UNIT ONE

Introduction to Marketing
1. Definition & Core Concepts

2. Nature of Marketing

3. Goals of Marketing

4. Scope of Marketing

5. Evolution of Marketing Approach

6. Significance of Marketing

7. Functions of Marketing

8. Recent trends in Marketing

Marketing – identifying and meeting human and social
needs
- Meeting needs profitably
Marketing is a planned process through which
organizations primarily identify the needs of people
and then recognise target customer among the
people, satisfy the needs of the customer by selling
products & services and most importantly retain the
customer
Marketing is an organizational function and a set of
processes for creating, communicating, and delivering
value to customers and for managing customer
relationships in ways that benefit the organization and
its stakeholders.
Success of business depends on…..

how efficiently the products and services are

delivered or marketed to the customers

Difference in delivery in comparison to the

competitors
Figure 1.2
A Simple Marketing System
Nature of Marketing

1. Customer Centric – meet the needs and wants of the

customer
Nature of Marketing

2. Managerial Function – process by which individuals and

organizations obtain what they need and want through
creating and exchanging value with others
Nature of Marketing

3. Dynamic Process

Dynamic - constantly changing

Customer needs, wants and demands are constantly changing

Influence of External Environment – Culture, religion,

globalization etc
Nature of Marketing

4. Economic Function

-Demand and Supply

5. Marketing is Science and Art

-Emerged from Economics

- concepts taken from psychology, Sociology etc
- Using of knowledge in a creative way to sell products
Nature of Marketing

6. Continuous Process

-Achieving leadership in terms of market share and survival

- Profit Maximization

- Innovate or Perish
Nature of Marketing

7. Value Driven

Value – defined as the variation between what they expect

from the product & they actually get

Value creation & Value delivery

[Link] Oriented

-Delivery quality products

-Profit
-Brand Image
Scope of Marketing

a) Primary Elements of Marketing

Goods – Products

Services

Events
Experiences

Persons –

Places

Properties

Organizations
Scope of Marketing

b) Auxiliary Elements of marketing

1. Consumer Behaviour

2. Marketing Research

3. Customer Satisfaction

4. 4 Ps of Marketing
Marketing Activities include…….

Understanding customers’ needs and wants

Communicating specifications to the product teams

Developing the right products and services

Meeting and satisfying the customers

Goals of Marketing

1. Cater the wants and needs of customer

2. To improve and maintain image of the product or the
business
3. To increase market share
4. To target an unexplored market
5. To target a new market segment in an explored market
6. To build trust and rapport with customers
7. Attract new customers & retain existing customers
8. To illustrate benefits & introduce products
9. To boost sales revenue
10. To develop new business ideas
11. To understand consumer behaviour through marketing
research
Traditional and Modern Marketing Approaches
Approaches Key Focus
The Trade Approach Exchange of household utilities for other
goods
The Product Approach Products were sold at a low cost
Sales orientation Enhancing sales volume with promotion
Approach
Customer orientation Supplying products to suit new consumer
Approach tastes – Understanding the customer
Social orientation Marketing activities should not harm the
Approach society – overall welfare of a community
Relationship Marketing Building and keeping good customer
Approach relations
Virtual Marketing Links the marketing activities to online world
Approach
Branding Emotional and psychological relationship
Customer Orientation – Steps

Marketing Research

Customer Need Assessment

Product Development

Advertisement &
Promotion

Sales
Social orientation – takes the society’s well-being into
account in addition to the satisfaction of the consumers’
wants – focuses on production of product and services does
not harm environment and condition of public health or
safety

Relationship Marketing – process in which marketers develop

a long-term satisfying relations with its customers in order
to retain the customers’ loyalty in buying the firm’s
products

Virtual Marketing – avenue for online community concerned

with marketing – social media

Branding – marketers promise to its customer – communicates

what consumers can expect from products and services
Marketing and Selling
Dimension Marketing Selling
Meaning Satisfying needs and wants exchange of money for
through an exchange goods or service – effort is
process to execute the exchange
process
Inception Mkg starts before decision Selling starts after
of production of goods or production of goods or
services services
Subject Importance is on Importance is on selling
Matter satisfaction of consumers products - Sales
Environment Both internal and external Internal – production and
factors are considered distribution of goods
Scope Wider term – selling, Part of marketing
advertising, customer
service and distribution
Dynamics Integrated approach Short-run oriented
Role & Significance of Marketing

1. Marketing scripts organization’s reputation – attracting and

retaining consumers – relationship between corporate
reputation and the marketing strategies of a company
2. Marketing generates revenue – increased customer
awareness result in demand creating – leads to increased
sales revenues
3. Marketing makes organization dynamic – respond to the
changing customer wants, needs and demands
4. Facilitates demand & product awareness – create
awareness- create a need in the consumers mind – grab the
interest of potential customer
5. Offer wide employment opportunities – careers in
advertising, brand management, market research
Role & Significance of Marketing

6. Ensures healthy competition – proper pricing, promotion

and customer relations
7. Business value acceleration – combines employee value,
customer value, supplier value, channel partner value and
societal value – directly correlated with success of
marketing
8. Offers satisfaction of customer requirements – understand
consumer needs and develop products and services to
satisfy the requirements
9. Creates Competitive Advantage – through marketing
excellence and innovative products – exploit marketing
tools and techniques that enhance business performance
Functions of Marketing

Exchange of goods and services from producer to customer

with an aim of maximising the satisfaction of needs of
customer

A. Exchange Functions ( Merchandising Functions)

B. Supply Chain Functions ( Physical Distribution Functions)

C. Utility Functions ( Facilitating Functions)

Functions of Marketing

A. Exchange Functions

1. Buying
– decisions on what to buy, quantity, from whom, when
and at what price
- on the basis of the need and preferences of customers

2. Selling
- persuasion of prospective buyers to actually complete
the purchase of product or servce
- Transfer of ownership
Functions of Marketing

A. Exchange Functions

3. Pricing
- depending on the price of products demand fluctuates
- get the right pricing – both organisation and customers
are benefited

4. Assembling
- creation and maintenance of the inventory of goods
purchased from different sources
Functions of Marketing

B. Supply Chain Functions

1. Transportation
- economical transportation system
- enhance the value of goods by the creation of place
utility

2. Storage
- holding and preservation of goods
- protection of the quality and quantity of the stored
products
Functions of Marketing

B. Supply Chain Functions

3. Retailing
- buy in larger quantities and sell in smaller quantities
- dual role as marketer and customer
- offers convenient shopping locations, market
information, after sales services etc

4. Stock Management
- maintain optimum inventory
- deciding factor in identifying markers potentials to
function with good profit margins
Functions of Marketing

B. Supply Chain Functions

5. Standardisation & Grading

- specifications for products in terms of quality and
quantity
- standard conveys a uniformity of the products
- Grading involves classification of standardised products
into certain well-defined classes or groups
Functions of Marketing

C. Utility Functions

1. Financing
- providing credit facilities
- The service of providing the credit and money needed to
meet the cost of getting merchandise into the hands of
the final user is referred as finance function in marketing

2. Customer Service
-concerned with the entire experience a customer derives
from using the products or service
Functions of Marketing

C. Utility Functions

3. Marketing Information
- System designed to support decision making in marketing
- collect, analyze and interpret facts – Internal & External
- Market Research

4. Advertising and Sales Promotion

- create and increase brand awareness
- influencing the customer to purchase the product or
service
Recent trends

Development of Information Technology

Marketers – focused on making marketing more

attractive and interactive

Educating, attracting prospects and customers –

adding value
Recent trends
Digital Marketing
- E-marketing
- M-marketing
- Search Engine Optimization
- Social Media Marketing
Tele marketing
Viral Marketing
Green Marketing
Retail Marketing
Relationship Marketing
Customer Relationship Management
Recent trends
E-business

- use of Internet and Web technologies in

business

- referred as buying and selling of goods or

services through internet

- use information and communication

technologies to facilitate and support processes
& activities of business
Recent trends

E-business – Features

- Wider reach in terms of market access

- Operational round the clock and across the year

- Covers all the activities of business

- Use of Information and communication

technologies

- Attractive, interactive and collaborative

Recent trends

E-business

Business – to – Business (B2B) Model – ordering,

purchasing
Business – to – Consumer (B2C) Model – selling its
products to consumer over the Internet
Consumer-to-Consumer (C2C) Model – consumer
sells directly to another consumer
Consumer-to-Business (C2B) Model – Individuals
who sell products and services to organisation
Recent trends
M - Marketing

- Mobile marketing is marketing

on or with a mobile device,
such as a smart phone

“is the use of mobile devices to communicate, inform,

transact and entertain using text and data."
Recent trends

Search Engine Optimization

A web search engine is a software system that is

designed to search for information on the World Wide
Web

- Search engine optimization (SEO) is the process of

affecting the visibility of a website or a web page in a
search engine's "natural" or un-paid search results.
Recent trends

Social networked marketing

- Process of use of social media to persuade

customers which involves a set of activities like
creating content that attracts attention and
encourages readers to share it with their social
networks
Recent trends

Tele-Marketing

Process of persuading prospective customers to

buy products or services using
telecommunication technology
Recent trends
Tele-Marketing

- Pre-recorded messages
- Video chat
- SMS
- Tele-shopping
- Call Centers
Recent trends

Viral Marketing (Marketing Buzz)

- Involves use of social networks to promote &

increase brand awareness or to achieve other
marketing objectives
- (video clips, images, messages)
- Forward messages
- Cost effective
Recent trends

Green Marketing

Marketing of products that are presumed to be

environmentally safe
Recent trends

Retail Marketing

Retailing includes all the activities involved in

selling goods or services directly to final
consumers for personal and non-business use
Indian Consumers Today
Buying into a better life – high disposable income – eating out,
films and entertainments, credit cards and willingness to
buy, Mall is the new culture
Consumers need constant change and new products

Rise of the middle class – tech savvy, young educated

consumers, use of Internet and mobile phones

Indian Consumers have growing appetite for cars, computers

and clothes
Recent trends

Relationship Marketing

Includes a set of activities & strategies aimed at

developing loyalty, interaction, managing trust
and long-term engagement with the customers
Recent trends

Customer Relationship Management

Business strategy indented towards

understanding, interacting, anticipating and
responding to the needs of current and
potential customers using technology to
organise business processes
Recent trends

Customer Relationship Management

Maintain the existing customers and getting new

customers into the organisation

Marketing, customer service and technical

support
Recent trends

Customer Relationship Management – Benefits

[Link] cost – retaining the existing customers

[Link] customer satisfaction

[Link] in number of customers

[Link] term profitability

2 Marks
1. Define Marketing Management
2. Define Marketing
3. Define Market
4. Define Social marketing
5. State any two functions of marketing
6. Give the meaning of tele-marketing
7. What is m-business
8. What is green marketing
9. What is retailing
10. What is relationship marketing
11. What is CRM
7 Marks or 15 marks
1. Explain the nature and scope of marketing
2. Explain the role of marketing in economic
development
3. Explain the importance of marketing
4. Difference between selling and marketing
5. Explain the functions of marketing
6. Explain the approaches to the study of marketing
7. Explain the recent trends in Marketing
Marketing Environment - Introduction

Factors that affect the marketing management’s ability to develop

and maintain successful relationships with its target customers

The market environment refers to various internal & external

factors and forces that affect a firm’s activities such as marketing
plans, customer management, financial planning etc., directly or
indirectly

The internal and external influences which affect marketing decision-

making and have an impact on its performance is called Marketing
Environment
Features

1. Confined by external forces – sum total of all factors external to

the marketer
– customers, competitors, suppliers, government, social, cultural,
political, technological, legal and global forces

2. Complex & Dynamic – changing and sometimes unpredictable –

economic, technological, cultural and legal

3. Needs adaptability – Marketers have to adapt to changes in their

activity – for keeping their customers – avoiding losses
4. Changes Regularly – changes in customer preferences,
competition, Government policies, market share – identify the
new areas of business for growth and expansion

5. Long term impact – Functioning of the business in long run –

Each factors will have an effect on business function
Environment scanning & Analysis

Scanning - Process of collecting information about the forces

in marketing environment

Scanning involves observation, checking of secondary sources

of information

Analysis - Process of assessing and interpreting the

information gathered through scanning

To assess the performance of current marketing efforts and

develop marketing strategies for the future
Benefits of Environment scanning & Analysis

1. Awareness of environmental changes

- anticipate problems arising in the longer term
- Possible futures and their effect on the organisation
- Act in advance of changes

2. Industry and market analysis

- Improvement in the quality of products
- Identifying changes in buyer behaviour
- Anticipate future needs and new products
Benefits of Environment scanning & Analysis

3. Strategic planning and decision making

- greater awareness of political events and economic
cycles
- to take long term decisions

4. Diversification and resource allocation

- focus resources in business areas
- greater ability to allocate resources

5. Relationship with Government

- Improved understanding
- Ability to be proactive
Benefits of Environment scanning & Analysis

6. Overseas businesses
- understand overseas markets
- adopt strategies to sustain in overseas markets
Steps in environmental scanning & analysis

1. Scanning of environmental influences

- monitoring activity that is undertaken by the
marketers
- Undirected viewing – exploring information in
general without carrying a specific agenda – broad attempt
to beware of factors or areas that may have changed
- Conditional viewing – search of information that
identifies changes in specific areas of activity
- Informal search – limited search for information to
support a specific goal
- Formal search – actively done in an organised way
Steps in environmental scanning & analysis

