Marketing Management

 

To know the marketing management at first we have to know the marketing and management.

Marketing: Marketing is the task of creating, promoting, and delivering goods and services to the consumers and business.

Management: Management is the combination of planning, organizing, actuating, motivating and controlling.

These are management tools. So, when these tools are applied in marketing will be called marketing management.

In broad sense, marketing management is the art and science of choosing target markets and building profitable relationship with them. The marketing manager’s aim is to find out, attract, keep & grow target customers by creating, delivering & communicating superior customer value.

To do these a marketing manager must answer two important questions.

1. What customers will be served?

2. How can we serve them best? That means what’s our value proposition.

 

The core philosophy or things of marketing management are as follows-

1. Vision: It referees to dream. For example – a person want to be a marketing executive or, gaining large scale of profit.

2. Mission:  Media through which the vision can be achieved. For example- Our mission is marketing discipline/ department through which we can be an executive.

3. Objective: The definite or specific thing to be achieved can be treated as objective. That’s also called target. For example - to gain 15% profit in this year.

 

To know the marketing management very well, we need to know the core concept of marketing.

1. Needs, wants and demand:

a. Needs: It refer to states of felt deprivation. Actually, what we feel in a broad area not specific is need. Ex- to meet up our hunger us firstly, seeks food.

b. Wants: The form needs take as shaped by culture & individuals’ personality is treated as wants. That means, when human needs will be specific by a person’s choice, habit and which will be supported by his culture & society is want. Ex As a Bangladesh we’ll seek rice, pulse fish as food where as south Indian will seek broad & pickle.

c. Demands: Human wants that are backed by buying power can e considered as demands. Ex- many people want a Mercedes but only a few are willing & able to buy one. That means wants for specific products backed by an ability to pay are demands. 

2. Marketing offers: Some combination of products services, information or experiences offered to a market to satisfy a need or want. It includes –

Ø Product

Ø Service

Ø Experience

3. Customer value & satisfaction: Customer value & satisfactions are key building blocks for developing & managing customer relationship.

a. Customer value: Difference between perceived combination of (q.sp) quality service and price or intangible. There are some values-

Ø Product value

Ø Service value

Ø Personal value

Ø Image value

It increases with quality & service and decreases with price.

b. Customer satisfaction: Difference between the actual performance & expectation. It depends on how much the product is fault free. That means, if the product’s performance becomes up to the customer expectation that refers to customer satisfaction.

  

4. Exchanges & relationships:

Exchange: The act of obtaining a desired object from somebody by offering something in return. It’s done through marketing offers and getting the response.

Relationship: Marketers want to build strong relationships with customers by consistently delivering superior customer value.

5. Markets: The set of actual and potential buyers of a product or service. These buyers can share a particular need or want that can be satisfied through exchange relationship

Beside these there are some further concepts delivered by Philip Kotler in marketing management. These are –

Ø Target markets, positioning & segmentation

Ø Marketing channels.

Ø Supply chain

Ø Marketing environment.

Ø Compilation.

 

Core objective of marketing management task is to create loyal customer through delivering high customer value & satisfaction backed by an effective value delivery process. Here we find three important things.

1.     Customer value

2.     Customer satisfaction

3.     Effective value delivery process

Now, these can be discussed.

1. Customer value:  Difference between perceived cost and perceived benefit wheather tangible or intangible. It’s a central marketing concept and is the combination of quality, service and price (“qsp”). Value increases with the quality and service and decreases with price.

Customer value =  

a. Cost: The amount of money that is spent to buy a product or service.

Monetary cost: It’s explicit cost that can be measured or counted in term of money Ex- Tk. 50, Tk. 100 etc. It’s also an accounting cost.

i. Time cost: It’s implicit cost that can’t be counted in term of money. Convenience goods require less time cost where as shopping as well as specially goods require much time cost. It varies from man to man. Ex- to shop daily necessaries a businessman feels much time cost than a housewife or a less busy man does.

ii. Energy cost: It’s related with the physical observation of a person. To buy a product we have o go to a market, survey the market, choose a product, bargain with the seller and finally purchase it. To fulfill this process we lose our energy that’s energy cost. It also varies from person to person. Ex- a patient or unskilled person has more energy cost than a normal or skilled one.

iii. Psychic cost: It’s totally related with the mind or psychological support of a person. At the time of buying  a product the psychological condition  of the buyer regarding is this product (Shirt) suits  with me, is the price so high, will my friend & family member choose it etc. are the expose of psychic cost.

     

b. Value: How much product is worth compared with its price?

i. Product value: Direct utility we get from the product. The actual performance of a product is product value. Ex- a pen wireless well or not: if well means having much product value; if not, means having less product value. It varies from person to persons.

ii. Service value: What type of service is associated with the product delivered by a firm? Ex- after sales service, return after sale guarantee, warranty etc. It’s totally related with the company’s policy and practice.

iii. Personnel value: As the name depicts the value related with the personnel or sales person’s behavior is personnel value. When we buy a product how the sales person treats us bad or great is personnel value of the product. In spite of having good product as well as service value the sale may be increased or decreased by the behavior of the salesperson.

iv. Image value: How product creates a positive feeling in the mind of a customer refers to brand image. Due to having same quality, design, color, price etc. The branded products are sold much more than non-branded one. Ex- the demand of Nokia cell phone is higher than the other brand in the market due to having more image value.

2. Customer satisfaction: Difference between the actual performance & expectation. It depends on how much the product is fault free. That means, if the product’s performance becomes up to the customer expectation that refers to customer satisfaction. If performance is less than expectation, the customers will be dissatisfied; if equals to expectation, he will be satisfied; and if more than expectation, he will be delighted.

3. Effective value delivery process: Besides value & satisfaction, the value should be delivered through an effective process. Here value chain is important.

Value chain: Normally it is the sum of various activities. In broad, value chain is the chain of activities & relationship by which a company brings or purchases materials, creates a good product or services, markets it & provides services after the sale is made. So at last we can say value chain is the combination of activities that create value and add new value in the products.

