MMS Notes

PR (Public Relations)

2009-07-15T12:51:00.006+05:30

PUBLIC RELATION

“Public Relations is defined as helping an organization and its publics adapt mutually to each
other.”

Public relations is a planned and sustained activity to help an institution create a social climate
favorable for its growth. It is based on the fundamental belief that the survival of any enterprise, public or private depends today on the sensitive response to changes in public opinion.

The International Public Relations Association defines public relations as “Public relations is the
art and social science of analyzing trends, predicting their consequences, counseling organisation leaders and implementing planned programmes of action which will serve both the organization’s and the public interest.”

Public relation is a two way process. On the one hand it seeks to interpret an organization to
society while on the other it keeps the organization informed about the expectation of the society.
Fundamentally public relation is a means by which an organization improves its operating
environment.

ROLE OF PUBLIC RELATIONS

Public relations people have the role of being always in the middle – pivoted between their
clients/employers and their publics. They must be attuned to the thinking and needs of the
organizations they serve or they cannot serve well. They must be attuned to the dynamics and
needs of the publics so they can interpret publics to the clients, as well as interpret the clients to
the publics.

ORGANIZATIONAL ROLE & FUNCTIONS: 10 BASIC PRINCIPLES

We can describe the function and role of public relations practice by stating ten basic principles:

1. Public relations deal with reality, not false fronts. Conscientiously planned programs
that put the public interest in the forefront are the basis of sound public relations
policy.(PR deals with facts, not fiction.)

2. Public relations is a service-oriented profession in which public interest, not personal
reward, should be the primary consideration. (PR is a public not personal, service.)

3. Since the public relations practitioner must go to the public to seek support for
programs and policies, public interest is the central criterion by which he or she
should select these programs and policies. (PR practitioners must have the guts to say
no to a client or to refuse a deceptive program.)

4. Because the public relations practitioner reaches many publics through mass media,
which are the public channels of communication, the integrity of these channels must
be preserved. (PR practitioners should never lie to the news media, either outright or
by implication.)

5. Because PR practitioners are in the middle between an organization and its publics,
they must be effective communicators – conveying information back and forth until
understanding is reached.

6. To expedite two-way communication and to be responsible communicators, public
relations practitioners must use scientific public opinion research extensively. (PR
cannot afford to be a guessing game.)

7. To understand what their publics are saying and to reach them effectively, public
relations practitioners must employ the social sciences – psychology, sociology, social
psychology, public opinion, communications study and semantics. (Intuition is not
enough.)

8. Because a lot of people do PR research, the PR person must adapt the work of other
related disciplines, including learning theory and other psychology theories,
sociology, political science, economics and history. (The PR field requires
multidisciplinary applications.)

9. Public relations practitioners are obligated to explain problems to the public before
these problems become crisis. (PR practitioners should alert and advise, so people
won’t be taken by surprise.)

10. A public relations practitioner should be measured by only one standard: ethical
performance. (A PR practitioner is only as good as the reputation he or she deserves.)

WHO NEEDS PUBLIC RELATIONS?

The diverse institutions and individuals requiring professional Public Relations go beyond
the more traditionally defined corporate world. Who are they? And Who are the “Publics”
of Public Relations?

Following are the main “publics” of Public Relations:

A College or University: A public relations expert needs to defuse those crisis situations
where student bodies could be in revolt over demands, where there is a change in
educational policy, where something could be wrong with the examination papers or
simply when, in interaction with State and Central Governments, grants have to be sought
or when a college organizes intercollegiate festivals.
Case: public relations for college festivals like Kshitij – Mithibai college, Brouhaha of
sidnam college, Drishti of Narsee Monjee college.

A Newspaper: Some of the better newspapers have Public Relations Staff quite separate
from the advertising department or the marketing people.

A Non-Profit Body: From the point of view of the organisation, whether it is Rotary,
UNICEF, the Institute of Cerebral Palsy, the Red Cross, or any number of charitable and
cultural and social service organizations, a Public Relations cell is an integral part of the
institution. It has to interact with a number of bodies for its very existence, for the support
of its causes, for mis-understandings that can crop-up as, at every stage it is public money
at stake.

An Individual: An aspirant to a political post needs it, so does a person standing for president-
ship of a chamber of commerce. So does an actor, a producer or a gallery owner, or a non-
resident who is seeking to make a mark in the Indian business circle.

A Cause: The problems exist – AIDS, drugs, population explosion and other environment
concerns, slums, poverty of every sort, child abuse, women’s rights on abortion and property and marriage laws, the handicapped, uneducated – and the champions and doers for these causes are only in thousands, not in millions. If PR agencies unite and pool in their resources they can help in tackling such problems.

CORPORATE BODIES:

Corporate organizations constitute bulk of recognized Public relations activity involving
numerous publics.

• Employee Interaction:

The most important “public” of Public Relations activity in a corporation is the employee. He is
vital in a more crucial way than people imagine. The employee could be viewed as a decision-
maker, someone who cannot merely be a target for communication but who would also be
dictating the direction in which the company moves. Which means that the Public Relations
Practitioners cannot be mere purveyors of information, but have to ensure an involvement and
participation of and direction from employees. Employee aspirations have soared as a result of
which a PR expert has to remember some basic tenets. He has to ensure the least amount of
secrecy and holding back of information. He has to cater to many strata of employees, he has to
convey the company’s plans, ideas, projects and vision, and also ensuring better communications
during a crisis. Effective Public Relations begins at home!

• Shareholder Interface:

A shareholder relation is a key aspect of corporate Public Relations. Shareholders, particularly
those who have stayed with a company for many years because they value their investment in it, deserve more than just the statutory annual report, interim report or ‘not well’ shareholders visits to the company which turn out to be a mere picnic. A well-treated shareholder can do a lot for the company’s image in terms of his feedback to his peer group. For, armed with his detailed
knowledge of the company’s financial status, twinned with the kind of “treatment” the company
the metes out to him in terms of goodies like shareholders meets and gifts and information, he
can be a better ambassador of the company than the organisation could ever imagine. Also now
there are new investor associations, which are championing the rights of shareholders. This is an
issue companies need to be aware of so that their interaction can extend beyond shareholders to
these associations.

Example: Balrampur Chini

The “Stretch” philosophy of Balrampur Chini Mills, is yet another inspiring example of public
relations. Stretch is the philosophy of the company, their baseline and also the attitude that
reflects everything they do, according to their Managing Director Vivek Saraogi. It is used as the
title of their annual reports; it is also a pocket-sized document that is sent out to a few thousand
people encapsulating anecdotes that have compiled with great sensitivity. These anecdotes
embody the Stretch philosophy, as you would apply it to everything from uncompromising
integrity to stretch as a boon, as an education. It has inspired the depressed individual as well as
the corporate chief alike.

The annual report for they year 2000-01 gives an overview of the sugar industry and the role of Balrampur. In the new scenario of progressive de-regulation, the future of the industry in the
international context and then goes into the Measurement of Value, the requirements of
Corporate Governance, analytical reports and a focus on Community Development. The 68-page report leaves no stone unturned, giving an invaluable picture without actually doing any pictorial spreads.

Consumer Consciousness: Where public relations comes in, when marketing products is
concerned, is in revealing the character of the company that is behind a product. It could be
summed up as the reassurance factor beyond brand image. Llew von Essen in his Handbook of
Public relations quotes, “Public Relations Techniques can be effectively used to put the
company’s side of picture across; to explain marketer’s problems, talk about product complexity, review market conditions and pressures, show how good companies are in combating these
pressures and above all highlight how the consumer benefits from product improvement,
research and keen competition.

Dealer Dealings: Most of the companies, especially those with large dealer networks, have no
integrated approach to communicate or formulate a corporate personality in the minds of the
dealers. However, a handful of companies have through their Public Relations efforts, instituted
even such things as financial funds for dealers that have served them well when they have they
have required sums of money for, say, a wedding in the family or a crisis arising out of an
accident.

• Media Monitoring:
The area, which occupies considerable amounts of time for any Public Relations department is
the relationship with the media. To many people, this is probably the only function of a public
relations person. To the Chief executive, this is the area, which is likely to create the greatest
problems. To the public relations expert, this is what brings in the best opportunities to
communicate the product-policy-plan conundrum of the company through well-mustered plans.
To the journalist or the television producer, it is sometimes a reactive situation of reviving
unsolicited plugs, but also one, which could provide material for analysis, projection of industrial
progress and background for potentially explosive stories.

• Government Goodwill:
When public relations was in its infancy, the strongest focus, and perhaps the need of the day,
was lobbying with the powers that be. Today, the needs of the company to interact with the
policy makers, not just through their government liaison departments, but also through their
public relations managers who are expected to be able to study the complete picture and present not just a case for license but a total image package.

BENEFITS OF PUBLIC RELATIONS

1. Prestige or ‘favourable image’ and its benefits
The familiarialty and reputation of its name are among the greatest assets of any organization –
whether it deals directly with the public or not. Everyone is influenced by Reputation because
reputation in industry can rarely be one without true accomplishments.

2. Promotion of products and services
Telling people about products and interesting them, in purchasing requires more than advertising
efforts. People’s tastes and desires are developed by the unobtrusive influences by them. These
unobtrusive, non-selling influences have an immeasurable effect on their desire to buy.

3. Determining the organization’s posture in dealing with its publics

Increasing sophistication had modified how organizations have approached their relations with
various groups. There are 3 major conceptions of that role:

1) To master the publics; to direct what they think and do, according to the desires of the
organization involved

2) To block; to react to developments and problems, to respond to events or the initiatives of
others by blunting them

3) To achieve mutual adaptation; to develop relations of mutual benefits all parties involved
In the present human climate, achieving mutual adaptation, has become the most widely taken
course.

4. Fostering the Goodwill
Goodwill of:
- The employees
- Communities in which the organization has units
- Stockholders
- Suppliers
- Government
- Rest of the industry
- Dealers
- Customers
- Supporters

5. Helps in building Brands

Building Brands becomes easy when proper public relations exist. Brand vitality and brand
credibility follow. This can be concluded from a national poll of brand managers. The brand
managers have given authentication that public relation is the most effectual way to institute
brand credibility. Maximum utility can be derived on every marketing rupee spend. More than
half the voters i.e., brand managers regard that, PR are more imperatively judged against
advertising, sales promotion and new media. PR paves the path for effective communications
discipline though the editorial context cannot be put aside.

PR is the best way to gather third party endorsements according to brand managers. The survey clearly states that PR is a valued marketing partner in building brand equity. Probably the return earned on the marketing rupee spent makes the brand managers, give more importance to public relations.

6. Prevention and Solution of Labour Problems

Public Relations can assist in stabilizing labor conditions through employee relations
activities. The use of public relations as a labour stabilizing aid is preventive as well as
curative and it’s most beneficial when it is carried on continuously rather than only when
strike clouds appear.

7. Overcoming Misconceptions and Prejudices

Prejudices that may exist because misinformation has been spread also threaten the success
of business. Analysis of the situation, plans for meeting it, and the dissemination of correct
information can clear up these difficulties

8. Ability to attract the Best Personnel

No organization’s future is any better than the caliber of future executives it is able to
attract. Making a company or organization known and respected is necessary to assure its
healthful development.

9. Education of the Public to the use of a product

When an entirely new service or product is to be promoted, it is necessary to capture the
imagination of the public in order to make the item attain steady sales. When a company
brings out a new type of product, public relations must support advertising and the sales
staff in capturing the public’s imagination.

10. Education of the Public to appoint a view

When an organization seeks to win support for its method of operation, its principles, the system
that supports it, or any other viewpoint, its most effective means are the channels of teaching the public that are constant being utilized by Public relations people

11. Dealing with Emergencies

This has three phases:
1) Monitoring whatever may cause unexpected difficulties for the organization
2) Preparing for meeting the full range of such emergencies
3) Actual handling of matters when there is an emergency

12. Directing the course of change

At its best, public relations is a bridge to change. It is a means to adjust to new attitudes that have been caused by change. It is a means of stimulating attitudes in order to create change. It
provides judgment creativity and skills in accommodating changing groups to each other.

13. Altering Misconceptions:

In India some PR agencies and independent consultants are doing just that. An example of an
advertising management would be when pictures of Pepsi bottles with fungus in them were
splashed in newspaper, their agency, Perfect Relations launched an intensive media awareness
campaign with the misinformation in the media. How did they do this? They highlighted that 40 percent of Pepsi bottled in India was spurious, established that the bottle reproduced in
newspapers was not an original one, and then suggested Government needed to take a firm stand on enforcing laws against spurious manufacturers of consumables.

What happened in the end was that many illicit plants were raided and closed down, Pepsi
emerged as the aggrieved party and the case was diminished.

14. Issues and Perception Management:

The Issues Management departments of companies or of consultancies today have become a part of a total system of anticipative Public Relations.

A fair amount of research has to be done by the communications department to be able to track
issues that could affect companies in the long run.

Public Relations have both advantages and disadvantages.

Advantages include:

1. Credibility: Because PR communications are not perceived in the same light as advertising – that is, the public does not realize the organization either directly or indirectly paid for them – they tend to have more credibility. The fact that the media are not being compensated for providing the information may lead receivers to consider the news more truthful and credible. For example, an article in newspapers or magazines discussing the virtues of aspirin may be perceived very much as more credible than an ad for a particular brand of aspirin.

2. Cost: In both absolute and relative terms, the cost of PR is very low, especially when the possible effects are considered. While a firm can employ PR agencies and spend millions of dollars on PR, for smaller companies, this form of communication may be the most affordable alternative available.

3. Avoidance of Clutter: Because they are typically perceived, as news items, PR messages are not subject to the clutter of ads. A story regarding a new product, introduction of break through is treated as a news item and is likely to receive attention.

4. Lead Generation: Information about the technological innovations, medical break-throughs and the like results almost immediately in a multitude of inquiries. These inquiries may give the firm some quality sales lead.

5. Ability to reach specific groups: Because some products appeal to only small market segments, it is not feasible to engage in advertising and / or promotions to reach them. If the firm does not have the financial capabilities, to engage in promotional expenditures, the best way to communicate to these groups is through PR.

6. Image Building: Effective PR helps to develop positive image for the organization. A strong image is insurance against later mis-fortunes.
Perhaps, the major disadvantage of PR is the potential for not completing communication
process. While PR messages can break through the clutter of commercials, the receiver may not
make the connection to the source. Many firms’ PR efforts are never associated with their
sponsors in the public mind.
PR may also mis-fire through mis management and a lack of co-ordination with the marketing
department. When the marketing and PR department operate independently, there is a danger of inconsistence communication, redundancies in efforts and so on.
The key to effective PR is to establish a good program, worthy of public interest and manage it
properly. To determine if this program is working, the firm must measure the effectiveness of the PR effort.

PR AND SIMILAR ACTIVITIES

PR AND ADVERTISING: Many people consider public relations and advertising as almost
synonymous, probably because there is an element of information and persuasion inherent in
both. Public Relations and Advertising

PR is winning of public acceptance by acceptable performance without any idea of instant tangible gain.

Advertising is any paid form of non-personal presentation and promotion of ideas, goods or services by any identified sponsor. Although some advertisements seek to inform an even educate, there is an immediate, commercial goal behind most.

PR does, of course, provide support to marketing activities but it has a wider prospective and is broader in scope and vision.

Advertising is essentially a tool of marketing along with product, price, packaging and place (distribution).

PR is a management function.
Advertising is a marketing function.
Every organization has a public perception and consequently public relations.
Advertising may or may not be used by an organization.
PR presents its messages to specialize external audiences and internal publics.
Advertising is addressed to external audiences, primarily consumers of goods and services.

PR message is largely a matter of credibility.
Advertising messages are mostly emotive and strident.
PR is more proactive than advertising.
It involves anticipating, diagnosing problems and then providing solutions
Advertising involves directly acting upon the briefs or problems presented by the client.

PR AND MARKETING:
There are certain areas like publicity, sponsorship, exhibitions, consumer and dealer relations
where both the functions of PR and marketing overlap. They do not always talk the same
language though both marketing and PR make use of communication to pursue their goals. What
really matters in the long run, however, is not whether a particular set of techniques should be
labeled PR or marketing but whether they are effective in achieving the desired corporate goal.

From a marketing perspective, PR is part of the promotional element in the marketing mix and
aid to consumer relations. It is seen as a component in the total marketing communication and is
bracketed with advertising and sales promotion. As a support function for marketing, PR
operates primarily as a publicity function.

PR Marketing
 PR is a marketing of an organization
 Marketing is the selling of a tangible service or product through promotion, pricing and distribution.
 PR is equally concerned with internal and external groups.
 Marketing is external in its orientation.
 The audiences of PR include employees, shareholders, neighbors and many others.
 Customers are the key audiences for marketing.
 Good PR can pave the way for marketing effort. It is concerned with creating a favorable climate for marketing. It can help maintain good relations with dealers organize product publicity and disseminate information to trade and industry.
 Similarly, a successful marketing campaign and satisfied consumers make good relations with the others easier to develop and maintain.

PR is both a compliment and a corrective to the marketing approach. As a compliment, it
provides and techniques with support marketing efforts. The techniques of communication used
in PR and available to marketing and can be used in support of product and sales promotion.
Introduction of new products and publicity campaigns to put fresh life into the sales of
established products are important marketing functions. In these areas, PR can work closely with marketing. Indeed, PR and marketing can support and reinforce each other with synergistic force, if planned and coordinated in a total communication strategy.