2. Scrutiny of key environmental forces

Internal Factors
- internal organizational environment – Employees,
Shareholders, management, Structure etc
- helps to find the strength and weakness of the
organisation
External Factors
- Micro Environmental factors – Suppliers, Market
Intermediaries, Customers, Competitors, Public
-Macro environmental factors – Demographic, Economic,
Political, Social and cultural, Technological

SWOC ANALYSIS AND PEST ANALYSIS

Steps in environmental scanning & analysis

3. Selecting relevant and key factors

- relevant factors that affects business highly for further
analysis – most affecting factors

4. Determining principle opportunities & threats

key factors which had an effect on the success and failure
of business – helps in identifying new areas in the market

5. Strategic position & reporting

- projecting of business position in the light of micro and
macro environment – future forecasting
Need for analysing Market Trends (Importance,
Benefits, Significance)

1. Identification of SWOT
Need for analysing Market Trends (Importance,
Benefits, Significance)

2. Explore & exploit business Opportunities

- changes in internal and external factors –

making it an opportunity
- helping in growth and expansion
Need for analysing Market Trends (Importance,
Benefits, Significance)

3. Respond to new demands & trends

- understanding the customer requirements

and responding to it
- making of new products and services

4. To grow & Stay alive in competition

- continuous monitoring
- ensure maximum advantage
- identifying the growth opportunities
Need for analysing Market Trends (Importance,
Benefits, Significance)

5. Ensure effective utilization of resources

- understand the availability of resources

- take full advantage of the various factors
affecting the business

6. To build brand reputation

- conveying an identity and a promise

- to understand the values, culture & believes
of potential customers
Need for analysing Market Trends (Importance,
Benefits, Significance)

6. Proactive approach & Strategy Building

- acting in advance for a future situation

- help in assessing the size and growth of a
market
Components of Marketing Environment

Micro Environment – factors and forces over which

the organisation has control
- can be modified in order to provide complete
customer satisfaction

- Functional Areas of Business

- Suppliers
- Marketing Intermediaries
- Customer
- Competitors
- Shareholders
Components of Marketing Environment

Functional areas

Human Resources – providing appropriate

personnel for marketing jobs
Finance – allocation of funds – cost control
Research & Development – development of new
products
Production – making of products required
Components of Marketing Environment

Suppliers

- Supplies resources needed by the firm

- Customer satisfaction has an indirect
relationship with suppliers

Marketing Intermediaries

- Involved in marketing distribution channel from

original producer to the final user
- Promote, sell and make-available products
- Transportation, Storage and distribution
Components of Marketing Environment

Customers

- understand all relevant buying behaviour and

product usage characteristics
- 5W Model – Who, What, Where, When, Why

Shareholders

- Expect the management to generate an high

rate of return on their capital
- Increasing sales revenue and attain marketing
leadership
Components of Marketing Environment

Competitors

-framing marketing plan to overcome competition

- Identify the strength and weakness of
competitor
- Create strategy for improvements
- Helps in product comparison and promotional
decisions
Components of Marketing Environment

Macro Environment - refers to all major external

factors and forces over which the marketing
firm has no control

- Understand the threats and opportunities

created by these factors

- Are uncontrollable factors which indirectly

affect the concern’s ability to operate in the
market effectively
Components of Marketing Environment
Macro Environment Factors

1. Political & Legal Environment – refers to the way

a country is being run in terms of politics –
include laws, government policies
- Political System
- Political risk
- Political Ideologies
- Political Instability
- Monopoly controls & Legislations
Components of Marketing Environment
Macro Environment Factors

2. Economic Environment – policies and nature of an

economy, trade cycles, level of income,
distribution of income and wealth
- Economic System
- Inflation rates
- Business Cycles
- Economic Growth rate
- Economic Policies
- Savings, Debt and credit availability
Components of Marketing Environment
Macro Environment Factors

3. Demographic Environment – trends in Country’s

population composition and its growth, levels of
income, household patterns etc
- Population Growth
- Population Age Mix
- Educational Level
- Household Patterns
- Geographical Shifts in Population
Components of Marketing Environment
Macro Environment Factors

4. Technological Environment – advancements in

the field of technology
-Degree of Automation
- R & D Activity
- Technology Transfer
- Use of IT & Communication
Components of Marketing Environment
Macro Environment Factors

5. Natural Environment – combination of natural

resources which is used by business as inputs and
affects their marketing activities
- Geographic Location
- Availability of resources
- Access to natural resources
- Concern for environment
Components of Marketing Environment
Macro Environment Factors

5. Socio-cultural Environment - set of beliefs,

customs, practices, norms and behaviour that
exists within a society which describes
relationship to themselves and others
- Change in Lifestyles
- Beliefs, Values and Attitudes
- Family Structures
Market Segmentation

A market segment consists of a group of customers who share

a similar set of needs and wants.

Identifying a target market by dividing the market into

segments according to customer needs and characteristics
Why Market Segmentation

1. Precise satisfaction of customer needs –

developing a distinct marketing mix for
each segment – offer a better solutions for
customer needs
2. Increased Profits – through better
positioning of chosen segments
3. Effective allocation of resources –
promotions and advertisement
Why Market Segmentation

3. Retain Customers – appeal to customers at

different stages of their life
4. Segment Leadership – attain maximum
profitability
5. Focused marketing communications – ascertain
media channels that can particularly reach the
target group
Basis of Market Segmentation
Demographic Segmentation – observable aspects of a
population
Age, Gender, income, occupation, and family structure

Socio-economic Segmentation – study of both social and

economic conditions relevant to well-being
Time, Purpose, Place of Use, Person

Behavioural Segmentation – divide buyers into groups on the

basis of their knowledge of, attitude toward, use of, or
response to a product
Need and Benefits, Decision Roles, Usage
Basis of Market Segmentation
Psychographic Segmentation – classifies people in terms of
psychological and behavioural similarities
Personality, Lifestyle, Need Motivation, Perception,
Learning Involvement

Cross-Cultural Segmentation & Socio-Cultural - dealing with

or comparing two or more cultures
Cultures, Religion, Ethnicity

Geographic Segmentation – places, physical features and the

inhabitants
Regional, City Size, Density of area, Climate
Benefits of Market Segmentation
1. To establish and strengthen the position in the market and
operate more effectively
2. Effective market segmentation will counter competition
3. Greater degree of market sector knowledge and customer
loyalty
4. First step in a three phase marketing strategy
-Segmenting the market into homogeneous clusters and
develop profiles of each segment
- Market Targeting – evaluate the potential and
attractiveness of each segment and select the target
segment
- Positioning – identify and develop the appropriate
positioning concept
Benefits of Market Segmentation
5. To understand customers better – identify the specific
benefits desired by consumers – willingness to pay –
outlets from where they likely to buy

6. To operate in a cost effective manner – focus their

marketing efforts on the most productive and profitable
segments
Steps involved in segmentation Process

Profiling of - Creating a group of customers with

customers similar tastes and preferences

Identification - Indentify
the segmentation variables
of Segment and segment the markets
- Develop profiles of each segment
Evaluating - Evaluate the Potential and
segment attractiveness of each segment
attractiveness - Select the suitable Target segment
Assessment of
- Ability of the marketer to generate
Segment
profit from the identified segment
profitability
Segment - Creating a perception about the
Positioning product
Steps involved in segmentation Process

- Testingto ensure that estimated

Segment
segment is accurate and responds to
Testing
the firm’s marketing actions
Develop a
marketing mix Proper analysis of 4 P’s of Marketing
Criteria and Strategies for Market
Segmentation
Identification – identify certain common or shared
characteristics relevant to the product or service

Sufficiency – sufficient number of customers with certain

common needs or interests – Consumer Research

Stability – more stable in terms of demographic and

psychological factors and needs and also grow over a
long period of time

Accessibility – those market segments who are easily

reachable and in the most economical way
Customer, Consumer and Behaviour

Customer – purchases and pays for a product or service

Consumer - is the ultimate user of the product or service; the

consumer may not have paid for the product or service

Behaviour – a person’s action or reaction to some situation

Consumer Behaviour- Definition
Consumer Behaviour refers to the behaviour that consumers
display in searching for, purchasing, using, evaluating and
disposing of products and services that they expect will satisfy
their needs

CB is the study of how individuals, groups, and organisations

select, buy, use, and dispose of goods, services, ideas or
experiences to satisfy their needs and wants
Nature of Consumer Behaviour
1. Consumer Behaviour is motivated - When you buy a
product there will be a motive

2. Consumer Behaviour includes many activities –

Thinking about product
Visiting stores
Viewing ads
Seeing displays
Observing others
Decision to buy
Arrangement of payment
Telling others about the product
Nature of Consumer Behaviour
3. Consumer Behaviour is a process

Stage 1 – Pre purchase Activities

Stage 2 – Purchasing Activities

Stage 3 – Post Purchase Activities

4. Consumer Behaviour varies in timing and complexity

Time required to do the Purchasing process (including

analysis, search information)

Difficulty faced in purchasing

Nature of Consumer Behaviour
5. Consumer Behaviour involves different roles

Purchaser / User

One single person plays both the roles or differently.

6. Consumer Behaviour is influenced by external factors

Family
Friends
Culture
Physical Environment
Nature of Consumer Behaviour
7. Consumer Behaviour differs for different people

People are not of same characteristics

-will have to go for segmentation

Trends in Consumer Behaviour
a) Consumer Demographic Trends
- Aging Population – Health, Financial security, Personal
Safety
- Young Generation – Savings, Fashionable Products
- More Income in the family – male and female earning
- Change in Lifestyles – purchasing weekends in convenient
location, Social Network, Restaurants, Beauty parlours
- Change in Middle class – More disposable Income, Increase in
Purchasing power, More streams of Income
- Diversity in Metros – Standard of living, cultural differences
Trends in Consumer Behaviour
b) Technological Trends

- Information Seeking
- Techno Savvy generation

c) Ethical consciousness, society concern

d) Greater participation of private sector – better products

Factors influencing Consumer Behavior
Factors Affecting Consumer Behavior
Cultural Factors
• Buyer’s culture
• Buyer’s subculture
• Buyer’s social class
Factors Affecting Consumer Behavior
1. Cultural Factors
Culture is the fundamental determinant of a person’s wants and
behaviors acquired through socialization processes with family and
other key institutions.

- Process of socialization

Marketers – to understand how to best market their existing products

and find opportunities for new products
Factors Affecting Consumer Behavior
1. Cultural Factors

Sub cultures – smaller group that provide more specific identification

Religions, Statewise, geographic regions

Marketers – specialized marketing programs

Factors Affecting Consumer Behavior
1. Cultural Factors

Social class refers to the status ranking which individuals and

groups within a society are assigned, on the basis of
esteem and prestige acquired through family background,
education, occupation and income
Factors Affecting Consumer Behavior
Social Factors
• Reference groups
• Family
• Roles and status
Factors Affecting Consumer Behavior
Reference Groups – all the groups that have a direct (face-to-face) or indirect influence on their attitudes or
behaviour
1. membership group – direct influence – may be primary groups (person interacts continuously and
informally- family, friends, neighbors, coworkers) or secondary groups (Formal group -religious,
professional)
2. Aspirational group – person hopes to join
3. Dissociative groups – those whose values or behaviour an individual rejects
Marketers must determine how to reach and influence the group’s opinion leaders
Opinion leaders – is the person who offers informal advice or information about a specific product or product
category
Factors Affecting Consumer Behavior
Family
Family of orientation – parents and siblings

Family of procreation – spouse and children

Factors Affecting Consumer Behavior
Roles and Status

Role consists of the activities a person is expected to perform

Each role in turn connotes a status

People choose products that reflect and communicate their role and their
actual or desired status in society
Factors Affecting Consumer Behavior
Personal Factors
a) Age and life-cycle stage - critical life events or
transitions – marriage, childbirth, illness,
relocation, Job, career change, retirement,
death of a spouse

b) Occupation & Economic Circumstances –

Marketers try to identify the occupational groups
that have interest in their product and services
Economic situation includes trends in Personal
Income, Savings, Interest rates
Factors Affecting Consumer Behavior
Personal Factors

c) Lifestyle – person’s pattern of living in the world

as expressed in activities, interests and opinions

d) Personality and self-concept

Personality – set of distinguishing human traits
Self-concept – person’s image of himself or herself
Factors Affecting Consumer Behavior
Psychological Factors
a) Motivation: inner drive that is sufficiently pressing
and directs the person to seek satisfaction of the
need.
Factors Affecting Consumer Behavior
Psychological Factors
b) Perception: process of selecting, organising and interpreting or attaching
meaning to events happening in environment
c) Learning: describes changes in an individual’s behaviour arising from
experience
d) Beliefs and attitudes
A belief is thought that a person hold about something
Attitude – describe a person’s relatively consistent evaluations, feelings,
and tendencies toward an object or idea.
Consumer Decision Process Model

Need Recognition

Search for Information

Pre-purchase Evaluation of Alternatives

Purchase

Consumption

Post-consumption Evaluation

Divestment
1. Need Recognition

Consumers recognize needs and seek to

fulfill them, or seek a product to solve their
problems
Knowing consumers’ needs helps firms
develop products and marketing programs
to reach them more effectively
2. Search for Information
Internal search: retrieving knowledge
from memory
External search: collecting information
from peers, family, and the marketplace

