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SRINIVAS UNIVERSITY, , BBA(ALM), , UNIT-1: INTRODUCTION TO MARKETING MANAGEMENT, & MARKETINGSEGMENTATION, 1.1 MEANING OF MARKET, The term 'market' is derived from the Latin word 'marcatus', which means trade, or place of, business., Market refers to a certain place where Buyers & sellers personally meet each other & make, their purchase & sales., In short, it means a certain place where goods are bought & sold. In other words, it is a, particular place where goods are brought & sold., In economics market is the result of a contact between the sellers & buyers of the goods., They can establish contact through telephones, post, courier service, etc., , 1.2 DEFINITION OF MARKET, , , , , According to Pyle "Market includes both place & region in which buyers & sellers are in, free competition with one another.", According to C.B.Memoria "A market is convenient meeting place for buyers & sellers to, come together in order to conduct buying & selling.", As per AMA, “Marketing is the process of planning and executing the conception,, pricing, promotion and distribution of ideas, goods and services to create exchanges that, satisfy individual and organizational goals”., , 1.3 MEANING OF MARKETING, Marketing refers to all those activities which help in the movement of goods from the centres, of production to centers of consumption., Marketing is treated as philosophy, knowledge, or guideline to achieve business goals., Marketing means distribution of goods from producers to final consumers., Marketing is the process that facilitates the exchange of valuable products created & offered, to consumers so as to satisfy their needs & wants & demands., , 1.4 DEFINITION OF MARKETING, , , , , , According to Peter F .Drucker "Marketing means to create customers", According to, the, American Marketing, Association (AMA), Board, of, Directors, Marketing is the activity, set of institutions, and processes for creating,, communicating, delivering, and exchanging offerings that have value for customers,, clients, partners, and society at large., According to American Marketing Association defines marketing as "the performance of, business activities that direct the flow of goods & services from producer to consumer &, services.", , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 1.5 Nature of Marketing:, Marketing is a never ending task. Marketing concerns itself with a arranging all the resources, in a way that meets the needs of the customers. The following points will bring forth the, nature of marketing., 1, , 2, , 3, , 4, , 5, , Marketing is customer oriented: Marketing begins and ends with the customer., Marketing concerns itself not only with the satisfaction of the customer but also objects to, delight him/her. All the organizational activities must be targeted and focused towards the, customer. Customers must be allowed to decree product specifications and standards, regarding quality. And for this, customer’s needs must be examined continuously., Marketing is the delivery of value: When a customer is satisfied from a particular, product based on its overall performance, then the satisfaction that he has received is, known as customer value. Customers consider the product’s value and price before, making a decision and make a trade-off between cost and benefit of the product. They, will choose a product that gives them more value per rupee. According to De Rose,, “Value is the satisfaction of customer requirements at the lowest possible cost of, acquisition, ownership and use”. Thus, the organization must aim to deliver greater, customer value than that of their competitors., Marketing is network of relationships: The focal point of all marketing activities is the, customer. The term relationships marketing came into light in1990’s. According to Philip, Kotler, “Relationship Marketing is the practice of building long-term satisfying relations, with key parties like customers, suppliers and distributors in order to retain their long, term preference and business.” So the marketers should aim at maintaining long term, relationships by delivering high quality products, better services and fair prices than their, competitors., Marketing is business: All activities start from marketing i.e. through knowing, customer’s needs and wants and ends on the customer i.e. providing after sales service, and knowing customer dissonance. The entire business revolves around marketing., Marketing is dynamic: The word dynamic means ever changing. The needs and wants of, the customer are changing constantly. Since the goal of marketing is to meet customer’s, needs and wants by furnishing them with the products they want to buy, therefore,, marketing must also change constantly to meet those needs and wants., , 1.6 IMPORTANCE OF MARKETING, 1) Marketing serves as a source of marketing information:, Marketing serves as a source of marketing information. Here marketing information refers to, information about the marketing conditions i.e. information about the number of consumers,, their location, their requirements, purchasing power, preferences, buying motive etc, 2) Generation of employment opportunities:, It increases employment opportunities on a rough estimate, about 70% job opportunities are, generated in marketing field alone., 3) Development of agriculture sector:, Along with industrial development, the agricultural development is also achieved by, marketing., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , Marketing offers a latest tools, seeds, fertilizers, and techniques to agriculture sector. Thus, there is a balanced economic development in an economy., 4) Improves the standard living of the society:, When production and distribution are made market oriented, costs can be reduced, and, quality can be improved., People can be supplied with standard products at reasonable price. Thus the standard of living, of the people can be improved., Every businessman at micro and macro level tries to maximize consumer satisfaction. he, constantly tries for superior products. Thus, marketing encourages innovation, inventions,, and modernization. It brings to society new varieties, and models that further boost living, standard, 5) Marketing helps the business firm to earn profits in a best and better way:, Profit is a pillar around which all marketing activities rotate., To earn maximum profit is the main aim of every business firm., Marketing provides many opportunities to the firm to earn maximum profit through the, process of buying and selling, by creating time, place and possession utilities., 6) Development of Ancillary Service:, All the marketers try to facilitate their consumers. They are in search of better services to, provide products with minimum difficulties. As a result, quantity and quality of ancillary, services like banking, transportation, insurance, warehousing, communication, and so on can, automatically improve., 7) Development of Educational Institutes: Marketing promotes educational, professional, technical institutes. Growth of educational & training institutes is vital or fundamental need, for overall progress. It also promotes mobility of population throughout the world., 8) It Supports Government Policies: Marketing makes distribution of products effective &, efficient. Goods & service are made available at every corner of the world. It removes, obstacle of non-availability products. Marketing supports globalization, liberalization, modernization policies of governments., 9) Worldwide peace: Marketing leads to cultural development among the countries of the, world. Further, it establishes interdependence among countries for satisfying mutual needs., Improves international relations.It minimizes chances of wars between/among countries., Marketing ensures the world wide peace., 10) Increased consumption: Marketing activates consumptions. Marketers try to offer, superior products & undertake them to inform and convince them to buy. Thus Consumption, increases and the increased consumption is the fundamental condition for economic & social, development. High level of consumption affect positively on production, national income &, per capita income as well., , 1.7 FUNCTIONS OF MARKETING:, The marketing is the performance of those business activities that direct the flow of goods, and services from producers to consumers or users. These are briefly discussed hereunder., 1. Marketing Research: Marketing research involves collection and analysis of facts, relevant to various aspects of marketing. It is a process of collecting and analysing, information regarding customer needs and buying habits, the nature of competition in the, market, prevailing prices, distribution network, effectiveness of advertising media, etc., Marketing research gathers records and analyses facts for arriving at rational decisions and, developing suitable marketing strategies., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 2. Product Planning and Development: The marketing starts much before the actual, production. The marketers gather information regarding what are the needs of the consumers, and then decide upon what to produce. So, the task of marketing begins with planning and, designing a product for the consumers. It can also be done while modifying and improving an, already existing product. For example, now-a-days we find much better soaps and detergent, powders than we used to get earlier. Similarly, we have many new products introduced, almost on a regular basis., 3. Buying and Assembling: Buying and assembling activities as a part of marketing refer to, buying and collection of required goods for resale. This function of marketing is primarily, relevant to those business organisations that are engaged in trading activities. In the context, of manufacturing organisations, buying and assembling involves buying raw materials and, components required for production of finished goods., 4. Packaging: Packaging involves putting the goods in attractive packets according to the, convenience of consumers. Important considerations to be kept in view in this connection are, the size of the package and the type of packaging material used. Goods may be packaged in, bottles (plastic or glass), boxes (made of tin, glass, paper, plastic), cans or bags. The size of, the package generally varies from a few grams to a few kilograms, one piece to a number of, pieces of a product, or in any other suitable quantity in terms of weight, count, length etc., Packaging is also used as a promotional tool as suitable and attractive packages influences the, demand of the products. It may be noted that packaging is different from packing, which, refers to putting goods in suitable containers for transportation purposes., 5. Standardisation and Grading: Standardisation refers to development of standards for, production of goods with respect to shape, design, colour and other characteristics. If, products are standardised, customers are able to identify a product and its characteristics very, well. So goods can be sold by sample or description. Standardisation helps in promoting the, sale of the product by increasing consumers’ confidence in the product quality. Grading, involves separating products into different classes on the basis of certain predetermined, standards relating to size and quality. Grading is required in case of agricultural, forest and, mineral products such as cotton, sugar cane, iron ore, coal, timber, etc., 6. Branding: Branding means giving an attractive name, symbol or identity mark to the, product to make a product different from others so that it is known by that name or symbol or, mark. For example, Surf is the brand name of a detergent powder produced by Hindustan, Unilever Limited (HUL). Similarly, you must be familiar with brands like Colgate for, toothpaste, Lux for soap and so on., 7. Pricing the Product: Pricing involves decisions regarding fixation of product prices,, keeping in view the product costs, the capacity of customers to pay, and the prices of the, competitive products. It is an important decision as it influences the sales and so also the, profits. So pricing has to be done very carefully., 8. Promotion of the Product: Promotional activities include advertising, personal selling,, sales promotion and publicity. All promotional activities involve communication with the, existing and prospective customers whereby they are made aware of the product, its, distinctive features, price, availability etc. The objective of promotional activities is to, motivate the customers to buy the product., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 9. Distribution: Distribution refers to those activities that are undertaken for sale of products, to the customers and the physical transfer thereof. The first aspect i.e., sale of product, involves use of middlemen such as wholesalers and retailers whose services are used for, making the products available at convenient points and helping in their sale to the ultimate, consumers. The second aspect i.e., physical transfer involves warehousing and transportation, of goods from the point of production to the point of sale or the consumer. The objective of, distribution activities is to ensure that consumers get the goods and services at the place and, time most convenient to them and in the desired quantity., 10. Selling: Selling is an important function of marketing whereby the ownership of goods, and services is transferred from the seller to the buyer for a consideration known as price. To, initiate and complete the process of selling, the seller has to inform the prospective buyer, about availability of goods, the nature and uses of products, their prices and the needs of the, customers that may be effectively satisfied by the product. In the process, he arouses, customers’ interest in the product and persuades them to buy it., 11. Storage and Warehousing: Storage refers to holding and preserving goods from the time, of their procurement or production till the time of their sale. In other words storage involves, making suitable arrangements for preserving the goods till they are bought by the consumers, and delivered to them. Warehousing is synonymous to storage but is normally used for largescale storage facility for goods and commodities. The cold storage where vegetables like, tomato, cabbage, potato etc. are stored to be consumed throughout the year. In marketing it is, essential to store raw material and finished goods to be used later by the company for, production or for resale., 12. Transportation: Transportation refers to the physical movement of goods from one place, to another. In marketing, transport as an activity refers to physical movement of raw materials, as well as finished goods from the place of production to place of consumption. Goods are, transported through various means like railways, roadways, waterways and airways. For, heavy and bulky goods, the railways and waterways are the best. For other goods, it depends, upon the demand, cost involved, urgency, nature of the goods etc. to decide about a suitable, means of transportation., , 1.8 DIFFERENCE BETWEEN MARKETING AND SELLING, The terms ‘marketing’ and ‘selling’ are related but not synonymous. ‘Marketing’ as stated, earlier, emphasises on earning profits through customer satisfaction. In marketing, the focus, is on the consumer’s needs and their satisfaction. ‘Selling’ on the other hand focuses on, product and emphasises on selling what has been produced. In fact it is a small part of the, wide process of marketing wherein emphasis is initially on promotion of goods and services, and eventually on increase in sales volume., Marketing has long term perspective of winning over consumer loyalty to the product by, providing him maximum satisfaction. However, selling has short-term prospective of only, increasing the sales volume., In marketing, the consumer is the on king whose needs must be satisfied. In selling, the, product is supreme and the entire focus is its sale. Marketing starts before production and, continues even after the exchange of goods and services has taken place. It is so because, provision of after sale service is an important component of marketing process., MARKETING, , MARKETING MANAGEMENT, , SELLING

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SRINIVAS UNIVERSITY, , BBA(ALM), , Marketing includes selling and other, activities like various promotional measures,, marketing research, after sales service, etc., Marketing means serving customer demands, by offering and selling right product, at right, price, in right amount, at right place and to, right customers, , Selling is confined to persuasion of, consumers to buy firm’s goods and services, , It starts with research on consumer needs,, wants, preference, likes, dislike etc., and, continues even after the sales have taken, place., Focus is on earning profit through, maximisation of customers’ satisfaction., Customer’s need is the central point around, whom all marketing activities revolve., It is an integrated approach to achieve long, term goals like creating, maintaining and, retaining the customers., Stresses on needs of buyer., In marketing, emphasis is on customer, satisfaction., , Selling starts after the production and ends as, soon as the exchange of goods and services, has taken place., , Marketing starts before production., , Selling starts after production., , Selling means transferring ownership of, goods and services from manufacturers to, buyers in exchange of money and money’s, worth., , Focus is on earning profit through, maximisation of sales., Fragmented approach to achieve shortterm, gain., All activities revolve around the product that, has been produced., Stresses on needs of the seller., In selling, emphasis is on maximising sales., , In marketing, focus is on customers’ needs In selling, the focus is on seller’s needs i.e. to, i.e. providing product as per wants and needs convert product into cash., of customer., Marketing continues after sale. Post sale Selling ends with the sale of goods or, research is conducted to know consumer service., satisfaction with the product., Marketing is wider in scope as it includes, various functions., Marketing includes selling and other, activities., Marketing is based on the principle ‘let the, seller beware’., Marketing is a philosophy of management. It, includes planning, decision-making and, execution of marketing, plans, and, programmes, Marketing is customer-oriented, Marketing has long term perspective, Product designing and development is an, important marketing function., Marketing is an integrated approach., In marketing, personal selling, advertising,, , MARKETING MANAGEMENT, , Selling is narrower in scope, Selling is a part of marketing., Selling is based on the principle ‘let the, buyer beware’., Selling is a routine activity, , Selling is product oriented, Selling has a short term perspective, Selling is concerned with sale of goods, already produced and designed., Selling is fragmented approach., Personal selling has great importance in

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SRINIVAS UNIVERSITY, , BBA(ALM), , product designing, packaging, product selling., pricing and product distribution are equally, important., , 1.9 RELEVANT TERMS ON MARKETING, • Market: Normally people understand the term market as a place where goods are bought, and sold. But, in the context of Marketing, it refers to a group of buyers for a particular, product or service. For example, the market for Accountancy textbooks consists of students, in Commerce and specialised Accountancy Programmes; the market for ladies readymade, garments consists of girls and women, and so on., • Marketer: It refers to the person who organises the various marketing activities such as, market research, product planning, pricing, distribution etc., • Seller: It refers to a person or organisation who is directly involved in the process of, exchange of goods and services for money. This includes the wholesaler, retailer, etc., • Buyer: A buyer is one who is directly involved in the process of purchase of goods and, services. He/she is one who selects the goods, makes payment and takes the delivery., • Consumer: One who actually uses the product or service. For example, you bought a shirt, and gifted it to your friend who uses it. Here your friend is the consumer and you are a buyer., However, a consumer can also be the buyer., • Customer: A customer usually refers to the person who takes the buying decision. For, example, in a family, father decides on the brand of the toothpaste to be used by his children., Here, the children are the consumers and the father is the customer. A customer can also be, the consumer. Similarly, the buyer may be different from the customer or one can be the, customer as well as the buyer., • Virtual Market: With advancement of technology, the buyer and sellers can, now-days,, interact with each other by using Internet. This is called virtual market., , 1.10CONCEPTS OF MARKETING -TRADITIONAL & MODERN, CONCEPTS,, INTRODUTION TO TRADITIONAL MARKETING/OLD MARKETING, CONCEPT, The old view of marketing is totally concentrated on the functions of distribution of goods &, commodities. The flow of goods from producer to the consumers is sales -oriented, aiming to, maximize the profits through maximizing the sales., , MEANING OF TRADITIONAL MARKETING/OLD MARKETING, According to the traditional marketing concept, marketing is a physical process or set of, activities connected with the exchange of goods or selling., In short, according to the traditional marketing concept .marketing is "sales-oriented", In traditional marketing more importance is given on selling the product. They start with, production & marketing is done while selling and promoting the product to attain sales at, profit. In this technique the existing products are imposed on the market through aggressive, selling & promotional pressures., In other words traditional marketing refers to set of activities connected in exchange of, goods. Thus traditional marketing is the process by which products are made available to the, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , final consumers from the place of production. It consists of all those activities which are, meant to ensure the flow of goods & services from the producers to the final consumers., , MODERN MARKETING CONCEPT /MARKETING CONCEPT, The concept of modern marketing came into existence after 1950., The modern marketing concept is considered as a philosophy of business., It is concerned with the creation of customer's i.e. identifying the needs of the customers &, according to the needs of the customers the goods are produced. Thus the modern marketing, is considered as "consumer oriented", According to the modern marketing, marketing is not just a physical process or set of, activities connected with the exchange of goods but also concerned with the creation of, satisfied customer., Thus, it is clear that the scope of marketing consists of all those activities in discovering, present & potential requirements of consumers for goods & services & in distributing them, from producers to the final consumers or users. Therefore .activities like supplying capital,, assuming risk, establishing grading & standardization, providing storage, conducting market, research etc& also activities like buying, selling, advertising, transportation, insurance etc, constitute marketing., , 1.11 DIFFERENCE BETWEEN TRADITIONAL MARKETING AND, MODERN MARKETING, Traditional Marketing, 1. Meaning: Traditional marketing is a, physical process of set of activities, connected with the exchange of goods., , 2. Traditional marketing is sales oriented:, The old view of marketing is totally, concentrated on the functions of, distribution of goods and commodities. The, flow of goods from producer the consumer, is sales oriented, aiming to maximize the, profits through maximizing the sales., , 3. In traditional marketing, the selling, efforts of a concern are company-oriented,, i.e., based on seller’s needs., 4. Traditional marketing is concerned with, the performance of activities necessary to, secure the distribution and sale of goods, with the producer has, 5. Traditional marketing aims at short-term, objectives, i.e., short term profits, 6. Traditional marketing aims at profit, , MARKETING MANAGEMENT, , Modern Marketing, 1. Meaning : Modern marketing is not a, physical process or set of activities, connected with the exchange of goods but, also concerned with the creating of, satisfied customers, 2. Modern marketing is consumer oriented:, The modern marketing is considered as a, philosophy of business. It is concerned, with the creation of customers i.e., identifying the needs of the customers and, according to the needs of the customers the, goods are produced. Thus the modern, marketing is considered as consumer, oriented., 3. In modern marketing, selling efforts are, market – oriented, i.e. based on the needs, of the market or consumers, 4. Modern marketing is concerned with the, performance of activities necessary to, secure the distribution and sale of such, goods as are needed by the consumers., 5. Modern marketing aims at long-term, objectives, i.e., long term profits., 6. Modern marketing aims at profit through

