Meaning of Human Resource (HR) and Human Resource Management (HRM)

What is HR (Human Resource)

     Total knowledge, skills, competencies, intelligence, values, attitudes and aptitudes of the employees working in an organisation.

According to Jucius Michael

     "Whole consisting of inter related, inter dependent and interacting physiological, psychological, sociological and ethical components."

What is HRM (Human Resource Management)

• It's management function
• That's helps mangers to recruit, selection, training and developments of manpower of an organization.
• That's also help to manager for employees' remuneration, motivation and growth

Definition:

As per Flippo

• HRM is the planning, organizing, directing, and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resource
• To the end that individual, organizational, and social objective accomplished.

Organization Buying Process: step for organization buying process

Organization Buying Process

Let's start with one example, A Company name by XYZ, they want to packaging machinery, up to now they done by their worker, but it's slow process, and they want to match increase demand they want a fully automatic machinery.

Step 1: Problem Recognition

When company face a problem or need that can be met by acquiring a good or service. As per our example, XYZ company facing problem of slow packaging. Therefore they need a automatic machinery that can match their demand in market. That can be triggered by internal or external stimuli. Other than our example, company want to start new product, expanse their production, or security reason, or sometime government rule triggering stimuli.

Step 2: General need Description and Product Specification

Now, company want to general characteristic and required quantity. If item is complex organization involve engineers, users to define characteristics such as reliability, durability, or price. As per our example, Company involve engineers to understand what  capacity required require, what will maintains cost, what will set up cost.

Now, organization develop item's technical specification. Often, the company will assign a product - value - analysis (PVA) to engineering team. Main aim of PVA is cost reduction that studies components to determine whether they can be redesigned or standardized or made by cheaper methods of production. XYZ company's PVA team will analysis the machinery's specification also work on best cheapest way to solve packaging solution.

Step 3: Supplier Search

Now, company have product description and specification, time to search supplier who meet their needs. Company can search supplier through Internet, trade directories, contact with other companies, trade advertising, and trade shows. As per our example, Company will lookout packaging machine manufacturer in their area, near city or country, they want from outside of company, collect list of suppliers

Step 4: Proposal Solicitation

Now, XYZ company, contact with suppliers and chose some suppliers and asking to submit their proposals. If item is complex or more expansive buyer asking to detail written proposal. After evaluating proposal, company invite few supplier for make formal presentations.

Step 5: Supplier Selection

At this stage, company analysis suppliers, they rate and identify the most attractive suppliers. XYZ company can be give rank to supplier on basis of Price, Supplier reputation, Product reliability, Service reliability, Supplier flexibility.

Step 6: Order-Routing Specification

XYZ, company elected a supplier, now they listing technical specifications, the quantity needed, negotiates the final order, expected time of delivery, return policies, warranties and so on.

Step 7: Performance Review

Now, company take review from end users for machinery's performance and ask for their evaluations. For XYZ company, asking or taking review or machine operator. Sometime company set up incentive systems to reward purchasing managers for good buying performance.

Reference:

Marketing Management by Philip Kotelr

Consumer Buying Behavior: Stimulus-Response Model

Consumer Buying Behavior

By analysis of Consumer Buying Behavior, Company get answer of the following question:

• why consumer make the purchases that they make?
• What factor influence consumer purchase?
• The changing factor in our society ?

Buying Decision process

Step 1: Problem recognition

Buying process start when buyer recognize problem or need triggered by internal stimuli or external stimuli. Internal Stimuli, example, Hunger, need to eat. External Stimuli, example, you see your friend's car and you think you also need a car.

Step 2: Information Search

Sources of information are:

personal: family, friends, neighbor

Commercial: Ads, Website, salespeople

Public: Mass media,

Experiential: handling, examining, using product.

Step 3: Evaluation of Alternatives

Rank/weight alternatives or resume search. May decide that you want to buy laptop, you search company which you aware, and give high rank which like, prefer or satisfied your need. If that brand not satisfied, u go back to information search phase.

Step 4: Purchase decision

After evaluation of alternative, consumer collect information for purchase, for example, where do I get laptop, where is the showrooms, they offer discount, they provide proper service. Than after consumer related attitudes of others in the role played by infomediaries who use various media channels. or second factor is unanticipated situation factors that may erupt to change the purchase intention. than after preferences and even purchase intentions are not completely reliable predictors of purchase behavior.

