NATURE AND SCOPE OF MARKETING Marketing is typically seen as the task of creating , promoting , and delivering goods and

services to consumers and business. Marketers are skilled in stimulating demand for a company's products, but this becomes limited view of the tasks marketers perform. Just as production and logistics professionls are responsible for supply management,marketers are responsible for demand management.Marketing managers seek to influence the level, timing, and composition of demand to meet the organization's objectives. There are eight different states of demand and the corresponding tasks faced y marketing managers. They are as follows: 1.Negative Demand: when the markets dislike the products and avoid them, negative demand gets generated. The task of marketing managers, is to analyze why the markets dislike the products and whether a marketing program consisting of Product redesign, lower prices, and more positive promotion can change beliefs and attitudes. 2.No Demand:The target consumers may be unaware or uninterested in the product. The marketing task is to find ways to connect the benefits of the products with people's natural needs and interests. 3.Latent Demand: Consumers may share a strong need that cannot be satisfied by the existing Products.The marketing task is to measure the size of the potential market and develop goods and services to satisfy the market. 4.Declining Demand:The demand for certain goods and services over a period of time starts declining. The marketer should analyze the causes of the decline and should determine whether demand could be re stimulated. 5.Irregular Demand:Demand may vary on a seasonal, daily , or even hourly basis. The marketing task called Synchromarketing is to find ways to alter the pattern of demand through flexible pricing ,promotion and other incentives. 6.Full Demand:Organizations face full demand when they are pleased with their volume of business . The marketing task is to maintain the current level of demand in the face of changing consumers preferences and increasing competition. 7.Overfull Demand:Organizations may face a demand level that is higher than they can or want to handle. The marketing task called de marketing requires finding ways to reduce demand temporarily or permanently.

8.Unwholesome Demand:Unwholesome products will attract organized efforts to discourage their consumption. The marketing task is to get people who like something to give it up. Example: Campaign against drugs, large families etc. Marketing people are involved in marketing a variety of entities like goods, services, experiences, events, persons, places, properties, organizations,

Marketing Management Notes

NATURE OF MARKETING MANAGEMENT Marketing as a process:Marketing is a process that marketing managers execute. In a number of instances, a marketing manager does not manage people, but manages the marketing process. A product manager is an example of such a marketing manager; s/he manages the marketing process for a product within a larger marketing organization. We, as consumers, see the results of that process in the form of products, stores, shopping malls, advertisements, sales pitches, promotions, prices, etc. This process usually involves four phases.

1. Ring your customers for a chat. Everyone likes to be made feel valued and so ringing your customers and asking them how everything is going and if there is anything they need or you can do to improve your service is a no brainer. Most small businesses dont do it. Make a time in your diary for every month to call at least 5 customers and ask them these questions. You will find the answers shape your business and open up opportunities.

2. Have a database. This is a crucial investment. One central place to collect information about your customers. The more you know about them, the more you can tailor your services to their individual needs. There are lots of great CRM products out there to hold your customer information (see sidebar CRM links) but a simple excel sheet with their details, name, phone number, email address and what they have bought from you is a good start. You can then begin to segment your customers based on different criteria, how much they buy from you, $ value, products or services they buy. This information can then be useful when you start talking with your customers using other social medias including, blogs, newsletters, or lead generation campaigns.

3. Ask your staff for customer insight. I was talking about this the other day with a client and we decided to put a big whiteboard in the middle of the open office space with Happy Customers, Upset Customers and then people could come and write down what they were hearing and seeing. This gave the CEO much greater visibility to customers and gave the staff some ownership over the customer satisfaction of their clients. So set up some forum where staff can discuss customer issues, good and bad.

4. Do some research. Research these days can be very quick to do and economical. There are a lot of free survey tools (look under my links on the side bar) that allow you to create surveys quickly. When you need to test an idea, get some feedback then perhaps try a survey with your existing clientele. Very quickly you can get a feeling whether you are on the right track and as long as the survey is not too long, they can feel good that they were consulted.

5. Invite customers to your planning and brainstorming sessions. It is sometimes worthwhile to have a customer or a customer advocate like a marketing consultant involved in your planning sessions for the business to ensure that the customer remains central to the focus of your business. This holds the business accountable and by having an actual voice at these forums, ensures that the customer is really represented. The other option is to hold a focus group just with your customers around an important decision that you are going to make with the business, to test the concept or pilot it before you commit to it.

