Marketing Management PDF

MARKETING MANAGEMENT Marketing management Consists of the analysis, planning, implementation and control of programs designed to bring about desired exchanges with target consumers both for profit and service (Kotler); a purposive activity aimed at bringing desired exchanges and is anchored at th...

MARKETING MANAGEMENT Marketing management Consists of the analysis, planning, implementation and control of programs designed to bring about desired exchanges with target consumers both for profit and service (Kotler); a purposive activity aimed at bringing desired exchanges and is anchored at the coordination and adaptation of the product, price, place and promotion for achieving effective response from the target customers Function: Getting the most out of people and services Responsibilities: delivery of standard of living Marketing Management Tools: Marketing research Product planning Sales forecasting Marketing planning Marketing strategy Marketing Mix (4Ps of Marketing) PRODUCT PRICE PLACE PROMOTION  Marketing Environment 1. Controllable factors a. Directed by top management – product or service category, functions, geographic coverage and type of ownership, production, finance, acctg, distribution and R&D b. Directed by marketer – selection of target market, marketing objectives, marketing orgn, marketing plan, and control of the marketing plan Marketing Environment(contd…) 2. Uncontrollable factors a. Consumers – consumer characteristics, consumer’s purchases b. Competition – rivalry among marketers who seek to satisfy particular markets c. Technology d. Organization’s level of success or failure in reaching its objectives e. Feedback f. adaptation MARKETS & CONSUMERS Basis of classifying customers Demographic characteristics Socio-economic status Psychological/personality characteristics Product-specific characteristics Kinds of Consumers Ultimate consumers – buy products for their own use & satisfaction Industrial consumers – businessmen who buy products for further processing or assembling of products Commercial customers – buy products and resell to others Institutional customers – buy goods under the name of the institution The social characteristics of consumer is a combination of the following: Social performance-is Culture Social class-ranking of anchored of how a person people within culture carries out his/her role as a worker, family member, citizen and a friend Reference group-is a The family life cycle- Time expenditures-reflect group that influences a describes how a typical changes in the work week, person’s thoughts or family evolves family care, and leisure actions  The Consumer’s Decision Process 6 Stages 1. Stimulus – is a cue (social, commercial or non-commercial) or a drive (physical mean to motivate or arouse a person to act) a. Social stimulus – comes from an interpersonal source not affiliated with the seller b. Commercial stimulus – message sponsored by a manufacturer, wholesaler, retailer, or other seller (advertisements, personal selling, sales promotion) c. Non-commercial stimulus – a message received from an impartial source as consumer reports d. Physical drive – this occurs when a person’s senses are affected (thirst, pain, cold, hunger and fear) The Consumer’s Decision Process 6 Stages(contd…) 2. Problem awareness – entails recognition of a shortage of a product or service or unfulfilled desire 3. Information search – gathering of information after recognizing that the unfulfilled desire needs further action 4. Evaluation of alternatives – ranking of alternatives from the most desirable to the least desirable; selecting one product or service from the alternatives 5. Purchase – the act of purchasing the selected product or service  This consists of the acts of individuals in obtaining and using goods and services. Consumer Consumer behavior is a function of interaction of the Behavior consumer’s personal influences and the pressure exerted upon them by the outside forces in the environment  Needs Basic Motives determinants of consumer Perceptions behavior attitudes Environmental Influences Social influences Group influences Reference group Social classes Role of the opinion leader Cultural influences  Rational Performance characteristics Economy Durability Serviceability Buying 2.Emotional Motives Attractiveness Prestige Distinctiveness Comfort Innovation Recreation security