14. Marketing Management

14.  Marketing Management

14.1 Basic concepts on marketing  

Marketing can be identified as a wide process which starts and ends from consumer itself and is conducted to attain the aims of the business through fulfilling consumer needs and wants.

Various definitions have been presented on marketing.

Marketing is social process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with other.

-          Pilip Kotler -

 Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges tthat satisfy individual and organizational goals.

-          American Marketing Association -

 According to the above definition, Marketing is Social and managerial process for the satisfaction of needs and wants of individuals and organizations.

The importance of the marketing can be presented as follows. Marketing is important to the businessman, the consumer as well as for the economy.

Market

Collection of all true and potential customers having the same needs and wants and with the willingness and the ability to satisfy them through a transaction process is  known as the market. In other words, collection of all true and potential customer for a product is the market. While various classification of the market could be seen, two classifications can be shown as follows

1. To the needs and preference of customers in the market, according two primary types of markets can be illustrated as follows.

i. Consumer market

The market where customers demand goods and services for personal or household consumption.

ii. Industrial goods market/ b 2 b market

The market where the exchange of capital goods, various resources and industrial services take place.

2. The basic market that is use in the modern exchange economy can be classified under five sections.

1.      Resource market.

2.      Manufacturing market

3.      Government market.

4.      Consumer market.

5.      Intermediary Market.

The mode of the market in the modern exchange economy can be shown as follows.

 

The core concepts of marketing are the basic factors that the marketing process is based.

The core concepts of marketing can be listed as follows.

v  Needs, Wants and demand.

v  Target market, Positioning, Segmentation

v  Offerings and Brands

v  Marketing Channels

v  Paid, Owned and Earned media

v  Impression and Engagement

v  Value and Satisfaction

v  Supply chain

v  Competition

v  Exchange

v  Transaction

v  Relationship

v  Marketing Environment

Needs, Wants and Demand

The state of felt deprivation of some basic satisfaction in man or an essential condition that must be fulfilled to ensure the survival of the man is known as needs.

 Wants

Desire or preference for a certain commodity or a service with regard to a particular need or else the various ways of fulfilling the needs are known as wants.

 Demand

The need to buy a particular commodity or a service with the desire and the ability to pay can be defined as the demand. While the various ways of fulfilling needs and wants, a demand is created when need and ability to pay are combined.

Target Market, Positioning and Market Segmentation

Focusing on a specific consumer group from the total market by a producer to sell his products or introducing his product to the selected consumer group itself can be stated as target market.

 Building up a favorable attitude in the consumer's mind regarding a specific product is referred to as positioning.

Dividing the total market so as the similar consumer groups to be included into the same sub set is referred to as market segmentation.

Offering and Brands.

A bundle of values presented by businessmen to satisfy a customer's needs is referred to as offerings. These offerings are fulfilled through provision of products. Brand is a group of words, a logo or a combination of there to distinguish no’s productfrom competition products in the market.

Marketing Channels

Various accesses that the marketers use to reach the target market can be referred to as marketing channels. Communication channels, distribution channels and service channels are the three main marketing channels.

 Paid Owned and Earned Media.

Advertising advertisements on media such as television, magazines, live shows and on display advertisements through paying money by a firm is referred to as paid media.

Advertising advertisements by a firm on such as its web pages and Facebook pages is referred to as owned media.

The communication voluntarily done with regard to the brand of the firm by consumers and outsiders of the firm through media such as verbal and viral marketing is referred to as earned media.

Impression and Engagement

From the producer's perspective the number of times that the communication media used by him reach the customer among the other communication media is referred to as impression

Engagement is the extent of a customer's attention and active involvement with a communication.

Value and Satisfaction

Value is the total evaluation done by the consumer regarding the ability of a product to satisfy consumer need. For this evaluation, the three factors such as the quality of the product, services and price are considered here. Though the quality and the provision of service assist in uplifting the value of a product, the price will be the factor that influence the reduction of the value

The gratification gained by the consumer from a product which is produced as the wish of a consumer is referred to as satisfaction. Accordingly, the relationship between the value and satisfaction is apparent. Consumer becomes dissatisfied if the value expected from a product is not received, the consumer becomes satisfied if he receives the value expected from a product similarly and when the product provides a higher value than expected value the consumer is delighted. Perception about these concepts are bound according to individual base.

