Marketing Management -Unit 3 recap

Marketing Management –
Unit 3 Recap

Channel Management
 Marketing channels (or
distribution channels) are sets of
independent organizations
involved in the process of marking
a product or service available for
use.

Intermediaries
 Merchant
◦ wholesalers and retailers: who buy, take title to
and resell the merchandise to customers.
◦ Retailing : it includes all activities directly related
to the sales of goods or services to the ultimate
consumer for personal, non-business use.
 Agents
◦ Brokers, manufacturer’s representatives who
search for customers, negotiate on behalf of
company but do not titled to goods.
 Facilitators
◦ Transporters, warehouse owners, banks,
advertising agencies assist in the distribution
process.

Channel Levels
 The producer and the customer are
part of every channel. There can be
several levels in marketing channels
depending on the number of
intermediaries placed in the channels.
1. Zero-level channel
It also called direct marketing channels
like telemarketing, internet selling.
Producer Consumer

Channel Levels
2. First-level channel
It also called one level channel.
Producer Retailer Consumer
3. Two-level channel
Producer Wholesaler Retailer
Consumer
4. Three-level channel
Producer wholesaler Jobber Retailer
Consumer

TWO-level Channel for Industrial
Market
 Manufacturer Manufacturer’s
Representative Industrial
Distributors Industrial Consumer

Functions of Marketing
Channels
 Facilitate physical movement of goods
form factory to the customers.
 Provide distribution setup to reach
warehouse depot, wholesalers and
retailers.
 Break the bulk into small stock
keeping units for buyers purchase.
 Proper handling and reselling.
 Bearing risk of transportation, storing
and disposing waste.

Functions of Marketing
Channels
 Share the financial burden of the
principle; provide deposits; finance the
risk till they are sold to the ultimate
customers. Extend credit facility to
retailers/ customers.
 Provide pre-sale and after- sale service.
 Assist in merchandising and sales
promotion.
 Assist in developing sales forecasts and
sales plans for territories.
 Provide liaisoning, maintain market
intelligence and feedback.

Factors Considered in Designing
Market channels
 Evaluate competitor’s channel design.
 Evaluating company resources like man and
money and matching the channel design to
the resources.
 Analyzing customer market size and make
customer demographics.
 Evaluating product type, product line, product
variants.
 Evaluating distribution environment.
 Evaluating economic factors like cost,
profitability of channels, effectiveness in
terms of market coverage and sales volume.

Vertical Marketing System-
VMS
 In conventional marketing channel, all
intermediaries are separate businesses
seeking to maximize its own benefits
event at the cost of others.
 In contrast, a VMS is a unified system
comprises the producer, wholesalers,
retailers.
 VMS arose as a result of strong channel
members attempts to control channel
behavior and eliminate the conflict that
results when independent members
pursue their own objectives.

Types of VMS
 Corporate VMS
◦ Combines production and distribution
under ownership. HP runs company
owned company oriented petrol pumps.
No other party is selling producer’s goods.
 Administered VMS
◦ Manufactures of a dominant brand are
able to secure strong trade cooperation
from any resellers in connection with
displays, shelf space, promotion and
distribution.

Types of VMS
 Contractual VMS
 These include wholesaler-sponsored
voluntary chains, retailers cooperatives,
franchise organization who integrate
their programmes on a contractual basis
with manufacturer to obtain more
economies or sales impact.

Market Control
 Market control is the tool for ensuring
that the marketing programmes and
activities of the firm are always
directed towards its marketing
objectives.
 It provides the means of testing
performance of marketing team in
achieving firm’s goals.

Market Control
 It involves:
1. Setting predetermined performance
standards
2. Evaluating actual performance
3. Comparing it with set standards
4. Take corrective action, if deviations
exist by readjusting marketing mix to
the marketing goals.

Techniques of Marketing
Control
 Marketing Audit
◦ Systematic and objective study of the total
marketing efficiency of the firm.
 Market Share Analysis
◦ It helps to develop long-term sales
forecasts and evaluate marketing results
at micro and macro level.
 Marketing Cost Analysis
◦ It compare marketing and distribution cost
with actual sales to check profitability.