Patronage Motives Location or accessibility Reputation of the store Wide selection Customer service Marketing Strategy Outlines the manner in which marketing is used to accomplish an organization’s objectives a. Increasing sales volume b. Continuous receipt of revenues and profits Target Market Described as a defined set of present and potential customers that an organization attempts to satisfy Market segmentation Aims at a narrow, specific consumer group (market segment) through one, specialized marketing plan that caters to the needs of that segment; subdividing of a market into homogenous subsets of customers  Geography –by regions or marketing areas Demography – sex, age, family size, etc. psychography – based on lifestyle and personality Basis of segmentation: Benefit segmentation – various benefits that they seek to obtain from the product Volume segmentation – heavy, medium, light and non-users of the products Marketing factor segmentation – attempts to subdivide the market into groups responsive to different factors such as price and discounts, advertising, sales promotion and brands  A. PRODUCT STRATEGIES PRODUCT- is anything offered for sale, attention, and acquisition.  ESSENTIAL ELEMENTS OF A CATEGORIES OF AGRICULTURAL PRODUCT PRODUCTS 1. physical core 1. Raw or fresh 2. function 2. Semi-processed 3.adaptability 3. processed 4. value  Product Classifications A. CONSUMPTION & B. EFFORT & C. LEVELS OF TANGIBILITY RISK PRODUCTS 1. Durables 1. Convenience products 2. Non-durables 2. Preference products 1. Core product 3. services 3. Shopping products 2. Augmented 4. Specialty products product 3. Formal Product  a. Product Mix REFERS TO THE NUMBER OF PRODUCTS A FIRM IS HANDLING. IT CAN BE: a. wide - if there are a lot of product lines b. deep - if there are several products within each line c. consistent - if the products being produced are related  BRAND is a letter, word, symbol, design or a combination of them used to identify & the trademark products. It has 3 parts: the name, the mark & the trademark BRAND NAME part of the brand which consists of word, letter or group of letters or words comprising a name which identify a specific good; part of the brand which B. BRANDING can be vocalized. TRADE MARK is a brand that has been given legal protection because it is capable of exclusive appropriation by its owner, it is used in a distinctive manner affixed to a product when sold.  CHOOSING A 50 BRAND NAME: 40 1. Short, simple and easy to spell and 30 read. 2. Pleasing and easy to pronounce. 3. Distinctive but not deceptive. 20 4. Logo or design must be adaptable to packaging or labelling requirements. 10 5. Always timely does not go out of date. 6. Not vulgar, offensive or obscene. 0 Item 1 Item 2 Item 3 Item 4 Item 5 ADVANTAGES OF 50 BRANDING 40 1. Helps the customers in identifying the 30 products for sale. 2. Help customers to purchase quality goods. 3. Branded products are more superior than 20 unbranded ones. 4. Good brand speeds up shopping procedure. 10 5. Helps in reducing selling time. 6. Helps marketing management to identify what appears to be similar essentially 0 different products. Item 1 Item 2 Item 3 Item 4 Item 5 TESTS IN MEASURING THE 50 BRAND EFFECTIVENESS 40 1. Association test - merely mentioning 30 the brand, the customer can associate it with a particular product. 2. Learning test- to measure the ease 20 which brand names are read and pronounced. 3. Memory test- easiness in recalling 10 the name. 4. Uniqueness test- determine the uniqueness of the brand. 0 5. Preference test-rate of the Item 1 Item 2 Item 3 Item 4 Item 5 preference of the customers.  DEGREE OF BRAND 50 PREFERENCE 40 1. Brand recognition this means that customers remember having seen or heard 30 of the brand. 2. Brand preference - customers tend to insist on buying only those products with a 20 particular brand of their choice or preference as a result of the. satisfaction that they have enjoyed or received from the 10 use of the product bearing such brand. 3. Brand Insistence - insistence for a particular brand and accepting no 0 Item 1 Item 2 Item 3 Item 4 Item 5 substitute.  50 BRANDING POLICIES: 40 1. Manufacturer's vs. 30 distributor's brand 2. Brand vs. no brand 20 3. Family brand vs. individual brand 10 0 Item 1 Item 2 Item 3 Item 4 Item 5  BRAND 50 STRATEGIES: 40 1. Individual branding - is a policy of naming its product differently. 