Supply Chain All the flows from planning of infrastructure for creating a product to implementing it, from ordering of raw materials for producing products to handing over them to consumers and also the other flows thereafter that assist in providing customer's needs are known as supply chain.

 Competition

The influence creates from potential and existing identical (similsr) products; and substitute products is referred to as competition. The competitions are of few levels.

v  Brand Competition

v  Industry Competition

v  Form Competition

v  Generic Competition

 Exchange

Transferring the ownership of something with value between two parties, on the agreement of both parties is known as the exchange. There are few features that necessarily should be for the completion of an exchange.

·         There should be minimum of two parties.

·         Each party should possess something valuable.

·         Each party should be capable of communication and delivery of views among each and every party.

·         Each party should have a freedom to accept or reject the exchange offer.

·         Each party should believe it is appropriate to deal with the other party.

Transactions

Transaction can take place between two or more parties with an exchange. Trading of a value between two or more parties can be interpreted as a transaction. Transaction is an evidence for an exchange.

Relationships

If the exchange and transaction are to take place, formation of better relationships among each and every party (customers, suppliers, distributors) is necessary. In modern-days, this is referred to as relationship marketing. Building up of satisfactory and profitable long term mutual relationship among the main parties such as customers, suppliers, distributors and other parties that associate with the business organization is known as relationship marketing.

Marketing Environment

Functional and wide environmental factors and forces that influence the strategies and marketing abilities of a business is referred to as marketing environment that is to say that the marketing environment can to categorized into two as functional environment and wide environment (Marketing functional environment consists of parties related to the business such as suppliers, distributors, marketers and target customers. Wide environment consists of democratic, economic, natural, technological, political, legal, social and cultural environment

Marketing is important for businessman, consumer and the economy.

Importance of Marketing to the Businessman

1.      To attract and retain the customers

2.      To maintain the success of the institution

3.      To earn profits continuously

4.      To promote the satisfaction of proprietors and employees

5.      To face the competition successfully

6.      To expand the market share

 Importance of Marketing to Consumers

1.      To get maximum satisfaction for the amount of money spent.

2.      To be informed by getting information about the market.

3.      To make the goods and services abundant in the market.

4.      To purchase goods and services easily (with less effort).

5.      To uplift the living condition through consumption of various goods and services

Importance of Marketing to the Economy

1.      Diversification of products

2.      Expansion of production

3.      Increasing the employment

4.      Eradicating inequalities in distribution of income

5.      Developing the entire economy of the country

14.2 Evolution of marketing concepts

The views on changes happened timely with regard to marketing is known as marketing philosophy. Marketing concepts, technological improvement, the growth of consumers’ income have mainly influenced for the expansion of marketing philosophy.

The evolution of marketing philosophy

v  Production concept

v  Product concept

v  Selling concept

v  Marketing concept

v  Customer concept

v  Social marketing concept

v  Holistic marketing concept

Production Concept

This is the oldest concept that guided marketers. This is a seller oriented concept. The meaning of this concept is that through making the products of producers' preference abundant in the market under low cost, there is an ability of selling their products successfully. It did not give much concentration towards the consumer needs, the businessman focused only on increasing the volume of the production. According to this concept, the marketers focused on the following functions.

·         Increasing the production as much as possible / making the production efficient.

·         Low cost (Minimizing the unit cost)

·         Making a wider and more efficient delivery

Product Concept

This is also a seller oriented concept functioning with the vision that the consumer would come forward to buy the product of high quality and performance as well as with modern and attractive features in it. When following this concept marketing managers focused on the following functions.

·         Focusing on the quality of the products of the firm as they wish.

·         Conducting research and development activities by dedicating their time and energy continuously to make their products superb.

Selling concept

This concept relates that the products cannot be sold, unless the consumer is motivated. In other words, the profit and market share can be increased through increasing sales by following competitive selling policies and selling promotional tools. This is also a marketer based concept.

Marketing Concept

The meaning of this concept is producing goods that can be sold, instead of producing products that can be produced. That is to say, that goods and services should be produced having identified the needs and wants of the target market, through which consumer satisfaction should be given. This is a consumer oriented concept. The priority is given to consumer needs and wants rather than the product. This concept is also called as two-factor marketing concept.