 

The overall process of building and maintaining profitable customer relationship is done by delivering superior customer value & satisfaction. It deals with all aspects of acquiring, keeping and growing customers.  It consist of two important things-

1. Customer life time value

2. Customer equity

Now these are described in bellow—

1. Customer life time value: Here life time means life cycle of the products. To develop customer relationship company invest something and by this way customer loyalty is obtained and company achieve the stream of profit. The present value of this stream of future profit is called customer life time value. Customer will frequently purchase the products up to product life cycle & by this way company will earn profit. So customer life time value is the differences between total customer gain and total cost up to life time of a product.

2. Customer equity: Customer equity is the total of discounted lifetime values of all the current & potential customers. The ultimate aim of customer relationship management is to produce high customer equity.  

 

A company can build relationship with the customers in the bellow way—

1. Additional financial benefit: It is one kink of sales promotion for a short period of time. Ex- discount, coupon, lottery, free goods, low price, penetration price etc.

2. Addition of special benefit: It deals with allowing some special facilities, justice, ethics, social charities, donation etc.

3. Structural types: it is used in modern digital age & deals with building relationship through computerized system or technology. For example- providing mobile phone to customers, on line facility etc. it is not familiar in our country. Everything will go in vain if it is not possible to create customer loyalty and satisfied customers.

 

Good relationship is impossible without the quality that the customers expect. The target of TQM is –

1. To set a specific quality standard.

2. To find the deficiency.

3. To develop the relationship among personnel.

To fulfill these tasks company at first appoints or employs an outsider expertise in managing. He may be a professor or business expertise. That person will be empowered to visit all the departments & find out the deficiency of quality in product. He is actually appointed to increase the relationship among the personnel in order to increase the specific slandered quality.

 

Marketers are responsible for demand management just as production and logistic professionals are responsible for supply management. Marketing managers seek to influence the level timing & composition of demand to meet the organizations’ objectives.

Demand management is the analysis, interpretation, creation, manipulation & maintenance of demand.

 

The different states of demand the corresponding tasks facing the marketing manager are as follows:

 1. Negative demand:      A major part of the market dislikes the product. The marketing task is to analyze why the market dislikes the product and whether a marketing program consisting of product redesign, lower prices, and more positive promotion can change beliefs and attitudes.

2. No demand: Target consumers may be unaware of or uninterested in the product. The marketing task is to find ways to connect the benefits of the product with people's natural needs and interests.

3. Latent demand: Consumers may share a strong need that cannot be satisfied by any existing product. The marketing task is to measure the size of the potential market and develop goods and services to satisfy the demand.

4. Declining demand: Every organization, sooner or later, faces declining demand for one or more of its products. The marketing task is to reverse declining demand through creative remarketing.

5. Irregular demand:        Many organizations face demand that varies on a seasonal, daily, or even hourly basis, the marketing task, called synchro-marketing, 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 consumer preferences and increasing competition. The organization must maintain or improve its quality and continually measure consumer satisfaction.

7. Overfull demand: Some organizations face a demand level that is higher than they can or want to handle. The marketing task, called de-marketing requires findings ways to reduce demand temporarily or permanently. General de-marketing seeks to discourage overall demand and includes such steps as raising prices and reducing promotion and service.

8. Unwholesome demand: Unwholesome products will attract organized efforts to discourage their consumption. Un-selling campaigns have been conducted against cigarettes, alcohol, hard drugs, handguns, X-rated movies, and large families. The marketing task is to get people who like something to give it up, suing such tools as fear message, price hikes, and reduced availability.

 

Market forecast refers to the indicator of the market elements. Such as income, expenditure, customer behavior etc change.

Only one level of industry marketing expenditure will actually occur if the market demand corresponding to this level that is called market forecast.

A company must forecast in short term demand for a particular product for the purpose of ordering raw materials, planning production and borrowing cash.

So, the market forecast shows expected market demand but not maximum market demand. Actually it is the estimation of market that what and when will be changed. Forecast is estimation and measurement is calculation. Estimation is hypothetical so it is not 100% accurate but human forecasting is approximately 100% accurate only 25% - 5% error occurs.

 

The company must measure and forecast the size, growth and profit potential of each market opportunities. It is the measurement and forecasting of the market.

Demand measurement: Demand measurement refers to measuring the current or actual demand in the market. Demand measurement is related to the ex-post theory. It is essential for strategic decision. The major concept of demand measurement are-

1. Market demand.

2. Company demand.

1. Market demand: The marketer’s first step in evaluating marketing opportunities is to estimate the total market demand. Market demand is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.

2. Company demand: The company demand is the estimated share of market demand at alternative level of company marketing effort in a given time period. It depends on how the company’s products, services, prices and communications are perceived relative to the competitors. Each demand measure serves specific purpose.

Demand forecasting: forecasting is related to the future condition. Forecasting is necessary to exist in the market. Forecasting is related to observe the change of market, customers’ behavior, technological change, or change of the market elements. It is estimated or assumed to actual calculation. It is essential to serve in future and adjust with the resources.

So, forecasting is to finding out the consequences of change. It is related to ex-ante theory. Sales forecasting are based on estimate of demand.

                                            

For measuring the demand accurately, the company must follow three types of level. These are as follows-

1. Space level.

2. Product level

3. Time level.

1. Space level: Space level measurement is done on the basis of geographical areas. The geographical measurement can be done either world wise or country wise and this decision depends on the company’s characteristics. Space level measurement is done by five ways. Those are-

a. World level: When the demand is measured by considering the whole world then it is called world level measurement.

b. Country level: When the demand is measured by considering the specific country then it is called country level measurement.

c. Region level: When the measurement is done by considering the location of the customers then it is called region level measurement. For example- the demand of aAC in northern zone.

d. Territory level: It is the specific area of region. We can also say that it is the segment of the regions. For example- market of refrigerator in Rajshahi is territory based.

e. Geographical level: It is the segment of the territory. Consumer may be in the specific area or district. For example- Monnujan hall in Rajshahi.