PR AND PUBLICITY: Publicity is often confused as an identical activity to PR probably because it is the most visible aspect of PR. Tangible evidence of PR efforts can be seen thorough publicity.
A publicist works on only one area of PR-dissemination of information for the media.
Publicity consists of obtaining free space or time for news about the organization. Spreading of
information in this way can effectively improve PR program. But it is quite possible to have
wide, even favorable publicity and still not achieve good public relations. Publicity can
sometimes be unfavorable or even controversial. Frequently, its over abundance may cause bad reaction instead of good.
Publicity can be measured by the length of space or time obtained in mass media and it is
possible to maintain a record through press clipping. But publicity is, in effect, one-way
communication. PR, on the other hand, strives to initiate dialogue and feedback. It is a more
complex and comprehensive discipline.
Unlike advertising the main cost of PR is time. If an advertising campaign is undertaken
too early, it will fail to overcome the barriers of prejudice, apathy and ignorance. To create
acceptance, interest and impart knowledge, PR should come earlier.
While PR begins very early and then proceeds steadily as a constant factor as a part of an
organization’s existence, advertising is intensive at the launch and then tapers off in proportion
to the product sensibility.
 PR and Propaganda:
Public Relations
Propaganda
 PR is responsible for presenting factual information without comment.
 Propaganda seeks to build a favorable public opinion through one-sided presentation of facts. The selective and slanted presentation is designed to strengthen particular images by emphasizing only the good points of one position and the bad points of another.
 The receiver of the information has the freedom to take his own decision.
 They resort to deliberate disinformation for building the strongest possible case for their views.
 The fundamental purpose of PR is to establish mutual understanding. It is based on facts and information.
 Propaganda is designed to manipulate the beliefs and attitude of the people through colorful half-truths.
 Objective: Consent
 Objective: to build a sectarian movement.

TOOLS OF PUBLIC RELATONS

 PRINT MEDIA

Most of the efforts chapters make in public relations are through forms of print media, primarily
newspapers. These are usually the most visible outlets on college campuses, especially school
newspapers, and in the local community.

1. PRESS RELEASE

The press release is the most common material provided to media outlets. These documents
provide a brief, yet thorough, description of an upcoming activity, whether it is rush or a service
project.

2. PUBLIC SERVICE ANNOUNCEMENTS

These are very short articles (no more than 75 words) that simply provide the facts of the activity (what it is, where it is located, when it will be, who is sponsoring, etc.).

3. PHOTOGRAPHS

There are usually two types of photographs in publicity portrait shots, where people pose for the camera and smile, and candids, where the subjects are doing something.

4. CASES HISTORIES/ STUDIES

Case studies which show a good image of the company are shared with the media/ investors,
community etc. Books on Making of Asoka, Making of Lagaan,, Amitabh Bacchan- A book by
Jaya Bachchan

5. EDITORIALS

No money, high credibility, however no control over message.

6. ADVERTORIALS

Advertisement + Editorial. Control over message, pay lesser than an advertisement. It is a
strategic tool, but should not be used too often. J & J is coming out with Branded Cotton. So they
are coming out with advertorials on wound handling.

7. INTERVIEWS/FEATURES

Meeting journalists. Here there is lot of room for different interpretations. More often than not,
press releases will not be printed verbatim. Even though your media contact will likely rewrite
them, possibly including additional quotes or information they research on their own your press
releases should be written well enough. However, there are also times that a press release will
encourage a reporter to do more, such as conduct a full interview with chapter members or write
a feature article on an upcoming project. While doing sponsorships one should try to brand it
with the event simultaneously.

8. BROCHURE
A booklet published bye the organization which contains the organisation’s background, its
ethics, vision, mission, its past, present and future projects, its USP, etc.

9. POSTER AND CALENDAR
Any poster or calendar used to achieve a public relations objective.

10. WRITTEN SPEECH
The typewritten or printed text of a speech given to achieve a public relations
objective.

11. INTERNAL NEWSLETTERS AND PUBLICATIONS
e.g. ICICI has their internal Newsletters, in which information about the company, its profits,
employees etc. is given.

 EVENT AND PRESS SUPPORT
Special events are acts of news development. The ingredients are time, place, people, activities,
drama, showmanship; one special event may have many subsidiary events, such as luncheons,
banquets, contests, speeches, and many others as part of the build up.

 LETTERS TO THE EDITOR
Submitting these articles does not require a media contact. This also gives an opportunity for any member to submit a letter on their chapter for printing in a local or campus newspaper.

 ANALYSTS BRIEF
One tells about the company, what the company is doing. It is done to influence the stock buyers, analysts, employees and media.

 CONFERENCES AND SEMINARS
- Press – Om Kotak doing many seminars. It contacts associations and tells them to give
numbers of their members so that they can talk to them. The members are contacted through
telephones and asked to attend seminar on General Insurance. In the seminar they talk on
General Insurance for 20 minutes and then the next 10 minutes they talk about the company
products.

Pharma Companies when they do any research say for example, diabetic research, they would
launch the product and before or after the launch they would call doctors for a conference to
discuss about the research

 PROMOTIONAL ITEMS
Any gift, premium, novelty or physical token used to convey an impression, make
a point, establish an image or achieve a public relations objective.

 CORPORATE ADVERTISING
If you believe the image of the company is good i.e. that trustworthy, reliable one then you can
use that as a PR tool.

 INTERNET
This one medium has helped transform the whole business of marketing and public relations. In a way, it gives any organization the ability to promote themselves without having to rely solely on other media outlets. Websites and e-mail are the two most common methods to use the Internet for PR purposes.

 WEBSITE
A chapter website should not only be designed to serve as a resource for members, but it should
also present a positive message to nonmembers just "browsing through.". Brief descriptions of
chapter history, past projects and activities, and long-standing relationships with other
organizations may give an outsider a positive impression of the fraternity. Like the newsletter,
information for members shouldn't just inform, it should also encourage involvement and
develop enthusiasm.

 E-MAIL
Today, this has become the most common method used for communication between fraternity
members. It can also be used to promote a chapter to fellow students and others, but it should be used carefully.

 AUDIO AND VISUAL
This division includes any audio or audio/visual presentation or program which serves a
public relations objective.

1. AUDIO PRESENTATION
Any sound-only program, including telephone hot lines and other recorded messages, radio programs, public service announcements and audio news releases.

2. AUDIO/VISUAL PRESENTATION
Any internal or external audio-visual presentation using still illustrations, with or without sound, using one or more projectors.

3. FILM OR VIDEO
Any film or video which presents information to an organization's internal audiences.

4. VIDEO NEWS RELEASE
Any film or video prepared and released to the media as a news item, article or feature story on behalf of a sponsoring organization.

 NEWS AND PUBLICITY

News is something that interests many people today. From the point of view of THE
TIMES OF INDIA, that means the national readers of THE TIMES OF INDIA and the metropolis readers of THE BOMBAY TIMES, etc. From the point of view of THE INDIAN
EXPRESS, it means all the people interested in hardcore content and no masala.

“Every medium has a news standard of its own, and that is the criterion the publicist goes
by in attempting to address publicity to the public through that medium.”

Ways To Make News

 Tie in with the news events of the day
 Tie in with another publicity person
 Form and announce the names of a committee
 Hold an election
 Announce an appointment
 Issue a summary of facts
 Make a statement on a subject of interest
 Bring a celebrity from elsewhere
 SPECIAL EVENTS

Special events are acts or news development. The ingredients are time, place, people, activities,
drama, and showmanship. One special event may have many subsidiary events, such as
luncheons, banquets, contests, speeches, and many others, as part of the build-up. The special
event is the coup de maitre of publicity, propaganda, and public relations.

ORGANIZATIONAL STRUCTURE OF A PR AGENCY
On the basis of size PR agencies can be classified into:
 Big Agencies
 Medium sized Agencies
 Small Agencies
In big agencies the scope for growth is large, whereas in small agencies responsibility may be
very high but there is little scope for growth.
When the number of clients of a small agency increases it needs to hire new people, and
gradually becomes a medium sized organization.

Grey Worldwide (India) Pvt. Ltd., has three branch offices situated at Mumbai, Delhi and
Bangalore.

Each of these teams follows the following hierarchy.

An Account Director maybe heading 2-3 supervisors depending on the number of total accounts
GCI is handling.

MAJOR CLIENTS OF GCI

OM KOTAK MAHINDRA
RUF AND TUF
CRY
BRITANNIA

PUBLIC RELATIONS PROCESS

Establishing an public relations program on behalf of a business or industry, or a professional
group, involves a series of steps that, although subject to some variation in differing situations,
generally will include

 ANALYSIS OF THE SITUATION:

Analysis of the situation calls for broad study of all aspects of the business that affect the
publics. The starting point will be the people in the business or industry (particularly those who
are active in the company, such as board members, appropriate committee chairman and
members, and so on) who appear to have awareness of the public relations situation. The public
relations person will begin by interviewing such people; from them he or she will go to people
outside the business but in a position to observe it more closely than the average layman (these
may include editors of trade publications, officials of chambers of commerce and better business
bureaus, government officials concerned with the regulations of the business or profession – if
there are any – and others). Finally, this basic study may approach the general public for
additional views. This may be done through an opinion or attitude research study, of market
research, conducted by a recognized research firm. Sometimes, this may be done on a more
informal basis where the budget will not permit formal research. Such an approach to the general
public will be designed to provide a profile of the business as it appears in the public mind.

 DEFINITION OF PROBLEM AREAS:

This will follow naturally from the interviews and research activities. Comparisons among the
views of the public, of people in the business, and of those who are close observers of the
business may reveal some interesting parallels as well as differences and may indicate some
cause and effect relationships. It should be noted, also, that ignorance and misconception will not
always or necessarily be found in the public mind. Industry people more often then not will be
found to have some misconceptions about the public’s viewpoint, too. In such an event,
correction of industry thinking will be called for. Sound public relations may require changing
the attitudes of the client (diplomatically, of course) as much as it involves endeavoring to
change the attitudes of certain publics. As a matter of fact, although the public relations person is
usually hired to change public attitudes, he or she sometimes performs the most important task in
changing the attitude of his client or employer.
In today’s climate, the role of public relations practitioner is enlarging. He or she should be
capable of observing and analyzing the social, economic, and political trends and helping his or
her management or clients become aware of their significance to the institution they represent.
Through such expanded awareness, the manager or clients come to view their business or
institution in a new and different perspective.

 IDENTIFICATION OF PUBLICS:
A public is a group of people bound together by a specialized interest with reference to a focal
point.

Example: Employees in the steel mill may constitute one of the publics of a steel industry
association’s public relations effort; dairy farmers may be a special public of the association
representing the milk processing industry; automobile dealers a special public of the association
representing automobile manufacturers, and so on.

Customers of a particular business always are a primary public; for a professional society, the
individual members will also be one. Indeed, the association’s members should not be
overlooked in any public relations effort; their understanding and support are necessary.

 ESTABLISHING OBJECTIVES:

Once the problem areas are defined, long range objectives should be established. Usually, these
will be outlines in terms of the respective publics involved. General objectives should be drawn
with perspective in order to serve as guides over the long range. If they are drawn only in respect
to immediate, short term problems, they will not serve to provide continuity of direction and they
will need constant revision.

It would be unwise to draw an overall objective in reference to a specific piece of current
legislation that is to be opposed or supported, for once the legislature has adjourned, the
objective is meaningless. Instead, a long range objective might describe in general terms the
nature of legislation that an industry favours, viz:

 “ To support, in the respective states, legislative efforts that will enable our business to
serve the public on a competitive basis in accord with the traditions of a free market
economy, and to oppose legislation that would deny this opportunity.”

Any association public relations program must be flexible; obviously it should be modified as
time and circumstances require. But if it is drawn with sufficient perspective, changing day-to-
day and month-to- month problems will be found to fit within the framework of its general
objectives. And, of course, short-range objectives will be developed from time to time. In
addition, if sound communications networks have been developed to obtain long-range
objectives, these networks will facilitate the solution of passing and temporary problems. But
common sense demands a long-range plan with specific objectives against which results may be
measured.

 PROGRAM PLANNING:

It involves laying out in detail the various activities and communications that will be employed
with reference to the key publics that have been pinpointed in the objectives.

Let us assume, for example, a situation in which an association of home appliance
manufacturers finds that the industry has lost standing in the public mind because a substantial
number of consumers are dissatisfied with the repair and maintenance services. The industry
association identifies, as one of its publics, the retail appliance dealers who are responsible for
servicing. The objective with respect to this public is to indoctrinate the dealers in the necessity
for providing quality repair services and to provide information to them on the methods by which
high quality servicing may be established.

The program plan will outline the activities to be directed toward gaining the support of
the dealers for this mutually benefit purpose. It may, for example, call for the preparation of a
“code of good service” and of a manual describing the service functions the dealer is expected to
perform. Further, this part of the plan may call specifically for a series of dealer meetings in
various communities; for special articles to be prepared for trade publications that are circulated
among the dealers; for a special periodical to be published by the association especially for the
dealer-audience; for paid advertisements in industry publications, addressed to dealers; for the
conduct of special training schools for the service people employed by the dealers; or for any
combination of these and other techniques, some of which may lie outside the field of public
relations must, inevitably, be based on good performance, and it should be noted that all of these
measures would be designed to improve performance in repair and maintenance.

 IMPLEMENTING THE PROGRAM:
Involves carrying out these steps. It calls primarily for hard work by the association’s public
relations staff or the external counsel. In association work, however, the implementation of a
public relations program frequently requires active participation of people in the profession or
industry. Indeed, in respect to many objectives, the only path to success is to enroll the people in
the business or profession who are located at many points across the country.

No association staff, however large, has sufficient people to perform the grass roots
indoctrination task all by itself. Frequently, therefore, means will be devised for recruiting people
who are working in the business, but who are not themselves public relations people, to assist in
the public relations efforts of the association.

For any grass-roots efforts by a national, regional, or even a state association, reliance on local
representatives of the business, industry, or profession is essential. This Carrying out the
program can involve a wide range of functions, always guided by the long-range plan and
association’s policies.

 PERIODIC EVALUATION:

Periodic evaluations of progress are necessary. Such evaluations should be made on a continuing
basis, of course, by the professional public relations staff or public relations counsel or by the
association. Progress reports should be made regularly also to the membership and to interested
committees and boards of the association.

Though the contribution of the campaign would be difficult to measure we should try to evaluate
it with the help of the following 3 most commonly used measures of PR effectiveness.

The return on PR investments can be calculated as follows:
Total sales increase
Rs……..
Estimated sales increase due to PR
Rs……..
Contribution margin on product sales
Rs……..
Total direct cost of PR programme
Rs……..
Contribution margin added by PR investments
Rs……..
Return on PR investments
…..%

An activity which fails to add value stands to be eliminated in today’s professional world for
several decades PR practitioners did not see any need to demonstrate that the PR adds value.
“Any publicity is good publicity” was the questionable catch cry of the PR model practiced. The
main method of demonstrating results of PR was collecting and presenting the management with
piles of press clippings. The different methods of evaluation are:
MEASUREMENT BY KILOGRAM
Commonly referred to as measurement by kilogram collecting press clippings focuses on
quantitative measurement with little attention paid to the quality of media coverage. Press
clippings, tapes or transcripts indicate only that reporting occurred in the media. They do not
indicate whether target audiences read, saw or heard the information and if they did whether it
influenced their attitudes or behavior.
 POSITIVE/ NEGATIVE ANALYSIS
In attempt to provide qualitative assessment of editorial media coverage PR practitioners
accepted that negative publicity was unlikely to achieve objectives and began to categorize
media coverage in terms of positive, negative or neutral. This was done based on the belief that
positive coverage supported clients or employers objectives while neutral coverage at least raised
awareness. However this runs into 2 major challenges:
1. It involves a high degree of subjectivity,
2. Sometimes positive articles may appear in media which do not reach the client’s
target audience or which while generally positive may not contain the client’s key
messages. Also the articles may be positive but not strategically important and thus
do not contribute to achieving a client’s objectives.

 MEDIA CONTENT ANALYSIS

Media content analysis is a growing area of public relations research for evaluating publicity and
offers a more reliable and relevant method of evaluating the effectiveness of media coverage.
While systems vary, most rigorous media content analysis systems measure:
1. Total circulation or audience reached;
2. Target audience or market reach/penetration;
3. The extent to which key messages were communicated;
4. Share of voice compared with competitors or others.

In simple terms, communication is about getting your key messages to your target audiences –
preferably better than competitors do. That is what PR needs to focus on and what PR research
should address.

BILLING OF A PR AGENCY

It is the bread and butter of an agency. PR agencies are doctors and lawyers, professional who
diagnose a problem and dispense their skills and expertise on a time cost basis. They charge by
the hour or motnthly retainer ship and sall projects or events are then billed at cost or on a total
turn-key basis.

Case: At Contact corporate communication they prepare a contract based on the needs of the
client. Sometimes if the client is not media savvy then the public relations agency provides
media counselling to the client. For this they charge an additional amount to the client.

The scope of the billing is generally decided before hand. E.g.: The PR agency may charge for
the STD, ISD calls, traveling separately if the PR activities are on a broader base.

ROLE OF PR TO ESTABLISH AND DEVELOP CORPORATE IMAGE

 CORPORATE IDENTITY

Every individual, every business or nation has an identity. For most of us, as individuals, it
emerges naturally. Just as the way we speak, dress, behave, just as much as what we say and do,
consciously or unconsciously, expresses what we stand for and believe in as individuals, in the
same manner organisations too express themselves in a variety of ways. It accumulates over a
period of time and is a sum total of the company's history, philosophy, ethical values, ownership,
people, technology and performance.

Ideally the corporate identity reflects the inner truth about the organisation. It is the
coordinated and consistent projection of everything an organisation stands for. Corporate identity
is not reflected merely by visual elements but nevertheless, it is often readily identified through
visual signs and symbols. Because, the visual expression tends to encapsulate with imagery what
the company holds to be its essential belief and philosophy.

As organisations grow large, complex and increasingly impersonal, most of them feel the need to
develop a distinctive identity in order to provide them with a competitive edge in the market
place. The desire to seek a new identity may arise out of dissatisfaction with the current identity
or even an absence of any consciously created identity. Diversification, entry into a new field,
mergers and acquisitions, major technological changes can all be reasons for the creation of a
new identity. This desire to be different, to stand out from the crowd, is one of the many vital
measure to survive and grow in this fiercely competitive world.

The need for developing a strong corporate identity has been further felt owing to the
weakening of brand loyalty. A considerably shorter life-cycle of an average product in today's
market has forced the companies to reposition themselves. If a company has a definite public
perception, it is likely that it will also have a definite market slot.