Step 5: Post-purchase behavior

After the purchase, the consumer might experience dissonance that stems for noticing certain disquieting features of hearing favorable things about brands and will be alert to information that supports his/her decision.

Post-purchase Satisfaction is a function of the closeness between expectations and the product's perceived performance.

Stimulus - Response Model

Marketing and environmental stimuli enter the consumer's consciousness and a set of psychological processes combine with certain consumer characteristics to result in decision processes and purchase decisions.  Major task is to understand what happens in the consumer's consciousness between the arrival of the outside marketing stimuli and the ultimate purchase decisions.

Segmentation Model: Types of Segmentation

Segmentation Model

Segmentation model helping tool for develop database that provide calculations and rankings for identified critical elements that are necessary for meet companies objective within a particular segment.

Company do segmentation because:

• For meet company's objective, like, sales growth and profit.
• To determine the necessary calculations,  grouping and ranking of all customers.
• To identify which of customers are most valuable in the attainment of your objectives.
• Developed and executed properly, provides a very clear understanding to the target group, What the objectives are, how the model work

Type of market segmentation

Geographic segmentation

Segmentation by Geographic criteria, Like, Nations, Stat, regions, city, etc. Demographic data with geographic data to create a more accurate profile. For example, KFC, Started to add vegetable dish in menu. With respect to region, in rainy regions merchants can sell things like raincoats, umbrellas, in hot regions, can sell summer clothing.  Small or local merchant can sell product cording to local people preference.  

Demographic segmentation

Segmentation can be done by on basis on age, gender, occupation and education level etc. for example, sport bike target youngsters, luxurious  car target business men/ top level executives. Demographic segmentation divides markets into different life stage groups and allows for messages to be tailored accordingly.

Behavioral Segmentation

Segmentation can be done on basis of knowledge, attitude, usage rate, responses, status, etc. Marketers believe that behavior variables are the best starting point for building market segments.

Psychographic segmentation

Segmentation can be done by on basis of lifestyle, interests, opinions of customers. It considers how people spend their leisure (relaxation ). Psychographics are very important to segmentation, because psychographics identify the personal activates and targeted lifestyle the target subject endures. or image they are attempting to project.

Process of Marketing Research

Marketing Research

Step 1: Define the problem and Research Objective

• What is to be researched?
• Why is it to be research?

Working on this two question will be define research objective/problems. Purpose of research is to generating meaningful information, which will help in taking effective decision.

Step 2: Develop the research plan

Next step to generating required information. 

Data Source: Gather secondary data, primary data or both. Secondary data are data that were collected for another purpose, and already exist somewhere. Primary data are freshly gathered data for a specific purpose or for a specific research project.

Primary Data collected by:

• Observational Research: collect fresh data by observing the as the they shop or they consume product, hold informal interview sessions.
• Focus Group Research: Called five to ten people to discuss about product, service, organization spend few hours on discussion, under skilled moderator.
• Survey Research: This is one of the best descriptive research. Company conduct surveys to learn about people's knowledge, beliefs, preferences, and satisfaction. it required development of a survey instrument, usually a questionnaire, which the respondents are asked to fill up.
• Experimental Research: Most scientifically valid research. Purpose of doing experimental research is to capture cause-and-effect relationship by eliminating competing explanations of the observed findings.

Research Instruments:

• Questionnaires: Most common instrument for collect primary data. It's consists of a set of questions presented to respondents.
• 
  
• Qualitative measures: Qualitative research techniques are relatively unstructured measurement approaches that permit a range of possible responds. Their variety is limited only by creativity of the marking researcher.

Sampling Plan:

Research must design a sampling plan.  

• Sampling unit: Who should we survey?
• Sample Size: How many people we survey?
• Sampling Procedure: How should we choose the respondents?

Step 3: Collect the information

The data collection phase of marketing research is generally the most expensive and the most prone to error. Four major problem arise in survey. Some responded refuse to co-operate, Some give dishonest answer, some will not be at home and must be contacted again or replaced, some will be biased.

Step 4: Analyze the information

Researcher test different hypotheses and theories, applying sensitivity analysis to test assumption and the strength of the conclusions.

Step 5: Present the Findings

At last, researcher presents findings relevant to the major marketing decisions facing management. they are also considering ways to present research findings in as understandable and compelling a fashion as possible.

Step 6: make Decision

Research findings only provide additional information and insight the mangers. Depending on their confidence in the findings, mangers decide to use it, discard it or carry out more search.