2. Product level: Product level measurement is done by accumulating the total sales of the company. The position of a company can be measured by the product level measurement. Product level measurement can be done in many ways. Those are-

a.     All sales.

b.      Industry sales.

c.      Company sales.

d.     Product line sales (shampo)

e.     Product form sales (500ml, 1000ml)

f.       Product item sales (all clear, sunsilk)

4. Time level: Time level measurement is done by measuring time to time sales of a firm. Specific time period is selected and then find out the total sales in that specific period of time. Time level measurement is done by three ways. Those are-

a.     Short run (1-5 years)

b.     Medium run (5-10 years)

c.      Long run (10- more)

So, at last we can say that which market is to be served is decided in term of space, product and time level.

 

Before implementing the new marketing strategy, the company must have to analyse the trends of demand of the customers. If the customers want to reduce their product price then they have to analyze the determinants of demand. The determinants of demand can be expressed by an equation as-

                   QD = f ( P, I, S, A,………………..    )

                          Here, p= price

                                    I = Income

                                    S = Substitute

                                    A = Advertising

                                    B = Parameter of price.

So, (b1p+ b2I + b3S + b4 A) will be the total demand of the company. Now we can analyze each determinants of the demand as follows-

1. Price: Price is the most vital determinants of demand of a product. Price is the only controllable factor for increasing or decreasing demand. As we can change the price according to situation, price sometime acts as advertising and promotion.

2. Income: If the income of a customer is high, his demand will also be high. And if low then demand will also be low. So income is also vital determinants of demand.

3. Substitutes: If various substitution of a product are available in the market then the demand of that product will be low, if not available then demand will be high.

4. Advertising: Strong advertising of a product can create larger demand of a product. So advertising is a vital determinant of demand.

At last if we consider a product demand from all of these determinants and add them according to that parameter, we will get the total demand of a particular item.

 

Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals & capabilities and its changing marketing opportunities.

To understanding the strategic planning we have to know three levels of business. These are as follows-

1. Corporate level: It is that level of business under which there are several business levels. The corporate level firstly designs investment strategies & policies for overall functions done by it &its consisting levels. So, top management is the corporate level. The success of the business largely depends upon effective design of policies and investment decision. For example sugar Mill Corporation, febicol Industry Corporation.

2. Business level: Business level is that type of level which performs the functions and implements the policies and strategies taken by corporate level. Business level employees design production plan and marketing program. For example- Rajshahi sugar mill, North Bengal sugar mill etc.

3. Functional level: Functional level is where the implementations of policies and strategies are done actually. Here it is implemented in the production plan and marketing program which are designed by the business level. The functions are performed in a specific area.

Strategic planning processes are active in the bellow area-

1. Design the investment port-folio: port folio is the aggregate of the business and products of company.  The port-folio will the best when it will match or fit with the company’s SWOT, company has to analyze the current business port-folio in order to invest in profitable sectors and withdraw capital from non-profitable sectors. On the other hand, company analyses the port-folio not only for the present but also for the future business analysis.

2. Assess the strength and weakness of the business units: strength & weakness are the internal factors of a company. The strengths are management efficiency, finance and technology. Among these technology is the greatest strength. If these are absent in the company will be treated as weak. These should be assessed by the company in order to take strategic planning.

3. Formulation of policies & strategies: the policies and strategies may be formulated from corporate level or strategic business units (SBUs) level. Corporate level will formulate overall or general policies and business level will take or formulate strategies depending on locality and implement it.

Topics:  Marketing management is demand management-Explain.

 OR,

   State of demand and marketing tasks.

Marketers are responsible for demand management just as production and logistic professionals are responsible for supply management. Marketing managers seek to influence the level, timing and   composition of demand to meet the organization’s objectives.

           

So, they  have to be  informed  about the  following  states  of  demand and to  be the  marketing  task  accordingly. Demand management is the analyzing, interpretation, creation, manipulation and maintenance of demand.

           1.  Negative demand: Market dislikes the product. In  this case  marketer  well  find  the  cause  of  dislike, search   and  collect  information through  market  research. Then he will take corrective measure.  Here, he  can  apply “conversional marketing”  meaning the marketing  of  changing  the  form of a  product  through  design,  lower price  and  positive promotional  activities.

             2. No demand: It refers     to there is no market.  Actually, it occurs in case of new product. Purchasing a  new product  a   customer  perceives  various  risk  regarding  financial, monetary, time, psychological  and  social  risks. Marketer need to reduce these perceived risks. So  he  finds the  need and intention  of  the  customer  and  shows  the  connectively  of  the  product  with  their  needs through  showing  how  a  product can  satisfy   their  needs  and  wants. Here, he can apply “stimulation marketing”. 

                      

              3.Latent demand: It  refers to the  presence  demand in  the  customer’s  mind but  absent in the market .Here, the purchasing power as  well as  the strong intention of  customer  exists  but unavailability of  product . So,  marketer  should  supply  the  product and make  it  available  in  the  market .   To  do  this  he  should  measure  the  siege of  the  potential market  and  develop the goods and services to satisfy  the  customer. Here marketer can apply “Development marketing”.

 4. Declining demand:  As needs, fashion, expectation etc.  are always  dynamic ,demand is also dynamic. The demand of the product always declines .Like-desk top computer. So, marketer  should  change  or   differentiate the  product  to  avoid competition   through  technological  advancement . For Example- creation of Laptop can get the decline market of desktop. He  has  to  seek  the  way  to  stimulate  the  demand ,  associate  sales promotion like-discount , coupon, free  etc. for  a  time being .But  if It’s  found  any fault in  product  it’s  to  be taken  corrective  measure. Here, marketer can apply “creative marketing” and “remarketing” strategy.      