Sources of Information
Marketer Dominated – Advertising,
Salespeople, Websites

Non-Marketer Dominated – Friends,

Family, Opinion leaders
3. Pre-purchase Evaluation of
Alternatives

The process of evaluating alternatives

identified from search, which leads to a
product or brand selection most likely to
satisfy the consumer
4. Purchase

Acquisition of the product that involves

choosing a specific retailer

Purchase intention can change during

the purchase stage—it can be
influenced by factors such as in-store
promotions, discounts, salespeople,
failure to find the product, or lack of
financial resources
5. Consumption

The process of using the product or

service purchased
Consumption can either occur
immediately or be delayed
6. Post-consumption Evaluation

Consumption is an important
determinant of satisfaction
Satisfaction: when consumers’
expectations are matched by perceived
performance
Dissatisfaction: when experiences and
performance fall short of expectations
7. Divestment
How consumers dispose of the
packaging or product after use
Options include:
Disposal
Remarketing or reselling
Recycling
Marketing Mix

is a combination of Marketing Tools used to satisfy

customers and company objectives

According to Philip Kotler

“A Marketing Mix is the mixture of controllable
marketing variables that the firm uses to
pursue the sought level of sales in the target
market
Marketing Mix – An Overview
Marketing Mix Explanation
Elements

Product The Product or services offered

to your customer such as, the
product’s physical attributes,
how they differ from your
competitors and what benefits
they provide
Marketing Mix – An Overview
Marketing Mix Explanation
Elements

Price Pricing allows to make profit

Differentiating your products

Creates demand
Marketing Mix – An Overview
Marketing Mix Explanation
Elements

Promotion The method used to

communicate the features and
benefits of the products or
services

Advertising, Sales Promotion

Marketing Mix – An Overview
Marketing Mix Explanation
Elements

Place How to get the products or

(Distribution) services to your customers

Channels of Distribution
Meaning of Product
A product is a set of attributes that satisfies a customer
demand. It may be in the tangible form or in the form
of services or idea

- A bundle of utilities or satisfaction

- A customer also buys satisfaction alongwith the product
- A concept of product should include the social and
psychological needs and their satisfaction and it must
involve its functional aspects
What is a product ?

• According to Kotler, “A product is anything that can be

offered in a market for attention, acquisition, use or
consumption that might satisfy a want or a need.”
• According to Aldeson.W., “ Product is a bundle of utilities
consisting of various product features and accompanying
services.”
• According to Schwarte. D. J., “ A product is something a
firm markets that will satisfy a personal want or fill a
business or commercial need.”
Classification of Products
Convenience Products – brought with ease and
without consuming any time
Shopping Products – purchased but concerned
about price, quality and style- visit several
outlets before deciding to buy
Speciality Product – High priced – Expensive
Products
ROLES OF PRODUCT MANAGER
• Developing a suitable long range planning and strategy for
the brand or product.
• Preparing suitable short term and long term forecast for the
brand.
• Preparing annual marketing plan and budget.
• Preparing annual and general sales policy and to coordinating
with sales force and distribution channel members.
• Coordinating advertising and sales promotion work within the
departments and external agency to meet the competitive
need of the market.
• Collecting continuously and systematically market
information regarding product preferences, competitors’
status etc.
Meaning of Product Planning

• Every business needs to develop a product plan consistent with

its overall marketing strategy.
• Product Planning is the ongoing process of identifying and
understanding market requirements that define a product’s
feature set.
• a function whereby an enterprise is responsible for the efficient,
planning, scheduling and coordination of production activities.
• Making decisions about the features that are needed to sell a
business's products, services, or ideas.
Meaning of Product Planning

• Product Planning outlines the focus given to

Core Business – current products in current segments

Market Development – new segments for current products
Product Development – New products for current
segments
Diversification – Products totally new to the company for
new segments
Objectives Of Product Planning

1. Basis of Marketing Programmes – Effective use of Marketing Mix

– easy to price, promote and distribute
2. To face Competition – Strong competitive position
3. To minimise Risks
4. As an instrument of growth – Product Innovation – newer and
better products - to exploit business opportunities
5. For the very survival itself – Improve sales volume – Improve the
product – Meet changing demand
6. To discharge social responsibilities – serving the society –
supplying products that satisfy public needs – quality of life
Objectives Of Product Planning

7. Identification of future development – modification, Changes in

features – value addition to the product
8. Consideration of opportunities and threats – SWOT Analysis
9. Facilitates coordination – Every activities involved in Marketing –
Coordination between departments in relation with the product
10. Focus on objectives – achieve Company Objectives
Planning Process

Situation Analysis

Targeting

Positioning

Development of the marketing mix

Planning Process

SITUATIONAL ANALYSIS
- Includes all the marketing activities required to understand
the marketing environment, the customer’s needs and
wants, and the competition
- Provides a platform in which plans are created, altered and
adjusted
- Knowledge about Consumers
- Provide information needed to select certain customers for
emphasis – Targeting
Planning Process

TARGETING
- Potential customers with many different needs and wants
- Divide customers into group with similar characteristics
- Target market is a group of potential customers with similar
characteristics that the company tries to satisfy better than
the competition
Planning Process

POSITIONING

- Process of creating an image, reputation, or perception of

the company or its goods and/or services in the consumer’s
mind.
- Creating and adjusting the product, place, promotion, and
price variables so that consumers can recognize the
distinctiveness of a company or its product
Positioning

eBay’s positioning: No
matter what “it” is, you
can find “it” on eBay!
Planning Process

DEVELOPMENT OF MARKETING MIX

Product Strategy – decisions related to the development,

managing existing products – decisions regarding product
attributes, warranties, package design and customer service
features – creating of brand image
Place Strategy – Providing products where and when they are
needed in the proper quantities, with the greatest appeal
and at the lowest possible cost – Distribution channels –
physical distribution
Planning Process

DEVELOPMENT OF MARKETING MIX

Promotion Strategy - communicating with customers in a
variety of ways – Integrated Marketing Communications –
increases demand for products, describes unique product
characteristics and helps build customer loyalty by creating
expectations and reinforcing buying decisions

Price Strategy - set prices to reflect the value received by

customers and to achieve the volume and profit required by
the organisation
Product Life Cycle
The Product Life Cycle (PLC) is depicted by the sales
curve of the product since its introduction

Four Stages
- Introduction
- Growth
- Maturity
- Decline
Product Life Cycle

• Introduction – Sales are starting

• Growth – Rising sales at increasing rate
• Maturity – Rising sales at decreasing rate
• Saturation – Stable sales
• Decline Stage – Falling sales
Product Life Cycle
Introduction
- Starts with the launching of the new product
- Low sales because it generally takes some time for a new
product to get wide acceptance by consumers and it also
takes time to expand the marketing of the product
- High costs per unit because of the low sales and high
promotional expenditure
- Loss or negligible profits because of low sales and high costs
Product Life Cycle
Growth
- Fast growth in sales because of increasing consumer
acceptance and expansion of marketing
- Growing profits because of growing sales
- Increasing Competition
- Market segmentation and the introduction of different
versions of the products
Product Life Cycle
Maturity
- Saturation of sales
- Intense competition
- Falling profits because of high promotional
expenditure
Product Life Cycle
Decline
- Entry of new products
- Decline in sales
- Decline in profits
Introduction Stage of the PLC
Sales
Sales Low
Low sales
sales

Costs
Costs High
High cost
cost per
per customer
customer

Profits
Profits Negative
Negative
Create
Create product
product awareness
awareness
Marketing
Marketing Objectives
Objectives and
and trial
trial
Product
Product Offer
Offer aa basic
basic product
product

Price
Price Use
Use cost-plus
cost-plus

Distribution
Distribution Build
Build selective
selective distribution
distribution

Advertising Build
Build product
product awareness
awareness among
among early
early
Advertising adopters
adopters and
and dealers
dealers
Growth
Growth Stage
Stage of
of the
the PLC
PLC

Sales
Sales Rapidly
Rapidly rising
rising sales
sales

Costs
Costs Average
Average cost
cost per
per customer
customer

Profits
Profits Rising
Rising profits
profits

Marketing
Marketing Objectives
Objectives Maximize
Maximize market
market share
share
Offer
Offer product
product extensions,
extensions, service,
Product
Product warranty
service,
warranty
Price
Price Price
Price to
to penetrate
penetrate market
market

Distribution
Distribution Build
Build intensive
intensive distribution
distribution

Advertising Build
Build awareness
awareness and
and interest
interest in
in the
the
Advertising mass
mass market
market
Maturity
Maturity Stage
Stage of
of the
the PLC
PLC

Sales
Sales Peak
Peak sales
sales

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits High
High profits
profits

Marketing Maximize
Maximize profit
profit while
while defending
defending
Marketing Objectives
Objectives market
market share
share
Product
Product Diversify
Diversify brand
brand and
and models
models

Price
Price Price
Price to
to match
match or
or best
best competitors
competitors

Distribution
Distribution Build
Build more
more intensive
intensive distribution
distribution

Advertising
Advertising Stress
Stress brand
brand differences
differences and
and benefits
benefits
Decline
Decline Stage
Stage of
of the
the PLC
PLC

Sales
Sales Declining
Declining sales
sales

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits Declining
Declining profits
profits

Marketing
Marketing Objectives
Objectives Reduce
Reduce expenditure
expenditure

Product
Product Phase
Phase out
out weak
weak items
items

Price
Price Cut
Cut price
price
Go
Go selective:
selective: phase
phase out
out unprofitable
unprofitable
Distribution
Distribution outlets
outlets
Advertising
Advertising Reduce
Reduce to
to level
level needed
needed toto retain
retain
hard-core
hard-core loyal
loyal customers
customers
PRODUCT LIFE CYCLE EXTENSION
Product Life Cycle Extension
- Re-branding the product with a new name and purpose to
attract new attention to the product
- Repackaging to target a new market or give your product a
fresh look
- Price reductions to gain customer affordability
- Launch in new markets this may be locally, nationally or
internationally
- Introduce new varieties by modifying features to adapt to
market changes
- New advertising campaigns to capture consumer’s lost interest
in the product
- Altering the channel of distribution, such as online shops
New Product - Introduction
- Companies which fail to innovate usually fail
- Modifying and improving
- Features and benefits to the existing product

New Product – Original product, modified or improved

version or new addition to the product line or even one
belonging to another product group
Success rate of new products

• The success rate of new products is very low – less

than 5%. ‘You have to kiss a lot of frogs to find a
prince.”
• Product obsolescence is rapid with improvements in
technology
• Shorter PLCs
What is a New Product?
- Product that are really innovative – Truly unique
- Imitative products that are new to a company but not
new to the market
- Addition to existing product lines – Products that
provide improved lines
- Improvements to existing products – provide
improved performance or greater perceived value
and replace existing products
Reasons for Product Innovation
- To meet market changes
- To adopt technological changes
- To adjust diversification of risk
- To incorporate changes in fashion
- To meet consumer needs
- To adopt product differentiation
- To produce goods more economically
Organisation for new product development
New Product Department
- Identifying ideas, developing products and preparing them for
commercialization
New Product Committee
- Key functional personnel who are brought together from time to time to
develop new products
Venture Team
- Group formed for a set period to accomplish a set objective
Consulting Organizations
- Specialty consulting firms to set up new product development
New Product Development
- Creation/innovation/enhancement of a product and
its features
- Introducing a new product to market
New Product Development
1. Idea Generation – new product ideas
- Consumer’s opinions and suggestions
- Suggestions of retailers or salesmen
- Observing the competitors products
- Research and Development
New Product Development
2. Idea Screening – eliminate the ideas which are not
feasible
- New product should be useful to the society
- Make use of the firm’s own creative technology
- Superior to the new products of the competitors in
cost and performance
- Able to stand exhaustive product tests at all stages
New Product Development
3. Concept of Development and Testing
- Consumer wants and needs
- Possible positioning in the market
- Target group customers
- kind of Competition
- Tested by presenting the product to appropriate target
customers and getting their reactions
To find a good concept for the product that the consumer would
like to try
New Product Development
4. Market Strategy Development
- Develop market strategy for introduction of the new product
into the market
- describing the size, structure and behaviour of the target
market
- Deciding the price, distribution strategy and allocating the
marketing budget
- Deciding the strategy for marketing mix for promotion of the
product
New Product Development
5. Business Analysis – Estimate product features, cost,
demand and profit
– Suggesting whether the product idea will help the
company in meeting its profit goals
- Estimation of future sales of the product
New Product Development
6. Product Development – involves lot of lab and
technical tests – New technology, New machinery –
feedback from customers and dealers
New Product Development
7. Market Testing
- Product is introduced in the market
- To determine potential marketing problems and the
optimal marketing mix – Modification if any
- To evaluate a complete market plan including
advertising, distribution, sales, pricing etc
-
Market
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New Product Development
8. Commercialization – Company is ready for full scale
commercialization by actually going through with full
scale production and marketing
• When? (Timing)
• Where? (Which geographical markets)
• To whom? (Target markets)
• How? (Introductory Marketing strategy)
New-Product Development Decision Process
The Innovation of Chotukool
Product Failure
- Inadequate market analysis and market appraisal
- Insufficient and effective market support
- Bad timing of introduction of a new product
- Failure to recognise rapidly changing market environment
- Absence of formal product planning and development procedure
- Technical or production problems
- Higher costs than estimated costs
- Failure to estimate strength of competition
- Too many new products entering the market
Steps to Minimise Product failure
- Product must be suitable to the market
- Must be a good demand in the market
- Must keep the company’s image
- Should not be any legal restriction
- Must be in tune to the consumer’s need
- Exist a good system of marketing
- Compatible with the current environment and social standards
- Exist a good demand creation method
- Exist a good system of distribution
Product Mix

