Unit 3
Unit 3
Convenienc Raw
e products materials
Fabricating
Shopping
products
Installations
Specialty
products Accessory
Equipment
Operating
Unsought Supplies
products
Business
Service
New Product Development Process
Step • Idea Generation
1
Step • Commercialization
7
Product Line and Product Mix Strategies
Product line is a closely related group of products for essentially
similar use and technical and marketing considerations.
Line Stretching
Product line Decision
Both-Way Stretch
Line Filing
Product Offer a basic Offer product Diversify brands Phase out weak
product extensions, service, and items models
warranty
Sales Promotion Use heavy sales Reduce to take Increase to Reduce to minimal
promotion to entice advantage of heavy encourage brand level
trial consumer demand switching
Marketing Strategies in the Various Stages
of Product Life Cycle
• Introduction Stage
♣ Rapid skimming-launching the product at high
price and high promotion level
♣ Slow skimming-launching the product at high price
and low promotional level
♣ Rapid penetration-launching the product at low
price with significant promotion
♣ Slow penetration- launching the product at low
price and minimal promotion
Marketing Strategies in the Various Stages
of Product Life Cycle
• Growth Stage
♣ Improving product quality and adding new product
features and improved styling;
♣ Adding new models and flanker products
♣ Entering new market segment;
♣ Increasing distribution coverage and entering new
distribution;
♣ Shifting from product-awareness advertising to product-
preference advertising;
♣ Lowering prices to attract the next layer of price-sensitive
buyers.
Marketing Strategies in the Various Stages
of Product Life Cycle
• Maturity Stage
♣ Market modification
♣ Product modification
♣ Marketing-mix modification
Marketing Strategies in the Various Stages of
Product Life Cycle
• Decline Stage
♣ Increasing the firm’s investment(to dominate the market or
strengthen its competitive position);
♣ Maintaining the firm’s investment level until the uncertainties
about the industry are resolved;
♣ Decreasing the firm’s investment level selectively, by
dropping unprofitable customer groups, while simultaneously
strengthening the firm’s investment in lucrative niches;
♣ Harvesting (“milking”) the firm’s investment to recover cash
quickly;
♣ Divesting the business quickly by deposing of its assets as
advantageously as possible.
Product and Branding Practice in Nepal
• Physical goods are considered as product.
• Service is growing in Nepalese market.
• Mostly, ideas are promoted in social marketing
• Most of the FMCG products are standardized
• Nepalese market use both product line and product mix
strategies
• Majority of the physical goods are branded
• Service has also started branding
• There is lack of professionalism
PRICING
• Price is the value placed on what is exchanged.
Pride and Ferrel
• Price is the sum of all the values that
customers give up in order to gain benefits of
having or using product or service.
Phlip Kotler
• Price is the amount of money and/or other
items with utility needed to acquire a product.
Stanton
Objectives and Methods of Pricing
Objectives
of Pricing
Factors affecting
decision making
External Factors
Internal Factor
i. Market Demand
i. Pricing Objectives
ii. Competition
ii. Costs
iii. Market Intermediaries
iii. Other elements of marketing mix
iv. Government
iv. Pricing responsibility v. Pressure Groups
Developing Pricing Strategies and Program
• Pricing strategy is a course of action framed to affect and guide
price determination decisions.
• These strategies help realizing pricing objectives and answer
different aspects of questions like; how will price be used as a
variable in the marketing mix, such as
• New product introductions,
• Competitive situations,
• Government pricing regulations,
• Economic conditions, or
• Implementation of pricing objectives
• More than one pricing strategy may be selected to address the
needs of different markets or to take advantage of opportunities in
certain markets.
Developing Pricing Strategies and Program
Methods of Pricing
Multi-Channel or
Horizontal
Vertical Conflict Inter-type
Conflict
Conflict
Logistic Management Decision
Logistic Management is a supply chain
management component that is used to meet
customer demands through the planning,
control and implementation of the effective
movement and storage of related information,
goods and services fro origin to destination.
Logistic Management helps companies reduce
expenses and enhance customer service.
Components of Logistics
Management Decision
Order
Processing
Organizational
Responsibility for Inventory
Physical Management
Distribution
Components
Other
Transportation
Components
Warehousing
Order Processing
• It includes: Receiving order, Recording order,
Filing order, Executing order, Credit and
collection
The person in charge if order processing must
be careful for following aspects:
• Assembling product must be exactly as per demand of customer
• Execution must be as quick as possible
• The dispatch must be in appropriate mode of transportation.
