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					Marketing Management
                       Marketing Management

Product Management

Layers of the Product
Classification of Products - Consumer Products/ Business Products
Product Mix Decisions
Organisational Goals and Product Mix
Managing Product Lines
Elements of Branding - Brand Identity/ Brand Image/Brand Position
Brand Equity
Product Life Cycle (PLC)
                                    Marketing Management
The core layer of the product explains the reasons for which the
customer is making the purchase. This layer explains the reason
'why' of buying the product. At the second layer, the consumer
looks at the basic utilities, like physical features, tangible elements
of the product. The expected layer is a set of attributes and
conditions buyers normally expect out of the product. Whereas the
basic product is the 'given thing' in the product, in expected level,
consumers use their anticipations and utility expectations for
defining the product.

The augmented part of the product is the associated services and
cues, which help the product to deliver beyond the expectation
level of the consumer. Brand positioning and competition starts at
farm level when all the products in a market look similar. In
developing nations, the competition originates at the level of
expected product. The last layer is the potential layer of the product
where all the possible augmentations and transformations the offer
may undergo in the future. Here the marketer is always on constant
search for new methods and processes to differentiate the offer on
the basis of product features and services that will satisfy the
customer and create the desired differentiation.
                         Marketing Management
PRODUCT MIX DECISIONS
A product mix is also called product assortment, which is the set of all
products and items a particular seller offers for sale. It consists of various
product lines. Godrej has multiple product lines namely soaps, office
equipments, edible oil, computers and other products through different
manufacturing processes and targeted towards different markets.
ORGANISATIONAL GOALS AND PRODUCT MIX
Four ways in which product mix can be adjusted to achieve organizational goals:

Market Penetration, under which market share is increased by expanding sales
of present products in existing uses;
Market Development, under which markets are expanded by creating new uses
of present products;
Product Development, where market share is increased by developing new
products to satisfy existing needs;
Diversification, where market is expanded by developing new products to satisfy
new consumer needs.
                                        Marketing Management
MANAGING PRODUCT LINES
Major product line strategies are:
Expansion of Product Mix - Increasing the number of lines and/or the depth within a line can help in expansion of
the present product mix. Such new lines may be related or unrelated to the present products. For example, a large
supermarket with provisions may add drugs, cosmetics and house wares (width) while at the same time increase
their assortments of dry fruits, baby foods and detergents (depth).
Contraction of Product Mix – The product may be consolidated with several others in the line so that fewer styles,
sizes, or added benefits are offered. Alternatively, the marketing manager can simplify the position within a line.
Even after this pruning if the product fails, then the company may stop it altogether.

Alteration of Existing Product - Alterations may be made either in the design, size, color, texture, or flavor or in the
packaging, or in the use of raw materials or in the advertising appeal, or the brand manager may bring a change in
quality level. This strategy is to be followed regardless of the width and depth of the product mix.

Development of New Uses for Existing Product - When people find new uses
of an existing product, for example a detergent being used for cleaning clothes, floors, utensils and even glass
products.

Trading-Up and Trading Down- Trading Up refers to the adding of a higher priced, prestige product to the existing
lines with the intention of increasing sales of the existing low-priced product. Under trading up, the seller continues
to depend upon the older, low priced product for the major portion of the sales. Ultimately he may shift the
promotional emphasis to the new product so that larger share of sales may go to the new product.

 Trading Down refers to the adding of low priced items to its line of prestige products, with the expectation that the
people who cannot buy the original product may buy these new ones because they carry some of the status of the
higher priced goods. An instance in point is that of LG Electronics, which attempted to broaden its market for color
televisions by introducing frilled down version of television called "Sampoorna" for rural markets in India.
              Marketing Management

ELEMENTS OF BRANDING
Brands are unique in many ways. Each brand has its
position in the customer's mind and delivers a set of
values perceived higher than those of other competing
brands.