2. Over-all family branding - all of a firm's products are branded with the same name or 30 at least part of the name. 3. Brand-extension branding - when the firm uses one of its existing brand for an improved 20 or new product that is usually in the same product category or the existing brand. 4. Multi-brand strategies 10 Generic branding - indicates only the product category and does not include the company 0 Item 1 Item 2 Item 3 Item 4 Item 5 name and other identifying terms.  C.PACKAGING is the total presentation of the product; may be defined as the process of designing, manufacturing, and incorporating the various physical elements and accessories required for the proper wrapping containing protection, shipping, stacking and identification of the product. Package- is a product's physical container, label and inserts; may include a cardboard box, cellophane, wrapper, glass, aluminum or plastic jar, paper bag Styrofoam, or a combination of these. Label - contains the product's brand name, company, logo, ingredients, promotional messages, inventory control code, and Instructions for use. Inserts are 1) detailed instructions and safety information for complex and dangerous products that are carried in drug, toy or other packages, or 2) coupons, prizes, or recipe booklets. PACKAGING OBJECTIVES: 1. To attract attention or compete for competition on counter or shelves. 2. To make maximum use of the display area. 3. To maintain identity for a line of product. 4. To afford convenience to both the consumer and dealer alike. 5. The package must provide the necessary protection to the product. 6. To assure proper measure or quantity for the purchaser. 7. To serve as medium of advertising. BENEFITS OF PACKAGING 1. PROTECTS THE GOODS IN STORAGE & TRANSIT 2. IT MAKES HANDLING CONVENIENT 3. IT PROMOTES THE PRODUCT 4. IT ENHANCES THE PRODUCT  1. Attractive 5. Textural CHARACTERISTICS 2. Recognizable 6. Dependable OF A GOOD PACKAGE: 3. Informative 7. Functional 4. Immediate 8. Labeling  PACKAGE PLANNING 1. ATTITUDES OF CONSUMERS 2. COLOR 3. PROTECTION AGAINST SUNLIGHT 4. SUSCEPTIBILITY TO DAMAGE 5. CONTAMINATION 6. PILFERAGES 7. WAREHOUSING CONSIDERATIONS  PROBLEMS IN PACKAGING 1. PACKAGE VARY AMONG PRODUCTS 2. KINDS OF PACKAGING MATERIALS ESPECIALLY FOR FOOD. 3. COST OF MATERIALS 4. SIDE EFFECTS OF THE PACKAGING MATERIALS.  B. PRICING STRATEGIES PRICE - IS THE AMOUNT OF MONEY PAID FOR THE GOODS AND SERVICES.  1. prices should aim at maximizing profits for the entire PRICING product line. 2. prices should be set in such a way that they will promote a long-range welfare of the firm. OBJECTIVES 3. prices should be adapted and individualized to fit the diverse competitive situations encountered by different products. 4. pricing should be flexible enough to meet changes in economic conditions of the various customer industries. 5. a predetermined and systematic method of pricing new product should be provided. 6. replacement parts prices should be determined.  MANUFACTURER'S PRICING RETAILER'S PRICING STRATEGIES STRATEGIES 1. Skimming the Market - holding prices at relatively 1. Competitive pricing - set price to be near or equal to high level & promoting product's the effectiveness & those in other stores for products bought on a regular or value. irregular basis. 2. Moving down the demand curve - prices are set at a 2. Psychological pricing - odd-centavo pricing to give relatively high point there until the market available at the appearance of having cut prices to the base that point is pretty well saturated. Minimum/ even-centavo pricing to gain a quality image 3. Penetration Pricing - aims at getting an immediate 3. Unit pricing - pricing items in units of two or more. mass market. 4. Price Lining - offering two or more classes of the 4. Pre-emptive pricing - set the price of the product so same product at different prices. low that the market is unattractive to competitors. 5. Special prices - offering items as specials for a given 5. Extinction pricing - price of the product is set based period of time. on the variable costs in order to force firms in weak financial or marketwise positions to discontinue their production. 6. Formula pricing - pricing agreement is negotiated with the buyer. 7. Tie pricing - negotiate a sale that provides for the inclusion in the purchase of a sought-for product a quantity of the unwanted product.  