Product Mix – refers to total of products that a marketer sells

to meet the needs of customers

- Set of all products offered for sale by a company

Examples of Product Mix

Company – Godrej Agrovet Limited – Product Mix for different

market
- Animal feeds
- Agricultural inputs
- Palm Oil
- Tissue-culture planting material
- Retail brands – Real Good Chicken and Yummiez
Examples of Product Mix

Company – Nirma Limited

- Fabric care products

- Personal care products
- Food products
- scouring products
Product Mix

Width of a Product Mix – refers to how many different product

lines the company carries

Length of a Product Mix – refers to the total number of items in

the mix

Depth of a product Mix – refers to how many variants are

offered of each product in the line

Consistency of the Product Mix – how closely related the

various product lines are in end use, production
requirements, distribution channels etc
HINDUSTAN UNILEVER LIMITED (HUL)
Product Mix Width – 11 lines
- Personal Wash – Lux, Lifebouy etc
- Skin care and cosmetics – Fair & Lovely, Pond’s etc
- Hair Care – Sunsilk, Clinic Plus etc
- Deodorants – Axe, Rexona
- Oral Care – Closeup, Pepsodent
- Fabric Care – Surf Excel, Rin, Sunlight, Comfort
- Kitchen and Floor Care – Domex, Vim
- Tea – Lipton, Brooke Bond Red Label, Taj Mahal
- Coffee – Bru
- Food – Kissan, Annapurna
- Ice Cream – Kwality Wall’s
Product Line

• Refers to a group of products that are closely related

because they satisfy a class of needs, are used together,
are sold to the same customer groups are marketed
through the same type of outlets
Product Line Strategies

1. Expansion of product mix

2. Contraction or Dropping the product
3. Alteration of existing product
4. Development of new uses for existing product
5. Trading-up and trading-down
6. Product differentiation and Market segmentation
Branding

A brand is an identity of the marketer that allows

consumers to recognise the maker of a product

Branding is a process through which a marketer creates a

unique name and image for a product in the
consumers’ mind through marketing communication
Features/Characteristics of Good Brand

1. It should be short, simple and easy to recognise,

pronounce and remember.
2. The brand name should be appropriate for the product
3. Brand name should be helpful in advertising and
identifying
4. It should be versatile (flexible) so that it can be
applicable to any product added
5. It should be clear and attractive
Benefits/Importance of Branding

1. Product Identification – customers recognise the brand

– highlights qualities
2. Product Acceptance – trust in the brand – positive
response from the consumers by influencing the
customer buying decisions
3. Concretes User Loyalty – creates unique positioning,
differentiation and communicates to customers
4. Less Competition – brand personality cannot be
duplicated – hesitate to enter a particular market
segment that is dominated by a well known brand
Benefits/Importance of Branding

5. Enhances revenues and market share – creates

difference in the minds of consumers – creates
competitive advantage
6. Increases the company’s market value – most important
asset – majority of business value is derived from
intangibles – brand is company’s strongest asset
7. Enhances retailers’ loyalty – attracting new retailing
partners – domestic and global markets – buying brands
well recognised by the customers
8. Unique and differentiated company image – stand out
from competitors – adds value to its offerings – meeting
the expectations of the customers
Packaging

- Designing and producing the container or wrapper of

product

- A Package is the cover or container for a product that

provides product protection, facilitates product use
and storage, and supplies important marketing
communication.
Need/ Functions/ Benefits and Importance of
Packaging

1. Protection and Preservation – when transported and

stored – health and safety – keep the content clean
and safe
2. Improving Logistics Efficiency – selecting the right
types of containers – reducing the costs due to
breakage
3. Containment – to contain effectively and make the
movement easy
4. Information transmission – details of the products
5. Convenience – easier to open, carry, good appearance
6. Enhance product image and appeal – attract buyers
Need/ Functions/ Benefits and Importance of
Packaging

7. Product Identification – combines size, design and

colour to identify the product
8. Product Positioning – Using of better materials, colour
effects
9. Product Promotion – help increase shelf appeal and
attract attention at point of sale
Pricing

Price is the element of marketing mix that produces

revenue

Price is the amount of money charged for a product or

service

Price is the assignment of value, or the amount the

consumer must exchange to receive the offering or
product
Pricing

Price is the amount of money required to purchase a

definite product or service

Pricing is the process of determining consideration given

in exchange for transfer of ownership of products

Pricing policy is the method of determining the prices for

a company’s products or services based on the cost of
production or provision with a margin of profit
Factors influencing Pricing Policy / Decisions
Internal Factors
- Marketers has control – can be modified in order to provide
complete customer satisfaction
a) Organizational Consideration – Strong leadership, availability
of technology, good sales personnel, adequate funding
b) Marketing Mix Strategy – coordinated with product
management, distribution and promotion
c) Product Uniqueness – how different is the product in
comparison with its competitors
d) Cost of Production – Start-up costs, Variable Costs and Fixed
Costs – Firm’s cost in producing and marketing a product
Factors influencing Pricing Policy / Decisions
Internal Factors
e) Stage of Product Life Cycle – pricing strategy changes over the life of the
product
Introduction – balancing the costs
Growth – prices maintained at a high level if demand is high – kept lower
to capture additional customers
Maturity – prices reduced in response to competition
Decline – Prices are lowered
f) Pricing Objectives – at par with business and financial goals – profit
maximisation or maintenance of market share
g) Depth of Distribution Channel –
- Distribution Channel – network of intermediaries
- More Intermediaries – More price and vice versa
Factors influencing Pricing Policy / Decisions

External Factors
Influencing factors which cannot be controlled by the
marketer
a) Product Supply and Demand – Price elasticity of
demand
b) Degree of Competition – Highly influenced when two
products have similar features, from different
companies – Competitive pricing – pricing a product or
service based on what the competitor is charging
c) Economic Situation – Business Cycle, inflation,
economic growth
Factors influencing Pricing Policy / Decisions

External Factors
d) Government Regulations - Government restrictions on
price fixing – maximum and minimum pricing
e) Ethical Considerations – what constraints are needed
on the pursuit of market share and profits when the
actions of a company affect others adversely
f) Suppliers – Inputs like raw materials, machinery and
equipment influence
g) Consumer behaviour – what makes people buy
Objectives of Pricing
1. To maximise the profits – increase the profit margin –
enable the firm to recover its total cost and get excess
revenue over costs
2. Price Stability – should not fluctuate too often – enhance
goodwill
3. Achieve Market Share – Market’s total sales that is earned
by a particular company over a specified time period
4. Survival Objective – reasonable revenue and it exceeds
their costs
5. Cash Flow management – Cash inflow through sales – lower
price for the cash sales and high prices for credit sales
Objectives of Pricing
6. Competitive Matching – meeting competition with
price cuts – to meet or to prevent competition
7. Prestige and brand image – to create an image of the
product
8. Return on Investment – considering profits in relation
to capital invested – to secure an adequate return on
investment
9. Quality leadership – build up a quality image – positive
relationship between price and product quality
Pricing Strategies

A pricing strategy takes into account segments, ability to

pay, market conditions, competitor actions, Trade
margins and input costs, amongst others.

1. Skim the Cream Pricing – Skimming Pricing Strategy

2. Marketing Penetration Pricing

3. Follow Leader Pricing

Pricing Strategies

1. Skim the Cream Pricing – Skimming Pricing Strategy

- Charging high as Introductory price

- When there is no competition in the market
- New product has some exclusive characteristics
- Later stage the producer reduces the prices
Pricing Strategies

2. Market-Penetration Pricing Strategy

- Offering low introductory price to increase the sales

- When the marketer expects more market share
- Encourages customers to switch to the new product
- Acts as an entry barrier for competitors
Pricing Strategies

3. Follow Leader Pricing

- Fixes prices similar to the leader in the market

- May also fixes price which are generally lower than
those of their leaders
- Suitable when competitive situation exist in market
- Suitable when buyers are price-conscious
Methods of Pricing Policy/ Types of Pricing

Based on Customer
1. Odd Pricing – lower the rounded-up price of a product
by a paise or so, which people perceive as significantly
lower than the rounded-up price – customer believe
that an odd-price is indicative of a low or fair price
2. Psychological Pricing – how customers perceive the
price can have a significant impact on level of sales –
what actually makes people buy the product –
assumption is that higher product price indicates a
higher level of quality
Methods of Pricing Policy/ Types of Pricing

Based on Customer
3. Prestige pricing – also called premium pricing – setting
higher than normal to create an image of superior
quality – image building
4. Dual Pricing – marketers sell the same or identical
product at different prices in different markets
5. Price Lining – product line pricing – prices are set with
certain price points believed to be attractive to
customer – to satisfy different segments – different
variants.
Methods of Pricing Policy/ Types of Pricing

Based on Competition
1. Penetration Pricing
2. Skimmed Pricing
3. Monopoly Pricing – marketer prices a product to
maximize profits
4. Administered pricing – price of products are set by
Government or regulatory bodies
Methods of Pricing Policy/ Types of Pricing

Based on Costs and Demands

1. Cost plus pricing method – seller totals all the costs
for the product and then adds an amount to arrive at
the selling price
2. Target return pricing – determines the price that
would yield its target rate of return on investment
3. Demand based pricing method – if the demand is high
then the prices are raised and if the demand is low
the prices are cut off
Methods of Pricing Policy/ Types of Pricing

Based on Geographical Location

1. FOB Pricing (Free on Board) – seller pays for
transportation of the goods to the port of shipment, plus
loading costs. The buyer pays cost of marine freight
transport, insurance, unloading, and transportation from
the arrival port to the final destination.
2. Zone pricing – setting prices of goods or services based
on the location where they will be offered for sale to
customers
3. Base point pricing – based on the locations, decides as
base points and the transport cost is collected from the
base point of the buyer’s location
Role / Importance of Pricing

1. Profitability depends on pricing

2. Price is determinant of buying decision
3. Price influences customer perception
4. Price is weapon to fight competition
5. Price is an important part of sales promotion
Channels of Distribution

- Routes or pathways through which goods and services

flow or move from producers to consumers

- Is a set of interdependent marketing institutions

participating in the marketing activities involved in
the movement or the flow of goods or services from
the primary producer to the ultimate consumer
Channels of Distribution

Channel Components

- All kind of merchant middlemen – wholesalers and

retailers
- All kinds of agent middlemen – commission agent,
brokers, warehouse-keepers
- All other facilitating agencies – carriers, bankers,
advertising agencies
Need/ Importance/ Significance of Channels of
Distribution

1. Help in the production function – manufacturer can

leave the marketing activity to middlemen
2. Marketing Demand and Supply – assemble the goods
from many producers and customers can make effective
purchase
3. Financing the Producer – Bulk order and payament
4. Aid to Communication – Channel partners have complete
knowledge of consumer behaviour – communicate the
necessary information to the producer
5. Stabilizing the Prices – stocking goods, constant flow of
goods to the market at the proper time
Need/ Importance/ Significance of Channels of
Distribution

6. Promotional Activities – Advertising, Personal selling

and sales promotion
7. Pricing – suggestions from the middlemen – depends
upon the type of channel of distribution
Factors affecting choice of Distribution Channel
Product Factors: nature, qualities and peculiarities of the
product
a) Physical Nature – perishability, sizes & weight of the
product – Perishable products have a short distribution
channel – Bigger products have direct channel
b) Technicality of Product – training and expertise required to
handle and use the products – sold directly by the producer
c) Product range – more variety, it may have its own outlets –
narrow product range, ideal to distribute through
wholesalers and retailers
d) Product Price – low unit price products consumed on very
large scale, through long channels – low turnover products
will have smaller distribution channels
Factors affecting choice of Distribution Channel
Market Factors : nature and extent of market
a) Composition of target market – number of customers –
large, then requires services of the middlemen –
limited customers, then requires direct marketing
b) Availability of channel – availability of distribution
partners
c) Buyer’s Behaviour – time and effort spend on shopping
and information gathering
d) Legal constraints – licensed shops
Factors affecting choice of Distribution Channel
Institutional Factors : consideration of Intermediaries
a) Promotional ability of intermediaries - capacity of
the intermediaries to promote the products
b) Financing capacity of Intermediaries – credit and
credit terms
c) After Sales services – adding value – repair or replace
d) Channel Cost – cost of distribution and the services
provided by the middlemen or agents – select the most
economical channel
Factors affecting choice of Distribution Channel
Organisational Factors: nature of the business, marketing
knowhow, managerial competence & experience,
management style and policies
a) Financial resources – Strong company needs less
middlemen – own sales force and retailing outlets
b) Reputation – reputation is high, no need of much
middlemen
c) Marketing Policies – Strategies of the company
Classification of Channels
Conventional Channels
- Zero-Level Channels - Manufacturer to Consumer
- One-Level Channels - Manufacturer to retailer to Consumer
- Two-level Channels - Manufacturer to wholesaler to retailer to
consumer
- Three-Level Channels - Manufacturer to agents to wholesaler
to retailer to consumer