Source: Marketing Management by Philip Kotler

Distribution Chanel: Function of Channel

Distribution Channel

Distribution Channel is a set of different independent organization(intermediate) which involve in process of making product(Service) available for customers.

Functions of channel

• gather information about current customers, competitors, and other actors and forces in the marketing environment
• Place orders with manufacturers.
• Acquire the funds to finance inventories at different levels in marketing channel.
• Assume risks connected with carrying out channel work
• Provide for the successive storage and movement of physical products.
• provide for buyers' payment of their bills through banks and other financial institutions.

Design Channel

Step1: Analyzing Customers' desired service output levels

Target customer want:

Lots size: can buying large size, a household wants a channel that permits buying a lot size of one.

Waiting and delivery time: Customer prefer faster and faster delivery channel.

Spatial convinces:  Specially for Indians, taking order on phone and give home delivery.

Product variety: Customers prefer a grater assortments because more choices increase the chance of finding what they need.

Service backup: credit service, repairs provide by channel.

Step2: Establishing Objectives and Constraints

Channel objective in terms of targeted service output level. Channel arrange like minimize total channel costs and still provide desired levels of service outputs.  Channel objective vvary with product characteristics.

Step3: Identifying and evaluating major channel alternatives

Company have to chose wild verity of channel to reach customers, Like, sales force, distributors, dealers, direct mail, telemarketing, and the internet. A channel alternative is described by three elements:  the types of available business intermediaries, the number of intermediaries needed, and the terms and responsibilities of each channel member

Role of Channel members

Retailer: Organization that sell product direct to the customer. Marketing of companies product by put holding, lift let, Brochures.

Wholesalers:  Organization that purchase product from manufacture or industrial distributors and sell to reseller. Wholesalers, bring risk, carry large stock, promote companies, match supply and demand, collect market information.

Industrial Distribution: Example include Business to Business marketing, selling product to industrial suppliers.

Why Channel Members:

Reduce exchange time: exchange time includes physical goods, payment, information.

Retailers' are more touch with customer, make relationship with customers and generate sales for companies'

Market information: They are dealing with real market, they provide information about market condition, product value, and about competitors

Cost Saving in specialization: wholesaler/retailers know what they do. They perform their task at lower cost, and they have own build market.

Wholesaling: types of wholesalers

Wholesaling

Wholesaling includes selling goods/service to re-seller. They are different from retailers, Wholesalers pay less attention to promotion, atmosphere, and location, because of they are dealing with business customer rather than final consumers. Wholesaler transaction are usually larger then retail transitions.  Wholesalers usually cover a large amount of goods than retailers. On government regulations and taxes are differently in retailers.

Why Wholesalers

Selling and promoting: wholesalers' sales forces help manufacturers reach many small business customers at a relatively low cost. they have more contacts and buyers often trust them more than they trust a distant manufacturer.

Buying and assortment building: wholesalers are able to select items and build the assortment their customer need, saving them considerable work.

Bulk breaking: wholesalers achieve saving for their customers by buying large carload lots and breaking the bulk into smaller units.

Warehousing: hold inventories. Reduce inventory costs and risks to suppliers and customers.

Transportation: wholesalers can often provide quicker delivery to buyers.

Risk Baring: Taking title and bearing the cost of theft, damage, Spoilage and obsolescence.

Types of Wholesaler

Merchant wholesalers: They are full service and limited service distributors, mill supply houses. Independently own businesses that take title to the merchandises they handle.

Full-service wholesalers: Maintain sales and sales force, carry stock, offer credit, provide management assistance.

Limited-service Wholesalers: Sell a limited line of fast-moving goods to small retailers for cash. Deliver goods to supermarkets, hospitals, restaurants, hotels.

Specialize wholesalers: For example, agricultural assemblers, petroleum bulk plants and terminals, auctions companies. 

Retailing: types of Retailing

Retailing

Retailing include sell product to final customers.

Type of Retailing:

Speciality Store: Narrow product line. Selling a specific good for example, Electronics shops, Home decor, Toys store, Gift store, medical shops, Garment shop.

Department Store: Several product lines. where you get more than one categories product, for example, Big Bazar, Reliance super, Centre mall .

Supermarket: Where customer get, large, low-cost, low margin, high volume, self-service store designed to meet total needs for food and household product

Convenience store: Small store, which you may find hear to your home. Limited line of convenience products.