PRICING PROBLEMS REVOLVE AROUND THE FOLLOWING: PRICE DISCOUNT STRUCTURE BASIC PRICE MUST CONSIDER DISCOUNTS AND ALLOWANCES IT WILL INVOLVES THE DETERMINATION OF THE COMPANY'S GRANT TO ITS CUSTOMERS TAKING INTO ACCOUNT THE PRICE LEVEL OR BASIC PRICE. QUANTITY PURCHASED, TERMS OF PAYMENT AND OTHERS. PRODUCT-LINE PRICING RELATES TO THE DETERMINATION OF THE RELATION OF PRICING OF NEW PRODUCTS PRICES OF MEMBERS OF A PRODUCT LINE. SPECIFIC PRICING POLICIES: 1. Cost-plus pricing - Determine the cost of goods, adds a percentage to cover expenses and profit. 2. flexible markup method - a special form of cost-plus pricing instead of constant margin, it calls for a markup to be varied in the basis of several considerations. Markup- is the difference between the selling price of an article or merchandise and the cost price; could be % of cost price (markup on cost) or % of the sales price (markup on retail) 3. intuitive pricing - set the price of goods simply by estimating how much people will be willing to pay for the product, and without regard to cost (fad items) SPECIFIC PRICING POLICIES: 4. less-than-cost pricing market-minus-price policy; is based on the theory that it is desirable to sell goods at prices below the cost of the seller which happens when there is declining sales in order to dispose the product as fast as it can be done 5. price maintenance - adhering to the price that has been charged in the past. 6. other pricing policies product-line pricing, skimming price policy, penetration pricing policy, follow the leader price, variable price policy, odd- pricing policy. 1. F.O.B FACTORY- "Free on board"; the buyer is responsible for paying the cost of transportation GEOGRAPHICAL PRICING POLICIES 2. C.I.F.-"COST IN FREIGHT"; The seller is responsible for the cost of transportation: the seller quotes a price including the cost of the goods and all transportation charges 3. ZONE Pricing-the company's marketing area is divided into zones 4. BASING-POINT SYSTEM C. DISTRIBUTION STRATEGIES CONSIDERATIONS 1. NUMBER OF POTENTIAL CONSUMERS 2. COMPLEXITY OF THE PRODUCTS 3. DISTRIBUTION BUDGET 4. SELLER'S SALES & DISTRIBUTION EXPERIENCE 5. GEOGRAPHY  CHANNELS OF DISTRIBUTION CHANNELS OF DISTRIBUTION-ALSO REFERS TO TRADE CHANNELS WHICH REPRESENT VARIOUS MIDDLEMEN THROUGH WHOM THE TITLE PASSES RATHER THAN THE "GOOD PASSES" Functions of Middlemen: 1. Transportation - this deals with the spatial separation and includes all activities directly concerned with moving goods from places of production to places of consumption or to any designated place of sale. 2. Inventory - this is concerned with temporal separation and includes those activities directly connected with holding goods between time of producing them and the time of sale such other times as may be designated by the user.  CHANNELS OF DISTRIBUTION CHANNELS OF DISTRIBUTION-ALSO REFERS TO TRADE CHANNELS WHICH REPRESENT VARIOUS MIDDLEMEN THROUGH WHOM THE TITLE PASSES RATHER THAN THE "GOOD PASSES" 3. Promotion - deals with perceptional separation and includes all activities directly concerned with providing information, including persuasive information (advertising) with respect to the nature of goods and services and their relationship to the potential user's perceived needs. 4. Transaction - deals with separation of ownership and values and includes all activities directly concerned with active negotiation and transfer of title.  1.FUNCTIONAL MIDDLEMEN a. The manufacturer's agent - is a commission salesman who sells for manufacturers of CLASSES OF machinery, heavy lines, similar goods, often selling a wide list of non-competing lines. MIDDLEMEN b. The manufacturer's sales agent - is a commission salesman who sells only one line, that is, the entire output of one manufacturer. c. The commission merchant - often maintains facilities for receiving handling, or even warehousing commodities which he handles.  1.FUNCTIONAL MIDDLEMEN d. The broker - he maintains a year round sales who sells goods for his principal; does buy and CLASSES OF sell on his account but negotiates sales for others. MIDDLEMEN e. The resident buyer - he buys for a group of buyers. f. The factor - he helps finance the production operation in addition to performing other functions of selling for the principal.  