Direct Channel – company chooses to sell directly to the

consumer without engaging any intermediary

Indirect Channel – which employs the services of intermediaries

in moving the goods to the consumers
Functions of Channel Intermediaries

1. Procurement & Assembling – buying in bulk – selling in

small quantities
2. Warehousing and Storing – Preserving the material – quick
availability of product
3. Grading and Packing – classification of products variety –
packing in small quantities
4. Selling – sell merchandise to customers – transfer of
ownership
5. Assumption of Risk – risk of forecasting of demand from
customers
Functions of Channel Intermediaries
6. Financing – credit facilities
7. Supply of Market Information – support decision making in
marketing – feedback – helps manufacturer in product
development & other decision making
8. Advertising & Communication – promotion &
advertisement both inside & outside the store
Logistics
Managing, designing and improving flow of resources between the
point of origin and the point of destination through the supply
chain

- Order Management – dealing with purchase requests – order

entry, picking, packing, shipping and billing
- Warehousing – preserve the stock
- Transportation – Integrate the resources scattered – enhance
the value of goods by the creation of place utility
- Material Management – ensuring uninterrupted supply for
production
- Inventory Control – monitoring and coordinating supply,
storage, distribution and recording of materials
PROMOTION
- Create and increase awareness
- Provide information about the products and services
- Build sales and profits

Promotion includes –
- Advertising
- Personal Selling
- Sales Promotion
Role/Importance/Significance of PROMOTION
Influencing the customer to purchase the product or service

1. Persuades Customer – attracting the attention of

consumers – stimulate consumers’ familiarity on a product
– increase consumers’ confident and their product
preferences and attitudes
2. Provides Information – motivate to purchase –
communicate the features and benefits of the product –
inform and remind about existing products
3. Image creation – creating perception about the brand –
Positioning the product and effective promotional
messages
Role/Importance/Significance of PROMOTION
Influencing the customer to purchase the product or service

1. Persuades Customer – attracting the attention of

consumers – stimulate consumers’ familiarity on a product
– increase consumers’ confident and their product
preferences and attitudes
2. Provides Information – motivate to purchase –
communicate the features and benefits of the product –
inform and remind about existing products
3. Image creation – creating perception about the brand –
Positioning the product and effective promotional
messages
Role/Importance/Significance of PROMOTION
4. Motivates distribution Partners – helps in moving its
products through the channel – convincing distribution
partners
5. A tool to fight competition – creates differentiation in the
mind of the consumer between products
Objectives of Promotion
1. Create Awareness

2. Educate Customer

3. Persuade

4. Reinforce to buy

5. Retain Customers
Elements /Methods of the Promotion Mix
I. ADVERTISING
- Any paid form of non-personal presentation of ideas,
goods or services by an identified sponsor

Broadcast Media – Television, Radio

Non-Broadcast Media – Cinema Theatres, Cable TV, Discs

Outdoor Media – Street Furniture, Hoardings and Bill boards,

Banners and Posters
Direct Response – Telemarketing, Mailers, Pamphlets

Internet – Social Networks, Search engines, Youtube

Elements /Methods of the Promotion Mix
I. Advertising

Role and Importance of Advertising

- Persuades Customer
- Provides Information
- Image Creation
- Motivates distribution partners
- A tool to fight competition
Elements /Methods of the Promotion Mix
Advertising a boon or Bane (Advantages and Disadvantages)

Boon:
- Helps in promotion of product and services
- Assist channel partner to sell
- Creates brand awareness
- Encourages salesman
- Provides information to customers
- Increase sales, employment and profits
- Source of entertainment for the people
Elements /Methods of the Promotion Mix
Advertising a boon or Bane (Advantages and Disadvantages)

Bane:
- Increases product costs
- Misleads the Consumer
- Creates unwanted desires
- Wastage of National resources
Elements /Methods of the Promotion Mix
Advertising

Advertising Copy – written or spoken part of the

advertisement – headlines, sub heads and the text
Elements /Methods of the Promotion Mix
II PERSONAL SELLING

- Face to face interaction with one or more perspective

purchasers for the purpose of making presentations,
answering questions and procuring orders

- Direct form of communication between a company

representative and a customer to communicate about a
product or service
Elements /Methods of the Promotion Mix
II PERSONAL SELLING

Steps in Personal Selling

1. Prospecting – Identifying potential buyers

2. Preapproach – Learning more about the prospective buyers
3. Approach – Making initial contact
4. Presentation – attract attention, stimulate interest
5. Handle Objections – clearing the doubts
6. Close the Sale – asking the customer to buy
7. Follow up – service to customers
Elements /Methods of the Promotion Mix
II PERSONAL SELLING - Role/Benefits and Importance

1. Provides flexibility
2. Builds Relationships
3. Persuasive Impact
4. Educates Customer
5. Interactive
Elements /Methods of the Promotion Mix
II PERSONAL SELLING - Disadvantages

1. Widely misunderstood
2. High cost
3. Labour intensive
4. Limited Reach
5. Sales Pressure
Elements /Methods of the Promotion Mix
III SALES PROMOTION

- Activities that create buyer incentives to purchase a product or that add value
for the buyer or the trade

- Discounts
- Loyalty Programs
- Point-of-purchase promotion
- Samples
- Vouchers and Coupons
- Contests
- Premiums
- Exchange offers
Elements /Methods of the Promotion Mix
IV PUBLIC RELATIONS AND PUBLICITY

- Marketing communication function intended to collaborate

and build mutually beneficial relation with organization’s
publics, including consumers, shareholders and government

- PUBLIC RELATION OFFICR (PRO)

- Improve the public’c general awareness about the firm

- Publicity is the unpaid communication about an organisation

that appears in the mass media
Elements /Methods of the Promotion Mix
IV PUBLIC RELATIONS AND PUBLICITY – Activities

a) Press release
b) Investor Relations
c) Speeches
d) Media Relations
e) Sponsorships
f) Public Service Activites
g) Lobbying – providing information to Govt
Marketing Mix

is a combination of Marketing Tools used to satisfy

customers and company objectives

According to Philip Kotler

“A Marketing Mix is the mixture of controllable
marketing variables that the firm uses to
pursue the sought level of sales in the target
market
Marketing Mix – An Overview
Marketing Mix Explanation
Elements

Product The Product or services offered

to your customer such as, the
product’s physical attributes,
how they differ from your
competitors and what benefits
they provide
Marketing Mix – An Overview
Marketing Mix Explanation
Elements

Price Pricing allows to make profit

Differentiating your products

Creates demand
Marketing Mix – An Overview
Marketing Mix Explanation
Elements

Promotion The method used to

communicate the features and
benefits of the products or
services

Advertising, Sales Promotion

Marketing Mix – An Overview
Marketing Mix Explanation
Elements

Place How to get the products or

(Distribution) services to your customers

Channels of Distribution
Meaning of Product
A product is a set of attributes that satisfies a customer
demand. It may be in the tangible form or in the form
of services or idea

- A bundle of utilities or satisfaction

- A customer also buys satisfaction alongwith the product
- A concept of product should include the social and
psychological needs and their satisfaction and it must
involve its functional aspects
What is a product ?

• According to Kotler, “A product is anything that can be

offered in a market for attention, acquisition, use or
consumption that might satisfy a want or a need.”
• According to Aldeson.W., “ Product is a bundle of utilities
consisting of various product features and accompanying
services.”
• According to Schwarte. D. J., “ A product is something a
firm markets that will satisfy a personal want or fill a
business or commercial need.”
Classification of Products
Convenience Products – brought with ease and
without consuming any time
Shopping Products – purchased but concerned
about price, quality and style- visit several
outlets before deciding to buy
Speciality Product – High priced – Expensive
Products
ROLES OF PRODUCT MANAGER
• Developing a suitable long range planning and strategy for
the brand or product.
• Preparing suitable short term and long term forecast for the
brand.
• Preparing annual marketing plan and budget.
• Preparing annual and general sales policy and to coordinating
with sales force and distribution channel members.
• Coordinating advertising and sales promotion work within the
departments and external agency to meet the competitive
need of the market.
• Collecting continuously and systematically market
information regarding product preferences, competitors’
status etc.
Meaning of Product Planning

• Every business needs to develop a product plan consistent with

its overall marketing strategy.
• Product Planning is the ongoing process of identifying and
understanding market requirements that define a product’s
feature set.
• a function whereby an enterprise is responsible for the efficient,
planning, scheduling and coordination of production activities.
• Making decisions about the features that are needed to sell a
business's products, services, or ideas.
Meaning of Product Planning

• Product Planning outlines the focus given to

Core Business – current products in current segments

Market Development – new segments for current products
Product Development – New products for current
segments
Diversification – Products totally new to the company for
new segments
Objectives Of Product Planning

1. Basis of Marketing Programmes – Effective use of Marketing Mix

– easy to price, promote and distribute
2. To face Competition – Strong competitive position
3. To minimise Risks
4. As an instrument of growth – Product Innovation – newer and
better products - to exploit business opportunities
5. For the very survival itself – Improve sales volume – Improve the
product – Meet changing demand
6. To discharge social responsibilities – serving the society –
supplying products that satisfy public needs – quality of life
Objectives Of Product Planning

7. Identification of future development – modification, Changes in

features – value addition to the product
8. Consideration of opportunities and threats – SWOT Analysis
9. Facilitates coordination – Every activities involved in Marketing –
Coordination between departments in relation with the product
10. Focus on objectives – achieve Company Objectives
Planning Process

Situation Analysis

Targeting

Positioning

Development of the marketing mix

Planning Process

SITUATIONAL ANALYSIS
- Includes all the marketing activities required to understand
the marketing environment, the customer’s needs and
wants, and the competition
- Provides a platform in which plans are created, altered and
adjusted
- Knowledge about Consumers
- Provide information needed to select certain customers for
emphasis – Targeting
Planning Process

TARGETING
- Potential customers with many different needs and wants
- Divide customers into group with similar characteristics
- Target market is a group of potential customers with similar
characteristics that the company tries to satisfy better than
the competition
Planning Process

POSITIONING

- Process of creating an image, reputation, or perception of

the company or its goods and/or services in the consumer’s
mind.
- Creating and adjusting the product, place, promotion, and
price variables so that consumers can recognize the
distinctiveness of a company or its product
Positioning

eBay’s positioning: No
matter what “it” is, you
can find “it” on eBay!
Planning Process

DEVELOPMENT OF MARKETING MIX

Product Strategy – decisions related to the development,

managing existing products – decisions regarding product
attributes, warranties, package design and customer service
features – creating of brand image
Place Strategy – Providing products where and when they are
needed in the proper quantities, with the greatest appeal
and at the lowest possible cost – Distribution channels –
physical distribution
Planning Process

DEVELOPMENT OF MARKETING MIX

Promotion Strategy - communicating with customers in a
variety of ways – Integrated Marketing Communications –
increases demand for products, describes unique product
characteristics and helps build customer loyalty by creating
expectations and reinforcing buying decisions

Price Strategy - set prices to reflect the value received by

customers and to achieve the volume and profit required by
the organisation
Product Life Cycle
The Product Life Cycle (PLC) is depicted by the sales
curve of the product since its introduction

Four Stages
- Introduction
- Growth
- Maturity
- Decline
Product Life Cycle

• Introduction – Sales are starting

• Growth – Rising sales at increasing rate
• Maturity – Rising sales at decreasing rate
• Saturation – Stable sales
• Decline Stage – Falling sales
Product Life Cycle
Introduction
- Starts with the launching of the new product
- Low sales because it generally takes some time for a new
product to get wide acceptance by consumers and it also
takes time to expand the marketing of the product
- High costs per unit because of the low sales and high
promotional expenditure
- Loss or negligible profits because of low sales and high costs
Product Life Cycle
Growth
- Fast growth in sales because of increasing consumer
acceptance and expansion of marketing
- Growing profits because of growing sales
- Increasing Competition
- Market segmentation and the introduction of different
versions of the products
Product Life Cycle
Maturity
- Saturation of sales
- Intense competition
- Falling profits because of high promotional
expenditure
Product Life Cycle
Decline
- Entry of new products
- Decline in sales
- Decline in profits
Introduction Stage of the PLC
Sales
Sales Low
Low sales
sales

Costs
Costs High
High cost
cost per
per customer
customer

Profits
Profits Negative
Negative
Create
Create product
product awareness
awareness
Marketing
Marketing Objectives
Objectives and
and trial
trial
Product
Product Offer
Offer aa basic
basic product
product

Price
Price Use
Use cost-plus
cost-plus

Distribution
Distribution Build
Build selective
selective distribution
distribution

Advertising Build
Build product
product awareness
awareness among
among early
early
Advertising adopters
adopters and
and dealers
dealers
Growth
Growth Stage
Stage of
of the
the PLC
PLC

Sales
Sales Rapidly
Rapidly rising
rising sales
sales

Costs
Costs Average
Average cost
cost per
per customer
customer

Profits
Profits Rising
Rising profits
profits

Marketing
Marketing Objectives
Objectives Maximize
Maximize market
market share
share
Offer
Offer product
product extensions,
extensions, service,
Product
Product warranty
service,
warranty
Price
Price Price
Price to
to penetrate
penetrate market
market