                

             5 .Irregular Demand: It  may  be   seasonal  like –warm  cloth,  daily  or  even  different time  within  a  day  like-at  office  fair (9.am) the  demand  of  rickshaw  remains  high  etc. Mainly service producing firms face irregular demand. They use the pricing strategy like - different price for different  time  to  overcome  this .For an  example-call  rate  of  mobile  phone  company  differs  from  pick hour  to  off  pick  hour. Here marketer can apply “sync no-marketing”

            6.Full Demand: It  refers  to  there  is  no  necessity  to  create  the  demand .The  marketer  has  to  maintain  the quality  in  order  to maintain the  current  level  of  demand  in  the face of changing  consumer  preference  and  increasing  competition  So , he  is  to  measure the continuous consumer intention. Here, the marketer applies “maintenance marketing” policy.

           

7.Overfull  Demand: When  the demand  of a  product  is  more  then  its  firms ability  or  capacity  to serve  is overfull  demand. Marketer  tries  to  reduce supply  in  less profitable  areas  and  increase it  in  more  profitable  areas. He has to utilize. If necessary demand may be reduce   temporarily or permanently. That means here “de-marketing” strategy is used. Ex-pulsar bike of Bajaj did this strategy.

8. Unwholesome Demand:  It refers to un-expected or unethical demand. For example- any harmful products like-cigarette, alcohol, hard drinks etc. Govt. imposes   higher tax on this product to remove the availability or supply it.

 In this very situation marketing manager takes the measures to adjust with these. So, we can say marketing management is demand management.

Topics:  Analysis determinants of demand.

The  relationship  between  the  quantity  demanded  of  the  product  and the  various  factors That  influence  this  quantity  is  called  the  demand  function. This function can be shown-

           

 Q=f (P, I, S, A------∞)

This relation may be expressed as follows-

          Q = b1p +b2 I + b3 S +b4A

          Here, Q= Quantity demand.

                    P=Price.

                    I = Per capita   income.

                    S =   Substitute    product.

                   A=   Advertising    expenditure.

                   ∞ = Parameters of the demand function.

Among  these  factors  price  is  vital  because  its  comfortable  and  60%  success  depends  or  counts   on  it .  Price may be used both as promotional and profit earning tools.

            Price  Elasticity: The  percentage  change  in  quantity  demanded  resulting  from  a  1  percent  change   in  price  is  called  price  elasticity  of  demand. This may be –

1. More   then 1 or   more then unity elasticity.

2. Equal to 1 or unity elasticity.

3.Less  then  1  or  less  then  unity  elasticity.

 1. More   then 1 or   more then unity elasticity. :  When  with  the  fall  in price  the  total  amount  spent  increases  and  with the rise in  the  price , the total  amount  spent  decreases  is  called  the  grater  then  unity  elasticity.  It can be shown-

Price (TK)          Quantity demand(unit)       Total expense/Revenue (TK) 

         8                                                3                                 24

         7                                                4                                 28

 In  this  type  of  product  if price  decreases the market   will  expand  as  customer  increases  his  expense.

                         

  2. Equal to 1 or unity elasticity:  When  the  total  amount  spent remains  the  same  through  the  price  changes, is   called  unity  or  unitary  elasticity.

Price (TK)      Quantity demanded (unite)   Total expenses/revenue (TK)                                                                          

     6                               5                                                30

     5                               6                                                30

  In  this  case ,  though  sales  increases  the  profit  of  sales  will  not increase. Here,  the  customer  will  purchase  that  very  amount  which  will  be got  by same  money.

 3.Less  then  1  or  less  then  unity  elasticity :  When  the  total  amount  spent  increases  with  a  rise in  price  and  decreases  with a  fall  in  price  is  called less  then  unity  elasticity .

Price (TK)   Quantity demanded (unity)     Total expenses/Revenue (TK)

         5                            6                                              30

         4                            6                                              24

 In  this  case  customer  will  purchases  the  same  amount  through  price  increases  or  decrease-  He  will  not  purchase  more  or  less.

Topics-What is Market Potential?

 Potential is near to 100% truth. Potential  of  market  means  the  estimation  of  maximum  total  sales  of  a  product  during  a  certain  period  in  future .  If population   or income increases the demand will also increase. So if a marketer supplies, the market will be created.  It is the market potentiality.        

 For  example  total  sales  of  a  company  5 corer,  in  2007  ,  6  corer  in  2008 ,  6.5  corer  in  2009 ,  7  corer  in  2010 ,  etc.  that’s  mention  further  sales  will be  increased  in  next  year .  So, it can invest accordingly.

 

There are two types of market potential.

                      

 1.  Total market potential. 

                      2.  After market potential.

                

Topics: Factors affecting the product development.

The ultimate goal of a company is the profit maximization.  To  maximize  profit  it’s  needed  to  develop  the  product .

                       

 Profit earning motive: Profit of any business exists in the three points .That’s are –

1.     Monopoly market.

2.     Risk.

3.     Innovation.  

1. Monopoly market: The market where is not existing any competitor for concerned      products or services.

2.     Risk: Future is uncertain and there are many reasons for loss of business, for this why risk affects the product development.

3. Innovation: Innovation  refers  to  utilization  of new  technology   in  the  commercial  sector  to  satisfy the  needs  and  wants.

Following factors direct to innovate-

                      

 1. Tenancies factors / ability.

 2. Technological ability.

 3. Human resource ability

 4. Dynamic environment.

Any company has to be free from competition and to take risk. In addition to it, it’s to be

Checked that is there availability of ability and resources.  If  it  can’t  exist  in  the  competition it’s  to  be driven  out from the market. So a company will take decision whether it will develop a new product or not.

Topics: What are the different types of new product?

                       

1.Acquisition :  When  the  share  of  an  unable  company  is  purchase  by  other  company  is  called  acquisition.  Ex- Airtel   has purchased 70% share of Warid telecom.  Again  LG  doesn’t  produce  any  product  just  purchased  from Butterfly  and  sells them  in  the market with there own  brand .  So, Butterfly is a marketing company not a purchasing company.

