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Presentation on theme: "MARKETING MANAGEMENT."— Presentation transcript:


2 MARKETING MANAGEMENT PRODUCT: Meaning Goods & Services Product Mix
Levels of Product PLC- Managing PLC

3 MARKETING MANAGEMENT Types of new product Test marketing a new product
NEW PRODUCT DEVELOPMENT Types of new product Test marketing a new product Portfolio analysis Branding- Definition, Purpose & significance and Branding Decisions Packaging and labeling- Purpose ,types and new trends in packaging

4 MARKETING MANAGEMENT PRICE Meaning Importance Pricing Objectives
Factors influencing Pricing decisions Approaches to Pricing Setting the price and managing the price changes

Functions of Distribution Channels Introduction to various channels of distributions Designing of Marketing Channels Introduction of Wholesaling, Retailing, Franchising Direct Marketing Impact of technology & internet on Distribution

6 MARKETING MANAGEMENT PROMOTION Concept and role in Marketing
Promotional Mix-Advertising, Sales Promotion , Personal Selling, Public Relations Impact of technology internet on Promotion EXTENDED P’S OF MARKETING People, Process & Physical Evidence

7 PRODUCT PRODUCT: Anything that can be offered to market for attention ,acquisition use ,or consumption that might satisfy a want or need Bundle of physical ,Service and symbolic attributes designed to satisfy a customer’s wants and needs.

8 PRODUCT Classification Consumer Products(B2C)
Products, which are purchased by the ultimate consumers or users for satisfying their personal needs and desires are referred to as consumer products. For example, soap, edible oil, eatables, textiles, toothpaste, fans, etc. which we use for our personal and non business use are consumer goods. Destined for use by ultimate consumer

Industrial products are those products, which are used as inputs in producing other products. The examples of such products are raw materials, engines, lubricants, machines, tools, etc. Industrial products are meant for non personal and business use for producing other products. The market for industrial products consists of manufacturers, transport agencies, banks and insurance companies, mining companies and public utilities.

10 Consumer Products(B2C)
Depending upon shopping efforts Consumer products are further classified as 1.Convenience Products 2. Shopping Products 3. Specialty Products 4. Unsought Products

11 Consumer Products(B2C)
Convenience Products Goods and services that consumer wants to purchase frequently immediately and with minimal effort. Easily available e.g Toothpaste, Magazines, Shopping Products After comparing competing offerings on price, quality and style e.g Television, Furniture Clothing Unsought products Little product knowledge or if aware little or even negative interest e.g Pre-needed Funeral plans Specialty Products Strong brand preference and loyalty, special purchase efforts, little comparison of brands, low price sensitivity e.g luxury cars, Tax Attorney

12 Convenience Products CHARCTERISTICS
a) These products are purchased at convenient locations, with least efforts and time (b) Convenience products have a regular and continuous demand,as these generally come under the category of essential products (c) These products have small unit of purchase and low prices. For example the eggs are sold at Rs.28 per dozen and the customers purchase them in small numbers (d) Convenience products have standardised price as most of these products are branded products; (e) The competition in these products is high as the supply is greater than the demand. The marketers have, therefore, to heavily advertise for these products f) Sales promotion schemes or short term incentives such as sales contests, discount offers, etc play an important role in the marketing of such products

13 Convenience Products Classification:
(a) Staples Most frequent and most routinely purchased e.g Milk, Dry cleaning (b) Impulse Totally unplanned .Exposure to the product triggers want e.g Savvy magazines and chocolates (c) Emergency Purchases result from urgent and compelling needs e.g Emergency room visit, Asthma inhalers

14 Shopping Products Characteristics
(a) The shopping products are generally of durable nature, i.e., they normally survive many uses (b) The unit price as well as profit margin of shopping products is generally high; (c) As these products have high unitprice, customers compare the products of different companies before making selection; (d) Purchases of shopping products are generally pre-planned and there is little degree of impulse buying in these products (e) Retailers generally play an important role in the sale of shopping products as lot of persuasive effort is needed to convince the buyers to purchase them.

15 Shopping Products Classification
(a) Homogeneous: All products are considered similar Shopping focus mainly on price comparisons e.g Airplane flights/T.V (b) Heterogeneous: Shopping focus on quality comparisons e.g Child Care, Selection of flat/Appt

16 Specialty Products Characteristics
(a) The demand for speciality products is limited as relatively small number of people buy these products; (b) These products are generally costly and their unit price is very high; (c) These products are available for sale at few places as the number of customers is small and are willing to take extra efforts in the purchase of these products; (d) An aggressive promotion is required for the sale of speciality products, in order to inform people about their availability, features, etc. (e) After sales services are very important for many of the speciality products.