Distribution
Distribution Build
Build intensive
intensive distribution
distribution

Advertising Build
Build awareness
awareness and
and interest
interest in
in the
the
Advertising mass
mass market
market
Maturity
Maturity Stage
Stage of
of the
the PLC
PLC

Sales
Sales Peak
Peak sales
sales

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits High
High profits
profits

Marketing Maximize
Maximize profit
profit while
while defending
defending
Marketing Objectives
Objectives market
market share
share
Product
Product Diversify
Diversify brand
brand and
and models
models

Price
Price Price
Price to
to match
match or
or best
best competitors
competitors

Distribution
Distribution Build
Build more
more intensive
intensive distribution
distribution

Advertising
Advertising Stress
Stress brand
brand differences
differences and
and benefits
benefits
Decline
Decline Stage
Stage of
of the
the PLC
PLC

Sales
Sales Declining
Declining sales
sales

Costs
Costs Low
Low cost
cost per
per customer
customer

Profits
Profits Declining
Declining profits
profits

Marketing
Marketing Objectives
Objectives Reduce
Reduce expenditure
expenditure

Product
Product Phase
Phase out
out weak
weak items
items

Price
Price Cut
Cut price
price
Go
Go selective:
selective: phase
phase out
out unprofitable
unprofitable
Distribution
Distribution outlets
outlets
Advertising
Advertising Reduce
Reduce to
to level
level needed
needed toto retain
retain
hard-core
hard-core loyal
loyal customers
customers
PRODUCT LIFE CYCLE EXTENSION
Product Life Cycle Extension
- Re-branding the product with a new name and purpose to
attract new attention to the product
- Repackaging to target a new market or give your product a
fresh look
- Price reductions to gain customer affordability
- Launch in new markets this may be locally, nationally or
internationally
- Introduce new varieties by modifying features to adapt to
market changes
- New advertising campaigns to capture consumer’s lost interest
in the product
- Altering the channel of distribution, such as online shops
New Product - Introduction
- Companies which fail to innovate usually fail
- Modifying and improving
- Features and benefits to the existing product

New Product – Original product, modified or improved

version or new addition to the product line or even one
belonging to another product group
Success rate of new products

• The success rate of new products is very low – less

than 5%. ‘You have to kiss a lot of frogs to find a
prince.”
• Product obsolescence is rapid with improvements in
technology
• Shorter PLCs
What is a New Product?
- Product that are really innovative – Truly unique
- Imitative products that are new to a company but not
new to the market
- Addition to existing product lines – Products that
provide improved lines
- Improvements to existing products – provide
improved performance or greater perceived value
and replace existing products
Reasons for Product Innovation
- To meet market changes
- To adopt technological changes
- To adjust diversification of risk
- To incorporate changes in fashion
- To meet consumer needs
- To adopt product differentiation
- To produce goods more economically
Organisation for new product development
New Product Department
- Identifying ideas, developing products and preparing them for
commercialization
New Product Committee
- Key functional personnel who are brought together from time to time to
develop new products
Venture Team
- Group formed for a set period to accomplish a set objective
Consulting Organizations
- Specialty consulting firms to set up new product development
New Product Development
- Creation/innovation/enhancement of a product and
its features
- Introducing a new product to market
New Product Development
1. Idea Generation – new product ideas
- Consumer’s opinions and suggestions
- Suggestions of retailers or salesmen
- Observing the competitors products
- Research and Development
New Product Development
2. Idea Screening – eliminate the ideas which are not
feasible
- New product should be useful to the society
- Make use of the firm’s own creative technology
- Superior to the new products of the competitors in
cost and performance
- Able to stand exhaustive product tests at all stages
New Product Development
3. Concept of Development and Testing
- Consumer wants and needs
- Possible positioning in the market
- Target group customers
- kind of Competition
- Tested by presenting the product to appropriate target
customers and getting their reactions
To find a good concept for the product that the consumer would
like to try
New Product Development
4. Market Strategy Development
- Develop market strategy for introduction of the new product
into the market
- describing the size, structure and behaviour of the target
market
- Deciding the price, distribution strategy and allocating the
marketing budget
- Deciding the strategy for marketing mix for promotion of the
product
New Product Development
5. Business Analysis – Estimate product features, cost,
demand and profit
– Suggesting whether the product idea will help the
company in meeting its profit goals
- Estimation of future sales of the product
New Product Development
6. Product Development – involves lot of lab and
technical tests – New technology, New machinery –
feedback from customers and dealers
New Product Development
7. Market Testing
- Product is introduced in the market
- To determine potential marketing problems and the
optimal marketing mix – Modification if any
- To evaluate a complete market plan including
advertising, distribution, sales, pricing etc
-
Market
Testing

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New Product Development
8. Commercialization – Company is ready for full scale
commercialization by actually going through with full
scale production and marketing
• When? (Timing)
• Where? (Which geographical markets)
• To whom? (Target markets)
• How? (Introductory Marketing strategy)
New-Product Development Decision Process
The Innovation of Chotukool
Product Failure
- Inadequate market analysis and market appraisal
- Insufficient and effective market support
- Bad timing of introduction of a new product
- Failure to recognise rapidly changing market environment
- Absence of formal product planning and development procedure
- Technical or production problems
- Higher costs than estimated costs
- Failure to estimate strength of competition
- Too many new products entering the market
Steps to Minimise Product failure
- Product must be suitable to the market
- Must be a good demand in the market
- Must keep the company’s image
- Should not be any legal restriction
- Must be in tune to the consumer’s need
- Exist a good system of marketing
- Compatible with the current environment and social standards
- Exist a good demand creation method
- Exist a good system of distribution
Product Mix

Product Mix – refers to total of products that a marketer sells

to meet the needs of customers

- Set of all products offered for sale by a company

Examples of Product Mix

Company – Godrej Agrovet Limited – Product Mix for different

market
- Animal feeds
- Agricultural inputs
- Palm Oil
- Tissue-culture planting material
- Retail brands – Real Good Chicken and Yummiez
Examples of Product Mix

Company – Nirma Limited

- Fabric care products

- Personal care products
- Food products
- scouring products
Product Mix

Width of a Product Mix – refers to how many different product

lines the company carries

Length of a Product Mix – refers to the total number of items in

the mix

Depth of a product Mix – refers to how many variants are

offered of each product in the line

Consistency of the Product Mix – how closely related the

various product lines are in end use, production
requirements, distribution channels etc
HINDUSTAN UNILEVER LIMITED (HUL)
Product Mix Width – 11 lines
- Personal Wash – Lux, Lifebouy etc
- Skin care and cosmetics – Fair & Lovely, Pond’s etc
- Hair Care – Sunsilk, Clinic Plus etc
- Deodorants – Axe, Rexona
- Oral Care – Closeup, Pepsodent
- Fabric Care – Surf Excel, Rin, Sunlight, Comfort
- Kitchen and Floor Care – Domex, Vim
- Tea – Lipton, Brooke Bond Red Label, Taj Mahal
- Coffee – Bru
- Food – Kissan, Annapurna
- Ice Cream – Kwality Wall’s
Product Line

• Refers to a group of products that are closely related

because they satisfy a class of needs, are used together,
are sold to the same customer groups are marketed
through the same type of outlets
Product Line Strategies

1. Expansion of product mix

2. Contraction or Dropping the product
3. Alteration of existing product
4. Development of new uses for existing product
5. Trading-up and trading-down
6. Product differentiation and Market segmentation
Branding

A brand is an identity of the marketer that allows

consumers to recognise the maker of a product

Branding is a process through which a marketer creates a

unique name and image for a product in the
consumers’ mind through marketing communication
Features/Characteristics of Good Brand

1. It should be short, simple and easy to recognise,

pronounce and remember.
2. The brand name should be appropriate for the product
3. Brand name should be helpful in advertising and
identifying
4. It should be versatile (flexible) so that it can be
applicable to any product added
5. It should be clear and attractive
Benefits/Importance of Branding

1. Product Identification – customers recognise the brand

– highlights qualities
2. Product Acceptance – trust in the brand – positive
response from the consumers by influencing the
customer buying decisions
3. Concretes User Loyalty – creates unique positioning,
differentiation and communicates to customers
4. Less Competition – brand personality cannot be
duplicated – hesitate to enter a particular market
segment that is dominated by a well known brand
Benefits/Importance of Branding

5. Enhances revenues and market share – creates

difference in the minds of consumers – creates
competitive advantage
6. Increases the company’s market value – most important
asset – majority of business value is derived from
intangibles – brand is company’s strongest asset
7. Enhances retailers’ loyalty – attracting new retailing
partners – domestic and global markets – buying brands
well recognised by the customers
8. Unique and differentiated company image – stand out
from competitors – adds value to its offerings – meeting
the expectations of the customers
Packaging

- Designing and producing the container or wrapper of

product

- A Package is the cover or container for a product that

provides product protection, facilitates product use
and storage, and supplies important marketing
communication.
Need/ Functions/ Benefits and Importance of
Packaging

1. Protection and Preservation – when transported and

stored – health and safety – keep the content clean
and safe
2. Improving Logistics Efficiency – selecting the right
types of containers – reducing the costs due to
breakage
3. Containment – to contain effectively and make the
movement easy
4. Information transmission – details of the products
5. Convenience – easier to open, carry, good appearance
6. Enhance product image and appeal – attract buyers
Need/ Functions/ Benefits and Importance of
Packaging

7. Product Identification – combines size, design and

colour to identify the product
8. Product Positioning – Using of better materials, colour
effects
9. Product Promotion – help increase shelf appeal and
attract attention at point of sale
Pricing

Price is the element of marketing mix that produces

revenue

Price is the amount of money charged for a product or

service

Price is the assignment of value, or the amount the

consumer must exchange to receive the offering or
product
Pricing

Price is the amount of money required to purchase a

definite product or service

Pricing is the process of determining consideration given

in exchange for transfer of ownership of products

Pricing policy is the method of determining the prices for

a company’s products or services based on the cost of
production or provision with a margin of profit
Factors influencing Pricing Policy / Decisions
Internal Factors
- Marketers has control – can be modified in order to provide
complete customer satisfaction
a) Organizational Consideration – Strong leadership, availability
of technology, good sales personnel, adequate funding
b) Marketing Mix Strategy – coordinated with product
management, distribution and promotion
c) Product Uniqueness – how different is the product in
comparison with its competitors
d) Cost of Production – Start-up costs, Variable Costs and Fixed
Costs – Firm’s cost in producing and marketing a product
Factors influencing Pricing Policy / Decisions
Internal Factors
e) Stage of Product Life Cycle – pricing strategy changes over the life of the
product
Introduction – balancing the costs
Growth – prices maintained at a high level if demand is high – kept lower
to capture additional customers
Maturity – prices reduced in response to competition
Decline – Prices are lowered
f) Pricing Objectives – at par with business and financial goals – profit
maximisation or maintenance of market share
g) Depth of Distribution Channel –
- Distribution Channel – network of intermediaries
- More Intermediaries – More price and vice versa
Factors influencing Pricing Policy / Decisions

External Factors
Influencing factors which cannot be controlled by the
marketer
a) Product Supply and Demand – Price elasticity of
demand
b) Degree of Competition – Highly influenced when two
products have similar features, from different
companies – Competitive pricing – pricing a product or
service based on what the competitor is charging
c) Economic Situation – Business Cycle, inflation,
economic growth
Factors influencing Pricing Policy / Decisions

External Factors
d) Government Regulations - Government restrictions on
price fixing – maximum and minimum pricing
e) Ethical Considerations – what constraints are needed
on the pursuit of market share and profits when the
actions of a company affect others adversely
f) Suppliers – Inputs like raw materials, machinery and
equipment influence
g) Consumer behaviour – what makes people buy
Objectives of Pricing
1. To maximise the profits – increase the profit margin –
enable the firm to recover its total cost and get excess
revenue over costs
2. Price Stability – should not fluctuate too often – enhance
goodwill
3. Achieve Market Share – Market’s total sales that is earned
by a particular company over a specified time period
4. Survival Objective – reasonable revenue and it exceeds
their costs
5. Cash Flow management – Cash inflow through sales – lower
price for the cash sales and high prices for credit sales
Objectives of Pricing
6. Competitive Matching – meeting competition with
price cuts – to meet or to prevent competition
7. Prestige and brand image – to create an image of the
product
8. Return on Investment – considering profits in relation
to capital invested – to secure an adequate return on
investment
9. Quality leadership – build up a quality image – positive
relationship between price and product quality
Pricing Strategies

A pricing strategy takes into account segments, ability to

pay, market conditions, competitor actions, Trade
margins and input costs, amongst others.