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SRINIVAS UNIVERSITY, , BBA(ALM), , through increased sales volume., , increased sales to the satisfaction of, consumers and profit to the sellers., 7. Traditional marketing can be successful 7. Modern marketing can be successful, only in country where there is shortage of both in a country where there is seller’s, goods leading to the existence of sellers’ market and buyer’s market., market. And cannot be successful where, there is surplus leading to the existence of, buyer’s market., , 1.12 MEANING OF MARKETING MANAGEMENT, Marketing management refers to management of marketing activities., The prime goal of marketing management is to achieve maximum consumer satisfaction., Marketing management is the functional area of business management which deals with the, problems of customer satisfaction., Marketing management deals with planning, organizing, directing & controlling the activities, related to the marketing of goods & services to satisfy the customer’s needs., Marketing management is a system of integrated business activities designed to develop, strategies & plan to the satisfying customers wants of selected market segments., , 1.13 IMPORTANCE OF MARKETING MANAGEMENT, 1. Determination of customer needs: As marketing management is concerned with the, determination & satisfaction of the customer needs, Thus determination or ascertainment of, the customers’ needs is one of the important aims of marketing management., 2. Creation of demand: Creation of demand for the goods is another important goal of, marketing management. Demand can be created through various means. For instance,, demand can be created by ascertain the preference & tastes of the customers & producing, goods to satisfy the needs of the customers. Demand can be created through advertising i.e.,, by informing the customers the utility of the goods & services offered., 3. Customer satisfaction: Satisfaction of the customers’ needs is one of the important goals, of the marketing management. The needs of the customers can be best satisfied by studying, the demands of the customers beforehand, & producing & offering only those goods which, the customers demand. It may be noted that selling of goods is not as important as the, satisfaction of the needs of the customers., 4. Generation of profits: Generation of sufficient profits for the business is another, important goal of marketing management. Earning of profits is necessary for the growth &, diversification of the business. In fact, earning of profits is necessary for the very survival of, the business firm in the market., 5. Contribution to national development: Marketing management contributes to large scale, production which, in turn, contributes to better utilization of natural resource & increases in, employment facilities & economic growth., 6. Raising the standard of living of the people: By providing varieties of goods for, consumption, marketing management aims at raising standard of living of the community., , 1.14MEANING OF MARKET SEGMENTATION, A process of dividing a total market into different sub markets, segments, or parts by using, some definite criteria or bases., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , The division of the total market for a product into sub markets is called market segmentation., Dividing the market into various segments is called market segmentation., , 1.15 DEFINITION OF MARKET SEGMENTATION, According to Philip Kotler, "Market segment is the act of dividing a market into distinct, groups of buyers who might merit separate products & or marketing mixes", According to R.S. Davar, "Grouping of buyers or segmenting the market is described as, market segmentation., , 1.16, FEATURES, /IMPORTANCE, OF, MARKET, SEGMENTATION/BENEFITS OF MARKET SEMENTAION, 1) INCREASING SALES VOLUME: Segmentation helps the company to know the, demand pattern of each segment & satisfy it by preparing desired products. This leads to, increase in overall sales volume of the product., 2) DEVELOPING EFFECTIVE MARKETING PLANS: On the basis of segmentation,, the company can prepare & fallow different marketing programs for different segments that, leads to effectiveness. Thus market segmentation helps the producer to adopt an effective, marketing programme & serve the customers better at comparatively low cost., 3) UNDERSTANDING THE NEEDS OF CONSUMERS: It helps the marketer to fully, understand the needs, behaviour, habits, tastes & expectations of the consumers of different, segments. So that precise & clear decisions can be taken to harness marketing opportunities., Thus Market segmentation helps the marketer to understand fully the needs, behaviour and, expectation of the consumers of different segments., 4) MEETING CUSTOMER NEEDS: it is possible to satisfy a variety of customer needs, with a limited product range by using different forms and promotional activities. Thus, through market segmentations customers’ needs and wants can be satisfied., 5) EXPANSION OF MARKET: By segmenting the market, a company is able to create, new markets for their products., 6) BENFITS TO THE CONSUMERS: The segmentation benefits' the customers as the, company produce & supplies products that serve customers interest and satisfy their needs &, wants., Thus Market segmentation benefits' the customers, as the producers & suppliers goods which, serve customers interest & satisfy their needs & wants., 7) FILLING GAPS: Segmentation can help in finding out the unfilled gaps in a market,, which can then be satisfied through unique product or promotional offerings., 8) IMPR0VED PROFITABLITY: 0n the basis of the study on needs of specific group of, buyers, the products are manufactured. Company can attract distinct groups of buyers & can, increase sales. An increased sale has positive impact on its profitability., 9) CHOOSING OF ADVERTISING MEDIA: Market segmentation helps the firm in, choosing advertising media more wisely. It also helps the firm in the timing of the advertising, efforts so that they are more during those periods when response is likely to be at its peak., 10) INCREASING SALES VOLUME: Market segmentation helps the producer to increase, his sales volume. Market segmentation helps the producer to know the demand pattern of, each market segment, & satisfy the demand of each market segment by improving his, product. As a result, the total sales volume of the enterprise increases. If the market is, properly segmented, the buyers preference are accurately ascertained & all market segments, are properly served, the sales volume will be much larger than if the same product is, produced and offered to all buyers., MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 11) PROVISION OF INFORMATION: Market segmentation provides various kinds of, information that are useful in product planning & development, marketing research,, evaluation of marketing activities., Market segment also gives information with regards to major trends in a changing market,, and thereby, helps the firm to adjust its products to a expected changes in the market., , 1.17BASES OF MARKET SEGMENTATION, Bases of market segmentation is classified in to 4 categories, , A) GEOGRAPHICAL BASES., B) DEMOGRAPHIC BASES., C) BEHAVIOURAL BASES., D) OTHER FACTORS:, A) GEOGRAPHICAL BASES: This segmentation is based on place or locations where, consumers reside. Here, market segmentation calls for dividing the market in to different, geographical units such as nations, states, regions, cities, climates, urban/village, etc. Needs, & preferences differ significantly in different places. So, company may operate in one or, more geographical area as per its capacity., THE FOLLOWING ARE THE MARKET SEGMENTATION GROUPED UNDER, GEOGRAPHICAL BASES, 1) Urban Market: Here company serves to urban consumers only. Certain products are used, mostly in urban areas like costly furniture, lifts, etc. Thus the marketer will understand the, needs, wants of the consumer, based upon that the goods are produced., 2) Local Market: Here company serves to limited areas only, like villages town and city., Thus company concentrates on local needs and preference.Vegetables, bakery items, local, dairies, etc are the products may prefer in this segmentation., 3) Rural Market: Here company serves only to rural areas. Certain products are used in rural, areas only, such as thick cotton cloths, cattle feeds, pesticides, fertilizers etc. In most cases,, rural consumers use cheaper, durable, & simple products., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 4) National Market: Here company serves the product to national market.Thus certain, products are sold throughout the nation, For Example: Bata's products, Goderej refrigerator, Lux soap, etc have national market., 5) International Market: Some products are sold in many countries. Market for these, products is called international or global market., FOR EXAMPLEAir India, coca-cola, Pepsi etc, B) DEMOGRAPHIC BASES: Demographic means related to population. In demographic, segmentation, the market is divided on the basis of demographic variables, such as age, sex,, family size, income, occupation, etc., THE FOLLOWING ARE THE MARKET SEGMENTATION GROUPED UNDER, DEMOGRAPHIC BASES, 1) Age: Consumers of different age groups differ in terms of needs, preference, quantity,, interest, habits etc., Individual changes his needs, preference, & habits as he grows from childhood to adulthood., Based on age criteria, we can classify the market in various segments as infants/children,, teenagers, young adults, & olds., 2) Gender: Gender refers to male & female. This base is used in the products like cloths,, cosmetics, magazines, two wheelers, garments, etc. Thus male and female consumers differ, significantly in terms of needs, attitudes, preference & overall response to the product., 3) Size Of Family: Market can be segmented in term of size of family also. Needs, size,, frequency, & packing, even quality, etc., depends on number of members in the family., 4) Family-Life-Cycle: According to family life cycle, market can be segmented into several, segments such as single, newly married, family with one child, family with aged parents & so, on. At different stage of family- life- cycle, type, quantity, size, & preference are subject to, vary., 5) Income: Income is a powerful determinant of needs & wants. It affects quantity, size,, quality, novelty, & style. Companies dealing with automobiles, clothing, furniture, footwear,, electronics, clubs, hotels, etc can use income based segmentation., 6) Education: Education makes a difference. The market can be divided in term of level of, education also such as illiterate, semi-educated & educated. Illiterate cannot read & write;, semi-educated can read & write with limited capacity., 7) Castes And Social Clasess: Sometimes, market segmentation takes place as per caste &, social classes. Castes & social classes are based on social system & income. As per social, system, there may be higher class or lower class, while on the basis of income there may be, lower class, middle class, higher class, etc., 8) Profession/OccupaTion: On the basis of profession or occupation, the market can be, divided as businessmen, service class, farmers, labourers, professionals, actors, writers, etc., Consumers belong to various professions/occupations differ in term of need, preference,, lifestyle, status, income and so on. This segmentation is relevant to such products like two wheeler, car, club membership etc., 9) Religion: As per this base, the market is segmented on the basis of religion like Hindu,, Muslim, Christian, Jew, & many other religions. Even in each religion, there can be more, sub-religions. Followers of each religion have different needs, habits, preference, foods,, clothing, rituals .Thus the producers should keep in their mind about the different religious &, accordingly the segmentation should be done., 10) Nationality: Use of products depends on nationality. Consumers of various countries, differ in term of habit, preference, food, clothing, festivals, religions, education, income,, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , customs, beliefs & traditions. They need different product of different style, price, quality &, taste., For Example: Indians, Americans, Chinese, Japanese, African etc., have completely varied, needs & preferences., C) BEHAVIORAL BASES: This base of segmentation is also called as consumer response, segmentation or product characteristics based on market segmentation. Thus the market is, divided on the bases of product features & consumer response to the products., THE FOLLOWING ARE THE MARKET SEGMENTATION GROUPED UNDER, BEHAVIORAL BASES, 1) Occasions: Market segmentation is done on the bases of occasional buying pattern of the, customers., Occasions may be regular Birthday, marriage anniversary., Occasions may be special Achievement, special party, transfer/promotion, birth of child., Occasions may be festivalskite -flying, diwali, etc., Thus company segments the market on one or more occasions &tries to meet needs & wants, during such occasions., 2) Benefits: This segmentation is based on benefits the consumers seek from products., Benefits desired by the consumers may include quality, services, guarantee/warrantee,, economy, ease, safety, performance, durability, & prestige. Company divides the market as, per benefits expected by the buyers., 3) User Status: Market may be segmented on the basis of user status such as, a) Non users: They are not using the company's products., b) Ex-users: They were using’ but now they are not using the products., c) Potential users: They are not using, but there is potential that they may use the, product., d) First-time users: They have used only for the first time, if they are satisfied, they, may use repeatedly., e) E) Occasional users: They use products infrequently; they may buy when other, brands are not available., f) F) Regular users: They are regularly using the product., 4) USAGE RATES: Market can be segmented on the basis of the usage rates like light,, medium, & heavy product users., a) Light users: They are more in number, but purchase a small quantity., b) Medium users: They are relatively more in number, & consume more quantity, compared to the first one., c) Heavy users: They are the small percentage of consumers in the market, but account, for high percentage of total consumption., 5) LOYALTY PATTERN: Consumers can be divided according to the loyalty pattern in the, market., a) Hard- Core Loyal: Consumers who buy the same brand all the time., b) Soft/Split Loyal: Consumers who are loyal to two or more brands., c) Shifiting Loyal: Consumers who shift from one brand to another., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , d) Brand Switchers: Consumers who show no loyalty to any brand. They are switching, from one brand to next. They are variety seekers., 6) BUYER READINESS STAGE: Consumers show different stages of readiness to buy the, product. They can be classified on the following basis, a) Unaware: They are not aware of the product., b) Aware: They are just aware, but don't have information about the product ’eatures,, quality & price., c) Informed: This group has sufficient information to evaluate the offer., d) Intrested: This group is interested to buy the product., e) Desirous: This group more likes to buy., f) Intended To Buy: They will buy, if they are convinced., D) OTHER FACTORS, a) SOCIAL CLASS: Social classes mean relative status in community. Consumers in, different social classes vary in term of values, product preferences & buying habits., The concept of social classes implies a hierarchy in which individuals occupy different, statues. In the same class, generally they have degree of status, while members of other, class have either higher or lower status. Each class has specific values, traditions &, habits., Thus the social classes are divided into various classes like higher class, middle class, and, lower class., b) LIFE STYLE: Life style is a total pattern of life .It can be defined as one's own way of, living. It is reflected ’n term of interest, association, use of products, & way of, influencing others. People purchase those products, which reflect their life styles., Car, motorbike, cell phones, magazines, clothing etc., products marketed on life style, base., c) PERSONALITY: Personality & life style go hand to hand. Consumers buy those, products, which suit to their personality. Personality is a distinctive way to influence, others. Personality is determined by certain physical & mental characteristics., d) BUYING MOTIVES: Buying motives refer to the purpose of buying the product-People, hold different motives for different products. They buy those products that can match, with their expectations .Buying motives may be durability, reliability, taste, safety,, prestige, status etc. The market can be divided on the basis of these motives., , 1.18 TARGET MARKET, Company cannot concentrate on all the segments of markets. Company can satisfy only, limited segments. The segments that company want to serve is called target market. And the, process of selecting target market is referred as market targeting., Market targeting is a process of selecting the target market from the entire market .Target, market consist of group / groups of buyers to whom the company wants to satisfy or for, whom product is manufactured, price is set, promotion efforts are made & distribution, network is prepared., Market targeting is an act of evaluating & selecting market segments., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 1.UNDIFFERENTIATED, MARKETING, STRATERGEY, /, MARKET, AGGREGATION:, Undifferentiated marketing strategy is a type of marketing strategy under which a firm, introduces a single product in the whole market & adopts a single marketing programme,, single medium of advertisement, a single brand & packing & a single price for all market, segments., In short it refers to a single product to the whole market is called undifferentiated marketing., This strategy is, usually, adopted by production- oriented firms. Producers of soft drinks,, milk, etc adopt this strategy., ADVANTAGES OF UNDIFFERENTIATED MARKETING STRATERGY, l) It enables the firm to produce on a large scale., 2) It enables the firm to make use of standardization, specialization & division of labour., 3) Under this strategy, it is not necessary for the firm to prepare different marketing, programmes & policies., 4) This strategy enables the firm to make the maximum possible utilization of its resources., DISADVANTAGES OF UNDIFFERENTIATED MARKETING STRATEGY, l) This strategy is not a consumer-oriented strategy, as it concentrates only upon the product., 2) The effectiveness of this strategy in the modern consumer- oriented markets is doubtful,, because the entire consumer can never be of the same tastes & attitudes., 3) This strategy may be successful in short run. But in the long run, its success is always, doubtful., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 2) DIFFERENTIATED MARKETING STRATEGY/MAKET SEGREGATION, It is the strategy of dividing the total market of a concern into several homogeneous, consumers on the basis of the common characteristics of consumers., In other words different marketing strategy is a type of strategy under which the total, heterogeneous market of a firm is divided into several segments, & different products are, offered in different segments, & different marketing programmes are prepared, different, methods of sales promotion are launched., In short differentiated marketing strategy refers to where different product are sold to, different market segments., ADVANTAGES OF DIFFERENTIATE MARKETING STRATERGY, l) This strategy is a consumer-oriented strategy. It provides maximum satisfaction to, consumers., 2) It attracts a large number of consumers from all corners., 3) As different products are offered to different consumers under this strategy, this strategy, maximizes the sales & profits of the enterprise., 4) Under this strategy, marketing can be more specialized, and better suited promotional, activities can be undertaken under this strategy., 5) Developing a variety of products and more designs to cater to the tastes of different, customers, as implied in this strategy, makes the marketing programme more competitive., DISADVANTAGES OF DIFFERENTIATED MARKETING STRATERGY, 1) Under this strategy, different products are to be produced for different segments of the, market to satisfy the needs of the customers., 2) It requires intensive marketing research, product planning & development, etc., 3) Under this strategy, different marketing programmes & strategies are required for different, segments of the market., 4) This strategy increases the overall costs of the product, because it involves increased cost, of marketing research, product planning & development, advertising & sales promotion &, physical distribution., 5) This strategy is useful only for firms producing different products on large scale., 3) CONCENTRETED MARKETING STRATERGY, Concentrated marketing strategy is a type of marketing strategy under which a firm, concentrates on marketing efforts, not in total market, but in some selected segments of the, market., Under this strategy, efforts are made to discover the market segments in which the products, of the firm can be sold, and all the efforts of the firm are devoted to those segments., ADVANTAGES OF CONCENTRETED MARKETING STRATEGY, l) It provides the best possible satisfaction to the consumers., 2) It facilitates the maximum exploitation of the resources of the enterprise., 3) It decreases the costs of production, & management & administrative costs., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 4) It helps the firm to earn the maximum profits with limited resources of the firm., 5) This strategy is quite suitable for introducing a new product., DISADVANTAGES OF CONCENTRETED MARKETING STRATEGY, 1) This strategy increases the possibilities of competition., 2) This strategy is very risky, because, if wrong segments are selected, the existence of the, firm itself is lost., , 1.19 Marketing is important in Present Scenario:, Marketing is one of the most important things a business can do. Not only does marketing, build brand awareness but it can also increase sales, grow businesses and engage customers., There are so many core business functions that stem from a good marketing plan that any, SMB would be silly not to give it a shot., While the brain of a business is the finance department, body the product offered, the, heart is the marketing department of the business which pumps oxygen and the necessary, nutrients to every other body part. Unlike the old times, marketing no more deals only in the, communication of the product to the consumers. The activity is now found in every aspect of, the business. One should not turn a blind eye to the importance of marketing as marketing, fuels both the external and internal activities of the business today. Today, large and smallscale, global and local, innovative and traditional, public and private, everyone is competing, for the same market. Companies have realized the power of holistic approach to marketing to, create and maintain a desirable demand, reputation, and competition. The role of marketing is, too diverse to be summarised in one small article. Nevertheless, we’ve come up with few, arguments to state the importance of marketing in today’s world., Today, large and small-scale, global and local, innovative and traditional, public and, private, everyone is competing for the same market. Companies have realized the power, of holistic approach to marketing to create and maintain a desirable demand, reputation, and, competition. The role of marketing is too diverse to be summarised in one small article., Nevertheless, we’ve come up with few arguments to state the importance of marketing in, today’s world., , Key reasons why marketing is so important for any modern business., 1. It informs:, On a base level, marketing is useful for customer education. In order to buy into a product,, audience needs to have a solid understanding of what it does and how it works. According to, Creatives, marketing is the most effective way to communicate the value proposition to the, customers in a fun and interesting way. If consumer education is on priority list then, marketing should be too., 2. It equalizes:, Modern marketing is a less expensive game than ever before. Social media platforms and, email campaigns have made reaching out to consumers a much more finance-friendly, possibility. For SMBs, smart marketing can help even the playing field when it comes to, competing against big name competitors, explained Business 2 Community contributor La, Mancha Sims. In fact, marketing may even give SMBs a leg up. Due to the smaller nature of, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , their businesses, SMB leaders often have much more time to pay attention to every client, individually via the various marketing platforms. Modern consumers value experience over, pricing, so this kind of one-on-one interaction could push customers in your direction over, bigger brands., 3. It sustains:, According to Forty, marketing is more like food than it is medicine. Essentially, marketing is, meant to sustain a company’s presence – not remedy a lack of engagement. In this sense,, marketing is something that businesses need to create and manage every day to maintain a, healthy relationship with their consumers. Marketing is important because it allows, businesses to maintain long-lasting and ever-present relationships with their audience. It is, not a one-time fix, it is an ongoing strategy that helps businesses flourish., 4. It engages:, Customer engagement is the heart of any successful business – this is especially true for, SMBs. Marketing solves the question of how to keep a conversation going once your, customer has walked out the door. In the past, face-to-face interactions made up much of, B2C engagement. Walk in the pizza shop, talk to the hostess, laugh with the waiter, wave, hello to the owner etc. While that in-person engagement is still alive and well, it’s no longer, enough. Consumers want to be engaged outside the store. This is where marketing comes in,, and whatever the medium, company can send their customers content to keep them engaged, beyond store hours. Company audience wants to form a relationship with their brand, and, marketing can be used to do just that., 5. It sells:, Marketing is important because it helps to sell the products or services. The bottom line of, any business is to make money and marketing is an essential channel to reach that end goal., Creatives explained that without marketing many businesses wouldn’t exist because, marketing is ultimately what drives sales. Sure, company need to have a good product but if, people don’t know about your offerings to begin with then how can you generate sales., 6. It grows:, Marketing is an important strategy to ensure the growth of the business. While the current, customers should always be the main priority, marketing efforts can help you expand this, base. Little efforts like social media posts and email campaigns can not only engage existing, consumers but spread the word to new potential customers. In essence, marketing secures, your business’s future through new and old customer engagement., 7. Creating A Brand, According to Stephen King of the WPP Group:, “A product is something that is made in a factory, a brand is something that is bought by a, customer. A product can be copied by a competitor, a brand is unique. A product can be, quickly outdated, a successful brand is timeless”, The brand is the company’s most valuable asset and the sole responsibility to create a brand, lies on the shoulder of the marketing department of the organization. The market is full of, MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , similar products and the only thing which makes the company stand out is its brand., Today, Brand is not just a combination of name, symbol, and design, it is the businessconsumer relationship, the consumers’ perception, and the consumers’ opinion about the, company and its products. Along with the symbolic value, a brand also carries an awareness, value which eventually leads to brand loyalty and more sales if taken care of properly., 8. Product Development, One of the most important aspects of product development is to search for a perfect market, for the product, get consumer insights, and develop a perfect proposition to make it stand out, of the rest. The 4p’s of marketing play a huge role in the product development., 9. Communication, Competition is everywhere and sometimes it’s only the good communication strategy which, makes the brand stands out of the rest. New communication avenues like internet, smart, devices, and social media, have opened the doors to new and more targeted communication, strategies which eventually lead to more conversions., In this competitive environment, a product without communication is a dead product., Communication infuses life in it and triggers sales., 10. Building Relationships, A relationship is built on trust, understanding, and pride. Marketing plays a very significant, role in building a relationship between the customers and the organization. It works along, with the product team to deliver what’s promised at the time of and after the sale has taken, place. The relationship, once built, makes the customers more brand loyal and gives them the, confidence to repeat sales and buy more products under the same brand. The relationship, further narrows down the marketing funnel by removing the top two stages (awareness &, interest) and making the business activities more fruitful., 11. Maintaining the Company’s Reputation, The success and the life-span of the company are positively correlated to the company’s, reputation which usually is correlated to the brand equity of the business. A majority of the, activities of the marketers are directed towards building the brand equity of the business., Company’s reputation is built when it successfully fulfils the expectations of its customers,, when it acts like a responsible member of the society, and when the customers feel proud of, using its products. Marketers by using effective communication, CSR, PR, and branding, strategies, make sure that the company’s reputation is maintained., 12. Tackling the Competition, Competition has reached an all-time high to a point where the only difference in most of the, cases is not a product feature but how it is communicated to the user. New communication, avenues are being explored along with new markets. Marketing plays a vital role in tackling, the competition by not only deciding which feature will sell but also planning strategies on, how to portray it better than the other players., Customers are more informed as they were a few years ago. Deception and short-term sales, strategies not only backfire on the product but also the brand. This has led to more burden on, the shoulders of the marketers., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , MULTIPLE CHOICE QUESTIONS AND ANSWERS, 1. The term 'market' is derived from the ____________ 'marcatus', a. German word, b. Latin word, c. French word, d. Greek word, 2. The word 'marcatus', which means____________, a. Business entity, b. market, c. Trade, or place of business., d. None of these, 3. According to _________"A market is convenient meeting place for buyers & sellers to, come together in order to conduct buying & selling.", a. American Marketing Association, b. Pyle, c. C.B.Memoria, d. Peter F .Drucker, 4. According to _____________"Marketing means to create customers", a. C.B Memoria, b. Pyle, c. American Marketing Association, d. Peter F Drucker, 5. AMA stands for,, a. American Marketing Association, b. American Marketing Agency, c. American Market Association, d. American Market Agency, 6. traditional marketing concept is _______________, a. associated with Barter system, b. regarding buyer concept, c. consumer oriented, d. Sales oriented, 7. Modern market concept is _____________, a. Consumer oriented, b. Sales oriented, c. Focuses on the seller, d. Product concept, 8. Traditional concept aims _____________a. Maximizing sales, b. Maximizing profit, c. for customer satisfaction, d. Maximizing sales and profit, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 9. The concept of modern marketing came into existence after _____________, a., b., c., d., , 1950, 1960, 1940, 1930, , 10. A process of dividing a total market into different sub markets, segments, or parts by, using some definite criteria or bases., a. Division of labor, b. Marketing segmentation, c. Market segmentation, d. None of these, 11. According to ______- "Grouping of buyers or segmenting the market is described as, market segmentation., a. R.S.Davar, b. Philip Kotler, c. Peter F Drucker, d. C.B.Memoria, 12. According to ____________, "Market segment is the act of dividing a market into distinct, groups of buyers who might merit separate products & or marketing mixes”, a. Peter F Drucker, b. R.S Davar, c. Philip Kotler, d. C.B Memoria, 13. This segmentation is based on place or locations where consumers reside., a. Geographical bases, b. Demographic bases, c. Other factors, d. Behavioral bases., 14. Air India is an example for _______________, a. National market, b. International market, c. Urban market, d. none of these, 15. Demographic market is related to ____________, a. Place or location where consumers reside, b. population, c. Local and individual marketing., d. Self-marketing., 16. _________________base of segmentation is also called as consumer response, segmentation or product characteristics, a. Behavioral bases, b. Emotional bases, c. Demographic bases, MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , d. None of the above, 17. Occasions maybe ;_______________, a. Special,irregular,regular, b. Special,regular,festivals, c. Special,irregular,festivals, d. None of these, 18. ___________- is a process of selecting the target market from the entire market., a., b., c., d., , Target marketing, Viral marketing, Market segmenting, All the above, , 19. Undifferentiated market strategy is called as ________________a. Market segregation, b. Market aggregation, c. Market concentration, d. None of these, 20. The magazine __________ is targeted as the magazine of woman of substance., a. Femina, b. Cosmopolitan, c. Deccan Herald, d. None of the above, 21. Differentiated market is ________________________a. Seller oriented strategy, b. Consumer oriented strategy, c. Aggregation strategy, d. All of the above, 22. According to the_________________, Marketing is the activity, set of institutions, and, processes for creating, communicating, delivering, and exchanging offerings that have value, for customers, clients, partners, and society at large., a. American Marketing Association (AMA) Board of Directors, b. Peter F Drucker, c. Pyle, d. C.B.Memoria, 23. The modern marketing concept is considered as _______________., a. Philosophy of business, b. Advanced marketing, c. Sales oriented business, d. All of these, 24. Vegetables, bakery items, local dairies, etc are the products may prefer in this, segmentation., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , a., b., c., d., , BBA(ALM), , Rural market, Urban market, National market, Local market, , 25. Bata's products, Goderej refrigerator, Lux soap, etc have ______________market., a. International Market, b. National market, c. Rural market, d. Urban market, , 8 Marks questions, 1. Define Marketing and its Importance., 2. Business owners everywhere recognize that if they want to make money, they have to sell, their products or services. But what you might know is that there are actually functions of, marketing which boosts sales. Explain it, 3. Differentiate the concept Marketing and Selling with its distinguished characteristics., 4. What is marketing? Marketing is viewed differently under traditional and modern era., Analyze., 5. Write the difference between traditional and modern concept of marketing, 6. Marketing management is the functional area of business management which deals with, the problems of customer satisfaction. Elaborate this with reference to importance of, Marketing Management., 7. What makes the marketer to personalize their marketing campaigns based on market, segmentation? State the Importance and features of market segmentation., 8. What is market segmentation? Mention the bases of market segmentation & Explain, Demographic bases in market segmentation., 9. Company cannot concentrate on all the segments of markets. Company can satisfy only, limited segments by adopting different market targeting strategies. Describe how?, 10. Explain the Behavioral bases under market segmentation., 11. Suggest the bases for geographical and demographic under market segmentation., 12. Why Marketing is playing vital role in Present scenario., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , UNIT 2 MARKETING MIX, 2.1 INTRODUCTION:, The mixing, blending or combining of the four controllable forces, viz., the product,, price, promotion and place or distribution, is called the marketing mix of the firm., Marketing mix is the optimum combination of the four marketing elements or ingredients in, the light of the current marketing environment., Marketing mix refers to the kinds & the amounts of marketing variables a business firm uses, to produce the response it wants in the target market at a particular time., , 2.2 COMPONENTS/ ELEMENTS OF MARKETING MIX:, 1) Product., 2) Price., 3) Place., 4) Promotion, 5) People, 6) Process, 7) Physical Evidence, 8) Productivity, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 2.3 PRODUCT., 2.4 MEANING OF PRODUCT, A product is a complex of tangible & intangible attributes, including packaging, colour, price,, which buyer may accept as offering satisfaction of wants or needs. A product is any object, which has an identifiable physical existence. A product may be physical goods, a service, a, plan, an idea, an organization or even a person. A product is bundle of utilities consisting of, various product features & accompanying services., A product means all goods and services, tangible or intangible, of any size, quality, colour,, packing or price, which may be exchanged for money and accepted by the consumers to, satisfy their needs and wants., , 2.5 DEFINITION OF PRODUCT, According to C.P Stephenson defines a product as “everything the purchaser gets in, exchange for money”, According to Philip kolter, “A product is anything that can be offered to a market for, attention, acquisition, use or consumption that might satisfy a want or need., , 2.6 ESSENTIAL FEATURES OF A PRODUCT:, 1. Physical Attribute: Anything can be a product, if it possesses the characteristic of, tangibility or physical existence. It means that it is visible to the eyes; it is touchable; and its, physical existence is felt. eg. Books, scooters, toothpaste, soap, talcum powder, fruits, milk, etc., 2. Intangible Attribute: The product may be in the form of a service to be bought or sold to, satisfy a human want. e.g. repairing service, banking service, insurance service, lawyer’s, service etc. Such services may be bought either independently or with the tangible products., For example, the service of a mechanic may be purchased independently for repairing a, fridge or his service may be purchased along with the fridge at the time of purchase., 3. Associated Attributes: Generally a product has certain peripheral or associated attributes, to facilitate its identification and easy recognition by the buyers. Such attributes include, brand name, package, warranty, credit facility, free home delivery etc. Most of the products, are sold with these attributes. e.g. Tata Hair Oil, Colgate tooth paste etc., 4. Exchange Value: Every product has some exchange value irrespective of whether the, product is tangible or intangible. In other words, a product is always available at a price, and, it is exchanged between buyer and seller for some agreed consideration., 5. Consumer Satisfaction: From the consumer's point of view, a product must be capable of, satisfying the consumer want. This satisfaction may be real or psychological. For example,, when a housewife buys a talcum powder, she is buying not only a tangible object but also, buying 'beauty'. The seller may deliver a tangible object to the housewife but the housewife, really buys a psychological value as she expects that the product will satisfy her feeling that, she looks beautiful by applying that talcum powder., 6. Business Satisfaction: Business satisfaction means fulfillment of the primary aim of, business which is nothing but profit maximization. The seller of the product must be able to, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , earn some profit on the sale of his products. However, profit-earning is not the only aim of, the seller. He may be selling the product in order to meet a societal need also. For example,, when a firm is selling some edible oil which is free from cholesterol, it is selling not only the, product-oil- but also a product satisfying a societal need i.e. cholesterol-free edible oil., 7. Any change introduced in the product results-in a separate product: Any change, introduced in the physical features (i.e., design, size, colour, packaging, etc), however minor, it may be, creates a new product. In other words, if a minor change is made in the existing, product, a new product is created. For this reason, each brand is considered a separate, product., 8. Buyers buy the benefit: When the consumers are buying a product, they are buying more, than a set of physical attributes. Fundamentally, they are buying want-satisfaction. A wise, firm sells product benefits rather than just products., , 2.7 CLASSIFICATION OF PRODUCTS OR GOODS:, The nature and characteristics of the product affect the marketing programme to a large, extent. Further, the buying motives differ from buyer to buyer, depending upon the type of, product. Again marketing situation and problems vary depending upon the class or type of a, product. Above all marketers should know their products well for successful marketing., Classification of Products:, Depending upon the purpose for which products are primarily intended to be used, products, are classified into two main classes. They are, (1) Consumer products and, (2) Industrial products., , CONSUMER GOODS OR CONSUMER PRODUCTS:, The American Marketing association has defined the term consumer goods thus: "Consumer, goods are the goods destined for use by ultimate consumers or households and in such form, that can be used without commercial processing"., From this definition, it is clear that consumer goods are the goods, which can be sold to their, real consumers without any commercial processing. In other words, these are the goods,, which are finally consumed by their real consumers without any commercial processing., Examples of consumer goods are soap, tooth paste, tooth brush, pens, books, shoes, food, items, sports goods, television sets, refrigerators, washing machines, etc., Consumer goods have certain characteristics. They are:, 1. The number of products and brands is very large in the case of consumer goods., 2. Product variation is more common in the case of consumer goods than in the case of other, goods., 3. Consumer goods are purchased at the most convenient and easily accessible stores., 4. Consumer goods are purchased immediately, i.e., at short notice., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 5. Repeated purchases are common in the case of consumer goods. In other words, these, goods are purchased at frequent intervals., 6. Minimum effort is made by the consumers to buy these goods., 7. They are branded and standardized., 8. They are low-priced items., 9. These goods are suitable for sale even on self-service basis in super markets or self-service, stores., 10. They belong to the category of daily necessaries of life., 11. The outlets for these goods are conventional and numerous., 12. Mass production and mass distribution are quite common in the case of consumer goods., 13. Though consumer goods are mostly used by the ultimate consumers and households, they, are also sold as industrial goods., Sub-division of Consumer Goods:, Consumer goods are, generally, classified on the basis of the way in which they are bought by, the consumers, the unit of purchase, the price of the goods and the sales and after-sale, services rendered by the sellers. On the basis of these considerations, consumer goods can be, classified into three kinds, viz.,, (1) Convenience Goods,, (2) Shopping Goods and, (3) Specialty Goods., 1. CONVENIENCE GOODS, Converse, Huegy and Mitchel have defined convenience goods as "those goods for which, people do not shop and which they prefer to buy, at places that are most accessible and that, stock the desired goods at satisfactory prices"., From this definition, it is clear that convenience goods are the goods, which are purchased by, consumers at satisfactory prices with minimum shopping efforts, frequently, at short notice at, convenient localities: These goods include a wide range of household goods of very low unit, value. Examples of convenience goods are match boxes, newspapers, note books, soaps,, vegetables, fruits, grocery products, etc., Characteristics of Convenience Goods:, Convenience goods have certain characteristic features., They are:, (i) These goods are purchased by customers very frequently, but in small quantities., (ii) The consumers do not consider it worthwhile to go from one shop to another for the, purchase of convenience goods. They prefer to buy them at short notice with minimum, shopping efforts at convenient location. "., (iii)These goods include a wide range of household goods., (iv) Generally, these goods are not bulky., (v)They are mostly standardized and branded., (vi)These goods have low unit value, i.e., low-priced, e.g. bread, cigarettes, match boxes,, note books, vegetables, etc., (vii)These goods are of non-durable nature., (viii)The purchases of these goods are dominated by the buying habits of consumers., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , (ix) The consumers want to purchase these goods from the nearest shop., (x) Easy and quick availability of these goods is the main consideration of purchase of these, goods., (xi) They are not affected very much by fashion., (xii) The demand for these goods is regular, as they are bought frequently. ., (xiii) In the case of convenience goods, consumers have full or complete knowledge of the, specialties, the uses and the merits of the particular products wanted by them and their, substitutes before they go out to buy them. ., (xiv) As the demand for convenience goods is regular and continuous, the retailers are, required to keep ready stocks of these goods., (xv) The production of these goods is, generally, on a large scale and in anticipation of, demand., (xvi) As the production of these goods is on a large scale and in anticipation of demand, there, is keen competition in the marketing of these goods., (xvii) Location of retail stores at convenient points easily accessible to the consumers is of, primary importance in the marketing of these goods., (xviii) AS there is keen competition in the marketing of these goods, the manufacturers of, these goods are required to undertake extensive advertising and publicity as well as other, sales promotion measures for the marketing of their products. .,  SHOPPING GOODS:, William Stanton defines shopping goods as "those goods for which a customer wishes to, compare quality price and style at several stores before purchasing"., From this definition it is clear that shopping goods are those goods which require shopping, for their purchases, i.e., they are usually purchased by the consumers only after comparing, their quality, utility, colour, style, suitability and price at several shops. Costly readymade, clothes, shoes, household-furniture, refrigerators, sewing machines, Washing machines, radio, sets, television sets, automobiles, electrical appliances, jewellery, etc. are some of the, examples of shopping goods., Characteristics of Shopping Goods:, The chief characteristics of shopping goods are:, (i)The shopping goods are purchased by consumers only after some shopping efforts, i.e.,, only after comparing their quality, utility, suitability, design, style, colour, price, etc. That is,, the consumers select these goods only after an evaluation of merits and demerits of all the, substitutes of the product available in the market., (ii) Shopping goods are durable in nature, i.e., they last for longer period of time., (iii) They are purchased less frequently. That is. purchases will be occasional., (iv) These goods are of high value. That is they are high priced., (v) The purchases of shopping goods are often planned in advance., (vi) The consumers do not want to purchase these goods in haste. They want to purchase, these goods only when they are satisfied with what they purchase., (vii)These goods are wanted to satisfy the specific wants of the consumers. So, the buyers are, prepared to spend considerable time and effort in making their purchases., (viii) The consumers of shopping goods prefer to visit a number of shops to compare the, quality, style, price and other special features of these goods before they buy their, requirements., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), ,  SPECIALITY GOODS, Meaning of specialty Goods:, The Committee on Definitions of American Marketing Association defines specialty, goods as "those goods with unique characteristics and brand identification for which a, significant group of buyers ate habitually willing to make a special purchasing effort"., From these definitions, it is clear that, specialty goods are those goods which possess certain, special features or brand specification and because of which, the, consumers make special, efforts to visit the store in which they are sold and make their purchases without shopping., Costly ready-made garments, high quality shoes, photographic equipments, electric, appliances, automobiles, etc. are some of the examples of specialty goods., In this context, it may be noted That it is very difficult to make a clear distinction between, shopping goods and specialty goods. This is because the same goods may be shopping goods, for some and specialty goods for others depending upon the attitude of the consumers., For instance, if a buyer wishes to buy a car and if he visits different dealers dealing in, different models, compares the relative merits of different models, and then, makes a final, choice of a car, the car bought by him is classed as shopping goods. But if the buyer has a, particular model of car in his mind, say, 'Maruti esteem', goes to the dealer dealing in that, model and buys the same without any shopping or comparison, the car bought by him, is, classed as specialty goods., Characteristics of Specialty Goods:, The chief characteristics of specialty goods are:, (i) The specialty goods have some unique characteristics or brand specifications., (ii) These goods are purchased by consumers only due to some unique characteristics or, brand specifications or loyalty., (iii) Specialty goods are purchased by consumers after a deep and careful study of merits and, demerits of the specialty products available in the market., (iv) Brand loyalty also influences the consumers to purchase these goods., (v) The, consumers of these goods have to make special efforts for the purchase of speciality, goods., (vi) Specialty goods are widely advertised by the manufacturers to distinguish them from, those of rival products and to enable the consumers to identify them easily., (vii) These goods are very high-priced., (viii) Buyers are well-informed buyers., (ix) There is customer bias for particular brand., (x) Services like credit, repairs, etc. playa very vital role., (xi) There is maximum product differentiation through branding and advertising., (xii) Specialty goods are purchased by consumers occasionally,, (xiii) The demand for specialty goods is much more limited than that for convenience goods, as all cannot afford to buy them., 2. INDUSTRIAL GOODS:, The American Marketing Association has defined industrial goods thus: "Industrial goods are, goods which are destined to be sold primarily for use in producing other goods or rendering, services. They include equipments, component parts, repair and operating supplies, raw, materials and fabricating materials"., From this definition, it is clear that industrial goods are goods, which are for use in the, commercial production of other goods or for use in connection with the carrying on of some, business or for use in rendering of some services or in institutional activities. In other words, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , industrial goods are goods, which are destined to be sold primarily for producing other goods, before it is sold to the ultimate consumers for final consumption., Examples of industrial goods are raw materials, machine tools, computers, maintenance, supplies, semi finished goods, etc., Characteristics of Industrial Goods:, Industrial goods have certain characteristics. They are:, 1. Industrial goods are for use in the commercial production of other goods or for use in, connection with carrying on of some business or rending services , and are not meant for final, consumption. ', 2. Some goods have common features of being consumer goods as well as industrial goods., For example, tyres sold to a motor vehicle company are industrial goods, but when they are, sold to owners of private vehicles, they become consumer goods., 3. Product variation is an important aspect of industrial goods industries where technology is, rapidly changing., 4. Distribution channels vary in industrial goods industries although the actual networks are, generally, simpler than in the consumer goods or service industries., 6. The number of consumers of industrial goods is small compared to the number of, consumers of consumer goods., 7. The buyers of industrial goods purchase these goods in bulk., 8. Industrial goods have a derived demand., , 2.8 LAYERS OR LEVELS OF A PRODUCT:, A product is basically a need satisfying entity. But no product offering remains at basic level, of need satisfaction. The firm takes it to higher level by infusing several inputs into the basic, product like advanced features and functions, distinctive brand name, attractive and, convenient packaging, affordable price, meaning positioning etc.so a product that is, ultimately offered in the market is a combination of all these elements.,  Core Product: Not the tangible physical product. Core product is the BENEFIT of the, product that makes it valuable.,  Basic product: also known as generic product. It is unbranded and undifferentiated, commodity. Unbranded rice, bread and atta are the examples. Here the product does not, have an identity through a name and is not linked to any one maker or owner.,  The Branded product: The branded product gets an identity through a name or Brand., All packaged products are normally branded products. Sona basmati rice, modern bread, Annapurna atta are branded products.,  The differentiated product: This product enjoys the distinction from similar products, brands in the market. It is associated with some special qualities that claim its uniqueness.,  The customised product: A product that is adapted to the requirements of the individual, customer is a customized product. Here the products are customized to suit the individual, requirements of the consumer.,  The augmented product: The augmented product includes voluntary improvements, brought by the firm to improve the value of the product. Here the product is augmented, by adding extra features and functions to it., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , , , BBA(ALM), , The potential product:Potential product is tomorrows product carrying all the, improvement and fineness that is possible under the technological, economic and, competitive conditions prevailing the category., , 2.9 PRODUCT PLANNING:, 2.10 MEANING:, In order to maximize his sales revenue and profits, a business firm must continuously adjust, and adapt its products and services to the changing requirements of customers. From time-totime, it may have to design and develop new products., Product planning is the process of searching ideas for new products, screening them, systematically, converting them into tangible products and introducing the new product in the, market. It also involves the formation of product policies and strategies., Product planning includes improvements in existing products as well as deletion of, unprofitable or marginal products. It also encompasses product design and engineering which, is also called product development. Product planning comprises all activities starting with the, conception of product idea and ending up with full scale introduction of the product in the, market., It is a complex process requiring effective coordination between different departments of the, firm. It is intimately related with technical operations of the organisation, particularly with, engineering, research and development departments., Any product has two broad objectives—immediate objectives and ultimate objectives., Immediate objectives include satisfaction of immediate needs of consumers, increasing sales,, utilising idle plant capacity, etc. Permanent or ultimate objectives consist of reduction in, production costs, creation of brand loyalty, monopolising the market, etc., 2.11 SIGNIFICANCE AND OBJECTS:,  Product planning and development is a vital function due to several reasons. First, every, product has a limited life span and needs improvement or replacement after some time.,  Secondly, needs, fashions and preferences of consumers undergo changes requiring, adjustments in products.,  Thirdly, new technology creates opportunities for the design and development of better, products. Product planning and development facilitate the profitability and growth of, business. Development of new products enables a business to face competitive pressures, and to diversity risks. Product is the most important constituent of marketing mix.,  Finding and meeting the needs of customers is the key element in a successful marketing, strategy. New product development has become all the more important in the modern, world characterized by technological change and market dynamics.,  New product development brings opportunities but also involves heavy commitment of, finance, technology and even emotional attachment. New product decisions are necessary, as well as costly. Many new products fail causing ruin to business firms.,  Product development is a continuous and dynamic function. Continuous adjustments and, improvements in the product arc necessary to minimise costs of production and to, maximise sales. High rate of product obsolescence requires product innovation, frequently. At the same time, cost and time scales have increased. In some products, the, gestation period is very long, sometimes longer than the life of the product., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), ,  As a result the role of R&D expert has become very important. He needs to be in touch, with sales persons and actual end users. Successful technological innovation involves, great resources as well as great risks. Product innovators face spectacular successes as, well as disastrous failures.,  Most of the new product ideas do not become actual products. Many new products, achieve limited acceptance in the market. This is so because firms very often are reluctant, to move away from tried and tested products., , 2.12 PRODUCT MIX:, 2.12.1 MEANING:, Product mix, also known as product assortment, is the total number of product lines that a, company offers to its customers. The product lines may range from one to many and the, company may have many products under the same product line as well. All of these product, lines when grouped together form the product mix of the company., The product mix is a subset of the marketing mix and is an important part of the model of a, company., , 2.12.2 DIMENSION OF PRODUCT MIX:, Width:, The width of the mix refers to the number of product lines the company has to offer., For e.g. If a company produce only soft drinks and juices, this means its mix is two products, wide. Coca-Cola deals in juices, soft drinks, and mineral water and hence the product mix of, Coca-Cola is three products wide., Length:, Length of the product mix refers to the total number of products in the mix. That is, if a, company has 5 product lines and 10 products each under those product lines, the length of the, mix will be 50 [5 x 10]., Depth, The depth of the product mix refers to the total number of products within a product line., There can be variations in the products of the same product line. For e.g. Colgate has a, different variant under the same product line like Colgate advanced Colgate active salt, etc., Consistency, Product mix consistency refers to how closely products are linked to each other. Less the, variation among products more is the consistency. For example, a company dealing in just, dairy products has more consistency than a company dealing in all types of electronics., , 2.12.3 SIX PRODUCT MIX STRATEGIES:, To regulate and direct the changes in the product line or product mix, well planned strategies, are essential. These plans are known as product line strategies or product mix strategies., William J Stanton has suggested six different strategies of product mix. They are:, 1. Expansion of product mix: Expansion of product mix refers to the expansion of the, product mix either by increasing the number of product lines or by increasing the number, of product items in the product lines. The new lines may be related to or unrelated to the, existing products., 2. Contraction of product mix: Contraction of product mix means elimination of the whole, or one or two product lines or products within a product line for which demand has been, declining., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 