The Reseller System Resellers-purchase and resell goods without altering their CLASSES OF forms. Objectives of a Reseller System: MIDDLEMEN 1. To promote smooth, uninterrupted and harmonious relations among those who compose their distribution system. 2. To provide greater exposure for their products, especially to the kinds of customers they are trying to cultivate.  Distribution Policies 3 degrees of market exposure: CLASSES OF 1. Intensive distribution - is refers to the sale of a product through any responsible wholesaler or retailer who will stock and/or sell the product. MIDDLEMEN 2. Selective distribution-half-way between intensive and extensive distribution under this policy, only better distributors or those chosen off some pre-determined basis are used for distribution. 3. Exclusive distribution- there is a definite agreement between the principal and agent; single dealership or through limited number of representatives.  Factors affecting choice of distribution channels CLASSES OF 1. Nature of the market 2. Nature of available middlemen MIDDLEMEN 3. Size of the company 4. Relative costs of such channels 5. Expenses for promotion  Channels of Distribution: 1. Sale by the producer direct to the consumer or user. 2. Sale direct to the retailer who sells the product to the CLASSES OF consumer. 3. Sale to the wholesaler who sells to the industrial user. MIDDLEMEN 4. Sale to the wholesaler (Jobber), who in turn, sells to the retailer for resale to the consumer. 5. Sale to or through an agent middleman who sells to large- scale retailers or to wholesalers for distribution to retailers and consumers.  Major Arteries in the Distributive System 1. Wholesaling-is a marketing institution which includes the activities of all individuals or businesses which sell to, or CLASSES OF negotiate sales with, customers who buy for resale. MIDDLEMEN Service or full-function wholesalers - they are service middlemen serving two important groups: the manufacturer from whim they buy, and the retailer to whom they sell. Cash-and-carry wholesalers.  2. Retailing-refers to all forms of selling direct to the ultimate consumer. a. Independent store - sari-san/variety store CLASSES OF b. Specialty store-handles a limited variety of goods in a single line of merchandise. MIDDLEMEN c. Department store - a retail store which handles a wide variety of lines of goods. d. Chain store-consists of four or more stores which carry the same kind of merchandise, are centrally owned and managed, and are usually supplied from one or more central warehouses.  D: PROMOTION STRATEGIES PROMOTION - IS THE PERSONAL AND/OR IMPERSONAL PROCESS OF ASSISTING A PROSPECTIVE CUSTOMER TO BUY A COMMODITY OR TO ACT FAVORABLY UPON AN IDEA THAT HAS COMMERCIAL SIGNIFICANCE TO THE SELLER.  PROMOTIONAL POLICIES 1. PULLING STRATEGY 2. PUSHING STRATEGY promotional effort by sellers to stimulate final relies more heavily on personal selling the user demand: this demand exert pressure on product is promoted to the members of the the distribution channel; the plan is to build marketing channel rather than to this final consumer demand for the product so that user. channel members will be stimulated to fill the void. IMPORTANCE OF PROMOTION 1. Makes the buyers aware of alternative goods & services. 2. Shorten the distance between the market & the manufacturers. 3. Regulate the level & timing of demand.  OBJECTIVES OF PROMOTION: 1. TO PROVIDE INFORMATION 2. TO STIMULATE DEMAND 3. TO DIFFERENTIATE THE PRODUCT 4. TO ACCENTUATE THE VALUE 5. TO STABILIZE SALES METHODS OF PROMOTION presentation of promotion of the products 1. Advertising-any paid form of non-personal 2. Personal Selling - oral presentation of the product 3. Sales Promotion- are price off, bonuses, lotteries, etc. 4. Publicity-non-personal form of promotion which aims to attract buyers by publishing commercially significant news about the product in different media ADVERTISING - CONSISTS OF VISUAL OR ORAL MESSAGES ADDRESSED TO THE SELECTED PUBLICS FOR THE PURPOSE OF INFORMING AND INFLUENCING THEM TO BUY PRODUCTS OR SERVICES Forms of messages: the messages carried in newspapers and magazines, on outdoor billboards, on buses, jeepneys, in radio and television broadcasts, and in circular of all kinds whether distributed by mails, in persons, or by inserts in packages, window displays and store signs.  