1. Skim the Cream Pricing – Skimming Pricing Strategy

2. Marketing Penetration Pricing

3. Follow Leader Pricing

Pricing Strategies

1. Skim the Cream Pricing – Skimming Pricing Strategy

- Charging high as Introductory price

- When there is no competition in the market
- New product has some exclusive characteristics
- Later stage the producer reduces the prices
Pricing Strategies

2. Market-Penetration Pricing Strategy

- Offering low introductory price to increase the sales

- When the marketer expects more market share
- Encourages customers to switch to the new product
- Acts as an entry barrier for competitors
Pricing Strategies

3. Follow Leader Pricing

- Fixes prices similar to the leader in the market

- May also fixes price which are generally lower than
those of their leaders
- Suitable when competitive situation exist in market
- Suitable when buyers are price-conscious
Methods of Pricing Policy/ Types of Pricing

Based on Customer
1. Odd Pricing – lower the rounded-up price of a product
by a paise or so, which people perceive as significantly
lower than the rounded-up price – customer believe
that an odd-price is indicative of a low or fair price
2. Psychological Pricing – how customers perceive the
price can have a significant impact on level of sales –
what actually makes people buy the product –
assumption is that higher product price indicates a
higher level of quality
Methods of Pricing Policy/ Types of Pricing

Based on Customer
3. Prestige pricing – also called premium pricing – setting
higher than normal to create an image of superior
quality – image building
4. Dual Pricing – marketers sell the same or identical
product at different prices in different markets
5. Price Lining – product line pricing – prices are set with
certain price points believed to be attractive to
customer – to satisfy different segments – different
variants.
Methods of Pricing Policy/ Types of Pricing

Based on Competition
1. Penetration Pricing
2. Skimmed Pricing
3. Monopoly Pricing – marketer prices a product to
maximize profits
4. Administered pricing – price of products are set by
Government or regulatory bodies
Methods of Pricing Policy/ Types of Pricing

Based on Costs and Demands

1. Cost plus pricing method – seller totals all the costs
for the product and then adds an amount to arrive at
the selling price
2. Target return pricing – determines the price that
would yield its target rate of return on investment
3. Demand based pricing method – if the demand is high
then the prices are raised and if the demand is low
the prices are cut off
Methods of Pricing Policy/ Types of Pricing

Based on Geographical Location

1. FOB Pricing (Free on Board) – seller pays for
transportation of the goods to the port of shipment, plus
loading costs. The buyer pays cost of marine freight
transport, insurance, unloading, and transportation from
the arrival port to the final destination.
2. Zone pricing – setting prices of goods or services based
on the location where they will be offered for sale to
customers
3. Base point pricing – based on the locations, decides as
base points and the transport cost is collected from the
base point of the buyer’s location
Role / Importance of Pricing

1. Profitability depends on pricing

2. Price is determinant of buying decision
3. Price influences customer perception
4. Price is weapon to fight competition
5. Price is an important part of sales promotion
Channels of Distribution

- Routes or pathways through which goods and services

flow or move from producers to consumers

- Is a set of interdependent marketing institutions

participating in the marketing activities involved in
the movement or the flow of goods or services from
the primary producer to the ultimate consumer
Channels of Distribution

Channel Components

- All kind of merchant middlemen – wholesalers and

retailers
- All kinds of agent middlemen – commission agent,
brokers, warehouse-keepers
- All other facilitating agencies – carriers, bankers,
advertising agencies
Need/ Importance/ Significance of Channels of
Distribution

1. Help in the production function – manufacturer can

leave the marketing activity to middlemen
2. Marketing Demand and Supply – assemble the goods
from many producers and customers can make effective
purchase
3. Financing the Producer – Bulk order and payament
4. Aid to Communication – Channel partners have complete
knowledge of consumer behaviour – communicate the
necessary information to the producer
5. Stabilizing the Prices – stocking goods, constant flow of
goods to the market at the proper time
Need/ Importance/ Significance of Channels of
Distribution

6. Promotional Activities – Advertising, Personal selling

and sales promotion
7. Pricing – suggestions from the middlemen – depends
upon the type of channel of distribution
Factors affecting choice of Distribution Channel
Product Factors: nature, qualities and peculiarities of the
product
a) Physical Nature – perishability, sizes & weight of the
product – Perishable products have a short distribution
channel – Bigger products have direct channel
b) Technicality of Product – training and expertise required to
handle and use the products – sold directly by the producer
c) Product range – more variety, it may have its own outlets –
narrow product range, ideal to distribute through
wholesalers and retailers
d) Product Price – low unit price products consumed on very
large scale, through long channels – low turnover products
will have smaller distribution channels
Factors affecting choice of Distribution Channel
Market Factors : nature and extent of market
a) Composition of target market – number of customers –
large, then requires services of the middlemen –
limited customers, then requires direct marketing
b) Availability of channel – availability of distribution
partners
c) Buyer’s Behaviour – time and effort spend on shopping
and information gathering
d) Legal constraints – licensed shops
Factors affecting choice of Distribution Channel
Institutional Factors : consideration of Intermediaries
a) Promotional ability of intermediaries - capacity of
the intermediaries to promote the products
b) Financing capacity of Intermediaries – credit and
credit terms
c) After Sales services – adding value – repair or replace
d) Channel Cost – cost of distribution and the services
provided by the middlemen or agents – select the most
economical channel
Factors affecting choice of Distribution Channel
Organisational Factors: nature of the business, marketing
knowhow, managerial competence & experience,
management style and policies
a) Financial resources – Strong company needs less
middlemen – own sales force and retailing outlets
b) Reputation – reputation is high, no need of much
middlemen
c) Marketing Policies – Strategies of the company
Classification of Channels
Conventional Channels
- Zero-Level Channels - Manufacturer to Consumer
- One-Level Channels - Manufacturer to retailer to Consumer
- Two-level Channels - Manufacturer to wholesaler to retailer to
consumer
- Three-Level Channels - Manufacturer to agents to wholesaler
to retailer to consumer

Direct Channel – company chooses to sell directly to the

consumer without engaging any intermediary

Indirect Channel – which employs the services of intermediaries

in moving the goods to the consumers
Functions of Channel Intermediaries

1. Procurement & Assembling – buying in bulk – selling in

small quantities
2. Warehousing and Storing – Preserving the material – quick
availability of product
3. Grading and Packing – classification of products variety –
packing in small quantities
4. Selling – sell merchandise to customers – transfer of
ownership
5. Assumption of Risk – risk of forecasting of demand from
customers
Functions of Channel Intermediaries
6. Financing – credit facilities
7. Supply of Market Information – support decision making in
marketing – feedback – helps manufacturer in product
development & other decision making
8. Advertising & Communication – promotion &
advertisement both inside & outside the store
Logistics
Managing, designing and improving flow of resources between the
point of origin and the point of destination through the supply
chain

- Order Management – dealing with purchase requests – order

entry, picking, packing, shipping and billing
- Warehousing – preserve the stock
- Transportation – Integrate the resources scattered – enhance
the value of goods by the creation of place utility
- Material Management – ensuring uninterrupted supply for
production
- Inventory Control – monitoring and coordinating supply,
storage, distribution and recording of materials
PROMOTION
- Create and increase awareness
- Provide information about the products and services
- Build sales and profits

Promotion includes –
- Advertising
- Personal Selling
- Sales Promotion
Role/Importance/Significance of PROMOTION
Influencing the customer to purchase the product or service

1. Persuades Customer – attracting the attention of

consumers – stimulate consumers’ familiarity on a product
– increase consumers’ confident and their product
preferences and attitudes
2. Provides Information – motivate to purchase –
communicate the features and benefits of the product –
inform and remind about existing products
3. Image creation – creating perception about the brand –
Positioning the product and effective promotional
messages
Role/Importance/Significance of PROMOTION
Influencing the customer to purchase the product or service

1. Persuades Customer – attracting the attention of

consumers – stimulate consumers’ familiarity on a product
– increase consumers’ confident and their product
preferences and attitudes
2. Provides Information – motivate to purchase –
communicate the features and benefits of the product –
inform and remind about existing products
3. Image creation – creating perception about the brand –
Positioning the product and effective promotional
messages
Role/Importance/Significance of PROMOTION
4. Motivates distribution Partners – helps in moving its
products through the channel – convincing distribution
partners
5. A tool to fight competition – creates differentiation in the
mind of the consumer between products
Objectives of Promotion
1. Create Awareness

2. Educate Customer

3. Persuade

4. Reinforce to buy

5. Retain Customers
Elements /Methods of the Promotion Mix
I. ADVERTISING
- Any paid form of non-personal presentation of ideas,
goods or services by an identified sponsor

Broadcast Media – Television, Radio

Non-Broadcast Media – Cinema Theatres, Cable TV, Discs

Outdoor Media – Street Furniture, Hoardings and Bill boards,

Banners and Posters
Direct Response – Telemarketing, Mailers, Pamphlets

Internet – Social Networks, Search engines, Youtube

Elements /Methods of the Promotion Mix
I. Advertising

Role and Importance of Advertising

- Persuades Customer
- Provides Information
- Image Creation
- Motivates distribution partners
- A tool to fight competition
Elements /Methods of the Promotion Mix
Advertising a boon or Bane (Advantages and Disadvantages)

Boon:
- Helps in promotion of product and services
- Assist channel partner to sell
- Creates brand awareness
- Encourages salesman
- Provides information to customers
- Increase sales, employment and profits
- Source of entertainment for the people
Elements /Methods of the Promotion Mix
Advertising a boon or Bane (Advantages and Disadvantages)

Bane:
- Increases product costs
- Misleads the Consumer
- Creates unwanted desires
- Wastage of National resources
Elements /Methods of the Promotion Mix
Advertising

Advertising Copy – written or spoken part of the

advertisement – headlines, sub heads and the text
Elements /Methods of the Promotion Mix
II PERSONAL SELLING

- Face to face interaction with one or more perspective

purchasers for the purpose of making presentations,
answering questions and procuring orders

- Direct form of communication between a company

representative and a customer to communicate about a
product or service
Elements /Methods of the Promotion Mix
II PERSONAL SELLING

Steps in Personal Selling

1. Prospecting – Identifying potential buyers

2. Preapproach – Learning more about the prospective buyers
3. Approach – Making initial contact
4. Presentation – attract attention, stimulate interest
5. Handle Objections – clearing the doubts
6. Close the Sale – asking the customer to buy
7. Follow up – service to customers
Elements /Methods of the Promotion Mix
II PERSONAL SELLING - Role/Benefits and Importance

1. Provides flexibility
2. Builds Relationships
3. Persuasive Impact
4. Educates Customer
5. Interactive
Elements /Methods of the Promotion Mix
II PERSONAL SELLING - Disadvantages

1. Widely misunderstood
2. High cost
3. Labour intensive
4. Limited Reach
5. Sales Pressure
Elements /Methods of the Promotion Mix
III SALES PROMOTION

- Activities that create buyer incentives to purchase a product or that add value
for the buyer or the trade

- Discounts
- Loyalty Programs
- Point-of-purchase promotion
- Samples
- Vouchers and Coupons
- Contests
- Premiums
- Exchange offers
Elements /Methods of the Promotion Mix
IV PUBLIC RELATIONS AND PUBLICITY

- Marketing communication function intended to collaborate

and build mutually beneficial relation with organization’s
publics, including consumers, shareholders and government

- PUBLIC RELATION OFFICR (PRO)

- Improve the public’c general awareness about the firm

- Publicity is the unpaid communication about an organisation

that appears in the mass media
Elements /Methods of the Promotion Mix
IV PUBLIC RELATIONS AND PUBLICITY – Activities

a) Press release
b) Investor Relations
c) Speeches
d) Media Relations
e) Sponsorships
f) Public Service Activites
g) Lobbying – providing information to Govt
Introduction to Service Management

A service is any activity or benefit that one party can offer to

another which is essentially intangible and does not result
in the ownership of anything

Service is an act or performance offered by one party to

another

- Those activities, benefits or satisfaction which are offered

for sale or provided in connection with the sale of goods
Introduction to Service Management

Services: are intangible products, deeds and processes that

are exchanged directly from the producer to the consumer

Services Management: refers to planned activities of supply

chain system that intersects and connects actual company
sales and the customer

Services Marketing : is a planned process through which

organisations satisfy the needs of the customer by selling
intangible products, deeds and processes
Characteristics of Services

Intangibility: Customers can’t see, touch or smell

- inability of seeing, feeling, touching and weighing

- customer’s perception and customer’s expectation

- Banking

- Hotel

- College Education

- Movie Theatre

- Insurance
Characteristics of Services

Perishability – Customers have to use it or lose it

- makes it impossible to store, return or resell

Variability – Lack of consistency in service performance

- inability of services providers to offer same level of

service consistently
- difficult to standardize services – service providers and
customers vary
Characteristics of Services

Perishability – Customers have to use it or lose it

- makes it impossible to store, return or resell

Variability – Lack of consistency in service performance

- inability of services providers to offer same level of

service consistently
- difficult to standardize services – service providers and
customers vary
By adopting good human resource management practices
Standardizing service delivery
Understanding customer
Feedback and Follow up
Characteristics of Services

Inserparability: Produced and Consumed simultaneously

- Service provider would become a part of a service – services

cannot be separated from the service provider
Difference between Product and Service
Attribute Product Service
Tangibility Tangible Intangible
Transferability Transfer of ownership Not Possible
possible
Nature Physical Action
Storage and Possible Not Possible
Transportation
Quality Can be standardized Difficult
Peculiarity Homogenous Heterogeneous
Seperability Production and Produced and
distribution are Consumed
seperated simultaneously
Classification of Services

On the basis of Tangibility

- Core Services: benefit that a customer gets from the

service

- Augmented Services: supported benefits provided to

enhance the value of core service – attached to a tangible
product or intangible service
Classification of Services

On the basis of inseparability

Inseparable Services : services that cannot be separated from

the service provider

Semi-separable services: services requires the customer to

obtain an outcome without the intervention of a human
provider
Classification of Services