A corporate identity is also a method of expressing a body corporate in human terms. In essence,
it communicates the style of management and the spirit of the working culture within the
organisation. Successful companies like ITC and Tatas have distinctive identities borne out of
long and widely-held beliefs and values. But identities require to be relevant to the new business
strategies. Identities, therefore, call for constant review.

CORPORATE IMAGE

Some people seem to get confused between corporate image and corporate identity. Corporate
Identity is a matter of physical recognition while Corporate Image is a matter of mental
perception. Corporate identity can contribute to corporate image.

A corporate image develops out of a company's corporate identity and, as a result of people's
knowledge and experience of the company. The organisation can seek to influence this image, it
cannot control it. Vic Markham describes corporate image in these words: "Everything we buy
helps us express our personalities; helps us to say to the world around us: 'This is the kind of
person I would like you to think I am.' We buy products to assist us in this projection of our
personalities. In effect, we see the mirror image of ourselves in the product we buy. Image is a
reflection of that personality. Corporate bodies project recognisable personalities and people
choose between competing brands very largely because the brand reflects their own
personalities. Corporate identity, on the other hand, is how one identifies ourself: on one's
advertising, on the packaging, on the van sides so that a symbol or logo can be a part of the
corporate identity." To sum up therefore, corporate image is what people think about an
organisation and corporate identity is how people identify an organisation.

An organisation will have a corporate image whether or not it has made conscious efforts to
manage a corporate identity. Since the image is going to be present anyway, it is now universally
accepted that organisations should make an effort towards the development of a favourable
image through the projection of the chosen corporate identity.

Creating the desired corporate image is not just a matter of giving a face-lift to the company's
otherwise sagging identity. It is a matter of firm commitment to a corporate life-style and culture
in policy and action. The organisation has to address itself to a variety of publics. Quite often,
they have mutually conflicting expectations of the organisation and as a result, they may
interpret the message from their particular point of interest. The corporate image, therefore, has
to be consistent among all its operation and all its audiences. Hence, the management of
corporate image has to be a constant and all-encompassing process.

CORPORATE COMMUNICATON

“Corporate communication is the process that makes the corporate identity visible in concrete
terms.”

But corporate communication is not an option. It is happening to all companies all the time,
sometimes haphazardly and often without real planning. It has also been described as a process
that translates corporate identity into corporate image. The role of communication is crucial in
the entire process because without communication the values and strategies of an organisation
will never be understood properly. Corporate communication includes virtually the entire range
of its interaction with the society; from the way telephone calls are answered to the way video
films are made.

“Corporate communication cannot overnight turn a poor company into a successful one.”

It can only ensure that it conveys a consistent and credible message of what the company is, what
it does and how it does it by trying to synthesize the messages it transmits.

The visual projection in corporate identity is derived from the fact that it not only helps internal
cohesion but it plays a large part in showing to the outside world what the company is like and
how it can be expected to behave. Indeed a distinctive visual communication programme is one
of the most prominent and marketable corporate assets; without it, ready acceptance of even the
most superlative product may be difficult. It can provide a focus for a consistent message to all
the external publics.

Institutional Advertising or Corporate Advertising
The main aim is to build a positive image for the firm in the eyes in internal and external public
in institutional advertising. It does not attempt to sell anything directly. However, it does a lot of
good to the organization as a whole. It forcefully tells how the organisation is a socially
responsible institution. It also tells about the nationalistic learning’s of the organization. It shows
how its actions are consistent with overall national objectives like environmental protection,
employment generation, literacy, loss prevention, health for all etc. It is integrated to public
relations function of the organisation.
Institutional advertisements may be addressed either to consumers or other groups like
government, suppliers, financial institutions etc. Effective institutional advertising evokes a
positive response amongst the target group and creates goodwill. Institutional advertising may
introduce products indirectly or may introduce the sales people indirectly. Glaxo’s advertising on
child health may make doctors favourably inclined to meet its medical representatives.
Institutional advertising like product advertising can be in formative, persuasive or reminder-
oriented.
It's objectives is of institutional/corporate advertising are:

To make the company known.
To make its products/services known.
To make its achievements known
To make its values known.
To make socio-political/economic/moral statements

Case: Philips hosts the second 'India Retail Summit'
100 retailers from the Consumer Electronics industry attend India's one and only summit on
trends in the Retailing sector.

July 22 2002, Mumbai: The Consumer Electronics Division of Philips India Limited, in
association with leading global retail consultants, KSA Technopark hosted the 'India Retail
Summit' - 2002', for 100 top Consumer Electronics Retailers, from across the country, on 21st
and 22nd July 2002, in Mumbai. The 'India Retail Summit' was organised, for the second time in
successive years, after it was launched in July 2001.
The theme for the 'India Retail Summit - 2002', was "Retailing for the New Millenium". Besides
high pitched discussions on "How to improve the Consumer Electronics Retailer's business" in
India; sessions on 'International Retailing trends', 'Regional Trade Evolution' and the 'Human
Resource aspect to Retailing' were some of the key attractions at the two days India Retail
Summit 2002.

The top 100 Retailers of Philips were enthusiastic participants, who witnessed the coming
together of leading national & international experts on retailing, as Philips aimed to address
issues of critical importance to the current and future business of retailers both with respect to
general trends and specific operational issues.

The tone of the day was set by Mr. Alan Sparks, who was addressing such a major platform on
retailing for the very first time in India after taking the reins of Philips as its new Regional
General Manager, Philips Consumer Electronics (PCE), Asia Pacific, Middle East & Africa.
After inaugurating the Summit, in an insightful special address, he commended the major
changes witnessed by our markets in the last few years and how closely these changes matched
developed markets on most parameters.

Earlier, while opening the Summit, Mr. Rajeev Karwal, Senior Vice President, Consumer
Electronics, Philips India, said, "After being the first Consumer Electronics company to initiate
an interactive session on Retailing trends for its dealers, by launching the 'India Retail Summit'
for the first time in India, in July 2001, Philips has reiterated its commitment towards its valued
trade partners by once again inviting them to be a part of the 'India Retail Summit' experience in
2002. We believe that exposure to current and future retailing trends in India and internationally,
will help broaden our trade partners' approach of looking at his business, and in the process
generate a win-win relationship for the Retailer as also Philips".

Mr. Raghu Pillai, President & CEO, Retail Sector - RPG Enterprises, focusing on The Retail
evolution in India and the emergence of various formats across various categories, said, "The
hypermarkets, supermarkets, mass merchants, Departmental stores, exclusive stores, specialty
stores, are all emerging. Each has its own role to play and a value proposition for the consumer.
This has been a good initiative by Philips to share learnings across the retail segment with it's
channel partners"

Mr. Rajan Chibba - Managing Director, KSA - Technopak provided a few valuable insights on
the 'Step-by- Step' approach to 'Better Retailing'. Providing an overview of what retailing entails -
an end-to-end macro view, Mr Chibba said, "Retailing is complex. Anybody who is a retailer or
understands retailing will appreciate what it means to ensure that the consumer gets what he
wants, when he wants in the store." On the Philips India Retail Summit 2002 he said, "This is our
second year of association with Philips on this platform, and, seeing the response this year round,
we feel that the India Retail Summit would be an important date on the calendars of retailers
from here on"

The Importance Of Operational Excellence And Other Key Success Factors Of Retailing was an
interesting talk by Mr. B. Nagesh, CEO & MD - Shoppers' Stop. He shared with the CE retailers ,
what it takes to achieve operational excellence in retailing and its importance. "It's pleasing to see
a leading brand like Philips working hand in hand with its trade partners to imbibe best practices
followed globally in the retail industry" said Nagesh.

Case: Pantene unveils 'Shine Morning to Night' campaign
Pantene, the world's largest selling shampoo from Procter & Gamble conducted a consumer
research on identifying the top hair needs which revealed that Indian women rated 'Shine' as the
No.1 hair attribute.
August 26, 2002, Mumbai: Research further indicated that the major cause of dull hair that lacks
shine is weakness of hair, misalignment and roughness. Pantene's unique Pro-V formula has been
researched and identified as one of the best solutions to achieve long-lasting hair-shine, because
it penetrates dry strands better, smoothens roughness, reduces frizz and fly-aways thus making
hair smooth, straight and polished. Supporting the research, Pantene unveiled the launch of
"Shine Morning to Night" campaign that has two exciting components to it; The MTV "Shine
Your Soul" contest which has diamonds worth Rs. 12.5 lacs to be won and the launch of 'Pantene
Shine Booths' across the country that helps to achieve shine that lasts from morning to night.
Complementing the "Shine Morning to Night" campaign P&G has launched Pantene Shine-
Meter, a unique device that measures the level of hair shine, followed by a recommendation from
the Pantene Beauty Assistant on the right variant of Pantene shampoo. To help consumers attain
long lasting hair-shine, the Pantene Shine Meters will be covering 30 cities across India through
Pantene Mobile Vans and Pantene Shine Booths. The Pantene Shine Booths will be set up at
more than 1100 leading retail stores across the country for the next six weeks.
The "Shine your Soul" contest with MTV gives consumers an opportunity to win an exquisite
Diamond Necklace and 19 diamond sets from Inter Gold. All Pantene users are eligible to
participate in the MTV 'Shine Your Soul' contest by answering the simple question - "What gives
you a Shining personality" (a) Wealthy Mind and Wealthy body, (b) Healthy mind and Healthy
body and (c) Stealthy mind and Stealthy body.
Commenting on the Pantene "Shine Morning to Night" campaign, Mr. Rahul Malhotra, Brand
Manager, P&G India said: "Only hair that is healthy can have long lasting shine. Pantene's
unique Pro Vitamin B formula strengthens hair, smoothens roughness and leaves hair looking
shiny from morning to night. We have tied up with MTV and Intergold for the "Shine your Soul"
contest to communicate Pantene's ability to deliver long-lasting shine, through the simple analogy
between diamonds and shine."
Said Ms. Neha Dhupia, Miss India-Universe'02, at the launch, " With the everyday pollution hair
is exposed to and the routine hustle-bustle, there is very little time to invest in your hair and
possess dream hair that shines 'Morning to Night'. But truly, Pantene with its remarkable range of
shampoos; Smooth & Silky, Volume & Fullness, Balanced clean, Anti-Dandruff and Lively
Clean offers the right shampoo variant for every hair type and gives hair that shine all day long".
All Pantene shampoo variants are available at Rs.61 for the 100 ml pack and Rs. 117 for the 200
ml pack. Procter & Gamble Home Products, India also has in its portfolio, Head & Shoulders'
Shampoo in three variants; Smooth & Silky, Refreshing Menthol and Clean & Balanced, Ariel
Total Compact, Tide detergent and Gain Super Soaker.
Procter & Gamble Worldwide has in its beauty-care basket, brands like Vidal Sassoon, Pert Plus,
Pantene, Head and Shoulders, Rejoice, and Physique in Hair care; Olay Skin Care and
Cosmetics; Max Factor and Cover Girl cosmetics and fragrances from Hugo Boss.

Case: Amway to use corporate ad campaign in India to communicate
25 October 2002

Mumbai: Amway India Enterprises, the multilevel direct marketing company, which has grown
into a global multibillion corporation exclusively by word of mouth publicity, is now planning to
use corporate advertising to communicate to its customers, though in a limited manner. And India
is the first country where the company plans to use the mode of advertising.
Amway India managing director and CEO William Pinckney says: “Amway is growing fast in
India and corporate advertising at this stage will be beneficial to its distributors, prospective
distributors, customers and prospective customers. It will also add to the increased awareness and
appreciation of the company.”
He emphasises that it would not have a real change in Amway’s communication strategy. “The
company still relies mainly on the word of mouth, and the ad campaign in India is a low-key
affair.”
He says Amway’s ad campaign focuses on the business opportunities thrown up by the company,
its corporate values and commitment. “More importantly, ads mention very distinctly about one
of its important unique selling points, which is the 100-per cent customer satisfaction or money-
refund policy commitment towards India is found necessary if only to supplement the efforts the
company’s distributors continued to put in.”
The ad campaign, he feels, will enhance the receptivity of Amway products, and with it the
business opportunities, and enable distributors to reach out to a much larger audience and much
faster.
Amway India clocked a turnover of Rs 553 crore in the year ended 30 September 2001 and is
targeting a turnover of Rs 700 crore for the coming year. From a six-product company ii 1998,
the company now sells 33 products through 3 lakh distributors and is present in four categories -
personal care, home care, nutrition and cosmetics.
Amway India is a wholly owned subsidiary of Amway Corporation and was established in
August 1995 after getting approval from the Foreign Investment Promotion Board. The company
commenced commercial operations on 5 May 1998.
The company manufactures all its products in India through three third-party manufacturers. Till
now, it has invested in India in excess of $35 million, of which $6 million is in the form of
foreign direct investment.

Case: Daler Mehndi to paint for quake-hit
New Delhi, February 24
Popular crooner Daler Mehndi, who becomes a livewire performer with a microphone, will try
his hands with a painting brush for the sake of earthquake victims in Gujarat.
The Punjabi pop singer will be the chief guest at an on-the-spot painting competition for
schoolchildren being organised tomorrow at Aadharshila Vidyapeeth School, Pitampura in West
Delhi.
Organisers of the programme informed that famous painter Jatin Das would grace the occasion as
the guest of honour. The canvas to be painted by the two celebrities will later be auctioned and
the proceeds given to the quake-hit.
In the competition, being jointly organised by Aadharshila Vidyapeeth School and Archies,
children from class II to VII have been invited to participate

BCG Matrix (Boston Consulting Group Matrix)

2009-07-15T01:47:00.005+05:30

BCG Matrix

Introduction

The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities.

The company must:
(1) Analyse its current business portfolio and decide which businesses should receive more or less investment, and
(2) Develop growth strategies for adding new products and businesses to the portfolio, whilst at the same time deciding when products and businesses should no longer be retained.

Methods of Portfolio Planning

The two best-known portfolio planning methods are from the Boston Consulting Group (the subject of this revision note) and by General Electric/Shell. In each method, the first step is to identify the various Strategic Business Units ("SBU's") in a company portfolio. An SBU is a unit of the company that has a separate mission and objectives and that can be planned independently from the other businesses. An SBU can be a company division, a product line or even individual brands - it all depends on how the company is organised.

Using the BCG Box (an example is illustrated above) a company classifies all its SBU's according to two dimensions:

On the horizontal axis: relative market share - this serves as a measure of SBU strength in the market

On the vertical axis: market growth rate - this provides a measure of market attractiveness

By dividing the matrix into four areas, four types of SBU can be distinguished:

Stars - Stars are high growth businesses or products competing in markets where they are relatively strong compared with the competition. Often they need heavy investment to sustain their growth. Eventually their growth will slow and, assuming they maintain their relative market share, will become cash cows.

Cash Cows - Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars.

Question marks - Question marks are businesses or products with low market share but which operate in higher growth markets. This suggests that they have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors. Management have to think hard about "question marks" - which ones should they invest in? Which ones should they allow to fail or shrink?

Dogs - Unsurprisingly, the term "dogs" refers to businesses or products that have low relative share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.

Using the BCG Box to determine strategy

Once a company has classified its SBU's, it must decide what to do with them. In the diagram above, the company has one large cash cow (the size of the circle is proportional to the SBU's sales), a large dog and two, smaller stars and question marks.

Conventional strategic thinking suggests there are four possible strategies for each SBU:

(1) Build Share: here the company can invest to increase market share (for example turning a "question mark" into a star)

(2) Hold: here the company invests just enough to keep the SBU in its present position

(3) Harvest: here the company reduces the amount of investment in order to maximise the short-term cash flows and profits from the SBU. This may have the effect of turning Stars into Cash Cows.

(4) Divest: the company can divest the SBU by phasing it out or selling it - in order to use the resources elsewhere (e.g. investing in the more promising "question marks").

What is a product?

2009-07-15T01:26:00.004+05:30

What is a product?

Products are created as a result of an art or many arts.
A product can be characterized by

Its means (how it is made),
Material (what it's made of),
Form (shape and style), and
Function (how it works).

There are four classes of products:

Information/signs
Artifacts/physical objects
Activities and services
Organizations and systems

In marketing, the term “product” is often used as a catch-all word to identify solutions a marketer provides to its target market.
The term “product” to cover offerings that fall into one of the following categories:

Goods
Services
Ideas

Goods – Something is considered a good if it is a tangible item. That is, it is something that is felt, tasted, heard, smelled or seen. For example, bicycles, cell phones, are all examples of tangible goods.

Services – Something is considered a service if it is an offering a customer obtains through the work or labor of someone else.
Services can result in the creation of tangible goods (e.g., a publisher of business magazines hires a freelance writer to write an article) but the main solution being purchased is the service.

Unlike goods, services are not stored, they are only available at the time of use (e.g., hair salon) and the consistency of the benefit offered can vary from one purchaser to another (e.g., not exactly the same hair styling each time).

Ideas – Something falls into the category of an idea if the marketer attempts to convince the customer to alter their behavior or their perception in some way.
Marketing ideas is often a solution put forth by non-profit groups or governments in order to get targeted groups to avoid or change certain behavior.

Types of Consumer Products

Convenience Products
Shopping Products
Specialty Products

Convenience Products – These are products that appeal to a very large market segment. They are generally consumed regularly and purchased frequently.
Because of the high purchase volume, pricing per item tends to be relatively low and consumers often see little value in shopping around since additional effort yields minimal savings.

From the marketer’s perspective the low price of convenience products means that profit per unit sold is very low.
In order to make high profits marketers must sell in large volume.
Marketers attempt to distribute these products in mass through as many retail outlets as possible.

Shopping Products – These are products consumers purchase and consume on a less frequent schedule compared to convenience products.
Consumers are willing to spend more time locating these products since they are relatively more expensive than convenience products and because these may possess additional psychological benefits for the purchaser, such as raising their perceived status level within their social group.