3. Alteration of existing products: When a firm makes alterations in the design, colour,, size, texture, flavour, packaging, or raw materials used instead of developing a new, product or removing a product from the product mix, it is called as Alteration of existing, products., 4. Positioning the product: Product position is the image that product projects in relation to, (i) competitive products and (ii) other products marketed by the company in question". It, emphasises the features of the product that will prove attractive to consumers., 5. Trading up and trading down: Trading up means adding high-priced and prestigious, products to the existing low priced products with a view to increase the sales of the, existing low-priced products. Trading down means adding low-priced products to the, existing high-priced prestigious products with the hope that people who could not buy, high-priced old products can now go in for the low-priced new products., 6. Product differentiation and market segmentation: Product differentiation is a, technique employed by a firm to make its product or brand appear different from the, competing products or brands. The differentiation may be done in quality, design, brand, or packaging. Market segmentation strategy, the whole or total market is divided into a, number of small homogeneous specific segments (i.e., markets), which have different, wants and needs, and then, the firm develops and offers different products to suit the, wants and needs of the different segmented markets., , 2.13 PRODUCT LINE:, 2.13.1 MEANING AND DEFINITION :, A product line is a group of products that a company creates under a single brand. The, products are similar and focus on the same market sector. Maybe their function or channel, distribution are the same or similar. Perhaps their physical attributes prices, quality, or type of, customers are the same we call the activity product lining., A company can have more than one product line. The number of product lines it has reflects, its resources, i.e., how powerful it is., Product line numbers might also show the other players in the marketplace how competitive, the company is. In this context, the term ‘marketplace’ means the same as ‘market’ in its, abstract sense, According to Collins Dictionary, “A product line is a group of related products produced by, one manufacturer. For example, products that are intended to be used for similar purposes or, to be sold in similar types of shops.”, , 2.14 PRICING:, 2.14.1 INTRODUCTION:, Pricing (i.e., pricing the product) is one of the important areas in marketing decision making., A good pricing policy is significant for getting maximum sales revenue. In the marketing, mix, price is the only element that produces revenue, the other elements produce only costs., Pricing handled by firms in a variety of ways. In small firms, prices are often fixed by the top, management rather than by the marketing department. In big concerns, pricing is handled by, the marketing department and product line managers. However, even here, the general, pricing objectives and policies are determined by the top management., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 2.14.2 DEFINITION OF PRICE:, In the words of W.J. Stanton, "Price is the amount of money which is needed to acquire, in exchange of some combined assortment of a product and its accompanying services"., , 2.14.3 MEANING OF PRICE:, Price is the amount of money paid or payable to acquire a product and its accompanying, services., In others words, price is the exchange value of a product or service expressed in terms of, money. Price is the money value of a product or service., , 2.14.4 MEANING OF PRICING:, Pricing is the process of determining the value of a product or service in terms of money, before it is offered to the market for sale., , 2.14.5 IMPORTANCE /OBJECTIVES OF PRICING OR PRICING, OBJECTIVES:, Before fixing the price, the management should decide the objectives of pricing or pricing, objectives. There are many objectives of pricing., 1. Maximizing the profit:, Maximizing the profit through maximum sales is one of the important objectives of pricing., For this purpose, the price the product must be determined in such a manner that it can, increase the demand for the product so that maximum sales can be made and maximum, profits may be earned., 2. Ensuring target return on Investment:, Business requires capital for making capital expenditure as well as revenue expenditure., When a business invests capital in a business it determines the target return on its investment., Then it fixes the price accordingly., 3. Improving or maintaining market share:, A good market share is the best indicator of progress. So, an important objective of pricing is, to increase or to maintain the market share of the enterprise., 4. Avoiding (i.e., preventing) or meeting competition:, Avoiding or meeting competition is one of the objectives of pricing, particularly when the, product is introduced in a competitive market. For attaining this objective, before fixing the, price, a proper price policy should be formulated after considering the prices of rival, products, the existing competition, etc., 5. Controlling payback or cash flow:, Another important objective of pricing is to control payback or cash flow in such a manner as, to generate high cash flow as early as possible., 6. Ensuring sufficient margin of profit for middlemen:, Ensuring sufficient margin of profit for middlemen is one of the objectives of pricing, decision, This is necessary because unless the middlemen get a fair return or margin of profit, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , on the sale of products of an enterprise, they will not take interest in selling the concern's, products., 7. Seeking price stability (i.e., stabilizing the price):, Keeping in view the changing marketing conditions and the changes in prices, one of the, important objectives of pricing is to seek stability, i.e., to seek to keep the prices of products, relatively stable with minimum fluctuations over a long period., , 2.14.6 TYPES, STRATEGIES:, , OR, , METHODS, , OF, , PRICING, , POLIC1ES, , AND, , There are different types of pricing policies, and an enterprise has to choose anyone price, policy for the determination of prices for its products. For example, if the market of a product, is highly competitive, low pricing policy may be followed. On the other hand, if there is no, competition in the market, high pricing policy may be adopted. Again, different pricing, policies may be followed in different stages of the life cycle of a product., The various pricing policies may be classified into certain types on certain bases for, convenience of study. The different pricing policies may be classified into five groups. They, are:, (i) Classification of pricing policies on the basis of price levels., (ii) Classification of pricing policies on the basis of flexibility., (iii) Classification of pricing policies on the basis of specialty., (iv) Classification of pricing policies on the basis of geographical locations of buyers and, sellers., (v) Classification of pricing policies on other basis., 1. Classification of Pricing Policies on the basis of price levels:, On the basis of price levels, pricing policies may be subdivided into three types. They are:, (a) Meeting competition price policy., (b) Below competitive level price policy., (c) Above competitive level price policy., (a) Meeting competition price policy:, When a business enterprise adopts a price policy which is in accordance with the price, policies adopted by its competitors, the price policy is called meeting competition Price, policy., Under this price policy, when the prices of a product are reduced by the competitors, the, enterprise also reduces its price. Similarly, if the prices of a product are raised by the, competitors, the enterprise also raises its price., (b) Below competitive level price policy:, When an enterprise determines the prices of its products below the prices determined by its, competitors for their products, it is called below competitive level price policy., Under this policy, an enterprise fixes the prices of its products below the prices fixed by its, competitors. If the prices are reduced by the competitors, the enterprise further reduces the, prices of its products., (c) Above competitive level price policy:, When an enterprise determines the prices of its products above the level of prices determined, by its competitors for their products, it is called above competitive price policy., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , Under this policy, an enterprise fixes the prices of its products in such a manner that its prices, are always higher than the prices of similar products of its competitors., 2. Classification of pricing policies on the basis of flexibility:, On the basis of flexibility, price policies may be classified into two types. They are:, (a) One price policy., (b) Flexible price policy., (a) One price policy:, When an enterprise determines a single price for all the consumers of its products who, purchase the product under similar conditions and in the same quantity, it is called one price, policy., This policy is also known as customary price policy. Under this policy, no difference is made, in the price of products for different customers. Under this policy, the price once determined,, continues for a long period. The price is changed only when it becomes absolutely necessary., When changes become necessary, efforts are made not to change the price, but preference is, given to change the weight or size., (b) Flexible price policy:, When no fixed price is determined by a concern for its products, and different consumers are, charged different prices for the same product, depending upon the quantity of their purchase,, place of delivery, paying capacity of customers, bargaining power of consumers with the, seller etc., is called flexible price policy., Under this policy, different prices are determined for different customers for the same, product and for the same quantity., 3. Classification of price policies on the basis of specialty:, On the basis of specialty, price policies may be sub-divided into eight types. They are:, (a) Skimming the cream pricing policy., (b) Penetration pricing policy., (c) Bait pricing policy., (d) Price line policy., (e) Full line pricing policy., (f) Unit pricing policy., (g) Psychological pricing policy., (h) Leader pricing policy., , (a) Skimming the cream pricing policy or high pricing policy:, When a very high price is fixed by an enterprise for a new product at the very outset to skim, the cream of demand and earn maximum profits at the earliest and to recover the amount of, capital invested quickly, it is called skimming the cream pricing policy or high pricing policy., (b) Penetration pricing policy or low pricing policy:, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , When a low price is determined for a product from the very outset so as to serve as an active, agent for market penetration immediately, it is called low penetration pricing policy., Penetration pricing policy is just the opposite of skimming the cream pricing policy. Under, this policy, the price of a product is kept low from the very outset in order to reach a mass, market immediately., This policy aims at maximizing profits through maximum sales with a low margin of profit., This policy also aims at discouraging competitors from entering the market., (c) Bait pricing policy:, Bait pricing policy is a policy under which two products are manufactured by a firm, and the, price of one product is kept low and the price of the other product is kept high., When a customer comes to purchase, the low-priced product is presented before him, and, when he shows some interest in buying this product, the high-priced product is presented, before him and the merits of the high-priced product are explained to him, and thus, efforts, are made to sell the high priced product by showing the low-priced product. The low priced, products are offered only to bait the consumers., (d) Price line policy:, When different products of different prices are manufactured, but the prices of all the, products are determined in a line, say, as Rs. 25, Rs. 30, Rs. 35, Rs. 40, etc.,It is called price, line policy. Under this policy, different prices are determined for different products, but the, prices are determined in a line., (e) Full line pricing policy:, When a manufacturer produces all the varieties of a product or all the products of a line, he, can determine the prices of his products according to the demand for these products. He can, determine very high prices for some products, medium prices for some other products and, low prices for the remaining products. Such a pricing policy is known as full line pricing, policy., (f) Unit pricing policy:, When the unit price of a product is printed on its packing, it is called unit pricing policy. This, policy helps the consumers in knowing the prices of products and in purchasing the products., (g) Psychological pricing policy:, When some manufacturers fix the prices of their products in such a manner that it may create, in the minds of the customers the impression that the prices are low, it is called psychological, pricing policy., For instance, if the price of a product is fixed at Rs. 199.95 instead of Rs. 200, it may have an, psychological significance for the buyer. The Bata Shoe Company prices its shoes as Rs., 89.95, Rs. 99.95, Rs. 119.95, Rs. 229.95, Rs. 289.95, Rs. 899.95, and so on., (h) Leader pricing policy:, Leader pricing policy is. a pricing policy in which one firm in the industry assumes the role, of a leader in determining the price, and the other firms in the industry approximate their, prices to that of the leader. The firm which initiates the price is called the leader and the, other firms following the price .are called the followers., MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 4. Classification of pricing policies on the basis of geographical locations of buyers and, sellers:, Geographical pricing policies are pricing policies oriented towards geographical locations of, buyers and sellers and accounting for transportation costs of goods sold. On the basis of, geographical locations of buyers and sellers, pricing policies may be classified into five, types., They are:, (a) Uniform delivery pricing policy:, Uniform delivery pricing policy is a policy in which a firm absorbs full transport cost and, delivers the goods to all buyers at their ends at a uniform or single price irrespective of, location and distance., This policy is becoming more and more popular these days. All the manufacturers of repute, adopt this policy. For example, the prices of Bata shoes are uniform at all the places in India., (b) Zonal delivery pricing policy:, Zonal delivery pricing policy is a policy under which the whole market of a product is, divided into certain number of zones, and the price of the product remains the same in all the, places of a zone. But there may be differences in the prices of a product in different zones., (c) Base or basing point pricing policy:, Base point pricing policy is a policy under which the manufacturer quotes the prices of goods, by incorporating therein the transport costs computed up to the buyer's location, by reference, to a geographical location, not necessarily the factory called the base point., (d) Production point pricing policy or point of origin pricing policy or factory pricing, policy:, Production point pricing policy is a policy under which a firm quotes ex-factory price and, makes no allowance for the transport cost involved in moving the product from the point of, production to the point of consumption., (e) Freight absorption pricing policy:, Freight absorption pricing policy is one in which the seller absorbs the transportation costs, either fully or partly and determines the price, which is inclusive of transportation Cost, absorbed by him., 5. Other Types of Pricing Policies:, There are a few other important types of pricing policies., They are:, (a) Mark-up pricing, margin pricing, cost-plus pricing or full cost pricing:, Meaning of mark-up pricing policy:, Mark-up pricing policy is a pricing policy under which the seller adds a certain predetermined mark-up or margin of profit to the cost per unit of the product manufactured or, purchased for resale to determine the sale price of the product per unit., In other words, under this pricing policy, the sale price of a unit of a product is set at a level, equal to the unit cost of the product plus a desired margin of profit on the unit., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , For instance, if the cost per unit of a product is Rs. 100 and the desired margin of profit is, 25% on the cost or 20% on the sale price, the sale price of the product per unit will be the, cost per unit, Rs.100 plus desired margin per unit, Rs. (100 x 25/100)= Rs. 125., (b)Mark down pricing policy: mark down pricing policy is a pricing policy in which a, product is priced below that price originally fixed. The mark down is expressed as a, percentage on original sale price., Suppose the original sale price of a product is Rs. 200 per unit. The firm reduces the price of, the product to Rs. 180 per unit. In this case the mark down or reduction in price per unit is, Rs.200-180= 20., Mark down price may be due to competition, recession and depression., , 2.15 PLACE / DISTRIBUTION, 2.15.1 INTRODUCTION TO CHANNELS OF DISTRIBUTION, A channel of distribution serves as the connecting link between the producer & consumers., It creates time and place utilities by bridging the gap between the time and the place of, production and consumption. Channels of distribution increase the efficiency of marketing, because the middlemen are specialized agents of distribution. They help to reduce the cost of, transactions and smoothens the flow of goods and services., , 2.15.2 MEANING, A channel of distribution is also called as distribution chain, distribution pipeline, supply, chain, marketing channel, trade channel, market channel., Channels of distribution mean a route or pathway where goods are moved from the place of, production to the place of consumption. The route taken by the goods as they move from, producer to consumer is known as channels of distribution., Thus channel of distribution consists of producers, consumers, or users, middlemen,, wholesalers, retailers. Therefore, the channel serves to bridge the gap between the point of, production and point of consumption thereby creating time, place & possession utilities., , 2.15.3 DEFINITION, According to Prof. W. Stanton, “Channel of distribution is the route taken by the title to the, goods as they move from the producer to the ultimate consumer or industrial user”, According to Cundiff and Still, “Distribution channel is a path traced in the direct or indirect, transfer of title to a product as it moves from a producer to ultimate consumers or users.”, , 2.15.4 TYPES OF CHANNELS OF DISTRIBUTION:, The channels of distribution may be broadly classified into two categories. They are:, A) Direct selling / direct channels of distribution., Under direct selling the manufacturer or producer sells his products directly to the final, consumers or industrial users without the help of any middlemen., Under this method, goods move from the manufacturer or producer to the final consumers or, industrial users directly without any middlemen. In case of direct selling ,there is direct, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , contact between the manufacturers or producers and the final consumers or users. Direct, selling can be adopted by large manufacturing organizations., Direct selling is common in the case of industrial marketing, i.e., in the case of marketing of, machines, fabricating parts, equipment’s, operating supplies and industrial raw materials. It is, also undertaken in the case of marketing of agricultural commodities, especially by small, producers., Manufacturer or producer  Consumer, DIRECT SELLING IS SUITABLE IN THE FOLLOWING CIRCUMSTANCES, , Perishable goods: like fruits, vegetables, eggs, milk, etc. which must be sold to the, final consumers immediately., , Speciality goods :like refrigerators, automobiles , etc,, , When the producers has enough financial resources & efficient managerial personnel, to take up the marketing functions., , Where the buyers of the product are very few., , Where the goods are highly technical in nature ,e.g capital goods like machines., B)INDIRECT SELLING /INDIRECT CHANNELS OF DISTRIBUTION, Indirect selling refers to the selling of goods by the manufacturers or producers to the, consumers or users indirectly, i.e., through middlemen., Under this method, the manufacturer or producer sells his goods to the final consumers or, industrial users, not directly by himself, but through one or more intermediaries or, middlemen., In case of indirect selling, there are intermediaries or middlemen like merchant middlemen &, agent middlemen. There is no direct contact between the producers and the ultimate, consumers or users., In case of indirect selling can be adopted by both large & small manufacturing organizations., TYPES OF INDIRECT SELLING OR INDIRECT CHANNELS OF DISTRIBUTION, , Manufacturer /producerWholesaler  Retailer Consumer., , Manufacturer/ producerAgent middlemen Wholesaler Retailer, Consumer., , Manufacturer / producer Retailer Consumer, , Manufacturer /producerAgent middlemen  Retailer consumer., , Manufacturer / producerAgent middlemenConsumer., a) Manufacturer or producerRetailerConsumer: Under this channel, goods are sold, by the manufacturer or producer directly to the retailers, & retailers, in turn, sell the goods to, the final consumers or users. This is a short trade channel. This channel is aimed at the, elimination of wholesalers .It has become popular with the growth of large retail organization, like departmental stores, multiple shops , super markets, etc. It is an important channel of, distribution for manufactured consumer goods. It is usually, adopted by the manufacturers of, speciality & shopping goods who deal with a few large –scale retailers . It is also used for the, distribution of ready – made garments ,foot-wears, certain types of food products,etc. Here, the manufacturer does not use the services of the wholesalers., b)Manufacturer or producerWholesalerRetailerConsumer: Under this channel,, goods move from manufacturer to the wholesalers ,from the wholesalers to the retailers, and, from the retailers to the ultimate consumers., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , This is also helpful & economical to small retailers who make their purchases in small, quantities at frequent intervals., This is the traditional & the most common channel of distribution for manufactured consumer, goods like drugs, stationary articles, hardware, cloth, tobacco products, etc. ., c)Manufacturer or producer Agent middlemen  Wholesaler  Retailer , Consumer:, Under this channel, the producer sells his goods, through his agent, to the wholesalers .The, wholesalers sell the goods to the retailers, & the retailers, in turn ,sell the goods to the final, consumers. Here agent middlemen are an person who acts as an sale agent or representative, of the manufacturer & helps in the movement of goods from the manufacturer to the, wholesalers on commission basis. This channel is followed by manufacturers who cannot, afford to have their own sales force. This channel is found quite suitable for manufacturers of, single line product. This channel is important channel of distribution of manufactured, consumer goods., d) Manufacturer or producerAgent middlemen Retailerconsumer: Under this, channel, a manufacturer, instead of using the services of the wholesalers ,uses the services of, an agent middlemen, for the distribution of his goods to the retailers, The retailers ,in turn,, sell the goods to the ultimate consumers. Thus under this channel, the wholesalers are, eliminated ,and the functions of the wholesalers are eliminated, & the functions of the, wholesalers are performed by the agent middlemen.This channel is, generally, used for the, distribution of manufactured goods .It is, usually adopted by manufacturers who cannot, afford to have their own sales force., e)Manufacturer or producerAgent middlemenConsumer: Under this method the, manufacturer or producer sells his goods to consumers through agent middleman.This, method is followed by manufacturers or producers who cannot afford to have their own sales, force.This channel is popular in the case of marketing of industrial goods & agricultural, goods. It is also used in the marketing of manufactured consumer goods, , 2.16 Promotion/ Marketing communication mix:, 2.16.1 DEFINITION:, William J Stanton, “Promotion includes advertising, personal selling, sales promotion and, other selling tools.”, , 2.16.2 MEANING:, Promotion is a process of marketing communication, involving communication, persuasion, and influence. It conveys information about the product of the firm to the consumers,, persuades the consumers to purchase the firm’s product and finally influences the consumers, to purchase the firm’s product., , 2.16.3 Objectives / Importance of promotion:, 1. To communicate: Communication is the basis of all marketing efforts. Promotion, communicates the consumers about the availability, features and uses of the firm’s, products. Tools such as advertising, personal selling, sales promotion , publicity are used to, communicate the consumers about the firm’s product., 2. To convince: the information must be communicated to the consumers in such a way as, to ensure necessary action on the part of the consumers. The information must be so, convincing as to produce marketing results., MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 3. To motivate: promotion must motivate the consumers to purchase the sellers products., Therefore the consumers must be reminded time and again to purchase the firms products, by highlighting its importance., 4. To differentiate: promotion must differentiate the products of the firm from its, competitors’ products by highlighting the unique features of the product and creating brand, loyalty., 5. To stablise sales: promotion should stablise the sales of the firm by reducing fluctuations, in sales caused by seasonal or irregular factors., , 2.16.4 Elements / Forms of promotion, Promotional methods or tools of, promotion:, There are many forms of promotion. The main forms of promotion are:, , , , , , , , , , Personal selling, Advertising, Publicity, Public relations, People, Processes, Physical Evidence, Productivity, , 2.17 PERSONAL SELLING/ SALESMANSHIP:, 2.17.1 DEFINITION:, According to Stephenson, “salesmanship refers to the conscious efforts on the part of the, seller to induce a prospective buyer to purchase something that he had not really decided to, buy even if he had thought of it favourably.”, According to National Association of marketing teachers of America, “Salesmanship is, the ability to persuade people to buy goods or services at a profit to the seller and benefit to, the buyer.”, , 2.17.2 MEANING:, Salesmanship is the art of persuading and assisting a prospective customer to buy a, commodity or service which he needs., , 2.17.3 FEATURES AND SIGNIFICANCE OF SALESMANSHIP:, Salesmanship is of utmost importance in the modern business world. It is essential for, business. It is helpful or advantageous to the producers, distributors, the customers, the, salesmen and the community., 1. Salesmanship is the oldest and important form of selling., 2. It is selling a product or service by presenting the product to the prospects in a convincing, and persuasive manner that prospect is induced to buy., 3. Salesmanship is an attempt to induce people to buy goods.