17 Durability of Products
On the basis of their durability, the consumer products have been classified into three categories” (a) Durable Products (b) Non-durable Products (c) Services.

18 Durable Products These goods are generally used for a longer period, command a higher per unit margin, require greater personal-selling efforts, guarantees and after sales services, on the part of the seller. E.g Refrigerator, Radio, Bicycle, Sewing machine and kitchen gadgets

19 Non-durable Products The consumer products which are normally consumed in one or few uses e.g Toothpaste, Detergents, Bathing soap and Stationary products etc From the marketing point of view, these products generally command a small margin, should be made available in many locations and need to be heavily advertised.

20 Services The durable and nondurable goods are tangible in the sense that these have a physical existence and can be seen and touched. Services are intangible in form. By services we mean those activities, benefits or satisfactions, which are offered for sale, e.g., dry cleaning, watch repairs, hair cutting, postal services, services offered by a doctor, an architect and a lawyer.

21 Distinguishing characteristics of services :
(a) By their very nature, services are intangible, i.e., we can not see, feel or touch them; (b) A service is inseparable from its source. That means we cannot separate the service from the person providing the service; (c) The services cannot be stored. They are highly perishable. For example, if a tailor does not work for one week, the services he would have provided during such period go waste; (d) Services are highly variable as their type and quality depends on the person providing them. That is why, there is a difference in the extent of satisfaction we get from the services provided by different people.

22 Classification of Product
shopping efforts involved Depending upon Durability basis Durable Non durable Service Convenience Product Shopping product Specialty Unsought Homogeneous Heterogonous Staples Impulsive Eonegency

The important characteristics of industrial products are given below: Number of Buyers: As compared to the consumer products, the numbers of buyers of industrial products are limited. For example, sugarcane is purchased by few producers of sugar, but sugar, which is a consumer product, is purchased by crores of people in our country. 2. Channel Levels: Because of limited number of buyers, the sale of industrial products is generally made with the help of shorter channels of distribution, i.e., direct selling or one level channel. 3. Geographic Concentration: Because of location of industries at certain points or regions, industrial markets are highly concentrated, geographically. For instance, the demand for power loom comes from Bombay, Sholapur, Bangalore, etc where the textile industry is concentrated in our country.

24 characteristics of industrial products
4.Derived Demand: The demand for industrial products is derived from the demand for consumer products. For example, the demand for leather will be derived from demand for shoes and other leather products in the market. 5. Role of Technical Considerations: Technical considerations assume greater significance in the purchase of industrial products because these products are complex products, bought for use in business operations. 6. Reciprocal Buying: Some big companies from basic industries like oil, steel, rubber, and medicines resort to the practice of reciprocal buying. For example, Ashok Leyland may buy tyres and tubes from MRF, which in turn may buy trucks from Leyland, whenever it feels the need for the same. 7. Leasing Out: A growing trend in industrial product market is to lease out rather than to purchase the products on outright basis because of the heavy price of these products.

Materials and Parts Capital Items Supplies and Business Services

26 Materials and Parts These include goods that enter the manufacture’s products completely Raw material: Farm products like cotton, sugar cane, oil seed and natural products such as minerals (say crude petroleum, iron ore), fish and lumber (b) Manufactured material and parts. These are again of two types – (I) Component materials : glass, iron, plastic and component parts such as tyre, electric bulb, steering, and battery

27 (a) Installations like elevators, mainframe Computers,
CAPITAL ITEMS (II)Capital Items: These are such goods that are used in the production of finished goods These include: (a) Installations like elevators, mainframe Computers, (b)Equipments like Hand Tools,Personal Computer, Fax Machines, etc.

28 Supplies and Business Services
These are short lasting goods and services that facilitate developing or managing the finished product. (a) Maintenance and repair items: Paint, Nails, etc (b) Operating supplies : Lubricant, Computer Stationary, Writing Paper, etc.

