MARKETING MANAGEMENT - 1

1. How do companies develop an effective message and select an efficient channel of communication?

Ans :

Selection of an appropriate channel depends on the consumer, the producer's resources, the product, the competition, the alternative channels available, and in some cases, the laws governing channel relationships.

Recently there has been a trend toward a greater presence of intermediaries in marketing channels. That is, we are seeing fewer direct channels. Several factors account for the trend. First, the cost of selling directly to customers has been very rapidly, making it even more economical to sell through resellers. For instance, retails can sell the product lines of many manufactures and reach thus reach a large number of customers more economically than can manufacturers. Second, many industries have concentrated on lowering inventory carrying costs by placing inventory when and where it is needed. Intermediaries such as wholesalers are able to react to demand better than producers can. Third, large distribution chains have grown in size in many industries, taking market from smaller "mom and Pop" distributors.

A marketing channel is used for one product may not be suitable for another the same channel used to distribute live Maine lobsters would not be used distribute appliances. Likewise one organization may select a different channel than the one used by competitors. A number of different channels are for consumer and organizational products, as well as for products marketed in foreign countries.

Channels for Consumer Products

Several typical marketing channels consumer products are shown below. In channel 1, the product moves directly from producer to consumers. Customers who purchase fruit and vegetables from a farmer's "truck stand" or pick their own fruit or vegetables are utilizing a direct marketing channel. Most services are distributed through a direct channel because they are produced and consumed at the same time.


CHANNEL 1

Producer =============================================== Consumer

CHENNAL 2

Producer ========================== Retailers ============== Consumer

CHENNAL 3

Producer ============Wholesaler ====== Retailers ============== Consumer

CHENNAL 4

Producer ====Agents == Wholesaler ====== Retailers ============== Consumer

By contrast, channels 2,3, and 4 represent indirect movement of goods or services from manufacture to consumer. In channel 2, the product flows from the producer to retailers to consumers. This channel is often used for automobiles; most consumers do not wish to go to a factory in Michigan to produce new Chevrolets; instead they buy them from authorized Chevrolet dealers that purchase the automobiles from General Motors. Using such a channel structure, Large retailers like Kmart and Sears sell many products such as telephones and tires, which they buy directly from producers.

In channel 3, a product flows from the producer to wholesaler to retailers to consumers. This channel is used frequently to consumer products that are sold to large numbers of consumers through many retailers. A producer finds it easier to deal directly with a limited number of wholesaler rather than with thousand of retailers. For example, William Grant & Sons distributed its Scotch whisky products globally through wholesalers and retailers.

Channel 4 in which the use of two or more marketing channels to distribute the same product to the same target market. By using dual distribution a firm can increase its products availability to consumers. For instance, may companies like Neiamn Marcus, General Nutrition Inc.Talbots and Sundance sell their products through retail outlets as well as mail-order catalogues.

P International Channels of Distribution

All Products, including those sold across national boundaries, must be physically moved from the domestic producer to the consumer or organizational buyer. A firm marketing its product in other nations may decide to distribute products through existing marketing channel or to develop new international channel. The decision depends on the availability of both domestic and foreign channels that satisfy the distribution requirements.

P Distribution Intensity

When selecting a marketing channel, a firm must be determine the number of intermediaries needed to provide the best target market coverage. Distribution intensity is the number of marketing intermediaries at each level of the marketing channel. At the retail level, distribution intensity refers to the number of outlets that sell a particular product to consumers. The three major levels of distribution intensity are intensive, selective and exclusive distribution.

P Intensive Distribution

Means that all available outlets are used at each level of the channel to distribute a product. Convenience products receive intensive distribution. Some products, such as soft drinks and cigarettes are available virtually everywhere through vending machines. They are less expansive product. These are generally less expensive products that are purchased frequently by a large number of consumers and require little shopping effort.

P Selective Distribution

Uses only some available outlets to distribute a product. Shopping products and durable goods such as automobiles, stereos and large household appliances usually fall into this category. Because such products are more expensive than convenience goods, consumer spend more time visiting several outlets to compare prices, designs, styles and other features

P Exclusive Distribution

A Product is offered only one or very view outlets within a relatively large geographic area. Organizational use exclusive distribution for products that are purchased rather infrequently,are consumed over a long period of time, or require service or information to fit them to buyer's needs. Some consumer products like luxury cars and customer-made jewelry are also distributed in this way.