-W.G.Carter., 4. Salesmanship helps the seller to get reasonable profit and the buyer to get adequate, satisfaction., 5. Salesmanship involves in discovering the buyer’s aim or motive and emphasizing how the, goods would assist him in attaining it., 6. It involves direct and personal contact with the buyers., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 7. It is a creative art. It creates new wants. The existing need is transformed into wants., 8. It is an educative process. It educates people about their needs and their satisfaction., , 2.18 ADVERTISING:, 2.18.1 MEANING:, Advertising is informing public of the availability of a particular product or service,, stimulating their desire for the advertised product and inducing them to buy the same., , 2.18.2 OBJECTIVES:, 1. To create demand for a new product by informing the prospect of the existence of the, product, its special features etc., 2. To maintain the demand for an existing product by explaining the merits of the product., 3. To extend the market by emphasizing the superiority of the product over the other products, and diverting the customers from the rival products., 4. To warn the public against the imitation of the particular product by others by giving, description about the product., 5. To assist the salesmen in their efforts to promote sales., 6. To induce the dealers to stock the goods advertised., 7. To help the dealers to sell the products without much difficulty and expense., Objectives of Advertising:, The objective of advertising is nothing but to sale the product or idea or a service. The real, objective of advertising is to increase awareness among the consumer about the sellers, product. According to Huigy and Mitchell, “The purpose of advertising is to sell goods,, services or ideas to a large group of prospective purchasers.”, R.S. Davar stated the advertising objective as, “Advertising aims at commencing the, procedure, educating the consumer, supplementing the salesman, connecting the dealer to, eliminate the competitor but above all, it is a link between the producer and the consumer”., In simple words the following are the main objectives of advertising:, 1. Preparing Ground for Sale of New Products:, Whenever a new product is introduced in the market, advertising becomes necessary for, informing potential consumers about the product. In this way, advertising can be used for, preparing ground for sale of new product., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , For achieving this objective, various mass media like radio, television and cinema are used by, the advertisers., 2. Increasing Demand for the Product:, Another objective of the advertising is to increase the demand for the product. Advertising, helps in creating a favourable atmosphere for maintain or improving sales of the product. By, means of the advertising prospective customers may be induced to buy a particular product, by informing them about comparative quality price and other attributes of the product. Thus,, changing the habits of the consumers so as to shift from a rival product., 3. Educating the Consumers:, One of the basic objectives of every advertising is to educate the consumer and the users, about the uses and utilities of the product. This helps the consumers and users in making, good choice., 4. Building up Brand Image:, Another objective of advertising is to build up brand image and brand loyalty towards the, product. This objective is achieved through constant and repeated advertising about the, brand., 5. Facing the Competition:, One of the basic objectives of advertising is to help the marketer to face the existing, competition effectively and efficiently. The marketers inform the consumer about the price,, quality and availability of product through advertising., 6. Supplementing the Salesman:, The objective of advertising is also to assist the salesman’s efforts in increasing the sales of, the product. By means of educating customers about the product, advertising reduces the, work load of the salesman for selling the product., Mathew’s, Buzzell and Frank had given the following objectives of the advertising:, (a) To make an immediate sales., (b) To build primary market., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , (c) To introduce a price deal., (d) To inform about a product., (e) To build brand recognition or brand insistence., (f) To help salesmen by building an awareness of a product among retailers., (g) To create a reputation for services, reliability or research strength., (h) To increase market share., (i) To modify existing product appeals and buying motives., (j) To inform about the availability of new products or features or price., (k) To increase the frequency of use of a product,, (l) To increase the number or quality of retail outlets,, (m) To build overall company image,, (n) To effect immediate buying action., (o) To reach new areas or new segments of population within existing areas, and, (p) To develop overseas., , 2.18.3 Types of Advertising:, Broadly speaking, advertising can be classified into two broad categories viz. product, advertising and institutional advertising., Product Advertising:, Product advertising is that advertising whose main purpose is to inform and stimulate the, market about the advertiser’s product or services. This advertising usually promote specific, branded products in such a manner as to make it more desirable in the eyes of prospects than, competitor’s brand., Product advertising on the basis of action can be further classified as Direct Action, Advertising and Indirect Action Advertising —, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , (a) Direct-Action Advertising – Direct-action advertising are those advertisements which, makes buyer to take action immediately. For example- Reduction in price during clearance, sales., (b) Indirect-Action Advertising – Indirect-action advertising is done to stimulate demand, over a period of time and increase buyer’s respect towards manufacturer’s brand. Such, advertising is a form of long-range promotion and is designed to create desires in the buyer’s, mind., Product advertising on the basis of demand may be sub-divided into pioneer demand, advertising and selective demand advertising., (a) Pioneer Demand Advertising is used when a product is first introduced in the market. The, main aim of such advertising is to inform about what the product is, what it does, how it is, used and from where it can be purchased. For example – advertising of motor cars, electronic, items etc., for first time., (b) Selective advertising is made to meet the selective demand for a particular brand or type, of product such as Ambassador Car. It is also known as competitive advertising as it point out, features and advantages that a consumer get by using it and that may not be available in, competing brand., Product advertising can be also divided on the basis of product life cycle stage. It can be, informative, persuasive and reminder advertising., (a) Informative advertising is that advertising which is done for the promotion of the, products. It seeks to develop initial demand for a product. These advertising ads are such that, they appeals to the consumer’s emotions as well as their rational motives. These are used at, the introduction stage of the product life cycle., {b) Persuasive product advertising is done at growth and maturity stage in the product life, cycle. These advertisements aim at providing competitive advantage over the rivals’ product., (c) Reminder product advertising aims at reminding the prospects about the features and, benefits of the products. It is generally used at the maturity as well as in decline phase of the, product life cycle. It is also known as retentive advertising., , 2.18.4 Functions of Advertising:, For many firms advertising is the dominant element of their promotion mix. It is particularly, true in the case of producers producing convenience goods like – detergent, toilet soaps; soft, MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , drinks etc. However, in recent times the use of advertising is continuously increasing in case, of shopping and speciality goods too, as we see in case of automobiles; home appliances etc., Huge advertising is done by the marketers to introduce a new product and show its features to, the target audience., Advertising can also be used to convince the potential buyers that firm’s goods or services, are superior to that of the competitor’s goods or services in terms of quality, quantity or price., It also creates a brand image in the mind of the customer and make them loyal towards the, firms goods or services., Advertising generally performs the following functions:, i. Promotion of firm’s goods and services and thereby increasing sales of the firm., ii. Creating awareness in the potential buyer about the new product., iii. Creating a favourable public image and thereby brand image in the market., iv. Mass production facilities and thereby optimum utilization of resource of the firm., v. Providing supportive roles to other promotional measures., Media of Advertising:, , 1. Mural Advertising:, Mural or outdoor advertising has long life. It has a general and wide appeal. It can attract, attention of a large section of population. An advertiser has ample scope to use skill and art in, advertising., 2. Press Advertising:, Newspapers have a general and wide appeal. Repeat advertising is possible. Periodical, change in size and contents is also easy. Newspapers offer promotional assistance. They are, the best source of market information., However, newspapers have short span of life. We cannot have coloured and attractive, advertisements. Waste in advertising is considerable. Illiteracy affects its utility., 3. Film Advertising:, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , It has a wide appeal. It can overcome language barriers. Audio visual technique has, maximum impact on audience. Sound and sight both are employed for communicating the, message., 4. Radio Advertisement:, Radio has the shortest closing times. Radio uses only an audio signal. Announcement can be, made very quickly. It can secure dealer support, has a very wide appeal and suitable even for, illiterate people. Repeat message is quite common., 5. Television Advertisement:, Television uses both video and audio signals. Television has all the advantages of radio,, namely, sound and explanation, plus the additional advantage of sight. It can appeal through, ear as well as eye., Products can be demonstrated with explanation. Television reaches the audience almost like, personal face to face contact. To that extent it is just like personal salesmanship., 6. Transit Advertising:, It consists of car-card advertising, which is located within buses, subways, railways and, outside displays which appear on the front sides and backs of buses or other public transport, and at transportation terminals. It is the lowest-cost media., 7. Direct Mail:, Direct mail is any advertising sent by mail, including sales letters, folders, pamphlets,, booklets, catalogues and the like. Direct mail is the most personal and selective media. It, reaches only the desired prospects. It has minimum waste in circulation., , 2.18.5 Benefits of Advertising:, Advertising helps in spreading information about the advertising firm, its products, qualities, and place of availability of its products, and so on. It helps to create a non-personal link, between the advertiser and the receiver of the message., The significance of advertising has increased in the modern era of large scale production and, tough competition in the market. Advertising is needed not only by the manufacturers and, traders but also for the customers and the society., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 1. Benefits to Manufacturers and Traders:, It pays to advertise., Advertising has become indispensable for the manufacturers and distributors because, of the following advantages:, (i) Advertising helps in introducing new products. A business enterprise can introduce itself, and its products to the public through advertising., (ii) It can create new taste among the public and stimulate them to purchase the new product, through effective advertisement., (iii) Advertising assists to increase the sale of existing products by entering into new markets, and attracting new customers., (iv) Advertising helps to create steady demand of the products. For instance, a drink may be, advertised during summer as a product necessary to fight tiredness caused by heat and during, winter as an essential thing to resist cold., (v) Advertising help in meeting the forces of competition in the marketplace. If a product is, not advertised continuously, the competitors may snatch its market through increased, advertisements. Therefore, in certain cases, advertising is a necessity to remain in the market, and remind the customer as done by soft drink companies., (vi) Advertising is used to increase the goodwill of a firm by promising improved quality to, the customers., (vii) Advertisements increase the morale of the employees of the firm. The salesmen feel, happier because their task becomes easier if the product is advertised and known to the, public., (viii) Advertising facilitates mass production of goods which enables the manufacturer to, achieve lower cost per unit of product. Distribution costs are also lowered when the, manufacturer sells the product directly to the customers. Advertising facilitates direct, distribution of the product through the retailers. Retailers are encouraged to purchase and sell, the advertised products., 2. Benefits to Customers:, Advertising offers the following advantages to customers:, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , (i) Advertising helps the customers to know about the existence of various products and their, prices. They can choose from the various brands to satisfy their wants. Thus, they cannot be, exploited by the sellers., (ii) Advertising educates the people about new products and their diverse uses., (iii) Advertising increased the utility of existing products for many people adds to the amount, of satisfaction which they are already enjoying., (iv) Advertising induces the manufacturers to improve the quality of their products through, research and development. This ensures supply of the products of better quality to the, consumers., 3. Benefits to Society:, The society at large is also benefited because of advertisement:, (i) Advertising provides employment to persons engaged in writing, designing and issuing, advertisements. Increases employment brings additional income with the people which, stimulates more demand. Employment is further generated to meet the increased demand., (ii) Advertising promotes the standard of living of the people by increasing the variety and, quality in consumption as a result of sustained research and development activities by the, manufacturers., (iii) Advertising educates the people about the various uses of different products and this, increases their knowledge. Advertising also helps in find customers in the international, market which is essential for earning foreign exchange., (iv) Advertising sustains the press, and other media. It provides an important source of, income to the press, radio and television network. The customers are also benefited because, they get newspapers and magazines at cheaper rates. The publishers of newspapers and, magazines are benefited because of increased circulation of their publications. Lastly,, advertising also encourages commercial art., , 2.18.6 FEATURES OF ADVERTISING:, 1. Advertising is a form of publicity giving the information regarding a product, service or, idea., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 2. It is a sponsored publicity or communication. That is the publicity has been deliberately, sponsored, initiated and undertaken by the sponsor., 3. The sponsor of advertisement is usually identified in the advertisement itself., 4. It is paid by the sponsor. In other words it is a paid form of publicity., 5. It is a non personal communication: here the communications only through written, spoken, or visual means and through persons., 6. It is a mass communication and not a communication to a specific individual., 7. It is undertaken to influence the buying behaviour of the customers., , 2.19 PUBLICITY:, 2.19.1 DEFINITION:, According to American Marketing Association, “Publicity is a non-personal stimulation of, demand for a product, service or business unit by planting commercially significant news, about it in a published medium or obtaining favourable presentation of it on radio, television, or stage that is not paid for by the sponsor.”, , 2.19.2 MEANING:, Publicity is a non personal stimulation of demand for a firms product or service which is not, paid by the sponsor., , 2.20 PUBLIC RELATIONS:, 2.20.1 MEANING:, Public relations refer to an effort to create a favourable attitude towards a firm among, employees, shareholders, suppliers, customers, the government and the society at large., In other words public relations mean the total process of maintaining good relations with the, public and improving the image of the firm in the eyes of the public., , 2.20.2 OBJECTIVES OF PUBLIC RELATIONS:, Within the overall objective of understanding the public and making itself favorably, understood, public relations have these objectives:, 1. Creating awareness about the company, its goals, products and services where this counts., 2. Sustaining the awareness as an ongoing process, keeping in mind what the competitors are, doing, and knowing that public memory is short., 3. Striving to be accepted by the various publics. Special efforts are required to be accepted, by employees. A foreign company has its own requirements for being accepted on this soil., 4. Creating a bond of trust. In times of rumors, misinformation, etc., a company has to, establish the truth. In normal times, too, a company has to promote its reliability. Just, consider the frequent use of words like believe, trust, reliable, safe, 100%, etc. in building a, company image., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 5. Getting cooperation from various quarters. A company has many publics on whom it has to, depend. Government organizations, providers of various services etc. have to be wooed in, such a way that they willingly help the company., 6. Earning recognition. It is not enough to perform feats but it is necessary to get these, noticed and talked about. Through winning awards, certifications etc. and getting these read, and seen, a company gets recognition. Having so-and-so as a client or collaborator may itself, be a recognition. This has to be publicized., , 2.21 PEOPLE:, People’ include people who are directly or indirectly involved in the trade of the product or, service. These are mainly customer contact employees (contact centre employees,, representatives, account managers, etc.), customers, personnel and management. It is mainly, the customer contact employees who are the face of the organization and they translate the, quality into a service. They are the ‘service’ providers on account of their occupation or, entrepreneurship. They include for instance stylists, hair dressers, coaches, trainers,, gardeners, lawyers, contact centre employees, etc. They deliver a physical service with a, visible result., Service companies are thoroughly aware that they must effectively manage the customer, contact employees in order to monitor the quality of the service with respect to attitudes and, behaviour. This is very important in service companies because there might be a large, variable in the performance of the customer contact employees in relation to the results of the, services delivered. The quality of a service between service companies and customers, (hospital intake, having a meal in a restaurant or accountancy or management consultancy, services) can vary very strongly in addition to other important factors. The lack of, homogeneity in services creates difficulties for service companies. Delivery of services often, occurs during an interaction between a customer and contact employees. Attitude and, behaviour of an employee create a perception of the service as experienced by the customer, (customer perception). This perception may be either positive or negative. It is even more, important because it can influence customer satisfaction and in turn the customer’s purchase, intentions., , 2.22 PROCESS, The element ‘Process’ of the service marketing mix represents the activities, procedures,, protocols and more by which the service in question is eventually delivered to the customer., As services are results of actions for or with customers, a process involves a sequence of, steps and activities to get there., The element ‘process’ of the service marketing mix is an essential element within the, entire service marketing mix strategy. This element comprises all activities and services in, which the people involved play an important role. As a service is made up of a chain of, activities, it is important to take the possible waiting period between the activities into, consideration. That is why it is important that marketeers take care of the communication, about possible delivery times and by doing so the management of customer expectations., Creating and managing effective service processes are for the existence of service companies., Managing the process factor is mainly due to the perish-ability of services which means that, the services cannot be inventoried, stored for reuse or returned. For instance, airline seats that, are not booked cannot be reclaimed. It is therefore important that the service companies, manage demand as well as they possibly can., Another distinguishing characteristic of a process in relation to a service is the evidence to be, provided to the customer and this is often a standardized or customized approach based on, MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , the customer’s needs and expectations. Feedback from the customer will see to the required, tightening in the process with the aim to meet the customers’ needs. The delivery system and, the flexibility of the employees are two other key factors in the successful delivery of a, service. As services are dynamic and experiential, service companies also use a blue print, method called ‘Service Blue Printing’. This process-based method provides a better, management of the service in the area of internal and external interaction, makes this, transparent and ultimately this is implemented in practice., , 2.23 PHYSICAL EVIDENCE :, The physical evidence within the service marketing mix refers to an environment in which a, service comes about from an interaction between an employee and a customer which is, combined with a tangible commodity. The physical evidence includes a representation of a, service for instance brochures, company stationery, business cards, reports, company website,, etc. A good example is a hotel. The design, furnishing, lighting and decoration of a hotel as, well as the appearance and the attitudes of the employees have a certain influence on the, quality of the service and customer experience. For example for a theme park, restaurant, or, school, its ‘service scape’ or the environment in which the service takes places (service, setting) is of crucial importance when it concerns communicating about the service and the, positive influencing of customer experience., This service scape includes three physical environment dimensions that represent the relation, between services and environment, namely:, 1. Environmental conditions such as temperature, sound, smell, etc., 2. Space and functions such as map, equipment, decoration, etc., 3. Signs, symbols and artefacts such as signature, decoration style, personal touch, etc., As services are intangible, customers are continuously looking for concrete clues to help, them understand the nature of the service company. The more intangible the service the more, important it is to make the service around it tangible. Credit cards are a good example of, tangible proof compared to the provision of (intangible) credit facilities by credit card, companies and banks. In conclusion, the physical evidence serves as a visual metaphor of, what the company represents, what services it facilitates and the relations between customers, and employees., Another important point for consideration: satisfied customers. Satisfied customers are the, best publicity for the services or products to be delivered. The marketing strategy must be, effective, in which satisfaction of existing customers can be communicated to potential, customers. Social marketing is a useful tool in this respect. It is not tangible but it supplies, physical evidence with the aid of for instance a written recommendation by a customer or, user., , 2.24: Productivity & Quality:, This P asks “is what you’re offering your customer a good deal?” This is less about you as a, business improving your own productivity for cost management, and more about how your, company passes this onto its customers., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , MULTIPLE CHOICE QUESTIONS AND ANSWERS, 1. ______________ is the optimum combination of the four marketing elements or, ingredients in the light of the current marketing environment., a. Product Mix, b. Marketing Mix, c. Product Planning, d. Product, 2. The four controllable forces of marketing mix ;, a. Product ,price ,place, promotion, b. Product ,product planning, place ,promotion, c. Product, product planning, product mix, promotion, d. None of these, 3. According to __________________defines a product as “everything the purchaser gets in, exchange for money”., a. Pyle, b. C.P Stephenson, c. Peter F .Drucker, d. Philip Kotler, 4. According to __________, “A product is anything that can be offered to a market for, attention, acquisition, use or consumption that might satisfy a want or need., a. C.B Memoria, b. Pyle, c. American Marketing Association, d. Philip Kotler, 5. Soap, tooth paste, tooth brush, pens, books, shoes, food items, sports goods, television, sets, refrigerators, washing machines, etc. are the examples for., a. Industrial Goods, b. Consumer Goods, c. Specialty Goods, d. None of these, 6. Examples for shopping goods., a. Washing machines, jewellery, refrigerators etc., b. soap, tooth paste, tooth brush, pens, books,, c. Equipment’s, components part repairs, operating supplies., d. All of the above, 7. Basic product is also known as ____________, a. Generic Product, b. Core Product, c. Branded product, d. Augmented product, 8. Product Mix is also called as______________, a. Marketing Mix, b. Product Planning, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , c. Product Assortment, d. Product Dimension, 9. According to _______________, “A product line is a group of related products produced, by one manufacturer. For example, products that are intended to be used for similar, purposes or to be sold in similar types of shops.”, a. Collins Dictionary, b. Peter F Drucker, c. Philip Kotler, d. C.B Memoria, 10. In the words of, "Price is the amount of money which is needed to acquire in exchange of, some combined assortment of a product and its accompanying services"., a. C.B.Memoria, b. Collins Dictionary, c. W.J. Stanton, d. None of these, 11. ______________is the process of determining the value of a product or service in terms, of money before it is offered to the market for sale., a. Product planning, b. Pricing Policy, c. Price, d. Pricing, 12. When an enterprise determines a single price for all the consumers of its products who, purchase the product under similar conditions and in the same quantity, it is called, ____________., a. Flexible price policy, b. Bait pricing policy, c. One price policy, d. Dual pricing policy, 13. ___________________is a policy under which two products are manufactured by a firm,, and the price of one product is kept low and the price of the other product is kept high., 1. Bait pricing policy, 2. Full lining price policy, 3. Unit pricing policy, 4. Psychological pricing policy, 14. __________________ is a policy in which a firm absorbs full transport cost and delivers, the goods to all buyers at their ends at a uniform or single price irrespective of location and, distance., a. Uniform pricing policy, b. Uniform delivery pricing policy, c. Delivery pricing uniform policy, d. None of these, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 15. According to _____________, “Distribution channel is a path traced in the direct or, indirect transfer of title to a product as it moves from a producer to ultimate consumers or, users.”, a. Prof.W.Staton, b. Cundiff and Still, c. C.B.Memoria, d. None of these, 16. _________________ refers to the selling of goods by the manufacturers or producers to, the consumers or users indirectly, i.e., through middlemen., a. Direct Selling, b. Indirect Selling, c. Local and individual marketing., d. Self-marketing., 17. _______________ is a process of marketing communication, involving communication,, persuasion and influence., a. Promotion, b. Advertising, c. Process, d. Product planning, 18. Salesmanship is the ____________of persuading and assisting a prospective customer to, buy a commodity or service which he needs., c. Social Science, a. Art, b. Science, d. None Of These, 19. Publicity is a ____________________ of demand for a firms product or service which is, not paid by the sponsor, a. Personal Simulation, c. Persuading, d. Influencing, b. Non Personal Simulation, 20. The physical evidence includes a representation of a service for instance brochures,, company stationery, business cards, reports, company website, etc c. Process, a. Physical evidence, b. Market aggregation, d. People, 21. _____________ is a pricing policy under which the seller adds a certain pre-determined, mark-up or margin of profit to the cost per unit of the product manufactured or purchased for, resale to determine the sale price of the product per unit., c. Margin pricing, a. Mark-up pricing policy, b. Mark down pricing policy, d. None of the above, 22. ______________of the product mix refers to the total number of products in the mix., a. Width, c. Depth, d. Consistency, b. Length, 23. The________________ of the product mix refers to the total number of products within a, product line., a. Width, b. Length, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , c. Consistency, , BBA(ALM), , d. Depth, , 24. The _____________of the mix refers to the number of product lines the company has to, offer., c. Length, a. Width, b. Consistency, d. Depth, 25.