29 Maintenance & Repair Services
BUSINESS SERVICES Maintenance & Repair Services Usually supplied under contract by small producers Available from the manufacturer of original equipment e.g. Window cleaning, Copier repair Business advisory Services: e.g. Legal ,Management Consultancy, advertising

30 Industrial Goods Material & parts Capital items Supplier & Business
Services Raw material Manufactured material & parts Installation Equipment Maintenance & repair items Operating & Suppliers Form product Natural products Component

31 Product mix/Product Assortment
Complete set of all Products offered for sale by a company The number of products carried by the firm at a given point of time

32 HUL Product Line HUL Food Brands Home care Brands Personal Care Brand
HUL Food Brands Home care Brands Personal Care Brand Water Red Label Active Wheel Aviance Pure it Brooke Bond Cif Axe Taj Mahal Domex Clinic Plus Lipton Rin Close up Bru Sunlight Pepsodent Annapurna Surf Excel Sunsilk Knorr Vim Vaseline Kwality Walls Ayush Breeze Dove Hamam Lifebuoy Pears Rexsona


34 Real Activ (No Added Sugar) Dabur Chyawanprakash Hair oil
Health Care Personal Care Foods Health Supplements Hair Care Real Fruit Juices Dabur Chyawanprash Real Activ (No Added Sugar) Dabur Chyawanprakash Hair oil Burrst(Light and Refreshing Fruit Beverage) Dabur Chywan Junior Dabur Amla Hommade Glucose-D Dabur Amla Flower Magic Cooking Paste Honey Vatika Enriched Coconut oil Tomato Puree Vatika Enriched Almond Hair oil Coconut Milk Oral Care Dabur Red Tooth Paste Shampoo Babool tooth Paste Vatika Smooth And Silky Meswak Tooth paste Vatika Root Strengthening Promise tooth Paste Black Shine Lal Dant Manjan Vatika Danddruff Control Babool Mint Fresh Gel Dabur Total Protect Digestives Conditioner Hajmola Tablets Vatika Smooth And Silky Conditioner Hajmola Candy Vatika Root Strengthening Conditioner Skin Care Uveda Range Complete Fairness Range Moisturiser Face Wash Clarifiying Face Wash Dabur Gulabari

35 Product Line A group of products clubbed together by virtue of satisfying a particular class of needs ,being used together or distributed through the same channel or possessing common physical or technical characteristics A group of closely related products constitute a product line

36 Some terms Width/Breadth of product mix
The number of Product line it carries Length/Depth of Product line Number of items or brand in line Depth of Product line Total number of items under each brand in line, in terms of variants, shades models packs size

37 Product Mix For HUL WATER EXPORTS

38 Product Mix Decisions Adding /Stretching Product line upwards /downwards Line filling Line Pruning

39 Adding /Stretching Is done due to structural changes in the market place- the most important being the customer lifestyles and demographic characteristics like rising income and lower proportion of income being spent on food and other essential items . Two types: Stretching down Stretching up

40 Stretching down Initially taken its position in high price slot ,stretches the line downwards by offering the products in the same line for lower end markets HUL Surf- 40/K.g Nirma Sunlight-26/k.g Wheel- 10/k.g

41 Stretching up The firm moves up the line from its original posture and makes higher priced offers from its stable Philips-

42 Line filling The firm introduces more items to the line to plug certain gaps in its current range of offers. Intention: Full line company, customers do not go to competitors for offers/models in particular price slot Videocon co lour T.V: Initially on launch target was elite market segment hence introduced premium range within three years launched 14 ” Private-Yupiee, Bazooka-Top end, Turbo tough – MI, Budget line-LMI new offers inch Models, 02-20, 4-21,1-25,1-29.

43 Line pruning Conscious decision to reduce the number of items in the product line ,the company is trying to save the cost and maximize the efficiencies in production and distribution and promotion

44 Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer’

45 When an organization introduces a product into a market they must ask themselves a number of questions. Who is the product aimed at? What benefit will they expect? How do they plan to position the product within the market? What differential advantage will the product offer over their competitors?

46 Kotler suggested that a product should be viewed in three levels
Kotler suggested that a product should be viewed in three levels. Level 1: Core Product. What is the core benefit your product offers?. Customers who purchase a camera are buying more then just a camera they are purchasing memories. Level 2 Actual Product: All cameras capture memories. The aim is to ensure that your potential customers purchase your one. The strategy at this level involves organizations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors. Level 3: Augmented product: What additional non-tangible benefits can you offer? Competition at this level is based around after sales service, warranties, delivery and so on.