Since the consumers are purchasing less frequently and are willing to shop to locate these products, the target market is much smaller than that of convenience goods.
Hence , marketers often are more selective when choosing distribution outlets to sell their products.

Specialty Products – These are products that tend to carry a high price tag relative to convenience and shopping products. Consumption may occur at about the same rate as shopping products but consumers are much more selective.
In fact, in many cases consumers know in advance which product they prefer and will not shop to compare products.
But they may shop at retailers that provide the best value.

In addition to the three main categories above, products are classified in at least two additional ways:

Emergency Products
Unsought Products

Emergency Products – These are products a customer seeks due to sudden events and for which pre-purchase planning is not considered. Often the decision is one of convenience (e.g., whatever works to fix a problem) or personal fulfillment (e.g., perceived to improve purchaser’s image).

Unsought Products – These are products whose purchase is unplanned by the consumer but occur as a result of marketer’s actions.
Such purchase decisions are made when the customer is exposed to promotional activity, such as a salesperson’s persuasion or purchase incentives like special discounts offered to certain online shoppers.

Components of a Product

A product is simply a marketing offering, whether tangible or intangible, that someone wants to purchase and consume.
In reality while decisions related to the consumable parts of the product are extremely important, the TOTAL product consists of more than what is consumed.

The total product offering and the decisions facing the marketer can be broken down into three key parts:

Core Benefits
Actual Product
Augmented Product

Core Benefits: The core product itself is the benefit the customer receives from using the product.

In some cases these core benefits are offered by the product itself (e.g., floor cleaner) while in other cases the benefit is offered by other aspects of the product (e.g., the can containing the floor cleaner that makes it easier to spread the product).

Actual Product: The core benefits are offered through the components that make up the actual product the customer purchases.

For instance, when a consumer returns home from shopping at the grocery store and takes a purchased item out of her shopping bag, the actual product is the item she holds in her hand.
Within the actual product is the consumable product, which can be viewed as the main good, service or idea the customer is buying.

Augmented Product: Marketers often surround their actual products with goods and services that provide additional value to the customer’s purchase.

While these factors may not be key reasons leading customers to purchase (i.e., not core benefits), for some the inclusion of these items strengthens the purchase decision while for others failure to include these may cause the customer not to buy.

Items considered part of the augmented product include:

Guarantee
Warranty
Customer Service
Complementary Products
Accessibility

The Marketing Concepts

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The Production Concept

This prevailed from the time of industrial revolution. The production concept was of idea that firm should focus on those that it could produce most efficiently and that the creation of supply of low cost would and of itself create the demand for the product. The key questions that a firm should ask itself before producing the product were

Can we produce the product?

Can we produce enough of it?

At times this production concept worked well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. Virtually that a could be produced was sold easily by a sales team whose job was simply t o execute the transactions at a price demanded by the cost of production.

The Sales Concept

In early 1930’s mass production became commonplace, competition had increased and there was an unfulfilled demand. Around this time firms began to practice the sales concept under which companies not only would produce the products, but also would try to convince the customers to buy them through advertising and personal selling .Before producing a product , the key questions were,

Can we sell the product?

Can we charge enough for it?

The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was the function that was performed after the product was developed and produced and many people came to associate marketing with hard selling. Even today many people use the word marketing when they really mean sales.

The Marketing Concept

After the World War II the variety of products increased and hard selling no longer could be relied upon to generate sales. With increased discretionary income, customers could afford to be selective and buy only those products that precisely met their changing needs and these needs were not immediately obvious. The key questions became

What does customer want?

Can we develop while they still want it?

How can we keep our customer happy?

In response to the se discerning customers, firms began to adopt the marketing concepts which involve

Focusing on customer needs before developing a product.

Aligning all functions of the company to focus on theses needs.

Realizing a profit by successfully satisfying the customer needs over the long term.

When firm first began to adopt the marketing concept, they typically set up a seprate marketing department whose objective was to satisfy the customer’s needs. Often these departments were sales department5s with expanded responsible; ities. Since the entire organization exist to satisfy the customer needs, nobody can neglect the customer issue by declaring it a marketing problem – every body must be concerned with customer satisfaction.

The marketing concept relies upon the marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing teame makes a decision about the controllable parameters of marketing mix.

The role of marketing in business

Marketing collects and analyses data on markets and consumers / customers, and then uses this information to guide business decisions as to which products they should produce and the best methods to promote them.

Different Approaches to Marketing

In practice companies they differ greatly in their understanding of what marketing is, and this is evidenced in their approach to marketing. Here we will consider the four most commonly adopted approaches taken by businesses in conducting their marketing activities.

Production Orientated

Product Orientated

Sales Orientated

Market Orientated business

The Production Orientated Business

Within the Production Orientated Business the assumption is that consumers will prefer products that are both readily available and affordable. Management in such businesses therefore focus on production efficiency and distribution. Henry Ford, with his Model T pioneered the mass production of a car which was both affordable and at that time far more available than his competitors. The problem with such an approach is that the customer wants more than just availability and affordability, compare Henry Fords famous quote ' a car of any colour as long as it's black' , with the range of Ford car colour combinations now available

The Product Oriented Business

Within the Product Oriented Business the assumption is that consumers will prefer products / services which offer the most quality, performance, and range of features. Most famously one Ralph Waldo Emerson advise us, 'If a man ... makes a better mousetrap ... the world will beat a path to his door'. In short if your product is the best, then people will buy it. Management in such businesses therefore focus on Research and Development of product improvements.
Such companies believe that technical superiority is the key to business success, but this obsession with technological advancement can prove too blinkered. For example people need to be informed about your product, before they will be willing to pay what may well be a higher price for your better product.

The Sales Oriented Business

Within the Sale Oriented business here the assumption is that consumers will not buy enough of the product unless they sell and promote the product, no matter how affordable, available and superior it is. The focus of management is therefore on making the sale, and not on whether the customer is satisfied afterwards. Here the customer is sold the product, whether it satisfies their real needs or not.
This can prove to be a poor assumption, as it has been claimed that dissatisfied customers don't buy again, and therefore repeat sales are lost. Whilst it has also been reported that whilst the average satisfied customer tells 3 people about their positive experience of a product, the average dissatisfied customer tells 10.

The Market Oriented Business

Within the Market Oriented business there is a belief that its success depends on identifying and satisfying the needs of its customers now and in the future. Management start therefore by researching their market in order to define customer needs, and invest in developing products which will satisfy those needs effectively and efficiently.
Once this has been achieved, the whole process must begin again in order to finely tune their products to the changing needs of its existing and potential customers.
The truly market orientated business does not rest on past success. Many companies claim to adopt a marketing orientated approach, in that they have a Marketing Department, Marketing Plans, Research & Development, but that this in no way means they are completely customer focused.

Nature and role of marketing

All modern organizations engage in marketing so as to be able to please and win the loyal support of their customers. Gillette engages in marketing to find out about the needs and requirements of shavers, banks engage in marketing research to find out about its customers financial services requirements

'Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably.'

Identifying - This will involve answering questions such as
'How do we find out what the consumer's requirements are?' and
'How do we keep in touch with their thoughts and feelings and perceptions about our good or service. This is a key purpose of market research.

Anticipating - Consumer requirements change all the time. For example, as people become richer they may seek a greater variety of goods and services. Anticipation involves looking at the future as well as at the present. What will be the Next Best Thing (NBT) that people will require tomorrow.

Satisfying - Consumers want their requirements to be met. They seek particular benefits. They want the right goods, at the right price, at the right time in the right place.
Profitability- Marketing also involves making a margin of profit. An organization that fails to make a profit will have nothing to plough back into the future. Without the resources to put into ongoing marketing activities, it will not be able to identify, anticipate or satisfy consumer requirements.

Marketing Management

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Marketing Management

Marketing management is a business discipline focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities.
Marketing managers are often responsible for influencing the level, timing, and composition of customer demand in a manner that will achieve the company's objectives.

Marketing is one of the most important functions in business.
It is the discipline required to understand customers' needs and the benefits they seek.
In nutshell it consists of the social and managerial processes by which products (goods or services) and value are exchanged in order to fulfill the needs and wants of individuals or groups.

What is Marketing?

In general, marketing activities are all those associated with identifying the particular wants and needs of a target market of customers, and then going about satisfying those customers better than the competitors.
This involves doing market research on customers, analyzing their needs, and then making strategic decisions about product design, pricing, promotion and distribution.

Definition:

Marketing is the process of interesting potential customers and clients in your products and/or services.
The key word in this marketing definition is "process"; marketing involves researching, promoting, selling, and distributing your products or services.

Marketing is the management process responsible for identifying, anticipating and satisfying consumers' requirements profitably .

This puts even more emphasis on identifying the needs of the clients, and on providing a service or product which is of the required quality.
It also brings the well-being of society into the equation, and leaves out the profit motive (in order to include not-for-profit organizations).
However, if an organization has profitability as one of its objectives, then that will be an important factor when marketing objectives are being drawn up.

A phrase which often comes up is 'exchange relationships'. Exchange, in this context, means the provision or transfer of goods, services or ideas, in return for something of value.

The Marketing Cycle

The marketing process is cyclical:

Formulate a MISSION for your information service / library (where do we want to be?)
Review your current position (where are we now?), and identify opportunities, using techniques such as SWOT and PEST
Formulate marketing objectives

Undertake MARKET RESEARCH

Modify marketing objectives
Formulate marketing strategies (how do we get there?), balancing various components of the MARKETING MIX.
Implement Marketing strategies.
Monitor success (how do we find out whether we got there?)
Review strategies - and objectives and mission if necessary (starting again from the top)

Marketing Mission

A mission statement should embody the vision and values of an organization and ensure that everyone knows what they're aiming for.
It is important that the staff of an organization identify with and 'own' the mission.
If they do not, the mission is unlikely to be achieved, particularly if you are offering services (which depend on the commitment of staff).

The other stakeholders (customers, funding bodies etc.) should also be able to fit the mission to their idea of what the organization is about.
If there is too much of a mismatch (e.g. if you were running a small college library and had as your mission 'to be the best library in the world'), people are very skeptical about the stated mission.

A mission statement is a formal description of the mission of a business.
The mission statement might be published in several places (e.g. at the front of an annual report and accounts, on promotional material, in the board room and on the factory floor).

There is no standard format for a mission statement. However, an effective mission statement should contain the following characteristics:

Brief – it should be easy to understand and remember
Flexible – it should be able to accommodate change
Distinctive – it should make the business stand out

Mission Statements of Well Known Enterprises

3M
"To solve unsolved problems innovatively"

Merck
"To preserve and improve human life."

Wal-Mart
"To give ordinary folk the chance to buy the same thing as rich people."

Walt Disney
"To make people happy."

Reviewing your position

Before you can decide where you want your business to go and how you are going to get there, you need to find out where you are now.
SWOT and PEST analyses are techniques that can be used to help determine your position in your market.

SWOT stands for

Strengths
Weaknesses,
Opportunities; and
Threats

The idea is that you identify the strengths and weaknesses of your service, pinpoint opportunities and note threats. It is important to be as objective as possible:
For example, you may think that a 'large collection of books' is a strength, but it may be more important to the users that the books should be up-to-date - they would be happier with a smaller collection if it were more current.

Therefore it is a good idea to take a brainstorming approach, and consider undertaking market research, to test your hypotheses about strengths and weaknesses. Some factors (e.g. the internet) can be seen as both threats and opportunities.

PEST stands for the

Political factors and legal factors
Economic factors
Social factors; and
Technological factors

which will effect your service in the future.

Political factors: include legal aspects (eg copyright), the general political ethos;

Economic factors: include the effect of the economy (eg in recession) on individuals, and on organizations;

Social factors: include demographic change (eg changes in proportion of age groups), changes in social habits (where people go to shop, leisure expectations), educational changes.

There are obviously a wide range of technological factors affecting libraries and information centers (e.g. the Internet, telecommunications, the media in which people expect to find information).

Formulate marketing objectives

Marketing success can be measured on several non-financial market metrics.
These measure are important since these often shed light on underlying conditions and circumstances facing the company that are not easily seen within financial measures.

For instance, a company may report strong sales for a product but market share information may suggest the product is losing ground to competitors.
The marketing objectives will indicate targets to be achieved across several marketing decision areas.

Target market objectives

Market share

total
by segments
by channel

Customers

total
number/percentage new
number/percentage retained

Purchases

rate of purchases
size/volume of purchases

Promotional objectives

Level of brand/company awareness
Traffic building

(e.g., store traffic, website traffic)

Product trials

(e.g. sales promotions, product demonstrations)

Sales force

(e.g. cycle time, cost per call, closing rate, customer visits, etc.)

Channel objectives

Dealers

total
number/percentage new
number/percentage retained

Order processing and delivery

on-time rate
shrinkage rate
correct order rate

Market research objectives

studies initiated
studies completed

R&D objectives

product development

Other objectives

partnerships developed

Undertake MARKET RESEARCH

Marketing Research is the function that links the consumer, customer, and public to the marketer through information--information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. .

Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications

Market research is supposed to be a systematic activity - orderly and impartial.
The cycle for market research normally involves:
Defining the problem (eg 'Department X scarcely ever asks me for information')
Developing a hypothesis (eg 'They don't realise how much relevant information I could access')

Deciding how to test it (using either secondary data, or primary data - see below)
Information gathering
Collation and interpretation
Decision making

Marketing Strategy

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What is strategy?

A “Strategy” means an artifice or a subtlety of contrivance.
A dictionary describes strategy as an “artful means to some end.”
It is a realistic process of solving or tapping or nabbing opportunities by identifying the consistency of the alternatives with the corporate goals, policies and available resources.

Strategy brings in to notice the critical activities requiring prior concentration and special efforts.
It acts as a bridge between a firm’s objectives and its action plans or programs.

A company’s strategy represents managements answer to such fundamental business questions as -

Whether to concentrate on single business or build diversified group of business,
Whether to cater to a broad range of customers or focus on particular market niche,
Whether to develop a wide or narrow range of product line,
Whether to peruse a competitive advantage based on low cost or product superiority or unique organizational capabilities,
How to respond to changing buyers preferences,
How big geographic market n to try to cover,
How to react to newly emerging market & competitive conditions,
How to grow the enterprise over the long term.

Hence strategy reflects managerial choice among the alternatives & signal organizational commitment to a particular product s, services, competitive approaches 7 ways of operating enterprise.
Formulating a strategy brings into play the critical managerial issues of how to achieve the targeted results , in light of the organizational ‘s situation & prospects. Objects are the ends & strategy is the means of achieving them.
The how’s of company’s strategy are typically a blend of –

a) Deliberate & purposeful actions as needed reactions to unanticipated development & fresh market conditions & competitive pressures.
b) The collective learning of the organization over time – not just insights gained from experience, but more important, but the internal activities it has learned to perform quite well & the competitive capabilities it has developed.

What does a company’s strategy consists of?

An organization’s strategic concern is

How to grow the business?
How to satisfy the customers?
How to compete with the rivals?
How toms respond to changing market conditions?
How to achieve strategic & financial objectives?

The how’s of strategy tends to be company specific, customized to a company’s own situation & performance objectives.

What are the Components of Good Marketing Strategy?

There are 10 components of marketing strategy:

1. Ongoing review & augmentation of business & marketing strategies - Are you continuing to assess the strengths and weakness of your business and its marketing strategies? Are you continuously improving your strategies?

2. Conducting Market Research: Have you estimated the size & potential of your customer market? Do you understand the industry and economic drivers in your customer markets? What are the strengths and weaknesses of your competitors?

3. Customer Perspective: Do you clearly understand the customer perspective? Very often, this is where the seed of innovation begins as we learn more about the customer perspective, we start to be able to identify new & emerging customer needs.

4. Differentiating: Will you stand out from your competitors based on price or value or developing a niche market where you are the dominant player?

5. Creating Visibility: Is your business clearly visible to your target customer groups? If not, what do you need to do to become more visible to each of the customer groups that you serve?
Developing a marketing communications strategy and branding strategies will help you do this.

6. Developing Channels to Distribute Product/Service: Do you have deep and wide channels for distributing your product and/or services?

7. Establishing a Marketing Budget: Have you realistically budgeted for the cost of all promotional activity - salaries/commissions of sales people, advertising, sales promotions, trade show promotions, print/media packages, etc.

8. Trial & Error - Do you have a willingness to finance trial & error with your marketing activities to determine what works best?

9. Tracking Results - Do you track your marketing results to determine what's working the best?

10. Following Through: Are you keeping your promises to your customers? Are your customer service and operations providing on-time, quality product?

Why company’s strategy evolve?

Every company encounters an occasion in which it needs to adapt a strategy to shifting industry & competitive conditions, newly emerging buyer preference & requirements, the initiatives of rival firms to grab the increases market share, the appearance of fresh opportunities & threats, advancing technology, & other significant events that affect its business.

A good marketing strategy provides specific goals and can include:

a description of the key target buyer/end user
competitive market segments the company will compete in
distribution channels
the unique positioning of the company and its products versus the competition
the reasons why it is unique or compelling to buyers
price strategy versus competition
marketing spending strategy with advertising and promotion
possible research and development
market research expenditure strategies.

An overall company marketing strategy should also:

define the business
position the business as a leader, challenger, follower, or niche player in the category
define the brand or business personality or image that is desired in the minds of buyers and end users
define life cycle influences, if applicable

The strategy should specify –

What (objectives to be accomplished)
Where (on which industries & products -markets to focus)
How (which resources & activities to allocate to each product-market to meet environmental opportunities & threats & to gain a competitive advantages)

The Components of Strategy

A strategy has five components –

1. Scope – this refers to the breadth of its strategic domain –the number & types of industries , product lines & market segment it competes in or plan to enter.

2. Goals & objectives – strategy should furnish the information about the desired levels of accomplishment on one or more dimensions of performance –such as volume growth, profit contribution, or return on investment –over specified time periods for each of these business & product markets & for the organization as a whole

3. Resource deployments –optimal use of financial & human resources. formulating strategy involves deciding how those resources are to be obtained & allocated, across business, product –markets, functional departments& activities within each business or product –market.

