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We know that sales force management is the analysis, planning, implementation and control of sales force activities. To manage the sales force, it has some steps. These are as follows:
• Designing sales force strategy and structure
• Recruiting and selecting sales people
• Training sales people
• Compensating sales people
• Supervising sales people
• Evaluating sales people
These steps are as follows:
• Designig sales force strategy and structure: Marketing managers face several sales force strategy and design question. How should sales people and their tasks be structured? How big should be sales force be? Should sales people sell alone or work in teams with other people in the company? On the basis of above Questions Company design the sales force strategy and structure. Sales force structure is influenced by sales force strategy. The decision is simple if the company sells only one product line to one industry with customers in many locations. In that case the company would use a territorial sales force structure.
• Recruiting and selecting sales people: At the heart of any successful sales force operation is the recruitment and selection of good sales people. For this reason company select the experienced and experts sales force. Company can select the sales force from the internal source or external source of the company.
• Training sales people: Many companies used to send their new sales people into the field almost immediately after hiring them. They would be given samples, order books and general institutions. Although trainings can be expensive, it can also yield dramatic returns on the training investment training program have several goals, sales people need to know and identify with the company. So most training program begin by describing the company's history and objectives its organization, its financial structure and facilities and its chief products and markets.
• Compensating sales people: To attract the sales people company offers attractive package to the sales force. The success of the company depends on the operation of sales people. Again the performance of sales people depends on the quality of sales depends on the attractiveness of the package. So, company should offer huge compensation to the sales people.
• Supervising sales people: Now sales people need more than a territory, compensation and training. They need supervision. Through the supervision the company directs and motivates the sales force to do a better job.
• Evaluating sales people: It is the last step in the sale force management. In this step to evaluate the sales people require good feedback. Good feedback means getting regular information about sales people to evaluate their performance. Management get information about its sales people in several ways. The most important source 's sales reports. The sales manager might begin with a quantitative evaluation, looking at a sales person's knowledge of the company, products, customers, competitor's territory and task.
Friday, April 23, 2010
Major Sales Promotion Tools
Sales promotion is a short term incentives to encourage the purchase or sale of a product or services. Many tools can be used to accomplish sales promotion objectives. We can describe the sales promotion tools in below ways:
• Consumer promotion tools
• Trade promotion tools
• Business promotion tools
They are summarized in below:
• Consumer promoting tools: The main consumer promotion tools include
a. Sample: A small amount of a product offered to consumer for trail.
b. Coupons: Certificate that gives buyers a saving when purchase a specific product.
c. Cash refunds (rebate): Offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer.
d. Price packets: Reduced price that is marked by the producer directly on the local or package.
e. Premium: Good offered either free or at low cost an incentive to buy a product.
f. Advertising specialist: Useful article imprinted with an advertiser's name, given as gift to consumer.
g. Patronage rewards: Cash or other reward for the regular use of a certain company's products or service.
h. Point of purchase displays and demonstration etc: Display and demonstrations that takes place at the point of purchase or sale.
• Trade promotion tools: Trade promotion are as follow:
a. Discount: A straight reduction in price on purchase during a stated period of time.
b. Allowance: Promotional money paid by manufactures to retailers in return for an agreement to feature the manufacturer's product in some way.
• Business promotion tools: Companies spend huge amount each year on promotion to industrial customers. These business promotions are used to generate business leads, stimulate purchase reward customers and motivate people. Business promotion includes many of the same tools used for consumer or trade promotion.
• Consumer promotion tools
• Trade promotion tools
• Business promotion tools
They are summarized in below:
• Consumer promoting tools: The main consumer promotion tools include
a. Sample: A small amount of a product offered to consumer for trail.
b. Coupons: Certificate that gives buyers a saving when purchase a specific product.
c. Cash refunds (rebate): Offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer.
d. Price packets: Reduced price that is marked by the producer directly on the local or package.
e. Premium: Good offered either free or at low cost an incentive to buy a product.
f. Advertising specialist: Useful article imprinted with an advertiser's name, given as gift to consumer.
g. Patronage rewards: Cash or other reward for the regular use of a certain company's products or service.
h. Point of purchase displays and demonstration etc: Display and demonstrations that takes place at the point of purchase or sale.
• Trade promotion tools: Trade promotion are as follow:
a. Discount: A straight reduction in price on purchase during a stated period of time.
b. Allowance: Promotional money paid by manufactures to retailers in return for an agreement to feature the manufacturer's product in some way.
• Business promotion tools: Companies spend huge amount each year on promotion to industrial customers. These business promotions are used to generate business leads, stimulate purchase reward customers and motivate people. Business promotion includes many of the same tools used for consumer or trade promotion.
Public Relations,Major Tools,Personal Se
• THE ROLE OF THE SALE FORCE: Personal selling is the interpersonal arm of the promotion mix. Advertising consists of one-way non personal communication with target consumer group. In contrast, resonal selling involves two way personal communication between sales people and individual customer. Whether face to face by telephone, through video conferences or by other means personal selling can be more effective than advertising in more complex selling situations. Sales people can probe customers to learn more about their problems. They can adjust the marketing offer to fit the special needs of each customer and can negotiate terms of sale. They can build long term personal relationship with key decision makers.
• PERSONAL SELLING: Personal selling is an individual acting for a company by performing one or more of the following activities, prospecting, communicating, servicing and information gathering.
Personal selling means directly sale the product to the customer.
• MAJOR TOOLS OF PUBLIC RELATIONS:
• Sponsorship: Company participates in car racing, sports, cricket, boat racing or any other publication.
• Trade show: Trade show represents a great opportunity to build brand awareness, knowledge and interest.
• Club and consumer communicate: Company many arrange to build any club where consumer can enjoy and communicate with each other.
• Societal cost marketing: Company may spend money for any social welfare activities.
• Social development: Company may involve in the social development activities such as they may prepare hospital, bridge, culvert, barriers, etc.
• PUBLIC RELATIONS: Another major mass promotion tool is public relations. It makes good relations with the company's various publics by obtaining favorable publicity, building or heading off unfavorable rumors, stories and events.
Public relation departments may perform any or all of the following functions.
• Press relations
• Product publicity
• Public affairs
• Lobbying
• Counseling
• PERSONAL SELLING: Personal selling is an individual acting for a company by performing one or more of the following activities, prospecting, communicating, servicing and information gathering.
Personal selling means directly sale the product to the customer.
• MAJOR TOOLS OF PUBLIC RELATIONS:
• Sponsorship: Company participates in car racing, sports, cricket, boat racing or any other publication.
• Trade show: Trade show represents a great opportunity to build brand awareness, knowledge and interest.
• Club and consumer communicate: Company many arrange to build any club where consumer can enjoy and communicate with each other.
• Societal cost marketing: Company may spend money for any social welfare activities.
• Social development: Company may involve in the social development activities such as they may prepare hospital, bridge, culvert, barriers, etc.
• PUBLIC RELATIONS: Another major mass promotion tool is public relations. It makes good relations with the company's various publics by obtaining favorable publicity, building or heading off unfavorable rumors, stories and events.
Public relation departments may perform any or all of the following functions.
• Press relations
• Product publicity
• Public affairs
• Lobbying
• Counseling
Thursday, April 22, 2010
Selecting Advertising Media
It has some steps in selecting advertising media. The major steps in media selection are
• Deciding on reach, frequency and impact
• Choosing among media types
• Selecting specific media vehicles
• Defieing on media timing
They are summarized in below:
• Deciding on reach, frequency and impact: To select media, the advertiser must decide what reach and frequency are needed to achieve advertising objectives. It is a measure of percentage of people in the target market who are exposed to the advertising campaign during a given period of time. Frequency is a measure of how many times the first three months of the campaign.
• Chopping among major media types: The media planner has to know the reach frequency and impact of the major media types, the major media types are newspapers, television, direct mail, radio, magazines, outdoor and the internet. Each media has advantages and limitations media planners consider many factors when their media choices.
• Selecting specific media vehicles: The media planner must decide the best media vehicles. Media planners must compute the cost per thousand persons reached by a vehicle.
• Deciding on media timing: The advertiser must decide how to schedule the advertising over the course of a year. The firm can vary its advertising to follow the seasonal pattern to oppose the seasonal pattern or to be small all year.
• Deciding on reach, frequency and impact
• Choosing among media types
• Selecting specific media vehicles
• Defieing on media timing
They are summarized in below:
• Deciding on reach, frequency and impact: To select media, the advertiser must decide what reach and frequency are needed to achieve advertising objectives. It is a measure of percentage of people in the target market who are exposed to the advertising campaign during a given period of time. Frequency is a measure of how many times the first three months of the campaign.
• Chopping among major media types: The media planner has to know the reach frequency and impact of the major media types, the major media types are newspapers, television, direct mail, radio, magazines, outdoor and the internet. Each media has advantages and limitations media planners consider many factors when their media choices.
• Selecting specific media vehicles: The media planner must decide the best media vehicles. Media planners must compute the cost per thousand persons reached by a vehicle.
• Deciding on media timing: The advertiser must decide how to schedule the advertising over the course of a year. The firm can vary its advertising to follow the seasonal pattern to oppose the seasonal pattern or to be small all year.
Advertising, Major Advertising Decision
ADVERTISING: Advertising is any paid form of non personal presentation and promotion of ideas, goods or services by an identified sponsor.
MAJOR ADVERTISING DECISION:
Marketing management must make four important decisions when developing an advertising program these four important are as follows:
• Setting advertising objectives
• Setting advertising budget
• Developing advertising strategy
• Evaluating advertising campaign
They are summarized in below:
• Setting advertising objectives: The first step is to set advertising objectives. These objectives should be based on past decisions about target market, positioning and marketing mix, which define the job that advertising must do in the total marketing program advertising is a specific communication task to be accomplished with a specific target during a specific period of time. Advertising objectives can be classified by primary purpose-where the aim is to inform persuade or remind.
• Setting advertising budget: After determining its advertising objectives the company next sets its advertising budget for each product. A brand's advertising budget depends on its stages of product life cycle. Market share also impacts the amount advertising needed. Because building the market or taking share from competitors requires larger advertising spending than does simply maintaining current share, high share brands usually needs more advertising spending as a percentage of sales.
• Developing advertising strategy: Advertising strategy consists of two major elements.
a. Creating advertising message
b. Selecting advertising media
In the past companies often themed media planning as secondary to the message, creation process. These creative departments first created good advertisement then the media department selected first created good advertisement then the media department selected the best media for carrying these advertisements to desired target audience.
• Evaluating advertising campaign: It is the last step in major decision of advertising. In this stage evaluate the message of advertising. How much people get attention on the message of advertising. Its market covering capacity, style, tone, words and format etc are evaluated in this stage.
MAJOR ADVERTISING DECISION:
Marketing management must make four important decisions when developing an advertising program these four important are as follows:
• Setting advertising objectives
• Setting advertising budget
• Developing advertising strategy
• Evaluating advertising campaign
They are summarized in below:
• Setting advertising objectives: The first step is to set advertising objectives. These objectives should be based on past decisions about target market, positioning and marketing mix, which define the job that advertising must do in the total marketing program advertising is a specific communication task to be accomplished with a specific target during a specific period of time. Advertising objectives can be classified by primary purpose-where the aim is to inform persuade or remind.
• Setting advertising budget: After determining its advertising objectives the company next sets its advertising budget for each product. A brand's advertising budget depends on its stages of product life cycle. Market share also impacts the amount advertising needed. Because building the market or taking share from competitors requires larger advertising spending than does simply maintaining current share, high share brands usually needs more advertising spending as a percentage of sales.
• Developing advertising strategy: Advertising strategy consists of two major elements.
a. Creating advertising message
b. Selecting advertising media
In the past companies often themed media planning as secondary to the message, creation process. These creative departments first created good advertisement then the media department selected first created good advertisement then the media department selected the best media for carrying these advertisements to desired target audience.
• Evaluating advertising campaign: It is the last step in major decision of advertising. In this stage evaluate the message of advertising. How much people get attention on the message of advertising. Its market covering capacity, style, tone, words and format etc are evaluated in this stage.
Promotion
Promotion mix (Communication Mix): Promotio mix consist of the specific mix of advertising, personal selling, sales promotion, public relations and direct marketing tools a company uses to pursue its advertising and marketing objectives.
That means, the promotio mix has five distinctive tools, these are advertising, personal selling, sales promotion, public relations and direct marketing. They are summarized in below:
• Advertising: Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor.
• Personaling selling: Personal selling is the personal presentation by the firm's force for the purpose of making sales and building customer relationships.
• Sales promotion: Sales promotion is a short term incentives to encourage the purchase or sale of a product or service.
• Public relations: Public relations is building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image and handling or heading off unfavorable quotmss, stoppi and events.
• Direct marketing: Direct marketing is direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships through the use of telephone, mail, fax, e-mail, the internet, and other tools to communicate directly with specific customers.
INTEGRATED MARKETING COMMUNICATION
Integrated Marketing Communication (IMC): Integrated Marketing Communication is the concept under which a company carefully integrates and coordinates its many communication channels to deliver a clear, consistent and compelling message about the organization and its product. In another way, integrated marketing communications involves identifying the target audience and shaping a well coordinated promotional program to obtain the desired audience response too often marketing communications focus an immediate awareness, image, or preference goals in the target market. We can show the integrated marketing communication through the below figure:
Advertising ~ Personal Selling
Sales Promotion ~ Public Relations-~Consistent, clear and compelling company and product message
^Direct Marketing^
Figure: Integrated Marketing Communication (IMC)
COMMUNICATION SYSTEM
To communicate effectively, marketers need to understand how communication works. Communication involves the nine element shown in the below figure:
Sender > Encoding > Message* > Decoding > Receiver
^|Feedback < Response <___|
Sender Field of Experience * = (Media
Noise) Reciever Field of Experience
There are nine elements in the above figure and two of those elements are the major parties in a communication, the sender and the reciever. Another two are the major communication tools-the message and the media. Four are major communication functions-encoding, response and feedback. The last element is noise in the system. The definition of these elements is as follows:
• Sender: The party sending the message to another party.
• Encoding: The process of putting thought into symbolic form.
• Message: The set of symbols that the sender transmits.
• Media: The communication channels through which the message moves from sender to reciever.
• Decoding: The process by which the receiver assigns meaning to the symbols encoded by the sender.
• Receiver: The party receiving the message sent by another party.
• Feedback: The part of the receiver's response communicated back the sender.
• Noise: The unplanned static or distortion during the communication process, which results in the receiver's getting a different message than the one the sender sent.
STEPS IN DEVELOPING EFFECTIVE COMMUNICATION
• Identify the target audience
• Determine the communication objective
• Design a message
• Choose the media through which to send the message
• Select the message source and
• Collect feedback
That means, the promotio mix has five distinctive tools, these are advertising, personal selling, sales promotion, public relations and direct marketing. They are summarized in below:
• Advertising: Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor.
• Personaling selling: Personal selling is the personal presentation by the firm's force for the purpose of making sales and building customer relationships.
• Sales promotion: Sales promotion is a short term incentives to encourage the purchase or sale of a product or service.
• Public relations: Public relations is building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image and handling or heading off unfavorable quotmss, stoppi and events.
• Direct marketing: Direct marketing is direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships through the use of telephone, mail, fax, e-mail, the internet, and other tools to communicate directly with specific customers.
INTEGRATED MARKETING COMMUNICATION
Integrated Marketing Communication (IMC): Integrated Marketing Communication is the concept under which a company carefully integrates and coordinates its many communication channels to deliver a clear, consistent and compelling message about the organization and its product. In another way, integrated marketing communications involves identifying the target audience and shaping a well coordinated promotional program to obtain the desired audience response too often marketing communications focus an immediate awareness, image, or preference goals in the target market. We can show the integrated marketing communication through the below figure:
Advertising ~ Personal Selling
Sales Promotion ~ Public Relations-~Consistent, clear and compelling company and product message
^Direct Marketing^
Figure: Integrated Marketing Communication (IMC)
COMMUNICATION SYSTEM
To communicate effectively, marketers need to understand how communication works. Communication involves the nine element shown in the below figure:
Sender > Encoding > Message* > Decoding > Receiver
^|Feedback < Response <___|
Sender Field of Experience * = (Media
Noise) Reciever Field of Experience
There are nine elements in the above figure and two of those elements are the major parties in a communication, the sender and the reciever. Another two are the major communication tools-the message and the media. Four are major communication functions-encoding, response and feedback. The last element is noise in the system. The definition of these elements is as follows:
• Sender: The party sending the message to another party.
