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MGT301Principles of Marketing

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SummaryofLecture-44

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Review-1

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Todays Topics

Review-2

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Individual Product Decisions

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Product Attributes

Branding

Packaging

Labeling

Product Support Services

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IdeaGeneration

Idea

Screening

ConceptDevelopmentand Testing

MarketingStrategy BusinessAnalysis

Product

Development

Test

Marketing

Commercialization

New Product Development

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Time

ProductDevelopmentStage

Introduction

Profits

Sales

Growth Maturity Decline

Sales andProfits ($)

Sales and Profits Overthe Products LifeFrom

Inception to Demise

Product Life-CyclePLC)

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Price The amount of money charged for a product or

service, or the sum of the values that consumers

exchange for the benefits of having or using the

product or service.

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Factors Affecting Price Decisions

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Internal Factors

Pricing

Decisions

External Factors

Target

Market

Positioning

Objectives

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Total CostsSum of the Fixed and Variable Costs for a Given

Level of Production

Variable Costs

Costs that do varydirectly with the

level of production.

Raw materials

Fixed Costs

(Overhead)Costs that dont

vary with sales orproduction levels.

Executive Salaries

Rent

Costs

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Fixed Costs Variable CostsRaw materials

Component parts

Hourly wages

Packaging & freight

Sales commissions

Rent

Depreciation

Managers salaries

Property taxes

Insurance

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Setting Pricing Policy

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Cost-based Pricing

Value-based Pricing

Competition-based Pricing

General Pricing Approaches

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Break-evenforDetermining Target Return PriceandBreak-even Volume

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Rupees

(inthous

ands)1200

1000

800

600

400

200

0

Total cost

Fixed cost

TargetprofitTotal revenue

10 20 30 40 50

Sales volume in units (thousands)

Break-even point

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Market Skimming

MarketPenetration

New Product Pricing Strategies

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Price - Quality Strategies

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Premium

Strategy

Overcharging

Strategy

Good-Value

Strategy

Economy

Strategy

PriceHigher Lower

Higher

Lower

Quality

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Discount and Allowance Pricing

Segmented Pricing

Psychological Pricing

Promotional Pricing

Geographical Pricing

International Pricing

Price-Adjustment Strategies

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Price Changes

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Responding to price changes

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Hold Current Price;Continue to MonitorCompetitors Price.

Reduce Price

Raise PerceivedQuality

Improve Quality& Increase Price

Launch Low-Price

Fighting Brand

Has Competitor Cut

Price?

Will Lower Price

Negatively Affect OurMarket Share & Profits?

Can/ Should EffectiveAction be Taken?

Yes

No

No

No

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Place DistributionChannel Marketing Channel

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20 Contacts

Manufacturer

Manufacturer

Manufacturer

Manufacturer

Manufacturer

Customer

Customer

Customer

Customer

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9 Contacts

Manufacturer

Manufacturer

Manufacturer

Manufacturer

Manufacturer

Customer

Customer

Customer

Customer

Wholesaling

Intermediary

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ProducerAgent/

BrokerWholesaler Retailer Consumer

Producer Wholesaler Retailer Consumer

Producer Retailer Consumer

Producer Consumer

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Selecting

FEEDBAC

K

Motivating

Training

Evaluating

Channel Management Decisions

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Marketing Logistics and Supply ChainManagement

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Inventory When to order?

How much to order?

Just-in-Time

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RightProduct

Right

Cost

Right

Place

Right

Condition

Right Time

Customer Service Concept

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Producer End usersInterme-diaries

Marketing

activities

Demand

Push Strategy

Demand

Push Versus Pull Strategy

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Compete on value (not just price.)

Save customers time and energy.Make shopping fun.

Retailing and Wholesaling

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Marketing Communications

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Builds Relationships

Persuades

Informs

Reminds

Promotion and Its Goals

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The Marketing CommunicationsMix

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Advertising

Personal Selling

Any Paid Form of Non-personal Presentation by anIdentified Sponsor.

Sales Promotion Short-term Incentives toEncourage Sales.

Public RelationsBuilding Good Relations withVarious Publics by Obtaining

Favorable Unpaid Publicity.

Direct Marketing Direct Communications WithIndividuals to Obtain anImmediate Response.

Personal Presentations by aFirms Sales Force.

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Setting the Promotion Mix

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Advertising

A paid form of non-personal communication

about an organization and/or its products to

a target audience through a mass medium.

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Personal sellingThe direct presentation of a product

to a prospective customer by a

representative of the selling

organization.

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Sales promotion

Demand-stimulating activity designed to

supplement advertising and facilitatepersonal selling.

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Public relationsA planned communication effort by an

organization to contribute to generally

favorable attitudes and opinions toward an

organization and its products.

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Direct MarketingDirect connections with carefully targeted individual

consumers to obtain an immediate response and

cultivate lasting customer relationship

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Step 1. Prospecting andQualifying

Step 2. Preapproach

Step 3. Approach

Step 4. Presentation/Demonstration

Identifying and Screening For

Qualified PotentialCustomers.

Learning As Much AsPossible About a ProspectiveCustomer Before Making a

Sales Call.

Knowing How to Meet theBuyer to Get the RelationshipOff to a Good Start.

Telling the Product Story tothe Buyer, and Showing theProduct Benefits.

Steps in the Selling Process

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Step 5. Handling Objections

Step 6. Closing

Step 7. Follow-Up

Seeking Out, Clarifying,and Overcoming

Customer Objections toBuying.

Asking the Customer for

the Order.

Following Up After theSale to Ensure Customer

Satisfaction and RepeatBusiness.

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Managing the Sales force

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Designing Sales force Strategy and Structure

Recruiting and Selecting Salespeople

Training Salespeople

Compensating Salespeople

Supervising Salespeople

Evaluating Salespeople

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Competitive Strategies

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Market Leader

Market Challenger

Market Follower

Market Nicher

Competitive Positions

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Global Village

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Global Marketplace

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Think Globally ActLocally

Global Marketing

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e-Marketing

New Tool to Reach Consumer

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Internet

Postal Service

Television

Telephone

Radio

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Marketing and Society

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Current Issues in Marketing

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The current issues and marketing can be dividedinto two major subjects:

Social responsibility

Ethics

The two concepts are very closely related

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Summary Marketing Management

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TargetConsumers

Product

Place Price

Promotion

Competitors

Marketing

Intermediaries

PublicsSuppliers

Demographic-Economic

Environment

Technological-Natural

Environment

Political-Legal

Environment

Social-Cultural

Environment

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Simple Marketing System

Producer/Seller Consumer

Communication

Product/Service

Money

Feedback

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Marketing Process

The process of :

Analyzing marketing opportunities

Selecting target markets

Developing the market Mix

Managing the marketing effort

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Marketing in Theory and Practice

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Enough for Marketing. . .

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MGT301Principles of Marketing

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