Customer Concept

The meaning of this concept introduces that the presentation of goods and services that suits each customer and conducting of all marketing strategies prioritizing each of those customers. In this concept, it is expected to obtain customer loyalty having given them a lifetime value.

Social Marketing Concept

Satisfying the needs and wants of the target market so as to protect or improve the consumer and social wellbeing is known as social marketing concept. The concentration is given here for social responsibility also, same as for trade profit and consumer needs when deciding marketing policies. Therefore, this concept is also called as three factor marketing concept.

Holistic Marketing Concept

It is emphasized here that if the firm is to obtain higher results, all the components of the marketing needs to be executed with a single aim. That is to say, a complete integrated approach suits well for the competitive business environment.

Accordingly, Holistic marketing concept was generated. This concept consists of the following four main parts.

1.      Relationship Marketing

2.      Integrated Marketing

3.      Internal Marketing

4.      Social Responsibility Marketing/Performance Marketing

1. Relationship Marketing

The goal of this concept is the long term relationship in which all the stakeholders of business are satisfied. The result of that is the creation of a marketing network with a profitable relationship among the business and all the stakeholders of it.

2. Integrated Marketing

The meaning of this concept is that all the variables of the marketing mix (4Ps) should be implemented aiming the satisfaction of the target market. In other words, the functions of all the managers and all the employees of the business organization should be coordinated with the functions of marketing.

3. Internal Marketing

The integration of all the employees from the top manager to the lowest employee of the business, to provide a better service to the customer is referred to as internal marketing Accordingly, everyone in the firm assures that they use appropriate principles.

4. Performance Marketing

This says that when preparing and implementing marketing programs and actions,attention should be paid for social responsibilities, ethics as well as for the environment.

That is, while business goals and consumer satisfaction are being attended, the attention for Society as well as for ethics should be paid uniformly.

14.3 Market segmentation and Target market

Any kind of market can be segmented in to sub sections using various consumer characteristics.

Segmenting the entire market which has dissimilar features into groups of similar features is known as market segmentation.

The bases that are used to segment consumer market can be shown by the following diagram.

1.      Geographical factors

2.      Demographical factors

3.      Psychological factors

4.      Behavioural factors

 

Following requirements should be fulfilled for an effective market segmentation

·         Measurability

·         Substantiality

·         Accessibility

·         Differentiability

·         Actionable

 Benefits of market segmentation can be mentioned as follows.

 Since the entire market is subjected to analyze, a much awareness regarding the market can be gained.

1.      Ability of recognizing the appropriate and periodic market.

2.      Ability of utilizing the limited resources available in the firm efficiently and effectively.

3.      The firm is able to minimize the market risk

4.      Ability to launch marketing programs more successfully.

Target market

The target market refers to the market segment with similar characterized customers that a firm can serve more attractively and profitably from the various characterized customers in the whole market.

The duty of marketers is to develop the product or the offering that suits the selected market.

Positioning

Creating a favourable attitude in consumers’ mind regarding a good or a service is known as market positioning. The victory of the marketing is the positioning of a certain good or a service well in the market.

The ways of market positioning

·         Including various features and benefits to the product.

·         Providing a high service compared to competitors.

·         Positioning the product in the customers’ mind deeply using various promotional strategies.

14.4  Marketing mix and its variables

The marketing strategies that are implemented to attain the expected aims of the business organization are called marketing mix and it can be presented in various perspectives.

The marketing mix can be divided into four components from the point of view of the marketer.

·         Product

·         Price

·         Place

·         Promotion

Following are the basic and sub variables of marketing mix.

A marketing mix for services also can be seen from the point of view of the businessman

That includes another three variables in addition to the marketing mix for goods, making it comprising of seven variables (7Ps = 4Ps + 3Ps)  Accordingly;

·         People

·         Process

·         Physical Environment will be added to the above variables.

 Product

Anything presented to the market for sale to satisfy consumer needs and wants.

 Price

The amount of money paid by the consumer to obtain a good or service.

 Place

Distributing the product in the market in order to get them marketed successfully.

