Marketting Mix decisions

UNIT 3 - Marketing Mix decisionsUNIT 3 - Marketing Mix decisions
 Product planning and developmentProduct planning and development
 Product life cycleProduct life cycle
 New product developmentNew product development
 Marketing Segmentation, Targeting andMarketing Segmentation, Targeting and
positioning (Activity – Worksheet)positioning (Activity – Worksheet)
 Channel ManagementChannel Management
 Advertising and sales promotionAdvertising and sales promotion
 Pricing objectives, policies, methodsPricing objectives, policies, methods
1.1Hallmark Business School

Product PlanningProduct Planning
 Product planning is that part of marketing,Product planning is that part of marketing,
which is concerned with determining thewhich is concerned with determining the
products to be offered, deleted & diversificationproducts to be offered, deleted & diversification

ObjectivesObjectives
1. To offer products based upon customer needs.1. To offer products based upon customer needs.
2. To diversify, to capitalize on the company’s strength.2. To diversify, to capitalize on the company’s strength.
3. To utilize the available resources more profitability.3. To utilize the available resources more profitability.
4. To decide on the elimination of non-profitable products.4. To decide on the elimination of non-profitable products.
5. To change the features of the product as per the changes in the5. To change the features of the product as per the changes in the
market.market.
6. For long-term survival.6. For long-term survival.

Components of ProductComponents of Product
Planning:Planning:
1. Product Innovation1. Product Innovation
2. Product Diversification2. Product Diversification
3. Product Development3. Product Development
4. Product Standardization4. Product Standardization
5. Product Elimination5. Product Elimination
6. Product Mix & Product Line6. Product Mix & Product Line

Product InnovationProduct Innovation
 Innovation is required to keep up with the phaseInnovation is required to keep up with the phase
of changing market needs. According toof changing market needs. According to
Drucker, “Innovation will change customer’sDrucker, “Innovation will change customer’s
wants, create new ones, extinguish old ones &wants, create new ones, extinguish old ones &
create new ways of satisfying wants.”create new ways of satisfying wants.”

Product DiversificationProduct Diversification
When a manufacturer offers more productsWhen a manufacturer offers more products
in different areas, it is referred asin different areas, it is referred as productproduct
diversification.diversification.
Eg: ITC entering into hotel business, sonyEg: ITC entering into hotel business, sony
entering into film production businessentering into film production business

Product DevelopmentProduct Development
It involves introducing a new product eitherIt involves introducing a new product either
by replacing the existing one orby replacing the existing one or innovating ainnovating a
completely new product. It can either be brandcompletely new product. It can either be brand
extension or line extensionextension or line extension

Product StandardizationProduct Standardization
It gives uniformity in terms of quality, economy,It gives uniformity in terms of quality, economy,
convenience & Valueconvenience & Value

Product EliminationProduct Elimination
 This involves an emotional decision ofThis involves an emotional decision of
withdrawing the existing product line. ation:withdrawing the existing product line. ation:

Product Mix & Product Line:Product Mix & Product Line:
 Product line is defined as a group of productsProduct line is defined as a group of products
offered by a company whichoffered by a company which
 belongs to same family of products or similar to eachbelongs to same family of products or similar to each
other or substitutes. Eg: Product line of ponds forother or substitutes. Eg: Product line of ponds for
 personal care products includes cold creams, talcumpersonal care products includes cold creams, talcum
powders, etc.powders, etc.
 Product Mix is defined as combination of product linesProduct Mix is defined as combination of product lines
offered by a company. Eg: Product mix of Bajajoffered by a company. Eg: Product mix of Bajaj
 includes two wheelers, home appliances, electricalincludes two wheelers, home appliances, electrical
appliances, financial products etcappliances, financial products etc

1.13
New Product DevelopmentNew Product Development
Hallmark Business School

New Product DevelopmentNew Product Development
 Idea GenerationIdea Generation
 Screening AnalysisScreening Analysis
 Concept TestingConcept Testing
 Business AnalysisBusiness Analysis
 Product DevelopmentProduct Development
 Test MarketingTest Marketing

Idea GenerationIdea Generation
 New product development starts with an idea.New product development starts with an idea.
The idea may come from any source.The idea may come from any source.
 Ex: Competitors, Newspapers, Government,Ex: Competitors, Newspapers, Government,
Research & Development, Department, etcResearch & Development, Department, etc

Screening AnalysisScreening Analysis
 Here the company evaluates all ideas. TheHere the company evaluates all ideas. The
intention here is to avoid unnecessary expensesintention here is to avoid unnecessary expenses
by stopping further processing of unwantedby stopping further processing of unwanted
ideasideas
 An idea is evaluated with reference to variousAn idea is evaluated with reference to various
factors such as consumer needs, investments,factors such as consumer needs, investments,
profitability, technology, etc.profitability, technology, etc.