Four key concepts in elements of branding
brand identity
brand image
brand position
brand equity
                             Marketing Management
Brand Identity
The concept of brand identity helps in building brand equity. Aaker defines brand identity as a set of
five categories of brand assets and liabilities linked to a brand that add or subtract from the value
provided by a product or service to a firm and also to the firm‘s customers. These categories of brand
assets include brand loyalty, brand awareness, perceived quality, brand associations and other
propriety assets such as patents, trademarks and channel relationships. These are a unique set of
brand associations that represents what the brand stands for and what it promises to customers.

Brand Image
Every brand has got a distinct brand image in the customer's mind. In simple words, what the customer
perceives about the brand is called the brand image. A brand may aspire to communicate a lot through
its brand communication strategy but what the customers receive and perceive as the brand is termed
as the brand image. It is a combination of brand associations and brand personality. It includes a set of
brand associations usually structured in a logical fashion. Consumers express them in the form of
descriptive thoughts by using similes and metaphors. It is important to see if consumers see
themselves as 'fit’ for the brand and vice versa. For example, Horlicks is perceived as a great nourisher
whereas Boost is perceived as an energy drink for the sportsman due to its typical positioning and
celebrity endorsement.

Brand Position
Brand position is that part of brand identity and value proposition that is to be actively communicated
to the target audience which depicts advantages of the brand over competitors. Once the brand
position decision is made, brand identity and value proposition can be translated into a suitable
execution strategy in the form of an integrated advertising campaign. A customer related benefit is part
of the value proposition and forms a basis for brand customer relationship. For example, the
positioning statement of Titan as a 'Tata Product' explains the core identity in the form of a brand
position statement whereas the brand positioning statement of DHL couriers explain the service
component with 'Nobody delivers like us'.
                        Marketing Management

BRAND EQUITY

Brand equity is a set of brand assets and liabilities linked to a brand, its name and
symbol that add to or subtract from the value provided by a product or service to a
firm and/or to that firm's customers. These equity components can be grouped into
five categories, namely brand loyalty, brand name awareness, perceived quality,
brand association, in addition to the perceived quality and other proprietary brand
assets like patents, trademarks, and channel relationships. Brand equity is the added
value that the consumer assigns to products and services. It is based over what the
consumer thinks, feels and acts with respect to the brand and is often reflected in
company's sales performance, market share and profitability
                    Marketing Management




Case: Haier Brand
                        Marketing Management
New Product Decisions
                  Marketing Management
Idea Generation

                                  Steps towards new products

                                  Market Structure Analysis
                                  Sales Potential
                                  Concept Screening
                                  Advertising Development
                                  Product Formulation and Testing
                                  Testing the new product
                        Marketing Management

REASONS FOR ADDING A NEW PRODUCT

Excess Capacity as a Reason for Expanding Product-line
Profit as a Criterion of Optimum Product-line
Diversification as Response to Change
Diversification as Response to Restrictive Government Regulations - To avoid the
rigors of the various restrictive regulations, many multinational companies and those
belonging to big houses have decided to diversify. Associated Cement Companies
have diversified into high technology areas like cast refractory. BASF, the German
multinational, has diversified to include leather chemicals in its product-line because
they were compatible with the technological and marketing expertise of the
company. Reliance Group has diversified into retail business with an investment of
12000 crores, as the opportunity for growth lies in emerging retail sector.
                                 Marketing Management




Awareness: During the first stage of adoption process, consumers are explained the product
innovation. It gives information about the new product or service.
Interest: When consumers develop an interest in the product or product category, they
search for information about how the innovation can benefit them.
Evaluation: The evaluation stage represents a kind of ‘mental trial’ of the product innovation. Only
if the consumers’ evaluation of the innovation is satisfactory will they actually try the product. In
case the evaluation is unsatisfactory, the product is automatically rejected.
Trial: At this stage, consumers use the product on a limited basis. Their experience
with the product provides them with the critical information that they need to adopt or
reject it.
Marketing Management
                                     Marketing Management
Distribution Chanels and Logistics