Discount store: Standard or speciality merchandise: Low-price, Low-margin, high-volume stores. D-mart, Wal-mart.

Off-price retailer: factory outlets, sold at less than retail. Kolar, Apple store, Pentaloons.

Retailing also divide basis on service

Self-service: Customer chose by their own choice. all major store, like wal-mart, Big bazar.

Self-Selection: Customer find their own goods although they can ask for assistance.

Limited Service: Customer need more information and assistance. Include more shopping goods and service such as credit and merchandise-return privileges.

Full service: Salespeople are assist you in every phase of the selection process.

Public Relation: Tools

Public Relation

Company relate to large number of interested public. Public, any group that have potential and interest on companies ability to achieve its target. There are some function which perform under public relation:

1. Press Relations- News and information about organization in the most positive light.

2. Product publicity- Sponsoring efforts to publicize specific products

3. Corporate Communications- Promoting understanding of the organization through internal and external communications.

4. Lobbying: Dealing with legislators and government officials to promote or defeat legislation and regulation.

5. Counselling- Advising management about public issues, and company positions and image during good time and bad.

Major Tool in Marketing PR

Publications:  Companies rely extensively on publish materials to reach and influence their target markets. Like, Annual Reports, Articles, Brochures, Magazines and Audiovisual material

Events: To caught attention for new product or company, arranging special events, like, news conferences, seminars, outing, trade shows, exhibits, contests and competitions, anniversaries.

Sponsorship: Companies promote their brands and corporate name by sponsoring sports and cultural events and highly regarded causes.

News: One of the major tasks of PR professionals is to find or create favourable news about the company, products and its people.

Speeches: increasingly, company executives must field questions from the media or give talks at trade associations or sales meetings, and these appearances can build the company's image.

Steps for making effective public relations:

1st: Make Objective: PR can be Awareness, Credibility, Enthusiasm. Company have to set goal or objective for marketing public relation.

2nd: Chose Messages and Vehicles: After electing objective, company have to decide how to reach target market and what deliver to target market.

3rd: Implement Plan And Evaluating Result: It's difficult to measuring PR, the easiest measures of marking PR effectiveness is the number of exposures carried by the media. Publicists supply the client with a clipping book showing all the media that carried news about product and summary statement. This is not effective tool to get result because it contain no indication of how many people read, heard, or recalled the message.

A better measure is the change in product awareness, comprehensions, or attitude resulting from the PR Campaning.

Sales Promotion: tools and evaluation

Sales Promotion

Select Objective:

The major objective of sale promotion are : (for Consumers)

• ·         Encourage consumer to purchase of large-size units
• ·         Building trial among nonusers
• ·         Attracting competitors customer to switch our product by building trial

Objective for retailers:

Carry new items and higher levels of inventory,

• ·         Encouraging off season buying,
• ·         Encouraging stocking of related items
• ·         Offsetting competitive promotions
• Objective for Sales Force
• ·         Encouraging support of new product and model
• ·         encouraging more prospecting
• ·         stimulating off-season sales

Selecting Consumer Promotion Tools:

Major consumer promotion tools are:

• ·         Samples: Free amount of product or service
• ·         Coupons: Saving on purchasing product
• ·         Cash refund offers (Rebates): price reduction after purchase
• ·         Premiums (Gift): low cost or free incentive to purchase of particular product  
• ·         Frequency Program: rewards on frequency in purchasing company's product
• ·         Prizes (contests, sweepstakes, games): Prize like to win gold coin, cash, trips on purchasing something.
• ·         Product warranties: it's promise from company to buyer, they will fix it or refund the money during a specified period
• ·         Tie-in Promotion: two or more companies team up on coupons, refunds
• ·         Cross-promotions: using one brand to advertise another non-competing brand

Selecting trade promotion tools

• ·         Price -off : discount off the list price on each case purchased during stated time period
• ·         Free Goods: offers of extra cases of merchandise to intermediaries who buy certain quality or who feature a certain flavor or size

Major business and sales-force promotion tools

• ·         trade shows and conventions: participate in trade shows and conventions
• ·         Sales Contests: Gives chance to get extra income or gift to sales personnel for getting sales target

Evaluate

Manufactures can evaluate the program using sales data, consumer surveys, and experiments. Sales data helps analyze the types of people who took advantage of the promotion, what they bought before the promotion, and how they behaved later toward the brand and their brands.

Consumer surveys can uncover how many recall the promotion, what they thought of it, how many took advantage of it, and how the promotion affected subsequent brand-choice behavior.