 Promotion

The process used to communicate about the product to the interested, target and to potential customers.

People

The salesmen who are friendly, polite and specialized are important here.

Process

Operational system required to provide the service and the after sale service.

 Physical Environment

Creating the surrounding and the environment of the business outlet in order to give a higher value to the customers.

 The marketing mix for the goods is presented as four variables from the point of the customer. This is known as 4C’s

·         Customer needs and wants     à product

·         Cost                                         à price

·         Convenience                           à place

·         Communication                       à promotion

Marketing mix is very important for successful marketing.

1.      The turnover can be increased by being able to present the product to the market in a way that satisfies consumer needs in optimum level.

2.      Consumers can be attracted by pricing the product in a way that it can face competition.

3.      By using various promotional strategies, consumers can be induced to purchase the product.

4.      Distributing products in a way which makes consumer buy the product very easily from the closest place.

5.      As a whole, all the variables in the marketing mix helps to fulfill the aims of the organization.

14.5 Various marketable products

Product

Anything presented to the market with the purpose of fulfilling the human needs and wants is known as a “product”.

Products can be classified as follow

 

Consumer Goods

These are Used for day to day consumption. Most of the time consumer goods end with use. These goods are of 4 types with the marketers view.

Examples: - Furniture used by consumers at home.

Convenience Goods - Goods that are frequently bought by the consumer (Soap, toothpaste, peas, newspapers, rice, bread)

Shopping goods - Goods that are bought after comparing the price and the quality of products are known as shopping good. The consumer is always concerned about a best purchase. He purchases these goods by taking much time. (Examples: - Electric appliances, Clothing, Footwear, Furniture)

Specialty Goods - If a Special attempt is made to purchase a product, it is known as specialty good. The consumer gets satisfied only if he consumes these special goods. The prices of these can be much higher. (Examples: - Jewellery, motor vehicles, Computers, medicines with medical approval)

Unsought Goods - Goods unknown to consumer or goods to which much attention of the consumer is not paid even though they are available in the market are known as unsought goods.( Examples: - Life assurance policies, new books.)

Industrial Goods / Business Goods

Goods that are used for producing other goods are known by this, Since these industrial goods are purchased by businessmen to produce other goods, these are also known as business goods Goods that are produced using industrial goods could be consumer goods as well.

(Examples: - Office items like furniture, tables, chairs and equipment's Etc..used by businessmen to get the assistance for their business activities.)

1. Materials and parts

Things used as input in the production process are known as materials & parts.

Examples: - Materials related to architectural creations such as iron, cement; and parts such as tires, tools etc. used for vehicle production.

2. Capital Items.

Finished goods with long term existence which are used for producing other goods in the production process are known as capital items.

Examples: - Factory buildings, machinery

3. Supplies & Business Services.

Goods and Services that are used to produce finished goods but are of relatively Short term existence are known as supplies and business services

Even though the products are classified simply as goods and services various items are adding to the products at present,

·         Goods

·         Services

·         Ideas

·         Events

·         People

·         Activities

·         Experience

·         Places

·         Organizations

·         Information

Product	Description	Examples
Goods	This refers to the tangible things with physical existence which satisfy human wants.	Furniture, machinery, apparels
Services	This refers to an action or activities that satisfy human wants, intangible and can be presented from one party to another.	1. Insuring the business risk. 2. Conducting banking activities by businesses Carrying out the 3. transportation services by business.
Ideas	The kind of thought that can be sold and that is generated within the producer about the products that is presented to the market.	Unilever Sri Lanka :“Wash the hands for minute before eating”  Litro Gas Company : “Jathika Lipa Gini Sepayuma” “Sri Lanka burner gas supply”.
Events	Various instances related to satisfying human wants are known as events.	Olympic games Annual shows International trade exhibition BMICH book fair (in the literature month)
People	People with significant abilities who come forward to satisfy human needs are known by this	Michael Jackson (Rhythmic singings)  Mr. Bean (comedian)
Activities	A program conducted for a certain want is known as activities.	Dengue preventing program (in the organization).  Creating outfits for school volleyball team.  Organizing a volleyball tournament.
Experience	Selling a person’s specialized knowledge for a certain task to another customer is referred to as experience	A versatile cricket player being a cricket coach.
Places	This refers to places that can satisfy human wants.	Sigiriya, Hummanaya, Lokanthaya
Organizations	The entities that are created by humans themselves to satisfy human wants are known as organizations.	Body building societies  Red Cross Organization  YMBA
Information	Information is born by processing data that are useful for persons to take decisions. Information is used in business activities to satisfy wants.	Stock market information

Product Mix

 The bundle of products presented by a certain seller for sale is known as product mix. While some organizations present only one item to the market, some organizations present a bundle of products. The production mix of a firm comprises of a breadth, a length, a depth and consistency.