Acquisition  is  occurred  particularly  when  a firm becomes  disable  to  market  their  products  or  run  their  business .Then  other company  with  enough  resources  gets  the  chance   of  acquisition  of  that vary  company .  Licensing is   another from of acquisition.

 Licensing: Patent is the right to utilize formula.  When  a  company  creates  a  product  using  the  formula  of  other company  and  markets  it  with the name of  that  vary  company  is  called  licensing . Ex- “Nevia” cream  actually  is  of  Germany  but  India  also  produces  and  markets  it  with same   name  NEVIA  and  same  technology  by  the  help of  licensing

2. Development of new product:

                       

 a. New to the market:  A  product  that  is  totally  new  in  the  market . Example-soap for man and woman.

b. Modification: Modification  refers  to  addition  of  new  thing  or  technology  with the existing  one . Ex-MP3 camera, Internet etc.            addition to the mobile phone.

 C. Alteration of old product: It means converting old product into new. Ex- new LUX, renew close up etc.   

d. Differentiation:  Differentiation implicates the technological feature change of    a product. Ex-black and white TV converted to color   TV   to LCD etc.

 3.  Totally new innovation :  innovation  means  utilization  of  new  method  or  technology  in  order  to  make  new  combination .  In this case  a product  is  produced  through  the  development stage like-

Idea generation, idea  screening ,  concept  development, concept  testing ,  product  development  and  test  marketing .Ex-  electronic  toothbrush that  can  be used  without toothpaste.

 Topics: Development stage or steps of new product.   

                       

To create successful new products, a  company  must  understand  its  consumers  markets ,  and  competitors  and  develop products  that  deliver superior  value  to  customers .  It develops a new product through the following process:

1. Idea generation:  Idea generation is the systematic search for new- product ideas. It’s done by two ways.

a)    R  &  D : R&D  origins  the  idea  for  new  product.

b)    Market  research :  Consumer  needs ,  wants, & demand  are  found  out  through  market  research. Company establish as organization (i.e.  Distribution duties and responsibilities among the employees and employers and coordinating among them) to establish the management to generate idea. Major sources of new product ideas include internal and external sources such as –customers

2. Idea screening. Idea screening refers to keep the good ideas and drop the poor ones from the gathered ideas as soon as possible.  \In this stage it’s adjusted the relationship with objectives and abilities. After deducting the useless ideas it’s gone to the next stage.

3. Concept development: Concept development is the elaboration of idea.  For example - Banglalink thought to make people communicate through air is an idea.  It used a sim to satisfy the communication needs is concept development.   So the concept means the specific product through which we can satisfy the needs of the market.  Technological feasibility is major factors of concept development.

4.Concept testing: Concept testing  calls for testing  new  product  concepts  with a group  of  target  consumers  to  find  out it  the  concepts  have strong  consumer  appeal.  The concept may be presented to consumers symbolically or physically to be known that the consumers take this or not practically.  Concept testing is done on the basis of financial ability and technology.

5. Business Analysis: Business  analysis is  pertaining to cost  benefit  analysis ,  cash flow  analysis  that  means  the present value of future profit.  It further relates to economic analysis like - the return on investment.  Here its needed a  managerial economist  in  order to analysis of  economic theories  in  the view  point  of  management.  Marketer decides what the price of our product   will be. These are business analysis.

6. Product Development: After business analysis if it’s found that the product can satisfy the company’s objectives, it can move to the product development stage.  Here R& D or engineers develop the product concept into physical product.  The product development step actually means a large jump in investment.

7. Test Marketing: Test marketing is the stag where the new product and marketing program are tested in more realistic way.  It gives the marker experience with marketing the product before going to the great expense of full introduction.  It lets the company  test the product  and its  entire marketing program-  positioning strategy,  advertising ,distribution,  pricing,  branding  and packaging  and budget level. Example - Nokia test marketed its mobile game player extensively before introducing its worldwide.              

                                        

    

     

Topics: Targeting and steps of targeting 

Normally, targeting means to identify target segment of the market. In  broad, the  process  of  evaluating each market  segments  attractiveness  and selecting  one  or more  segments  to entire is called  targeted  or target  marketing  .

           

Once  the firm has  identified  its  market segment  opportunities  , it must decide how  many  and  which  ones  to target.  Then  it  identifies both smaller and bigger  groups  Ex – a  bank  doesn’t only identify a  group of related wealthy  person  but  also segment  several  groups  among  them  depending  on current income ,  assets, savings, and  risk  preferences.

                 

 There are some steps of targeting.  That’s given bellow…

1. Segment of market :Market  segmentation is the process  of dividing a market into smaller groups  of  buyers who  have  separate needs, wants ,  and  demand,  etc .  of separate products  or  services.  When smaller  firms  can’t enter  into  a  big  market , they  try to  enter  into  smaller  markets  after segmentation . It’s called bypass strategy. It’s done on the basis of geography, demography, behavior etc.

  

2. Which segment to target: In  this  step,  a  firm  evaluate  each   market  segments  among  the  all  segments .  Then  it  decides  to  enter  into  one  or  more  segments  which it  can satisfy  by its  products  and  services. 

3. Deciding & implementing positioning strategy: Poisoning  means  arranging  products  and  all  the marketing  mix  in order  to  take  a  clear ,  distinctive , and  desirable place  in the market more then the  competitors  do .Ex- at  first,  GILLETTE  segmented  the market  based  on  men,  women,  children ,  etc.  After  evaluating all , it  found  that no  firm  is  dealing  with  the  market based  on  men  only . So , it  targeted Only  the  men based  market  &  took the  position  through  delivering  the products  and  all marketing  activities  (i.e. advertising ,  direct  marketing ,  public  relation  etc.)  through  only men  usable products  like-GILLETTE  foam , razor(match  3), blade ,  after  shave  gel  etc.

   Topics: Factors affecting targeting.