Experiments vary such attributes as incentive values, duration, and distribution media.

Advertising - Planning, Execute, Evaluation

Advertising - Planning, Execute, Evaluation

Planning:

Setting Advertising Goal: What's aim to do advertising? whether their aim is just inform about product,  persuade, remind or reinforce.

Deciding on the advertising budget: How does company know, how much to spend? Company have to know where to spend, where to target. industrial companies underestimate the power of company and product image building and under spend.

Execute

Developing the advertising campaign: Advertisers go through three steps: Message generation and Evaluation, creative development and execution(TV ads, Print ads, Radio ads, Firm ads), Social-responsibility review.

Selecting Media: Advertiser always search low cost media to attempt target audience.   

Deciding on media timing and allocation:

Continuity: ads appear evenly throughout a given period. Frequently purchased items, and in tightly defined buyer categories

Flighting: calls for spending all the advertising budget in a single period. This type of ads basically for those product which selling on season.

Pulsing: Its continuous advertising at low weight level reinforce periodically by waves of heavier activity. Those who favor pulsing believe the audience will learn the message more thoroughly, and at a lower cost to the firm.

Evaluating:

Communication effect research: Marketer should perform test, before ad and after ad.

Sales effect research: What sales are generated by an ad that increases brand awareness.  

Share of expenditures -> share of voice -> share of mind and heart -> share of market

Steps For New Product Development

Steps For New Product Development

Step one: Idea Generation:-

product development start with one of idea. Idea can come from interacting with various groups and using creativity-generating techniques. For example, Karshanbhi Patel, founder of Nirma Washing Powder, his idea to deliver Washing powder at lower cost.

Idea comes from different direction.

Scan and analysis of customers problem which they are facing.

Market Research

Suggestion from target audience, employee, partners

Mind mapping

New idea arise from lateral marketing that combines two product conepts or ideas to create new offering.

For example

Gas station stores            = gas stations + foods

cyber cafes                         = cafeteria + Internet

Sony Walkman                  = audio + portable

2nd Step: Idea Screening:-

Screening idea means look out suitability, look at ROI, affordability, market potential. before investing on idea, need to consider this all possibility

In Company, Idea avoid idea in two times of errors: DROPS- error, it's occurs, when company rejected good idea without understand it. : GO-error, company permits a poor idea to move into development and commercialization.

3rd Step: Concept Development and testing:-

Product idea convert into several concepts. like, who will use this product?, What primary benefit should this product provide?, When will people use product?

Product testing means preparing and presenting product concept or physically, and offer to customer and analysis the reaction of product. The more the tested concepts resemble the final product or experience.

4th Step: Develop Marketing Strategy

Marketing strategy at primary stage can be divided in three part, First: Target Market Size, Structure and behavior. Second: outline plan price, distribution strategy, and marketing budget for a year. Third:  plan for long-run sales and profit.

5th Step: Business Analysis:-

After development of marketing strategy and product concept, time to analysis business attractiveness. look at out, the cost, sales, and profit that satisfy company's need.

Their need to be check Estimated total sales, estimated cost and profit, Risk analysis, breakeven analysis. If result are satisfactory time to move to the development stage.

6th Step: Product development:-

After product approval, next stage to technical and R&D. In R&D, a prototype (Limited model) model will be created. Its goal to find safety, design and specification.

Customer tests, when prototype is ready, it's go to customer test before they enter the market. Basically, company do two type of testing, Alpha testing: the product testing within the firm to see how to performs in different applications. Beta testing: with customers.

7th Step: Test Marketing:-

Test marketing is different from consumer test. In test marketing, company chooses few representative cities, and the sales force tries to sell the trade on carrying the product and giving it good shelf exposure.

The company puts advertising and promotion campaign similar to the one it would use in national marketing. Test marketing measure, the impact of alternative marketing plans by varying the marketing program in different cities.

8th Step: Commercialization (Launch)

When the concept has been developed and tested, Final decision need to be made to move the product to its launch into the market. Most new-product campaigns rely on sequenced mix of market communication tools.

When(Timing), Where(Geographic strategy), To Whom (Target-market), How (Introductory  market strategy)

Pricing: objective: Methods

Pricing

Objective

Why company set price? this question comes in mind. their some of the objective give idea about set price

1. Company set price to earn Profit. Aim of company to manufacture product sell to customer and earn profit. in short, Maximize Profit. Profit may be long-run, or short-run.