• Credit discount and other allied benefits must be offered as per policy.
• Assessing the effectiveness of order processing
Classification of Warehouse
On the Basis of Commodity
• Special Commodity Warehouses
• Cold Storage Warehouses
• General Warehouses
• Mode of transportation
• Costs and availability
• Suitability and credibility
• Relations
• Legal provisions and restriction
• Ownership
Organizational Responsibility for Physical
Distribution
• The entire range of physical distribution must be systematic and even
scientific for effective distribution of products to the ultimate users.
Inventory Management
• Types of cost associated with inventory are holding cost, cost of stock out
or storage, reordering cost
• A company has to decide on total annual need of inventory, ordering size,
and level of inventory at which new order should be placed
Other Components
• Material Management
• Communication
• Sorting and packing
• Customer service, etc.
Market Logistics
“Market logistics involves planning,
implementing, and controlling the physical flows
of materials and final goods from points of origin
to points of use to meet customer requirement
at profit”
Objectives and importance
OBJECTIVES OF
PROMOTION
Components
Publicity of Promotion
Public
Relations
Direct
Marketing
Public Relations
• Public relations is a management tool designed
to favorably influence attitude toward an
organization, its products and its policies.
Stanton
• Public relation is a function or activity that aims
to establish and protect reputation of a company
or brand and to create mutual understanding
between the organization and the segments of
the public with whom it needs to communicate.
Dictionary of Marketing
Public Relations
Media
Media relation
relation Building
Building awareness
awareness
Announcing
Announcing new
new products
products
Group
Group relations
relations
Nature of Building
Building and
and maintaining
maintaining customers
customers loyalty
loyalty Objectives
Public of Public
Relations Relations
Lobbying
Lobbying
Building
Building relationship
relationship with
with opinion
opinion leaedrs
leaedrs and
and others
others
Publicity
• Publicity is any communication about an
organization, its products or policies through the
media that is not paid for by the organization.
Stanton
• Publicity is a special form of public relations that
involves any communication about an
organization, its product or its policies through
the media that is not paid for by the sponsoring
organization.
Dictionary of Marketing
Publicity
Third
Third person
person involvement
involvement Credibility
Credibility
Publicity
Publicity is
is free
free Greater
Greater readership
readership
Greater
Greater readership
readership
Cost
Cost benefit
benefit Importanc
Nature of e of
Publicity Publicity
Speed
Speed
No
No chance
chance of
of repition
repition
Sales Promotion
• Sales promotion consists of a diverse collection of
incentive tools, mostly short-term, designed to
stimulate quicker and/or greater purchase of
particular product/services by consumers or the
trade.
Philip Kotler
• Sales promotion is a form of promotion which
encourages customers to buy products by offering
incentives such as contests, coupons,
sweepstakes, samples, free gifts and so on.
Dictonary of Marketing
Sales Promotion
Roles and Methods or
Objectives Tools
Importance
• Importance of Sales • To introduce new product • Consumers
• To identify new customers promotion
Promotion to Producer • Channel/Trade
• Importance of Sales • To combat competitors’
marketing efforts promotion
Promotion to
Intermediaries • To stabilize the fluctuating • Sales-force
sales pattern promotion
• Importance of Sales
Promotion to Consumers • To increase brand
awareness
Personal Selling
• Personal selling is the personal communication of
information to persuade somebody to buy something.
Stanton
• Personal selling is one to one communication
between seller and prospective purchaser.
Dictionary of Marketing
• Personal selling is face-to-face interaction with one or
more perspective purchasers for purpose of making
presentations, answering questions, and procuring
orders.