2. How will you estimate the size of a market for a new product?

1. Idea Generation: Search for new product ideas from both inside and outside the firm.
2. Idea Screening: Select the idea with the greatest potential. Reject ideas that have limited potential. Analyze the needs and wants of buyers, the environment and competitors.
3. Concept Testing : Describe or show product concepts and their benefits to potential customers to determine their reactions. Identify and eliminate poor product concepts. Obtain useful information for product development and marketing personnel.
4. Business Analysis: Assess the new product’s potential profitability and compatibility with the market place. Examine the organizations research, development and production capabilities. Ensure that financial requirements for development and commercialization are available. Project economic returns.
5. Product Development : Determine whether it is technically and economically feasible to produce the product. Convert the product idea into a working model. Develop and test various elements of the marketing mix.
6. Test Marketing: Launch the product is small regions. Determine the reactions of consumers in the target market. Measure the new products sales performance. Identify weaknesses in the product or the marketing mix.
7. Commercialization: Make the necessary cash outlays for productions facilities. Manufacture and market the product in the entire target market. Communicate the products benefits.


3. In respect of marketing research it is said that its major and single contribution is in augmenting the effectiveness of marketing decisions. Do you agree? Elucidate.

IMPORTANCE AND ADVANTAGES OF MARKETING RESEARCH

Marketing research has become a very important tool today. The success of a business enterprise depends upon the ability of its marketing managers to make correct and sound marketing decisions and marketing research is the basis of sound marketing decisions.
Marketing research has several advantages.
They are:
i) Marketing research helps the managements of a firm in planning its product line by providing accurate and up-to-date information about the customers demands, their changing tastes, attitudes, preferences, buying habits, etc.
ii) It helps the manufactures to adjust his production according to the conditions of demand.
iii) It helps to establish correlative relationship between the product brand and consumers’ needs and preferences.
iv) It helps the manufacturer to se4cure economies in the distribution of his products.
v) It makes the marketing of goods efficient and economic by eliminating all type of wastage.
vi) It helps the manufacturer and dealers to find out the best way of a approaching the potential buyers.
vii) It helps the manufacturer to find out the defects in the existing product and take the required corrective steps to improve the product.
viii) It helps the manufacturer in finding out the effectiveness of the existing channels of distribution and in finding out the best way of distributing the goods to the ultimate consumers.
ix) It guides the manufacturer in planning his advertising and sales promotion efforts.
x) It is helpful in assessing the effectiveness of advertising programmes.
xi) It is helpful in evaluating the relative efficiency of the different advertising media.
xii) It is helpful in evaluating selling methods.
xiii) It reveals the causes of consumer resistance.
xiv) It minimizes the risks of uncertainties and helps i9n taking sound decisions.
xv) It reveals the nature of demand for the firm’s product. That is, it indicates whether the demand for the product I constant or seasonal.
xvi) It is helpful in ascertaining the reputation of the firm and its products. 1
xvii) It helps the firm in determining the range within which its products are to be offered to the consumers. That is, it is helpful in determine the sizes, colors, designs, prices, etc. of the products of the firm.
xviii) It would help the management to know how patents, licensing agreements and other legal restrictions affect the manufacture and sale of the firm’s products.
xix) It is helpful to the management in determining the actual prices and the price ranges.
xx) It is helpful to the management in determing the discount rates.
xxi) It is helpful to the management in ascertaining the price elasticity of demand for its products.
xxii) It helps the firm in knowing the marketing and pricing strategies of the competitors.
xxiii) It is helpful in knowing the general conditions prevailing in the markets.
xxiv) It is helpful to the management in finding out the size of the market for its products.
xxv) It helps the firm in knowing the transportation, storage and supply requirements of its products.
xxvi) It is quite helpful to a firm in launching a new product.
xxvii) It helps the firm in exploring new uses for its existing products and thereby, increasing the demand for its products.
xxviii) It is helpful to a firm in making sales forecasts for its products and thereby, establishing harmonious adjustment between demand and supply of its products.
xxix) It helps the Firm in exploring new markets for its products.