1. Attractiveness:

a) Feasibility to earn profit or to attract the market. When  there  is  lack  of  product   but  if  it’s  possible  to supply  the  market  may be  created .  Ex-  if  it’s  supplied  pen  and  paper  to University  area ,  these  must  be  sold .

b)  Profitability of the market.

c) Competition is less.

Mainly customer’s characteristics and competitors positioning influence attractiveness. 

2. Are the opportunities for multiple   targeting?  Will a company serve or do multiple targeting that depends on its feasibility analysis. If it  an  serve  different  or  various  market  its  to be followed  .

                         a) Cost   leadership 

    b) Differentiation.

    C) Forces.

 For  example – Once  in our country  the  electronics  products  were  made  in  Japan,  Korea , or  Italy.  But now this market is occupied only by China through reducing cost.  That  means ,  China  follows  the  cost  leadership  strategy .  Again, IBM computers are ahead in computer market   due to technological leader.

i.        Should  the company  target  a  single  segment ,  selectively  a few  segments  or  all segments?

        

Depending  on the  ability  a  company  will  decide  whether  to target  a  small segment or  a few  segments  or  All  segments .  Where  there  well  be  more  return  that means , if it’s   taken  one losing  or  keeping  free  others well  it  earn  profit  or    loss ,  it’s  to  be analyzed .

Here two types   of analysis are required.

a)     Cost  benefit  analysis

b)    Future product analysis.

Topics: Strategy design and factors affecting the choice   of strategy. (Targeting & positioning)

                         

Strategy means implementing the policy.   Whereas  policy  is  the  philosophy  that  guides  the  activities  and  that  can’t  be  changed .  Ex -  profit  maximization  is  the policy  of a  company  and  strategy  is  the   mean  through  which  policy  can  be  gained .  That  means   positive   positioning  in  the market is  policy  how  to get  better  positioning  is  strategy  . So,  in  order  to  achieve  the  policy strong  strategy  should  be  designed   for  each   &  every  company.

Factors affecting the choice of strategy

          

 1. Stage of product & market maturity:  

 a) Stage of product   life cycle:                         

                              -  Development

                              -  Introduction 

                             -  Growth

                             -  Maturity and

                             -  Decline                                                                                                                                     b) Stage of adoption process:

                            -  Innovators   :  Who seeks new.  2.5%

                           - Early adaptors: Normally face to face   group.  Here, customers purchase   product   seeing others.  It’s happened for fashionable goods.  In this stage many products lose their market.  Here they purchase for word of mouth.

                          - Early  majority  : Here  some  fashions  are  recognized  by  the  society    after  deducting  the other  fashions  .  Those accepted fashions are called style.

                          - Late majority:  Here realistic groups accept the product in this stage.   In this case they think more about.

                                                                                                                I.      Social  respect 

                                                                                                             II.      Product  quality

                                                                                                           III.      Social acceptability.

                        -Laggard:   Laggard means the slow or leggy   person. They are good for nothing .They purchase at last after purchasing by all. They actually   do this due to low purchasing power or income.

For  choice  it’s  to  be measured  that  in  which  stage  the  product  is.

2. Extent of diversity in preference: At the time of purchasing a product a customer analyze the following things.

                                                                          i.            price

                                                                        ii.            duality

                                                                      iii.            Social acceptability or recognition.

Ex-  The  price  of wadding share   is  high  because  people  don’t  think  to  purchase   it .

3.  Industry  structure :  An  industry  may  be  small  or big  in  size .  Ex- poultry & fishery industries   are fragmented or small industry where as garment industry   is big industry.     

4. Competitive  advantage  : competitive  advantage  calls  for  an advantage  over  competitors  gained  by  offering  can  summers  greater value  either through  lower price  or by  providing  more  benefits .  A  company  can  achieve  competitive  advantage  counting  or  depending  on three  tools  …

                                                       i.            Technology

                                                     ii.            Less  competition

                                                   iii.            Financial strength

 For example – GrameenPhone gets the competitive advantage due to financial strength.

 Topics: What is Brand Positioning?

             

 Brand is the name, term, symbol, design, mark, etc. Which  differentiates  the  companies  products  or  service  from  those  of  competitors. It’s appropriate for high improvement and convenience Products. And , positioning  is  the  act  of  designing  the  companies  offering and  image  to  occupy  a distinctive  place  in the   minds  of  the  target  market .

 So, brand  positioning  locating  or  placing  the  brand  in  the  minds  of  the  target  market   to maximize  the  potential  benefit  to  the  firm . Its  done  to  identify  who  are  our  target  customer , main  competitors  and  the  differences  & similarities  between them.

Topics: Positioning guidelines or steps of brand positioning.

           

The  goal  of  positioning  is  to  locate  the  brand  in  the  minds  of  consumers  to maximize   the  potential  benefit  to  the  firm . Positioning requires the similarities & differences between brands. There   are basically two types of positioning. 

1.     Defining & communicating the competitive frame of reference.

2. Choosing points of party & points of difference.

1. Defining  &  communicating  the  competitive  frame  of  reference: Before  defining the  competitive  frame  of  reference  it  requires  to  determine  the  category  membership  means  the  products  or  sets  of  products  with  which  a  brand  competes.   Communicating  category  membership  informs  the  consumer  about  the  goods   that  they  might  achieve by  using  a  product  or  services .  High  established  products  don’t  require  so  category membership .Ex-  coca-cola  is  a  leading  brand  of  soft  drink  are  known to  its  target  customers.

Competitive  analysis  will  consider  a  whole  host  of  factors  like -  capabilities  etc.  To  determine  the  proper  competitive  frame  of  reference ,  marketers need  to  know  consumer  behavior  and  the  consideration  sells consumer  use  in  making  brand   choice.

2. Choosing  points  of  party  &  points  of  difference: Points  of  party  parity  are  those  features  of  a  products  meaning  same  features  existing  in  most  of the  products. Ex- the  main  feature  of  each  freeze  is  to  keep  things  store  & cold .           