__________to the number of product lines the company has to offer Vegetables, bakery, items, local dairies, etc are the products may prefer in this segmentation., c. customised product, a. Potential product, b. augmented product, d. differentiated product, 8 Marks questions, 1. Explain the traditional marketing mix and describe the expanded mix., 2. “In order to shape the products abstract value, Philip Kotler uses five product levels in, which a product is located or seen from the perception of the consumer”. Keeping this, statement into account, suggest the various Layers or levels of a Product., 3. Promotional marketing campaigns should always keep a particular purpose in mind., Suggest its importance., 4. Explain the essential features of a product., 5. What do you mean by Product Mix? Explain the 4 Dimensions of Product Mix, 6. “Before fixing the price, the management should decide the objectives of pricing or, pricing objectives”. Describe and explain the different objectives of pricing., 7. “To regulate and direct the changes in the product line or product mix, well planned, strategies are essential”. Explain those six different strategies of product mix?, 8. Depending upon the purpose for which products are primarily intended to be used,, products are classified into two main classes, which are those? Summarize., 9. “There are different types of pricing policies, and an enterprise has to choose anyone, price policy for the determination of prices for its products”. Elaborate the different, pricing policies in detail., 10. What do you mean by promotion? Explain the different forms of promotion., 11. “Channel of distribution is the route taken by the title to the goods as they move from the, producer to the ultimate consumer or industrial user”. Explain the two categories of, channels of distribution., 12. “Advertising is informing public of the availability of a particular product or service,, stimulating their desire for the advertised product and inducing them to buy the same”, Explain the objectives and benefits of advertising., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , UNIT-3: BRANDING, LABELLING & CONSUMER BEHAVIOUR, 3.1 DEFINITION OF BRAND:, According to the Committee on Definitions of American Marketing Association, "Brand is a, name, term, symbol or design or a combination of them which is intended to identify the, goods or services of one seller or group of sellers and to differentiate them from those of, competitors"., , 3.2 MEANING OF BRAND:, From this definition, it is clear that the term' brand' is a comprehensive term, and includes (a), brand name, (b) brand mark or (c) brand name and brand mark, which identifies the product, of a seller and distinguishes (i.e., differentiates) it from those of the competitors., Examples of brands are' Lux'soap, 'Hamam' soap, 'Rexona' soap, 'Usha' fan, 'Godrej furniture,, 'Parker' pen, 'Pilot' pen, 'Bata' shoes, 'Amul' butter and so on., , 3.4 MEANING OF BRANDING:, Branding is the process of identifying the name of a producer with his product by affixing to, the product or its container the trade name or brand represented by words or designs., In other words, it is the process of giving a trade name or brand, such as 'pilot' pen, brand, umbrella, etc. to a product to distinguish it from other similar products manufactured by rival, producers., , 3.5 OBJECTIVES OF BRANDING:, Branding is undertaken by a manufacturer or dealer with many objectives. The main, objectives of branding are:, 1. To provide product identification (i.e., to identify the name of a producer with his product)., 2. To introduce product differentiation (i.e., to differentiate or distinguish the product of one, manufacturer from similar products produced by other rival producers)., 3. To create consumer preference for a product., 4. To achieve greater control over the market., 5. To enjoy greater freedom in the fixation of the price of a product., , 3.6 FUNCTIONS OF BRANDING:, Branding is an essential sub-function of marketing. It is very important in the case of, manufactured goods. It performs several valuable functions. They are:, 1. It helps in product identification, which is of immense assistance in buying and selling., 2. It ensures product differentiation, i.e., differentiates the product of themanufacturer from, similar products of rival producers., 3. It eliminates imitation products., 4. It denotes the standard or quality of a product indirectly., 5. If the brand name is registered, it ensureslegal right on the product. A trade mark is a, valuable intangible asset., 6. It helps to create and maintain brand loyalty to particular products., 7. It helps in packaging., 8. It helps advertising. Advertising without a brand name will be meaningless., 9. It is helpful even in salesmanship or personal selling. The work of salesmen will be a, failure in the absence of a brand name., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 10. It is also the base for other sales promotion measures., 11. It helps in price differentiation of products., 12. It helps in effecting repeat sales, in the sense that, when a customer is satisfied with a, branded product, he will ask for it repeatedly., 13. It helps to eliminate middlemen like wholesalers., , 3.7 ADVANTAGES OF BRANDING:, Advantages of Branding to Manufacturers:, The main advantages of branding to the manufacturers are:, 1. It differentiates the product of one manufacturer from similar products of rival, manufacturers., 2. The product individuality is helpful to the manufacturer in getting consumer preference for, his product., 3. It helps the manufacturer to carry out advertising effectively., 4. It enables a manufacturer to reduce the advertising and other sales promotion expenses, gradually, because once a brand becomes popular, much advertising need not be undertaken, later., 5. It helps the manufacturer to eliminate the wholesalers from the chain of distribution, and, thereby, reduce his distribution expense, because once a brand becomes popular, the, manufacturer can sell his products directly to the retailers 'or consumers., 6. It enables the manufacturer to control the prices of his products, as the retail prices of, branded goods are fixed by the manufacturer., 7. It helps the manufacturer in increasing the demand for his products, as branded goods are, preferred by most of the consumers., 8. It helps the manufacturer in lowering the middlemen's margin or commission, as branded, goods are, normally, handled by the middlemen on a smaller margin., 9. Branding helps the manufacturer to widen the market for his product, as branded goods can, be bought by consumers of even distant areas without inspecting them., 10. It helps in packaging activities, as branding, generally, co-exists with packaging., 11. It helps the manufacturer to dispose of his products easily, as middlemen prefer to deal in, branded goods and consumers also, generally, prefer branded goods., 12. It helps the manufacturer to get steady demand for the goods by building up brand, loyalty., 13. Branding helps the manufacturer to introduce new products in the market under the same, brand name once a brand becomes popular., 14. It helps in differentiation of products. Branded goods can be sold at higher prices when, compared to unbranded goods., ADVANTAGES OF BRANDING TO MIDDLEMEN OR DEALERS:, The main advantages of branding to middlemen (i. e., wholesalers and retailers) are:, 1. Branding helps the wholesalers and retailers to sell the products without much efforts, as, there is a general preference for branded goods by the consumers., 2. The wholesalers and retailers need not spend much time on the purchase and sale of, branded goods, as the branded goods can be bought and sold without actual inspection., 3. Branding helps the dealers in their advertising and display programmes, as the branded, goods can be easily advertised and displayed., 4. Branding helps the dealers to secure increasing control and share of the market., 5. Branding helps the dealers in having price discrimination, as price discrimination is, accepted by consumers in the case of branded goods., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 6. Less risk is involved in the dealing of branded goods, as they can be sold easily., 7. Branding helps in creating stabilised demand for the branded goods., , Advantages of Branding to Consumers:, 1. Branding assures quality goods to the consumers, as branding compels the manufacturers, to maintain quality., 2. Generally, branded goods are packaged. So, the consumers get protection against damage, or spoilage., 3. The prices of branded goods are fixed by the manufacturers and so, the retailers cannot sell, the branded goods at prices higher than the fixed prices., 4. The consumers can get the branded goods easily, as the retailers are compelled to keep, stocks of all branded goods., 5. Branding ensures steady and regular supply of goods to the consumers., 6. Branded goods ensures unadulterated goods to the consumers since it is packed., 7. When products are branded, consumers can get products of uniform standard and design., 8. Usually, the prices of branded goods are not changed by the manufacturers frequently., That means, there is stability in the prices of branded goods for consumers., Criticisms against Branding:, No doubt, branding is advantageous to the manufacturers, dealers and consumers. But it is, not free from criticisms. The main criticisms against branding are:, 1. Branding creates brand loyalty, and thereby, results in monopoly, which is not desirable., But this criticism is not well-founded, because, in the case of manufactured goods, especially, consumer goods, there cannot be monopoly unless they are basic necessaries., 2. Branding involves expenses, and the expenses of branding raise the prices of branded, goods., 3. The benefits of branding, such as quality goods, fixed price, etc. are available to the, consumers only in the case of goods sold in packages. In the case of goods sold loose, the, benefits of branding are not available to the consumers., 4. Branding does not always assure good quality. Sometimes, inferior goods also are placed, in the market in attractive brand names., 3.8 METHODS OF BRANDING:, There are four different methods of branding. They are:, 1. Using the name of the manufacturer (i.e., using the trade name also as brand name)., 2. Using a special name., 3. Using a number., 4. Using a special symbol or design., 1. Using the Name of the Manufacturer:, Under this method, the manufacturer gives his own name or abbreviation thereof to his, product, e.g. 'Godrej' furniture, 'Ford'-motors, 'Dalmia' biscuits, 'Bata' shoes, 'Tata' hair oil,, and so on., 2. Using a Special Name:, Under this method, a manufacturer gives a special name to his product, e.g., 'Hamam' soap,, 'Prince' blade, Colgate toothpaste, titan watches etc., 3. Using a Number:, Under this method, the manufacturer gives some number to his product, e.g., '555' bar soap., 4. Using a Special Symbol or Design:, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , Under this method, the manufacturer gives a special symbol or design to his product, e.g.,, 'Monkey' brand tooth powder, 'Elephant' brand cigarettes, 'Scissors' brand cigarettes, 'Camel', brand 'ink','Sun' brand umbrella and so on., 3.9 CLASSIFICATIAN OF BRANDS OR CLASSES OF BRANDS:, On the basis of the number of brands used by a manufacturer or dealer to different products,, brands can also be classified as, (1) Family Brand, Blanket Brand or Single Brand and, (2) Multiple Brands or Individual Brands., , Family, Blanket or Single Brand:, Under this system, a single brand, i.e., the same brand is used by a manufacturer or dealer for, all his products., The use of the brand name, "Godrej" for the various products, i.e furniture, type-writers,, locks, etc. produced by the Godrej Company is an example of family or blanket brand., , Multiple Brands or Individual Brands:, Under this system, a manufacturer or dealer uses different brands for the different products, which he sells. This system helps to overcome the limitations of the system of blanket or, single brand., (3)Personal brand –, Otherwise known as individual brand. The brand a person builds around themselves,, normally to enhance their career opportunities. Often associated with how people portray and, market themselves via media. The jury’s out on whether this should be called a form of brand, because whilst it may be a way to add value, it often lacks a business model to commercialize, the strategy., 1., Product brand, Elevating the perceptions of commodities/goods so that they are associated with ideas and, emotions that exceed functional capability. Consumer packaged goods brands (CPG),, otherwise known as fast moving consumer goods brands (FMCG), are a specific application., 2., Service brand, Similar to product brands, but involves adding perceived value to services. More difficult in, some ways than developing a product brand, because the offering itself is less tangible., Useful in areas like professional services. Enables marketers to avoid competing skill vs skill, (which is hard to prove and often devolves to a price argument) by associating their brand, with emotions. New online models, such as subscription brands, where people pay small, amounts for ongoing access to products/services, are rapidly changing the loyalty and, technology expectations for both product and service brands – for example, increasingly, products come with apps that are integral to the experience and the perceived value., 3., Corporate brand, Otherwise known as the organizational brand. David Aaker puts it very well: “The corporate, brand defines the firm that will deliver and stand behind the offering that the customer will, buy and use.” The reassurance that provides for customers comes from the fact that “a, corporate brand will potentially have a rich heritage, assets and capabilities, people, values, and priorities, a local or global frame of reference, citizenship programs, and a performance, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , record”., 4., Investor brand, Normally applied to publicly listed brands and to the investor relations function. Positions, the listed entity as an investment and as a performance stock, blending financials and strategy, with aspects such as value proposition, purpose and, increasingly, wider reputation via CSR., As Mike Tisdall will tell you, done well, a strong investor brand delivers share price, resilience and an informed understanding of value., 5., NGO (Non Governmental Organization) or Non Profit brand – An area of, transition, as the sector shifts gear looki, ng for value models beyond just fundraising to drive social missions. Not accepted by some, in the non profit community because it’s seen as selling out. Necessary in my view because, of the sheer volume of competition for the philanthropic dollar., 6., Public brand –, Otherwise known as government branding. Contentious. Many, including myself, would, argue that you can’t brand something that doesn’t have consumer choice and a competitive, model attached to it. That’s not to say that you can’t use the disciplines and methodologies of, brand strategy to add to stakeholders’ understanding and trust of government entities. That’s, why I talk about the need for public entities to develop trust marks rather than brands. Jill, Caldwell takes this idea of how we consider and discuss infrastructure further and says we, now have private-sector brands that are so much a part of our lives that we assume their, presence in much the same way as we assume public services. Caldwell refers to brands like, Google and Face book as “embedded brands”., 7., Activist brand, Also known as a purpose brand. The brand is synonymous with a cause or purpose to the, point where that alignment defines its distinctiveness in the minds of consumers. Classic, examples: Body Shop, which has been heavily defined by its anti-animal-cruelty stance; and, Benetton, which confronts bigotry and global issues with a vehemence that has made it both, hated and admired., 8., Place brand, Also known as destination or city brands. This is the brand that a region or city builds around, itself in order to associate its location with ideas rather than facilities. Often used to attract, tourists, investors, businesses and residents. Recognizes that these groups all have significant, choices as to where they choose to locate. A critical success factor is getting both citizens and, service providers on board, since they in effect become responsible for the experiences, delivered. Most famous example is probably “What happens in Vegas stays in Vegas”., 9., Nation brand, Whereas place brands are about specific areas, nation brands relate, as per their name, to the, perceptions and reputations of countries. Simon Anholt is a pioneer in this area., 10., Ethical brand, Used in two ways. The first is as a description of how brands work, specifically the practices, they use and the commitments they demonstrate in areas such as worker safety, CSR and, more – i.e. a brand is ethical or it is not?. Secondly, denotes the quality marques that, consumers look for in terms of reassurance that the brands they choose are responsible., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , Perhaps the most successful and well known example of such a brand is Fairtrade. These, types of ethical brands are often run by NGOs – e.g. WWF’s Global Forest and Trade, Network., 11., Celebrity brand, How the famous commercialize their high profile using combinations of social media, delivered content, appearances, products and gossip/notoriety to retain interest and followers., The business model for this has evolved from appearances in ads and now takes a range of, forms: licensing; endorsements; brand ambassador roles; and increasingly brand association, through placement (think red carpet)., 12., Ingredient brand, The component brand that adds to the value of another brand because of what it brings. Well, known examples include Intel, Gore-Tex and Teflon. Compared with OEM offerings in, manufacturing, where componentry is white label and simply forms part of the supply chain,, ingredient brands are the featured elements that add to the overall value proposition. A key, reason for this is that they market themselves to consumers as elements to look for and, consider when purchasing. In this interesting piece, Jason Cieslak wonders though whether, the days of the ingredient brand are drawing to a close. His reasons Increased fragmentation, in the manufacturing sector, lack of space as devices shrink, stronger need for integration and, lack of interest amongst consumers in what goes into what they buy., 13., Global brand, The behemoths. These brands are easily recognized and widely dispersed. They epitomize, “household names”. Their business model is based on familiarity, availability and stability –, although the consistency that once characterized their offerings, and ruled their operating, models, is increasingly under threat as they find themselves making changes, subtle and, otherwise, to meet the cultural tastes and expectations of people in different regions., 14., Challenger brand, The change makers, the brands that are determined to upset the dominant player. While these, brands tend to face off against the incumbents and to do so in specific markets, “Being a, challenger is not about a state of market; being number two or three or four doesn’t in itself, make you a challenger,” says Adam Morgan of Eat Big Fish. “ It is a brand, and a group of, people behind that brand, whose business ambitions exceed its conventional marketing, resources, and needs to change the category decision making criteria in its favor to close the, implications of that gap.”, 15., Generic brand, The brand you become when you lose distinctiveness. Takes three forms. The first is specific, to healthcare and alludes to those brands that have fallen out of patent protection and now, face competition from a raft of same-ingredient imitators known as generics. The second, form of generic brand is the brand where the name has become ubiquitous and in so doing, has passed into common language as a verb – Google, Xerox, Sellotape. The third form is the, unbranded, unlabelled product that has a functional description for a name but no brand value, at all. This last form is the ultimate in commoditization., 16., Luxury brand –, Prestige brands that deliver social status and endorsement to the consumer. Luxury brands, must negotiate the fine line between exclusivity and reality. They do this through quality,, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , association and story. These brands have perfected the delivery of image and aspiration to, their markets, yet they remain vulnerable to shifts in perception and consumer confidence and, they are under increasing pressure from “affordable luxury” brands. Coach for example, struggled with revenues in 2014 because of declining sales growth in China and Japan, two of, the world’s key luxury markets., 17., Cult brand –, The brands that revolve around communities of fierce advocates. Like the challenger brands,, these brands often pick fights with “enemies” that can range from other companies to ideas,, but pure-play cult brands take their cues from their own passions and obsessions rather than, the market or their rivals. They tend to have followers rather than customers, set the rules and, ask people to comply and, if they market at all, do so in ways where people come to them, rather than the other way around., 18., Clean slate brand, The pop-ups of brand. Fast moving, unproven, even unknown brands that don’t rely on the, heritage and history that are so much a part of mainstream brand strategy. These brands feed, consumers’ wish for the new and the timely., 19., Private brand –, Otherwise known as private label. Traditionally, these are value-based, OEM-sourced retail, offerings that seek to under-cut the asking price of name brands. They focus on price. There, is significant potential though in my view for these brands to become more valuable and to, play a more significant role at the ‘affordable premium’ end of the market. For that to, happen, private brands will need to broaden their appeal and loyalty through a wider range of, consideration factors., 20., Employer brand –, The ability of a company to attract high quality staff in much-touted competitive markets., Often tied to an Employee Value Proposition. Focuses on the recruiting process though it is, sometimes expanded to include the development of a healthy and productive culture. Sadly,, given the process obsession of too many HR staff and the lack of interest from a lot of, marketing people to venture into people-issues, this tends to be a brand in name rather than a, brand by nature. Great potential – but, given the very low satisfaction rates across corporate, cultures globally, a lot more work is needed to realize the full potential of this idea., 3.8 PRODUCT PACKAGING: MEANING, FUNCTIONS, MEANING:Packaging is the science, art and technology of enclosing or protecting products for, distribution, storage, sell, and use. Packaging also refers to the process of designing,, evaluating, and producing packages. Packaging can be described as a coordinated system of, preparing goods for transport, warehousing, logistics, sale, and end use. Packaging contains,, protects, preserves, transports, informs, and sells. In many countries it is fully integrated into, government, business, institutional, industrial, and personal use., Packaging refers to the process of designing the package such as containers, wrappers etc. It, plays a very significant role in the marketing success or failure of many products especially, for non-durable consumer products., It not only provides protection to the product but also acts as a promotional tool. Sometimes,, customers assess the quality of the product from its packaging. Packaging has played an, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , important role in the success of many products like Colgate Toothpaste, Taj Mahal Tea, Lays, Wafers etc. It has been described as silent salesman., , 3.9 FUNCTIONS OF PACKAGING:, Following are the main functions performed by packaging:, 1) Protection:, One of the major functions of packaging is to provide for the ravages of time and, environment for the natural and manufactured products. The protection function can be, divided into some classes viz., A. Natural deterioration:, , It is caused by the interaction of products with water, gases and fumes, microbiologic, organisms like bacteria, yeasts and moulds, heat, cold, desiccation (dry environment in, deserts and high-altitude areas), contaminants and insects and rodents., B. Physical protection:, The packaging is also used for physical protection, which include improving shock, protection, internal product protection and reducing shock damage caused from vibration,, snagging, friction and impact., C. Safety:, A special kind of protective packaging is required for products that are deemed hazardous to, those who transport them or use them. These product include highly inflammable gas and, liquid, radioactive elements, toxic materials etc. The packaging should also be done so that, children could not easily use or dispose them., D. Waste reduction:, Packaging also serves to reduce the amount of waste specially in case of food distribution, 2) Containment:, This involves consolidation of unit loads for shipping. It starts with spots of adhesives on the, individual shippers that stick them together, straps of steel and plastic, entire shrouds of, shrinkable or stretchable plastic films and paper or corrugated wraps that surround an entire, pallet of product., There are some special bulk boxes or pallet bins made from unusually strong corrugated, board or fabricated form plastics or metal, the method of which depends on the type and, weight of product and its protective needs. The cargo containers made of aluminum used to, hold many pallet loads of goods can be transferred to or from ships, trains and flatbed trucks, by giant cranes., 3) Information:, The packaging conveys necessary information to the consumers. The common information, that packaging provides include general features of the product, ingredients, net weight of the, contents, name and address of the manufacturers, maximum retail price (MRP)., Packaging of medicine and some food products is required to provide information on, methods of preparations, recipes and serving ideas, nutritional benefits, and date of, manufacturing, date of expiry, warning messages and cautionary information. Sometimes, the, colour of the packaging itself provides some information. For example, orange colour of the, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , bottle of Mirinda or Fanta conveys the information that these brands are of orange coloured, soft drinks., 4) Utility of use:, The convenience packaging has been devised for foods, household chemicals, drugs,, adhesives, paints, cosmetics, paper goods and a host of other products. This type of, packaging includes dispensing devices, prepackaged hot metals, disposable medical, packaging., 5) Promotion:, Companies use attractive colours, logos, symbols and captions to promote the product that, can influence customer purchase decision., Packaging requires several decisions:, i. Packaging concept:, This defines what the package should be or do for the particular product in terms of size,, shape, materials, colour, text, brand mark and tamperproof ability, ii. Engineering tests:, This will ensure that the package stands up under normal conditions, iii. Visual tests:, This is to ensure that the script is legible and colours are harmonious, iv. Dealer tests:, This is to ensure that the dealers find the packages attractive and easy to handle, v. Consumer tests:, This is to ensure favourable consumer response., , 3.9 LABELLING:, Labelling is one of the important product features. Packaging, branding and labelling go, together and constitute an integral part of product planning., Labelling is the art or act of attaching or tagging the labels to the products for giving, information about the grades, uses and other valuable information about the products., Meaning of Label:, In the words of William J. Stanton, "The label is that part of a product which carries valid, information about the product or the sellers (manufacturers or middlemen). A label may be, part of a package or it may be a tag attached directly to the product"., From these definitions, it is clear that a label is a slip, a chit or a tag attached with the product, or with its package, providing necessary information about the product and its Producers., Functions of Labelling:, Labelling performs a number of functions. They are:, 1. Labelling provides definiteness to the product, and thereby, makes the identification of the, product by the customers easy., 2. Labelling lays stress on the special features of the product which are advertised., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 