Philip Kotler
Personal Selling
Dynamic
Dynamic Role
Role Producers’ Salesperson
Producers’
PioneerSalesperson
Pioneer
Merchandising
Merchandising
Dealers servicing
Dealers servicing
Social
Social Relations
Relations
Wholesalers’
Wholesalers’ Salesperson
Salesperson
Channel
Channel of
of Communication
Communication
Roles and
Importanc Types
Actual
Actual Sale
Sale
e
Retailers’
Retailers’ Sales
Sales Person
Person
Focus
Focus on
on Perspective
Perspective Customers
Customers
Personal Selling
Sales Process of Indoor Sales Sales Process of Outdoor
Drawing
Drawing
Attention
Attention
Reception
Reception Inquiry
Prospecting customer
Replying
Replying the
the Demonstrati
Demonstrati
Objectives
Objectives on
on of
of Goods
Goods
Additional Commendation
Selection
Selection of
of Additional Commendation
and
and Seeing-off
Pre-approach
Seeing-off
Goods
Goods Sales
Sales with Praise
with Praise
Approach
Meeting objectives
• Honesty
Mental Qualities • Loyalty
• Patience and enthusiasm
• Adequate intelligence Professional Qualities
• Maturity
• Complete in salesmanship
• Self-confidence
• Professional ethics
• Understanding
Advertising
●
To assist salespersons
●
Demand creation ●
To inform about new products
●
Increase in sales ●
To create new demand
●
Brand loyalty ●
To create and maintain image and goodwill
●
Wider communication approach ●
To reduce cost
●
Product information ●
To remind and reinforce customers
●
Employment generation
Steps in Developing Effective Communication
Interest
Desire
Acti
on
4. Select the Communication Channels
• Personal Communication Channel
• Non-personal Communication Channel
5. Establish the Total Communication Budget
• Affordable method
• Percentage-of-sales method
• Competitive-parity method
• Objectives-and-task method
6. Decide on the communication Mix
Promotional Tools
– Advertising
– Sales Promotion
– Public relations and publicity
– Personal selling
– Direct marketing
• Factors in Setting the Marketing Communication Mix
– Type of product market
– Push-versus-pull strategy
– Buyers-readiness stage
– Product-life cycle stage
– Company market rank
7. Measure the Communications’ Results
8. Manage the Integrated Marketing Communication
Process
Promotion Practices in Nepal
Objectives of Promotion
• General objectives of promotion are informing, persuading,
reminding, reassuring and image building in Nepal.
Promotion Mix
• In Nepal, promotion mix decision is dominated by advertising
and sales promotion.
Factors Affecting Promotion Mix in Nepal
• Promotion mix decision are highly influenced by promotion
objectives.
• It is also affected by competitors promotion min decisions.
• One of the major determinants is promotion budget
Concept of Marketing Control
According to Kotler, “Marketing control is the
process of measuring and evaluating the results of
marketing strategies and plans and taking
corrective action to ensure that marketing objects
are attained.”
Marketing Control can be defined as “the process of
measuring and evaluating the results of marketing
strategies and plans, and taking corrective action
to ensure that marketing objectives are archived.”
The Control Process
Fixation of
Standard
Taking Measuremen
Corrective t of
Action Performance
Comparing
Analysis of Performance
Deviations with
Standards
Types of Marketing Control
Types of Marketing Control
1. Annual Plan Control:
Following five measures are used in annual
plan control:
• Analysis of different sales
• Analysis of market share
• Analysis of Market expenses to sales
• Financial Analysis
• Analysis of customer and stakeholder atitudes
Types of Marketing Control
2. Profitability Control:
Process of Marketing Profitability Analysis :
Identifying Functional Expenses
Taking Action
Types of Marketing Control
3. Efficiency Control:
Efficiency control can improve efficiency of marketing
department in two ways – one is, improving ability to
contribute more in reaching the goals, and the second is,
reducing expenses or wastage.
Types of Efficiency Control:
• Sales Force Efficiency Control
• Advertising Efficiency Control
• Sales Promotion Efficiency Control
• Distribution Efficiency Control
• Marketing Research Efficiency Control
Types of Marketing Control
4. Strategic Control:
Strategic control implies a critical review of overall
marketing effectiveness in relation to broad and
long term objectives and firm’s response to
marketing environment.
Methods or Tools:
• The Marketing Effective Review
• The Marketing Audit
• The Marketing Excellence Review
• The Ethical and Social Responsibility Review
Marketing Control in Nepal
Marketing control in Nepal can be explained as follows:
• Marketing Control is neglected part of Nepalese
Marketing Management.
• There is big observed gap between theory and practice
about making control.
• There is provision for systematic control systematic
control system in Nepalese organization.
• Most of the marketers are ambition while setting
standards. Standards set are unrealistic.
• Actual performance is below the standard.