Techniques of Marketing
Control
 Marketing Information System
◦ To keep on watch on changes in the
marketing environment which are critical.
 Marketing by Objective (MBO)
◦ Fixing of objectives in important areas of
business, identifying KRAs, evaluating
results.

Promotion Mix
 It refers to the combination of various
promotional tools used by a business
firm to create, maintain and increase
the demand for its product or service
in the market.
 It involves an appropriate integration
of advertising, personal selling, sales
promotion and publicity.

Promotion Mix
 From the management’s perspectives,
following questions need to be answered
in finding out a balanced promotion mix.
1. What are the most effective ways to make
consumer awareness of the product?
2. Which elements of promotion mix to use?
3. How much expenditure should be incurred
on advertising, personal selling or any other
sales promotion?
4. How can we use promotion mix to make
distinct position for the product in the
competitive market?

Sales Activities in Promotion
Mix
 Advertising : Mass, paid, impersonal
selling.
 Personal selling: Face-to-face
dealing or salesmanship.
 Point of purchase display:
Exhibition, trade fairs, etc.

Types of Sales Strategies
 Pull Strategy
◦ In Pull Strategy, the manufacturer uses
advertising, promotion and other form of
communications to persuade consumers to
demand the product from intermediaries, thus
inducing the intermediaries to order it.
◦ This strategy is appropriate when there is a high
brand loyalty and high involvement in the
category, when consumers are able to perceive
differences between brands, and when they
choose the brand before they go to store.
◦ It focuses on mass promotion so that product pull
itself from manufacturer to the consumer.
◦ Advertising is the element of pull strategy.

Types of Sales Strategies
 Push Strategy
◦ A push strategy uses the manufacture’s sales
force, trade promotion or any other means to
induce intermediaries to carry, promote and
sell the product.
◦ This strategy applies where brand loyalty is
low, brand choice is made in the store, the
product is an impulse item. It emphasizes
personal selling.
◦ It makes the intermediaries to act on
personal selling to push the product through
channels to the consumer.
◦ Merchandising , POP display , Sales
promotion by dealers and retailers.

Objectives of Promotion
1. To communicate information about
product features, benefits, usage, utility,
price etc.
2. To convince the customer about the
utility of its purchase.
3. To beat the competition by brand
positioning in the market.
4. To stimulate demand by impulse
purchases.
5. To maintain regular sales for the
products by doing its remainder
function.
6. It influences the buying behaviors of

Elements of a Promotion Mix
 Advertising
 Sales Promotion
 Public Relations
 Personal Selling

Factors in Deciding a Promotion
Mix
 While deciding on the
combination of promotion mix, a
firm will consider the following
elements:
◦ Nature of Product
◦ Nature of Market
◦ Stage of the Product’s Life Cycle
◦ Availability of Resources

Advertising
 “Any paid form of non-personal
presentation and promotion of goods
and services by an identified
sponsor.”-by AMA
 It is a way of persuasiveness.
 It is any paid form of non-personal
communication of goods or ideas by
an identify sponsor.

Advertising
 Advertising is the means to promote
goods, ideas or service in the market.
 The objective is to catch attention of
the customers towards the product
and provide them information about
the features, utility, and price of
product.

Objectives of Advertising
 The principle of DAGMAR-Defining
Advertising Goals for Measured
Advertising Results clearly defines the
purpose of advertising broadly used by
all sales organizations.
 Objectives are:
1. To introduce product to customer.
2. Provide information about product features,
usage and price.
3. To inform about a product availability.
4. To build primary demand.
5. To make immediate sale.

Objective of Advertising
 Objectives are:
6. To build brand image in the market,
7. To create reputation for reliability of
product quality.
8. To make selling easy.
9. To inform about improved product
features.
10.To reach nation wide market and to
develop overseas market.

Functions of Advertising
 To Inform new product, improved
quality, price changes, new variants,
new brand.
 To Persuade customer to buy, aid
sales force, build brand preference, try
to offset competitor’s advertisement.
 To Remind to keep the awareness
intact, remind users when they
actually buy, maintain image during off
seasons.

Elements of Advertising
 Non-personal salesmanship.
 Paid communication by identified
sponsor.
 It expose large customer group at low
cost per prospect.
 It is a unique form of non-personal
mass communication.
 It can be emotional or scientific in
nature.