• Encoding: The process of putting thought into symbolic form.
• Message: The set of symbols that the sender transmits.
• Media: The communication channels through which the message moves from sender to reciever.
• Decoding: The process by which the receiver assigns meaning to the symbols encoded by the sender.
• Receiver: The party receiving the message sent by another party.
• Feedback: The part of the receiver's response communicated back the sender.
• Noise: The unplanned static or distortion during the communication process, which results in the receiver's getting a different message than the one the sender sent.
STEPS IN DEVELOPING EFFECTIVE COMMUNICATION
• Identify the target audience
• Determine the communication objective
• Design a message
• Choose the media through which to send the message
• Select the message source and
• Collect feedback
Wholesaler
Wholesaler includes all activities involved in selling goods and services to those for resale or business use. It purchases or services from the producers but they sell it to the reseller for resale or business users.
Types of wholesaler: Wholesalers fall into three major groups. They are as follows:
• Merchant wholesalers
• Brokers and agents
• Manufacture's sales branches and office.
They are summarized in below:
• Merchant wholesalers: Merchants wholesalers are the largest single group of wholesalers accounting for roughly 50% of all wholesaling. Merchant wholesalers include two broad types:
a. Full service wholesalers and
b. Limited services wholesalers
Full service wholesalers provide a full set of services whereas the various limited service wholesalers offer fewer services to their suppliers and customers.
• Brokers: Brokers is one type of wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negation.
Agent: Agent is a wholesaler who represents buyers or sellers on a relatively permanent basis performs only a few functions and does take title to goods.
• The third major type of wholesaling is that done in manufacturer's sales branches and offices by sellers or buyers themselves rather than though independent wholesalers.
Wholesalers marketing decisions
• Wholesaler strategy
• Target market
Service
Positioning
• Wholesaler strategy
• Product and service assortment
Prices
Promotion
Places(location)
• Figure: Wholesaler marketing decisions
Types of wholesaler: Wholesalers fall into three major groups. They are as follows:
• Merchant wholesalers
• Brokers and agents
• Manufacture's sales branches and office.
They are summarized in below:
• Merchant wholesalers: Merchants wholesalers are the largest single group of wholesalers accounting for roughly 50% of all wholesaling. Merchant wholesalers include two broad types:
a. Full service wholesalers and
b. Limited services wholesalers
Full service wholesalers provide a full set of services whereas the various limited service wholesalers offer fewer services to their suppliers and customers.
• Brokers: Brokers is one type of wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negation.
Agent: Agent is a wholesaler who represents buyers or sellers on a relatively permanent basis performs only a few functions and does take title to goods.
• The third major type of wholesaling is that done in manufacturer's sales branches and offices by sellers or buyers themselves rather than though independent wholesalers.
Wholesalers marketing decisions
• Wholesaler strategy
• Target market
Service
Positioning
• Wholesaler strategy
• Product and service assortment
Prices
Promotion
Places(location)
• Figure: Wholesaler marketing decisions
Retailing
Retailing means all the activities involved in selling goods or services directly to final consumers for their personal non-business use.
Types of Retailing: Retailing can be classified in terms of several characteristics, they are:
• The amount of service they offer
• The breadth and depth of product line
• The relative price of the product and
• How they are organized
Mainly on the basis of above factors retailing are classified.
On the basis of service retailing can be classified in below four ways:
• General stores: General store is a unit marketing that is dealing business by many products. But its amount of products is very poor. It involves meeting the local demand of product.
• Single line stores: Single line store is a one-product store. But it is dealing business by the huge of that product. It is like a general store but its amount is more than general store.
• Limited line store: Limited line store is dealing business only some kinds of products but their amount is very large.
• Door to door selling: It is a small retailing business. It provides door-to-door service to the customer. That means it sells the product to the customers by going their home. Generally their amount of product is poor but they sell many types of product.
Retailing by limited product but more profit oriented: On the basis of limited product but more profit retailing, it can divide in two ways-
Super market: It is a self-service store that carries a wide variety of food, laundry and house hold products. The main characteristics of super market are it has no salesman. Customer is buyer and seller. For this reason it is called self service retailing.
• Convenience store: Convenience store is a small store located near a residential area that is opened long hours seven days a week and carries a limited of high turn over convenience goods.
Another type of retailing:
• Department store: Department store is a retail organization that carries a wide variety of product lines, typically clothing, home furnishing and household goods. Each line is operated as a separate department managed by specialist's buyers or merchandisers.
• Super store: A store almost twice the size of a regular super market that carries a large assortment of routinely purchased food and non food items and offers services such as dry cleaning, post offices, photo finishing, check cashing, bill paying, lunch counters, car case and set care.
Retailing marketing decisions
It can present the retail marketing decision in below ways by the figure
[Retailer strategy
Target market retail store positioning]|~[Retailer marketing mix
Product and service assortment
Price
Promotion
Places(location)]
Figure: Retail marketing decisions
Types of Retailing: Retailing can be classified in terms of several characteristics, they are:
• The amount of service they offer
• The breadth and depth of product line
• The relative price of the product and
• How they are organized
Mainly on the basis of above factors retailing are classified.
On the basis of service retailing can be classified in below four ways:
• General stores: General store is a unit marketing that is dealing business by many products. But its amount of products is very poor. It involves meeting the local demand of product.
• Single line stores: Single line store is a one-product store. But it is dealing business by the huge of that product. It is like a general store but its amount is more than general store.
• Limited line store: Limited line store is dealing business only some kinds of products but their amount is very large.
• Door to door selling: It is a small retailing business. It provides door-to-door service to the customer. That means it sells the product to the customers by going their home. Generally their amount of product is poor but they sell many types of product.
Retailing by limited product but more profit oriented: On the basis of limited product but more profit retailing, it can divide in two ways-
Super market: It is a self-service store that carries a wide variety of food, laundry and house hold products. The main characteristics of super market are it has no salesman. Customer is buyer and seller. For this reason it is called self service retailing.
• Convenience store: Convenience store is a small store located near a residential area that is opened long hours seven days a week and carries a limited of high turn over convenience goods.
Another type of retailing:
• Department store: Department store is a retail organization that carries a wide variety of product lines, typically clothing, home furnishing and household goods. Each line is operated as a separate department managed by specialist's buyers or merchandisers.
• Super store: A store almost twice the size of a regular super market that carries a large assortment of routinely purchased food and non food items and offers services such as dry cleaning, post offices, photo finishing, check cashing, bill paying, lunch counters, car case and set care.
Retailing marketing decisions
It can present the retail marketing decision in below ways by the figure
[Retailer strategy
Target market retail store positioning]|~[Retailer marketing mix
Product and service assortment
Price
Promotion
Places(location)]
Figure: Retail marketing decisions
Distribution Channel, Functions Level
DISTRIBUTION CHANNEL AND THEIR FUNCTIONS
Distribution channel: Distribution is a set of interdependent organizations involved in the process of making a product or service availale for use or consumption by the consumer or business user. That means distribution channels mean who are taking duty to reach the product or service from the producer to final consumer. In the case of industrial market research the product from the supplier to industrial users.
Functions of distribution channel: The distribution channel notes goods and services from producers to consumers. It overcome the major time place and possession gaps that separate goods and services from those who would use them. Members of marketing channel perform the below key functions:
• Information
• Contract
• Promotion
• Matching
• Negotiation
• Physical distribution
• Financing
• Risk taking
They are summarized below:
• Information: Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and adding exchange.
• Contract: Finding and communicating with prospective buyers.
• Promotion: Developing and spreading persuasive communications about an offer.
• Matching: Shaping and fitting the offer to the buyer's needs including activities such as manufacturing, grading, assembling and packaging.
• Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.
• Physical distribution: Transporting and storing goods.
• Financing: Acquiring and leasing funds to cover the cost of the channel work.
• Risk taking: Assuming the risk of carrying out the channel work.
CHANNEL LEVEL: Channel level is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer. Since producer and the final consumer both perform some work they are part of every channel. Channel level may customer marketing channel and business marketing channel.
• Customer marketing channel
Channel-1: Manufacturer-consumer
Channel-2: Manufacturer-retailer-consumer
Channel-3: Manufacturer-wholesaler-retailer-consumer
Channel-4: Manufacturer-wholesaler-jobber-retailer-consumer
• Business marketing channel
Channel-1: Manufacturer-industrial customer
Channel-2: Manufacturer-industrial distributor-industrial customer
Channel-3: Manufacturer-manufactser's representative or sales branch-industrial customer
Channel-4: Manufacturer-manufactser's representative or sales branch-industrial distributor-industrial customer
Distribution channel: Distribution is a set of interdependent organizations involved in the process of making a product or service availale for use or consumption by the consumer or business user. That means distribution channels mean who are taking duty to reach the product or service from the producer to final consumer. In the case of industrial market research the product from the supplier to industrial users.
Functions of distribution channel: The distribution channel notes goods and services from producers to consumers. It overcome the major time place and possession gaps that separate goods and services from those who would use them. Members of marketing channel perform the below key functions:
• Information
• Contract
• Promotion
• Matching
• Negotiation
• Physical distribution
• Financing
• Risk taking
They are summarized below:
• Information: Gathering and distributing marketing research and intelligence information about actors and forces in the marketing environment needed for planning and adding exchange.
• Contract: Finding and communicating with prospective buyers.
• Promotion: Developing and spreading persuasive communications about an offer.
• Matching: Shaping and fitting the offer to the buyer's needs including activities such as manufacturing, grading, assembling and packaging.
• Negotiation: Reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred.
• Physical distribution: Transporting and storing goods.
• Financing: Acquiring and leasing funds to cover the cost of the channel work.
• Risk taking: Assuming the risk of carrying out the channel work.
CHANNEL LEVEL: Channel level is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer. Since producer and the final consumer both perform some work they are part of every channel. Channel level may customer marketing channel and business marketing channel.
• Customer marketing channel
Channel-1: Manufacturer-consumer
Channel-2: Manufacturer-retailer-consumer
Channel-3: Manufacturer-wholesaler-retailer-consumer
Channel-4: Manufacturer-wholesaler-jobber-retailer-consumer
• Business marketing channel
Channel-1: Manufacturer-industrial customer
Channel-2: Manufacturer-industrial distributor-industrial customer
Channel-3: Manufacturer-manufactser's representative or sales branch-industrial customer
Channel-4: Manufacturer-manufactser's representative or sales branch-industrial distributor-industrial customer
GENERAL PRICING APPROACHES
The price the company charges will be some where between one that is too low produce a profit and one that is too high to produce any demand. Company follows the below general approaches to determine the price for a product.
• Cost based approach
• The buyer based approach
• The competition approach
They are summarized below:
• Cost based on approach: In cost based pricing includes
a. Cost plus pricing: The simplest pricing method is cost plus pricing-adding a standard markup to the cost of the product that means adding the expectations profit with the total cost of the product determine the price in cost plus pricing approach. Suppose-variable cost 10 TK, fixed cost 300000 TK, Expected unit sales 50000
Them unit cost = variable cost + Fixed cost/ Unit sales
= 10 + 300000/50000
= 16 TK.
If the company wants to earn 20% profit them price will be
= Unit cost/(1-Desired return on sales)
= 16 / 1 - 0.2 (20% )
= 20 TK.
b. Break even pricing (target profit pricing): The firm tries to determine the price at which it will break even or make the target profit it is seeking. Break even pricing or target profit pricing uses the concept of a break even chart, which shows the total cost and total sequente expected at different sales volume levels. The break even chart is as follows:
1000_|_
........._|_
800._|_
........._|_
600._|_
........._|_
400._|_
........._|______________Fixed cost 200._|_|__|__|__|__|__|__|_______
( * )10 20 30 40 50
* Sales volume in units (Thousands)
Figure: Break Even Chart for determining target price
In above figure, fixed costs are 3,00,000 TK. Regardless of sales volume, variable costs are added to fixed costs to form total costs, which rise with volume. The total revenue curve starts at zero and rise of 20 TK. Per unit.
Break Even Volume = _F_i_x_e_d_c_o_s_t_
Price-variable cost
=_3_0_0_0_0_0_0_
20-10
= 30,000 units
• Buyer based approach: Buyer based approach means value based approach. An increasing number of companies are basing their prices on the products perceived value. Value based pricing uses buyer's perception of value not the seller's cost as the key to pricing. Value based pricing means that the marketer can not design a product and marketing program and them set the price. Price is considered along with the other marketing mix variable along before marketing is set.
• Competition based pricing: Competition based pricing is setting prices based for similar on the prices that competitors charge for similar product. One form of competition based pricing is going rate pricing in which a firm bases its price with less attention paid to its own costs or to demand. The firm might charge the same more or less than its major competitors. They charge their prices when the market leader's prices change, rather than when own demand or costs change.
• Cost based approach
• The buyer based approach
• The competition approach
They are summarized below:
• Cost based on approach: In cost based pricing includes
a. Cost plus pricing: The simplest pricing method is cost plus pricing-adding a standard markup to the cost of the product that means adding the expectations profit with the total cost of the product determine the price in cost plus pricing approach. Suppose-variable cost 10 TK, fixed cost 300000 TK, Expected unit sales 50000
Them unit cost = variable cost + Fixed cost/ Unit sales
= 10 + 300000/50000
= 16 TK.
If the company wants to earn 20% profit them price will be
= Unit cost/(1-Desired return on sales)
= 16 / 1 - 0.2 (20% )
= 20 TK.
b. Break even pricing (target profit pricing): The firm tries to determine the price at which it will break even or make the target profit it is seeking. Break even pricing or target profit pricing uses the concept of a break even chart, which shows the total cost and total sequente expected at different sales volume levels. The break even chart is as follows:
1000_|_
........._|_
800._|_
........._|_
600._|_
........._|_
400._|_
........._|______________Fixed cost 200._|_|__|__|__|__|__|__|_______
( * )10 20 30 40 50
* Sales volume in units (Thousands)
Figure: Break Even Chart for determining target price
In above figure, fixed costs are 3,00,000 TK. Regardless of sales volume, variable costs are added to fixed costs to form total costs, which rise with volume. The total revenue curve starts at zero and rise of 20 TK. Per unit.
Break Even Volume = _F_i_x_e_d_c_o_s_t_
Price-variable cost
=_3_0_0_0_0_0_0_
20-10
= 30,000 units
• Buyer based approach: Buyer based approach means value based approach. An increasing number of companies are basing their prices on the products perceived value. Value based pricing uses buyer's perception of value not the seller's cost as the key to pricing. Value based pricing means that the marketer can not design a product and marketing program and them set the price. Price is considered along with the other marketing mix variable along before marketing is set.
• Competition based pricing: Competition based pricing is setting prices based for similar on the prices that competitors charge for similar product. One form of competition based pricing is going rate pricing in which a firm bases its price with less attention paid to its own costs or to demand. The firm might charge the same more or less than its major competitors. They charge their prices when the market leader's prices change, rather than when own demand or costs change.
Factors 2B considered when setting price
We know that price is the amount of money charged for a product or a service or the sum of the values that consumer exchange for the benefits of having or using the department or service.
Considerable factors: A company's pricing decisions are affected by both internal company factors and external environmental factors. The below internal factors affect a pricing decisions.
• Marketing objectives
• Marketing mix strategy
• Cost
• Organizational considerations etc.
They are summarized in below:
• Marketing objectives: Before setting the price the company must decide on its strategy for the product. If the company has selected its target market and positioning carefully them its marketing mix strategy including price will be fairly straight forward. Company's objectives may be:
a. Survival
b. Current profit maximization
c. Market share maximization
d. Product quality
The above objectives are very considerable factors to determine a price. Because on the basis of above objectives pricing is different.