47 Levels of product

48 The Core Product Every product provides a basic function that solves a customer problem The core benefits or service consist of the benefits provided with when they purchase and use a good or service The core product refers to the use , the benefit or problem solving services the consumer is really buying when purchasing the product

49 The problem solving services or core benefits that consumers are really buying when they obtain a product Locks and alarm provide security Cars provide transportation

50 The Actual Product That the customer buys
The specific offering aimed at the market Tangible features associated with the product Five elements -Design -Style -Feature -Quality -Packaging

51 5 elements of Actual Product
Quality Brand Features Styling Packaging Product Performance Helps the customer position and identify the customer Combination of product attributes Aesthetic aspects Protects and promotes the product

52 Why is it important? This the way firms have traditionally differentiated from rivals Differentiation permits premium pricing and build customer loyalty Important in segmentation ,targeting & position (STP)

53 The Augmented Product The additional bundle of benefits purchased with actual product Additional Consumer services or benefits The term covers both - tangible Features: After Sales, Warranties -Intangible Features: Brand values

54 The Augmented Product After Sales Delivery Guarantee Credit Repairs
Spare Parts Advice Money back Guarantee

55 Why is it important? It offers psychological benefits that enhances the value of core and actual product Enhances the attractiveness of the product and is source of competitive advantage Firms are adding values to the product Companies wrap additional benefits around their product in order to differentiate themselves from rivals

56 Product life Cycle This describes the stages of new product goes through from beginning to end Every product passes through certain identifiable stages A theoretical model which describes the stages a product goes through

57 Stages of a Product Life Cycle
Introduction Growth Maturity Decline

58 Stages in a Life Cycle Introduction Growth Maturity Decline SALES

59 Introduction competing against older, established products
Low level of sales Low capacity utilization not widely distributed because reluctance to take an unproven product price usually high promotion needs to inform the customer

60 Strategies at the introduction
Objective to attract trend setters High Promotional spending to create awreness and inform people Either Skimming or penetration strategies Bought by innovators /trend setters

61 Growth Expanding market but arrivals of competitors
features and options must be added Cash flow becomes positive The market grows, profits rise but attracts the entry of new competitors wider distribution adjustment in pricing promotion must attract customers, advantages of the product

62 Strategies in Growth stage
Advertising to promote brand awareness Increase in distribution outlets-intensive distribution Improvements in product- New features , improved styling Go for market penetration and if possible price leadership

63 Maturity sales peak, profit begin to decline, customers have the product and there are many companies in the market, competition becomes very intense all products features, option, guarantees/warranties are similar (so customer service options could be added) pricing become very competitive increase availability of the product becomes wider promotion – why their product is better

64 Strategies for mature stage
Need to defend position Competitor based pricing Enter new segments Attract new users Repositioning Develop New uses

65 Decline product is no longer satisfying or they discover new and better products, sales drop, little or no profit try to identify other uses distribution is reduce price is usually reduced more selective and less promotions

66 Strategies for the decline phase
Maintain the market share Harvest by spending little on marketing the product Promotion to retain loyal customers

Introduction Growth Maturity Decline Sales Low Rapidly rising sales Peak Sales Cost/customer High cost Average Profits Negative Rising High Customers Innovators Early adaptors Middle Majority Laggards Competitors Few Growing Stable begins to decline Declining Number increases

68 SUMMARY OF PRODUCT LIFE CYCLE (Marketing Objective)
Introduction Growth Maturity Decline Create Product awareness & Trial Maximize market share Maximize profit While defending market share Reduce the expenditure and milk the brand

Introduction Growth Maturity Decline Product Offer a basic Extension service Diversify brand and models Phase out weak items Price Use cost plus Price to penetrate the market Price to match or beat competitors Cut price Place Build selective distribution Intensive Build more intensive Go selective phase out Unprofitable outlets Advertising Build product Awareness among early adopters Build awareness & interest in The mass market Stress Brand differences & benefits Reduce to level needed to Retain Hard core Loyal Sales Promotion Heavy Reduce Increase to encourage brand switching Reduce to minimal level

70 Boston Matrix The Boston Matrix consulting group developed this as a tool of portfolio Analysis It can be applied to the portfolio of products produced by a firm or the portfolio of business owned by the company Portfolio is the collection of businesses or products that make up a business

71 The axes of the Matrix Relative Market Share
-This is expressed not as % but share in relation to other firms in market -This is the measure of the firms /Product’s strength in market Market Growth -% rate of growth of sales in the market -A measure of market atrractiveness From this we derive four cells as a means of analyzing the product

72 Assumptions underlying BM
Market share can be gained by investment in marketing Market share gains will always generate cash surpluses Cash surpluses can be generated when the product is in the mature stage The best opportunity to build a dominant market position is during the growth phase

73 Growth-Share Matrix Boston Consulting Matrix


75 Question Mark Low share of rapidly growing market Cash flow is negative Has potential but the future is uncertain It could either be a star or a dog