Customer analysis Very often, managers conduct a customer value analysis to reveal the companys strengths and weaknesses relative to those of various competitors. The steps in this analysis are: 1. Identify the major attributes and benefits customers value. Customers are asked what attributes, benefits, and performance levels they look for in choosing a product and vendors. Attributes and benefits should be defined broadly to encompass all the inputs to customers decisions. 2. Assess the quantitative importance of the different attributes and benefits. Customers are asked to rate the importance of different attributes and benefits. If their ratings diverge too much, the marketer should cluster them into different segments. 3. Assess the companys and competitors performances on the different customer values

against their rated importance. Customers describe where they see the companys and competitors performances on each attribute and benefit. 4. Examine how customers in a specific segment rate the companys performance against a specific major competitor on an individual attribute or benefit basis. If the companys offer exceeds the competitors offer on all important attributes and benefits, the company can charge a higher price (thereby earning higher profits), or it can charge the same price and gain more market share. 5. Monitor customer values over time. The company must periodically redo its studies of customer values and competitors standings as the economy, technology, and features change.

Strong Brands

build a strong brand A key element of strategy planning should involve the development of your brand and how you would like to be perceived. When designing a brand strategy, this is the first question you should ask: What is your unique selling proposition? Consider all aspects of the marketing mix and examine what makes your business unique and attractive to the consumer. If these factors lead to a competitive advantage then you have determined your Unique Selling Points, or USPs. These USPs are major contributory factor to what makes your business successful, so should form the central theme to your brand strategy. Most brands concentrate on several of the most powerful and easily communicated proposition benefits in order to create a clearly understood brand message Benefits of a strong brand

It will add value to a company Requires less persuasion for consumers to use other products from the same brand Can ensure a lasting customer relationship due to trust It aids recognition in a cluttered marketplace Has the ability to command a premium Allows differentiation between very similar products, for example still mineral water Can attract merchandising contracts Leads to the perception of quality

There are two core elements to a strong brand emotional value and practical value. Get these two right and your brand will quickly grow. However, a brand can be damaged much quicker than it can grow - five things that will quickly damage your brand include:

Untrustworthy behaviour

Concern about public safety or health Poor customer service (at any level) Obvious company financial difficulty Poor quality products

Designing and Managing Value Networks and channels ::: Marketing Channels and Value Networks Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption. The importance of channels: A marketing channels system is the particular set of marketing channels employed by a firm. One of the chief roles of marketing channels is to convert potential buyers into profitable orders. Marketing channels must not just serve market, they must also make markets. A push strategy is appropriate where there is low brand loyalty in a category, brand choice is made in the store, the product is an impulse item, and product benefits are well understood. A pull strategy is appropriate when there is high brand loyalty and high involvement in the category. Channel development A new firm typically starts as a local operation selling in a limited market, using existing intermediaries. If the firm is successful, it might branch into new markets and use different channels in different markets. Different consumers have different needs during the purchase process. Buyers fall into one of the four categories. 1. Habitual shoppers 2. High value deal seekers 3. Variety-loving shoppers 4. High-involvement shoppers

Value Networks A system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings.

::: The Role of Marketing Channels Channel Functions and Flows A marketing channel performs the work of moving goods from producers to consumers. Some functions constitute a forward flow of activity from the company to the customer; other functions constitute a backward flow from customer to the company. A manufacturer selling a physical product and services might require three channels: a sales channel, and a service channel.

Channel levels A zero level channel consist of a manufacturer selling directly to the final customer. Major examples are door to door sale, mail order. A one-level channel contains one selling intermediary, a two-level channel contains two selling intermediaries. These intermediates could be retailers, distributors. As the no. of levels increase the level of difficulty of information sharing and coordination also increase. Channels normally describe a forward movement of products from source to user. Service Sector Channels Marketing channels are not limited to the distribution of physical goods. Producer of service and ideas also face problem of making their output available and accessible to target population.

Analyzing customers desired service output levels 1. Lot size 2. Waiting and Delivery time 3. Special convenience 4. Product variety 5. Service backup Establishing objectives and constraints Channel objectives should be stated in terms of targeted service output level. Channel objectives vary with product characteristics. Bulky product such as building materials require channels that minimize the shipping distance and the amount of handling. Identifying major channel alternatives Companies can choose from a wide variety of channels for reaching customers from sales forces to agents, distributors, dealers and direct mail. Channel alternative described by 3 elements: the types of available business intermediaries, the no. of intermediaries needed and the terms and responsibilities of each channel member. Types of intermediaries: A firm needs to identify the types of intermediaries available to carry on in channel work. No. of intermediaries: 3 stages are available: exclusive distribution, selective distribution and intensive distribution. Exclusive distribution means severally limiting a no. of intermediaries. Selective distribution involves the use of more than a few but less than all of the intermediaries who are willing to carry a particular of product. Intensive distribution consists of the manufacturer placing the goods or services in as many outlets as possible.