Companies do not sell all their products directly to consumers. There are two ways of marketing
products viz. direct marketing without using the channel and indirect marketing though a set of
intermediaries.
The intermediaries who provide a link between the manufacturers and the ultimate consumers or
users are known as middlemen.
Intermediaries help in different kinds of flows in the market between the producer and the end
consumer. They help in physical flow, title flow, information flow and cash flow The design of a channel
starts with understanding the customer’s service expectations.
It should help in setting objectives and constraints for the channel.
A company may pursue exclusive, selective and intensive distribution strategy for reaching markets.
Once the channel design decisions are taken and intermediaries are decided upon, the big task is to
manage the selected channel. The marketing manager should select appropriate channel by evaluating
product, market and producer related factors.
Channel management is a dynamic process as it involves participants not directly under the control of
the organization.
There are three types of primary channel participants, namely manufacturer, wholesaler and retailer.
Howsoever strong the channel design and management decisions may be there is likely to be channel
conflict. It is impossible to eliminate channel conflict, so managers should try to resolve and manage
the conflict.
Conflict management for building cooperation among intermediaries can be done by identifying the
nature and cause of conflict and developing strategies for resolving these conflicts through mediation,
arbitration, joint membership and mutual goal sharing across the channel.
                      Marketing Management
Direct Marketing



 Indirect Marketing
                     Marketing Management
ROLE OF DISTRIBUTION CHANNELS
                             Marketing Management

                                 OBJECTIVES OF CHANELS
Availability of product in the target market
Smooth movement of the product from the producer to the customer
Cost effective and economic distribution
Information communication from the producer to the consumer.
Identification of Major Channel Alternatives
While evaluating channel alternatives, there are three issues to be addressed viz. the overall
business environment, types and number of intermediaries needed and the terms and
responsibilities of each channel member.

Types of Intermediaries
Company Sales Force
Middlemen
Agent or Broker
Wholesaler
Retailer
Distributor
Dealer
Value Added Resellers
Merchants
Carrying & Forwarding Agents (C & F)
                          Marketing Management

Selection of Channel Members

Market Factors: Customer Preferences, Organizational Customers, Geography
(Location) and Competitors
Product Factors: Life Cycle, Product Complexity, Product Value, Product Size and
Weight and Consumer Perceptions
Producer/Manufacturer Factors: Company Objective, Company Resources, Desire
for Control and Breadth of Product Life

Training Channel Members - The training programs can be on selling skills, on
business processes and other soft skills required to serve the end customer. The
training programs should cover customer contact and interaction management,
selling skills, relationship building skills and business development skills.
Motivating Channel Members - The idea of developing a channel motivational
program is to build their capability to perform better and take additional
responsibility. It should also improvise its channel offering to provide superior value
to consumers and channel members.
            Marketing Management

LOGISTICS
Customer logistic involves a seven ’R’ framework namely, it should be a process of right quantity of the
right product or service to the right place in the right conditions at the right cost and at the right time
with the right impression. If these seven aspects are taken care of, customer logistics process will be
able to create higher levels of customer satisfaction.
  Case: Oceanic Needs to Cut Distribution Costs
                                  Marketing Management

Companies do not sell all their products directly to consumers. There are two ways of marketing products
viz. direct marketing without using the channel and indirect marketing though a set of intermediaries.
The intermediaries who provide a link between the manufacturers and the ultimate consumers or users
are known as middlemen.
Intermediaries help in different kinds of flows in the market between the producer and the end consumer.
They help in physical flow, title flow, information flow and cash flow.
The design of a channel starts with understanding the customer’s service expectations.
It should help in setting objectives and constraints for the channel.
A company may pursue exclusive, selective and intensive distribution strategy for reaching markets.
Once the channel design decisions are taken and intermediaries are decided upon, the big task is to
manage the selected channel. The marketing manager should select appropriate channel by evaluating
product, market and producer related factors.
Channel management is a dynamic process as it involves participants not directly under the control of the
organization.
There are three types of primary channel participants, namely manufacturer, wholesaler and retailer.
Howsoever strong the channel design and management decisions may be there is likely to be channel
conflict. It is impossible to eliminate channel conflict, so managers should try to resolve and manage the
conflict.
Conflict management for building cooperation among intermediaries can be done by identifying the
nature and cause of conflict and developing strategies for resolving these conflicts through mediation,
arbitration, joint membership and mutual goal sharing across the channel.
              Marketing Management