3. Labelling enables the manufacturer to give clear accurate and up-to-date information to the, customers about the proper use of product, and acts as a means of communication between, the manufacturers and consumers., 4. Labelling, by mentioning the maximum retail price, prevents the middlemen (i.e., dealers), from changing the prices of the product. In other words, labelling helps in ensuring, uniformity in the price of a product., 5. Labelling requires the producers to produce standardised and quality products., 6. Labelling recognises consumers' right to be informed about the product and its producer., Advantages of Labelling:, Labelling has certain advantages. The main advantages of labelling are:, (a), Labelling is a social service to the consumers, in the sense that it helps the customers, who do not know anything about product features to have more information about the product, features, uses of the product etc., (b), Labelling, by specifying the maximum retail price of the product, prevents the, dealers from changing the prices of the product, and thereby, protects the consumers for, exploitation by dealers., (c) Label acts as a means for popularising the product., (d) Labelling, by giving information about the quality of the product, protects the interests of, the consumers., (e) Labelling helps the advertising activity of the manufacturer., (f) Labelling helps the customers to assess the superiority or otherwise of the product., (g) Labelling provides guarantee about the standard of the product, and thereby, raises the, prestige of the product and the seller., Disadvantages of Labelling:, Labelling is not without drawbacks. The chief drawbacks are:, (a) Labels are useful only to literates. They are of no use to illiterates., (b) Brand labels aim only at popularising the product. They do not provide sufficient, information to customers., (c) Labelling will be effective only in the case of standardised products. That means, the use, of labelling is limited., (d) There is the danger of false labelling., (e) Labelling in general is neither a reliable index to quality nor an assurance of uniformity., (f) Misleading labels will invite prosecution and penalty., (g) Labelling increases the cost of the product, as it (i.e., labelling) involves expenditure on, the printing or imprinting of labels., 3.10 PRODUCT LIFE CYCLE, Definition of Product Life Cycle:, Philip Kolter, "The product life cycle is an attempt to recognize distinct stages in the sales, history of the product"., William J. Stanton, "From its birth to death, a product exists in different stages and in, different competitive environments. Its adjustment to these environments determines to a, great degree of how successful its life will be"., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , It is clear that every product is like a human being, has a certain length of life, during which it, passes through certain identifiable phases or stages. The life cycle of a product begins with its, introduction in the market, then, it goes through a period of growth, then, it passes through a, phase of maturity, then, it enters the phase or stages saturation, when it reaches its peak, and, finally, it reaches the stage of decline, and at the end of this stage, it disappears from the, market., 3.11 MEANING OF PRODUCT LIFE CYCLE., The various identifiable phases or stages through which a product passes are collectively, called the life cycle of the product or the product life cycle., In other words, the life cycle of a product refers to the various stages a product goes through, from its introduction, through its growth, maturity and saturation or stagnation and the, eventual decline and obsolescence (i.e., the withdrawal of the product from the market)., In short, the life cycle of a product refers to the different stages over the length of life through, which a product passes. It may be noted that many authorities on marketing prefer to call the, product life cycle as product market life cycle, because the life cycle of a product is related to, a given or particular market., PRODUCT LIFE CYCLE CURVE:, , 3.12 PHASES OR STAGES OF PRODUCT LIFE CYCLE:, 1)Introductory, Innovation or Development Stage: Introductory stage is the first stage in, the life cycle of a product., The main features of this stage are:,  At this stage, the product is introduced in the market and is made known to the, consumers.,  The product is made known to potential customers through various programmes of, advertising and sales promotion.,  As high level promotional efforts are required to inform potential consumers of the new, and unknown product, promotional expenditure will be very high.,  The product line is narrow.,  The distribution line is limited.,  Sales of the product do not pick up during this stage, because potential consumers are, quite unaware of the characteristics of the product, and purchases of such a product are, generally made cautiously by the high income group buyers on a trial basis., MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , , , , , , , BBA(ALM), , Technical defects in the product may often appear during this stage because of, insufficient prior testing, and so, there are frequent product modifications., The introductory stage is very risky for the marketers because of high percentage of, product failure in this period., The price of the new product will be high because of high because of high production and, marketing costs., There is no much competition for the new product at this stage, as the product is new for, the potential consumers., There is low margin of profit for the marketers because of low sales volume and heavy, costs of production and marketing., , 2. Growth Stage:, After the product is introduced in the market, the product enters the second stage called the, growth stage., The chief features of this stage are:, i) Under this stage, the product gains popularity among, & gets recognition from , the, consumers., (ii) As a result, the sales of the product increase considerably., (iii) Although the contribution to increasing sales is maximum from higher income group,, some contribution to increasing sales is also made by the middle income group., (iv) The profits of the firm also go up because of increase production and sales and the, resultant economies large-scale production and sales and lower production and marketing, cost per unit. ', (v) The main problem of the firm during this stage is produce goods in sufficient quantities, and market the output without delay., (vi) High profit during this stage attracts competitors to enter the market., (vii) In order to meet the growing competition effectively an to lengthen the growth stage, the, marketers concentrate upon advertising and sales promotion programmes., viii) Product improvements are made., (ix) New and alternative uses of the product are also made known to the consumers. ., (x) New market segments are opened and the system physical distribution also is improved., (xi) In this stage, as the demand, generally, continues exceed the supply, there is more scope, for, large-scale production and sales .But the firm is required to improve its marketing system, to compete effectively with the competitors., 3. Market Maturity Stage:, During this stage, there is the maturity of the product. The maturity of the product, is, reflected in terms of its capacity to face competition., The main features of this stage are:, (i) During the maturity stage, the consumer market becomes very -wide, as the low income, group also will begin to purchase the product., (ii) Product development and design become heavily style- oriented., (iii) In this stage competition becomes more acute .In spite of acute competition, the sales of, the product go up, but at a lower rate. During this stage, for the first time supply exceeds the', demand., ( iv ) Further, as the sales of the product increase at a lower rate, the marketers are required to, spend more on advertising and other ,sales promotion measures to capture the market. ., (v) Only firms with extremely effective marketing programmes can survive in the market in, this stage. So, the marketers are required to make necessary modifications in the marketing, mix, and also in the product mix., MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , (vi) Improvements in existing product are required to be made., (vii) Prices are reduced in order to attract more customers and to compete with rival firms., (viii)Price competition becomes increasingly severe and the profit margins of the, manufacturer and the retailers begin to decline because of lowering of prices due to, competition and rising marketing costs., (ix) As the profit margins decline, some producers simplify their product lines., (x) Marginal producers are forced to go out of the, market., 4. Saturation Stage: ,, During this stage, the market is saturated, as all the potential buyers are using the product:, The main features of this stage are, (i) This stage is a period of stability., (ii) In this stage, the sales of the product reach the peak, and there is no possibility of further, increase in sales. There will be only replacement sales. ,, (iii)Markets are highly segmented during this stage., (iv) During this stage, the products of competitors become popular and invade the market., (v) Severe competition leads to reduction in the prices of the product and increase in, distribution and promotional costs., (vi) As a result, profit margins come down unless the firm makes substantial improvements in, the product., 5. Decline and Obsolescence Stage:, Once the saturation or peak point is reached, the product enters the decline stage, and, becomes obsolete., The chief features of this stage are:, (i) During the decline stage, sales of the firm begin to decline in spite of best marketing, efforts. The decline in sales may be due to technological advances, consumers' shifts in tastes,, and increased competition., (ii) As sales and profits decline, some firms may withdraw from the market. Those remaining, in the market may reduce the prices of their' products and also shift their attention to new, products in order to compete., (iii) The expenditure on advertising and sales promotion is also reduced, as the profit margin, comes down drastically., (iv) Cost control becomes the key to generate profits., , Features of Business Cycles, The four different phases of business cycles are – expansion, peak, depression, and recovery., While all these phases have their own unique characteristics, there are some features that are, common to all the phases. Let us take a look at these features of business cycles., 1] Occur Periodically, As we saw, these phases occur from time to time. However they do not occur in for specific, times, their time periods will vary according to the industries and the economic conditions. Their, duration may vary from anywhere between two to ten or even twelve years., Even the intensity of the phases will be different. For example, the firm may see tremendous, growth followed by a shallow short-lived depression phase., 2] They are Synchronic, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , Another one of the features of business cycles is that they are synchronic. Business cycles are, not limited to one firm or one industry. They originate in the free economy and are pervasive in, nature., A disturbance in one industry quickly spreads to all the other industries and finally affects the, economy as a whole. For example, a recession in the steel industry will set off a chain reaction, until there is a recession in the entire economy., 3] All Sectors are Affected, All major sectors of the economy will face the adverse effects of a business cycle. Some, industries like the capital goods industry, consumer goods industry may be disproportionately, affected., So the investment and the consumption of capital goods and durable consumer goods face the, maximum brunt of the cyclic fluctuations. Non-durable goods do not face such problems, generally., 4] Complex Phenomenon, Business cycles are a very complex and dynamic phenomenon. They do not have any, uniformity. There are no set causes for business cycles as well. So it is nearly impossible to, predict or prepare for these business cycles., 5] Affect all Departments, Trade cycles are not only limited to the output of goods and services. It has an effect on all other, variables as well such as employment, the rate of interest, price levels, investment activity etc., 6] International in Character, Trade cycles are contagious. They do not limit themselves to one country or one economy. Once, they start in one country they will spread to other countries and economies via trade relations, and international trade practices., We have an actual example of this when the Great Depression of 1929 in the USA, later on, had, an adverse effect on the entire global economy. So in an integrated global economy like today’s, the effects of a trade cycle spread far and wide., , Marketing strategies to be followed at different stages:, 1. At the introductory stage:, (i) Effective advertising informing the consumers about the product., (ii) Personal selling also must be given sufficient attention., (iii) The system of physical distribution should also be very good., (iv) There should be extensive selling., (v) There should be introductory inducement., 2. At the growth stage:, The advertising and sales promotion and extensive selling undertaken in the introductory, stage will have its effect in the growth stage. That is, sales will pick up smoothly and start, attracting the competitors in the field., (i) Marketing strategy should shift to price appeals and product improvements., (ii) In order to maintain the stage of growth for a long time, the marketers must concentrate, upon the programmes of advertising and sales promotion., (iii) New alternative brands of product must be introduced and brought to the notice of the, customers., (iv) New market segments forthe product must be discovered., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , (v) The system of physical distribution must be made sound., (vi)A close study of the reactions of the consumers must also be made so that necessary, changes may be made in the products., 3. At the maturity stage:, The maturity state is a challenge to the marketer which must be faced with strong, determination and concrete efforts. The marketing strategies during this stage should include, the following:i. The marketer must change his marketing strategies, policies and programmes keeping in, view the changing circumstances in the market., ii. The marketer must also keep close watch upon the policies and strategies of his, competitors., 4. At the saturation stage:, The strategies during this stage should be as follows:, (i) At the saturation stage the marketer must try to develop new product and alternative uses, of the existing product., (ii) Necessary developments and modifications must also be made so as to attract new, customers to use the product., 5. At the decline/ obsolescence stage:, The marketing strategies at this stage should include:, (i) At this stage the marketer must try to find out whether there are any possibilities of selling, his product or not., (ii) If he finds that possibilities of selling his products are nil he should decide to stop the, production of the product and divert the resources for the production of some new products., (iii) If he finds that the possibilities of selling his products are still there then he must go, ahead to explore such possibilities and necessary changes must be made in the product, according to the tastes, habits and likes of the consumers., (iv) The management must attempt to recover costs., (v) Steps should also be taken to reduce the cost and for this purpose research and, development should be undertaken., (vi) Steps may also be taken to increase the utility of the product. That is new uses may be, suggested., (vii) New attractions such as gifts to purchasers may be thought of., Conclusion: In the context of the study of product life cycle, it may be noted that the above, discussion just concentrates on the life cycle of a product beginning with its introduction in, the market and ending with its decline and obsolescence. That is, the above discussion just, concentrates only on the post-marketing stages of the life cycle of a product. But there are, also a series of processes to be undertaken by the firm even prior to the introduction of the, product in the market. That is, there are also certain pre-marketing processes to be taken by, the firm. The pre-marketing process include product research, engineering and technical, improvements in the product, advertising, test marketing, etc., 3.13 NEW PRODUCT DEVELOPMENT:, Definition :, According to William Stanton, “A product is said to be a new product, when the consumers, consider it as new.”, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , Categories of new product:, • Products that are really innovative: Products that are quite different from existing, products, but satisfy the same needs. These are the products for which there is a real need, because existing substitutes are not satisfactory., • Products that are significantly different from the existing products: Instant coffee, replacing coffee powder, new models in clothing’setc belong to this category., • Imitative products that are new to a particular company, but not new to the market. The, company tries this new product only with a view to get a share of the existing market of a, product of another company., 3.14 REASONS FOR THE DEVELOPMENT OF NEW PRODUCTS:, 1. Increased consumer selectivity: In recent years consumers have become more selective in, their choice of products. The purchasing power of the consumers has doubly increased and, their wants have become more sophisticated., 2. Product life cycle: every product has a life cycle. It grows declines and finally abandoned., When a product is finally abandoned it must be replaced by some other new product. Even, products crossing maturity stage yields lower profits., 3. New product is a basic profit determinant: New products generally increase the volume, and thereby the volume of profits. Even if the sales of existing products do not tend to, decline, certainly the profits on such products tend to decline. This necessitates the, introduction of new products., 4. New products are essential for growth: Innovating has become a philosophy necessary, for effective marketing. Expansion of products items helps in the growth of a organization., 5. Resources and environmental considerations: Natural resources which constitute the, basic raw materials for products are very much limited. They will be exhausted completely, in the years to come. Most of them are non-renewable. Therefore alternatives should be, found out before their complete exhaustion., 3.15 FACTORS TO BE CONSIDERED BEFORE INTRODUCING A NEW, PRODUCT:, A New product should not be added abruptly to the existing product line. Several factors are, to be considered before introducing a new product both by the producers and the middlemen., Those factors are:, (a) Manufacturer’s criteria for new products: A manufacturer should attempt a new product, only when the following conditions:, (i) Enough demand: there should be adequate market demand for the product. This is the, first and perhaps the most important criterion., (ii) Suitable for current environment: the manufacturing process should not pollute air or, water and the final product should not be harmful to the environment., (iii) Suitable to the present market structure: The product should fit into the company’s, present market structure. That is the existing sales force of the firm should be sufficient, to market the product., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , (iv) Production fit: the new product must fit in with the existing production facilities, manpower and management capabilities., (v) Financial considerations: The product should fit in from the financial point of view. An, attempt to develop a new product may be made only where the financial facilities are, adequate. Moreover there should be enough profit possibilities for the product., (vi) No legal objections: There should not be any legal objections. Patents must be applied,, labelling and packaging must meet the existing regulations., (vii) Managerial considerations: The management must have enough time and ability to deal, with the new product., (viii) Company’s image and objectives: The product should be in keeping with the, company’s image and objectives. A firm which is dealing in low priced goods should, not add an item that suggests prestige or status., (b) Middlemen’s criteria:, When retailers or wholesalers are considering whether to introduce a new product or not, they should use all the above criteria., (i) Relationship with the producer: The manufacturer’s reputation, the possibility of, getting exclusive sole right in a given area, the type of promotional help given by the, manufacturer etc should be examined in detail., (ii) In store policies and practices: considerations such as selling efforts are required for, the new products, how does the new product fit in with the store policies regarding, repairs, service, credit delivery etc., 3.16 STAGES IN THE DEVELOPMENT OF NEW PRODUCT:, The process of starting the production of a new product is called the process of product, development. A new product goes through the following stages:, 1. Generation of ideas: Idea generation is the first stage of product development. For, developing a product, company takes the idea from his internal and external sources., Internal sources of idea generation is done through basic research, idea from production, department , sales men's idea, top management's idea. External sources of idea generation, includes business magazine, competitors, necessity of consumers, inventor's idea., Idea should be helpful for satisfying consumer's need., 2. Evaluation / screening of product Idea: It is the second stage or step of development of, new product. After collecting large number of idea for making new product, company, will analyze them with his technical screening system or team and drop bad idea. Idea, screening is helpful :, a) to reduce the chance of development of product on the basis of poor idea., b) to reduce the chance of not developing the product on the basis of very good, idea., 3. Business Analysis of idea: This is the third stage of development of new product. In this, stage, company calculates his overall return on investment, if company will launch the, product. If it is profitable, company will produce it otherwise, drop his plan because, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , company's money is not money of one man or employee but this money is invested by, large number of investors. So, board of directors cannot waste it by unprofitable, production of new product., 4. Actual Product development: Until the product development stage, the existence of the, product was only on paper. After this, company's R and D department produces one or, two sample of products and check it. These pilot models are produced in small quantities, with certain specifications. Laboratory tests and other technical evaluations necessary to, determine the production feasibility are also made., 5. Test Marketing: In this step or stage, company launches product in very small part of, market as market test and for knowing the interest of consumers, dealers and retailers. If, consumers' reaction is good, company will move ahead with commercialization, 6. Commercialization : In this step, company manages large scale production, marketing, and commercialization of new product with following marketing strategy., 3.17 REASONS FOR THE FAILURE OF NEW PRODUCTS:, 1. Inadequate market analysis: Inadequate Market research is one of the important reasons, for the failure of the new products. if the launched product does not satisfy the wants,, needs and preferences of the customers the product might not be accepted by the, customers. This results in the failure of the new product., 2. Product defects: it is common to have technical defects in the new products. These, defects have to be set right through the response from test marketing. If the products are, launched with the defects it might result in the failure., 3. Higher cost: products introduced with high price in the competitive market, might result, in the failure of the product. The company must change its pricing policy., 4. Poor timing: Too early or late entry into the market is a common cause of failure. Kinetic, Merlin was launched in pune in 1991.It was a 3 in 1 set consisting of a colour television, a, stereo with detachable speakers and a home computer. The product was targeted at the, Indian consumers who are fond of sophisticated gadgets to immediately adopt such an, innovative idea but in reality the idea was too advanced for the customers to digest at that, time because they were not exposed to such type of products before., 5. Competition; High competition in the market makes the entry of the new product, difficult. If the competitors are well set, then the cut throat competition might wipe away, the new product., 6. Insufficient marketing efforts: If the company does not give importance to the, marketing efforts and promotion of the new product, it might result in the failure., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 7. Inadequate sales force: the sales force which convinces the customers to buy the product, must be well trained and motivated. Inadequate sales force can result in the failure of the, new product., 8. Weakness in distribution/Distribution related problems: The new product fails if the, product is unable to meet the channel requirements. While developing the product the, channel requirements must be given adequate consideration. Eg: when NESTLE launched, its new chocolates the product and promotion was good but the product failed in the, distribution side because the company stipulated the product to be stored in refrigerators., The product faced two problems in the distribution side because it meant excluding a, number of retail outlets as they didn't have refrigeration facility and secondly the, chocolate was not picked by the customers as it was not seen upfront in the retail shops., Finally Nestle had to reformulate the product according to channel requirements., 9. Faulty product idea: The product often fail because faulty product idea. A good idea, can revolutionize the market but a bad idea may prove bitter to the firm or it may backfire, Eg: Polar industries in 1991 launched "cool cats" fan - decorated with cartoon characters, meant primarily for children. The fan was priced at premium; the idea was that children's, were increasingly becoming influencers in purchase decisions and to attract the kids with, the cartoon creatures and to position the product exclusively for kids. The product failed, miserably inspite of its huge advertising budget because when the fan was put on it did, not have any colour effect and the customer did not justify its premium price., 10. Improper Positioning: Product positioning is the image that product is projected to, attract consumers. Positioning means putting the product into the predetermined orbit., Improper positioning may affect the product success. Eg: Titan Tanishq introduced their, 18 carat jewellery and the product was positioned at elite segment but there was a, contradiction as to why these elite segment should go in for a low carat gold because the, norms for gold in India at that time was 22 carat. The product failed miserably in, retrospect Titan had to introduce 22-carat jewellery., , 3.18 CONSUMER BEHAVIOUR, INTRODUCTION: Profit from customer relationship is the major aspect of all business so, the basic objectives of any business are profit maximization through customer satisfaction., Today, consumer behaviour has become a central topic of modern marketing, since the, ultimate aim of marketing is consumer-satisfaction & profit-earning., CONSUMER & BUYER, CONSUMER: refers to a person who buys goods or services for his personal or household, use, &not for resale., BUYER: refers to a person who purchases goods either for resale or for his personal or, household use., 3.19 MEANING OF CONSUMER BEHAVIOUR:, MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , The process whereby individuals decide whether, what, when, where, how, &from whom to, purchase goods & services., Consumer behaviour is the study of how individuals make decisions on how to spend their, available resources (time, money, effort) on various consumption -related items., Consumer behaviour studied how individuals, groups & organizations select, buy, & dispose, of goods .services, ideas or experiences to satisfy needs & desires., Consumer behaviour is an attempt to understand & predict human actions in the buying role., In short consumer behaviour is the behaviour exhibited by consumers in planning, purchasing, & using goods & services., 3.20 DEFINITION OF CONSUMER BEHAVIOR, According to Waiters & Paul, “consumer behaviour is the process whereby individuals, decide