Width - The number of product lines of the firm.

Length - The number of items included in all product lines.

Depth - The number of items presented under one product line.

Consistency - The relationship among the types of goods.

Ex: different kinds of Unilver products,

Soap	Detergents	Shampoo	Toothpaste
Lux	Sunlight	Head and shoulder	Signal
Pears	Surfexcel	Dove	Close up
Lifebuoy	Rin	Clear
	Tide

Width - 4 (soap, shampoo, detergents, toothpaste)

Length - 12 (3soaps, 3shampoo, 4detergents, 2toothpastes)

Consistency - Yes, all the products are fast moving consumer goods .

Product Levels

Five product levels can be stated as follows. These are called as consumer’s value hierarchy.

Core benefit

This is the first level of a product which is also considered as basic benefit / core benefit.

Ex: - coffee  for thrust

Generic Product / basic product

This is the second level of a product. Here the core benefit becomes basic product

Ex: - coffee in a paper cup

 Expected Product

Presentation of the product with the features that the buyer expects. This is the third level of the product.

Ex: - coffee with sugar, proper cup. Good Taste, Warmth,

Augmented Product

The product is presented to the market in a level which exceeds the customers’ expectation. This is the fourth level of a product.

Ex: - Sweet smell. Nice decoration, coffee with milk

 Potential Product

Entering to the potential market through augmentation features at the planning of the product after considering the fact that the customer would demand these features in the future.

Ex: - A piece of cake with the coffee

Product life cycle

There are five stages of a product life cycle

1.      Product Development Stage

2.      Introduction Stage

3.      Growth Stage

4.      Maturity Stage

5.      Decline Stage.

Stage	Details
Product development stage	The production development stage starts with the conception of the idea about the new product. While there are no sales in this stage research and development expenses have to be borne.
Introduction stage	The products are presented in the introduction stage; the sales and profit gradually increase.
Growth stage	Since the sales increases in the growth stage, a profit margin can be seen here.
Maturity stage	The product has already been finished accepting by the market in the maturity stage. The profit and sales are fixed while the growth of the profit and sales occurs slowly, the reduction of sales and profit will take place in the last period because of the increased competition
Decline stage	Sales fall in the decline stage. Profit will be decreased.

The product life cycle depicts various marketing objectives and strategies for various stages, generally the theoretical product life cycle concept is built up on the following assumptions.

1. Product has a specific life time

2. A product passes few various stages that bring by different challenges to the marketer.

3. The sales and profit change at the various stages of the product life cycle.

4. The marketer follows marketing goals and strategies in accordance with the nature of each stage that the product passes.

14.6 Creates a suitable brand for product

Brand / Brand name / Trade mark

A brand is a name, term, sign, symbol, design or a combination of them, intended to differentiate the goods or services of one marketer or group of marketers from those of competitors.

The pronounceable part of a brand is named as the Brand Name. The inherent logo of the brand is referred to as Brand Mark. When it is registered it is referred to as Trade Mark.

Sri Lankan business firms should register their brands in the Institute of Patent and Trade Marks under the Intellectual Property Act No.36 of 2003.

The characteristics that should be in a good brand

1.      Being short and simple.

2.      Easy to pronounce, recognize and remember.

3.      Giving a hint on basic qualities and usefulness of the product.

4.      Easy to recognize in another language as well.

5.      Should be different from the brands used by competitive producers.

6.      Representing a particular culture

Various types of brands are used in branding

·         Private Brand

·         Family Brand

·         National Brand

·         Individual Brand

 Private Brand

After selling the product to traders by producers, the brand that has been created by those traders is referred to as Private Brand.

