Plc as a tool for marketing strategy

Explain the following: a Production conceptb Product linec Augmented productd Social marketing concept2.. Explain the following: a Production conceptb Product linec Augmented productd So

PLC AS A TOOL FOR MARKETING STRATEGY

Topic: MARKETING MANAGEMENT

1

1 Explain the following:

(a) Production concept

(b) Product line

(c) Augmented product

(d) Social marketing concept

2 Explain various concepts of marketing with suitable examples

3 “PLC as a tool for marketing strategy” justify

4 Explain process of selecting the final price

5 Explain “direct marketing” and its applicability with examples

CONTENT 1

1 Explain the following:

(a) Production concept

(b) Product line

(c) Augmented product

(d) Social marketing concept

I INTRODUCTION

Every company can have different ideas or philosophy For example, a particular company can have its idea or philosophy that if the production is done on a large scale, the cost would be less and the the product would be sold automatically

In this way, such a company will concentrate mainly on the large scale production of goods Similarly, some other company can have a different idea It may have an idea that if the quality of the product is improved, there will be no difficulty in selling the product

Under the marketing management philosophy, we shall study the following four concepts: production concept, product line, augmented product, social marketing concept

II BODY

(a) Production concept:

Business concerned itself primarily with production, manufacturing, and efficiency issues To put it another way, if a product is made, somebody will want to buy it The reason for the predominance of this orientation is there was a shortage of manufactured goods (relative to demand) during this period so goods sold easily The basic proposition is that customers will choose products and services that are widely available and are of low cost So business is mainly concerned with making

as many units as possible By concentrating on producing maximum volumes, such a business aims to maximise profitability by exploiting economies of scale Managers try to achieve higher volume with low cost and intensive distribution strategy This seems a viable strategy in a developing market where market expansion is the survival strategy for the business Companies interested to take the benefit of scale economies purse this kind of orientation

In a production-orientated business, the needs of customers are secondary compared with the need to increase output Such an approach is probably most effective when a business operates in very high growth markets or where the potential for economies of scale is significant It is natural that the companies cannot deliver quality products and suffer from problems arising out of impersonal behavior with the customers

(b) Product line:

A product line refers to a number of products that are related and developed by the same manufacturer A product line includes different products that are offered to the public at varying price points This way, a manufacturer or company can ensure that all products within a linewill be purchased by all kinds of people Product line extension refers to any additional products that may be added to a current product line Most of the time, product extensions are introduced to the public in order to ward off competitors By creating products that match other, competitive products,

manufacturers are able to keep customers interested in a product that they are familiar with Since most people purchase brands that they know, these same consumers are more likely to purchase a new product from a brand that they are comfortable with rather than purchase a product from an unknown brand

Marketers create target markets based upon age groups, geographical locations, and ethnicity Target markets refer to a group, or groups, of people that are likely to purchase one product Thus, even though products might be related, some products may look different, smell different, and even appear unrelated in order to appeal to different types of people

For example, many air freshener manufacturers offer a variety of products ranging, targeted to parents with young children; to simple aerosol air fresheners, targeted to consumers who don't want to spend a lot of money on an air freshener While these products are related, they are vastly different

Clearly, a great deal of strategy goes into marketing various products Marketers must be aware of competition at all times in order to advise manufacturers on new products that should be added to an existing product line In addition, a marketing agency should be aware of those products that sell, and those that remain unpopular Through the collection of statistical data, marketers can effectively determine what products should be kept within a product line, and what products should be phased out Pricing is used to create a large barrier between different products, and higher-priced products are usually justified based upon certain ingredients

(c) Augmented product:

An augmented product is a product with additional features and services that set

it aside from similar competitors Companies augment their products to increase revenues, and may create additional streams of revenue in the process, depending on the types of products and services they offer Consumers may preferentially select an augmented product when they have an option, which puts demand on manufacturers

to continue adding innovations to their products to capture and hold consumer attention Accessibility, products may be accessed by customers quickly such as availability when needed, quick delivery, shipment in person