2. Company set Price to increase sales volume. Company facing competition, over capacity, consumer mind set, Therefore company have to survive. For Survival company have make pricing strategies.

3. Company set price to grab maximum market. to increase market share.

4. Ultimately, Company have to grow

5. Company unveiling a new technology favor setting high price to maximize  market skimming. For example,  Sony introduced the world's first high-definition Television (HDTV) in Japan.

Pricing Methods

1. Mark up Pricing: Most preferable method is mark up pricing. Add a standard mark up to product's cost.

one of company's cost

Fix Cost                                10 $

Variable cost      300000$

expected unit sales = 50000

Unit Cost = Variable Cost + (fixed cost/unit sales) = 16$

Now, suppose manufacturer want to earn 20% on sales.

Mark up Price = unit cost/(1-desire return on sales (20%)) = 16/(1-0.2) = 20$

2. Target-Return Pricing:  Firm determines the price that would yield its target rate of ROI. For example, Company want to achieve a 20% ROI specifically $200000

Target Return Price: unit cost+ (desired return x invested capital)/unit sales

                                                    =16+ (0.2 x 1000000)/50000 = 20$

3. Going-Rate Pricing: It's price largely on competitors' prices. Changing more or less than major competitor/s. This method is quite popular. Where costs are difficult to measure or competitive response is uncertain.

4. Auction-Type Pricing: Growing more popular, specially on internet. Best example is Ebay.

   

How to Built Brand: Brand Building Strategies

Brand building strategies

According to the American Marketing Association (AMA), A Brand is "name, term, sign, symbol, or design or  combination of them, intended to identify a goods and services of one seller or group of sellers and to differentiate them from those of competition."

What can be Branded

Physical Goods: best known and highly regarded consumer products, like Coca-Cola, Mercedes-Benz, Nescafe, Sony etc.

Service: British Airways, SOTC travel, Fdex, etc. are strong brands existed for yers, the pervasiveness of service branding.

Retailers and Distributors: Sales India (for electrical, in Baroda, Gujarat (Inida)), Mobilewala (for mobile phone, Baroda Gujarat), Barafwala (Distributor of feeding shop, Bahruch Gujarat(India) ) are some example of retailers and Distributors who are brand in local market.

People: actors, politician, religion masters

Sport art and entertainment: Cricket, football, Star Wars,  

Geographic Location: Gir national park, Gir Gujarat, Safari SA,

Steps to Build Brand

First: Define your brand:

At this stage have to give answer of question "Who are you?", awareness of brand. For example, how often and how easily the brand is evoked under various situations and circumstances. you need to know what your brand stands for and you want to contributing to environmental, social, and economic wellbeing of consumers.

Second: Differentiate and Position your Brand

At this stage have to give answer of question "What are you?". need to give performance in primary characteristic and secondary futures, product reliability, suability, serviceability, efficiency, style and design, price. Create image for user profiles, purchase and usage, situations, personality and values, history, heritage and experiences. Once a come up with unique value proposition, you should use a good branding strategy to position your brand in a way that will help consumers see and appreciate the gather value of brand over competing once in the market.

Third: Response of Brand

At this stage have to give answer of question "what about you?" Analysis brand respond by brand judgments and brand feelings.

Brand judgments are customers' personal opinions about and evaluations of the brand, which consumer form by putting together all the different brand performance and imagery associations. Brand judgment may be basis on quality, credibility, consideration, and superiority.

Brand feelings are customers' emotional responses and reactions to the brand.  it's also relate to the social currency evoked by brand. Feeling basis on warmth, fun, excitement, security, social approval, self-respect.  

Fourth: Relationship (personalize)

If want to brand build to be successful, then have to personalize it. At this stage have to give answer the question of "what about you and me?". In brand building, invite customers to be co-creators of brand values so that they can feel that they also own it and relate with it. At this stage you have to give consumers reason to participate and engage with your brand for a lifetime.

Product Life Cycle: PLC

PLC: Product Life Cycle

Through PLC company will know

• Product have a limited life
• Product sales pass through distinct stages, each posing different challenges, opportunies, and problems to the seller
• Profit rise and fall from different stages of the plc
• Product required different marketing, financial, manufacturing, purchasing and human resource strategies in each plc stage

PLC is in curve shaped, this curve is typically divided into four stage: Introduction, growth, maturity and decline.

