1. Principles of Marketing Lecture-45

2. Summary of Lecture-44

3. Review-1

4. Today’s Topics

5. Review-2

6. Individual Product Decisions

7. Product Attributes Branding Packaging Labeling Product Support Services

8. New Product Development

9. Idea Generation Idea Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization

10. Product Life-Cycle (PLC)

11. Time Product Development Stage Introduction Profits Sales GrowthMaturityDecline Sales and Profits ($) Sales and Profits Over the Product’s Life From Inception to Demise

13. Price – The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.

14. Factors Affecting Price Decisions

15. Internal Factors Pricing Decisions Pricing Decisions External Factors Target Market Positioning Objectives

16. Costs

17. Total Costs Sum of the Fixed and Variable Costs for a Given Level of Production Total Costs Sum of the Fixed and Variable Costs for a Given Level of Production Variable Costs Costs that do vary directly with the level of production. Raw materials Variable Costs Costs that do vary directly with the level of production. Raw materials Fixed Costs (Overhead) Costs that don’t vary with sales or production levels. Executive Salaries Rent Fixed Costs (Overhead) Costs that don’t vary with sales or production levels. Executive Salaries Rent

18. Fixed Costs Variable Costs Raw materials Component parts Hourly wages Packaging & freight Sales commissions Rent Depreciation Manager’s salaries Property taxes Insurance

19. Setting Pricing Policy

20. General Pricing Approaches

21.  Cost-based Pricing  Value-based Pricing  Competition-based Pricing

22. Break-even…for Determining Target Return Price and Break- even Volume

23. Rupees (in thousands) 1200 1000 800 600 400 200 0 Total cost Fixed cost Target profit Total revenue 1020304050 Sales volume in units (thousands) Break-even point

24. New Product Pricing Strategies

25. Market Skimming Market Penetration

26. Price - Quality Strategies

27. Premium Strategy Overcharging Strategy Overcharging Strategy Good-Value Strategy Good-Value Strategy Economy Strategy Economy Strategy Price HigherLower Higher Lower Quality

28. Price-Adjustment Strategies

29. Discount and Allowance Pricing Segmented Pricing Psychological Pricing Promotional Pricing Geographical Pricing International Pricing

30. Price Changes

31. Responding to price changes

32. Hold Current Price; Continue to Monitor Competitor’s Price. Hold Current Price; Continue to Monitor Competitor’s Price. Reduce Price Raise Perceived Quality Raise Perceived Quality Improve Quality & Increase Price Improve Quality & Increase Price Launch Low-Price “Fighting Brand” Launch Low-Price “Fighting Brand” Has Competitor Cut Price? Has Competitor Cut Price? Will Lower Price Negatively Affect Our Market Share & Profits? Will Lower Price Negatively Affect Our Market Share & Profits? Can/ Should Effective Action be Taken? Can/ Should Effective Action be Taken? Yes No

34. Place….Distribution Channel….Marketing Channel

35. 20 Contacts Manufacturer Customer

36. 9 Contacts Manufacturer Customer Wholesaling Intermediary

37. Producer Agent/ Broker WholesalerRetailerConsumer Producer WholesalerRetailerConsumer ProducerRetailerConsumer ProducerConsumer

38. Channel Management Decisions

39. Selecting FEEDBACK Motivating Training Evaluating

40. Marketing Logistics and Supply Chain Management

41. Inventory When to order? How much to order? Just-in-Time

42. Customer Service Concept

43. Right Product Right Cost Right Place Right Condition Right Time

44. Push Versus Pull Strategy

45. Producer End users Interme- diaries Marketing activities Demand Push Strategy Demand

46. End users Interme- diaries Producer Demand Pull Strategy Marketing activities

47. Retailing and Wholesaling

48. Compete on value (not just price.) Save customers time and energy. Make shopping fun.

49. Marketing Communications

51. Promotion and Its Goals

52. Builds Relationships Persuades Informs Reminds

53. The Marketing Communications Mix

54. Advertising Personal Selling Any Paid Form of Non- personal Presentation by an Identified Sponsor. Sales Promotion Short-term Incentives to Encourage Sales. Public Relations Building Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity. Direct Marketing Direct Communications With Individuals to Obtain an Immediate Response. Personal Presentations by a Firm’s Sales Force.

55. Setting the Promotion Mix

56. Advertising A paid form of non-personal communication about an organization and/or its products to a target audience through a mass medium.

57. Personal selling The direct presentation of a product to a prospective customer by a representative of the selling organization.

58. Sales promotion Demand-stimulating activity designed to supplement advertising and facilitate personal selling.

59. Public relations A planned communication effort by an organization to contribute to generally favorable attitudes and opinions toward an organization and its products.

60. Direct Marketing Direct connections with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationship

61. Steps in the Selling Process

62. Step 1. Prospecting and Qualifying Step 1. Prospecting and Qualifying Step 2. Preapproach Step 3. Approach Step 4. Presentation/Demonstration Step 4. Presentation/Demonstration Identifying and Screening For Qualified Potential Customers. Learning As Much As Possible About a Prospective Customer Before Making a Sales Call. Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start. Telling the Product “Story” to the Buyer, and Showing the Product Benefits.

63. Step 5. Handling Objections Step 6. Closing Step 7. Follow-Up Seeking Out, Clarifying, and Overcoming Customer Objections to Buying. Asking the Customer for the Order. Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business.

64. Managing the Sales force

65. Designing Sales force Strategy and Structure Recruiting and Selecting Salespeople Training Salespeople Compensating Salespeople Supervising Salespeople Evaluating Salespeople

66. Competitive Strategies

67. Competitive Positions

68. Market Leader Market Challenger Market Follower Market Nicher

69. Global Village

71. Global Marketplace

72. Global Marketing

73. Think Globally Act Locally

74. e-Marketing

75. New Tool to Reach Consumer

76. Internet Postal Service Television Telephone Radio

77. Marketing and Society

78. Current Issues in Marketing

79. The current issues and marketing can be divided into two major subjects: – Social responsibility – Ethics The two concepts are very closely related

80. Summary – Marketing Management

81. Target Consumers Product PlacePrice Promotion Marketing Implementation Marketing Planning Marketing Control Marketing Analysis Competitors Marketing Intermediaries PublicsSuppliers Demographic- Economic Environment Technological- Natural Environment Political- Legal Environment Social- Cultural Environment

82. Simple Marketing System Producer/SellerConsumer Communication Product/Service Money Feedback

83. Marketing Process The process of :  Analyzing marketing opportunities  Selecting target markets  Developing the market Mix  Managing the marketing effort

84. Marketing in Theory and Practice ??

86. Enough for Marketing...

87. Principles of Marketing Lecture-45