OBJECTIVES 1. To attract attention 2 To arouse interest OF 3. To stimulate desire ADVERTISING 4. To create action  TYPES OF ADVERTISING  1. MANUFACTURER’S AND DEALER'S ADVERTISING Dealer's advertising- direct advertising designed for the immediate sale of merchandise and/or promotion of brands or of product lines Manufacturer's advertising - indirect advertising 2. PRODUCT ADVERTISING AND INSTITUTIONAL ADVERTISING Product Advertising - seeks to build the reputation of a manufacturer's product, usually under a brand identification, and such intended to promote the sale of such products. Institutional Advertising- is devoted to consumer attitudes relating to the company or institution for the purpose of promoting patronage or building a favor on the basis of these attitudes. PRIMARY DEMAND AND SELECTIVE DEMAND ADVERTISING Primary demand advertising - the objective is to induce people to buy products of the class in which the advertised article falls - this is to increase total demand for the product class. Selective demand advertising - is to induce people to buy a particular brand within a product class - this is to emphasize the superior characteristics of a brand being advertised  1. Outdoor advertising - refers to advertising thru the use of billboards along the highways and illuminated signs in OTHER TYPES OF prominent places 2. Point-of-purchase advertising- include various materials ADVERTISING used for advertising in the store of place of purchase itself (counter cards, displays, wrapped models of products, literature, shopping bags with the name of the store 3. National advertising- intended to reach the country as a whole thru the use of newspapers and other publications of nation-wide circulation. 4. Local advertising - has a limited target market; usually confined in a specific area 5. Direct mail advertising - is done by sending circular letters, cards and various kinds to prospective and potential customers ADVERSITING MEDIA 1. NEWSPAPERS 2. MAGAZINES 3. RADIO AND TELEVISION 4. TRANSPORTATION AND OUTDOOR ADVERTISING 5. DIRECT MAIL ADVERTISING SALES PROMOTION - may be defined as an activity and/or material that acts as a direct inducement, offering added value or incentive to the product, to resellers, encompasses all promotional activities or materials other than personal selling, advertising salespersons, or consumers; it and publicity.  1. To identify and attract new customers 2. To introduce a new product OBJECTIVES 3. To increase the total number of users for an established brand OF SALES 4. To encourage greater usage among current customers PROMOTION 5. To educate consumers regarding product improvements 6. To bring more customers Into the retail store 7. To establish s a fluctuating sales pattern 8. To Increase reseller inventories 9. To combat or offset competitor's marketing efforts 10. To obtain more and better shelf space and display  MANAGEMENT DECISIONS RELATING TO SALES PROMOTION 1. determine policy 2. analyze the market 3. decide what to promote 4. decide where to promote 5. when to promote 6. how much to spend TOOLS OF SALES PROMOTION 1. Publicity - any unpaid, non-personal mention of firm, product or person in any of the mass media 2. Visual advertising - display of merchandise 3. Special sales events 4. Contests 5. Premiums -i s an item offered free or at nominal cost as an incentive to buy the product a. Give-away - premium without cost to the recipient b. Self-liquidating - are those with nominal cost SELF PROMOTION AIMED AT RESELLERS 1. Buy-back allowances - is a certain amount of money given to a purchaser for each unit bought after an initial deal is over. 2. Buying allowances - is a temporary price reduction to resellers for purchasing specified quantities of a product. 3. Merchandise allowances - is a manufacturer's agreement to pay resellers certain amounts of money for providing special promotional efforts. 4. Sales Contests - is designed to motivate distributors, retailers, and sales personnel recognized outstanding achievements.  5. PRODUCT PLANNING AND DEVELOPMENT PRODUCT PLANNING- includes all activities conducted by manufacturers and producers in the discovery and development of new products, improvement of old products, the determination of new uses for existing products, and the reduction of product and packaging costs; consideration of such factors as function, quality, design, name, brand, labelling, packaging, and pricing concerned also with standardization, simplification, and diversification. STEPS IN NEW PRODUCT PLANNING 1. Idea generation - continuous, systematic search for new product opportunities 2. Screening product ideas - those ideas which show greater potential are considered for further development. 