              PRICING DECISIONS

Pricing Decision involves the following:
Decide the price objectives
Determine the demand
Estimate the costs
Analyze the competitors cost, prices and offers
Select the final price
Marketing Management
 OBJECTIVES OF PRICING
Marketing Management
 OBJECTIVES OF PRICING
                            Marketing Management
FACTORS INFLUENCING PRICING DECISIONS

Formulating price policies and setting the price are the most important aspects of
managerial decision-making. It is the most important device a firm can use to expand its
market share. The pricing decision is critical not only in the beginning but it must be
reviewed and reformulated from time to time.

The factors governing prices may be divided into external factors and internal factors.
The external factors include elasticity of supply and demand, goodwill of the company,
extent of competition in the market, trend of the market, purchasing power of the buyers,
and the government policy towards prices. The internal factors include the costs and the
management policy towards gross margin and sales turnover. The following are the general
considerations for formulating pricing strategy.
                              Marketing Management
The price of the product of a firm constitutes an extremely important element in its
marketing-mix. Pricing is of great importance to both the producer/seller and the consumer.

The price of a product affects other components of the marketing-mix of a firm.

A firm will improve the quality of a product, increase the number of accompanying services
and spend more on promotion and distribution, if it feels that it can sell its product at a
price high enough to cover the cost of these expenses.

Prices are also important from the consumer point of view. To the consumer, prices
determine his purchasing power and standard of living. Goods and services offered by
various producers at different prices help the consumer to make buying decisions and
satisfy his wants in a better way.

The price structure of a firm is a major determinant of its success as it affects the firm’s
competitive position and its market share. If prices are too high, business is lost; if prices
are too low, the firm may not make enough to run the business in the long term.

It has an important bearing on the firm’s revenue and net profit. With the help of price, the
firm can make an estimate of its revenue and profit. Profit is equal to revenue over cost.
                              Marketing Management

Price also helps in determining the quantum of production that a firm should carry.

The management of a firm can make estimates of profits at various levels of production
and prices to choose the best possible action for long-term goals of the organization.

Prices can be decided by analyzing the firm’s costs through different pricing methods
like full cost methods, target return pricing method and marginal cost method. These
methods do not take care of the market condition and current market structure for
making a decision.

However the second category of methods is competition based or market based
methods, in which the prices are decided on the prevailing market condition and
customary pricing methods.

There are specific pricing methods like value pricing, sealed bid pricing, price-quality
based pricing and psychological pricing.

The marketer needs to initiate price changes as well as respond to competitor’s price
changes, failing which he cannot manage the emerging market opportunity or the threat
raised due to competitor’s moves.
Marketing Management
 MARKETING COMMUNICATION
                                 Marketing Management
Developing an integrated marketing communication program involves eight steps, namely
identification of target audience, determination of communication objectives, design of
communication message, selection of the channel of communication, establishing the total
communications budget, deciding on the communication mix, measurement of communication
results and managing the integrated marketing communication process.

Identification of Target Audience - It is necessary to identify the target audience before developing
any integrated marketing communication program. It should include current customers, target
customers, potential customers, past users, influencers, and general public at large.