• Marketing Mix Strategy: Price is only one of the marketing mix tools that a company uses to achieve its marketing objectives. Price decisions must be coordinated with product design, distribution and promotion decisions to form a consistent and effective marketing program. Decisions made for other marketing mix variables may affect pricing decisions.
• Costs: The base of pricing decision is cost. The company wants to determine the price is such a way so that it is more than production cost, distribution and selling cost. So, we can say that cost is one of the most important factors for determining a price.
• Organizational Consideration: Management must decide who within the organization should set prices. Companies handle pricing in a variety of ways. In recent small companies prices are often set by top management rather than by the marketing or sales departments. In large companies pricing is typically handled by divisional or product line managers. So, we can say that organizational factors affect a pricing decision.
EXTERNAL FACTORS: External factors that affect pricing decision include
• The nature of market and demand
• Competition and
• Other environmental elements.
They are summarized below:
• The nature of market and demand: Where as costs set the lower of prices, the market and demand set the upper limit. Both consumer and industrial buyers balance the price of a product or service against the benefits of owing it. Thus before setting prices, the marketer must understand the relationship between price and demand for its product.
• Competition: The number of competitors in market affects a pricing decision. If the market is highly competitive them company select comparably less price. Again if the price is less competitive them company can determine comparably high price. So, competition affects a pricing decision.
• Other external factors: When setting prices, the company also must other factors in its external environment. Economic conditions can have a strong impact on the firms pricing strategies. Economic factors such as boom or recession, inflation and interest rates affect the cost of producing a product and consumer perceptions of the product's price and value.
Considerable factors: A company's pricing decisions are affected by both internal company factors and external environmental factors. The below internal factors affect a pricing decisions.
• Marketing objectives
• Marketing mix strategy
• Cost
• Organizational considerations etc.
They are summarized in below:
• Marketing objectives: Before setting the price the company must decide on its strategy for the product. If the company has selected its target market and positioning carefully them its marketing mix strategy including price will be fairly straight forward. Company's objectives may be:
a. Survival
b. Current profit maximization
c. Market share maximization
d. Product quality
The above objectives are very considerable factors to determine a price. Because on the basis of above objectives pricing is different.
• Marketing Mix Strategy: Price is only one of the marketing mix tools that a company uses to achieve its marketing objectives. Price decisions must be coordinated with product design, distribution and promotion decisions to form a consistent and effective marketing program. Decisions made for other marketing mix variables may affect pricing decisions.
• Costs: The base of pricing decision is cost. The company wants to determine the price is such a way so that it is more than production cost, distribution and selling cost. So, we can say that cost is one of the most important factors for determining a price.
• Organizational Consideration: Management must decide who within the organization should set prices. Companies handle pricing in a variety of ways. In recent small companies prices are often set by top management rather than by the marketing or sales departments. In large companies pricing is typically handled by divisional or product line managers. So, we can say that organizational factors affect a pricing decision.
EXTERNAL FACTORS: External factors that affect pricing decision include
• The nature of market and demand
• Competition and
• Other environmental elements.
They are summarized below:
• The nature of market and demand: Where as costs set the lower of prices, the market and demand set the upper limit. Both consumer and industrial buyers balance the price of a product or service against the benefits of owing it. Thus before setting prices, the marketer must understand the relationship between price and demand for its product.
• Competition: The number of competitors in market affects a pricing decision. If the market is highly competitive them company select comparably less price. Again if the price is less competitive them company can determine comparably high price. So, competition affects a pricing decision.
• Other external factors: When setting prices, the company also must other factors in its external environment. Economic conditions can have a strong impact on the firms pricing strategies. Economic factors such as boom or recession, inflation and interest rates affect the cost of producing a product and consumer perceptions of the product's price and value.
New Product Development Stages
We know that new product development means the development of original products, product improvement, product modifications and new brands through the firms own research and development effort. To develop a new product effort. To develop a new product needs to maintain below stages:
• Idea generation
• Idea screening
• Concept development and testing
• Marketing strategy development
• Business analysis
• Product development
• Market testing and commercialization
They are summarized below:
• Idea generation: It is the first task to develop a new product. Idea generation is the systematic search for new product idea. To develop a new product at first needs to generate idea for a new product from the company's internal and sources.
• Idea screening: After generating the idea from various sources, in second stages need to screen the idea from that ideas. That means from the various ideas in first stage select the best and suitable idea for developing a new product.
• Concept development and testing: In this step the above selected ideas convert into the concept, that means here consider the idea in written form and test concept. Moreover here defined the product features design size, etc.
• Marketing strategy development: In this step develop the marketing strategy for the above developed product that means here decides what product will be produced what will be its price, distribution channel, promotion and so on.
• Business analysis: Business analysis is the review of the sales, costs and profit projections for a new product whether these factors satisfy the company's objectives.
• Product development: So far, for many new product concepts, the department may have existed only as a word description, a drawing or perhaps a crude mock up. If the department concept passes the business test, it involves into product development that means after analyzing the product in business side develop the product in physical form.
• Market testing and commercialization: After developing a new product, in this stage test the market for this new product and know the customer opinion regarding the new products. It it can get the positive signal from the market them commercialize the new product.
• Idea generation
• Idea screening
• Concept development and testing
• Marketing strategy development
• Business analysis
• Product development
• Market testing and commercialization
They are summarized below:
• Idea generation: It is the first task to develop a new product. Idea generation is the systematic search for new product idea. To develop a new product at first needs to generate idea for a new product from the company's internal and sources.
• Idea screening: After generating the idea from various sources, in second stages need to screen the idea from that ideas. That means from the various ideas in first stage select the best and suitable idea for developing a new product.
• Concept development and testing: In this step the above selected ideas convert into the concept, that means here consider the idea in written form and test concept. Moreover here defined the product features design size, etc.
• Marketing strategy development: In this step develop the marketing strategy for the above developed product that means here decides what product will be produced what will be its price, distribution channel, promotion and so on.
• Business analysis: Business analysis is the review of the sales, costs and profit projections for a new product whether these factors satisfy the company's objectives.
• Product development: So far, for many new product concepts, the department may have existed only as a word description, a drawing or perhaps a crude mock up. If the department concept passes the business test, it involves into product development that means after analyzing the product in business side develop the product in physical form.
• Market testing and commercialization: After developing a new product, in this stage test the market for this new product and know the customer opinion regarding the new products. It it can get the positive signal from the market them commercialize the new product.
Definition & Characteristics of Services
Service: Services are a form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangale and do no result in the ownership of anything.
That means services is not physical form of product but intangle and it only indicates the activities or benefits or satisfaction that can offer in market for sale and it can satisfy the consumer need and wants. It can not separate from the service providers and vary person to person.
From the above definition, we get the below characteristics of a service:
• Service is intangle
• It is inseparable
• Variability and
• Perishability
They are summarized below:
• Inseparability: A major characteristics of services they are produced and consumed at the same time and can not be separated from their providers whether the providers are people or machines.
• Variablity: Another important characteristics of service is their quality may vary greatly depending on who provides them and when, where and how.
• Perishability: Since when services is produced them it needs to consume. For this reason, they can not stored for later sale or use.
That means services is not physical form of product but intangle and it only indicates the activities or benefits or satisfaction that can offer in market for sale and it can satisfy the consumer need and wants. It can not separate from the service providers and vary person to person.
From the above definition, we get the below characteristics of a service:
• Service is intangle
• It is inseparable
• Variability and
• Perishability
They are summarized below:
• Inseparability: A major characteristics of services they are produced and consumed at the same time and can not be separated from their providers whether the providers are people or machines.
• Variablity: Another important characteristics of service is their quality may vary greatly depending on who provides them and when, where and how.
• Perishability: Since when services is produced them it needs to consume. For this reason, they can not stored for later sale or use.
Individual Product Decision
Individual product decisions involve the development of a product and related decisions regarding marketing a product. The below things are related in individual product decisions.
• Product attributes decision
• Branding
• Packaging
• Labeling etc.
They are summarized in below:
• Product attributes decisions: It is the first task to define the product's benefits for developing a product. These benefits are communicated and delivered by product attribued such as quality, features, style and design.
The below factors are related with the product attributes decision.
Product Quality: Product quality is the ability of a product to perform its functions, it includes the product's overall durability, reliability, precision, case of operation and repair and other value attributes.
Product features: A can product be offered with varying features. Ve company can create higher models by adding more features. Features are a competitive tool for differentiating the company's product from competitor's products.
Product style and design: Another way to add customer value is through distinctive product style and design. Product is design is an elusive blend of form and function, quality and style, art and engineering.
• Branding: Perhaps the most distinctive skill of professional marketers is their ability to create, maintain, protect and enhance brand of their products and service. A brand is a name, term, sign, symbol or design or a combination of these that identifies the maker or seller of a product or service.
• Packaging: Packaging is the activities of designig and producing the container or wrapper for a product.
• Labeling: Labels may range from simple tags attached to products to complex graphics that are part of the package. At the very least, the label identifies the product or brand. It might also describe several things about the product who made it, where it was made, when it was made, its contents, how it is to be used and how to use it safety.
• Product attributes decision
• Branding
• Packaging
• Labeling etc.
They are summarized in below:
• Product attributes decisions: It is the first task to define the product's benefits for developing a product. These benefits are communicated and delivered by product attribued such as quality, features, style and design.
The below factors are related with the product attributes decision.
Product Quality: Product quality is the ability of a product to perform its functions, it includes the product's overall durability, reliability, precision, case of operation and repair and other value attributes.
Product features: A can product be offered with varying features. Ve company can create higher models by adding more features. Features are a competitive tool for differentiating the company's product from competitor's products.
Product style and design: Another way to add customer value is through distinctive product style and design. Product is design is an elusive blend of form and function, quality and style, art and engineering.
• Branding: Perhaps the most distinctive skill of professional marketers is their ability to create, maintain, protect and enhance brand of their products and service. A brand is a name, term, sign, symbol or design or a combination of these that identifies the maker or seller of a product or service.
• Packaging: Packaging is the activities of designig and producing the container or wrapper for a product.
• Labeling: Labels may range from simple tags attached to products to complex graphics that are part of the package. At the very least, the label identifies the product or brand. It might also describe several things about the product who made it, where it was made, when it was made, its contents, how it is to be used and how to use it safety.
Product Line Decision, Mix Decision
• Product Line Decision: We have looked at product strategy decisions such as branding, packaging, labeling and support service for individual products and service. But product strategy also calls for building a product line.
Product line: Product line group of products via are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same type of outles, or fall within given price ranges.
• Product Mix Decision: An organization with several product lines has a products mix. A product mix or product assessment consists of the entire product for sale.
Product line: Product line group of products via are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same type of outles, or fall within given price ranges.
• Product Mix Decision: An organization with several product lines has a products mix. A product mix or product assessment consists of the entire product for sale.
Product Life Cycle
After launching the new product, management wants the product to enjoy a long and happy life. Although it does not expect huge product to sell over, the company wants to farm a decent profit to cover all the effort and risk that went into launching it.
It involves five distinct stages. They are as follows:
• Product development
• Introduction
• Growth
• Maturity
• Decline
The product revenue and profits
can be plotted as a function of
the life-cycle stages as shown in
the graph below: /We can represent these stages through the figure in below way:
Management is aware that each product will have a life cycle, although the exact shape and length is not known in advance. So product life cycle is the course of a product's sales and profits over its life time.
*Product Life Cycle Diagram
• Product developement: Product Developement begins when company finds and develops a new product idea. During product development sales are zero and the company's investment costs mount.
• Introduction: Introduction is a period of slow sales growth as the product is introduced in the market. Profits are non existent in this stage because of heavy expenspes of product introduction.
• Growth: Growth is a period of market acceptance and increasing profit.
• Maturity: Maturity is a period of slow down in sales growth because the product has recieved acceptance by most potential buyers. Profit level off or decline because of increasing against competition.
• Decline: Decline is the period when sales fall off and profit drop.
It involves five distinct stages. They are as follows:
• Product development
• Introduction
• Growth
• Maturity
• Decline
The product revenue and profits
can be plotted as a function of
the life-cycle stages as shown in
the graph below: /We can represent these stages through the figure in below way:
Management is aware that each product will have a life cycle, although the exact shape and length is not known in advance. So product life cycle is the course of a product's sales and profits over its life time.
*Product Life Cycle Diagram
• Product developement: Product Developement begins when company finds and develops a new product idea. During product development sales are zero and the company's investment costs mount.
• Introduction: Introduction is a period of slow sales growth as the product is introduced in the market. Profits are non existent in this stage because of heavy expenspes of product introduction.
• Growth: Growth is a period of market acceptance and increasing profit.
• Maturity: Maturity is a period of slow down in sales growth because the product has recieved acceptance by most potential buyers. Profit level off or decline because of increasing against competition.
• Decline: Decline is the period when sales fall off and profit drop.
Classification of Product
Mainly these are two types of product.
A. Consumer product
B. Industrial product
A. Consumer product: Consumer products are those bought by final consumer for personal consumption. Marketers usually classify those products further based on how consumers go about buying them or on the basis of consumers shopping habit marketers classify the consumer goods. There are four types of consumer goods/product:
• Convenience product: Convenience products are consumer products and services that the customer usually buying frequently, immediately and with a minimum of comparison and buying effort. Generally it is less costly and it can get everywhere. Such as soap, candy, tooth paste, newspapers, salt, oil etc.
• Shopping product: Shopping products are consumer products that the customer on such bases as suitability quality, price and style. When consumer purchases shopping products and services them he spends much time and effort in gathering information and making comparison. It includes Furniture, Sharee, Clothing, Ornament, TV etc.
• Specialty product: Specially products are consumer products with unique characteristics or brand identification for willing to make a special brands and types of cars, high priced photographic equipment, designer, clothes and the service of medical or legal specialists.
• Unsought product: Unsought products are consumer products that the consumers either does not know about or knows about but does not normally think of buying. Such as life insurance and blood donations to the Red Cross.
B. Industrial goods: Industrial products are those products bought by individuals and organizations for further processing or for use in conducting a business.
The three groups of industrial product and services include.
• Material and parts
• Capital items and
• Suppliers and services
They are summarized below:
• Material and parts: Materials and parts are industrial products that totally entered the marketers or producers product. If is parts of main product. Materials and parts includes raw materials and manufactured materials and parts.
* Raw materials: Raw materials consists of farm products (wheat, cotton, livestock, fruits, vegetables) and natural producs (fish, lumber, crude petroleum, iron)
* Manufactured materials and parts: Manufactured materials and parts consists of component materials (iron, yarn, cement, wires) and component parts (small motors, tires, casting)
• Capital items: Capital items are industrial products that aid in the buyers production or operation or operation. Capital items include installation and accessory equipment.
* Installations: Installations consist of major purchases such as buildings (factories and office) and fixed equipment (generations, drill, presses, large computers, elevators) etc.
* Accessory equipment: Accessory equipment includes portable factory equipment and tools (hand tools, lift trucks) and office equipment (fax, machineries desks). They have a shorter life than installation and simply aid in the production process.
• Suppliers and services: The final group of business products is suppliers and services. Supplies include operating supplies (lubricants, coal, paper, pencil and repairs and maintenance items (paints, nails, brooms). Suppliers are the convenience product of the industrial field because they are usually purchased with a minimum of effort or comparison. Business service includes maintenance and repair services (window cleaning computer repair) and business advisom services (legal, management consulting advertising). Such services are usually supplied under contract.
A. Consumer product
B. Industrial product
A. Consumer product: Consumer products are those bought by final consumer for personal consumption. Marketers usually classify those products further based on how consumers go about buying them or on the basis of consumers shopping habit marketers classify the consumer goods. There are four types of consumer goods/product:
• Convenience product: Convenience products are consumer products and services that the customer usually buying frequently, immediately and with a minimum of comparison and buying effort. Generally it is less costly and it can get everywhere. Such as soap, candy, tooth paste, newspapers, salt, oil etc.