On  the other  hand ,  points of  difference  means  the  feature  which is  unique  in a  brand & different  from the  other  brands.  Ex- Bata  in quality ,  NOKIA,  in  performance , SONY  Eriksson &  Samsung in  design  etc.  The specific light     in some freezes that protects things from germs

Some following criteria’s exist in both of these two features …

             I.      Desirability  criteria  : Before     purchasing  a product  the consumer will  draw  a  frame  work  about  the  products appearance . Here, there are three desire of customer.

a). Relevance  : The  desire  must  have  the relevance  with  his / her   ability.  Ex-  a  freeze  but  also  a  beautification  media  of  a  room ,  meaning  there will  have  not  expense  to  beautify  the   room.

b)  Distinctiveness :  The  product will  not  only  be  related to core  function  but  also to color ,  design,   style   etc.

c) Believability:  The customer should have the trust in company’s product.

           II.      Deli verity:  This refers to the availability & delivery of products to the market.  There are three types of deli verity.

a)     Feasibility  : It  means  possibility  or  practicability  of the product  to be  found  in  the  market  easily.

b)    Communicatively  : It  must  be  informed  to  the  customer  that  where  the product  is  available.

c)     Sustainability: The product must be sustainable. That means it might satisfy the customer’s expectation.  Ex-  the   USP of  Raja afros  is  not  only  good  but also  it has  great after  sale  service        

          That   might satisfy customer’s desire.

 Topics: Criteria for differentiation and differentiation:

 Differentiation   means addition  of  some  extra  features  or  improvement  of  quality  that  differ  the  companies product  from  traditional  one  or  competitors  products .  Its  needed  to  avoid  competition  utilize advance  technology  & adjust  with  dynamic  change . Ex- Gray scale mobile phone -color monitor -multimedia etc.

            

Criteria for or considerable   factors of differentiation:        

 

1. Value and Benefits: Value is the difference between cost and benefit. Core task of differentiation is to increase value. If  value   increases the  products  importance  will  increase  in  the  mind  of  consumers.

           

2. Distinctiveness: It is the way of delivery criteria. The  product  must  be  distinctive  in  quality , price ,  design  etc. from the other products.

3. Superiority: It  c alls  for  the  product  should  have  not  only   the  core  value  but  also  other  features  those  increase  status ,  attractiveness ,  symbol  etc. 

4.Premtive: Its  protective  criteria .Differentiation  can’t  be  copied  by  others  so  easily . If it is copied the differentiation will not be effective.

5.  Affordable: The  differentiation  should  be  done  in  this  way  that  might be  under the  purchasing  power  of customer . 

6. Profitable: As  the  core  goal  of  a  firm  is  to  gain  profit ,  through  the differentiation  it can  achieve profit.  If it is not passable the differentiation will be called failure.

Topics: Kinds of differentiation ….                       

1. Proliferation  type differentiation : Proliferation    means  making  same  product  with  varieties  not  changing  the  technological  feature .  Ex- Dove shop with white & pink color.    

            2.  From change: Change only the height, length, width etc. That  means  keeping  the  core  feature  unchanged  if  its changed  the  design ,  configuration etc. will be treated as from change. It is not prime differentiation.  Ex-  Pajero  jeep  is  of  6.4  inc & 4.8  inc  in  high  for satisfying  different  customers  needs. Again  freeze  is  of  large  and  medium  as  will  as  small  in  size .

            3. Design change: Design is related with patient or law.  It  is  different  to  follow  others  design  if  its copy  righted  by  the  certain  company .  Patent is the formula.  There  is  the  patent  act  or  design  act  that  after  50  years  of  the death  of  the  main  owner ,  nobody  can  follow  that  design. Ex- the  design  of  Sabash  Bangladesh  anybody  can  replicate  it  50  years  after  the  death of Nitun   Kundo .  So  with  the  new  design  differentiation  can  be  done .

            4.  Feature  change  : It  may  be  minor .With  the  addition  of  new  feature  differentiation can be  made . It is done through two ways  -     

                  a) Qualitative change 

                  b)  Appearance change

Here quality change is major.  It is near to environment.  R&D should be very strong here.

            5. Qualitative change: It means to change in performance quality.  Ex- Black & white TV. – Color TV - LCD TV etc.  Actually it’s the change in technology.  It is   major type of change. It requires a lot of R&D cost.

            a)  Conformance   quality : For  a  specific  time  being  the  product  will  be  constant . Ex- guarantee, warranty etc.

            b) Durability: Its  not  fact  if  a  product  is  durable  or  not  for  those  customers  with  high  purchasing   power  but  its  essential  for  us .

            c) Reliability : A  product  should  have  those  qualities  for  that the  customer  may rely  on  it.

            d) Reparability : A  product  should  be  not  only  qualitative  but also  it  should  have  the   availability  of  the  parts  &  machinery  .  Ex- the  parts  & spares  of  Toyota  are  available  then the  Nissan  so  Toyota  cars  are  observed  in  our  roads  more  then  Nissan .

         e)Style :  Fashion         Fad`          Style   

             i.            Fashion -  the  new  design  which  has short  life  time . Ex-  Hair  fashion,  fashionable  goods  etc. Due  to having   short lifetime  the  price  of  those  products  are  high.

           ii.            Fad- which fashion is unaccepted or reject able by the society.

         iii.            Style- when the fashion is accepted by the society.

              6. Service differentiation: It is related to delivery. Ex-  offering  a  cup  of  tea  with  product  sale .  When  the   physical  product  can’t  easily  be  differentiated  the key  to  competitive  success   may  lie  in  adding  valued  service  &  improving  their  quality .Ex-  hotel ,  bank ,  insurance,  air  lines , etc .                   

             7. Image differentiation:  It calls for presentation.  Ex- showing a car in the showroom as moving.

                                                                                                                                                     

Topics: Brand positioning and   product developing.

Without  brand  positioning  &  product  developing  no  organization  can  exist . 4p’s  are  the  major  factors  here  product  development  means  brand  policy.