Introduction: This is most costly stag in PLC, in this stage company introduced new product, built market. The size of market product is small, therefore profit also low.

Growth: Strong growth in sales and profit. Company built brand preference and market shares

Maturity: A slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profit stabilize or decline because of increased competition. This is probably the most competitive time for most products or businesses, to maintain market share need to invest wisely in marketing. Need to product modification or improvements which might give them a competitive advantage.

Decline: Product will start to shrink, sales show a downward drift and profits erode.

Example:

Introduction stage: 3D TVs

Growth Stage: LED TVs

Maturity Stage: DVD

Decline Stage: CD

BCG Matrix

BCG Matrix

BCG Matrix is based on the company's business units that divided in to four categories based on combinations of market growth and market share. This model developed by Bruce Henderson of the Boston Consulting Group in 1970's.

In this metrix consider two factors important for the growth and success of firm one is market growth rate and another is relative market share.

Market Growth Rate is the overall industry's growth rate, as much high it is that much attractive it is to be in that business and leads to consumption of cash.

Relative Market Share is the firm's market share in comparison to the market leader in that sector and lead to the generation of cash.

There are divided into four segments on the basis of different combinations.

Question Mark: When high market growth rate and low relative market share that time business under question mark. Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market share they do not generate much cash. Question mark also know as problem child.

If potential to gain market share and become star and eventually a cash cow.  when the question mark does not succeed it, market growth decline, it will degenerate into a dog.

Question Marks must be analyzed carefully in order to determine whether they worth the investment required to grow market share.

Star: A business unit comes under stars when both its market growth rate and relative market share are high. Stars generate large amount of cash, if a star can maintain its large market share, it will become a cash cow when the market growth rate declines.

the portfolio of a diversified company always should have star that will become the next cash cow and ensure future cash generation.

Cash Cow: As leader in a market, cash cows exhibit a return on assets that is greater than the market growth rate, and thus generate more cash than they consume.

Business consume less funds as market growth is slow but it is generating more funds as it ahs dominance in the market share because of its experience in market.

Because the cash cow generates a relatively stable cash flow, its value can be determined with reasonable accuracy by calculating the present value of its cash stream using a discounted ach flow analysis.

Dog: Business which have low relative market share and slow market growth. Thus neither generate nor consume large amount of cash.

Dogs are cash traps because of the money tied up in a business that has little potential. such business are candidates for divestiture.

Limitation

BCG Matrix is not much relevant as per today's market. There are other factor also affected rather than market growth rate and market share. like number of competitor, market size, sector of the business etc.

BCG Matrix shows that each business unit is independent of the others. In some case, business unit that may be helping other business units gain a competitive advantage.

Matrix depends on breadth of definition of market. a business unit may dominate its samll niche, but have very low market share in the overall industry.

Role and Relevance of Segmentation and Positioning

Segmentation

As per Philp Kotler segmentation is "Market segmentation is the sub dividing of a market into homogeneous sub section of customer where by sub section may conceivably be selected as a market target to be reached within a distinct marketing mix"

Company rarely Satisfy everyone in a market. Therefore marketer want to start dividing the market in segment. Everyone not go to same hotel, resort, restaurant. Not drive same Car/Bike.

Therefore marketer divided market by:

Geographic Segmentation: It's basis on geographical area like, Nation, State, City Etc. For example, KFC add pure vegetarian dish in his menu for Indians.

Demographic Segmentation: Basis on age, gender, income, family size, education, occupation etc. For example, BlackBarry mobile phone, targeting Business personal, Sport Bike targeting youngsters.

Psychographic Segmentation:  Basis on personality, status, lifestyle, social class etc.  For example, Rolex watch, targeting high profile customer, luxurious lifestyle.

Behavioral Segmentation: Basis on customer buying behavior, like customer usage rate, type, occasions, loyalty, Benefit sought. For example Sensodyne tooth pest targeting those customer who have sensitive teeth.  

Benefit of Segmentation:

Reduce Risk

Increase Market Focus

Increase Market Efficiency

Target Market

Once a company decide segment market, it must decide how many and which ones to target. that's also call targeting group.

Suppose Ms are Market Ps are product in below figure

1. Single - Segment Concentration: Company focus on one product for one market

     m1     m2     m3

P1

P2 *

P3

2. Selective Specialization: Company focus on different product in different market, for example, P&G

     M1     M2     M3

P1                           *

P2 *

P3              *

3. Product Specialization: Company target different market for one product. for example Colgate tooth pest, offers for sensitive teeth, child pest etc

     M1    M2     M3

P1

P2 *       *             *

P3

4. Market Specialization: Company target different product for same Market. for example Colage provide all dental care, like tooth brush, tooth pest, mouth wash.