• Shopping product: Shopping products are consumer products that the customer on such bases as suitability quality, price and style. When consumer purchases shopping products and services them he spends much time and effort in gathering information and making comparison. It includes Furniture, Sharee, Clothing, Ornament, TV etc.
• Specialty product: Specially products are consumer products with unique characteristics or brand identification for willing to make a special brands and types of cars, high priced photographic equipment, designer, clothes and the service of medical or legal specialists.
• Unsought product: Unsought products are consumer products that the consumers either does not know about or knows about but does not normally think of buying. Such as life insurance and blood donations to the Red Cross.
B. Industrial goods: Industrial products are those products bought by individuals and organizations for further processing or for use in conducting a business.
The three groups of industrial product and services include.
• Material and parts
• Capital items and
• Suppliers and services
They are summarized below:
• Material and parts: Materials and parts are industrial products that totally entered the marketers or producers product. If is parts of main product. Materials and parts includes raw materials and manufactured materials and parts.
* Raw materials: Raw materials consists of farm products (wheat, cotton, livestock, fruits, vegetables) and natural producs (fish, lumber, crude petroleum, iron)
* Manufactured materials and parts: Manufactured materials and parts consists of component materials (iron, yarn, cement, wires) and component parts (small motors, tires, casting)
• Capital items: Capital items are industrial products that aid in the buyers production or operation or operation. Capital items include installation and accessory equipment.
* Installations: Installations consist of major purchases such as buildings (factories and office) and fixed equipment (generations, drill, presses, large computers, elevators) etc.
* Accessory equipment: Accessory equipment includes portable factory equipment and tools (hand tools, lift trucks) and office equipment (fax, machineries desks). They have a shorter life than installation and simply aid in the production process.
• Suppliers and services: The final group of business products is suppliers and services. Supplies include operating supplies (lubricants, coal, paper, pencil and repairs and maintenance items (paints, nails, brooms). Suppliers are the convenience product of the industrial field because they are usually purchased with a minimum of effort or comparison. Business service includes maintenance and repair services (window cleaning computer repair) and business advisom services (legal, management consulting advertising). Such services are usually supplied under contract.
Product, Level of Product
Generally PRODUCT means things or physical goods. But its meaning in marketing is massive. In the side of marketing product means goods or services that can satisfy the wants of the consumer. In this context invisible goods may be a product. Such as services of bankers or doctors etc.
According to Philip Kotler, Product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, events, persons, places, organization, ideas or mixes of these entities.
From the above discussion we can play our opinion that product is tangible or intangible things that can satisfy the want or need of the consumer.
• Level of Product
To prepare and offer a product, marketer needs to consider five levels of a product. These levels are as follows:
1. Core product or benefit
2. Expected product
3. Expected product
4. Augmented product
5. Potential product
These are summarized in below:
1. Core product or benefit: It is the primary levels to the developement of a product. It is a prime and central part of a product. It is the internal qualities of a product that satisfy the main warmt of a customer. By the answer of what product consumer is buying and what benefit he will get, it is expressed the core product or benefit. It is the main objective for purchasing a product, such as a hotel guest is buying "rest and sleep". The purchases of a drill is buying holes.
2. Expected product: At the second level the marketer has to turn the core benefit into a basic product. Thus a hotel room includes a bed, bathroom, towels, desk, dresser and closer.
3. Expected product: At the third level, the marketer prepares an expected product. It is a set of attributes and conditions that buyers normally expect when they purchase this product. Suppose Hotel guest expect a clean bed, fresh towels, working lamps and as relative degree of quiet.
4. Augmented product that exceeds customer expectations. A hotel can inatted a remote control television set, fresh floors, rapid check in, express checkout and fine dining and room service.
5. Potential product: At the fifth level stands the potential product which encompassess all the possible augmentations and transformations the product might go in the future. Here is where companies search for new ways to satisfy customers and distinguish their offers.
According to Philip Kotler, Product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, events, persons, places, organization, ideas or mixes of these entities.
From the above discussion we can play our opinion that product is tangible or intangible things that can satisfy the want or need of the consumer.
• Level of Product
To prepare and offer a product, marketer needs to consider five levels of a product. These levels are as follows:
1. Core product or benefit
2. Expected product
3. Expected product
4. Augmented product
5. Potential product
These are summarized in below:
1. Core product or benefit: It is the primary levels to the developement of a product. It is a prime and central part of a product. It is the internal qualities of a product that satisfy the main warmt of a customer. By the answer of what product consumer is buying and what benefit he will get, it is expressed the core product or benefit. It is the main objective for purchasing a product, such as a hotel guest is buying "rest and sleep". The purchases of a drill is buying holes.
2. Expected product: At the second level the marketer has to turn the core benefit into a basic product. Thus a hotel room includes a bed, bathroom, towels, desk, dresser and closer.
3. Expected product: At the third level, the marketer prepares an expected product. It is a set of attributes and conditions that buyers normally expect when they purchase this product. Suppose Hotel guest expect a clean bed, fresh towels, working lamps and as relative degree of quiet.
4. Augmented product that exceeds customer expectations. A hotel can inatted a remote control television set, fresh floors, rapid check in, express checkout and fine dining and room service.
5. Potential product: At the fifth level stands the potential product which encompassess all the possible augmentations and transformations the product might go in the future. Here is where companies search for new ways to satisfy customers and distinguish their offers.
Business Buying Behavior
If we describe the business buyer behavior, them we find four questions. Which are:
a. What buying decision do business buyers make?
b. Who participates in the buying process?
c. What are the major influences on buyers?
d. How do business buyers make their buying decisions?
These questions answer are discussed below:
A. Major types of buying situation: There are three major types of buying situation. These are:
• Straight rebuy: Straight rebuy is a business buying situation in which the buyer routinely recorders something without any modifications.
• Modified rebuy is a buying situation in which the wants to modify product specifications, prices, terms or suppliers.
• New task: New task is a business buying situation in which the buyer purchases a product or service for the first time.
B. Participants in the business buying process: The trillions of Taka worth of goods and services needed by business organization. The decision making unit of a buying organization is calle buying center. The buying center includes all members of the organization who play any of the five role in the purchase decision process. They are discussed below:
• Users: Users are members of the buying organization who will actually use the purchased product or service.
• Influencers: Influencers often help define specifications and also provide information for evaluation alternatives. Naturally, the technical efficient person work as influencers.
• Buyers: Buyers have the formal authority to select the supplier and arrange term of purchase.
• Deciders: Deciders are the people of organization's buying center who have formal or informal power to select or approve the final suppliers.
• Gatekeepers: Gatekeepers are the people in the organization buying center who can control the flow of information to others. These person are technically and the level of secreterial person.
C. Major influence on business buyers: Business buyers are influenced when they make their buying decision. Various groups of influences on business are- environmental, organizational, interpersonal and individual. They are discussed below:
• Environmental factors: Business buyers are influenced by factors in the current and expected economic environment. Such as level of primary demand, the economic outlook and the cost of money.
• Organizational factors: Each buying organization has its own objectives, policies, procedures and system. The business marketer must understand the factors well.
• Interpersonal factors: The buying center usually includes many participants who influence each other. So interpersonal factors also influence the business buying process. However, it is often to difficult to assess such interpersonal factors and groups dynamics.
• Individual factors: Each participant in the business buying-decision process brings in personal motives, perceptions and preferences. These individual factors are affected by personal characteristics such as age, income, education, professional identification, personality and attitudes toward risk.
D. The business buying process: Business buyers do not buy goods and services for personal consumption. They buy goods and services to make money or to satisfy the customers. There are eight stage in the business buying process. They are discussed below:
• Problem recognition: The first stage of the business buying process in which some one in the company recognizes a problem or need that can be met by acquiring a good or service.
• General need description: The second stage is general need description, the stage ing the business buying process in which the company describes the general characteristics and quality of a needed item.
• Product specification: The next stage is product specification. The stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item.
• Supplier search: After product specification the next stage is suppliers search. The stage of the business buying process in which the buyer tries to find the best vendors.
• Prospoal solicitation: The fifth stage is proposal solicitation. The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.
• Supplier selection: The next stage is supplier selection. The stage of the business process in which the buyer reviews proposals and rejects a supplier or suppliers.
• Order-routine specification: The seventh stage is order-routine specification. The order of the business buying process in which the buyer writes the final order with the chosen suppliers, listing the technical specifications, quantity needed, expected time of delivery, return policies and warranties.
• Performance review: The last stage is performance review. The stage of the business buying process in which the buyer rates its satisfaction with suppliers, deciding whether to continue, modify or drop them.
a. What buying decision do business buyers make?
b. Who participates in the buying process?
c. What are the major influences on buyers?
d. How do business buyers make their buying decisions?
These questions answer are discussed below:
A. Major types of buying situation: There are three major types of buying situation. These are:
• Straight rebuy: Straight rebuy is a business buying situation in which the buyer routinely recorders something without any modifications.
• Modified rebuy is a buying situation in which the wants to modify product specifications, prices, terms or suppliers.
• New task: New task is a business buying situation in which the buyer purchases a product or service for the first time.
B. Participants in the business buying process: The trillions of Taka worth of goods and services needed by business organization. The decision making unit of a buying organization is calle buying center. The buying center includes all members of the organization who play any of the five role in the purchase decision process. They are discussed below:
• Users: Users are members of the buying organization who will actually use the purchased product or service.
• Influencers: Influencers often help define specifications and also provide information for evaluation alternatives. Naturally, the technical efficient person work as influencers.
• Buyers: Buyers have the formal authority to select the supplier and arrange term of purchase.
• Deciders: Deciders are the people of organization's buying center who have formal or informal power to select or approve the final suppliers.
• Gatekeepers: Gatekeepers are the people in the organization buying center who can control the flow of information to others. These person are technically and the level of secreterial person.
C. Major influence on business buyers: Business buyers are influenced when they make their buying decision. Various groups of influences on business are- environmental, organizational, interpersonal and individual. They are discussed below:
• Environmental factors: Business buyers are influenced by factors in the current and expected economic environment. Such as level of primary demand, the economic outlook and the cost of money.
• Organizational factors: Each buying organization has its own objectives, policies, procedures and system. The business marketer must understand the factors well.
• Interpersonal factors: The buying center usually includes many participants who influence each other. So interpersonal factors also influence the business buying process. However, it is often to difficult to assess such interpersonal factors and groups dynamics.
• Individual factors: Each participant in the business buying-decision process brings in personal motives, perceptions and preferences. These individual factors are affected by personal characteristics such as age, income, education, professional identification, personality and attitudes toward risk.
D. The business buying process: Business buyers do not buy goods and services for personal consumption. They buy goods and services to make money or to satisfy the customers. There are eight stage in the business buying process. They are discussed below:
• Problem recognition: The first stage of the business buying process in which some one in the company recognizes a problem or need that can be met by acquiring a good or service.
• General need description: The second stage is general need description, the stage ing the business buying process in which the company describes the general characteristics and quality of a needed item.
• Product specification: The next stage is product specification. The stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item.
• Supplier search: After product specification the next stage is suppliers search. The stage of the business buying process in which the buyer tries to find the best vendors.
• Prospoal solicitation: The fifth stage is proposal solicitation. The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.
• Supplier selection: The next stage is supplier selection. The stage of the business process in which the buyer reviews proposals and rejects a supplier or suppliers.
• Order-routine specification: The seventh stage is order-routine specification. The order of the business buying process in which the buyer writes the final order with the chosen suppliers, listing the technical specifications, quantity needed, expected time of delivery, return policies and warranties.
• Performance review: The last stage is performance review. The stage of the business buying process in which the buyer rates its satisfaction with suppliers, deciding whether to continue, modify or drop them.
Characteristics of Business Market
Business market is formed by individual market, resale market and government. In large business market every businessman sell their produced goods to the other businessmen. The goods are provided to the ultimate consumer through dealer, wholesaler, retailer etc. The characteristics of business market are discussed below:
• MARKET STRUCTURE AND DEMAND: In business market, marketers are few but transaction is large amount. The characteristics which under market structure and demand are discussed below:
• Fewer but larger buyer: In business market, the buyers are few but the amount of purchase is large. Industrial organizations are needed to large amount of goods for large production.
• Geographically concentrated: Business market is concentrated geographically, that means business market in established in a certain area.
• Derived Demand: Derived demand is created from the final consumer demand. If the need of consumable goods increase or decrease then the industrial market increase or decrease.
• Inelastic demand: Demand of many business market is more inelastic. The demand is not affect as much as short run by price changes.
• Fluctuating demand: Demand in business markets fluctuates more and more quickly. If the need of consumable goods little increase then the need of industrial goods more increase.
NATURE OF BUYING UNIT: Business purchase is more complex that consumer purchase and the buyer have more professional effort. Sometimes this purchase is implemented by appointing trained up purchase agent.
TYPES OF DECISION AND THE DECISION PROCESS: Business marketer have to face more complex buying decision than the consumer marketer. Because a large amount of money is transacted for purchasing goods, which consider the monetary matter. In this buying process many people of the organization are engaged. Business buyer takes more time to take buying decision for complexity.
Above these are the characteristics of business.
• MARKET STRUCTURE AND DEMAND: In business market, marketers are few but transaction is large amount. The characteristics which under market structure and demand are discussed below:
• Fewer but larger buyer: In business market, the buyers are few but the amount of purchase is large. Industrial organizations are needed to large amount of goods for large production.
• Geographically concentrated: Business market is concentrated geographically, that means business market in established in a certain area.
• Derived Demand: Derived demand is created from the final consumer demand. If the need of consumable goods increase or decrease then the industrial market increase or decrease.
• Inelastic demand: Demand of many business market is more inelastic. The demand is not affect as much as short run by price changes.
• Fluctuating demand: Demand in business markets fluctuates more and more quickly. If the need of consumable goods little increase then the need of industrial goods more increase.
NATURE OF BUYING UNIT: Business purchase is more complex that consumer purchase and the buyer have more professional effort. Sometimes this purchase is implemented by appointing trained up purchase agent.
TYPES OF DECISION AND THE DECISION PROCESS: Business marketer have to face more complex buying decision than the consumer marketer. Because a large amount of money is transacted for purchasing goods, which consider the monetary matter. In this buying process many people of the organization are engaged. Business buyer takes more time to take buying decision for complexity.
Above these are the characteristics of business.
Business, Institutional & Govt. Markets
• BUSINESS MARKET: The business buyer is needed to process the industrial goods and to reach consumpable goods to the consumer, which market is formed by business buyer is called business market. In business market a large amount of goods are sold than consumer market.
According to Webstar and Wind, "The business market consists of all the business that buy goods and services to use in the production of other products and services that are sold, rented or supplied to others.
According it Steven J. Skinner, "A business market is a market that includes individuals or groups that purchase a specific kind of product for resale, direct use in the production of other products or use in general daily operations."
• Institutional Market: The institutional market consists of schools, hospitals, nursing homes, prisons and other institutions that must provide goods and services to people in their care. Many of these organization are characterized by low budgets and disable persons.
• The Government Market: The government market consists of governmment units federal state and local that purchase or sent goods for carrying out the main functions of government. Government buying is based on acquiring products and services that the voters and their representatives establish as necessary to carry out public objectives. Government agencies buy an amazing range of products and services. They buy sculpture, chalkboards, furniture, toileteries, clothing materials-handling equipment, fire engines, mobile equipmen and fuel.
According to Webstar and Wind, "The business market consists of all the business that buy goods and services to use in the production of other products and services that are sold, rented or supplied to others.
According it Steven J. Skinner, "A business market is a market that includes individuals or groups that purchase a specific kind of product for resale, direct use in the production of other products or use in general daily operations."
• Institutional Market: The institutional market consists of schools, hospitals, nursing homes, prisons and other institutions that must provide goods and services to people in their care. Many of these organization are characterized by low budgets and disable persons.
