types of distribution channels: the consumer channel and the

industrial channel.

Distribution Strategiesare discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar procedures

in developingService Distribution Strategies,and use applicable elements of the

product distribution strategies, when this is appropriate.


19. DIRECT MARKETING

STEP 10: DEVELOP DIRECT MARKETING STRATEGIES

Upon the selection of suitable marketing mix strategies, i.e. product or service,price, promotion and distribution strategies, the marketing manager must

proceed with the development ofDirect Marketing Strategies.

Direct Marketing is an interactive system of marketing which includes various

types of advertising, promotion, and personal selling of products and servicesoutlined below.

ELEMENTS OF DIRECT MARKETINGNo. Details

1. Telephone marketing.

2. Direct mail marketing.

3. Online marketing.

4. Direct selling.

5. Automatic vending machines.

6. TV infomercials.

7. TV home-shopping.

8. Postcard decks.

Business owners and marketing managers should pay special attention to

the Online Marketing of products and services, because the Internet represents

the fastest growing marketing media in the 21st century. Online marketing became

particularly popular in the last several years because of the recent developments in

the Search Engine Optimization (SEO) Methodology.


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Direct Marketingis discussed in detail in Tutorial 5.

A marketing manager in a Service Organization should follow similar procedures

in developingDirect Marketing Strategies,and use applicable elements of direct

marketing strategies, when this is appropriate.


20. MARKETING PLANNING

STEP 11: PREPARE A MARKETING PLAN

Preparation of the Marketing Plan represents the culmination of themarketing management process. There are two different types of marketing

plans, which can be prepared by the marketing manager, as presented below.TWO TYPES OF MARKETING PLANS

New Product Marketing Plan Annual Marketing Plan

This type of plan is prepared when the

company plans to introduce new

products or services in themarketplace.

This type of plan is prepared for an

existing range of products or services.

The marketing plan must be prepared in accordance with the overall objectives of

the organization for at least one fiscal period. The Marketing Plan Outline is

outlined below.

THE COMPANY'S MARKETING PLAN OUTLINE

No. Details

1.Marketing and sales plan summary.

2.Analysis of the companys products and services.

3.Analysis of the companys resources.

4.Analysis of the market demands and trends.

5.Analysis of external marketing factors.

6.Analysis of the competition in the marketplace.
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7.The existing and potential target markets.

8.Problems and opportunities in the marketplace.

9.Marketing and sales objectives.

10.Marketing and sales strategy.

11.Marketing and sales budget.12.Marketing plan supporting materials.

Marketing Planningis discussed in detail in Tutorial 5.

21. THE MARKETING BUDGET

STEP 12: SUMMARIZE THE MARKETING BUDGET

Formulation of a Marketing Budget represents the final stage of an effectivemarketing plan.

The marketing budget must take into consideration a broad range of activitiesrelated to the marketing of products or services as well as activities related to

the sales of products or services. The marketing budget preparation processentails finding answers to a number of important questions outlined below.

FORMULATION OF THE COMPANY'S MARKETING BUDGET

No. Details

1. What are the anticipated revenues expected from the sale of specific

products or services in each market segment selected by our company?

2. What are the anticipated advertising costs related to our company'sefforts of promoting specific products or services?

3. What are the anticipated costs of the sales team which will be engaged inthe process of selling our products or services?

4. What are the anticipated costs of manufacturing specific products orproviding specific services?

5. What is the anticipated unit cost of each product or service, which ourcompany plans to sell during the next fiscal period?

Marketing Budgetsare discussed in detail in Tutorial 5.

22. IMPLEMENTATION AND CONTROL OF MARKETING ACTIVITIES
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STEP 13: IMPLEMENT, EVALUATE, AND CONTROL MARKETING ACTIVITIES

Finally, when the Marketing Manager and the marketingteam complete themarketing plan, and upon approval of all relevant budgets by the company

owners, it becomes essential to implement this plan intoaction. Implementation Of The Marketing Plan entails providing the

company's employees with the opportunity to complete all relevant tasks in themost efficient manner.

The marketing manager must monitor the implementation of each marketing

task on a continuous basis to ensure that the company meets its overallmarketing objectives. Furthermore, the marketing manager must exercise an

effective control over all related marketing functions, which were discussedearlier.

RESPONSIBILITY OF THE MARKETING AND SALES MANAGER

The majority of small business owners usually combine all marketing and sales

functions under the umbrella of the Marketing And Sales Department. TheMarketing And Sales Managerwill be responsible for the evaluation,

planning, implementation, and control all marketing and sales activities withinthis department.

However, when the organization grows, the marketing and sales functions are

often separated into a Marketing Department and a Sales Department. Inthis case, the Marketing Manager will be responsible for the implementation

of all marketing plans, while the Sales Manager will be responsible for the

evaluation, planning, implementation, and control of allSales ManagementActivities, which are discussed in detail in Tutorial 5.

Additional detail related to implementation of marketing plans and budgets areprovided inMarketing Planningin Tutorial 5.