Personal Selling
 It consists of individual and personal
communication in contrast to mass
advertising communication.
 Personal selling is basically a method of
communication. It involves not only individual
but social behavior each of the person in
face-to-face contrast salesman and prospect
influences the other.”-by CUNDIFF & STILL
 It is a face-to face interaction with one or
more prospective buyers for the purpose of
making presentations, answering doubt and
taking purchase orders.

Qualities of Personal Selling
 It is the most effective tool at later stages
of the buying process, in building up
buying preference, conviction and buying
decision .
 It cultivates relationship between seller
and buyers
 Personal selling or salesmanship has 4
main qualities:
1. Personal Interaction
2. Cultivation
3. Response
4. Information Seeker

Kinds of personal Selling
 Based on Nature & Objective
1. Creative Salesmanship
1. It is educating the public in an
innovative way that they begin to
demand new products.
2. It requires creative thinking and
impressive dyad.
3. Salesmanship is using imagination
and originality in making sales
presentation.
4. Salesman provides extensive
information to the customer for

Kinds of personal Selling
 Based on Nature & Objective
2. Competitive Salesmanship
1. When salesman is pitching on the
product’s advantage in relation to the
substitutes or competitor’s products,
2. In changing technology and changing
lifestyle, competition is becoming
intense, salespeople resort to this type
of selling approach.

Sales Promotion
 It includes activities done by channel
members or intermediaries like
dealers and retailers.
 They incorporate incentives, samples,
discounts, contests, coupons and the
like to draw a stronger and quicker
buyer response.
 It has short-run perspective.

Sales Promotion
 Sales promotion is a tool used by
channel members to increase sales by
way of:
a) CRM (Customer Relationship
management)
b) Merchandising
c) Free Gifts
d) Buy one get one scheme
e) Free sampling
f) Vouchers & Coupons

Public Relations
 It is a recent but powerful form of
persuasion designed to protect, maintain
and improve the image of the company
and its products.
 It creates high credibility, goodwill and
has the ability to connect with customers.
 ITC (India Tobacco Company Limited)
has done it by way of rural network by e-
choupals to help farmers.
 Events, exhibitions, contests, quizzes
are all ways to Public relations.

Emerging Trends in Marketing
Green /Environmental/ Ecological
Marketing: According to the American
Marketing Association (AMA), green
marketing is the marketing of products that
are presumed to be environmentally safe.
 Green marketing can appeal to a wide
variety of these issues: an item can save
water, reduce greenhouse gas emissions,
cut toxic pollution, clean indoor air, and/or
be easily recyclable.

Social media marketing: It refers to the
process of gaining website traffic or
attention through social media sites.
 Consumer’s Online Brand Related Activities
(COBRAs) is another method used by
advertisers to promote their products.
Activities such as uploading a picture of
your new (anything) to Facebook are an
example of COBRA.
 Another technique of SMM is electronic
Word of Mouth (eWOM).

 Internet/web/ online/ webvertising/ e-
Marketing:
It is referred to as the marketing (generally
promotion) of product or services over the
Internet. It also includes marketing via e-mail,
wireless media, Digital customer data and
electronic customer relationship management
(ECRM).
 It uses tools & techniques such as social media
marketing (SMM), local directory listing, and
targeted online sales promotions. Examples
are EBay, OLX etc

Ecommerce (e-commerce) or electronic
Commerce: A subset of e-business, is the
purchasing, selling, and exchanging of
goods and services over computer
networks (such as the Internet) through
which transactions or terms of sales are
performed electronically. Contrary to
popular belief, ecommerce is not just on the
web.
 Ecommerce can be broken into four main
categories: B2B, B2C, C2B, and C2C.

Viral Marketing: It is a marketing
phenomenon that facilitates and
encourages people to pass along a
marketing message.
 Off the Internet viral marketing has been
referred to as “word-of-mouth,””creating a
buzz,” “leveraging the media,” network
marketing.” But on the Internet, for better or
worse, it is called ‘viral marketing.”
 Example : Hotmail.com, Reliance Jio

Event Marketing: Event marketing is the
experiential marketing of a brand, service,
or product through promotional events.
It typically involves direct interaction with a
brand's representatives.
It should not be confused with event
management, which is a process of
organizing, promoting and conducting
events

Network Marketing: Network marketing is
a business model that depends on person-
to-person sales by independent
representatives, often working from home.
A network marketing business may require
you to build a network of business partners
or salespeople to assist with lead
generation and closing sales.