• The Government Market: The government market consists of governmment units federal state and local that purchase or sent goods for carrying out the main functions of government. Government buying is based on acquiring products and services that the voters and their representatives establish as necessary to carry out public objectives. Government agencies buy an amazing range of products and services. They buy sculpture, chalkboards, furniture, toileteries, clothing materials-handling equipment, fire engines, mobile equipmen and fuel.
Buyer Decision Process for New Product
Before going to the buyer decision we have to know what is new product. New product is a good, service or idea that is perceived by some potential customer as new.
Now we discuss the buyer decision process for new products.
STAGE IN THE ADOPTION PROCESS: Adoption process is the mental process through which an individual passes first hearing about an innovation to final adoption. Consumers go through five stages in the process of adopting a new product. These are-
• Awareness: The consumer becomes aware of information about it.
• Interest: The consumer considers whether trying the new products make sense.
• Evaluation: The consumer considers whether trying the new product make sense.
• Trial: The consumer tries the new product on a small scale to improve his or her estimate of its value.
• Adoption: The consumer decide to make full and regular use of the new product.
INDIVIDUAL DIFFERENCES IN INNOVATIVENESS: People differ greatly in their readiness to try new products. People can be classified into five adopter categories. They are discussed below.
• Innovators: Innovators are venture some. They try new products at some risk.
• Early Adopters: Early adopters are guided by respect. They are opinion leaders in their communities and adopt new product early but carefully.
• Early Majority: Early majority are deliberates. Although they are rarely leaders. They adopt new product before the average person.
• Late Majority: Late majority are skeptical. They adopt an innovation only after a majority of people have tried it.
• Laggards: Laggards are tradition bound. They suspicious only when it has become something of a tradition itself.
INFLUENCE OF PRODUCT CHARACTERISTICS ON RATE OF ADOPTION: The characteristics of the new product affect its rate of adoption. Some produc bathbi on overnight, whereas others take a long time to gain acceptance. Five characteristics are important in influencing an innovation's rate of adoption. They are discussed below:
• Relative Advantage: Relative advantage is the degree to which the innovation appears superior to existing products.
• Compatibility: Compatibility is the degree to which the innovation fits the values and experiences of potential consumers.
• Complexity: Complexity is the degree to which the innovation is difficult to understand or use.
• Divisibility: Divisiblity is the degree to which the innovation may be tried on a limited basis.
• Communicability: Communicability is the degree to which the result of using the innovation can be observed or described to others.
• The new product marketer has to research all these factors when developing the new product and its marketing program.
Now we discuss the buyer decision process for new products.
STAGE IN THE ADOPTION PROCESS: Adoption process is the mental process through which an individual passes first hearing about an innovation to final adoption. Consumers go through five stages in the process of adopting a new product. These are-
• Awareness: The consumer becomes aware of information about it.
• Interest: The consumer considers whether trying the new products make sense.
• Evaluation: The consumer considers whether trying the new product make sense.
• Trial: The consumer tries the new product on a small scale to improve his or her estimate of its value.
• Adoption: The consumer decide to make full and regular use of the new product.
INDIVIDUAL DIFFERENCES IN INNOVATIVENESS: People differ greatly in their readiness to try new products. People can be classified into five adopter categories. They are discussed below.
• Innovators: Innovators are venture some. They try new products at some risk.
• Early Adopters: Early adopters are guided by respect. They are opinion leaders in their communities and adopt new product early but carefully.
• Early Majority: Early majority are deliberates. Although they are rarely leaders. They adopt new product before the average person.
• Late Majority: Late majority are skeptical. They adopt an innovation only after a majority of people have tried it.
• Laggards: Laggards are tradition bound. They suspicious only when it has become something of a tradition itself.
INFLUENCE OF PRODUCT CHARACTERISTICS ON RATE OF ADOPTION: The characteristics of the new product affect its rate of adoption. Some produc bathbi on overnight, whereas others take a long time to gain acceptance. Five characteristics are important in influencing an innovation's rate of adoption. They are discussed below:
• Relative Advantage: Relative advantage is the degree to which the innovation appears superior to existing products.
• Compatibility: Compatibility is the degree to which the innovation fits the values and experiences of potential consumers.
• Complexity: Complexity is the degree to which the innovation is difficult to understand or use.
• Divisibility: Divisiblity is the degree to which the innovation may be tried on a limited basis.
• Communicability: Communicability is the degree to which the result of using the innovation can be observed or described to others.
• The new product marketer has to research all these factors when developing the new product and its marketing program.
The Buyer Decision Process
The consumer passes through five stages: Problem recognition, information search, evaluation of alternatives, purchase decision, post purchase behavior. We can show the buying decision process though the following model.
>Problem Recognition
>Information Search
>Evaluation of Alternatives
>Purchase Decision
>Post Purchase Behavior
Now these stages are described below:
• Problem Recognition: The first stage of the buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good or a service.
• Information Search: The second stage of the buyer decision process in which the consumer is aroused to search for more information, the consumer may simply have heightened attention or may go into active information search.
• Evaluation of Alternatives: The third stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.
• Purchase Decision: The fourth stage of the buyer decision process in which the consumer actually buys the product.
• Post Purchase Behavior: The last stage of the buyer decision process in which consumers take further action after purchase based no their satisfaction or dissatisfaction.
>Problem Recognition
>Information Search
>Evaluation of Alternatives
>Purchase Decision
>Post Purchase Behavior
Now these stages are described below:
• Problem Recognition: The first stage of the buying process in which someone in the company recognizes a problem or need that can be met by acquiring a good or a service.
• Information Search: The second stage of the buyer decision process in which the consumer is aroused to search for more information, the consumer may simply have heightened attention or may go into active information search.
• Evaluation of Alternatives: The third stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.
• Purchase Decision: The fourth stage of the buyer decision process in which the consumer actually buys the product.
• Post Purchase Behavior: The last stage of the buyer decision process in which consumers take further action after purchase based no their satisfaction or dissatisfaction.
Types of buying decision behavior
Buying decision behavior is divited into four types. They are discussed in below:
• Complex buying behavior: Complex buying behavior is consumer buying behavior in situations characterized by high involvement but few differences among brands.
• Dissonance-reducing behavior: Dissonance-reducing buying behavior is consumer buying behavior in situations characterised by high involvement but few perceived differences among brands.
• Habitual buying behavior: Habitual buying behavior is consumer buying behavior in situation characterized by low consumer involvement and few significant perceived differences.
• Variety-seeking buying behavior: Variety seeking buying behavior is consumer buying behavior in situation characterized by low consumer involvement but significant perceived differences.
• Complex buying behavior: Complex buying behavior is consumer buying behavior in situations characterized by high involvement but few differences among brands.
• Dissonance-reducing behavior: Dissonance-reducing buying behavior is consumer buying behavior in situations characterised by high involvement but few perceived differences among brands.
• Habitual buying behavior: Habitual buying behavior is consumer buying behavior in situation characterized by low consumer involvement and few significant perceived differences.
• Variety-seeking buying behavior: Variety seeking buying behavior is consumer buying behavior in situation characterized by low consumer involvement but significant perceived differences.
Factors of affecting consumer behavior
Consumer purchases are influenced by cultural, social, personal and psychological characteristics.
These factors are discussed below:
CULTURAL FACTORS: Cultural factors influence on customer behavior. The marketer needs to understand the role played by the buyer's sub-culture and social class.
Cultural factors are discussed below:
• Subculture: Subculture is a group of people with shared value systems based on common life experiences and situations.
• Social Classes: Social classes are relatively permanent and ordered divisions in a society whose members share similiar values, interests and behaviors.
SOCIAL FACTORS: Consumer behavior is influenced by social factors such are the consumers small groups, family and social roles and status.
Social factors are discussed below:
• Group: Two or more people interact to accomplish individual or mutual goals.
• Family: Family members can influence buyer behavior. The family is the most important consumer buying organization in society.
• Roles and status: A role consists of the activities people are expected to perform according to the persons. Each people are expected to perform according to the persons. Each role barriers a status reflecting the general esteem given to it by society.
PERSONAL FACTORS: A buyer's decisions are also influenced by personal characteristics such as the buyer's age, life cycle stage, occupation, economic situation, lifestyle and personality and self-concept.
• Age and life cycle stage: People change the goods and services to buy over their lifetime. Tastes in food, clothes, furniture's and recreation are often age and life cycle stage related.
• Occupation: A person's occupation affects the goods and services bought. A worker tends to buy more rugged work cloths. But executives buy more business suit.
• Economic Situation: A person's economic situation will affect product choice. Product depends on personal income, savings and interest rate.
• Life style: A person's pattern of living as expressed in his or her activities, interests and opinions.
• Personality and self concept: Personality is person's distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment. Personality and self-concept also affect to buy product and service.
PSYCHOLOGICAL FACTORS: A person's buying choices are influenced by four major psychological factors such as motivation, perception, learning and beliefs and attitudes. Psychological factors are discussed below:
• Motivation: Motivation is the drive which a person influences to buy product and service.
• Perception: Perception is the process by which people select, organize and interpret information of form a meaningful picture of the world.
• Learning: Learning is the relatively permanent change of an individual's behavior and arising from experience.
• Beliefs and attitudes: Belief is a descriptive thought that a person holds about something. Attitude is that a person's consistently favorable or unfavourable evaluations, feelings and tendencies toward an object or idea.
• From the above discussion we can say that all factors affect in consumer buying behavior.
These factors are discussed below:
CULTURAL FACTORS: Cultural factors influence on customer behavior. The marketer needs to understand the role played by the buyer's sub-culture and social class.
Cultural factors are discussed below:
• Subculture: Subculture is a group of people with shared value systems based on common life experiences and situations.
• Social Classes: Social classes are relatively permanent and ordered divisions in a society whose members share similiar values, interests and behaviors.
SOCIAL FACTORS: Consumer behavior is influenced by social factors such are the consumers small groups, family and social roles and status.
Social factors are discussed below:
• Group: Two or more people interact to accomplish individual or mutual goals.
• Family: Family members can influence buyer behavior. The family is the most important consumer buying organization in society.
• Roles and status: A role consists of the activities people are expected to perform according to the persons. Each people are expected to perform according to the persons. Each role barriers a status reflecting the general esteem given to it by society.
PERSONAL FACTORS: A buyer's decisions are also influenced by personal characteristics such as the buyer's age, life cycle stage, occupation, economic situation, lifestyle and personality and self-concept.
• Age and life cycle stage: People change the goods and services to buy over their lifetime. Tastes in food, clothes, furniture's and recreation are often age and life cycle stage related.
• Occupation: A person's occupation affects the goods and services bought. A worker tends to buy more rugged work cloths. But executives buy more business suit.
• Economic Situation: A person's economic situation will affect product choice. Product depends on personal income, savings and interest rate.
• Life style: A person's pattern of living as expressed in his or her activities, interests and opinions.
• Personality and self concept: Personality is person's distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment. Personality and self-concept also affect to buy product and service.
PSYCHOLOGICAL FACTORS: A person's buying choices are influenced by four major psychological factors such as motivation, perception, learning and beliefs and attitudes. Psychological factors are discussed below:
• Motivation: Motivation is the drive which a person influences to buy product and service.
• Perception: Perception is the process by which people select, organize and interpret information of form a meaningful picture of the world.
• Learning: Learning is the relatively permanent change of an individual's behavior and arising from experience.
• Beliefs and attitudes: Belief is a descriptive thought that a person holds about something. Attitude is that a person's consistently favorable or unfavourable evaluations, feelings and tendencies toward an object or idea.
• From the above discussion we can say that all factors affect in consumer buying behavior.
Macro Environment
The macroenvironment consists of the larger societal forces that affect the microenthronenu demographic, economic, natural, technologick, political and cultural forces.
• Demographic Environment: Demography is the study of human populations in terms of size density, location, age, gender, race occupation and other statistics.
The demographic environment is a major interest to marketers because it involves people, and people make up markets.
>Geographic location of population
>Density of population
>Age
>Birth rate and death rate
>National discrimination
>Religion frame
• Economic Environment: The economic environment consists of factor that affect consumer purchasing power and spending pattern. Before marketed of any products marketers can know the economic conditions. Such as:
>The actual income of that where the product is marketed
>Is there any inflation
>How their saving tendency? etc.
• Natural Environment: The natural environment involves the natural resources that are needed by marketers or that are affected by marketing activities. Marketers should be asware of several trend in the natural environment such as shortages of say materials, increased pollution, increased government intervention, etc.
• Technological Environment: The technological environment forces that create new technologies, creating new product and market opportunites. Think of all today's common products that were not available 100 years ago or even 30 years ago.
• Political Environment: Marketing decisions are strongly affected by developments in the political environment. The political environment consists of law, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
• Cultural Environment: The cultural environment is made up of institutions and other forces that affect a society's basic values, perceptions, preferences and behaviors. People grow up in a particular society that shapes their basic beliefs and values. They absorb a worldview that defines their relationships with others.
• Demographic Environment: Demography is the study of human populations in terms of size density, location, age, gender, race occupation and other statistics.
The demographic environment is a major interest to marketers because it involves people, and people make up markets.
>Geographic location of population
>Density of population
>Age
>Birth rate and death rate
>National discrimination
>Religion frame
• Economic Environment: The economic environment consists of factor that affect consumer purchasing power and spending pattern. Before marketed of any products marketers can know the economic conditions. Such as:
>The actual income of that where the product is marketed
>Is there any inflation
>How their saving tendency? etc.
• Natural Environment: The natural environment involves the natural resources that are needed by marketers or that are affected by marketing activities. Marketers should be asware of several trend in the natural environment such as shortages of say materials, increased pollution, increased government intervention, etc.
• Technological Environment: The technological environment forces that create new technologies, creating new product and market opportunites. Think of all today's common products that were not available 100 years ago or even 30 years ago.
• Political Environment: Marketing decisions are strongly affected by developments in the political environment. The political environment consists of law, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
• Cultural Environment: The cultural environment is made up of institutions and other forces that affect a society's basic values, perceptions, preferences and behaviors. People grow up in a particular society that shapes their basic beliefs and values. They absorb a worldview that defines their relationships with others.
Marketing Positioning
• Market Positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
In positioning its product, the company first identifies possible competitive advantages upon which to build the position. To gain competitive advantage, the company must offer greater value to target consumers. It can do this either by charging lower than competitors do or by offering to justify higher prices. But if the company positions the product as offering greater value, it must them deliver that greater value. Thus, effective positioning begins with actually differentiating the company's marketing offers so that it gives consumers value. Once the company has chosen a desired position, it must take strong steps to deliver and communicate that position to target consumers. The company's entire marketing program should support the chosen positioning strategy.
• 4Cs
Customer solution
Customer cost
Convenience
Communication
• 4Ps
Product
Price
Place
Promotion
In positioning its product, the company first identifies possible competitive advantages upon which to build the position. To gain competitive advantage, the company must offer greater value to target consumers. It can do this either by charging lower than competitors do or by offering to justify higher prices. But if the company positions the product as offering greater value, it must them deliver that greater value. Thus, effective positioning begins with actually differentiating the company's marketing offers so that it gives consumers value. Once the company has chosen a desired position, it must take strong steps to deliver and communicate that position to target consumers. The company's entire marketing program should support the chosen positioning strategy.
• 4Cs
Customer solution
Customer cost
Convenience
Communication
• 4Ps
Product
Price
Place
Promotion
Marketing Analysis, Marketing Planning
• Marketing Analysis
Managing the marketing function begins with a complete analysis of the company's situation. The company must analyze its markets and marketing environment to find attractive opportunities and avoid environmental threats. It must analyze company strengths and weakness as well as current and possible marketing actions to determine which opportunities it can best pursue. Marketing provides input to each of the other marketing management functions.
• Marketing Implementation:
The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives.
• Marketing Control: The process of measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that objectives are achieved.
• Marketing control involves evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are attained. Marketing control involves four steps. Management first sets specific marketing goals. It them measures its performance in the marketplace and evaluates the causes of any differences between expected and actual performance. Finally, management takes corrective action to close the gaps between goals and its performance. They may require changing the action programs or even changing the goals.