The core product may be something like a computer The manufacturer can add features like warranty, customer support, membership with a club, or accessories that come with the computer, such as a laptop case or a keyboard A computer manufacturer has a number of manufacturers who create products of similar quality that operate in a similar way, and consumers may differentiate between various offerings on the basis of the augmented product package

Consumers weighing a choice between two similar options may pick the one with more apparent benefits, like the laptop that comes with a case and a year's support plan It is also possible to get consumers to pay more through the use of an augmented product, because the consumer could feel like the extra features make it a better deal Consumers view these options as value adders, and can interact with the product and the marketing much differently depending on the level of features available

d) Social marketing concept:

The societal marketing concept was an offshoot of the marketing concept wherein an organization believes in giving back to the society by producing better products targeted towards society welfare

The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices They must balance and juggle the often conflicting criteria of company profits, consumer want satisfaction, and public interest Yet a number of companies have achieved notable sales and profit gains by adopting and practicing the societal marketing concept Some companies practice a form of the societal marketing concept called cause related marketing Pringle and Thompson define this as “activity by which a company with an image, product, or service to market builds a relationship or partnership with a ‘cause,’ or a number of

‘causes,’ for mutual benefit

They see it as affording an opportunity for companies to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage Smart companies will respond by adding “higher order” image attributes than simply rational and emotional benefits Thus societal marketing

concept as related to cause related marketing differs mainly because here, the company makes a proactive effort to give back to the society

III CONCLUSION

Today, in the context of rich and diverse market demand, increasingly competitive, scarce business resources, the role of marketing management is becoming increasingly important in business maintenance and development

Proper understanding and application of marketing management knowledge will contribute to the success of business operations This will establish a strong position and grow in a modern business environment

2 Explain various concepts of marketing with suitable examples.

I INTRODUCTION

What philosophy should guide a company marketing and selling efforts? What relative weights should be given to the interests of the organization, the customers, and society? These interest often clash, however, an organization’s marketing and selling activities should be carried out under a well-thought-out philosophy of efficiency, effectiveness, and socially responsibility

Five orientations philosophical concepts to the marketplace have guided and continue to guide organizational activities:

(1) Production Concept

(2) Product Concept

(3) Selling Concept

(4) Marketing Concept

(5) Societal Marketing Concept

II BODY

The Production Concept. This concept is the oldest of the concepts in business It holds that consumers will prefer products that are widely available and inexpensive Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution They assume that consumers are primarily interested in product availability and low prices This orientation makes

sense in developing countries, where consumers are more interested in obtaining the product than in its features

The Product Concept. This orientation holds that consumers will favor those products that offer the most quality, performance, or innovative features Managers focusing on this concept concentrate on making superior products and improving them over time They assume that buyers admire well-made products and can appraise quality and performance However, these managers are sometimes caught up in a love affair with their product and do not realize what the market needs Management might commit the “better-mousetrap” fallacy, believing that a better mousetrap will lead people to beat a path to its door

The Selling Concept This is another common business orientation It holds that consumers and businesses, if left alone, will ordinarily not buy enough of the selling company’s products The organization must, therefore, undertake an aggressive selling and promotion effort This concept assumes that consumers typically show buying inertia or resistance and must be coaxed into buying It also assumes that the company has a whole battery of effective selling and promotional tools to stimulate more buying Most firms practice the selling concept when they have overcapacity Their aim is to sell what they make rather than make what the market wants

The Marketing Concept. This is a business philosophy that challenges the above three business orientations Its central tenets crystallized in the 1950s It holds that the key to achieving its organizational goals (goals of the selling company) consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its selected target customers The marketing concept rests on four pillars: target market, customer needs, integrated marketing and profitability

The Societal Marketing Concept. This concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors Additionally,

it holds that this all must be done in a way that preserves or enhances the consumer’s and the society’s well-being

This orientation arose as some questioned whether the Marketing Concept is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world hunger and poverty, and neglected social services Are companies that do an excellent job of satisfying consumer wants necessarily acting in the best long-run interests of consumers and society?