what, when, where, how & from whom to purchase goods & services", According to Boone & Kurtz," Consumer behaviour is the outcome of both individual &, environmental influences", 3.21 CHARACTERISTICS OR FEATURES OF CONSUMER BEHAVIOUR, l) Consumer behaviour is the process by which individuals decide whether, what, when, from, where & how much to buy., 2) Consumer behaviour includes both mental & physical activities of a consumer, when he, wants to buy goods or services to satisfy his needs., 3) It covers both visible & invisible activities of a buyer., Visible activities: refers to physical activities like going to the market place, buying the, product & consuming it., Invisible activities: refers to mental activities like thinking about the product, deciding to, buy one brand instead of another brand & so on., 4) Consumer behaviour is influenced by internal factors like needs, habits, & also external, factors family, social groups, culture, status, position, economic & business conditions etc, 5) Consumer behaviour is an integral part of human behaviour & so, it cannot be separated, from human behaviour., 6) Consumer behaviour is dynamic. That is, it is constantly changing. So the marketing, management is required to adjust the marketing mix with changes in buyer behaviour., 7) The study of consumer behaviour is complex because the buying behaviour is the sum, total of the behaviour of a number of persons. For example, the decision to buy a car for a, family is made by all the members of the family jointly. This makes the study of consumer, behaviour complex., 8) Consumer behaviour is relatively a new field of study in the field of marketing. It has, assumed increasing importance under market oriented or customer oriented marketing, management., 9) Consumer behaviour has become the central topic of modern marketing, since the ultimate, aim of marketing is consumer satisfaction &profit- earning., 10) Consumer behaviour includes commutation, purchasing and consumption behaviour., 11) Study of Consumer behaviour helps in taking marketing decisions, like production, decisions, price decisions, distribution decisions promotion decisions etc., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 3.22 IMPORTANCE OF CONSUMER BEHAVIOR, 1)PRODUCTION POLICES: A study of consumer behaviour gives an insight into the, various factors or attributes in a particular product which prompt a consumer to purchase that, product., Such knowledge will help the producer to pay special attention to those attributes in his, product to attract the customers., Thus, a study of consumer behaviour helps a great deal in formulating the production, policies., 2)PRICE POLICIES: The study of consumer behaviour is equally important in formulating, prices of policies., For instance, if the buyers purchase particular products only because those products are, cheaper than the competitive products, then, the prices of such products cannot be raised.,  On the other hand, if some products are purchased by consumers because they enhance the, prestige & social status of the purchasers, then, the price of such products can be raised., Thus a study of buyer behaviour helps the marketers in formulating the price policies of, their products., 3) DISTRIBUTION POLICIES: That is decisions regarding channels of distribution., Knowledge of consumer behaviour is helpful in taking decisions regarding the channels of, distribution., Every marketer should make efforts to distribute the products through channels of, distribution most suited to the consumers., For instance, goods which are sold and bought because of low prices must have cheap &, economical distribution channels, goods like television sets refrigerators etc which require, after sale services must have different channels of distribution., Thus, decisions regarding channels of distribution are taken on the basis of consumer, behaviour., 4) SALES PROMOTION POLICIES: A study of consumer behaviour is also useful in, making decisions regarding sales promotion., It helps the marketers to know the buying motives of the consumers to make purchases &, to use the information gathered about buying motives in advertising media to awaken the, consumers desire to purchase., Thus, a study of consumer behaviour is helpful to the marketers in formulating sales, promotion policies., 5) EXPLORING MARKETING OPPORTUNITIES: A study of consumer behaviour, helps the marketers to understand the consumer’s needs, aspirations, expectations, problems,, etc., This knowledge will be useful to the marketers in exploring marketing opportunities &, meeting the challenges of the market., 6) MODERN PHILOSOPHY: It concerns with modern marketing philosophy – identify, consumers need & satisfy them more effectively than competitors.,  It makes marketing consumer oriented. It is the key to succeed., 7) USEFUL FOR DEALERS & SALESMEN: The study of consumer behaviour is not, useful for the company alone., Knowledge of consumer behaviour is equally useful for middlemen & salesmen to perform, their tasks effectively in meeting consumers needs & wants successfully., Consumer behaviour, thus, improves performance of the entire distribution system., MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 8) COMPETETION: Consumer behaviour study assists in facing competition. Based on, consumer’s expectations, more competitive advantage can be offered. It is useful in, improving competitive strengths of the company, FACTORS INFLUENCING CONSUMER BEHAVIOUR, A) CULTRAL FACTORS: Culture is a set of traditional beliefs & values that are, transmitted & shared in a given society., Culture influence in shaping the patterns of consumption & patterns of decision making., Culture is the total way of life & thinking patterns that are passed from generation to, generation., It includes set of learned beliefs, values, attitudes, morals, customs, habits, traditions,, philosophy., CULTURAL FACTORS INCLUDES:, 1)Broad Culture., 2) Sub Culture., 3) Culture Of Social Classes., 1) BROAD CULTURE: Culture determines the total pattern of life., Culture has tremendous effect on needs & preference. People react according to the culture, to which they belong., Every culture has its values, customs, tradition, & beliefs, which determines needs,, preference & overall behaviour., 2) SUB CULTURE: Each culture consists of smaller sub cultures., Each sub culture provides more specific identifications of members belong to it., SUB CULTURE INCLUDES, NATIONALITY: Every nation has its own unique culture that shapes & controls its, citizens., For example: Indian culture, Chinese culture, American culture etc. Consumers of different, nations hold different behaviour toward company's products & strategies., RELIGION It is powerful determinant of consumer needs & wants. Every religion has its, culture in terms of rules, values, rituals, & procedures that have impact on its followers., RACIAL GROUPS In each culture, we find various racial groups, and each of them tends, to be different in terms of needs, role, professions, habits, preference, & use of products.,  Each group responds differently to marketing offers due to cultural backgrounds. Example, for racial groups like scheduled tribe, scheduled caste, etc., GEOGRAPHICAL GROUPSEach geographical region represents specific, culture &, differs in term of needs ,preference, habits, usage rates, & usage product., Clothing, residence, food, vehicle, etc., are determined by regional climate & culture., 3) CULTURE SOCIAL CLASSES: Social crises are relatively homogeneous & enduring, divisions in societies, which are hierarchically ordered & whose members share similar, values, interest, & behaviour., In many cases, social classes are based on caste system., Members of different castes have their cultures & accordingly they perform certain roles., Social classes reflect income, occupation, education, their roles in society, & so on., Social classes differ in their dress, speech patterns, social status, and value orientation., Social classes can be divided like upper classes, middle classes, lower classes., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , B) SOCIAL FACTORS: Social factors affect consumer’s needs & preferences. Consumer, response to product, brand & company are influenced by social factors like family reference, groups & roles & statuses., 1) REFERENCE GROUPS: A persons reference groups are those groups that have a direct, or indirect influence on the person’s attitudes or behaviour., REFERENCE GROUPS ARE-:, A) PRIMARY GROUPS: It includes family, friends, neighbours’, colleagues with whom, the person interact more frequently & the nature of interaction is more of informal., B) SECONDARY GROUPS: It includes religious circle, members of various professional, bodies etc which is more formal & with whom a person interact less frequently., c) ASPIRATIONAL GROUP: this group is that group which a person does not belong to, any particular group., But however he or she is very much influenced by behaviour of that group & he/she would, like to be a member of that group in future., EXAMPLE: Every cricketer in India would like to be a member in the Indian cricket team., D) DISLIKE GROUPS: These reference groups include such groups whose values, or, behaviour a person rejects or dislikes. He tends to behave differently than those groups., 2) FAMILY: Family members can strongly influence buyer’s behaviour., The family is the most important consumer buying organization in the society., Marketers are interested in the roles & influence of the husband, wife & children on the, purchases of different product & services., When a purchasing power is dominated by husband or wife in the purchase of products, .They are shown as below,  HUSBAND DOMINANT: Automobiles, TV, computer etc., WIFE DOMINANT: washing machine kitchen appliances, home appliances., 3) ROLE AND STATUS: A person plays various roles in many groups throughout his life ., He has to play different role in family, club, office, or social organization., A role consists of the activities that a person is expected to perform according to the, persons around them., For example : A person is father for his children, husband for his wife, son for his parents,, friend for his friends, boss for his department, & the member of social organization. Each role, carries status., For example, sales manager has higher status than sales officer. People choose those, products that communicate or represent their roles & statuses in society .Therefore, marketer, must be aware of the status symbol potential and brands. The marketer should also try to, associate products & brands with specific roles & status., 4) SOCIAL CUSTOMS & TRADITIONS: Social customs, beliefs or traditions can be, associated with religion, caste or economic aspects., Such customs determine needs & preference of products in different occasions & hence,, affect consumer behaviour., 5) INC0ME LEVEL: Income level effect needs & wants of consumers. Preference of rich, consumers & the poor consumers differ., In case of quality, brand image, novelty, & costs there is wide difference between the rich, & the poor buyers., Marketers must be aware of expectations of different income of his target market, C) PERSONAL FACTORS: Along with cultural & social factors, personal factors also, affect one's buying decision., MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), ,  Personal factors are related with buyer himself., PERSONAL FACTORS INCLUDES:, 1) AGE & LIFE CYCLE STAGE: People buy different goods & services over their life, time they eat baby food in the early years, different types of foods in growing & matured, years & special diets in later years., People's taste in clothes, automobiles, cosmetics, furniture, Recreation is also related to, age., In shortas people enter in to different age there purchasing habits also changes., 2) OCCUPATION: A person’s occupation has a direct effect on his choice of goods &, services., Thus according to the occupation of people they purchase the goods., EXAMPLE: A clerk will purchase products which are economical & not burn his pocket., Whereas a top executive will purchase expensive goods & services., Thus marketers will have to identify which occupational group will be interested in their, products & work out marketing strategies to communicate about their products & services to, the relevant occupational group & induce a positive buying motive in the particular, consumers., 3) ECONOMY/ECONOMIC FACTORS: A person’s economic situation will affect, product choice., The buying powers on economic factors are as follows, A) PERSONAL INCOME/DISPOSAL INCOME: It refers to those income where, consumer after spending his income on tax & other debts, the remaining income (money), which is left he spends for buying durables or luxuries goods., B) FAMILY INCOME: The surplus income in the entire family after deducting expenditure, on basic needs of the family is made available for buying durable goods., Thus the aggregate income of all members of the family determines the buying power of, the individual., C) INCOME EXPECTATION: The buying behaviour also depends on the expectation of, the future income., If a person expects future rise in his income, he purchases durables such as scooter, car, refrigerators, sofa set etc, on hire purchases or instalment basis., If his future income is likely to decline, he will restrict current expenditure to bare, necessities., D) SAVINGS: When a consumer decides to increase his savings his spending on consumer, durables will decrease., Thus when savings increases spending decreases., E) LIQUIDITY POSITION: The liquidity position of a person refers to his holding of cash, & assets which can quickly convertible into cash,., EXAMPLEBank balance, marketable securities etc., If consumer has adequate liquid assets, he goes in for buying consumer durables,, fashionable items, and vehicles as it enhances his purchasing power., F) STANDARD OF LIVING: Standard of living refers to the goods & services a person is, habituated to use., If there is rise in income his standard of living increases., If there is fall in income his standard of living decreases., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , 4) LIFE STYLE: A person life style is the person’s pattern of living in the world as, expressed in the person’s activities, interest & opinions., Life style of consumers can be measured by technique called psycho graphics., PSYCHOGRAPH1CS-> It is a new technique for analyzing & predicting consumer, behaviour., It tells how people spend their money, what are their major interests, what are their patterns, of work & leisure, what are their opinions of social & political issues etc., 5) PERSONAL1TY & SELF CONCEPT:, PERSONALITY: Personality of an individual refers to his personal traits & qualities which, determine his behaviour., The personality is made up of qualities possessed by a person like self-confidence,, shyness, creativity, adaptability, aggressiveness, etc., Personality of consumers has influence on his brand preferences & choice of product., SELF CONCEPT/SELF IMAGE: Self concept implies what one thinks of him., D) PSYCHOLOGICAL FACTORS:, 1) MOTIVATION: It refers to inner state of a person & identity with need fulfilment, Motivation factor can be explained with the help of Maslow's need of hierarchy., 1) Physiological needs: They ore biological wants such as food, clothing, air, water, sleep, etc., 2) Safety needs: These are wants relating to personal safety & security like job security,, personal security, income security etc., 3) Social needs: As man is a social being he is therefore interested in conversation,, sociability, exchange of feelings, love, sharing job etc., 4) Esteem needs /ego needs: These needs are related to ego, recognition, status, prestige,, knowledge, self respect., 5) Self actualization needs: These needs are concerned with creativity & self expression of, an individual., Thus marketers will have to keep in mind the role played by needs & motivation while, working on the buying motive of the target consumers., 2) PERCEPTION: It is the process of selecting, organizing & interpreting or attaching, meaning to events happening in environment. Even the perception also leads to the one of the, important factors effecting consumer behaviour., 3) LEARNING: Learning means the changes in behaviour of persons due to previous, experiences., Learning theory helps us in understanding "brand loyalty & patronizing a firm., 4) BELIEF & ATTITUDES:, BELIEF: Through doing & learning, people acquire beliefs & attitudes. These in turn,, influence their buying behaviour., A belief is a descriptive thought that a person has about something., Marketers are interest in the beliefs that people formulate about specific products & services,, because these beliefs make up products & brand images that affect buying behaviour., If some of the beliefs are wrong & prevent purchase, the marketer will want to launch a, campaign to correct them., ATTITUDES: Attitude describes a person’s relatively consistent evaluation, feelings &, tendencies toward an object or idea., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , An attitude is a person’s favourable or unfavourable evaluation of emotional feelings &, action tendency towards some objects or idea., , Consumer Behavior - Marketing Strategies, Marketing strategies and tactics are normally based on explicit and implicit beliefs about, consumer behaviour. Decisions based on explicit assumptions and sound theory and, research are more likely to be successful than the decisions based solely on implicit, intuition., Knowledge of consumer behaviour can be an important competitive advantage while, formulating marketing strategies. It can greatly reduce the odds of bad decisions and market, failures. The principles of consumer behaviour are useful in many areas of marketing, some, of which are listed below −, Analyzing Market Opportunity, Consumer behaviour helps in identifying the unfulfilled needs and wants of consumers. This, requires scanning the trends and conditions operating in the market area, customer’s, lifestyles, income levels and growing influences., Selecting Target Market, The scanning and evaluating of market opportunities helps in identifying different consumer, segments with different and exceptional wants and needs. Identifying these groups, learning, how to make buying decisions enables the marketer to design products or services as per the, requirements., Example − Consumer studies show that many existing and potential shampoo users did not, want to buy shampoo packs priced at Rs 60 or more. They would rather prefer a low price, packet/sachet containing sufficient quantity for one or two washes. This resulted in, companies introducing shampoo sachets at a minimal price which has provided unbelievable, returns and the trick paid off wonderfully well., Marketing-Mix Decisions, Once the unfulfilled needs and wants are identified, the marketer has to determine the, precise mix of four P’s, i.e., Product, Price, Place, and Promotion., Product, A marketer needs to design products or services that would satisfy the unsatisfied needs or, wants of consumers. Decisions taken for the product are related to size, shape, and features., The marketer also has to decide about packaging, important aspects of service, warranties,, conditions, and accessories., Example − Nestle first introduced Maggi noodles in masala and capsicum flavors., Subsequently, keeping consumer preferences in other regions in mind, the company, introduced Garlic, Sambar, Atta Maggi, Soupy noodles, and other flavours., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , Price, The second important component of marketing mix is price. Marketers must decide what, price to be charged for a product or service, to stay competitive in a tough market. These, decisions influence the flow of returns to the company., Place, The next decision is related to the distribution channel, i.e., where and how to offer the, products and services at the final stage. The following decisions are taken regarding the, distribution mix −, , , Are the products to be sold through all the retail outlets or only through the selected, ones, , , , Should the marketer use only the existing outlets that sell the competing brands? Or,, should they indulge in new elite outlets selling only the marketer’s brands?, , , , Is the location of the retail outlets important from the customers’ point of view?, , , , Should the company think of direct marketing and selling?, , Promotion, Promotion deals with building a relationship with the consumers through the channels of, marketing communication. Some of the popular promotion techniques include advertising,, personal selling, sales promotion, publicity, and direct marketing and selling., The marketer has to decide which method would be most suitable to effectively reach the, consumers. Should it be advertising alone or should it be combined with sales promotion, techniques? The company has to know its target consumers, their location, their taste and, preferences, which media do they have access to, lifestyles, etc., Market segmentation depends on two levels the strategic level and the tactical level. At a, strategic level, it has a direct link with the decisions on positioning. At a tactical level, it, relates with the decision of which consumer groups are to be targeted. We will discuss here, the parameters based on which a market can be segmented., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , Psychographic Segmentation, Psychographic Segmentation focuses on group customers according to their life-style and, purchasing psychology. Many businesses offer products based on the attitudes, beliefs and, emotions, ideas, and perceptions of the target market. Psychographic segmentation includes, variables such as Activities, Interests, Opinions, Attitudes, and Values., Behavioralistic Segmentation, Markets can be segmented on the basis of buyer behaviour. It is because the buying, behaviors of consumers differ based on the geographic, demographic and psychographic, factors. Marketers often find practical benefits in using buying behaviour as a separate, segmentation basis in addition to factors like geographic, demographics, and, psychographics., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , UNIT III- MULTIPLE CHOICES QUESTIONS:, 1. Firm uses any existing brand to introduce in market as a new product, brand is classified as, a. brand extension, b. sub-brand, c. parent brand, d. product extension, 2. Branding strategy is also called________________a. brand architecture, b. branding rate, c. brand earnings, d. brand responsiveness, 3. When companies combine existing brand with new brands, brands are called, a. parent brand, b. product extension, c. brand extension, d. sub-brand, 4. Parent brand if it is associated with multiple products in brand extension is called, a. product extension, b. sub-product, c. family brand, d. parent company, 5.Brand which is result of extension in brand or sub-brand is classified as, a. brand extension, b. sub-brand, c. parent brand, d. product extension, 6.Activities carry by company to design and produce a differentiated container for particular, product is classified as, a. guarantees, b. warranties, c. labeling, d. packaging, 7. Formal statement by manufacturer of product regarding its performance is classified as, a. guarantees, b. warranties, c. labeling, d. packaging, 8. Labeling, packaging are associated with:, a. Price mix, b. Product mix, c. Place mix, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , d. Promotion mix, 9. The goods which satisfy human wants directly are called:_______________, a. Consumer’s goods, b. Producers’ goods, c. Public goods, d. Intermediate goods, 10. The satisfaction of human want is called:, a. Consumption, b. Production, c. Distribution, d. None of these, 11. In 'stages of adoption process', customer decides to become regular user in, a. awareness stage, b. interest stage, c. evaluation stage, d. adoption, 12. According to research, there are four factors that influence consumer buyer behavior:, a. psychological, personal, social, CRM systems, b. cultural, organizational, personal, psychological, c. cultural, social, personal, psychological, d. none of the above, 13. The psychological factors influencing consumer behavior are;, a. motivation, perception, learning, beliefs and attitudes, b. culture, subculture, social class, c. reference groups, family, roles and status, d. all of the above, 14. The consumers' five steps of adopting a new product refer to which of the following?, a. Awareness, interest, evaluation, trial, adoption, b. Awareness, promotion, evaluation, trial, adoption, c. Adoption, interest, evaluation, trial promotion, d. Awareness, interest, cash cows, trial, adoption, 15. Consumer behavior consists of which of the following activities?, a. Obtaining, b. Consuming, c. Disposition, d. All the above, 15. Consumer behavior can be defined as:, a. a field of study focusing on marketing activities, b. a field of study focusing on consumer activities, c. a study of pricing, d. the study of decision rules, 16. ______________refers to how consumers get rid of the product and packaging., , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , a., b., c., d., , BBA(ALM), , Purchase, Obtaining, Consumption, Disposal, , 17. Successful organizations believe:, a. Consumers are influenced by the needs and wants of the organization., b. Marketing is the process of transforming or changing an organization to have, what people will buy., c. Marketing is not really important., d. Marketing is the process of transforming consumer wants into the firm's product, offering., 18. Which of the following areas can be better understood by studying consumer behavior?, a. Consumer preferences for different advertisements, b. Financial decisions, c. Voting in elections, d. All the above, 19. “Only the customer can fire us all” implies that:, a. Consumers determine which firms survive and which fail., b. Customers can be manipulated into buying goods and services., c. Customers are concerned only when prices go higher., d. Firms should not bother with research as the customer is fickle., 20. Consumer product manufacturers study consumer behavior to influence:, a. brand choice, b. consumption, c. purchase, d. All of the above., 21. Consumer analysis should include___________:, a. consumer trends, b. communication methods to reach target markets, c. models to predict purchase and consumption patterns, d. It should include all of the above., 22. ____ is an understanding of consumers' expressed and unspoken needs., a. Consumer analysis, b. Consumer insight, c. Consumer focus, d. None of the above., 23. Customizing goods or services for individual customers in high volumes and at relatively, low costs is known as:, a. target marketing, b. mass customization, c. niche customization, d. niche marketing, , MARKETING MANAGEMENT

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SRINIVAS UNIVERSITY, , BBA(ALM), , helps to understands how consumers are influenced by, , 24., their environment., a. Consumer behaviour, b. Motives, c. Perception, d. Learning., , 25. Groups that have a direct or indirect influence on a person‘s attitudes or behaviour is, known as, ., a. Reference groups, b. Family, c. Roles, d. Status., , 8 MARKS QUESTIONS, 1. “The most successful symbols allow consumers to identify a product or company even if, the name is not visible because of branding”. Explain the functions and advantages of, Branding., 2. On the basis of the number of brands used by a manufacturer or dealer to different, products, brands can be classified into different types, Elaborate., 3. Packaging has played an important role in the success of many products so state the, meaning of Product Packaging. Explain its different functions., 4. Labelling is one of the important product features. Packaging, branding and labelling go, together and constitute an integral part of product planning. Explain the advantages and, disadvantages of Labelling?, 5. “From its birth to death, a product exists in different stages and in different competitive, environments. Its adjustment to these environments determines to a great degree of how, successful its life will be”. Elucidate., 6. “Consumer behaviour is the outcome of both individual & environmental influences”, Explain the features and importance of consumer behaviour?, 7. Product development incorporates a product’s entire journey, so what is new product, development? Explain the stages of New Product Development., 8. Write a note on new product development? Explain the reasons for the failure of New, Product Development?, 9. Consumers are a part of marketing activity so what is consumer behaviour? Explain the, socio-cultural factors influencing consumer behaviour?, 10. What is consumer behaviour? Explain the economic factors influencing consumer, behaviour?, 11. “In modern marketing consumer is a God” now explain the consumer behaviour? Explain, the personal and other factors influencing consumer behaviour?, 12. What strategies would you recommend, to be followed during the different stages of, Product Life Cycle?, , MARKETING MANAGEMENT