• Marketing Plan: Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives. A detailed marketing plan is needed for each business, product, or brand.
The plan begins with an executive summary, which quickly overview major assessments, goals, and recommendations. The main section of the plan presents a detailed analysis of the current marketing situation as well as potential threats and opportunities. It next states major objectives for the brand and outline the specifics of a marketing strategy for achieving them.
A marketing strategy consists of specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels. In this section, the planner explains how each strategy responds to the threats opportunities, and critical issues spelled out earlier in the plan. Additional sections of the marketing plan lay out an action program for implementing the marketing strategy along with the details of a supporting marketing budget. The section outlines the controls that will be used to monitor progress and take corrective action.
• Market Positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
In positioning its product, the company first identifies possible competitive advantages upon which to build the position.
Managing the marketing function begins with a complete analysis of the company's situation. The company must analyze its markets and marketing environment to find attractive opportunities and avoid environmental threats. It must analyze company strengths and weakness as well as current and possible marketing actions to determine which opportunities it can best pursue. Marketing provides input to each of the other marketing management functions.
• Marketing Implementation:
The process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives.
• Marketing Control: The process of measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that objectives are achieved.
• Marketing control involves evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are attained. Marketing control involves four steps. Management first sets specific marketing goals. It them measures its performance in the marketplace and evaluates the causes of any differences between expected and actual performance. Finally, management takes corrective action to close the gaps between goals and its performance. They may require changing the action programs or even changing the goals.
• Marketing Plan: Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives. A detailed marketing plan is needed for each business, product, or brand.
The plan begins with an executive summary, which quickly overview major assessments, goals, and recommendations. The main section of the plan presents a detailed analysis of the current marketing situation as well as potential threats and opportunities. It next states major objectives for the brand and outline the specifics of a marketing strategy for achieving them.
A marketing strategy consists of specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels. In this section, the planner explains how each strategy responds to the threats opportunities, and critical issues spelled out earlier in the plan. Additional sections of the marketing plan lay out an action program for implementing the marketing strategy along with the details of a supporting marketing budget. The section outlines the controls that will be used to monitor progress and take corrective action.
• Market Positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.
In positioning its product, the company first identifies possible competitive advantages upon which to build the position.
MICRO ENVIRONMENT
"The microenvironment consists of the actors close to the company that affect its ability to serve its customer - the company, suppliers, marketing intermediaries, customers markets, competitors and publics."
• Discussion on Micro Environment:
Marketing management job is to build relationship skills with customers by creating customer's value and satisfaction. However. Marketing managers cannot do this alone. Marketing successs with require working closely with other company departments surprliess marketing intermediaries, customers, competitors and various publics which combine to make up the company's value delivery network.
[Marketing]<
Marketing is intermediaries
Customers
Competitors
Publics
Suppliers
The company
* Figure: Actors in the micro environment
• The company: In designing plans, marketing management takes other company groups into account-group such as top managemu, finance, research and development, purchasing operations and accounting. All these departments have an impact on the marketing departments plans and actions. So, marketers should work in harmony to provide superior customer value and satisfaction.
[Marketing]<
Research & Development
Purchase
Producer
Accounting
Finance
High Mgt.
• Suppliers: Most marketers today treat their suppliers as partners in creating and delivering customer value. Suppliers provide the resources needed by the company to produce its goods and services. Supplier problems can seriously affect marketing. Rising supply costs may force pride increases that can harm the company's sales volume. So a market has to consider suppliers seriously.
• Marketing intermediaries: Marketing intermediaries help the company to promote, sell and distribute its goods to final buyers. They include resellers, physical distribution, firms marketing services agencies and financial intermediaries.
• CUSTOMERS:
The company needs to study five types of customer markets closely. These five market closely. These five market are-
[COMPANY]
>Consumer Markets
>Business Markets
>Reseller Markets
>Govt. Markets
>International Markets
Each market type has special characteristics that call for careful study by the seller.
>Consumer Market is consist of those firms who buy the product for personal or family use.
>Business Market consist of those firms who bought products for producing another products or service.
>The market who bought product for re-selling is called Re-sell Market.
>Government Market is consist of those government corporation or department who bought product is called Government Market.
>When foreign consumer, foreign producer, foreign re-seller consis those market is called International Market.
>Institutional Market is consist of those institution such as- hospital, school, college, university is called institutional market.
• Competitors: No single competitive marketing strategy is best for all companies. Each firm should consider its own size and industry position compared to those of its competitors.
• Publics: The company's marketing environment also includes various publics. A public is any group that has an actual or potential interest in or an organization's ability to achieve its objectives. We can identify seven types of publics.
Government Publics
Citizen-action Publics
Local Publics
General Publics
Internal Publics
Media Publics
Financial Publics
• Discussion on Micro Environment:
Marketing management job is to build relationship skills with customers by creating customer's value and satisfaction. However. Marketing managers cannot do this alone. Marketing successs with require working closely with other company departments surprliess marketing intermediaries, customers, competitors and various publics which combine to make up the company's value delivery network.
[Marketing]<
Marketing is intermediaries
Customers
Competitors
Publics
Suppliers
The company
* Figure: Actors in the micro environment
• The company: In designing plans, marketing management takes other company groups into account-group such as top managemu, finance, research and development, purchasing operations and accounting. All these departments have an impact on the marketing departments plans and actions. So, marketers should work in harmony to provide superior customer value and satisfaction.
[Marketing]<
Research & Development
Purchase
Producer
Accounting
Finance
High Mgt.
• Suppliers: Most marketers today treat their suppliers as partners in creating and delivering customer value. Suppliers provide the resources needed by the company to produce its goods and services. Supplier problems can seriously affect marketing. Rising supply costs may force pride increases that can harm the company's sales volume. So a market has to consider suppliers seriously.
• Marketing intermediaries: Marketing intermediaries help the company to promote, sell and distribute its goods to final buyers. They include resellers, physical distribution, firms marketing services agencies and financial intermediaries.
• CUSTOMERS:
The company needs to study five types of customer markets closely. These five market closely. These five market are-
[COMPANY]
>Consumer Markets
>Business Markets
>Reseller Markets
>Govt. Markets
>International Markets
Each market type has special characteristics that call for careful study by the seller.
>Consumer Market is consist of those firms who buy the product for personal or family use.
>Business Market consist of those firms who bought products for producing another products or service.
>The market who bought product for re-selling is called Re-sell Market.
>Government Market is consist of those government corporation or department who bought product is called Government Market.
>When foreign consumer, foreign producer, foreign re-seller consis those market is called International Market.
>Institutional Market is consist of those institution such as- hospital, school, college, university is called institutional market.
• Competitors: No single competitive marketing strategy is best for all companies. Each firm should consider its own size and industry position compared to those of its competitors.
• Publics: The company's marketing environment also includes various publics. A public is any group that has an actual or potential interest in or an organization's ability to achieve its objectives. We can identify seven types of publics.
Government Publics
Citizen-action Publics
Local Publics
General Publics
Internal Publics
Media Publics
Financial Publics
MARKETING ENVIRONMENT
• "Marketing environment consists of the actors and forces outside market that affect marketing Management's ability to build and maintain successful relationships with target customers."
• The marketing environment offers both opportunities and threats. Successful companies know the vital importance of constantly watching and adapting to the changing environment.
• Marketing environment is the agents and forces that are external to the company's environment and that affect the organization in achieving its objectives.
• According to Philip Kotler, "A company's marketing environment consists of the external factors and forces that affect the company's ability to develop and maintain successful transactions and relationship with its taipet customers."
• From the light of above discussion it can be said that marketing environment is the sum total of all forces and conditions that act on organism or communities of organism including man.
•
MARKETING ENVIRONMENT
(a) Micro Environment
• Company
• Intermediaries
• Customers
• Competitors
• Public
(b) Macro Environment
• Demographic environment
• Economic environment
• Natural environment
• Technological environment
• Political environment
• Cultural environment
• The marketing environment offers both opportunities and threats. Successful companies know the vital importance of constantly watching and adapting to the changing environment.
• Marketing environment is the agents and forces that are external to the company's environment and that affect the organization in achieving its objectives.
• According to Philip Kotler, "A company's marketing environment consists of the external factors and forces that affect the company's ability to develop and maintain successful transactions and relationship with its taipet customers."
• From the light of above discussion it can be said that marketing environment is the sum total of all forces and conditions that act on organism or communities of organism including man.
•
MARKETING ENVIRONMENT
(a) Micro Environment
• Company
• Intermediaries
• Customers
• Competitors
• Public
(b) Macro Environment
• Demographic environment
• Economic environment
• Natural environment
• Technological environment
• Political environment
• Cultural environment
Marketing mix
• Marketing mix is the set of controllable tactical marketing tools- product, price, place and promotio-that the firm blends to produce the response it wants in the market.
• Marketing mix includes 4P's as the product, price, place and promotion.
Marketing mix or 4P's Are discussed one by one.
• Product: Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.
• Price: Price is the amount of omen customer have to pay to obtain the product.
• Place: Place includes companies activities that make the product available to the target consumer.
• Promotion: Promotion means activities that communicate the merits of the product and persuade target customers to buy it.
• Marketing mix includes 4P's as the product, price, place and promotion.
Marketing mix or 4P's Are discussed one by one.
• Product: Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.
• Price: Price is the amount of omen customer have to pay to obtain the product.
• Place: Place includes companies activities that make the product available to the target consumer.
• Promotion: Promotion means activities that communicate the merits of the product and persuade target customers to buy it.
Marketing Strategy
• Marketing strategy is the marketing logic which the business unit hopes to biggete its marketing objectives. Through market segmentation, targeting and positioning the company decide which customers it will serve and how.
• The process involve three steps as market segmentation, market targeting and marketing positioning. They are discussed below:
1. Market segmentation: Dividing a marketing into distinct groups of buyers who have distinct needs characteristics or behavior bye who might require separate products or marketing mixes.
2. Market targeting: Market targeting is the process of evaluating deci market segment attractiveness and selecting one more segments to enter.
3. Market positioning: Marketi positioning is arranging for a product to occupy a clear distinctive and desirable place relative to competing products in the minds of target customers.
• The process involve three steps as market segmentation, market targeting and marketing positioning. They are discussed below:
1. Market segmentation: Dividing a marketing into distinct groups of buyers who have distinct needs characteristics or behavior bye who might require separate products or marketing mixes.
2. Market targeting: Market targeting is the process of evaluating deci market segment attractiveness and selecting one more segments to enter.
3. Market positioning: Marketi positioning is arranging for a product to occupy a clear distinctive and desirable place relative to competing products in the minds of target customers.
Planning marketing-partnering to build
• Plannig marketing-partnering to build customer relationship.
• Marketers along cannot produce superior value for customers. Although it plays a leading role, marketers can be only a partner in attracting, keeping and growing customers. Marketers must work closely with partners in other company departments to form an effective value chain that serves the customer and the must also partner effectively with other companies in the marketing system to form a superior value delivery network. Now we discuss the concept of value chain and value delivery network.
• Partnering with other company departments: Each department can be thought of as a link in the company's value chain. Value chain is the series of departments that carry out value creating activities to design, produce, market, deliver and support a firm's product.
• Partnering with other in the marketing system: More companies today are partnering with the other members of supply chain to improve the performance of the customer value delivery network. Value delivery network is the network made up of the company, suppliers, distributors and ultimately customers who partner with each other to improve the performance of the entire system.
• Marketers along cannot produce superior value for customers. Although it plays a leading role, marketers can be only a partner in attracting, keeping and growing customers. Marketers must work closely with partners in other company departments to form an effective value chain that serves the customer and the must also partner effectively with other companies in the marketing system to form a superior value delivery network. Now we discuss the concept of value chain and value delivery network.
• Partnering with other company departments: Each department can be thought of as a link in the company's value chain. Value chain is the series of departments that carry out value creating activities to design, produce, market, deliver and support a firm's product.
• Partnering with other in the marketing system: More companies today are partnering with the other members of supply chain to improve the performance of the customer value delivery network. Value delivery network is the network made up of the company, suppliers, distributors and ultimately customers who partner with each other to improve the performance of the entire system.
Partnering to build customer relationshi
• Partnering to build customer relationship-Company wide strategic planning:
Strategic planning is the process of developing and maintaining strategic fit between the organizational goal and capabilities and its changing marketng opportunities.
It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio and co-ordinating functional strategies.
There are four steps of strategic planning. They are discussed one by one.
• Defining a market-oriented mission: A mission is a statement of the organization's purpose what it wants to accomplish in the larger environment.
Steps in strategic planning:
Defining the company mission>Setting company objectives & goals>Designing the business portfolio>Coordinating functional strategies
• Setting company objectives and goals: After defining the company mission, the company must setting the objectives and goals. Each manager should be responsible to reach ve objectives.
• Designing the business portfolio:
Business portfolio is the collection of business and products that make up the company. After setting the objectives and goals the company designs the business portfolio.
• Co-ordinating functional strategies: The last step is the co-ordination of functional strategies. After designing the business portfolio. The company must co-ordinate the functional strategies and planning the marketing.
Strategic planning is the process of developing and maintaining strategic fit between the organizational goal and capabilities and its changing marketng opportunities.
It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio and co-ordinating functional strategies.
There are four steps of strategic planning. They are discussed one by one.
• Defining a market-oriented mission: A mission is a statement of the organization's purpose what it wants to accomplish in the larger environment.
Steps in strategic planning:
Defining the company mission>Setting company objectives & goals>Designing the business portfolio>Coordinating functional strategies
• Setting company objectives and goals: After defining the company mission, the company must setting the objectives and goals. Each manager should be responsible to reach ve objectives.
• Designing the business portfolio:
Business portfolio is the collection of business and products that make up the company. After setting the objectives and goals the company designs the business portfolio.
• Co-ordinating functional strategies: The last step is the co-ordination of functional strategies. After designing the business portfolio. The company must co-ordinate the functional strategies and planning the marketing.
Understanding the Market and Consumer Ne
As a first step, marketers need to understand customer needs and wants and the market place within which they operate. Now we examine five core customer and marketplace concepts.
• CUSTOMER NEEDS, WANTS AND DEMANDS:
NEED: "A state of felt deprivation". They include basic physical needs for food, clothing, warmth and safety. Social needs for belonging and affection and individual needs for knowledge and self-expression. These needs are invented by marketers, they are a basic part of the human make-up.
WANTS: Wants are the form taken by human needs as they are shaped by culture and individual personality.
DEMANDS:
• MARKETING OFFERS: Some combination of products, services and experiences offered to a market to satisfy a need or want or need. Marketing offers physical products but also services, activities on benefits. Such as banking, airline, hotel etc.
PRODUCT: Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, events, persons, places, organizations and ideas.
SERVICE: Any activity or benefit that one party can offer to another that is essentially intangible does not result in the ownership of anything.
• CUSTOMER VALUE AND SATISFACTION
CUSTOMER VALUE: The difference between the values the customer gains from owning and using a product and the cost of obtaini the products.
CUSTOMER SATISFACTION: The extent to which a product's perceived performance matches a buyer's
• EXCHANGE AND RELATIONSHIP: Exchange is the act of obtaining a desired from someone by offering sometimes in return. Marketing consist of actions taken to build and maintain desirable exchange relationship with target audience involving a product, services, idea or other object.
• MARKETS: The set of actual and potential buyers of a products or services.
• CUSTOMER NEEDS, WANTS AND DEMANDS:
NEED: "A state of felt deprivation". They include basic physical needs for food, clothing, warmth and safety. Social needs for belonging and affection and individual needs for knowledge and self-expression. These needs are invented by marketers, they are a basic part of the human make-up.
WANTS: Wants are the form taken by human needs as they are shaped by culture and individual personality.
DEMANDS:
• MARKETING OFFERS: Some combination of products, services and experiences offered to a market to satisfy a need or want or need. Marketing offers physical products but also services, activities on benefits. Such as banking, airline, hotel etc.