3. Concept testing is a quick, inexpensive tool for measuring consumer acceptance of a particular product, asking potential consumers to react to a picture, written statement, or oral description of a particular product to enable the form to ascertain initial attitudes prior to expensive and more time- consuming prototype development. STEPS IN NEW PRODUCT PLANNING 4. Business analysis-demand projection, costs, competition, investment requirements, and profits. 5. Product development - focuses attention on manufacturing and outlines a marketing strategy accordingly, putting out new products into tangible form, from concept to test stage and thus involves the development of other elements of the marketing mix. 6. Test marketing- refers to limited introduction of a product in areas chosen to represent the intended market to determine probable buyer's reactions to various parts of the marketing mix. 7. Commercialization-introduction of a new product in the market: plans for full- scale manufacturing must be refined and settled, and budgets for the project must be prepared.  ADOPTION PROCESS IT IS A PROCEDURE CONSUMERS GO THROUGH WHEN LEARNING ABOUT A NEW PRODUCT Stages of adoption: 1. awareness - the person learns of the existence of the product but does not have the information about it 2. interest - the person is motivated to seek information 3. evaluation - the person decides whether to try the product or not 4. trial- the person buys the product and tests its usefulness 5. adoption - the person uses the product on a regular basis 6. confirmation - the person seeks reinforcement and may reverse decision if exposed to conflicting messages  THE PRODUCT LIFE CYCLE INTRODUCTORY STAGE MATURITY STAGE DECLINE STAGE  6. INDUSTRIAL MARKETING Industrial Marketing - marketing of industrial goods Industrial Goods-goods that are still subject for further processing TYPES OF INDUSTRIAL GOODS: 1. Raw materials - comprise the products of the farm which have to undergo processing before they are consumed. 2. Semi-manufactured goods - refer to those products which are finished output of one industry but enter into the product of others (leather, textile) 3. Installations - include major items of production equipment used for basic processing and usually involve a considerable outlay of money (fixed assets). 4. Supplies - include all items that are highly essential to the efficient operation of the business (filing cabs, paper, ink, clips, etc.) 5. Accessories - are goods which serve the performance of certain operation (aircon, blowers, time clocks, etc.) SCOPE OF INDUSTRIAL MARKET 1. Manufacturing industries - textile, wood, paper, food, other miscellaneous industries. 2. Construction industries - building construction, roads and bridges, surveying work, architects and engineers, dredging and excavation. 3. Transport industries - railroads, bus and freight lines, shipping air transport. 4. Public utilities - communication, ice plants, waterworks, light and water companies. 5. Mines and quarries - coal, cement, marble, petroleum and natural gas 6. Service industries - hotels, restaurants, theatres, insurance 7. Institutions - schools, hospitals, churches, banks 8. Commercial establishments - retail stores, hardware stores, groceries, drug stores 9. Government institutions CHARACTERISTICS OF THE INDUSTRIAL MARKET 1. Derived demand - industrial buyers buy industrial goods not for any personal satisfaction but to be able to make other goods or create services which will afford satisfaction to their users. 2. Elasticity of demand - give rise to a reverse elasticity, when the price of a material declines, a purchasing agent may be prompted to withdraw from the market to the extent with his inventory position will permit until such time as an opportunity to study the situation very carefully and decide whether in his opinion the decline is merely temporary fluctuation or actually represents the start of continued downward trend. This simply means that a small price decline sometimes has the effect of drying up demand for a period of time until the general market situation stabilizes. If the market condition remains uncertain, buyers are like to purchase from hand to mouth until it becomes more settled. On the other hand, if the price of the industrial goods goes up, there is a reason for the careful buyer to pause and think whether the increase portends the beginning of a general advance. CHARACTERISTICS OF THE INDUSTRIAL MARKET 3. Geographical concentration - many industries are concentrated in one location (shoe manufacturers in Marikina, textile goods in Pasig, etc.) 4. Limited Number of buyers - only manufacturers are the buyers of industrial goods. 