Determining the Communication Objective - The next task is to determine the communication
objectives. Firms have different kinds of communication objectives depending on which
communication tool is used and which stage of the product life cycle the current brand is passing
through. The marketer aims to communicate information about products and brands in such a way
that it influences consumer's mind, develops positive attitude towards products and brands and
prompts consumers to act in favor of the brand.

Designing the Communication Message- The next stage involves designing of communication
message. The message is what the marketing communicator tries to communicate to the customers
to attract his attention and interest, arouse desire and elicit action in the form of purchase. The
message should be developed in a way that it has the ability to integrate a common theme from the
awareness stage to the stage of purchase and satisfaction. The message formulation involves
message content (what to say), message structure (how to put the message),message format (how
to say it symbolically), and message source (who should say it).
                             Marketing Management
Selection of Media Channel
After the message decision is taken, the marketing manager searches for the appropriate
media for communicating with the customers. Research reveals that even when there are
great communication ideas and propositions if the media vehicle chosen is wrong, then
the message effectiveness diminishes. The presentation made through personal channels
should be crisp, logical and quick and should be responsive to customer queries.
Therefore communication channels are of two types, namely personal communication
channels and non-personal communication channels.



The personal communication channel involves direct interaction and communication
between two or more people. For example, a company like Eureka Forbes has understood
that to market vacuum cleaners it needs to use the personal channel, so that both
demonstration and customer objection handling can be done at the time of
communicating with the customers and during sales presentation.
                               Marketing Management
Selection of Media Channel


The non-personal communication channels include all those conventional channels used
by marketing communicators known as mass media channels. The non-personal
communication channels include media, atmosphere and events. The media consist of
print media like newspapers, magazines, and direct mail; the out of home media include
billboards, wall paintings, hoardings, bulletins, kiosks, display boards, signage and posters;
the electronic media include radio, television, Internet, CDROMs, audio and video tapes.
Many companies like McDonalds, Café Coffee Day give more attention to the atmosphere
for attracting their customers.
                             Marketing Management
Deciding the Total Communication Budget
Deciding of the Marketing Communication Mix
Measurement of Marketing Communication Results
               Managing and Coordinating the Integrated Marketing Communication
Marketing Management
Marketing Management
Marketing Management
                               Marketing Management

Sales Promotions Directed at     Sales Promotions Directed at   Sales Promotions Directed
Consumers                        Trade Partners                 at Sales Force

Prize Schemes                    Sales Competition              Sales and Contests
Fairs and Exhibitions            Boosters for Dealers           Conferences and Seminars
Free Samples                     Price Offs                     Commissions
Correspondence                   Free Merchandise               Incentives/ Bonus
Catalogues                       Allowances                      International tours
Advertising Novelties            Tradeshows and Conventions
Entertainment of Customers       Specialty Advertising
Sales Contest
Price-off
Refund
Point-of-Purchase Material
Coupons
Price Packs
Premiums
Free Trials
Patronage Awards
                          Marketing Management
Objectives of Public Relations Program
• Presenting a favourable image and its benefits
• Promotion of products or services
• Detecting and dealing with its publics
• Determining the organization's posture in dealing with its publics
• Goodwill of the employees or members
• Prevention and solution of labor problems
• Fostering the goodwill of communities in which the organization has units
• Goodwill of the stockholders or constituents
• Overcoming misconceptions and prejudices
• Forestalling attacks
• Goodwill of suppliers
• Goodwill of the government
• Goodwill of the rest of the industry
• Goodwill of dealers and attracting other dealers
• Ability to attract the best personnel
• Education of the public in the use of a product or service
• Education of the public regarding a point of view
• Goodwill of customers or supporters
• Investigation of the attitude of various groups towards the company formulation
• and guidance of policies
• Fostering the viability of the society in which the organization functions
• Directing the course of change.
                             Marketing Management
Tools of Public Relations
Press Releases: The press release is the basic building block of a publicity program
concerned with story placement.

Fact Sheets: Fact sheets include more detailed information on the product, its
origins, and its particular features.