On the basis of marketability

Marketable Services: traded and exchanged for money for

deriving personal benefit

Non-marketable Services: provided to people or society

without any intention of return
Classification of Services

On the basis of people orientation

People-Based Services: people play a major role

People and Equipment based Services: combining tangible

and intangible elements
Classification of Services

On the basis of end user

Business Services: businesses, governments and market

intermediaries

Consumer Services: provided to individuals – Excellent

consumer service is becoming the core element
Classification of Services

On the basis of Expertise

Training and experience in the concerned area

Professional Services – specialized knowledge – experts in the

concern field

Non-professional Services – No expertise and education

Classification of Services

On the basis of Profit Motive

For Profit Services – rendered to generate income for

producer and their employees

Non-profit Services – without considering income

On the basis of Industry
Marketing of Services / Service Marketing

Activity or benefit that one party can offer to

another that is essentially intangible and does
not result in the ownership of anything. Its
production may or may not be tied to a
physical product
Importance of Marketing of Services
1. A Key differentiator – It is the service quality that
distinguishes the two brands from each other –
differentiate themselves from the competition and
attract consumers
2. Importance of Relationships – buying decision will
depend on the degree to which he/she trusts the
seller
3. Customer Retention – taking into consideration his
requirements and feedback – greater scope for
customization, increased satisfaction – creating value
Importance of Marketing of Services
4. Relationships are Key: listen and understand the
needs of customers to build loyalty and trust –
good relationship leads to positive word of mouth
5. Multiple Touchpoints: Interactions with multiple
people and experiences – touchpoints work
together to establish a perception in the
consumer’s mind
6. Services Proliferate: outstanding from others –
ways to communicate the benefits of the services
Importance of Marketing of Services
7. Feedback Improve Service: Consumers are
involved in the process and contributes to a
positive outcome – use feedback to improve
service marketing effectiveness
8. Technology Impact: provide do-it-yourself
options for consumers
Marketing Mix in Service Industry
Marketing Mix in Service Industry
1. Product: refers to the service offered
2. Price: indicator of the quality offered
3. Promotion: service promotional campaign
4. Place: make the service accessible and available
5. People: delivering the service
6. Physical Evidence: tangible evidence
7. Process: process of the service product reaching
the end customer
Growth of Service Sector
Service sector is growing at a very fast rate
compared to any other sector

Contribution towards GDP and employment rate is

high
Growth of Service Sector
Service Industries:

Health Care: Hospital, Medical Practice, eye Care etc

Professional Services: legal, Accounting etc
Financial Services: Banking, Insurance etc
Hospitality: Restaurants, Resorts etc
Travel: Travel agencies
Others: maintenance, Health clubs etc
Reasons for Growth of Service Sector
1. Consumer Affluence
2. Changing Role of Women
3. IT Revolution
4. Health-care Consciousness
5. Economic liberalisation
6. Export Potential
Service Processes
Refers to how a service is provided/delivered to a
customer

- Is a creative process, which begins with a service

concept and strategy to provide a service with
features to differentiate it from the competition
Designing Service Processes - Factors
1. The Service itself : The effectiveness of the service
rendered
2. Customer Participation: service delivery system
from self-service to complete dependence
3. Degree of Customer Contact: come into contact
with the customer and proper care
4. Location of Service Delivery: Place of delivery
5. Complexity of Service: number of processes
involved in the delivery
Service Blue Print
- Technique used for service innovation
- A flowchart of the service process
- A map in which all the elements or activities – the
steps involved in serving the customers – their order
of sequencing and interaction with the customers
are involved
Contents of Service Blue Print
1. Customer Actions – steps that customers take as part of
the service delivery process
2. Onstage/Visible Contact Employee Actions –face-to-
face actions between employees and customers
3. Backstage/Invisible Contact Employee Actions –
invisible for the customers
4. Support Processes – all the activities carried out by
individuals and units within the company
5. Physical Evidence – all the tangibles that customers are
exposed to that can influence their quality perceptions
Building a Service Blue Print
1. Identification of the service process – supposed to be
blue printed
2. Identification of the customer segment or the
customers that are supposed to experience the service
3. Picturing the service from the customer’s perspective
4. Picturing the actions of the contact employee
5. Linking the contact activities to the needed support
functions
6. Adding the evidence of service for every customer
action
Front-Office and Back-Office Process
Front-Office Process
- Includes front office manager and his subordinates
- First person customers speak to or interact with
Responsibilities
- Answering a multi-line phone system
- Greeting and directing guests
- Responding to complaints and service issues
- General questions or concerns
- Performing cashier duties, maintaining visitor’s register,
etc
Front-Office and Back-Office Process
Back-Office Process
- handling data and office documents, administrative support,
additional information etc
- involved in processing the service orders
Responsibilities
- serve administrative department in their routine operations
- Collaborate with sales and marketing teams to facilitate service
delivery
- Execute marketing research
- support in handling and documenting customer accounts
- Order fulfilment and client services
Health Care Services

Consist of :
Health care organisations
- Hospitals
- Nursing homes
- Diagnostic centres
- Dental Hospitals
- Clinics
- Ayurveda hospitals etc
Health Care Services

Consist of :
Persons
- Doctors
- Dentists
- Nurses
Health Insurance Providers
Health Care Services

- Increasing patient population

- Expectation fo better quality of health services

Health care marketing is the process of

understanding the needs and wants of a
target market with an objective of integrating,
planning, implementing and controlling of the
health care delivery
Nature of Health Care Services

1. Intangibility
2. Variability in service delivery
3. Inseperability
4. Perishablity
5. Quality assessment
Factors contributing to growth of Health
Care Services
1. Growing population and economy
2. Expanding middle class – Increasing disposable
income
3. Rise of diseases
4. Economical treatment costs
5. Increase in incidence of lifestyle-related diseases
6. Health and safety education on preventive
healthcare disorders
7. Emergence of health insurance
Factors contributing to growth of Health
Care Services
8. Government initiatives on health sector
reforms
9. Access to qualitative diagnosis and
technological advancements
[Link] tourism
Marketing of Healthcare Services

Product Mix
- Casuality services
- Diagnostic services
- Pharmacy services
- Ambulance services
- Emergency services
- Ambience
Marketing of Healthcare Services

Price
depends on the characteristics of customers
and providers

Place
location or the hours a medical service
accessibility
Marketing of Healthcare Services

Promotion
Public relation Manager
Favourable word of mouth

People
quality of the people – receptionist,
administrative staff, nurses, doctors
Marketing of Healthcare Services

Process
involved in consultation – taking
appointments, registration, form filling etc

Physical evidence
better customer experience
building and equipment
Importance / Significance / Role of Health
Serives
1. Health and medical care improves the quality of
life
2. Career and employment opportunities
3. Provides business opportunities other to sectors
such as pharmaceuticals and insurance
4. Empowers research and development activities
5. Health Tourism contributes to national income
Importance / Significance / Role of Health
Services
6. Generates revenue to government in the
form of service tax
7. Prevention and management of chronic
diseases
TOURISM

- A growing Industry – due to higher disposable income,

increased liesure time and falling costs of travel

- Foreign Tourist : someone traveling abroad for at least

twenty four hours
TOURISM - Definition
- Tourism is an activity done by an individual or a group of
individuals which leads to a motion from a place to
another, from a country to another for performing a
specific task
TOURIST - Definition
A person who travels or visits a place or landmark particularly
away from home for recreational, leisure or business
purposes
TOURISM MARKETING - Definition
Planned process of integrating concepts and systems
underlying marketing processes with travel and tourism
activities to satisfy the social-psychological needs of the
tourist
Nature / Elements of Tourism and Travel

1. Transport: Rail, Sea, Road, Air

2. Place Significance: place of workship, Natural
beauty, place of entertainment, man made
wonders, Business Interests
3. Natural Attractions
4. History and Cultural Significance
5. Infrastructure
6. Facilities: expand the visibility and add value to
the tourist
7. Accommodation
Nature / Elements of Tourism and Travel

8. Consumed at destination: begins in a place of

origin and is consumed at desitination places
9. Involves Development
10. Creates diversified culture
Components of Tourism and Travel
Transport Attractions Accommodation

Air Transport Historical Hotels

Monuments &
Palaces
Road Transport Natural Scenery Resorts
& Wild life Parts
Rail Transport Museums & Villas
Cultural Centres
Ocean Transport Beaches & Hostels
Mountains
6 A’s of Tourism and Travel

1. Access
2. Accommodation
3. Attractions
4. Activities
5. Amenities
6. Agencies
Scope of Tourism and Travel

Scope of Tourism Support Services

Accommodation Hotels, Resorts, Guest
Houses
Transport Air, Rail, Road, Sea, Rivers
Travel Routes Air, Sea, Road, Rivers
Food Indian, Chinese, Continental,
Italian, Thai
Health Local Climate conditions,
Health Support
Money Banks, Transfer facilities,
ATMs, Post Office
Entertainment Clubs, Casinos, Movie
Theaters
Role / Significance / Importance of Tourism and
Travel Services
1. Cultural Transformation
2. Creates Business Opportunity
3. Generates Employment
4. Promotes Socialisation
5. Facilitates trade through sale of products and
services to the tourists
6. Provides foreign exchange
7. Government derives income from tourism
8. Provides a learning experience
Role / Significance / Importance of Tourism and
Travel Services
9. Promotes infrastructure development
10. Preserves national heritage and wildlife assets
11. Contribution to Gross Domestic product
12. Promotes interconnectedness throughout the
world
Marketing of Tourism and Travel Services

- Tour packages
- Customer’s participation
Product : Experience and hospitality provided
- Adventure
- Pilgrimage
- Nature & Wildlife
- Recreation
- Cultural
- Sport
- Medical
Marketing of Tourism and Travel Services

Price – operating costs, profit margin and

distribution network costs, seasonal variations

Place – means of getting the service to the target

customers – logistics – accessible to customers
with ease and convenience

Promotion – timely information, word-of-mouth

communication, advertising
Marketing of Tourism and Travel Services

Physical Evidence: Tangible includes the quality

of food, Hotel facilities etc – Intangibility is
the experience felt

Process : systems a service provider implements

in order to facilitate the delivery of services

People : different class of people – Tour guides,

travel agency people etc
INTRODUCTION
A Working Definition of
Outsourcing
Services
COMPANY OUTSOURCER

Organization Service
Level Level
Agreement Agreement

Outsourcing denotes the continuous procurement

of services from a third party, making use of
highly integrated processes, organization
models and information systems.
BPO – Business Process Outsourcing

BPO: Business process outsourcing (BPO) is a subset

of outsourcing that involves the contracting of the
operations and responsibilities of specific business
functions (or processes) to a third-party service
provider.
Significance/Importance/Need/Advantages for
Outsourcing of Services
1. Achieve cost reductions: process improvements, reengineering,
and use of technologies that reduce and bring administrative
and other costs under control.
2. Key in on company’s main business: management is free to
devote more time to building the company’s core businesses
3. Obtain outside expertise: domain experts from another company
provide the needed guidance and skills.
4. Meet constantly changing customer demands: provide the
management with flexible services to meet the customers’
changing requirements
5. Achieving revenue increases: companies can focus on increasing
their sales and market share, develop new products, expand into
new markets, and enhance customer service and satisfactions
Need for Outsourcing
Types of BPOs
Types of BPOs
BPO – Business Process Outsourcing

BPO: Business process outsourcing (BPO) is a subset

of outsourcing that involves the contracting of the
operations and responsibilities of specific business
functions (or processes) to a third-party service
provider.
Advantages and Disadvantages of BPOs
Call Centre

Call Centre is a place where the high volume of

calls or Emails are being made and received
Call Centre

call centre or call center is a centralised office used for

the purpose of receiving or transmitting a large
volume of requests by telephone
Calls may be inbound or outbound. Inbound calls are
made by consumers, for example to obtain
information, report a malfunction, or ask for help.
In contrast, outbound calls are made by agents to
consumers, usually for sales purposes (
telemarketing). One can combine inbound and
outbound campaigns
Call Centre

• Contact centre – Supports interaction with customers over a variety of media,

including but not necessarily limited to telephony, e-mail and internet chat. A
contact centre is usually an inbound service only.
• Inbound call centre – Exclusively or predominantly handles inbound calls (calls
initiated by the customer).
• Outbound call centre – One in which call centre agents make outbound calls
to customers or sales leads.
• Blended call centre – Combining automatic call distribution for incoming calls
with predictive dialling for outbound calls, it makes more efficient use of
agent time as each type of agent (inbound or outbound) can handle the
overflow of the other.
• Telephone answering service – A more personalised version of the call centre,
where agents get to know more about their customers and their callers; and
therefore look after calls just as if based in their customers' office.
Call Centre

• Handle overflow calls

Outsourcing some call center agents to an external service provider in order to
handle overflow call volume can be an excellent way to increase customer service
and to make sure no customer is left behind.
• Handle after-hours calls
When you hire an external service provider to provide after-hours support, you
can offer round the clock service for a fraction of the price.
• Disaster recovery
Whether your office is prone to bad weather, power outages and natural
disasters or your call center software and computer infrastructure isn’t the most
reliable, contracting an external service provider to handle calls in the event of an
emergency can be an effective way to ensure business continuity.
• Handle specialized calls
Co-sourcing a specific department (like IT) to an external service provider can be
an excellent way to provider amazing support, without breaking the bank.