4. Identification of a sustainable competitive advantage- how the organizations will compete in each business & product – market within its domain. An position itself to develop & sustain a differential advantage over current & potential competitors ?

5. Synergy – it enables the total performance of the related business to be greater than it would otherwise be. It exist when firm’s business ,product –markets, resources deployments, & competencies complement & reinforce one another.

Marketing

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Marketing is Philosophy.

Components of Marketing

M - Marketer
M - Market
C - Customer

Market is a place where buyers, potential buyers, sellers, resellers, intermediateries meet for exchange of goods & services.

Market is set of actual & potential buyers of products & services

Marketing more than any business functions deals with customers.

It is critical to the success of every organization.

Marketing means profitable customer relationships

Goals of Marketing

To attract new customers by promising superior values & to keep & grow current customers by delivering satisfaction.

Principles of Marketing

Marketing is about understanding the customer’s needs and ensuring that products and services are of the highest possible standards in order to satisfy the potential customers wants and needs.
Marketing also focuses on ways in which the business can influence the behaviour of customers.

Understanding Customers Needs

It is very important to understand the needs and wants of customers. The needs of customers may vary between different groups of people.

Customers needs include:
Good customer service – This would include the after care service and the service provided when the purchase of the goods is made.

Understanding & keep ahead of competition
The business may consider their competitive markets and may evaluate the competitive prices in order to provide a better service and better quality. They can use these strategies to meet the needs of their customers.
They need to have unique goods in order to stay ahead of competitors. For example a game shop can get the latest games so more customers can come there because no one else will have them
Communicate effectively with its customers to satisfy customer expectations.
The business will need to think of innovations, which they could use to help with communication between suppliers, contractors and customers.
There are a ways in which the business could communicate with its customers, this could be through the use of phone, fax and Internet.

Co-ordinate its functions to achieve marketing aims

Firms may need to diversify the way they operate in order to achieve marketing aims and objectives.
Company may change the way they deal with the level of production in order to achieve higher and more efficient production levels.
This could include the diversification of the work force and the diversification with the allocation of the resources available to the company.

Be aware of constraints on marketing activities

Be aware on the operations including the problems, which are associated with marketing activities and once evaluated then make sure they can change their marketing activities in order to achieve higher profit margins.

The Market, its definition and structure

A market consists of all the consumers who purchase a particular type of good or service. The market may be sub-divided into separate segments each of which can be considered to be a separate market in its own right.

It is very important for a business to be able to define its market:
1. So that it can estimate the size of the market
2. So that it can forecast the growth of the market
3. To identify the competitors in the market
4. To break the market down into relevant segments
5. To create an appropriate marketing mix to appeal to customers in the market.

There are different types of markets,
for example:
Business-to-Business (B2B) markets in which a businesses customers are other businesses.
Business to Consumer (B2C) markets in which businesses sell to other customers.

Some markets take place in a physical location e.g. a street market, whereas others may be virtual markets e.g. when people buy and sell through the medium of the Internet.

The size of the market can be calculated in terms of the number of customers that make up the market, or the value of sales in the market.
A business can then calculate its market share in terms of the number of customers its sells to, or the total value of its sales.

Markets are typically structured into segments. Primary segmentation is between customers buying entirely different products. For example, an oil company manufactures a wide range of fuels and lubricants for road, rail, water and air transport and for industry, all of them for different groups of customers.
Further segmentation can be based on demographic and psychographics factors. Demographics segment people by clearly ascertainable facts their sex, their age, size of family, etc.

Types of customer

Organizations will often set up different structures to deal with different sets of customers. This is because they will often give some groups more time and attention than others.
An obvious example would be in a hospital where casualty patients would require a different type of attention to those requiring a routine X-ray.

Many businesses will have different procedures for dealing with large and small customers.
Separate departments might handle these accounts, using different types of paperwork, offering different rates of discount, and treat customers in different ways.
The advantages of organizing in a pattern based on having different sets of customers are:

Different types of customers can be dealt with by separate departments.
Customers will be more inclined to deal with a business with departments concentrating on their particular needs.
It is easier to check on the performance of individual products.

Distribution

Getting products from the point of production into the hands of the end-user with the help of various transport modes, together with the cooperation of wholesalers and retailers.

Marketing Process

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THE MARKETING PROCESS

Under the marketing concepts, the firm must find ways to discover unfulfilled customer needs & bring to market products that satisfy those needs. The process of doing so can be modeled in a sequence of steps; the situation is analyzed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are made, the plan is implemented & the results are monitored.

The Marketing Process

Situational Analysis
Marketing Strategy
Marketing Mix Decisions
Implementation & control

Situational Analysis:

A through analysis of the situation in which the firm finds it serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying customer needs, the firm must understand its own capabilities & the environment in which it is operating. The situational analysis thus can be viewed in terms an analysis of the external environment & an internal analysis of firm itself. The external environment can be described in terms of macro-environmental factors that broadly affect many firms, & macro –environmental factors closely related to the specific situation of the firm. The situation analysis should include past , present & future aspects. It should include a history outlining how the situation evolved to its present state , & an analysis of the trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists. If the situation analysis reveals the gap between what customer want &what is offered to them , then there may be opportunities to introduce the products to better satisfy those customers. Hence the situation analysis should yield a summary of problems & opportunities. From this ,the firm can match its capabilities with the opportunities in order to satisfy customer needs better than the competitors. There several framework that can be used to add structure to situation analysis: 5 C Analysis – company, customers, competitors collaborators, climate. PEST analysis – for macro-environmental, societal, political, economical and technological factors. A PEST analysis can be used as the climate portion of the 5C analysis.
SWOT Analysis -strengths, weakness, opportunities & threats – for the internal & external situation. A SWOT analysis can be used to condense the situation analysis in to a listing of the most relevant problems & opportunities & to asses how well the firm is equipped to deal with them.

2. Marketing Strategy

Once the best opportunity to satisfy unfulfilled customer need is identified, a strategic plan for perusing the opportunity can be developed. Market research will provide specific market information that will permit the firm to select the target market segment& optimally position the offering within that segment. The result is a value proposition to the target market .The marketing strategy then involves -

Segmentation,
Targeting (target market selection)
Positioning the product within the target market
Value proposition to the target market.

3. Marketing Mix Decisions

Detailed tactical decisions then are made for the controllable parameters of marketing mix. The action items includes -

Product development- specifying , designing & producing the first units of product.
Pricing Decisions
Distribution contracts
Promotional campaign development

4. Implementation & control

At this point in the process, the marketing plan has been developed & the product has been launched. Given that few environments are static, the result the marketing effort should be monitored closely.
As the market changes the marketing mix can be adjusted to accommodate the changes. Often small changes in consumer wants can be addressed by changing the advertising message.
As the change become more significant, a product design or an entirely new product may be needed. The marketing process does not end with implementation – continual monitoring & adaptation is needed to fulfill customer needs consistently over the long time.

Situational Analysis

In order to profitably satisfy customer needs , the firm must understand its external & internal situation , including customer , the market environment ,& the firm own capabilities . Further more it needs to forecast trends in the dynamic environment in which it operates. A useful framework for performing situation analysis is 5C analysis. The 5C analysis is an environmental scan on five key areas applicable to marketing decisions. It covers the internal, micro-environmental, macro-environmental situation. The 5C analysis is an extension of the 3C analysis (company, customers and competitors), to which some marketers add 4th C of collaborators The further addition of a macro-environmental analysis results in a 5Canalysis, some aspect of which are outlined below –

Company
Product line
Image in the market
Technology & experience
Culture
Goals

Collaborators-

Distributors
Suppliers
Alliance

Customers-

Market size & growth
Market segment
Benefits that customer is seeking , tangible & intangible
Motivation behind purchase, value drivers, benefits v/s costs
Decision maker or decision making unit
Retail channel –where does the consumer actually purchase he product ?
Consumer information sources- where does the consumer obtain information about the product ?
Buying process-impulse or careful comparison.
Frequency of purchase, seasonal factors
Quantity purchased at a time
Trends – how consumer needs & preference change over time.

Competitors-

Actual or potential
Direct or indirect
Products
Positioning
Market share
Strengths &weakness of competitors

Climate (or context)- The climate or micro environmental factors are -

Political or regulatory environment – government policies & regulations that affect the market.
Economic environment –business cycle,inflation rate & other macroeconomic issues .
Social / cultural environment- society’s trends & fashions
Technological environment – new knowledge that makes possible new ways of satisfying needs; the impact of technology on the demand for existing products.
The analysis of these four external climate factors often is referred as PEST analysis.

Information Sources- Customer & competitor’s information specifically oriented towards marketing decisions can be found in market research reports, which provide a market analysis for a particular industry. For foreign markets, country reports can be used as a general information source for micro- environment . By combining the regional & market analysis with knowledge of firm’s own capabilities & partnerships, the firm can identify & select the more favorable opportunities to provide value to the customers. Target Market Selection segmentation. Target marketing contrasts with mass marketing, which offers a single product to the entire market.
Two important factors to consider when selecting a target market segment are the attractiveness of the segment & the fit between the segment & the firm’s objectives , resources & capabilities

Attractiveness of a market segment

The following are some examples of aspects that should be considered when evaluating the attractiveness of a market segment:

Size of the segment (number of customers and / or number of units)
Growth rate of the segment.
Competition in the segment.
Brand loyalty of existing customers in the segment.
Attainable market share given promotional budget and competitor’s expenditure.
Required market share to break even.
Sales potential for the firm in the segment.
Expected profit margins in the segment.

Market research & analysis is instrumental in obtaining this information. For example , buyer intentions, sales force estimates, test marketing& statistical demand analysis are useful in determining the sales potential. The impact of applicable micro – environment & macro –environmental variables on the market segments should be considered.

Note that larger segments are not necessarily the most profitable to target since they likely will have more competition. It may be more profitable to serve one or more smaller segments that have little competition. On the other hand, if the firm develops a competitive advantage, for example via patent protection, it may find it profitable to peruse larger market segment

Suitability of Market Segments to the firm

Market segments also should be evaluated according to how they fit the firm’s objectives, resources & capabilities .Some aspects includes -

Whether the firm can offer superior value to the customer in the segment.
The impact of the serving the segment on the firm’s image.
Access to the distribution channels required to serve the segments.
The firm’s resources v/s capital investments required to serve the segment.
The better the firms fit to a market segment , & the more attractive the market segments, the greater the profitable potential to the firm.

Target Market Strategies –

There are several different target market strategies that may be followed . Targeting strategies usually can be categorized as one of the following-

Single segment strategy- also known as concentrated strategy. One market segment (not the entire market) is served with one marketing mix. A single- segment approach often is strategy of choice for smaller companies with limited resources.

Selective specialization- this is an multi segment strategy also known as differentiated strategy. Different marketing mixes are offered to different segments .The product may or may be different – in many cases only the promotional message or distribution channels vary.

Product specialization – the firm specializes in a particular product & tailors it to different market segments.

Market specialization – the firm specializes in serving a particular market segment & offers that segment an array of different products.

Full market coverage – the firm attempts to serve the entire market. This coverage can be achieved by means of either market strategy a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment.

The following diagrams show the examples of the five market selection patterns given three market segments S1, S2, & S3 & the three different products P1, P2&P3.

A firm that is seeking to enter a market & grow should first target the most attractive segments that match its capabilities. Once it gains a foothold, it can expand by perusing a product specialization strategy, tailoring the product for different segments, or by a market specialization strategy & offering new products to its existing market segments.
Another strategy whose use is increasing, in which the marketing mix is tailored on an individual basis. While in the past impractical, individual marketing is becoming more viable thanks to advances in technology.
The Marketing Mix – Marketing decisions generally fall into the following four controllable categories

Product
Price
Place (distribution)
Promotions

The term marketing mix became popular after Neil Borden published his article ‘the concepts of the marketing mix’ The ingredients in Borden’s marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, displays, serving, physical handling & fact finding & analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as 4P’s of marketing.

Product
Price
Place
Promotions

These four P’s are parameters that the marketing manager can control, subject to internal & external constraints of the marketing environment. The goal is to make decisions that center the four 4P’s on the customers in the target market in order to create perceived value & generate a positive response

1. Product Decisions

The term product refers to tangible, physical product, as well as services. Here are some examples of the product decisions to be made-

Brand name
Function ability
Styling
Quality
Safety
Packaging
Repairs & support
Warranty
Accessories & services

2. Price Decisions

Some examples of pricing decisions to be made are –

Pricing strategy( skim, penetration, etc.)
Suggested retail price
Volume discounts & whole price
Cash & early payments discounts
Seasonal pricing
Bundling
Price flexibility
Price discrimination

3. Distribution ( place) decisions –

Distribution is about getting the products to the customers. Some examples of distribution decisions include-

Distribution channels
Market coverage ( inclusive ,selective, or exclusive distribution)
Specific channel
Inventory management
Warehousing
Distribution center
Order processing
Transportation
Reverse logistics

4. Promotions Decisions –

In the context of marketing mix , promotions represents the various aspects of marketing communications , that is , the communication of information about the product with the goal of generating a positive customer response . Marketing communications decisions includes

Promotional strategy (push or pull )
Advertising
Personal selling & sales force
Sales promotions
Public relations & publicity
Marketing communications budget

Limitations of the Marketing Mix Frameworks

The marketing mix framework was particularly useful in early days of the marketing concepts when physical product represented a larger portion of the economy.

Today with marketing more integrated into organization& with a wider variety of products & markets some authors have attempted to extend its usefulness by proposing 5th P , such as packaging, people, ,process etc,.

Today marketing mix mostly commonly remains based on the 4P’s. Despite its limitations & because of its simplicity, the use of this framework remains strong & many marketing text books have been organized around it.

Marketing Strategy

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Marketing Strategy

The marketing concept of building an organization around the profitable satisfaction of customer needs has helped firms to achieve success in high-growth, moderately competitive markets. However, to be successful in markets in which economic growth has leveled and in which there exist many competitors who follow the marketing concept, a well-developed marketing strategy is required. Such a strategy considers a portfolio of products and takes into account the anticipated moves of competitors in the market.

The Case of Barco

In late 1989, Barco N.V.'s projection systems division was faced with Sony's surprise introduction of a better graphics projector. Barco had been perceived as a leader, introducing high quality products first and targeting a niche market that was willing to pay a higher price. Being a smaller company, Barco could not compete on price, so it traditionally pursued a skimming strategy in the graphics projector market, where it had a 55% market share of the small market. Barco's overall market share for all types of projectors was only 4%.

Even though Barco's market was mainly in graphics projectors, the company had not introduced a new graphics projector in over two years. Instead, it was spending a large portion of its R&D budget on video projector products. However, video projectors were not Barco's market.
Barco's engineers had been working long hours on their new projector that would not be as good as Sony's. Some people thought they should not stop work on that product since the engineers' morale would suffer after being told how important it was to work hard to get the product out.

However, even considering the morale of the product team, it would not have been a good idea to introduce a product that was inferior to that of Sony. Barco wisely stopped working on the inferior product and put a major effort in developing a projector that outperformed Sony's.

The Barco case illustrates several marketing strategy concepts:

1. Price / Selling Effort Strategies: A firm that follows a skimming strategy seeks to be the first to introduce a product with very good performance, selling it to the innovator market segment and charging a premium price for it. It makes as much profit as possible, then moves on when the competition arrives. The price is likely to fall over time as competition is encountered. Such a skimming strategy contrasts with a penetrating strategy, which seeks to gain market share by sacrificing short-term profits, and increasing the price over time as market share is gained.

2. Competitors have certain strengths and abilities. To succeed, a firm must leverage its own unique abilities.

3. A firm should prepare defensive strategies before potential threats arrive. If the competition surprises a firm with the introduction of a vastly superior product, the firm should resist the temptation to proceed with its mediocre product. A firm never should introduce a product that is obsolete when it hits the market.

4. The competition's probable response to a firm's actions should be considered carefully.

Marketing Research for Strategic Decision Making

The two most common uses of marketing research are for diagnostic analysis to understand the market and the firm's current performance, and opportunity analysis to define any unexploited opportunities for growth. Marketing research studies include consumer studies, distribution studies, semantic scaling, multidimensional scaling, intelligence studies, projections, and conjoint analysis. A few of these are outlined below.

1. Semantic scaling: a very simple rating of how consumers perceive the physical
attributes of a product, and what the ideal values of those attributes would be. Semantic scaling is not very accurate since the consumers are polled according to an ordinal ranking so mathematical averaging is not possible. For example, 8 is not necessarily twice as much as 4 in an ordinal ranking system. Furthermore, each person uses the scale differently.

2. Multidimensional scaling (MDS) addresses the problems associated with semantic scaling by polling the consumer for pair-wise comparisons between products or between one product and the ideal. The assumption is that while people cannot report reliably which attributes drive their choices, they can report perceptions of similarities between brands. However, MDS analyses do not indicate the relative importance between attributes.

3. Conjoint analysis infers the relative importance of attributes by presenting consumers with a set of features of two hypothetical products and asking them which product they prefer. This question is repeated over several sets of attribute values. The results allow one to predict which attributes are the more important, the combination of attribute values that is the most preferred. From this information, the expected market share of a given design can be estimated.

Multi-Product Resource Allocation

The most common resource allocation methods are:

Percentage of sales
Executive judgement
All-you-can-afford
Match competitors
Last year based

Another method is called decision calculus. Managers are asked four questions:
What would sales be with:

no sales force
half the current effort
50% greater effort
a saturation level of effort.

From these answers, one can determine the parameters of the S-curve response function and use linear programming techniques to determine resource allocations.

Decision algorithms that result in extreme solutions, such as allocating most of the sales force to one product while neglecting another product often do not yield practical solutions.

For mature products, sales increase very little as a function of advertising expenditures. For newer products however, there is a very positive correlation.

Portfolio models may be used to allocate resources among major product lines or business units. The BCG growth-share matrix is one such model.