5. Well-informed buyers - purchase of industrial goods are always based on rational buying motives done by well-trained and well-informed purchasers of the company. 6. Quality consideration - purchasers look for quality products before they buy because they are aware that poor quality materials could result to poor quality products-poor quality image of the company. 7. Leasing equipment - Industrial leasing which is usually limited to expensive major equipment or installations.  DISTRIBUTION OF INDUSTRIAL PRODUCTS 1. GENERAL LINE DISTRIBUTOR 3. SELECTED LINES DISTRIBUTOR A GENERAL LINE DISTRIBUTOR IS ONE WHOSE ENTIRE HE RESTRICTS THE LINES HE STOCKS AND SELLS. HE ORGANIZATION, THAT IS PURCHASING, SALES, SERVICE STOCKS COMPLETELY AND CONCENTRATES IS SALES AND FINANCE, IS GEARED TO STOCK, SELL, AND OFFER EFFORT ON A RELATIVELY NARROW RANGE OF SERVICE ON ALL INDUSTRIAL SUPPLIES USED IN HIS INDUSTRIAL SUPPLY AND EQUIPMENT ITEMS. TRADING AREA OF OPERATION. 4. SPECIALIZED DISTRIBUTOR 2. DEPARTMENTALIZED DISTRIBUTOR- HE GEARS HIS STOCK, ORGANIZATIONAL SET UP AND SELLING A COMPROMISE BETWEEN THE GENERAL LINE AND A SPECIALIZED EFFORT TO THE DISTRIBUTION OF ONE OR TWO BROAD LINES AND DISTRIBUTOR, CARRIES A BROAD LINE, BUT SELLING AND OTHER KINDRED ITEMS. HIS SPECIALTY IMPLIES INTENSIVE TECHNICAL PHASES OF OPERATION ARE DEPARTMENTALIZED TO ACHIEVE THE KNOWLEDGE OF THE LINE/LINES HE HANDLED, PLUS A BROAD BENEFITS OF A SPECIALIZED EFFORTS. FAMILIARITY WITH THE APPLICATIONS AND USE OF THE PRODUCTS IN HIS TRADING AREA.  1. To maintain continuity of supply to support manufacturing BUYING schedule 2. To do so with a minimum investment in materials and inventory MOTIVES OF consistent with safety and economic advantage 3. To avoid duplication, waste and obsolescence of materials 4. To maintain standards of quality and materials based on INDUSTRIAL suitability for use 5. To procure materials at the lowest cost consistent with the quality and service required BUYERS 6. To maintain the company's competitive positions in its industry and to conserve its profit position, where materials costs is concerned  01 Quality FACTORS 02 Service (repairs and maintenance, delivery, information, sales contacts) INLUENCING 03 Reliability 04 Price PATRONAGE 05 06 Continuous supply under all conditions Liberal credit 07 Trade in allowance 7.INTERNATIONAL TRADING EXPORT TRADE - SELLING IN THE INTERNATIONAL MARKET  1. Direct method- the exporter sells directly to its METHODS: international buyers 2. Indirect method - the exporter avails the services of middlemen domiciled in the exporter's country a. Export broker-middleman who bridges the gap between the exporter and importer (go-between) b. Export merchant - buys goods outright from the producers or manufacturers and re-sell them to foreign customers. c. Export agent - merely acts as the selling agent of the producer or manufacturer and whose main function is to promote extensively the sale of products he handles in foreign markets under exclusive agency rights. FOREIGN TRADE BARRIERS 1. TARIFFS AND OTHER TRADE RESTRICTIONS Types of customs duties a. Specific duties - are expressed as specific amount of currency per unit of weight, volume, length, number or any other unit of measurement b. Ad valorem - are expressed as a percentage of the value of the goods. 2. PREFERENTIAL TARIFF - this kind of tariff system provides for a reduction of custom duties on products from a particular country in accordance with an existing trade agreement between the importing country and exporting country. 3. QUANTITATIVE RESTRICTIONS - quotas EXPORT PACKAGING 1. Consumer protection - composition of packaging materials and components, construction, label design and package sizes and content, and whether the package can be re-used or disposed after use 2. For product protection - the package should withstand all kinds of weather conditions as well as rough handling activities