           1.No  brand  policy : When  a firm has  less  ability &  controlling  power  it  follows  this  policy.

2.     Brand  policy : Its  followed  by  the  reputed  company  in  order  to  sustain  in the market .

Topics: Channel of   distribution.

                

 Channel of  distribution  is  the network of  organizations  performing  functions  that  connect  producer  to  end  users. It  may  be  organization  or  individual . In  broad  sense,  we  can say  a  set  of  interdependent  organizations  or  individuals  involved  in  the  process of making  a  product  or  services   available  for use  or  consumption  by the  consumer  or  business  user .

Producer                                                                             Consumer

Producer             Retailer                                                  Consumer   

Producer             Wholesaler            Retailer                  Consumer 

                                

Figure:  Consumer marketing channels.

Topics: Selection & management of channel of distribution.

   Manufacturers have following three options to distribute the product.

                     1. Direct distribution 

                     2. Use of intermediary 

                     3. Both of 1 & 2

1. Direct distribution:  When direct channel is feasible?  Direct    distribution means delivering the goods without any channel members. Direct channel requires strong financial   and   management ability.  That  means  in  this  case  the  firm  is  to  use  own .  Ex- Mobile operating company.  There are three distribution intensity.

                 a) Intensive  intensity : It  refers  to  the  each  and  every  corner  of  a  country  from  rural  to  urban.  Consumer convenience products require it.  In   this case direct channel is impossible.

                b) Selective  intensity:  It  refers  to  only  certain  geographical  areas  that means  major  cities, towns  etc. Ex- Dhaka, Chittagong,  Rajshahi  etc. Shopping goods require it. Sometimes direct channel is used here.

               c)  Exclusive  intensity : It refers  to  some  specific  market  areas  within  the selective  distribution  areas  or major  cities . Ex- Dhaka new market, RDA market at Rajshahi etc. Specialty  and technical  goods  require it. Ex- computer, chemical or weight machinery etc.  Specially in this case direct channel is applicable or feasible. A manufacturer can easily earn profit using the direct distribution channel. But there will have some costs like- warehousing, transportation etc.  To do this it is needed efficient management.  So only the lager scale   firms do this. Mainly service producing   company uses direct distribution   channel .Ex- GP, Banglalink    etc.

2.  Use  of  intermediary : Use  of  the firms  use  the  intermediaries  to  distribute  its  products .  Due to some following causes it is used.

           a) When  there  have  a  lack  of  financial  and  managerial  ability  to  distribute  by  own self .

           b) When middleman will be available.

           c) If product characteristics are both intensive and selective.

3. Use  of  direct  channel  and  intermediary : A  company  when  fiends  sometimes  profitable  in  direct  channel  then use  it  otherwise  used  intermediaries .  

 Topics: Steps in channel of distribution strategy.

There  are  several marketing  strategy  in   the  selection  of   channel  of  distribution  process that  are  given  bellow ..

 Determining channel arrangement:

   A. Conventional  channel /  Horizontal  channel:  Conventional  channel  is  that what  we  normally  observe  like  -

            Producer………….  Distributor …………… consumer 

 In this case there is no management responsibility.  Manufacture   doesn’t  have  any  management  responsibility   after  selling  the  producers  to  retailers  or  wholesaler . It’s managed by them after that.

           It’s done in the following cases-

a)     When management ability is less.

b)    When production in large scale.

c)     Intensive distribution   required.

d)     

   B. Vertical  marketing  system (VMS) : When  it  requires  selective & exclusive  distribution  its  used. In this case it has management responsibility. Ex- Bata.

         

There are three types of distribution outlet.                                                                                                                                                                                                                                                                                                                                                                                                          

1. Ownership

a)     Manufacturer oneself manages total outlet.

b)    Responsibility  of  management  are  imposed  to  other  marketing  organization .  Ex- LG Products marketed by butterfly. It is franchise.

c)     Collaboration:  In  this  case  there  exist  formal  relation  with  agreement  among  different  organizations. Distribution organizations may be multiple. Ex – Fertilizer, TCB, Sugar market etc. Sugar and food Industry Corporation distributes through dealership.

d)    Administrate red: Administration has power to take decision & implement it.  There may have a central organization & others organizations under that.  It can then apply power on others. Ex- BTCL, post office etc.

 

 2. Deciding distribution intensity:

a)     Intensive  

b)    Selective

c)     Exclusive    

 3. Selecting  channel  configuration :  Analyzing  these  above  two  its  to  be  profitable  for  me . Here economic & management factors to be analyzed.    

Topics: How you take decision about channel   management?

             

 Channel management refers to motivating the channel members. Here for direct channel all the tasks will have to be done oneself without any motivation. And its needed motivation and incentive in case of indirect channel.

              

               There are some considering factors under channel management. 

 

1.  Channel leadership:  In the channel one or few members are as   leader. Who can influence others? They or he is to be identified & motivated. Ex in rice market, Rajshahi   suppose - Kalimulla.

2. Channel structure: Channel structure is a must for channel management. This structure is found in case of distribution management. Here it is delegated the authorities and responsibilities.

 

3. Degree of collaboration :  Its  to  be inquired  that how much  degree of  collaboration and trust existing  among the  channel  members .

4. Legal & ethical knowledge: Ethics is the way which differentiates between right and wrong. It is mandatory for selecting and managing as will as motivating the channel members in legal ways.

5.  Relationship development: Besides all these factors its significant to develop the channel members. Otherwise it will be found gradual conflicts among them.

6. Conflict management:  Channel conflict means disagreement among marketing channel members on goals & roles. It is very common to be arisen the conflict.  But it  must  be  managed  in this  way  that  it  may be  constructive  and  may  led  to adapt with the changing situation.

Topics: Why price is significant?

1.     Price is the medium of profit maximization.

2. Price is the tools of   promotion.

3.  Price is the tools for market expansion.

4. Price is the tools of competition.

5.  Price is the medium of cost recovery.