Ex :-Araliya Sugar, Nipuna rice, Araliya rice, Vijaya chilli powder

Family Brand

Presenting a series of goods under the same brand by certain production firm is referred to as Family Brand.

Eg: MD products, Harischandra products

 National Brand

If a particular manufacturer presents his products under his own brand to the market, it is referred to as National Brand.

Eg:- Singer, Co-ca Cola

 Individual Brand

Using separate brands for various products by a firm.

Ex:- Products of Lever Brothers such as Sunlight, Lux, Signal etc…

Several benefits received by a businessman (producer) from a brand

1.      Ability to protect their identity by differentiating their own brand from other competitive brands.

2.      Easy to get orders.

3.      Getting the legal protection.

4.      To ascertain the trust of the consumers on the special features of the product.

5.      Ability of creating a brand loyalty among the consumers.

6.      By receiving a value for a high brand in the market, A value is created to the business as well.

7.      By doing small changes for the brand, various consumer groups can be targeted. (Ex:- Signal Junior, Anchor 1+)

The levels of brand loyalty

1.      Brand insistence

 This level is considered as high loyalty towards the brand. Consumer demand the product by the brand name.

Eg :- panadol, bata, qutex, tipex 

2.      Brand preference

This is the second level of brand loyalty. Consumer is ready to switch in to another brand if his favourite brand is not available in the market.

Eg :- buying pepsi on behalf of Coca-Cola

3.      Brand recognition

This is the lowest level of loyalty. Consumer recognizes the brand. But do not demand or having interest towards the brand. If consumer see the product in the market he may demand the product.

14.7 Designs an attractive package and a label for product

The function of designing and producing a wrapper outer covering or container for particular product is known as packaging. The wrapper used to give protection to product is referred to as a package. While a package is normally printed with a brand/ trade mark, it has inherent features.

A product can easily be identified at the first sight of the product. The design and the colour of a package are even. Though the major function of a package is to give protection for a product, it is used as a marketing tool at present.

The package can be recognized under three levels.

1. Primary Package - The first package of the product is primary package.

         Ex :- The Polythene package in which milk powder is contained / toothpaste tube

2. Secondary Package - Another package outside the primary package is the secondary package

Ex :-  The cardboard package in which the polythene package with milk powder is contained.

            The cardboard package in which the toothpaste tube is contained.

3. Transportation Package -  Another package outside the primary and secondary package is the transportation package.

Example :- A large box containing 24 cardboard boxes in which milk powder is included.

A large container in which 120 boxes of toothpaste tubes are contained

 Facts to be considered in planning a package

1.       The nature of the product

Example :-  Whether is breakable / Whether it is solid or liquid / Whether it is perishable

2.       Benefits to the product from the package

Example :- Receiving a protection for the product

3.      Easy to identify the product

4.      Providing information about the product

5.      Providing an attractive look

6.       Technological eligibility

Example  :-  Whether it is healthy and safety. / Whether chemicals are included.

7.      Features of the package

Example :- Length, width, weight

8.       The design of the product

9.      Convenience to the trader

 Example :- Easiness to store / Easiness to showcase / Easiness to transport

10.  Convenience and the usefulness to the consumer

Example :- To select / To take away /Ability to use for other uses

11.  Environment friendliness

Example :-  Ability to recycle / Disposable / Cost incurred for the package

PACKAGE

P =    Protection

A = Attracting Attention

C = Convenience

K = Knowledge

A = Affordable or Advertising

G = Grater Value

E = Environmental concern or Extra use

Labeling

Creating a label and the process relevant to it to show the information needed to use the product is referred to as labeling.

Label

Label is the one that is used as a part of the package to mention details about the product.

 Factors included in a label

·         Information regarding the production (producer the country that produce it, registered number)

·         Name or the brand of the product

·         Price

·         Ingredients

·         Manufactured date

·         Expiry date

·         Instructions to store and transport

·         Cautions/Warnings

·         Logos of standards

14.8 How to set a suitable price for a product

 The amount of money charged from a customer for a particular good or a service is simply known as the price in marketing. The value agreed to exchange for the benefits and satisfaction enjoyed by the consumer through consuming or receiving of a good or a service can be broadly known as the price.