23. THE AMERICAN MARKETING ASSOCIATION CODE OF ETHICS

AMERICAN MARKETING ASSOCIATION

American Marketing Association (AMA) has developed a Code OfEthics which represents a set of specific guidelines designed for its members

and covering a broad range of issues.

It is strongly advised, that every business owner and manager becomes

familiar with these guidelines and adopts them throughout the routinemarketing management process. The AMA Code Of Ethics Guidelines are

summarized next. These guidelines also include a List Of The Marketer'sResponsibilities outlined below.
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Any AMA member found to be in violation of any provision of this Code of

Ethics may have his or her association membership suspended or revoked.(7)THE AMERICAN MARKETING ASSOCIATION CODE OF ETHICS

1. Responsibilities Of The Marketer.

Marketers must accept responsibility for the consequences of their activitiesand make every effort to ensure that their decisions, recommendations, andactions function to identify, serve, and satisfy all relevant publics: customers,organizations and society.2. Marketers' Professional Conduct Must Be Guided By:

The basic rule of professional ethics: not knowingly to do harm. The adherence to all applicable laws and regulations. The accurate representation of their education, training, and experience. The active support, practice, and promotion of this Code of Ethics.

3. Honesty And Fairness.

Marketers should uphold and advance the integrity, honor, and dignity of themarketing profession by:

Being honest in serving consumers, clients, employees, suppliers,distributors, and the public.

Not knowingly participating in conflict of interest without prior notice to allparties involved.

Establishing equitable fee schedules including the payment of receipt ofusual, customary, and/or legal compensation for marketing exchanges.

4. Rights And Duties Of Parties In The Marketing Exchange Process.

Participants in the marketing exchange process should be able to expect that:

Products and services offered are safe and fit for their intended uses. Communications about offered products and services are not deceptive. All parties intend to discharge their obligations, financial and otherwise, ingood faith.

Appropriate internal methods exist for equitable adjustment and/or redressof grievances concerning purchases.

American Marketing Association, 2000. Reprinted with permission.

LIST OF THE MARKETER'S RESPONSIBILITIES1. In The Area Of Product Development And Management:

Disclosure of all substantial risks associated with product or service usage. Identification of any product component substitution that might materially


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change the product or impact on the buyer's purchase decision.

Identification of extra cost-added features.2. In The Area Of Promotions:

Avoidance of false and misleading advertising. Rejection of high pressure manipulations, or misleading sales tactics. Avoidance of sales promotions that use deception or manipulation.

3. In The Area Of Distribution:

Not manipulating the availability of a product for purpose of exploitation. Not using coercion in the marketing channel. Not exerting undue influence over the reseller's choice to handle a product.

4. In The Area Of Pricing:

Not engaging in price fixing. Not practicing predatory pricing. Disclosing the full price associated with any purchase.

5. In The Area Of Marketing Research:

Prohibiting selling or fundraising under the guise of conducting research. Maintaining research integrity by avoiding misrepresentation and omission ofpertinent research data.

Treating outside clients and suppliers fairly.6. Organizational Relationships.

Marketers should be aware of how their behavior may influence or impact onthe behavior of others in organizational relationships. They should:

Not demand, encourage, or apply coercion to obtain unethical behavior intheir relationships with others, such as employees, suppliers, or customers.

Apply confidentiality and anonymity in professional relationships with regardto privileged information.

Meet their obligations and responsibilities in contracts and mutualagreements in a timely manner.

Avoid taking the work of others, in whole, or in part, and represent this workas their own or directly benefit from it without compensation or consent of the

originator or owner.

Avoid manipulation to take advantage of stipulations to maximize personalwelfare in a way that unfairly deprives or damages the organization of others.


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American Marketing Association, 2000. Reprinted with permission.

24. U.S. LEGISLATION WHICH MAY AFFECT MARKETING PRACTICES

FEDERAL LAWS

There are a number of laws and regulations which must be taken intoconsideration by the marketing manager and employees throughout the

marketing management process. Some of these Federal Laws and regulations

are outlined below.U.S. LEGISLATION WHICH MAY AFFECT MARKETING PRACTICES

The Sherman Anti-Trust Act Of 1880.

Prohibits monopolies or attempts to monopolize trade.

Prohibits contracts, combinations and conspiracies designed to restraint trade in

interstate and foreign commerce.

The Federal Food And Drug Act Of 1906. The Food, Drug, And Cosmetic Act Of 1938. The Food Additives Amendment In 1958.

The Kefauver-Harris Amendment In 1962.

Forbids the manufacture, sale, or transportation of adulterated or fraudulently

labeled foods and drugs in interstate commerce.

Specifies pre-testing procedures of drugs for safety; and effectiveness and

labeling of drugs by generic name. (The Kefauver-Harris Amendment).

The Meat Inspection Act Of 1906.

Provides for the enforcement of sanitary regulations in the meat packagingindustry.

Provides for federal inspection of all companies selling meat in the interstate

commerce.