New Product Diffusion Curve

As a new product diffuses into the market, some types of consumers such as innovators and early adopters buy the product before other consumers. The product adoption follows a trajectory that is shaped like a bell curve and is known as the product diffusion curve. The marketing strategy should take this adoption curve into account and address factors that influence the rate of adoption by the different types of consumers.

Dynamic Product Management Strategies

Two fundamental issues of product management are whether to pioneer or follow, and how to manage the product over its life cycle.

Order of market entry is very important. In fact, the forecasted market share relative to the pioneering brand is the pioneering brand's share divided by the square root of the order of entry. For example, the brand that entered third is forecasted to have 1/√3 times the market share of the first entrant (Marketing Science, Vol. 14, No. 3, Part 2 of 2, 1995.) This rule was determined empirically.

The pioneering advantage is obtained from both the supply and demand side. From the supply side, there are raw material advantages, better experience effects to provide a cost advantage, and channel preemption. On the demand side, there is the advantage of familiarity, the chance to set a standard, and the choice of perceptual position.

Once a firm gains a pioneering advantage, it can maintain it by improving the product, creating a standard, advertise that it was the first, and introduce a new product in the market that may cannibalize the first but deter other firms from entering.

There also are disadvantages to being the pioneer. Being first allows a competitor to leapfrog the early technology. The incumbent develops inertia in its R&D and may not be a flexible as newcomers. Developing an industry has costs that the pioneer must bear alone, and the way the industry develops and its potential size are not deterministic.

There are four classic price/selling effort strategies:

In general, products are clustered in the low-low or high-high categories. If a product is in a mixed category, after introduction it will tend to move to the low-low or high-high one.

Increasing the breadth of the product line as several advantages. A firm can better serve multiple segments, it can occupy more of the distributors' shelf space, it offers customers a more complete selection, and it preempts competition. While a wider range of products will cause a firm to cannibalize some of its own sales, it is better to do so oneself rather than let the competition do so.

The drawbacks of broad product lines are reduced volume for each brand (cannibalization), greater manufacturing complexity, increased inventory, more management resources required, more advertising (or less per brand), clutter and confusion in advertising for both customers and distributors.

To increase profits from existing brands, a firm can improve its production efficiency, increase the demand through more users, more uses, and more usage. A firm also can defend its existing base through line extensions (expand on a current brand), flanker brands (new brands in an existing product area), and brand extensions.

The Marketing Process

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The Marketing Process
• Under the marketing concepts, the firm must find ways to discover unfulfilled customer needs & bring to market products that satisfy those needs.
• The process of doing so can be modeled in a sequence of steps; the situation is analyzed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are made, the plan is implemented & the results are monitored.
• Situational Analysis
• Marketing Strategy
• Marketing Mix Decisions
• Implementation & control

Situational Analysis
• A through analysis of the situation in which the firm finds it serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying customer needs, the firm must understand its own capabilities & the environment in which it is operating.
• The situational analysis thus can be viewed in terms an analysis of the external environment & an internal analysis of firm itself. The external environment can be described in terms of macro-environmental factors that broadly affect many firms, & macro –environmental factors closely related to the specific situation of the firm.
• The situation analysis should include past , present & future aspects. It should include a history outlining how the situation evolved to its present state , & an analysis of the trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists.
• If the situation analysis reveals the gap between what customer want & what is offered to them , then there may be opportunities to introduce the products to better satisfy those customers. Hence the situation analysis should yield a summary of problems & opportunities. From this ,the firm can match its capabilities with the opportunities in order to satisfy customer needs better than the competitors.
• There several framework that can be used to add structure to situation analysis:
• 5 C Analysis – company, customers, competitors collaborators, climate.
• PEST analysis – for macro-environmental, societal, political, economical and technological factors. A PEST analysis can be used as the climate portion of the 5C analysis.
• SWOT Analysis -strengths, weakness, opportunities & threats – for the internal & external situation. A SWOT analysis can be used to condense the situation analysis in to a listing of the most relevant problems & opportunities & to asses how well the firm is equipped to deal with them.

Marketing Strategy
• Once the best opportunity to satisfy unfulfilled customer need is identified, a strategic plan for perusing the opportunity can be developed. Market research will provide specific market information that will permit the firm to select the target market segment& optimally position the offering within that segment. The result is a value proposition to the target market .The marketing strategy then involves
• Segmentation,
• Targeting (target market selection)
• Positioning the product within the target market
• Value proposition to the target market.

Marketing Mix Decisions
• Detailed tactical decisions then are made for the controllable parameters of marketing mix. The action items includes
• Product development- specifying , designing & producing the first units of product.
• Pricing Decisions
• Distribution contracts
• Promotional campaign development

Implementation& control
• At this point in the process, the marketing plan has been developed & the product has been launched. Given that few environments are static, the result the marketing effort should be monitored closely.
• As the market changes the marketing mix can be adjusted to accommodate the changes. Often small changes in consumer wants can be addressed by changing the advertising message.
• As the change become more significant, a product design or an entirely new product may be needed. The marketing process does not end with implementation

– continual monitoring & adaptation is needed to fulfill customer needs consistently over the long time.

Situational Analysis
• In order to profitably satisfy customer needs , the firm must understand its external & internal situation , including customer , the market environment ,& the firm own capabilities .
• Further more it needs to forecast trends in the dynamic environment in which it operates. A useful framework for performing situation analysis is 5C analysis.

The 5C analysis is an environmental scan on five key areas applicable to marketing decisions.
• It covers the internal, micro-environmental, macro-environmental situation.

The 5C analysis is an extension of the 3C analysis (company, customers and competitors), to which some marketers add 4th C of collaborators. The further addition of a macro-environmental analysis results in a 5Canalysis, some aspect of which are outlined below –
• Company
• Product line
• Image in the market
• Technology & experience
• Culture
• Goals

Collaborators-
• Distributors
• Suppliers
• Alliance

Customers-
• Market size & growth
• Market segment
• Benefits that customer is seeking , tangible & intangible
• Motivation behind purchase, value drivers, benefits v/s costs
• Decision maker or decision making unit
• Retail channel –where does the consumer actually purchase he product ?
• Consumer information sources- where does the consumer obtain information about the product ?
• Buying process-impulse or careful comparison.
• Frequency of purchase, seasonal factors
• Quantity purchased at a time
• Trends – how consumer needs & preference change over time.

Competitors-
• Actual or potential
• Direct or indirect
• Products
• Positioning
• Market share
• Strengths &weakness of competitors

Climate (or context)-
• The climate or micro environmental factors are
• Political or regulatory environment – government policies & regulations that affect the market.
• Economic environment –business cycle,inflation rate & other macroeconomic issues .
• Social / cultural environment- society’s trends & fashions
• Technological environment – new knowledge that makes possible new ways of satisfying needs; the impact of technology on the demand for existing products.
• The analysis of these four external climate factors often is referred as PEST analysis.

Information Sources-
• Customer & competitor’s information specifically oriented towards marketing decisions can be found in market research reports, which provide a market analysis for a particular industry. For foreign markets, country reports can be used as a general information source for micro- environment .
• By combining the regional & market analysis with knowledge of firm’s own capabilities & partnerships, the firm can identify & select the more favorable opportunities to provide value to the customers.

Target Market Selection
• segmentation. Target marketing contrasts with mass marketing, which offers a single product to the entire market.
• Two important factors to consider when selecting a target market segment are the attractiveness of the segment & the fit between the segment & the firm’s objectives , resources & capabilities.

Attractiveness of a market segment
The following are some examples of aspects that should be considered when evaluating the attractiveness of a market segment:
• Size of the segment (number of customers and / or number of units)
• Growth rate of the segment.
• Competition in the segment.
• Brand loyalty of existing customers in the segment.
• Attainable market share given promotional budget and competitor’s expenditure.
• Required market share to break even.
• Sales potential for the firm in the segment.
• Expected profit margins in the segment.
• Market research & analysis is instrumental in obtaining this information. For example , buyer intentions, sales force estimates, test marketing& statistical demand analysis are useful in determining the sales potential. The impact of applicable micro – environment & macro –environmental variables on the market segments should be considered.
• Note that larger segments are not necessarily the most profitable to target since they likely will have more competition. It may be more profitable to serve one or more smaller segments that have little competition. On the other hand, if the firm develops a competitive advantage, for example via patent protection, it may find it profitable to peruse larger market segment
Suitability of Market Segments to the firm
• Market segments also should be evaluated according to how they fit the firm’s objectives, resources & capabilities. Some aspects includes
• Whether the firm can offer superior value to the customer in the segment.
• The impact of the serving the segment on the firm’s image.
• Access to the distribution channels required to serve the segments.
• The firm’s resources v/s capital investments required to serve the segment.
• The better the firms fit to a market segment , & the more attractive the market segments, the greater the profitable potential to the firm.

Target Market Strategies –
• There are several different target market strategies that may be followed.

Targeting strategies usually can be categorized as one of the following-
• Single segment strategy- also known as concentrated strategy. One market segment (not the entire market) is served with one marketing mix. A single- segment approach often is strategy of choice for smaller companies with limited resources.
• Selective specialization- this is an multi segment strategy also known as differentiated strategy. Different marketing mixes are offered to different segments .The product may or may be different – in many cases only the promotional message or distribution channels vary.
• Product specialization – the firm specializes in a particular product & tailors it to different market segments.

• Market specialization – the firm specializes in serving a particular market segment & offers that segment an array of different products.
• Full market coverage – the firm attempts to serve the entire market. This coverage can be achieved by means of either market strategy a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment.

Product Specialization
Market Specialization
Full Market Coverage

• A firm that is seeking to enter a market & grow should first target the most attractive segments that match its capabilities. Once it gains a foothold, it can expand by perusing a product specialization strategy, tailoring the product for different segments, or by a market specialization strategy & offering new products to its existing market segments.
• Another strategy whose use is increasing, in which the marketing mix is tailored on an individual basis. While in the past impractical, individual marketing is becoming more viable thanks to advances in technology.

The Marketing Mix –
• Marketing decisions generally fall into the following four controllable categories
• Product
• Price
• Place (distribution)
• Promotions
• The term marketing mix became popular after Neil Borden published his article ‘the concepts of the marketing mix’ The ingredients in Borden’s marketing mix included product planning, pricing ,branding, distribution channels, personal selling, advertising , promotions ,packaging , displays ,serving, physical handling & fact finding & analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as 4P’s of marketing ,

• Product
• Price
• Place
• Promotions
• These four P’s are parameters that the marketing manager can control, subject to internal & external constraints of the marketing environment. The goal is to make decisions that center the four 4P’s on the customers in the target market in order to create perceived value & generate a positive response

Product Decisions
• The term product refers to tangible, physical product, as well as services.

Here are some examples of the product decisions to be made-
• Brand name
• Function ability
• Styling
• Quality
• Safety
• Packaging
• Repairs & support
• Warranty
• Accessories & services

Price Decisions
• Some examples of pricing decisions to be made are –
• Pricing strategy( skim, penetration, etc.)
• Suggested retail price
• Volume discounts & whole price
• Cash & early payments discounts
• Seasonal pricing
• Bundling
• Price flexibility
• Price discrimination

Distribution ( place) decisions –
• Distribution is about getting the products to the customers. Some examples of distribution decisions include-
• Distribution channels
• Market coverage ( inclusive ,selective, or exclusive distribution)
• Specific channel
• Inventory management
• Warehousing
• Distribution center
• Order processing
• Transportation
• Reverse logistics

Promotions Decisions –
• In the context of marketing mix , promotions represents the various aspects of marketing communications , that is , the communication of information about the product with the goal of generating a positive customer response . Marketing communications decisions includes
• Promotional strategy (push or pull )
• Advertising
• Personal selling & sales force
• Sales promotions
• Public relations & publicity
• Marketing communications budget

Limitations of the Marketing Mix Frameworks
• The marketing mix framework was particularly useful in early days of the marketing concepts when physical product represented a larger portion of the economy.
• Today with marketing more integrated into organization & with a wider variety of products & markets some authors have attempted to extend its usefulness by proposing 5th P , such as packaging, people, ,process etc,.
• Today marketing mix mostly commonly remains based on the 4P’s. Despite its limitations & because of its simplicity, the use of this framework remains strong &

many marketing text books have been organized around it.

The Marketing Concepts

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The Marketing Concepts

The marketing is the philosophy that firms should analyze the need of their customer4s and make decisions to satisfy those needs better than the competition.
To understand the marketing concepts it is worthwhile to put it in perspective by reviewing other philosophies that once were predominant.

The Production Concept
This prevailed from the time of industrial revolution. The production concept was of idea that firm should focus on those that it could produce most efficiently and that the creation of supply of low cost would and of itself create the demand for the product. The key questions that a firm should ask itself before producing the product were
Can we produce the product?
Can we produce enough of it?

At times this production concept worked well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. Virtually that a could be produced was sold easily by a sales team whose job was simply t o execute the transactions at a price demanded by the cost of production.

The Sales Concept
In early 1930’s mass production became commonplace, competition had increased and there was an unfulfilled demand. Around this time firms began to practice the sales concept under which companies not only would produce the products, but also would try to convince the customers to buy them through advertising and personal selling .Before producing a product , the key questions were,
Can we sell the product?
Can we charge enough for it?

The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was the function that was performed after the product was developed and produced and many people came to associate marketing with hard selling. Even today many people use the word marketing when they really mean sales.

he Marketing Concept
After the World War II the variety of products increased and hard selling no longer could be relied upon to generate sales. With increased discretionary income, customers could afford to be selective and buy only those products that precisely met their changing needs and these needs were not immediately obvious. The key questions became
What does customer want?
Can we develop while they still want it?
How can we keep our customer happy?

In response to the se discerning customers, firms began to adopt the marketing concepts which involve
Focusing on customer needs before developing a product.
Aligning all functions of the company to focus on theses needs.
Realizing a profit by successfully satisfying the customer needs over the long term.

When firm first began to adopt the marketing concept, they typically set up a seprate marketing department whose objective was to satisfy the customer’s needs. Often these departments were sales department5s with expanded responsible; ities. Since the entire organization exist to satisfy the customer needs, nobody can neglect the customer issue by declaring it a marketing problem – every body must be concerned with customer satisfaction.

The marketing concept relies upon the marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing teame makes a decision about the controllable parameters of marketing mix.

The role of marketing in business
Marketing collects and analyses data on markets and consumers / customers, and then uses this information to guide business decisions as to which products they should produce and the best methods to promote them.

Differing Approaches to Marketing
In practice companies they differ greatly in their understanding of what marketing is, and this is evidenced in their approach to marketing. Here we will consider the four most commonly adopted approaches taken by businesses in conducting their marketing activities.

Production Orientated
Product Orientated
Sales Orientated
Market Orientated business

The Production Orientated Business
Within the Production Orientated Business the assumption is that consumers will prefer products that are both readily available and affordable. Management in such businesses therefore focus on production efficiency and distribution. Henry Ford, with his Model T pioneered the mass production of a car which was both affordable and at that time far more available than his competitors. The problem with such an approach is that the customer wants more than just availability and affordability, compare Henry Fords famous quote ' a car of any colour as long as it's black' , with the range of Ford car colour combinations now available

The Product Orientated Business
Within the Product Orientated Business the assumption is that consumers will prefer products / services which offer the most quality, performance, and range of features. Most famously one Ralph Waldo Emerson advise us, 'If a man ... makes a better mousetrap ... the world will beat a path to his door'. In short if your product is the best, then people will buy it. Management in such businesses therefore focus on Research and Development of product improvements.
Such companies believe that technical superiority is the key to business success, but this obsession with technological advancement can prove too blinkered. For example people need to be informed about your product, before they will be willing to pay what may well be a higher price for your better product.

The Sales Orientated Business
Within the Sale Orientated business here the assumption is that consumers will not buy enough of the product unless they sell and promote the product, no matter how affordable, available and superior it is. The focus of management is therefore on making the sale, and not on whether the customer is satisfied afterwards. Here the customer is sold the product, whether it satisfies their real needs or not.
This can prove to be a poor assumption, as it has been claimed that dissatisfied customers don't buy again, and therefore repeat sales are lost. Whilst it has also been reported that whilst the average satisfied customer tells 3 people about their positive experience of a product, the average dissatisfied customer tells 10.

The Market Orientated Business
Within the Market Orientated business there is a belief that its success depends on identifying and satisfying the needs of its customers now and in the future. Management start therefore by researching their market in order to define customer needs, and invest in developing products which will satisfy those needs effectively and efficiently.
Once this has been achieved, the whole process must begin again in order to finely tune their products to the changing needs of its existing and potential customers.
The truly market orientated business does not rest on past success. Many companies claim to adopt a marketing orientated approach, in that they have a Marketing Department, Marketing Plans, Research & Development, but that this in no way means they are completely customer focused.

Nature and role of marketing
All modern organizations engage in marketing so as to be able to please and win the loyal support of their customers. Gillette engages in marketing to find out about the needs and requirements of shavers, banks engage in marketing research to find out about its customers financial services requirements

'Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably.'

Identifying - This will involve answering questions such as 'How do we find out what the consumer's requirements are?' and 'How do we keep in touch with their thoughts and feelings and perceptions about our good or service. This is a key purpose of market research.

Anticipating - Consumer requirements change all the time. For example, as people become richer they may seek a greater variety of goods and services. Anticipation involves looking at the future as well as at the present. What will be the Next Best Thing (NBT) that people will require tomorrow.

Satisfying - Consumers want their requirements to be met. They seek particular benefits. They want the right goods, at the right price, at the right time in the right place.

Profitability- Marketing also involves making a margin of profit. An organization that fails to make a profit will have nothing to plough back into the future. Without the resources to put into ongoing marketing activities, it will not be able to identify, anticipate or satisfy consumer requirements.

Marketing Management

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Marketing Management

* Marketing management is a business discipline focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities.
* Marketing managers are often responsible for influencing the level, timing, and composition of customer demand in a manner that will achieve the company's objectives.
* Marketing is one of the most important functions in business.

* It is the discipline required to understand customers' needs and the benefits they seek.
* In nutshell it consists of the social and managerial processes by which products (goods or services) and value are exchanged in order to fulfill the needs and wants of individuals or groups.