The price is called in many names. Ex: rent, tax interest, premium, salary etc… The main factor considered by the consumer in purchasing is the “price”.

The marketing variables other than the price represent the cost of the firm and the price is the only variable generating revenue to the firm.

 Accordingly, much concern should be placed in deciding the price of the goods and services and a consumer should place much concern on the price in deciding a purchase as well.

The factors to be considered in pricing.

1.       Pricing objective

2.      Estimating Cost

3.      Competition (competitors cost  price and offerings)

4.      Determining Demand

5.      Pricing method

 Few objectives of pricing are given below.

·         Survival in the market

·         Maximizing current profit

·         Maximizing market share

·         Maximizing market skimming

·         Product quality leadership

A pricing method is selected by considering few or all of the factors such as cost, the price of competitors and the demand of customers.

Pricing methods

ü  Mark-up pricing

ü  Target return pricing

ü  Perceived value pricing

ü  Going rate pricing

ü  Auction type pricing

ü  Group pricing 

14.9 Suitable distribution channels to distribute products to consumers.

The process of getting the products reached for producer to consumer is referred to as distribution.

The importance of transportation,

·         Consumer gets the opportunity to consume various products.

·         Transportation can be done on the factors such as the nature of production, the nature of the market, and the demand.

·         It assists for the expansion of the market.

·         Product distribution channels are shown in the following diagram.

Distribution channel of consumer goods is given below

Distribution channels of industrial goods has been depicted in the following diagram

Distribution channels of services has been depicted in the following diagram.

Factors to be considered in selecting an appropriate distribution channel.

Factor	Examples
The Nature of the product	- Is it a consumer good? - Is it an industrial good? - Is it a durable good? - Is it a perishable good?
Nature of the market	- Is the market size large? - Is it regional?, national?, or international?
Nature of the demand	- Is it a continuous demand? - Is it a seasonal demand?
Distributional channels of the competitors	Examining the distribution channels used by competitions for distributing each product.
The strengths of producers	- How much is the financial strength? - Is there storage facilities? - Are there enough employees? -Are there transportation facilities

14.10 suitable promotional strategies to market products.

Communicating customers who are interested about the products with the purpose of motivating them to purchase is meant by “Promotion”.

The importance of promotion is as follows.

1.      To introduce new products to consumers.

2.      To increase the sale of existing products.

3.      To inform the target customers by communicating various information about the products.

4.      To face the competition successfully with other competitive products.

5.      The success of other variables of the marketing mix depends on the success of promotion.

6.      To enhance the image of the firm.

7.      To increases the potential demand.

Few instances where the promotion is important for a business are given below.

·         To introduce a new product to the market.

·         To maintain the demand for a product without letting it falls.

·         To improve the image of the firm.

Promotion mix can be shown in a flow chart as follows.

Promotion Mix
Advertising	Sales promotion	Personal selling	Public relations	Direct marketing	Events and experiences
TV Video Posters Banner Animations Seasonal Publications	Price reduction Sample Distribution Coupon Distribution Price list Gifts Lottery	Sales Auctions Incentive programs Sample Selling Exhibitions	Publications Sponsorship Lectures Media relations Seminar Annual reports	Direct mailing Catalogues sale Electronic sale Web pages	Sports events Entertainment Events Trips Causes Street Dramas

Given below are main promotion tools of marketing

Communication mix

1.      Advertising

2.      Sales promotion

3.      Personal selling

4.      Public relations

5.      Direct marketing

6.      Events and Experiences

Advertising

Advertising is any paid form of non-personal presentation of information by a certain sponsor on a certain product with the intension of improving future demand.

Sales promotion

The short term incentive strategies that influence consumers to purchase the product are referred to as sales promotion.

Personal selling

Personal selling means the selling of goods and services having built up of a better relationship with customers through face to face talks.

Direct marketing

 Direct communication with target consumers, inducing them to purchase products is referred to as Direct marketing.

Event and Experience

The interactive activities, programs organized by the business daily or on special occasions are referred to as events and experiences. By this, an exclusive communication program about the product and the brand is presented creatively. Here, the active participation of customer may happen as well.

 Example :- Street Dram / Fun games