MGT601 SME MANAGEMENT

Role of Marketing in SME – II Lesson 33 Role of Marketing in SME – II

Chapter Learning Objectives This lecture deals with: Marketing Decision Variables Marketing Controllable Variable Marketing Uncontrollable Decision about Product Product Life Cycle Marketing Mix

Marketing Decision Variables Marketing Controllable Variable Marketing Uncontrollable Variable

1. Marketing Controllable Variables a. Target Market Segment Location Target customers Timing

Marketing Controllable Variables….. b) Products offered Type of product Range of product Design features Quality

Marketing Controllable Variables….. c) Price Price level Price variables (discount) Maintenance

Marketing Controllable Variable….. d) Advertisement & Promotion Advertising level Advertising media Sales promotion

Marketing Controllable Variables….. e) Distribution Channels Number of sales outlets Warehousing facility

2. Marketing Uncontrollable Variables a. Resource Availability. Availability of required materials Cost and quality of required material Material

Marketing Uncontrollable Variables…. b) Competition – Direct & Indirect. c) Economic Conditions – total market size, economic trends, income situation.

Marketing Uncontrollable Variables…. d) Socio- Cultural Conditions societal values, life style, fashion consciousness. e) Political & Legal Conditions. Political risk situation Legal regulation

Marketing Uncontrollable Variables…. f) Technological Situation state of technology, rate of technological change.

Product In economics and commerce, products belong to a broader category of goods. The economic meaning of product was first used by political economist Adam Smith. In marketing, a product is anything that can be offered to a market that might satisfy a want or need. In retailing, products are called merchandise. In manufacturing, products are purchased as raw materials and sold as finished goods.

Decision about Product Product decisions have quite important because the length of time for which a Product remains profitable has considerably shortened. Frequent technological innovation and entry of new products have contributed to the shortening of life of a product. Such factors pose a problem beyond the financial capabilities of a Firm.

Decision about Product The product features amenable to manipulation by a small firm are; a) Performance and functional features i.e. firm’s ability to perform, durability, reliability and precision. b) Use characteristics i.e. ease in handling and serviceability. c) Aesthetic qualities e.g. style, design, color etc. d) Extrinsic features e.g. uniqueness of product, status value etc.

Product Life Cycle PLC like human beings, products also have an arc. From birth to death, human beings pass through various stages e.g. birth, growth, maturity, decline and death. A similar life-cycle is seen in the case of products. The product life cycle goes through multiple phases, involves many professional disciplines, and requires many skills, tools and processes. PLC has to do with the life of a product in the market with respect to business/commercial costs and sales measures.

Product Life Cycle Product Life Cycle is equally helpful in deciding about appropriate marketing strategy to be adopted. The five main stages of a product's life cycle. Product Development Stage Introduction Stage Growth Stage Maturity Stage Decline Stage

Introduction Stage costs are very high slow sales volumes to start little or no competition demand has to be created customers have to be prompted to try the product makes no money at this stage

Growth Stage costs reduced due to economies of scale sales volume increases significantly profitability begins to rise public awareness increases competition begins to increase with a few new players in establishing market increased competition leads to price decreases

Maturity Stage costs are lowered as a result of production volumes increasing and experience curve effects sales volume peaks and market saturation is reached increase in competitors entering the market prices tend to drop due to the proliferation of competing products brand differentiation and feature diversification is emphasized to maintain or increase market share Industrial profits go down

Decline Stage costs become counter-optimal sales volume decline prices, profitability diminish profit becomes more a challenge of production/distribution efficiency than increased sales

Marketing Mix The marketing mix is a business tool used in marketing products. The marketing mix is often synonymous with the 'four Ps': 'product', 'promotion', 'price', and 'place‘.

Product Correct combination of product and service. It will cover product depth (i.e. model, size, style, and color) and product breadth (i.e. number of product lines carried).

Price The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often, it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.

Promotion It represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion.

Place It refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution, franchising can be used by the marketer to complement the other aspects of the marketing mix.

Thanks you Happy Learning, Keep Learning