76 Strategy for Question Mark
Invest to increase the market share Substantial investment to achieve growth at the expense of powerful competitors Invest in promotions Build selectively

77 Stars High Share of rapidly growing market
Position of leadership in a high growth market The product/business is relatively strong and the market is growing Although the product generates income it is countered by high spending Net cash flow is neutral

78 Strategy for stars Investment to sustain growth
Build sales and market share Spend to keep competitors at bay Invest to maintain or increase leadership position Repel challenges from competitors

79 Cash Cows High share of slowly growing Market Mature stage in PLC Little potential for growth Large positive cash inflow

80 Strategy for Cash Cows Harvest Defend market share
Aim for short term profits Little need of investment Little potential for further growth Reduce investment in order to maximize short term cash flow and profits Use profits from cash cows to invest in new products

81 Dogs Means unattractive Low share of a slowly growing Market
No real potential Dogs are either - Products that have failed -Products that are in decline phase

82 Strategy for Dogs Phase out or sell off (Divest)
Not worth investing in Any profit made has to be re invested just to maintain market share

83 Boston Matrix Summary Star -High market growth -High market share
Cash neutral HOLD Question Mark -High market growth - Low market share Cash Absorbing BUILD - Cash Cow -Low market growth -High market share Cash Generating Harvest or milk Dog -Low market growth -Low market share Cash Neutral DIVEST -

84 Criticism Market growth is inadequate measure of a markets attractiveness Market share is an adequate measure of products ability to generate cash The focous on market share and market growth ignores issues such as developing a sustainable competitive advantage The product life cycle varies

85 BCG Matrix for Bharti Airtel
Stars ? Retail Insurance Cows Dogs Fixed Line Services HIGH Mobile Services DTH & IPTV Broad Band Market Growth Rate What they are doing in retail for last 4 years. What to put in Cash Cow. Bharti Infratel The Company has entered into a joint venture agreement with Vodafone Essar Limited (Vodafone) and Idea Cellular Limited (Idea) to form an independent tower company (“Indus Towers Limited” or “Indus Tower”) to provide passive infrastructure services in 16 circles of India. The Company and Vodafone will hold approximately 42% each in Indus Tower and the balance 16% will be held by Idea. Pursuant to the aforesaid agreement, Bharti Infratel Limited has subscribed 50,000 equity shares of Rs. 10 each in Indus Towers Limited on December 17, 2007 for an aggregate value of Rs. 500 thousand. For this purpose, Bharti Infratel Ventures Limited has been incorporated as a wholly owned subsidiary of Bharti Infratel Ltd. The telecom passive infrastructure will be transferred to Bharti Infratel Ventures for ultimate merger in Indus Towers Limited. The Company’s 61,984,721 mobile customers accounted for a 23.8% of wireless (GSM + CDMA) market share as on March 31, 2008. The revenues from the mobile services for the financial year were Rs. 218,697 mn., a growth of 55% over the revenues in the previous financial year. The mobile services business contributed 80% to the consolidated revenues. Telemedia Services During the year, the Broadband and Telephone Services business was renamed as Telemedia Services in line with the Company’s growing focus on new media solutions and foray into IPTV and DTH businesses. The Company provides broadband (DSL) and telephone services (fixed line) in 15 circles spanning over 94 cities across India. As on March 31, 2008, the Company had 2,283,328 customers (a growth of 22%), of which 34.8% (~795,000) were subscribing to broadband / internet services. The Company’s strategy for Telemedia business is to focus on the cities with high revenue potential, excepting for DTH which will be an all India offering. The product offering in this segment includes supply and installation of fixed-line telephones providing local, national and international long distance voice connectivity and broadband Internet access through DSL. The business also provides value added services such as intelligent network Passive Infrastructure Services The undertaking relating to the entire assets and liabilities of telecom passive infrastructure was transferred from Bharti Airtel Limited to Bharti Infratel Limited pursuant to a scheme of arrangement sanctioned by the Honble High Court of Delhi. Bharti Infratel provides passive infrastructure services on a non-discriminatory basis to all telecom operators in India. Bharti Infratel deploys, owns and manages passive infrastructure on an all India basis. The Company has approximately 52,000 towers as on March 31, 2008, of which approx 30,000 towers will be transferred to Indus Towers Ltd (a Joint Venture between Bharti Infratel, Vodafone and Idea Cellular) for 16 circles. LOW HIGH LOW Relative Market Share 85


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