Buzz Marketing: Buzz marketing is a viral
marketing technique that is focused on
maximizing the word-of-mouth potential of a
particular campaign or product, whether
that is through conversations among
consumers' family and friends or larger
scale discussions on social media
platforms.
Marketing buzz or simply buzz—a term
used in viral marketing—is the interaction of
consumers and users of a product or
service which amplifies or alters the original
marketing message

Global Marketing: Global marketing is
“marketing on a worldwide scale reconciling
or taking commercial advantage of global
operational differences, similarities and
opportunities in order to meet global
objectives“
It is the process of adjusting the marketing
strategies of your company to adapt to the
conditions of other countries.

 Rural Marketing: Rural marketing is a
process of developing, pricing, promoting,
and distributing rural specific goods and
services leading to desired exchange with
rural customers to satisfy their needs and
wants, and also to achieve organizational
objectives.

Internet Marketing
 It involves promotion of a product on the
company’s website available on the
internet online.
 These sites express the company’s
products, offers, variants, features, price,
take orders online.
 It is a way to B2B, B2C and C2C
marketing.
 Companies are using social website like
Facebook, Twitter, Instagram to interact
with the customers.

Benefits of Online/Web
Marketing
 Access to wide international market.
 Small firms can market themselves
internationally.
 Render service from single point.
 Imparts speed to responses from customers.
 Reduced marketing costs.
 Less salesforce requirement.
 Online transactions, payments and order
placement.
 Improved customer relations.
 wider search options for customers.
 Growth in customer’s base.

Seven key Elements (7C’s) in
Designing Effective Marketing
Website.
 Rayport & Bernard J Jaworski
introduced seven key elements to be
considered in designing an effective
marketing website:
◦ C 1 Context: Layout and design
◦ C 2 Content: Text, pictures, videos, site
information
◦ C 3 Community: Easy interaction between
users and sites
◦ C 4 Customization: Allow users to
personalize the sites

Seven key Elements (7C’s) in
Designing Effective Marketing
Website.
 Rayport & Bernard J Jaworski
introduced seven key elements to be
considered in designing an effective
marketing website:
◦ C 5 Communication: How the site enables
B2B, B2C, C2C interaction
◦ C 6 Connection: Degree with which site is
linked to other sites.
◦ C 7 Commerce: Site’s ability to make
commercial transactions.

Customer Relationship
Management (CRM)
 Customer Relationship Management is the
process of carefully managing detailed
information about customers to maximize
customer loyalty.
 It allows the company to discover who its
customers are, how they behave, and what
they need or want.
 The company integrates its major business
processes such as order processing,
production, delivery, customer feedback
within a single family of software modules.
 This enables company to respond
appropriately, coherently, and quickly to
different customer opportunities .

Customer Relationship
Management (CRM)
 Today's customers are becoming
harder to please. They are smarter,
more price conscious, more
demanding, and is approached by
many competitor’s with equal or better
offers ay same or lesser price.
 The challenge with marketers is to
produce delighted and loyal
customers.
 Key to customer loyalty is customer
value and customer equity.

Customer Value & Equity
 The term customer equity refers to the
total value of a small business's
customers over the life of the
company. Customer value is
calculated on a similar basis but
breaks down the overall equity into a
per person unit.
 By understanding customer value and
equity, a small business can
determine not only its future success
but what kind of customers it needs to
be targeting.

Steps in CRM
1. Integrate the voice of customer in designing
marketing mix.
2. Get cross-departmental participation in
planning the marketing strategy.
3. Create superior products, good after-sales
service.
4. Organize a customer database and make
continuous interaction with them by way of
customer reward programme, contest, gifts,
greeting cards on public occasions, club
marketing, frequent buying point in forms in
discounts on future purchases, charging
less price to loyal customers.

Marketing Management -Unit 3 recap

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