Terms and responsibilities of channel members: Price policy calls for the producer to establish a price list and

schedule of discounts and allowance that intermediaries see as a equitable and sufficient. Condition of sale refers to payment terms and producer guarantee. Mutual service and responsibilities must be carefully spelled out, especially in franchise and exclusive agency channels. ::: Channel management decisions 1. Selecting channel members Companies need to select their channel members carefully as they represent the company to the customer. To facilitate channel members selection, produces should determine what characteristics distinguish the better intermediaries, for e.g. the no. of years in business, the growth and profit record and financial strength. 2. Training channel members Companies need to plan and implement careful training programs for their intermediaries. 3. Motivating channel members Coercive power Reward power Legitimate power Expert power Referent power 4. Evaluating channel members 5. Modifying channel arrangements ::: Channel Integration and Systems Vertical marketing system A VMS by contrast, comprises the producer, wholesaler and retailer. Acting as a unified system.

Corporate vms Administered vms: It coordinates successive stages of production and distribution through the size and power of one of the member. Contractual vms: 1. Wholesaler-sponsored voluntary chains 2. Retailer cooperatives 3. Franchise organizations

Horizontal marketing systems In which two or more unrelated companies put together resources on program to exploit an emerging marketing opportunity. Multichannel marketing systems It occurs when single firm uses two or more marketing channels to reach one or more customer segments. Planning channel architecture

::: Conflict, cooperation, and competition Types of conflict and competition Vertical channel conflict means a conflict between different levels within the same channel. Horizontal channel conflict involves a conflict between members at the same level within the channel. Multi-channel conflict exists when the manufacturer has established two or more channel that sell to the same market. Causes of channel conflict Goal incompatibility Difference in perception Dependence Managing channel conflict

Co-optation is an effort by one organization to win the support of leaders of another organization by including them in advisory council. Arbitration occurs when the two parties agree to present their arguments to one or more arbitrators and accept the arbitration decision. Legal and ethical issues in channel relations Many producers likes to develop exclusive channels for their products. Exclusive dealing often include exclusive territory agreement. The producer may agree not to sell to other dealers in a given area. Producers are free to select their dealers, but their right to terminate dealers is somewhat restricted.

::: E-commerce marketing practices E-commerce means that a company or site offers to transact or facilitate the selling of product and service online. E-purchasing means companies decide to purchase goods services and information from various online suppliers. E-marketing described company efforts to inform buyers communicate, promote and sell its product and services over the internet.

Shaping The Market Offerings At the heart of the marketing program is the product the firm's tangible offering to the market, which includes the product quality, design features, and packaging. As part of its product offering, Atlas may provide various services, such as leasing, delivery, repair, and training. Such support services can provide a competitive advantage in the global marketplace. A critical marketing decision relates to price. Atlas has to decide on wholesale and retail prices, discounts, allowances, and credit terms. Its price should be commensurate with the offer's perceived

value; otherwise, buyers will turn to competitors' products.

Developing Effective Communication Program Companies have to put effort in developing an effective communication program. The development of the communication program can be charted into eight steps. 1. The first step is identifying the target audience. The target audiences are the existing customer or the potential new customers. Target audience identification is essential for further development and overall success of the communication program. Once the audience is identified the next part is assessing the present company or brand perception within the target audience. Based on the results from the audience analysis the message should address the requirements. 2. The second step is to set specific objectives for the given communication message. This objective could be to enhance existing image, convey attribute, or encourage a consumer to act. The objective can have a cognitive, affective or behavioral response. 3. The third step is the design of the message. The designing of the message follows the objective of the message. The design of the message has to address the following four points, content of message, message structure, message format and message source. 4. The fourth step is the selection of the communication channel. The channel must be appropriate to carry the message to the target audience. For pharmaceutical companies, their sales people are the most effective channel in reaching the target doctor audience, instead of placing billboards. 5. The fifth step is related with the financial estimates of the whole expenditure. Companies need to decide budget of sales promotional and other activities. The common methods followed are an affordable method, percentage of sales method, competitive parity method, and objective-task methods. 6. The sixth step is the decision relate to the communication mix. Companies have limited budget, so they need balance expenditure among advertising, sales promotion, public relation, sales force and direct marketing. The relevant choice of the communication mix is highly dependable on the industry the company is operating. 7. The seventh step measuring results of the communication process. It is very important for companies to keenly follow the outcomes of the communication process. The results could be increased in sales, change in attitude or image of the brand.

8. The eight step is managing the integrated marketing process. Companies cannot afford to continue one medium approach to achieve desired communication effect. Companies must integrate all the available tools as to reach a wider audience and effectively communicate about brand and products.