     M1     M2    M3

P1 *

P2 *

P3 *

5. Full Market Coverage: Company offer all product for all market, for example TATA Group, Microsoft, GM, Coca-cola.

     M1     M2    M3

P1 *       *             *

P2 *       *             *

P3 *       *             *

Understand Your Market And Competitor

Understand Your Market And Competitor

There are best way to understand market by conduct market research.  major three way to we conduct market research

1. Secondary Research (Desk Research): collect information throw existing information like internet, research paper, industrial publication etc.

2. Field Research (Primary Research): Collecting information by yourself by using survey, questionnaire, and other research tools.

3. Commercial Agency: hire external research agency who conduct research for you.

There is another way to analysis where our company stand for. that is SWOT analysis  

S for Strength: analysis what are our strength of our company. strength can be anything, like row material, place, service etc.

W for Weakness: analysis where our company not doing well compare to competitor, and how to overcome or minimize it.

O for Opportunity: continues searching in which area we can served. always finding new area and new uses of product

T for Threats: time to time scan market for new technology, substitute are eating our market.  For Example,  few years Mobile phone is Threat for Camera, Walkman industry.

Competitor: competitors as companies that satisfy the same customer need.

Macro and Micro Environment Effect Marketing

Environments And Their Influence On Marketing

Basically, there are three type of Environment Macro, Micro, Internal. This environment directly or indirectly affect the activity of marketing, Organization can control some of environment and some are not.

Macro Environment

1. Political Environment : Government regulation affecting marketing by regulation of pricing, tax policy, trade, tariffs, and political stability. Government also control influence on the health, education, and infrastructure of nation

Example: Indian government control on ads of tobacco, and Band on TV ads of smoke

2. Economical Environment: When time are good, sales also good, But, when time are bed, need to focus on marketing strategies and promotions. Economical condition of nation determining how much expendable income your consumer base has to spend and how much fear they may have about spending it. There are others factor like, economic growth, interest rates, exchange rates and inflation rate.

3. Social Environment: Social and cultural factor are important to consider while making and implementing  marketing strategy of product. it includes culture, awareness, health conscious, population growth rate, age.

4. Technological Environment: R&D activity, rate of technology change, automation, how fast accept technology, technology sift cost, innovation.

Example: Internet marketing growing very fast.

Micro Environment:

1. Customer: Marketing plan should aim to attract and retain customers through products that meets  "needs and wants" of customers.

2. Suppliers: Suppliers provide businesses by providing raw material.  for example, an increase in raw material price will affect an organisation's Marketing Mix strategy and may even force increase price. Close supplier relationship are effective way to remain competitive and secure quality products.

3. Competitors: Can the organization offer benefits that are better than those offered by competitors? Does the business have unique selling point (USP)? Competitor analysis and monitoring is important to maintain, improve position within the market.

4. Shareholders: Company need investment to grow. shareholders want to return from the money which they invested. shareholder pressure to increase profits. This pressure accept organisational strategy.  

5. Employees: Employing staff with relevant skills and experience in essential. Training and development play a critical role i achieving a competitive edge. If employs staff with motivation, skills or experience it will affect customer service and ultimately sales.

Marketing Mix : 4 Ps of Markeing : four Ps

Marketing Mix

4ps

Marketing mix help to understand of integrated marketing program to create, communicate and deliver value to customer.

Marketing mix help to make decision for influencing their end consumers and channel partners.

Product: 

which product we offer to our customer: Tangible (Goods) , Intangible (Service)

Variety of product	Product quality
Product design	Product future
Band	Packaging
Size	Warranties and return

Price:

Price is numeric value of product for that buyer have to pay.

Price on:

List of Price: the value on package, which depend on  distribution plan, value change cost, and how to defend rival.

Discounts            Allowances         Payment period                               Credit terms

Promotion:

Promotion is communication for targeting market, its create companies' stand for,

Promotion include:

Sales promotion               Advertising         Sales force          Public relation   Direct marketing

Place:

Place means, how to provide product to customer, how to end user get the product

Place include:

Distributors        Channel partners             Locations 

Reference: 

Marketing Management by Philip Kotler