What is Marketing?
• In general, marketing activities are all those associated with identifying the particular wants and needs of a target market of customers, and then going about satisfying those customers better than the competitors.
• This involves doing market research on customers, analyzing their needs, and then making strategic decisions about product design, pricing, promotion and distribution.

Definition:
• Marketing is the process of interesting potential customers and clients in your products and/or services.
• The key word in this marketing definition is "process"; marketing involves researching, promoting, selling, and distributing your products or services.

* Marketing is the management process responsible for identifying, anticipating and satisfying consumers' requirements profitably.

• This puts even more emphasis on identifying the needs of the clients, and on providing a service or product which is of the required quality.
• It also brings the well-being of society into the equation, and leaves out the profit motive (in order to include not-for-profit organizations).
• However, if an organization has profitability as one of its objectives, then that will be an important factor when marketing objectives are being drawn up.
• A phrase which often comes up is 'exchange relationships'. Exchange, in this context, means the provision or transfer of goods, services or ideas, in return for something of value.

The Marketing Cycle
• The marketing process is cyclical:
• Formulate a MISSION for your information service / library (where do we want to be?)
• Review your current position (where are we now?), and identify opportunities, using techniques such as SWOT and PEST
• Formulate marketing objectives
• Undertake MARKET RESEARCH
• Modify marketing objectives
• Formulate marketing strategies (how do we get there?), balancing various components of the MARKETING MIX.
• Implement Marketing strategies.
• Monitor success (how do we find out whether we got there?)
• Review strategies - and objectives and mission if necessary (starting again from the top)

Marketing Mission
• A mission statement should embody the vision and values of an organization and ensure that everyone knows what they're aiming for.
• It is important that the staff of an organization identify with and 'own' the mission.
• If they do not, the mission is unlikely to be achieved, particularly if you are offering services (which depend on the commitment of staff).
• The other stakeholders (customers, funding bodies etc.) should also be able to fit the mission to their idea of what the organization is about.
• If there is too much of a mismatch (e.g. if you were running a small college library and had as your mission 'to be the best library in the world'), people are very skeptical about the stated mission.
• A mission statement is a formal description of the mission of a business.
• The mission statement might be published in several places (e.g. at the front of an annual report and accounts, on promotional material, in the board room and on the factory floor).
There is no standard format for a mission statement. However, an effective mission statement should contain the following characteristics:
• Brief – it should be easy to understand and remember
• Flexible – it should be able to accommodate change
• Distinctive – it should make the business stand out

Mission Statements of Well Known Enterprises
3M:
"To solve unsolved problems innovatively"
Merck:
"To preserve and improve human life."
Wal-Mart:
"To give ordinary folk the chance to buy the same thing as rich people."
Walt Disney:
"To make people happy."

Reviewing your position
• Before you can decide where you want your business to go and how you are going to get there, you need to find out where you are now.
• SWOT and PEST analyses are techniques that can be used to help determine your position in your market.
SWOT stands for
• Strengths
• Weaknesses,
• Opportunities; and
• Threats
• The idea is that you identify the strengths and weaknesses of your service, pinpoint opportunities and note threats. It is important to be as objective as possible:
• For example, you may think that a 'large collection of books' is a strength, but it may be more important to the users that the books should be up-to-date - they would be happier with a smaller collection if it were more current.
• Therefore it is a good idea to take a brainstorming approach, and consider undertaking market research, to test your hypotheses about strengths and weaknesses. Some factors (e.g. the internet) can be seen as both threats and opportunities.

PEST stands for the
• Political factors and legal factors
• Economic factors
• Social factors; and
• Technological factors
which will effect your service in the future.

• Political factors: include legal aspects (eg copyright), the general political ethos;
• Economic factors: include the effect of the economy (eg in recession) on individuals, and on organizations;
• Social factors: include demographic change (eg changes in proportion of age groups), changes in social habits (where people go to shop, leisure expectations), educational changes.
• There are obviously a wide range of technological factors affecting libraries and information centers (e.g. the Internet, telecommunications, the media in which people expect to find information).

Formulate marketing objectives
• Marketing success can be measured on several non-financial market metrics.
• These measure are important since these often shed light on underlying conditions and circumstances facing the company that are not easily seen within financial measures.
• For instance, a company may report strong sales for a product but market share information may suggest the product is losing ground to competitors.
• The marketing objectives will indicate targets to be achieved across several marketing decision areas.
• Target market objectives
• Market share
– total
– by segments
– by channel
• Customers
– total
– number/percentage new
– number/percentage retained
• Purchases
– rate of purchases
– size/volume of purchases

• Promotional objectives
• Level of brand/company awareness
• Traffic building
– (e.g., store traffic, website traffic)
• Product trials
– (e.g. sales promotions, product demonstrations)
• Sales force
– (e.g. cycle time, cost per call, closing rate, customer visits, etc.)

• Channel objectives
• Dealers
– total
– number/percentage new
– number/percentage retained
• Order processing and delivery
– on-time rate
– shrinkage rate
– correct order rate

Market research objectives
• studies initiated
• studies completed
R&D objectives
• product development
Other objectives
• partnerships developed

Undertake MARKET RESEARCH
• Marketing Research is the function that links the consumer, customer, and public to the marketer through information--information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.
• Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications
• Market research is supposed to be a systematic activity - orderly and impartial.
The cycle for market research normally involves:
• Defining the problem (eg 'Department X scarcely ever asks me for information')
• Developing a hypothesis (eg 'They don't realise how much relevant information I could access')
• Deciding how to test it (using either secondary data, or primary data - see below)
• Information gathering
• Collation and interpretation
• Decision making

Retail project5 (Observations at Pantaloons)

2009-01-12T00:58:00.003+05:30

Pantaloon Retail Outlet at Milan Mall Santacruz West

Pantaloons :: Santacruz :: Mumbai
Address : Milan Mall, Opp. Gamdevi Mandir, Near S.V. Road Junction Signal, Milan Subway, Santacruz (W), Mumbai Pin code : 400054 State : Maharashtra Phone : 022 - 6714 4350

We visited the retail outlet of pantaloon on 15 August at 7.30 p.m. On that day there was sale going on in Big Bazaar, therefore the pantaloon shop also has many footfalls in the outlet. On normal days the foot falls are in between 400 to 500 approximately and on holidays it increase to 600 to 700. But during the sale in Big Bazaar the footfall of Pantaloon outlet has increased to 800 to 1000 this information was given to us by the sales man at retail outlet.

We also visited Pantaloons Outlets at Borivali West and City Centre at Mumbai Central

These are the findings of our group

Before entrance the instructions were given for the customers with the pictures. The instructions were given like this

· Pet Dogs are not allowed inside the outlet

· Though you will find some things very attractive photographs are not allowed

· Smoking not allowed for keeping the environment clean

· Eatables not allowed

There was also advertisement of UTV business news channel which was displayed before the entrance with the slogan that: MONEY IS NEVER OUT OF FASHION.

Another advertisement of pantaloon was displayed

1*6=7, i.e. purchase any 6 trousers and get one free.

At the entrance the board of pantaloon was there which has green background and white names written in English and Hindi language. Inside the outlet first there was baggage room where you have to keep your luggage or baggage’s because they are not allowed inside if any customer is carrying laptop then the chain of laptop bag is sealed with plastic lock and then he is allowed to take the laptop inside the outlet. Next to the baggage room the information about the merchandise was given in index form so the customer can have a view what kind of merchandise which is available in the outlet. The information regarding the index was given in this way.

· Men’s Occasion wear

· Men’s Ethnic Wear

· Men’s Party Wear

· Men’s Casual Wear

· Men’s Formal Wear

· Men’s Young Fashion

· Men’s Active Wear

· Women’s Occasion Wear

· Women’s Ethnic Wear

· Women’s Casual Wear

· Women’s Young Fashion

· Women’s Party Wear

· Women’s Nightwear and Lingerie

· Kids Wear

· Foot Wear for Men, Women and Kids

· Help desk

· Pay Counter

Then at the entrance and also inside the outlet the boards were suspended which gave the directions regarding each section e.g. left for kids wear, right for men’s wear etc.

The walls of outlet were coloured in white and also the flooring which has granites were white in colour on enquiring to one of the sales man regarding the use of white colour we were told that the white colour gives better visibility to merchandise which are displayed . The outlet was in L shape and approximately 3500 square feet of area.

The outlet was divided in different sections such as men’s wear, women’s wear, kids’ wear, shoes section, jewellery section, perfume section, Sunglasses etc. All the sections were given different names. The sections included in-house as well as other branded merchandise.

In-house brands were as follows

· All

· F. Factor

· Akruti

· Bare Denim/Leisure

· Chalk (Kids Wear)

· JM Sports

· Honey

Other Branded Merchandise were as follows

· John Miller

· Killer

· Lee

· Lee cooper

· Indigo Nation

· Urbana

· Lombard

· Rig

· Provogue

· Puma

· Adidas

· Gini & Jony

· Zapp

· Agile

· Fast Track Sun Glasses

· Calvin Klein

The interiors of the retail outlet

There were three plasma television of LG which were communicating about the merchandise and other goods inside the outlet.

Four Counters for making payment. The payment was accepted in cash, debit cards and credit cards. At the cash counter the cashier were enquiring regarding the green card and parking bills.

Green Cards were given to those customers who have done purchase of Rs.2000 or more and if the purchase is made of Rs.6000 or more than the customers were given discount of 5 %.

Parking Bills were asked because if any customer has paid for parking charges then he/she gets the parking charges deducted from his purchase amount.

They had centralised air conditioning of blue star and it was written on board that “now you know why this is such a cool place”

The outlet was having racks for displaying merchandise which were made of steel and wood of approximately 4 meters height and was divided into two parts

There were hangers on the wall for displaying sample merchandise.

Mercury light was used for focussing on the merchandise for highlighting the merchandise which was important.

The Packed shirts were kept on fibre plate which was fitted on the wall.

The Shoes section had combination of wood, fibre and steel furniture which was fitted on the wall for the displaying of shoes.

The jewellery section was made of glass and fibre for displaying jewellery

The Perfume section was also made of glass which was fitted on the wall for displaying perfume bottles

There were inbuilt speakers on ceiling.

Fibres Board were suspended on the ceiling for information and direction

Sunglasses were displayed on fibre and glass furniture

Posters of some brands were stuck on the walls for advertising e.g. Bare Denim (Keeping it real)

Sections of Outlet

· Bare Denim : - Jeans, Turtle Neck T-shirts for Men

· Bare Leisure : - 2 Ply Plaid Full Sleeve Shirt (18 Options Available Rs.649/-)

§ 2 Ply Plaid Shirt (9 Options Available Rs.599/-)

§ : - Full Sleeves Twill Shirt (Available in 12 Colours Rs.649/-)

§ : - Half Sleeves Twill Shirt (Available in 12 Colours Rs.599/-)

· John Miller : - FIL-A-FIL (12 Classic Shades Rs.649/-)

§ : - Full Sleeves Easy Care Shirt (Available in 10 Colours Rs.499/-)

§ : - 2 Double Matt Trouser (Available in 5 Colours Rs.699/-)

· JM Sports : - JM Sport Striper Tees (Available in 20 options in various designs

and colours Rs.399/-)

· ALL : - Fashion apparels for plus size people

· F. Factor : - Party Wear Shirts

· Akruti : - Traditional Wears e.g. Sherwani, Shirts, T-Shirts etc

· Chalk : - Kids Wear (Clothes for Age group 2-14 years)

· Bare 7214 : - Kids Wear (Age group 2-14 years)

· John Miller : - Formal Shirts, Trousers and Ties’

· Killer : - Jeans and Jackets

· Lee : - Jeans and T-Shirts

· Lee cooper : - Shoes, Jeans and T-Shirts

· Indigo Nation : - Formal Shirts and Trousers

· Urbana : - Formal Shirts and Trousers

· Lombard : - Shirts, Trouser, Ties and Handkerchief

· Rig : - Casual Shirts and T-Shirts

· Provogue : - Formal Shirts & Trousers, T-Shirts, Jeans and Shoes

· Puma : - Shoes

· Adidas : - Shoes

· Calvin Klein : - Perfumes

· Sun Glasses : - Fast Track

· Gini & Jony : - Kids Wear (Age group 2-5 years)

· Zapp : - Kids Wear (Age group 3-14 years)

Ladies Section: -

· Umm : - Ladies Jeans and Tops

· Biba : - Punjabi Suits and Kurtas

· Lee Cooper : - Ladies Jeans and Tops

· Honey : - Short Shirt and T-Shirts

· Dare Denim : - Jeans

· Agile : - Shorts and Tops

· Remanika : - Suits

There was also section where the designer clothes of Bachana Ye Haseeno were displayed at premium rates.

Quotes was written on the Ladies Section that “my cloth should be like diya not doona”

- Calvin or Georgio

Offers

Discount was given of 20% to 50% on most of the merchandise e.g. Gini & Jony 40 % Off

Lee Cooper Ladies Jeans 30 % off & New Arrivals 10 % off)

Buy two T-shirts and get one free (Price Rs.499/-)

Announcement & Music

Remix Music is played of Hindi & English Songs.

Their is announcement made in between the music for offers and discounts for particular section of merchandise i.e. clothes or jewellery items.

Trial Rooms

There were separate trial rooms for gents and female for trying apparels.

The trial room for men was made of tent which was not having any door and there was security guard outside the trial room.

Trial room for women was made of plywood and female security guard was waiting out of the trial room.

On the doors of trial room was written that not more than three apparels allowed inside

Human Resource

Total Employees : 103

Dress Code : Purple T-Shirt for Ladies and Black Trouser

Green Shirt and Black Trouser

ID : All employees were wearing Identity Card with their Name and Designation

Behaviour : Friendly and Helpful

Toilet

There was toilet inside the outlet which was only for ladies .

Pantaloon at Santacruz

Pantaloon at Borivili

Only security guard is standing outside trial room .

There were a particular sequence followed in outlet regarding the section.

At entry there was perfume & deodorant section then women’s apparel section later on kids section then men’s apparel section and Jewellery section for women.

There are three floor for display

They have display in house brand as well as many outhouse well-known apparel brands are there.

In third floor Lee has given a separate corner for display. Lee is also giving the discount as well gift coupon on then purchase of above Rs3400.

In a separate corner they display the combination of different brand like Nike ,Adidas ,Puma etc.ar

In Pantaloon it is written that ‘this place is cool by Blue star AC. But the fact is that AC was not working even escalator is also not working.

A small board of HDFC bank was at sealing.

Here changing room has permanent lock system so no need for security guard as per security concern.

Outside trail room it was written that you are allowed to carry only three cloths inside the trial room.

RECOMMENDATION

¡ Trial rooms were made of tent for gents so we recommend that they should have better trial rooms made of wooden furniture and good lock system

¡ At Milan Mall Pantaloon Outlet there were only three counters for collection of payment because of which people were standing in long queue so there should be more counters for making payment

¡ At Milan Mall Pantaloon Outlet there was only ladies washroom no washroom for men. So we recommend that they should also have one for men

¡ At some places lighting was not effective because of which the merchandise was not highlighted properly.

Retail project3 (Observations at Lifestyle mall)

2009-01-12T00:44:00.002+05:30

LOCATION

The decision of store location plays a vital role in the success of a retail store. There are many factors that should be kept in mind before taking decision about the location.

The factors that should be considered are:-

ACCESSIBILITY: - Phoenix mill in lower Parel is well connected with roadways and railways, so it is very much convenient for customer to reach the store. After the launch of lifestyle store at Phoenix Mr. V. Muralidharan, Vice President- Operations, Lifestyle International India said:- “We are happy to now being able to reach out to our customers in the heart of Mumbai with the launch of our store at Phoenix mills.

ATTRACTIVENESS: - Phoenix mill is attractive place in lower Parel. In phoenix mill there are several restaurants and many specialty store, providing great ambience to pass their time

PARKING SPACE: - Before setting up a retail store one should also consider whether there is adequate space available for parking or not. In the case of Lifestyle, there are enough parking space.

CATCHMENT AREA: - Lower Parel is much in the center of town and near to the central and western suburbs. So it would be convenient for the people from both the side could visit the place. It can cover until south Mumbai and the central part of Mumbai.

NEAR TARGET MARKET: - Target market is a mix of people from all areas and language. In lower Parel and it surrounding a large part of population belong to it.

TRAFFIC: - Phoenix mill located in Lower Parel where traffic is high. Many people are visiting this place every day.

COMPETITION: - when Lifestyle was being planned to set up it store at phoenix mill the competition was very much nil.

EXTERIOR DESIGN

Exterior design play very important role in attracting the customer. Lifestyle at lower Parel is double stored building. The location of building is very prominent. The building has a modern look. There are many sign boards are displaying on the front wall of different brands; that we can see in the upper photograph also.

At night the building is well lighted. It focuses well on the name board at the top of the building. There is adequate light at the exterior side so as to show the people what they have in the store.

There are two doors. One from the front side and second in back. The customers can go into and come out from the store from any of the doors. There are securities to collects customer’s belongings. They also greet the customer warmly. They have latest technology so they don’t use the metal detector.

INTERIOR DESIGN

Lifestyle considers a good store is like a good store book. Every store has a beginning, middle and end, usually in the order. The entrances get up the story .It creates expectations that contain promises. Keeping this in mind Lifestyle at Phoenix mill layout was prepared. While the design of store compliments the customers need it also portrays Lifestyle image. It influences the customers buying decision Lifestyle has concentrated a lot on the store layout and space planning issues.

The lifestyle has a good planning to keep the things in particular manner. They are providing 10 feet length, 10Feet breadth and 8 feet height for each men and women garments brand. The garments are being kept in racks.

Merchandise type and density: - Lifestyle focuses on latest fashion apparels. It sees to it that no rack is left empty as they feel that empty rack create a wrong impression in the mind of the customers .If it merchandise is good it is put up or else the merchandise is put up in such a way that the rack seems to be filled up.