PRODUCT: Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, events, persons, places, organizations and ideas.
SERVICE: Any activity or benefit that one party can offer to another that is essentially intangible does not result in the ownership of anything.
• CUSTOMER VALUE AND SATISFACTION
CUSTOMER VALUE: The difference between the values the customer gains from owning and using a product and the cost of obtaini the products.
CUSTOMER SATISFACTION: The extent to which a product's perceived performance matches a buyer's
• EXCHANGE AND RELATIONSHIP: Exchange is the act of obtaining a desired from someone by offering sometimes in return. Marketing consist of actions taken to build and maintain desirable exchange relationship with target audience involving a product, services, idea or other object.
• MARKETS: The set of actual and potential buyers of a products or services.
Scope of Marketing
According to W. J. Stanton "Marketing is a total system of business designed to plan, price, promote and distribute want satisfying products to target markets to achieve organization objective."
Marketing Activities: According to American Association "Marketing is the performance of business activities that direct the flow of goods and service from producer to consumer or user.
Selling/Buying/Transportation/Storage <(Marketing function)> Grading/Risk Taking/Market Information/Financing
Figure: Marketing Function
• MARKETING MIX: The combination of 4P's are called marketing mix. According to M. C. Carthy "The 4P's are inter related and must be balanced into one integrated whole to satisfy some target markets needs and preferences. These are commodity, cost, convenience and campaign.
MARKETING MIX >(Product/Price/Place/Promoting)} 4P'S
• PRE-PLANE OF PRODUCTION: Though at the primary stage post process of considered subject of marketing, in modern marketing pre-plane of production are included in the scope of marketing.
Marketing>Production>Demand>Consumption>Production
• BUSINESS ACTIVITIES: Basically, now a days Trade & Commerce that means all business activities are involved. Actually, without marketing business activities is not thinkable.
• ORGANIZATIONAL MARKETING: Marketing organization are those which direct and control the flow of products. Such as wholesalers, retailer, broker, jobber, stabilized organization and ancillary organization. Such as E. P. B and T. C. B, Share Market etc.
• MANAGEMENT PROCESS: W. J. Stanton says, The management process as applied to marketing. Consists basically of-
Planning a marketing program
Implementing it and
Evaluating its performance.
• ECONOMICAL PROCESS: Marketing organizations implement the theory and information economics. According to converse, "Marketing is the creation of place, time and possession utilities."
Marketing Activities: According to American Association "Marketing is the performance of business activities that direct the flow of goods and service from producer to consumer or user.
Selling/Buying/Transportation/Storage <(Marketing function)> Grading/Risk Taking/Market Information/Financing
Figure: Marketing Function
• MARKETING MIX: The combination of 4P's are called marketing mix. According to M. C. Carthy "The 4P's are inter related and must be balanced into one integrated whole to satisfy some target markets needs and preferences. These are commodity, cost, convenience and campaign.
MARKETING MIX >(Product/Price/Place/Promoting)} 4P'S
• PRE-PLANE OF PRODUCTION: Though at the primary stage post process of considered subject of marketing, in modern marketing pre-plane of production are included in the scope of marketing.
Marketing>Production>Demand>Consumption>Production
• BUSINESS ACTIVITIES: Basically, now a days Trade & Commerce that means all business activities are involved. Actually, without marketing business activities is not thinkable.
• ORGANIZATIONAL MARKETING: Marketing organization are those which direct and control the flow of products. Such as wholesalers, retailer, broker, jobber, stabilized organization and ancillary organization. Such as E. P. B and T. C. B, Share Market etc.
• MANAGEMENT PROCESS: W. J. Stanton says, The management process as applied to marketing. Consists basically of-
Planning a marketing program
Implementing it and
Evaluating its performance.
• ECONOMICAL PROCESS: Marketing organizations implement the theory and information economics. According to converse, "Marketing is the creation of place, time and possession utilities."
The New Marketing Landscape
As the world in first decade of the twenty first century dramatic changes are occurring in market place. We examine major forces that are changing the marketing landscape and changing marketing strategy. There are four major developement at the new marketing landscape. They are discussed below:
• THE NEW DIGITAL AGE: The recent technology boom has created in a new digital age. The explosive growth in computer, telecommunication, information transportation and other technologies has a major impact on the ways to bring values to the customer.
• INTERNET: Internet is a vast public web of computer network which connects users of all types all around the world to each other.
• RAPID GLOBALIZATION: As their relationship with customers and partners, marketers are also taking a fresh look in which they with the broader world around them. Many marketers are now connected globally with their customers and marketing partners.
• THE CALL FOR MORE ETHICS AND SOCIAL RESPONSIBILITY: Marketers are reexamining their relationship with social values and responsibilities. Today marketers take greater responsibilities for the social and environment impact of their action.
• THE GROWTH OF NON-PROFIT ORGANIZATION: In the past marketing has been most widely applied in the profit business section. But now, marketing has become major part of non-profit organization.
• As we are in twenty first century, a company must take a good look to the customer. They should provide an appropriate product and service to satisfy the customer.
• THE NEW DIGITAL AGE: The recent technology boom has created in a new digital age. The explosive growth in computer, telecommunication, information transportation and other technologies has a major impact on the ways to bring values to the customer.
• INTERNET: Internet is a vast public web of computer network which connects users of all types all around the world to each other.
• RAPID GLOBALIZATION: As their relationship with customers and partners, marketers are also taking a fresh look in which they with the broader world around them. Many marketers are now connected globally with their customers and marketing partners.
• THE CALL FOR MORE ETHICS AND SOCIAL RESPONSIBILITY: Marketers are reexamining their relationship with social values and responsibilities. Today marketers take greater responsibilities for the social and environment impact of their action.
• THE GROWTH OF NON-PROFIT ORGANIZATION: In the past marketing has been most widely applied in the profit business section. But now, marketing has become major part of non-profit organization.
• As we are in twenty first century, a company must take a good look to the customer. They should provide an appropriate product and service to satisfy the customer.
Designing a customer driven marketing st
Marketing management can design a customer-driven marketing strategy.
We define marketing management is the art and science of choosing target market and building profitable relationship with them.
To design a customer driven marketing strategy a manager must considered about selecting customer to serve, choosing a value proposition and marketing strategy concepts. Marketing strategy concepts are discussed below:
• Selecting customer to serve: The company must first decide who will serve the customer and selecting segment of customer to serve well.
• Choosing a value proposition: The company also decide how it will serve targeted customer, how it will differentiate and positio in the marketplace. Value proposition is the set of benefits to deliver to customer to satisfy their needs.
• Marketing strategy concept: There are five marketing strategy concepts. They are discussed below:
i. Production Concept: The idea that customer will favor products that are available and highly affordable.
ii. Production concept: The idea that customer will favor products that offer the most in quality, performance and feature and the organization should devote its energy to making continuous product improvements.
iii. Selling Concept: The idea that customer will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort.
iv. Marketing Concept: Marketing concept holds that achieving organizational goal depends no knowing the needs and wants of target market and delivering the desired satisfaction better than competitors do.
v. Societal Marketing Concept: The idea that the organization should determine the needs, wants and interests of target markets and deliver the desired satisfaction more effectively and efficiently than do competitors in a way that maintains or improves the customer's and societies well-being.
We define marketing management is the art and science of choosing target market and building profitable relationship with them.
To design a customer driven marketing strategy a manager must considered about selecting customer to serve, choosing a value proposition and marketing strategy concepts. Marketing strategy concepts are discussed below:
• Selecting customer to serve: The company must first decide who will serve the customer and selecting segment of customer to serve well.
• Choosing a value proposition: The company also decide how it will serve targeted customer, how it will differentiate and positio in the marketplace. Value proposition is the set of benefits to deliver to customer to satisfy their needs.
• Marketing strategy concept: There are five marketing strategy concepts. They are discussed below:
i. Production Concept: The idea that customer will favor products that are available and highly affordable.
ii. Production concept: The idea that customer will favor products that offer the most in quality, performance and feature and the organization should devote its energy to making continuous product improvements.
iii. Selling Concept: The idea that customer will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort.
iv. Marketing Concept: Marketing concept holds that achieving organizational goal depends no knowing the needs and wants of target market and delivering the desired satisfaction better than competitors do.
v. Societal Marketing Concept: The idea that the organization should determine the needs, wants and interests of target markets and deliver the desired satisfaction more effectively and efficiently than do competitors in a way that maintains or improves the customer's and societies well-being.
Importance of Marketing
Paul Majur says that "Marketing is the delivery of standard of living." Marketing has no limitation in a specific area. Now it is very important matter in any country. Marketing provide the desired products to meet the need of the customer. There are many importance of marketing are discussed below:
• Provide the necessary product: Everyday marketing provides the ideas, goods, services and information's to the customer. For consuming the product is produced from the resources of nature by processing in the industry. Marketing plays a vital sold to provide the product from producer to customer.
• Formation of economic structure: To form a economic structure in any country marketing is necessary. In Bangladesh, marketing plays a vital role. The raw materials are produced in village. But the goods are consuming in Dhaka City. So, it is possible only for marketing.
• Invention of Product: In developed or developing countries, after collecting the resource from the nature and by processing we get new product. So for this marketing is necessary.
• Facialitating Finance: In Bangladesh the present economic condition is created from the marketing. Goods are produced for consumer, but if marketing can not provide the goods to the customer, them the economic condition will be damaged.
• Helps to Continue Production: For continuing the production marketing is necessary. Because, marketing provide the product to the customer and also identify the need of the customer.
• Economical Stability: For economical stability marketing is necessary. Because to stable in economy marketing has to know about supplier, customer and do the desired activities. Marketing provide information about the product to supplier and customer.
• Provide Employment: There are many middlemen, bank, insurance, company, transportation, warehousing and other activities are created for marketing. As a result many people are engaged in these institution. For employment marketing is necessary.
• Delivery of standard of living: Without skillful marketing, much production is not possible. Without much production, the unit cost is high and decrease much consumption. As a result, the standard of living is decreased. Marketing provide product at a reasonable price and increase of living.
• Ensure Perfect Commercial Environment: To ensure perfect commercial environment marketing is necessary. To sell the much product, marketer must have to compete. For this, export selling institution, advertising institution and warehousing are required.
• From the discussion we can say that above these are the importance of marketing.
• Provide the necessary product: Everyday marketing provides the ideas, goods, services and information's to the customer. For consuming the product is produced from the resources of nature by processing in the industry. Marketing plays a vital sold to provide the product from producer to customer.
• Formation of economic structure: To form a economic structure in any country marketing is necessary. In Bangladesh, marketing plays a vital role. The raw materials are produced in village. But the goods are consuming in Dhaka City. So, it is possible only for marketing.
• Invention of Product: In developed or developing countries, after collecting the resource from the nature and by processing we get new product. So for this marketing is necessary.
• Facialitating Finance: In Bangladesh the present economic condition is created from the marketing. Goods are produced for consumer, but if marketing can not provide the goods to the customer, them the economic condition will be damaged.
• Helps to Continue Production: For continuing the production marketing is necessary. Because, marketing provide the product to the customer and also identify the need of the customer.
• Economical Stability: For economical stability marketing is necessary. Because to stable in economy marketing has to know about supplier, customer and do the desired activities. Marketing provide information about the product to supplier and customer.
• Provide Employment: There are many middlemen, bank, insurance, company, transportation, warehousing and other activities are created for marketing. As a result many people are engaged in these institution. For employment marketing is necessary.
• Delivery of standard of living: Without skillful marketing, much production is not possible. Without much production, the unit cost is high and decrease much consumption. As a result, the standard of living is decreased. Marketing provide product at a reasonable price and increase of living.
• Ensure Perfect Commercial Environment: To ensure perfect commercial environment marketing is necessary. To sell the much product, marketer must have to compete. For this, export selling institution, advertising institution and warehousing are required.
• From the discussion we can say that above these are the importance of marketing.
Marketing,Steps Marketing Process,Market
Generally marketing is the process of profit maximization, which starts from pre-product and ends through consumer satisfaction.
According to Philip Kotler, "Marketing is a social and managerial process by which individuals and groups obtain what the needs and wants through creating and exchanging products and value with others."
American Marketing Association, "Marketing is the performances of all business activities that direct the flow of goods and services from producer to consumer or ultimate user."
From the light of above discussion it can be said that, Marketing is the process which identify the customer needs and wants and deliver the products and services to satisfy the customer through profit earning and social welfare.
• The Marketing Process
The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
Figure 1.1 presents a simple five step model of the marketing process. In the first four steps, companies work to understand consumers, create customer value and build strong customer relationships. In the final steps, profits, and long-term customers equity.
Figure 1.1
A simple model of the marketing process
Create values for customers and build customer relationships_
_Understand the marketplace and customer needs and wants>Design a customer driven marketing strategy>Construct a marketing program that delivers superior value>Build profitable relationships and create customer delight_>
Capture values from customers in return_
Capture values consumer in the form in the form of sales, profits, and long-term customer equity_
• Markets : The concept of exchange and relationships lead to the concept of a market. A market is the set of actual and potential buyers of a product. These buyers share a particular need or want that can be satisfied through exchange relationships.
• Selling concept: The idea that consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort.
According to Philip Kotler, "Marketing is a social and managerial process by which individuals and groups obtain what the needs and wants through creating and exchanging products and value with others."
American Marketing Association, "Marketing is the performances of all business activities that direct the flow of goods and services from producer to consumer or ultimate user."
From the light of above discussion it can be said that, Marketing is the process which identify the customer needs and wants and deliver the products and services to satisfy the customer through profit earning and social welfare.
• The Marketing Process
The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
Figure 1.1 presents a simple five step model of the marketing process. In the first four steps, companies work to understand consumers, create customer value and build strong customer relationships. In the final steps, profits, and long-term customers equity.
Figure 1.1
A simple model of the marketing process
Create values for customers and build customer relationships_
_Understand the marketplace and customer needs and wants>Design a customer driven marketing strategy>Construct a marketing program that delivers superior value>Build profitable relationships and create customer delight_>
Capture values from customers in return_
Capture values consumer in the form in the form of sales, profits, and long-term customer equity_
• Markets : The concept of exchange and relationships lead to the concept of a market. A market is the set of actual and potential buyers of a product. These buyers share a particular need or want that can be satisfied through exchange relationships.
• Selling concept: The idea that consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort.
Wednesday, April 21, 2010
Managing: Science or Art?
Managing like all other practices-whether medicine, music composition, engineering, accountancy, or even baseball-is an art. It is know-how. It is doing things in light of the realities of a situation. Yet managers can work better by using the organized knowledge about management. It is this knowledge that constitutes a science. Thus, managing as practice is an art; the organized knowledge underlying the practice may be referred to as a science. In this context, science and art are not mutually exclusive; they are complementary.
As science improves, so should art, as has happened in the physical and biological sciences. To be sure, the science underlying managing is fairly crude and inexact because the many variables that managers deal with are extremely complex. Neverthlers, such management knowledge can certainly improve managerial practice. Physicians without the advantage of science would be little more than witch doctors. Executives who attempt, or what they did in the past.
In managing, as many any other field, unless practitioners are to learn by trial and error (and it has been said that managers' errors are their subordinates' trials), there is no place they can turn to for meaningful guidance other the accumulated knowledge underlying their practice.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
As science improves, so should art, as has happened in the physical and biological sciences. To be sure, the science underlying managing is fairly crude and inexact because the many variables that managers deal with are extremely complex. Neverthlers, such management knowledge can certainly improve managerial practice. Physicians without the advantage of science would be little more than witch doctors. Executives who attempt, or what they did in the past.
In managing, as many any other field, unless practitioners are to learn by trial and error (and it has been said that managers' errors are their subordinates' trials), there is no place they can turn to for meaningful guidance other the accumulated knowledge underlying their practice.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
Scientific Management
Frederick Winslow Taylor devised a system he called scientific management, a form of industrial engineering that established the organization of work as in Ford's assembly line. This discipline, along with the industrial psychology established by others at the Hawthorne Works of
Western Electic in the 1920s, moved management theory
from early time-and-motion studies to the latest total quality control ideas.