The Federal Trade And Commission Act Of 1914.


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Provides for establishment of a commission of specialists to investigate and to

issue cease-and-desist orders to enforce Section 5, which states that "unfair

methods of competition in commerce are unlawful."

The Clayton Act Of 1914. The Robinson-Patman Act Of 1936.

Supplements the Sherman Act and provides that violating corporate officials

can be held individually responsible. (Clayton Act).

Amends the Clayton Act by adding the phrase "to injure, destroy, or prevent

competition."

Defines price discrimination as unlawful.

Provides the FTC with the right to establish limits on quantity discounts, to

forbid brokerage allowances except to independent brokers.

Prohibits promotional allowances or the furnishing of services or facilities.

The Miller-Tydings Act Of 1937.

Amends the Sherman Act to exempt interstate fair-trade (price-fixing)

agreements from anti-trust prosecution.

The Wheeler-Lea Act Of 1938.

Prohibits unfair and deceptive acts and practices regardless of whether

competition is injured.

Places advertising of foods and drugs under FTC jurisdiction.

The Lanham Trademark Act Of 1946.

Requires that trademarks must be distinctive and makes it illegal to make any

false representation of goods or services entering interstate commerce.

The Anti-Merger Act Of 1950.

Amends Section 7 of the Clayton Act to prevent inter-corporate acquisitions

which may have a substantially adverse effect on competition.

The Automobile Information Disclosure Act Of 1958.

Prohibits car dealers from inflating the factory price of new cars.

The National Traffic And Safety Act Of 1958.

Provides for the creation of compulsory safety standards for automobiles and


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tires.

The Fair Packaging And Labeling Act Of 1966.

Provides for the regulation of the packaging and labeling of consumer goods.

Requires manufacturers to state what the package contains, who made it, and

how much it contains.

Permits industries' voluntary adoption of uniform packaging standards.

The Child Protection Act Of 1966.

Prohibits the sale of hazardous toys and articles.

Amended in 1989 to include articles that pose electrical, mechanical, or thermal

hazards.

The Federal Cigarette Labeling And Advertising Act Of 1967.

Requires that cigarette packages include the following statement: Warning:

The Surgeon General Has Determined That Cigarette Smoking Is Dangerous To

Your Health.

The Truth-In-Lending Act Of 1968.

Requires lenders to state the true costs of a credit transaction.

Prohibits the use of actual or threatened violence in collecting loans.

Restricts the amount of garnishments.

Established a national Commission on Consumer Finance.

The National Environment Policy Act Of 1969.

Establishes a national policy on the environment.

Provides for the establishment of the Council on Environmental Quality.

The Fair Credit Reporting Act Of 1970.

Ensures that consumer's credit report will contain only accurate, relevant, andrecent information and will be confidential unless requested for an appropriate

reason by a proper party.

The Consumer Product Safety Act Of 1972.

Establishes the Consumer Product Safety Commission and authorizes it to set

safety standards for consumer products as well as exact penalties for failure to


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uphold the standards.

The Consumer Goods Pricing Act Of 1975.

Prohibits the use of price maintenance among manufacturers and resellers in

interstate commerce.

The Magnuson-Moss Warranty/FTC Improvement Act Of 1975.

Authorizes the FTC to determine rules concerning consumer warranties.

Expands FTC regulatory powers over unfair or deceptive acts or practices.

The Equal Credit Opportunity Act Of 1975.

Prohibits discrimination in a credit transaction because of gender, marital

status, race, national origin, religion, age, or receipt of public assistance.

The Fair Debt Collection Practice Act Of 1978.

Prohibits to abuse any person and make false statements or use unfair methods

when collecting debts.

The Toy Safety Act Of 1984.

Provides for a quick recall of dangerous toys when found, by the government.

The Childrens Television Act Of 1990.

Limits the number of commercials aired during the childrens program.

The Nutrition Labeling And Education Act Of 1990.

Requires that food products labels provide detailed nutritional information.

The Telephone Consumer Protection Act Of 1991.

Establishes procedures designed to limit unsolicited phone calls from

telemarketers. Limits marketers use of automatic telephone-dialing systems

and pre-recorded voices.

Principles of Marketing, 7th ed. by Philip Kotler and Gary Armstrong, pp. 88 - 89, 1996, Adapted by permission of

Prentice Hall, Inc., Upper Saddle River, NJ. and Principles of Marketing, 9th ed. by Philip Kotler and Gary

Armstrong, p.109.

25. FOR SERIOUS BUSINESS OWNERS ONLY

ARE YOUSERIOUS ABOUT YOUR BUSINESS TODAY?


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26. THE LATEST INFORMATION ONLINE

WOULD YOULIKE TO LEARN MORE?

As an added benefit to all members ofBusiness Management Club, you willhave access to the Latest Information Online on various topics discussed in

this Check Point. You will be able to access this informationthrough Business Links included in the downloadable version of this program.

These links are updated on a continuous basis.
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