Press Kits: The press kit pulls together all the press releases, fact sheets, and
accompanying photographs about the product into one neat package.

Video News Releases: The Video News Release (VNR) is the video equivalent
of a press release.

Employee/Member Relation Program: Corporate public relations people often
spend a great deal of time developing employee communication programs, including
regular newsletters, informational bulletin boards, and internet postings.

Community Relations Program: Many companies actively encourage their
employees to take part in community organizations, and local corporations are often
major sponsors of community events and activities such as art presentations, blood
donation drives, and educational activities.
                            Marketing Management
Tools of Public Relations
Financial Relations Programs: Financial relations people are responsible for establishing
and maintaining relationships with the investment community, including industry
analysers stockbrokers, and journalists specializing in financial reporting.

Industry Relations Programs: The primary public that industry relations specialists
deal with is other businesses operating within the same industry, as well as trade
Associations.

Development/Fund-Raising Program: This is a particularly important area for not-for-
profit organizations such as art organizations, educational institutions, and community
service programs.

Special Events: Event marketing is rapidly gaining popularity. Besides linking their
brands to existing events, marketers are also creating events of their own, designed
to reach special targets.

House Ads: A company uses various media like newspapers, magazines and broadcast
stations to prepare advertisements for the internal public. Public relations program
manages these house advertisements.
Tools of Public Relations     Marketing Management
Public Service Announcements: These are ads for charitable and civic organizations that
run free of cost on television or radio or in the print media. These are called public service
announcements.

Corporate Advertising: This kind of advertising promotes corporate image or corporate
viewpoints. These advertisements do not talk about products and services.

Publications: Companies publish various publications in the form of pamphlets, booklets,
annual reports, books, bulletins, newsletters, inserts and enclosures and position papers.

Speakers, Photos and Films: Many companies use speaker bureaus to communicate with
people about topics of public's interest. Some publics like news media also want pictures
and video films for use in their media.

Displays, Exhibits, Events and Tours: Exhibits, displays, tours and events are important tools
for public relations. Companies use displays and point of purchase materials for image
building.
PUBLICITY                    Marketing Management
Non-Personal/Mass Media: Like advertising, publicity also reaches a very large number of
people at the same time through mass media such as newspapers, magazines, radio, TV,
etc (hence, non-personal)

Commercially Significant News: This is one of the features that distinguishes publicity from
advertising. When information about a product or company is considered newsworthy,
mass media tend to communicate that information free of cost. Since most publicity
appears in the form of news items or articles originating from the media, rather than the
advertiser, it has higher credibility (believability).

No Sponsor: Since the information originates from the media, there is no sponsor, which
means the messages are unsigned. This is another point of difference between advertising
and publicity.
 PUBLICITY                         Marketing Management
Not Paid for this: Since the sponsor is not identified in publicity and the information is not
disseminated at his behest, he does not pay for it. This is the an additional feature that
differentiates publicity from advertising.

Purpose (Demand Stimulation): In some situations, where publicity is properly planned, it
may lead to the creation or reinforcement of a favorable impression about the company
and its products in the minds of people receiving the message. This may lead to a favorable
attitude towards the product or company and, thus,leads to an increased demand for the
product.
Note : Negative publicity can damage the company's or product's image, resulting in reduced demand for the
product. For instance, a great deal of adverse publicity was generated when different media condemned the Union
Carbide's negligence in Bhopal gas tragedy through articles and editorials.
                            Marketing Management

Techniques of Personal Selling

Prospecting
Pre-approach

Approach
Ask Questions: Questions should preferably be relevant to sales presentation
Use a Referral: Preferably someone favourably known to the potential customer
Offer a Benefit or Service: This can be quite effective if relevant to customer's need
Complement the Prospect: It is a good way to establish rapport if there is anything the
prospect has achieved

Sales Presentation
Handling of Customer's Objections
Closing the Deal
Follow Up



Case : Pizza Hut

				
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