Western Electic in the 1920s, moved management theory
from early time-and-motion studies to the latest total quality control ideas.
Management
● Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims. This basic definition needs to be expanded:
• As managers, people carry out the managerial functions of planning, organizing, staffing, leading, and controlling.
• Management applies to any kind of organization.
• It applies to managers at all organizational levels.
• The aim of all managers is the same: to create a surplus.
• Managing is concerned with productivity, which implies effectiveness and efficiency.
● Management in all business and human
organization activity is the act of getting people together to accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human
resources, financial resources, technological
resources, and natural resources. Because organisations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a pre-
requisite to attempting to manage others
Management can also refer to the person or
people who perform the act(s) of management.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
• As managers, people carry out the managerial functions of planning, organizing, staffing, leading, and controlling.
• Management applies to any kind of organization.
• It applies to managers at all organizational levels.
• The aim of all managers is the same: to create a surplus.
• Managing is concerned with productivity, which implies effectiveness and efficiency.
● Management in all business and human
organization activity is the act of getting people together to accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human
resources, financial resources, technological
resources, and natural resources. Because organisations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to 'manage' oneself, a pre-
requisite to attempting to manage others
Management can also refer to the person or
people who perform the act(s) of management.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
A Management Theory Jungle
Although academic writers and theorists contributed notably little to the study of management untill the early 1950s- previous writings having come largely from practitioners- the past four to five decades have seen a veritable deluge of writing from the academic halls. The variety of approaches to management analysis, the amount of research, and the great number of differing views have resulted in much confusion as to what management is, what management theory and science is, and how managerial events should be analyzed. As a matter of fact, Harold Koontz many years ago called this situation "the management theory jungle."
Since that time, the vegetation in this jungle has changed somewhat- new approaches have developed and older approaches have taken the developments of management science and theory still have the characteristics of a jungle.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
Since that time, the vegetation in this jungle has changed somewhat- new approaches have developed and older approaches have taken the developments of management science and theory still have the characteristics of a jungle.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
Henri Fayol's 14Principles of Management
Henri Fayol, (1841-1925) a
French mining engineer,
developed 14 principles of
management based on his
management experiences. These
principles provide modern-day
managers with general
guidelines on how a supervisor
should organize her department
and manage her staff. Although
later research has created
controversy over many of the
following principles, they are still
widely used in management
theories.
· Division of work: Division of
work and specialization
produces more and better work
with the same effort.
· Authority and responsibility:
Authority is the right to give
orders and the power to exact
obedience. A manager has
official authority because of her
position, as well as personal
authority based on individual
personality, intelligence, and
experience. Authority creates
responsibility.
· Discipline: Obedience and
respect within an organization
are absolutely essential. Good
discipline requires managers to
apply sanctions whenever
violations become apparent.
· Unity of command: An employee should recieve orders from only one superior.
Unity of direction:
Organizational activities must
have one central authority and
one plan of action.
· Subordination of individual
interest to general interest: The
interests of one employee or
group of employees are
subordinate to the interests and
goals of the organization. This is
necessary to maintain unity and
to avoid friction among the
employees
· Remuneration of personnel:
Salaries - the price of services
rendered by employees - should
be fair and provide satisfaction
both to the employee and
employer.
· Centralization: The objective of
centralization is the best
utilization of personnel. The
degree of centralization varies
according to the dynamics of
each organization.
· Scalar chain: A chain of
authority exists from the highest
organizational authority to the
lowest ranks.
· Order: Organizational order for
materials and personnel is
essential. The right materials and
the right employees are
necessary for each
organizational function and
activity.
· Equity: In organizations, equity
is a combination of kindliness
and justice. Both equity and
equality of treatment should be
considered when dealing with
employees.
· Stability of tenure of
personnel: To attain the
maximum productivity of
personnel, a stable work force is
needed.
· Initiative: Thinking out a plan
and ensuring its success is an
extremely strong motivator. Zeal,
energy, and initiative are desired
at all levels of the organizational
ladder.
· Esprit de corps: Teamwork is
fundamentally important to an
organization. Work teams and
extensive face-to-face verbal
communication encourages
teamwork.
• ●
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
French mining engineer,
developed 14 principles of
management based on his
management experiences. These
principles provide modern-day
managers with general
guidelines on how a supervisor
should organize her department
and manage her staff. Although
later research has created
controversy over many of the
following principles, they are still
widely used in management
theories.
· Division of work: Division of
work and specialization
produces more and better work
with the same effort.
· Authority and responsibility:
Authority is the right to give
orders and the power to exact
obedience. A manager has
official authority because of her
position, as well as personal
authority based on individual
personality, intelligence, and
experience. Authority creates
responsibility.
· Discipline: Obedience and
respect within an organization
are absolutely essential. Good
discipline requires managers to
apply sanctions whenever
violations become apparent.
· Unity of command: An employee should recieve orders from only one superior.
Unity of direction:
Organizational activities must
have one central authority and
one plan of action.
· Subordination of individual
interest to general interest: The
interests of one employee or
group of employees are
subordinate to the interests and
goals of the organization. This is
necessary to maintain unity and
to avoid friction among the
employees
· Remuneration of personnel:
Salaries - the price of services
rendered by employees - should
be fair and provide satisfaction
both to the employee and
employer.
· Centralization: The objective of
centralization is the best
utilization of personnel. The
degree of centralization varies
according to the dynamics of
each organization.
· Scalar chain: A chain of
authority exists from the highest
organizational authority to the
lowest ranks.
· Order: Organizational order for
materials and personnel is
essential. The right materials and
the right employees are
necessary for each
organizational function and
activity.
· Equity: In organizations, equity
is a combination of kindliness
and justice. Both equity and
equality of treatment should be
considered when dealing with
employees.
· Stability of tenure of
personnel: To attain the
maximum productivity of
personnel, a stable work force is
needed.
· Initiative: Thinking out a plan
and ensuring its success is an
extremely strong motivator. Zeal,
energy, and initiative are desired
at all levels of the organizational
ladder.
· Esprit de corps: Teamwork is
fundamentally important to an
organization. Work teams and
extensive face-to-face verbal
communication encourages
teamwork.
• ●
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
Characteristics of Excellent Companies
● The authors identified eight characteristics of excellent enterprises. Specially, these firms
• were oriented toward action
• learn about the needs of their customers
• promoted managerial autonomy and entrepreneurship
• achieved productivity by paying close attention to the needs of their people
• were driven by a company philosophy often based on the values of their leaders
• focused on the business they knew best
• had a simple organization structure with a lean staff
• were centralized as well as decentralized, dependeneing on appropriateness.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
• were oriented toward action
• learn about the needs of their customers
• promoted managerial autonomy and entrepreneurship
• achieved productivity by paying close attention to the needs of their people
• were driven by a company philosophy often based on the values of their leaders
• focused on the business they knew best
• had a simple organization structure with a lean staff
• were centralized as well as decentralized, dependeneing on appropriateness.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
Managerial Skills
Managerial skills those are skills used from
managers that enable them maintaining efficiency in the way
how employers performing working tasks. Because of that
managers must have a skill with which they will manage people
and technology with the purpose of effective and efficient fulfillment of their working tasks.
● Three types of managerial skills Robert Kaz identifies three types of skills that are essential for a successful management process:
• Technical,
• Conceptual and
• Human skills.
• Technical Skills: As the name of these skills tells us, these are skills about technic of fulfillment of tasks. These are not only for working on machines, but also can be skills to performing sales, about marketing and so on.
• Conceptual Skills:
Conceptual skills are ability or knowledge of managers for abstract thinking that mean to see the whole through analysis and diagnose of different states and to predict the future state of the business as a whole.
• Human Skills: Human skills are knowledge of managers to work with people. The most important task for
managers is to work with people. Without people, there is not needed for management and
managers. These skills will enable managers to become leaders, to
motivate employees for better accomplishment of their tasks, to make more effective use of
human potential in the business. These are most important skills for managers. Human skills are needed equally on all hierarchical levels of management.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
managers that enable them maintaining efficiency in the way
how employers performing working tasks. Because of that
managers must have a skill with which they will manage people
and technology with the purpose of effective and efficient fulfillment of their working tasks.
● Three types of managerial skills Robert Kaz identifies three types of skills that are essential for a successful management process:
• Technical,
• Conceptual and
• Human skills.
• Technical Skills: As the name of these skills tells us, these are skills about technic of fulfillment of tasks. These are not only for working on machines, but also can be skills to performing sales, about marketing and so on.
• Conceptual Skills:
Conceptual skills are ability or knowledge of managers for abstract thinking that mean to see the whole through analysis and diagnose of different states and to predict the future state of the business as a whole.
• Human Skills: Human skills are knowledge of managers to work with people. The most important task for
managers is to work with people. Without people, there is not needed for management and
managers. These skills will enable managers to become leaders, to
motivate employees for better accomplishment of their tasks, to make more effective use of
human potential in the business. These are most important skills for managers. Human skills are needed equally on all hierarchical levels of management.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
The Functions of Management
• Planning is the ongoing process
of developing the business mission and objectives and determining how they will be accomplished. Planning includes both the broadest view of the
organization, e.g., its mission, and the narrowest, e.g., a tactic
for accomplishing a specific goal.
• Organizing is establishing the internal organizational structure
of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute
authority to job holders.
• Staffing is filling and keeping filled with qualified people all
positions in the business. Recruiting, hiring, training,
evaluating and compensating are the specific activities included in the function. In the family business, staffing includes all
paid and unpaid positions held by family members including the
owner/operators.
• Directing is influencing people's
behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behavior of all
personnel to accomplish the
organization's mission and objectives while simultaneously helping them accomplish their own career objectives.
• Controlling is a four-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
of developing the business mission and objectives and determining how they will be accomplished. Planning includes both the broadest view of the
organization, e.g., its mission, and the narrowest, e.g., a tactic
for accomplishing a specific goal.
• Organizing is establishing the internal organizational structure
of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute
authority to job holders.
• Staffing is filling and keeping filled with qualified people all
positions in the business. Recruiting, hiring, training,
evaluating and compensating are the specific activities included in the function. In the family business, staffing includes all
paid and unpaid positions held by family members including the
owner/operators.
• Directing is influencing people's
behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behavior of all
personnel to accomplish the
organization's mission and objectives while simultaneously helping them accomplish their own career objectives.
• Controlling is a four-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary.
--------------------------------------------------------------------
Fundamentals of Management : Introduction [BBA 2305]
Planning Types Import Purpose Objective
• Definition of Planning:
Planning is a process for accomplishing purpose. It is blue print of business growth and a road map of development. It helps in
deciding objectives both in quantitative and qualitative terms. It is setting of goals on the basis of objectives and keeping in view the resources.
● What should a plan be?
• A plan should be a realistic view of the expectations. Depending upon the activities, a plan can be long range, intermediate range or short range. It is the framework within which it must operate. For management seeking external support, the
plan is the most important document and key to growth. Preparation of a comprehensive plan will not guarantee success, but lack of a sound plan will almost certainly ensure failure.
--------------------------------------------------------------------
● Types of Planning
• Architectural planning
• Business plan
• Comprehensive planning
• Enterprise Architecture Planning
• Event Planning and Production
• Family planning
• Financial planning
• Infrastructure planning
• Land use planning
• Life planning
• Marketing plan
• Network resource planning
• Strategic planning
• Urban planning
--------------------------------------------------------------------
● Purpose of Plan
Just as no two organizations are alike, so also their plans. It is therefore important to
prepare a plan keeping in view the necessities of the enterprise. A plan is an important aspect of business. It serves the
following three critical functions:
• Helps management to clarify, focus, and research their business's or project's development and prospects.
• Provides a considered and logical framework within which a business can develop and pursue business strategies over the next three to five years.
• Offers a benchmark against which actual performance can be measured and reviewed.
--------------------------------------------------------------------
• A plan can play a vital role in helping to avoid mistakes or recognize hidden opportunities. Preparing a satisfactory plan of the organization is essential. The planning process enables management to
understand more clearly what they want to achieve, and how and when they can do it. A well-prepared business plan demonstrates that the managers know the business and that they have thought through its development in terms of products, management, finances, and most importantly, markets and competition.
Planning helps in forecasting the future,
makes the future visible to some extent. It bridges between where we are and where we want to go. Planning is looking ahead.
--------------------------------------------------------------------
● Objectives of Planning
• The objectives are general parts of the planning process. They are the end-results towards which all business activities are
directed. They are needed in every aspect
where performance and result directly and vitally affect the survival and success of the firm. In other words, the objective of the firm justifies its existence.
● Objectives of Planning
• The objectives are general parts of the
planning process. They are the end-results
towards which all business activities are
directed. They are needed in every aspect
where performance and result directly and vitally affect the survival and success of the firm. In other words, the objective of the firm justifies its existence.
According to Robert C. Appley, "Objectives are goals; they are aims which management and administration wish the organization to achieve."
In other words, goals, aims and purposes are also used to signify objectives.
Newman and Summer stated, "For managerial purposes, it is useful to think of objectives as the results we want to achieve.
Objective covers firm's long-range plans specific departmental goals and short-term individual assignment also."
--------------------------------------------------------------------
Fundamentals of Management : Planning [BBA 2305]
Planning is a process for accomplishing purpose. It is blue print of business growth and a road map of development. It helps in
deciding objectives both in quantitative and qualitative terms. It is setting of goals on the basis of objectives and keeping in view the resources.
● What should a plan be?
• A plan should be a realistic view of the expectations. Depending upon the activities, a plan can be long range, intermediate range or short range. It is the framework within which it must operate. For management seeking external support, the
plan is the most important document and key to growth. Preparation of a comprehensive plan will not guarantee success, but lack of a sound plan will almost certainly ensure failure.
--------------------------------------------------------------------
● Types of Planning
• Architectural planning
• Business plan
• Comprehensive planning
• Enterprise Architecture Planning
• Event Planning and Production
• Family planning
• Financial planning
• Infrastructure planning
• Land use planning
• Life planning
• Marketing plan
• Network resource planning
• Strategic planning
• Urban planning
--------------------------------------------------------------------
● Purpose of Plan
Just as no two organizations are alike, so also their plans. It is therefore important to
prepare a plan keeping in view the necessities of the enterprise. A plan is an important aspect of business. It serves the
following three critical functions:
• Helps management to clarify, focus, and research their business's or project's development and prospects.
• Provides a considered and logical framework within which a business can develop and pursue business strategies over the next three to five years.
• Offers a benchmark against which actual performance can be measured and reviewed.
--------------------------------------------------------------------
• A plan can play a vital role in helping to avoid mistakes or recognize hidden opportunities. Preparing a satisfactory plan of the organization is essential. The planning process enables management to
understand more clearly what they want to achieve, and how and when they can do it. A well-prepared business plan demonstrates that the managers know the business and that they have thought through its development in terms of products, management, finances, and most importantly, markets and competition.
Planning helps in forecasting the future,
makes the future visible to some extent. It bridges between where we are and where we want to go. Planning is looking ahead.
--------------------------------------------------------------------
● Objectives of Planning
• The objectives are general parts of the planning process. They are the end-results towards which all business activities are
directed. They are needed in every aspect
where performance and result directly and vitally affect the survival and success of the firm. In other words, the objective of the firm justifies its existence.
● Objectives of Planning
• The objectives are general parts of the
planning process. They are the end-results
towards which all business activities are
directed. They are needed in every aspect
where performance and result directly and vitally affect the survival and success of the firm. In other words, the objective of the firm justifies its existence.
According to Robert C. Appley, "Objectives are goals; they are aims which management and administration wish the organization to achieve."
In other words, goals, aims and purposes are also used to signify objectives.
Newman and Summer stated, "For managerial purposes, it is useful to think of objectives as the results we want to achieve.
Objective covers firm's long-range plans specific departmental goals and short-term individual assignment also."
--------------------------------------------------------------------
Fundamentals of Management : Planning [BBA 2305]
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