Concept TestingConcept Testing
 In the stage the concept of the new is tested.In the stage the concept of the new is tested.
The co. evaluates whether the concepts wouldThe co. evaluates whether the concepts would
suit the co., requirements.suit the co., requirements.

Business AnalysisBusiness Analysis
 Here a detail financial analysis is done. It isHere a detail financial analysis is done. It is
carried out to find out the financial marketingcarried out to find out the financial marketing
competitive & manufacturing viability usually,competitive & manufacturing viability usually,
they analysis is done by the expertsthey analysis is done by the experts

Product DevelopmentProduct Development
 In this stage, product on paper is converted intoIn this stage, product on paper is converted into
a physical producta physical product
 This is done by the engineering department orThis is done by the engineering department or
by the research & development department.by the research & development department.

Test MarketingTest Marketing
 Test marketing is defined as “developing aTest marketing is defined as “developing a
temporary Marketing Mix & introducing thetemporary Marketing Mix & introducing the
new product to a market called, the samplenew product to a market called, the sample
market to verify & analyze the market reactionmarket to verify & analyze the market reaction
for the new product”for the new product”

 CommercializationCommercialization

1.24
SegmentationSegmentation::
According to Philip Kotler, “It is theAccording to Philip Kotler, “It is the
subdividing of market into homogenous subsetssubdividing of market into homogenous subsets
of consumers where any subset may be selectedof consumers where any subset may be selected
as a market target to be reached with distinctas a market target to be reached with distinct
Marketing Mix”.Marketing Mix”.

1.25
TargetingTargeting
““The process of evaluating each marketThe process of evaluating each market
segment’s attractiveness and selecting on orsegment’s attractiveness and selecting on or
more segments to enter”more segments to enter”

1.26
PositioningPositioning
““The process by which marketers try to create orThe process by which marketers try to create or
build an image (identity) of their products orbuild an image (identity) of their products or
services in the mind of their targeted segment”services in the mind of their targeted segment”

Channel of DistributionChannel of Distribution
 According to Philip Kotler, “The distribution isAccording to Philip Kotler, “The distribution is
the set of all firms & individuals that assist in thethe set of all firms & individuals that assist in the
transferring thetransferring the
 little of goods & services as they move fromlittle of goods & services as they move from
producers to customers.”producers to customers.”
 It is also defined as “The root through whichIt is also defined as “The root through which
goods move from the place of production of thegoods move from the place of production of the
place of consumption.”place of consumption.”

Functions of the Channels:Functions of the Channels:
1. Channels of distribution helps, the goods & services to1. Channels of distribution helps, the goods & services to
move from the place of production to the place ofmove from the place of production to the place of
consumption, hence they create place utility.consumption, hence they create place utility.
2. Goods are brought by the channels when they are2. Goods are brought by the channels when they are
needed. Hence they create time utility.needed. Hence they create time utility.
3. A channel reduces complexity in the distribution system3. A channel reduces complexity in the distribution system
4. Inclusion of channel reduces the financial burden of the4. Inclusion of channel reduces the financial burden of the
producersproducers
5. They provide various services such as standardization,5. They provide various services such as standardization,
grading, etc.grading, etc.
6. They supply the market information to the producers6. They supply the market information to the producers
7. They help producers in promoting their sales.7. They help producers in promoting their sales. 1.28Hallmark Business School

AdvertisingAdvertising
 The word “The word “Advertise” has been derived fromAdvertise” has been derived from
the word “Ad” which means “Turn” &the word “Ad” which means “Turn” &
“Verto”“Verto” meaning “meaning “towards”. Hence the termtowards”. Hence the term
advertising means to turn the attentionadvertising means to turn the attention
towards something.towards something.

 The main objective of advertising may beThe main objective of advertising may be
explained in theexplained in the “AIDAS” formula,“AIDAS” formula,
 wherewhere A=Attract the attention, I=CreateA=Attract the attention, I=Create
interest (read), D=Desire (like), A=Actioninterest (read), D=Desire (like), A=Action
(act), S=Satisfaction.(act), S=Satisfaction.

Kinds of Advertising MediaKinds of Advertising Media
 Press Publicity or the Print MediaPress Publicity or the Print Media
 Direct MailDirect Mail
 Outdoor AdvertisingOutdoor Advertising
 The Broadcast MediaThe Broadcast Media
 Social MediaSocial Media

SALES PROMOTIONSALES PROMOTION
 According toAccording to American MarketingAmerican Marketing
Association, Sales Promotion is “A group ofAssociation, Sales Promotion is “A group of
activities otheractivities other than advertising, personalthan advertising, personal
selling, & publicity that stimulates consumerselling, & publicity that stimulates consumer
purchasing & dealer’s effectiveness.purchasing & dealer’s effectiveness.
 Eg: Discounts, Samples, Exhibition, etc.Eg: Discounts, Samples, Exhibition, etc.