Fixture type and density: - Lifestyle see’s to it that none fixtures have sharp edges. This is for the safety of the customers. A fixtures used for display is flexible. It is fully detachable and can be put up wherever desired. It also sees to it that the fixtures match the merchandise.

Employee type and density: - Lifestyle staff is well versed with the local language as well as in English. The staff is regularly updated with information of the products.

Sign board: - The sign is a hanging from the top wall and it’s eye catching sign board. In that section where different brands are there a name board for that brands and its price is put up in.

Sound type and density:- Familiar light instrument are continuously played at Lifestyle and western music is plying on.

Lighting: - Lifestyle uses good lighting in the store involves more than illuminating space. Lighting is used to highlight merchandise, sculpt space and capture a mood / feeling that enhance the store image

TIMING OF THE STORE: - Lifestyle has kept it shore timing from

11A.M to 9:30 P.M.

PERSONAL SELLING

Lifestyle mainly relies on counter sale and they have personnel for customer assistance. But in some area like jewelry, optical, cosmetic personal selling is used.

In house training for staff is organized at regular interval to enhance the knowledge about the product.

They trains its sales employees to understand customers need quickly, such that he notices a customers need even before he verbalizes it and short out it.

Their sells people always maintain a positive attitude and are enthusiastic. Their staffs always maintain good eye contact, even when under fire. Their sale person believes in listen closely to an objection. First they acknowledge the objection and then give their point of view.

SERVICES

A customer service desk is placed near entrance gate which provide all type of information to the customer. This is more help to the new customer who are coming for the first time and also help the customer to sort out their problems.

Staff is courteous and well informed about the product; they have the knowledge of the product. They are not enforcing the customer to buy anything but help them in purchasing.

A customer service cell is available at each store immediately to attend to customer quarries

A continuous training program is organized for the staff, so .that they are up to date with the products knowledge.

Lifestyle has also provision for those who are physically challenged and cannot climb stairs. They can use wheel chair and left is also there. Sufficient bags are available for the customers to take their goods to the payment counter.

PAY AND EXIT

Any shopping done by the customer is put in a plastic bag. They don’t close the bags because they use RFID. So there is no need to check the bags at the exit.

MERCHANDISING

Merchandising i.e. identifying customer’s needs, sourcing products to cater to the customers needs and displaying the products on the shelf space in such a way that it becomes easy for the customers to locate these products.

All the planning and strategies undergo the ultimate test when the merchandise actually reaches the shop floor. In terms of on-shelf strategies Lifestyle has a clear policy for each merchandise. The company gets weekly reports. The data is analysed to see the movement of various types of Goods.

VISUAL MERCHANDISING

Visual merchandising is a place to emphasis on your unique identity, advertise merchandise and catch the attention of the shoppers. The main function of the visual merchandising is to promote the store’s image and maximize the sales of its merchandise. In apparel section they displayed they product in this way which attract the customer. There are eye catching boards in every section to inform the product. These visual merchandising influences the customer for impulse purchase.

ADVERTISING

Lifestyle is spending huge amount of money in advertising. It is using print media for their corporate branding. They give advertisement in news paper like DNA & TOI.

They are also using hoarding poster in different parts of the city. Lifestyle advertisements are coming in Broadcast media also.

SALES PROMOTION

Lifestyle generally gives discount offer after summer during the month of August and September. This year discount offer period was 9^th Aug to 2^nd September.

While when the store opened in 2003 they organized cultural program for entertainment of the customer.

They also come up with different type lucky draw and giving gifts on a certain amount purchase. They also offer membership cards. They give point on purchased amount. These point converts into cash or gift. They collect a good data base by this way. They send greeting on festive as well as birthday card; they give a special discount on birthday (they used to write how much discount they are going to you on your birthday).

PRICES

Price is an integral part of the retail marketing mix. It is the factor which is the source of revenue for the retailer. The price of the merchandise also communicates the image of the retail store to the consumer. Various factors like the target market, store policies, competition and the economic conditions need to be taken into consideration while arriving at the price of a product.

Lifestyle keeps only branded products. Some in house brands are also available. Their target customer is middle class, higher middle class and upper class also. Generally, they sell these products on MRP. They follow the fix price strategy. The price of a product be same in every store of Lifestyle.

AMENITIES

Washrooms: - Washroom is present on second floor. There are separate washroom are available for male & female.

Changing rooms: - There changing room is a very important part of a store dealing in apparels. It plays a very crucial part as it is one of the influences of a customer’s decision making. Lifestyle has change room for each section like boys, girls, men and women. Changing room is well furnished and spacious.

Store keeping unit: - Lifestyle store keeping unit is very well efficient & maintain the store in a proper way.

OBSERVATIONS

Exterior design of Lifestyle at Lower Parel is very attractive. At front part of building they have given more emphasis on visual merchandising.
Sign board is very attractive it gives good impact to the customer’s mind about the store.
Visual merchandising is fantastic. Or you can say up to the mark.
The floor of Lifestyle is excellent. They have used marble so it looks neat and clean.
Paints of wall are well maintained.
In the store its sign boards look very attractive.
Washroom is well furnished.
Changing rooms were good but less in number so the customers have to wait for trial.
There is a notice outside the trial room which says that Dear customers Kindly don’t take more than three garments for trial.
Most of the times customers are stand for long time in que for paying the payment. So they should increase the cash counter.
They have good collection in formal shoes, casual wear and in everything.
Lighting is very good.
The look of ceiling on second floor was not good so they should cover the ceiling to make a better look.
Currently there is discount in lifestyle upto 50% off
Salesperson wear a Red colour T-SHIRT and a black colour pant.
RITU KUMAR has its own boutique at this store.

Retail project2 (Observations at D-Mart mall)

2009-01-12T00:35:00.003+05:30

D-MART

Location
D-Mart is situated at a strategic location at Bhandup and Mulund Junction. There has been a drastic change in the Bhandup-Mulund belt since last two years. Most of the industries along this side are converted into residential areas while the remaining are closed down. This area has got lot of potential in terms of customers. This is the reason malls have cropped up in this area. There are 2 more malls nearby namely Nirmal Lifestyles and R-Mall, which are crowded. The middle income group resides in this and nearby areas. There is lot of traffic (both vehicular and pedestial) along this belt since it is the main road towards Thane. Easy to access from Bhandup and Mulund side since BEST bus stop is nearby. For Navi Mumbai-ites, the accessibility is a bit difficult since they have to pay a heavy toll charge. Visibility is poor from outside. One can hardly see the board of D-Mart. The entrance has lot of trees which makes it difficult for a new comer to identify the place. Also, there are no hoardings near the mall to indicate that the mall is on this side. ATMs are available near the mall for one to withdraw money, if required.

Parking
Parking at this mall is a problem on weekends and national holidays since the visiting crowd is more than the available space. On Sundays, when we visited in the afternoon there was lot of space available and by evening it was almost full. When we visited on the Raksha bandhan festival, we somehow managed to get our vehicle parked luckily on the ground floor but it was away from the entrance. We had to take the the trolley to the car and it was quite a bit distance. We had to travel through the wet path, since it had rained, which left us feel uncomfortable. It was a totally unpleasant shopping experience,

Advertising
When D-mart had opened up, on the way towards Nahur station, there was a hoarding nearly for 3 months to advertise that the mall has opened up at Mulund.

Prices
The prices offered are economical over here. D-Mart offers minimum 5% discount on MRP on all items except medicines, grocery and vegetables and fruit items.

Merchandise
The product mix was fairly good. Lot of variety was available for all types of products. The assortments done for apparels was as per the price in descending order and as per the size i.e. extra large, large, medium and small. Also, in nearby racks the assortment was as per size nos. i.e. 28, 30, 32, etc for trousers and 38, 39, 40, 42, 44, etc. for shirts. The D-Mart offer price and the Max. Retail Price both were visible on the price card. During the festival season, the festival items were kept in the main area. This was done because they knew maximum customers will be looking for these festival items. A wide variety of Rakhis for Raksha bandhan festival and decorative items for Ganpati festival were kept along the main passage.
The whole area was divided as per the products that they offered like apparels, stationeries, crockeries, sanitary items, books, gift articles, steel items, furnitures, detergents, vegetables, fruits, etc. Each section had two to three attendants on average. Floor managers were monitoring the area. Also, the marketing employees of the respective companies were seen promoting their product. The floor cleaning activity was outsourced.
The products were not properly kept on the shelves. Chocolate products that needed appropriate cooling were not stored properly. The Cadburys chocolate had begun to melt on the rack itself. As a result these items were not very appealing to buy.Also packets of chocolate which were damaged were kept on the shelf where it was easily visible and easily accessible to the ccustomers In the passage lot of material was stored thus blocking the movement of the customers. One way movement was possible. And if a customers has parked his trolley to select a particular product then the other customer had inconvenience to move ahead. At the apparels section, the new entries were displayed by hanging it on the wall. These products were placed at such a height that it was difficult to see them. Looking at it for 2 minutes would strain ones neck.

Services
The service offered was somewhat okay. As soon as we went in, the security (lady) informed us that she was putting our belongings inside a D-Mart’s green clothed bag and sealing it. Even the purse bag of my mother was sealed inside. We had to argue with the security guard and finally we managed to get the purse out. We began shopping with 10 minutes of wasted time and a rather bad mood to begin shopping with.

The staff was unfriendly and unfamiliar with rules. It seemed as if they wanted to sell without understanding the requirements of the customer. On the Priya pickle offer ( 1free for 2 bought) the staff lady wanted us to buy the same pickle three times. This was a stupid idea, what would we do with 3 achaars of the same mango, or ginger, or lime? Finally after we explained the stupidity behind her reasoning she relented and let us chooses a variety of three.

Personal Selling
There were personal Personal Selling for some newly launched products . We encountered an instance of personal selling for Procter and Gamble products like the olay cream.Also there was a huge amount of personal selling in case of perfumes and cosmetics.

Promotion
Promotion and sales offers were present for most of the items.There were a discount of 10 % on all Navneet products and Cadbury celebrations.There was one separate whole shelf for garbage dust bin bags selling at Rs.29 wherin the actual MRP was Rs.45.In case of apparels there is a variety available ranging from menswear,womenswear and kidswear.

External Design:
As mentioned earlier D-MART is located in the middle of three bustling towns, namely Mulund, Bhandup, Nahur. The exterior design of D-MART is very ordinary and functional at best. It consists of a small complex with trees lining its front entrance. The building is painted white with D-MART logo clearly visible from the road. The exterior also houses certain food and refreshment stalls for the shoppers to enjoy.

Interior Design
The interiors were predominantly green thus associating it with the colour of their logo.This also made the store look more spacious and organized. As far as the flooring is considered the whole store was floored with ceramic tiles.Adequate light was present focusing on the merchandise as well as for the convenience of the customers. Music was pure soft hindi music which appealled to the target customers. Separate entrance is present for the physically challenged.

Layout:
Layout is fairly simple and it is kept simple with a view to keep everything that customer in his eye sight and reach. The whole store has been divided into various sections according to the categories that are stacked there. Is was found the most used products i.e. FMCG were very easy to spot and purchase.

Image Set up:
The image that D-Mart wants to set up is that of a discount store that offers most of the products with all the major brands. D-Mart is a store offers value for money. The store puts various offers on products some throughout the year and some periodically. When a customer enters the gate first thing he notices are the boards that say “ Minimum 5% discount on all products”. This itself makes customer think of a good value for money.

Target customer
D-mart projecting itself as a discount store targets the middle income group. The area in which it is located is predominantly middle class residential area. So the location is such that it is very convenient for its target customers. Also it is a very fast growing and value conscious segment. In order to attract their attention, D-mart keeps giving several offers that directly projects greater value to the customer.

Suggestions
1) Ladies purses should not be sealed in the bags which becomes inconvenient at the time of payment.
2) Adequate trial rooms should be provided to avoid rush during holidays
3) Damaged products and sealed boxes should be kept in warehouses instead of shelves
4) Adequate shelves should be made instead of using the bunch of boxes as a shelf.

Retail Project1 (Observations at Big Bazaar mall)

2009-01-12T00:24:00.002+05:30

Introduction to Big Bazaar

• A chain of shopping malls in India currently with 101 outlets owned by Kishore Biyani’s Future Group.
• Reflects the look and feel of Indian bazaars at their modern outlets. All over India, Big Bazaar attracts a few thousand customers on any regular day.
• 1,70,000 products under one roof

Business Objective

To increase footfalls and enhance sales by

• Attracting customers by giving them various offers.
• Inculcating in their minds the value for money through these offers.
• Increasing the average consumption of existing customers.

What image does the retailer wish to communicate?
• “Is se sasta aur achcha kahin nahin”
• It sells variety of merchandise at affordable rates, the prices of which it claims are lowest in the city.

OBSERVATIONS
There were various observations made from the time Iwe entered the store. They can be summed up as follows:
* Verticals inside the store relates to each category of product

Food Bazaar
Depot- books
M-bazaar
Electronic Bazaar
Furniture Bazaar
Footwear Bazaar

* Trolleys are not easily available on weekends
* Little attention to cleanliness. Dust on shelves as well as some product items.
* In-house packaging not efficiently done.
* Crowded store interiors. Items are arranged in a cluttered way. Tried to stock maximum number in limited area.
* Sign boards are not prominent. Lack of direction creates confusion.
* Family crowd is evident. Youth comprises of only around 10% of the crowd.

Food Bazaar very efficiently managed. It is a bit over-staffed but layout is very good. Shelf space is used very well to stock products with clear distinction.

Flooring
* We observed they are using shahabadi flooring.
* Floorings’ were uneven and different in the shades of colours.
* In furniture bazaar we observed water was split on the floor.

* Iron plate was displaced could be dangerous to the customers while walking

* Carpets were placed only on some areas.

Ceiling
* Near shoe section there was leakage from ceiling

* Tubelights were not uniform and some tubelights were not working

Shelf
* Height of the shelf was appropriate with 4 shelves
* Some shelves were circular with three shelves with smaller circle shape shelve at the top and larger at bottom
* Material used was not uniformed i.e. furnishing was different. Some were of large metal container and some were drum shape containers

General
* Some umbrellas were wrongly placed in auto accessories section.

* Things were not placed properly.

* Faulty items were kept for sale.

* Long queue at cash counter for bill payment.

* Trolleys are not easily available on weekends

* Clock watches for gents and ladies.
* Men’s ethnic wear. Ethnic wear section has less space causing difficulty to go through the products.
* Fabric material.

Footwear
* Formal shoes, sports shoes, branded and unbranded shoes.
* Staff is not helpful.
* The light not focused properly on the shoes.
* Ladies footwear section was dusty.
* Kids footwear section was near the ladies section since the buying influence of kids is majorly done by the elders especially the parents.

Jewellery
* Jewellery section was attractive.
* Nicely shined glasses and properly maintained shelves.
* Salesman were presentable. They were very young.

Ladies section
* Undergarments Specifically located at the corner.
* Saree and Dress material Section:
* Spacious with quiet range of varieties.
* Ladies nighties aligned at the wall.
* Baithak arrangement for families.

Mens/ladies perfumes section
* Kept at the higher position of the shelf.
* Tester were not available.
* Some bottles were empty.
* Some bottles were not packed properly.
* Salesman was employed and the arrangement was done on the stall.

Sunglasses
* Stall was installed with the salesman.
* Mirrors were kept.
* Computer eye testing.
* Contact lenses.
* Low priced sunglasses were placed on the stands.
Kids section
* Good interior with trial rooms
* Display of soft toys in kids section

Various offers from Big Bazaar we observed
* Branded gas stoves 35% off
* Get dish tv worth 1875/- on 21’’tv 5390/-
* Festival offers

Advertisements outside the mall
* Promotional Activities
* Customer service desk
* Provision for fire exit

Findings
• Number of entry points 2
• Number of exit points 3
• Number of cash counters 14
• Area 35000 sq.ft
• No. of employees 64
• No. of trolleys 110
• No. of handbags 70
• No. of baskets 50

Recommendations

Place
> Increase the space between product racks.
> Improve the Air-Conditioning
> Increase the number of washrooms and maintain hygiene.
> Glass should be properly aligned with the other glassesl.
> Some places should be properly lit.
> Leakage should be fixed immediately
> Directions for every department should be given.
> Should provide sitting arrangements.

Product
> The owner should not limit to brand of few companies only
> Items should suit local requirement
> Product should be placed rightly
> Product should be clean and dust free.
> Mannequins should well maintained.
> Damaged products should be removed

Price and promotion

offer local product of good quality with less price
-They should talk to general public and ask for suggestion on improving the layout.

Wednesday Bazaar – Hafte ka sabse sasta din
In January 2007, Big Bazaar introduced a Wednesday Bazaar concept called “Hafte Ka Sabse Sasta Din” with the aim to give homemakers the power to save the most on this day of the week. Wednesday Bazaar offers clothes, accessories and fashion jewellery and personal care products on greater discounts.
For Big Bazaar, Wednesday Bazaar is a concept, which it intends to run on a long-term basis. For which the aim is to inculcate in the minds of customers that every Wednesday is a day of greater savings at Big Bazaar. It is therefore, incumbent on the brand to have the offer grow and create deep impact on the minds of the customers. It has tried to do this in the following ways:

Below the line activities for Wednesday Bazaar involves:
• Visual merchandizing promoting the offer with the help of danglers, signages, standees, etc.
• Frequent announcements made by the staff inside the store on a regular basis.
Above the line activities for Wednesday Bazaar involves:
• TVC on popular entertainment channels like Sony, Star Plus, Set Max, Star One.

Recommendations

> Way of generating awareness of Wednesday Bazaar is by distributing discount coupons on Tuesdays with list of items under offer for Wednesday. Customers walking in with the coupon the next day can avail a discount if he/she selects and decides to purchase an item mentioned on the coupon.

> This way, customers will walk into the store on Tuesdays out of curiosity to know about the products that are being offered the next day hence, increasing the footfall on Tuesday as well as Wednesday. Creating an impact of Wednesday Bazaar is necessary as it is an offer which has been introduced at Big Bazaar on a long-term basis.