Just consider:The fast-food hamburger industry offers tasty but unhealthy food The hamburgers have a high fat content, and the restaurants promote fries and pies, two products high in starch and fat The products are wrapped in convenient packaging, which leads to much waste In satisfying consumer wants, these restaurants may be hurting consumer health and causing environmental problems

III CONCLUSION

From the basic philosophies, companies may choose to apply to their business activities The choice of a particular philosophy depends on factors such as: competitive position, product and service features, market situation But the most important thing in modern marketing management trends is to bring high satisfaction to their customers, business profits and social benefits

3 Explain market segmentation with suitable examples

I INTRODUCTION

Market segmentation is the process of dividing a market up into different groups

of customers, in order to create different products to meet their specific needs The most obvious type of segmentation is between customers who buy distinctly different products For example, in manufacturing sandwiches, you would clearly be able to make a distinction between creating sandwiches for vegetarians and those for meat eaters

II BODY

Basis of Market Segmentation:

- Gender:

The marketers divide the market into smaller segments based on gender Both men and women have different interests and preferences, and thus the need for segmentation

Organizations need to have different marketing strategies for men which would obviously not work in case of females

A woman would not purchase a product meant for males and vice a versa

The segmentation of the market as per the gender is important in many industries like cosmetics, footwear, jewellery and apparel industries

- Age Group:

Division on the basis of age group of the target audience is also one of the ways

of market segmentation

The products and marketing strategies for teenagers would obviously be different than kids

Age group (0 - 10 years) - Toys, Nappies

Age Group (10 - 20 years) - Toys, Apparels, Books, School Bags

Age group (20 years and above) - Cosmetics, Anti-Ageing Products, Magazines, apparels and so on

- Income:

Marketers divide the consumers into small segments as per their income Individuals are classified into segments according to their monthly earnings

The three categories are:

1) High income Group

2) Mid Income Group

3) Low Income Group

Stores catering to the higher income group would have different range of products and strategies as compared to stores which target the lower income group Pantaloon, Carrefour, Shopper’s stop target the high income group as compared

to Vishal Retail, Reliance Retail or Big Bazaar who cater to the individuals belonging

to the lower income segment

- Marital Status:

Market segmentation can also be as per the marital status of the individuals Travel agencies would not have similar holiday packages for bachelors and married couples

- Occupation:

Office goers would have different needs as compared to school / college students

A beach house shirt or a funky T Shirt would have no takers in a Zodiac Store as

it caters specifically to the professionals

Types of Market Segmentation

- Psychographic segmentation:

The basis of such segmentation is the lifestyle of the individuals The individual’s attitude, interest, value help the marketers to classify them into small groups

- Behaviouralistic Segmentation:

The loyalties of the customers towards a particular brand help the marketers to classify them into smaller groups, each group comprising of individuals loyal towards

a particular brand

- Geographic Segmentation:

Geographic segmentation refers to the classification of market into various geographical areas A marketer can’t have similar strategies for individuals living at different places

Nestle promotes Nescafe all through the year in cold states of the country as compared to places which have well defined summer and winter season

McDonald’s in India does not sell beef products as it is strictly against the religious beliefs of the countrymen, whereas McDonald’s in US freely sells and promotes beef products

III CONCLUSION

Segmentation refers to the process of creating small segments within a broad market to select the right target market for various brands Market segmentation helps the marketers to devise and implement relevant strategies to promote their products amongst the target market

A market segment consists of individuals who have similar choices, interests and preferences They generally think on the same lines and are inclined towards similar products Once the organizations decide on their target market, they can easily formulate strategies and plans to make their brands popular amongst the consumers

4.“PLC as a tool for marketing strategy” justify:

I INTRODUCTION

A product in the market will go through the stages of development and declination The development phases of the product from time to time are known as the "Product Life Cycle", abbreviated as PLC

Product life cycle is a key concept of marketing It vividly describes four stages in product consumption: Introduction, growth, maturity and decline

Companies should be aware of their products stages to propose the following appropriate marketing plans: Product introduction, old product renewal, or replacement with a new product line to help businesses applications in numerous marketing strategies