Factors that affect pricingFactors that affect pricing

Penetration PricingPenetration Pricing
 A low price is set by the company to build upA low price is set by the company to build up
sales and market share. This may be done tosales and market share. This may be done to
establish position in a market with preexistingestablish position in a market with preexisting
similar products on offersimilar products on offer

Skimming PricingSkimming Pricing
 Here, the initial price is set high and may slowlyHere, the initial price is set high and may slowly
be brought down. This will allow the companybe brought down. This will allow the company
to introduce the product step by step toto introduce the product step by step to
different layers of the market. different layers of the market.

Competition PricingCompetition Pricing
 When trying to go head to head with competitorsWhen trying to go head to head with competitors
offering similar benefits, a company may decideoffering similar benefits, a company may decide
to:to:
a.a. price higher to create a higher quality perception or to price higher to create a higher quality perception or to
target a niche markettarget a niche market
b.b. price the same to show more benefits for the same price the same to show more benefits for the same
priceprice
c.c. price lower to try to gain a wider customer base price lower to try to gain a wider customer base

Product Line PricingProduct Line Pricing
 Here, different products in the same range mayHere, different products in the same range may
be set at different prices.be set at different prices.
 Television sets are priced differently dependingTelevision sets are priced differently depending
on whether they are HD or not, whether theyon whether they are HD or not, whether they
have wifi features of not and whether they arehave wifi features of not and whether they are
3D or not.3D or not.

Bundle PricingBundle Pricing
 A group of products may be bundled togetherA group of products may be bundled together
and sold at a reduced price. Supermarkets oftenand sold at a reduced price. Supermarkets often
use this method through their ‘buy one get oneuse this method through their ‘buy one get one
free’ offers.free’ offers.

Psychological PricingPsychological Pricing
 Often a company will make small changes toOften a company will make small changes to
prices to make a customer think the item isprices to make a customer think the item is
priced lower than it is.priced lower than it is.
 This is often seen in prices ending in 99. ForThis is often seen in prices ending in 99. For
example, an item market 199 will be perceived asexample, an item market 199 will be perceived as
closer in price to 100 than 200.closer in price to 100 than 200.

Premium PricingPremium Pricing
 A high price is set to establish an exclusiveA high price is set to establish an exclusive
product of high quality. Designer cars andproduct of high quality. Designer cars and
premium brand stores are a good example ofpremium brand stores are a good example of
this type of pricing.this type of pricing.

Optional PricingOptional Pricing
 A company may add optional extra items withinA company may add optional extra items within
the price to increase a product’s attractiveness.the price to increase a product’s attractiveness.
Car sellers may offer car insurance for the firstCar sellers may offer car insurance for the first
year for example.year for example.

Cost Based PricingCost Based Pricing
 Simply, a company may determine the exact costSimply, a company may determine the exact cost
of producing and selling an objective, add aof producing and selling an objective, add a
markup that may be desirable for profits andmarkup that may be desirable for profits and
price accordingly.price accordingly.
 This method may be used in a changing industryThis method may be used in a changing industry
where even costs of production arewhere even costs of production are
unpredictable.unpredictable.

Cost Plus PricingCost Plus Pricing
 A percentage is added to the costs as a profitA percentage is added to the costs as a profit
margin to determine final price.margin to determine final price.

PromotionPromotion
 Promotion is a part of an organizationPromotion is a part of an organization
marketing mix that is used to inform & persuademarketing mix that is used to inform & persuade
the market regarding its products & services.the market regarding its products & services.

Promotion mixPromotion mix
 It is a combination of personal selling,It is a combination of personal selling,
advertising, sales promotion, publicity & publicadvertising, sales promotion, publicity & public
relations that helps an organization to meet itsrelations that helps an organization to meet its
marketing objectives.marketing objectives.

Communication Process inCommunication Process in
MarketingMarketing
 Identifying the Target MarketIdentifying the Target Market
 Determine the communication ObjectiveDetermine the communication Objective
 Designing the MessageDesigning the Message
 Selecting Communication ChannelsSelecting Communication Channels
 Allocating of Promotional BudgetAllocating of Promotional Budget
 Deciding on the Promotion MixDeciding on the Promotion Mix

Marketting Mix decisions

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie Marketting Mix decisions

Ähnlich wie Marketting Mix decisions (20)

Mehr von Hallmark B-school

Mehr von Hallmark B-school (18)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Marketting Mix decisions