Shared Marketing Managment

Welcome
Marketing Management for MBS 2020

From Sushil Awale, MBA, MA, M. Phil.
Sushil Awale, Author: Service Marketing

According
MBA to 2019
in Sales estimates Average
& Marketing: of Glassdoor.com, the
salary offerednational average salary of a
marketing manager
According is about Rs
to 2019 estimates 9.9 LPA.
of Glassdoor.com, the national average salary of a
Here we have
marketing mentioned
manager theRs
is about average salary offered by some reputed companies
9.9 LPA.
for marketing
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mentionedpositions.
the average salary offered by some reputed companies
*Data
for source: manager
marketing Glassdoor.com
positions.
*Data source: Glassdoor.com
Company Average Salary*
Godrej & Boyce Manufacturing Rs 1.20 LPA
IBM Rs 1.61 LPA
Future Group Rs 1.83 LPA
Vodafone Rs 11.14 LPA
Amazon Rs 20 LPA

• Unit 1: Introduction LH
6
• Definition of Marketing and Core Marketing Concepts
• Company Orientation Towards the Market Place
• Customer Value, Satisfaction and Creating Long Term Loyalty Relationship
• Concept of Marketing Management
• Marketing Management Process
•
• Unit 2: Marketing Opportunity Analysis
LH 6
• Macro Environmental Trend and forces
• Corporate and Division Strategic Planning, Business Unit Strategic Planning
• Assigning Resources to SBUs: SBU Model, BCG Model and GE Model
• Nature and Contents of a Marketing Plan

• Unit 3: Marketing Information System and Demand Measurement LH 6
• Marketing Information System and its Components
• Marketing Research: Areas and Process
• Market Demand and Its Measurement
• Methods of Estimating Current and Future Market Demand
• Practice of Marketing Information System(MKIS) in Nepal
•
• Unit 4: Identifying Market Segment, Target and Position Strategies LH 6
• Bases for Consumer and Industrial Market Segmentation
• Process of Market Segmentation
• Evaluation and Selection of Target Market
• Developing Positioning Strategies
• Market Segmentation Practices in Nepal

• Unit 5: Competitors Analysis LH 4
• Concept of Competition
• Key Competitor Analysis
• Competitive Strategies for Market Leader
• Competitors Analysis in Nepal
•
• Unit 6: Implementation of Marketing Program: Product Strategies LH
8
• Concepts and Types of New Products
• New Product Development Process
• Product Line and Product Mix Strategies
• Brand Positioning, Branding Policies and Strategies
• Marketing Strategies in the Various Stages of Product Life Cycle
• Product and Branding Practice in Nepal

• Unit 7: Implementation of Marketing Program: Pricing Strategies
LH 4
• Objectives and Methods of Pricing
• Developing Pricing Strategies and Program
• Pricing Practices in Nepal
•
• Unit 8: Implementation of Marketing Program: Channel & Logistic
Strategies LH 3
• Selection of Channel Design Decision
• Channel Dynamics
• Logistics Management Decisions
• Distribution System in Nepal

• Unit 9: Implementation of Marketing Program: Integrated Marketing
Communication
• Strategies
LH 3
• Designing and Managing Integrated Marketing Communications
• Steps in Developing Effective Communication
• Promotion Practices in Nepal
•
• Unit 10: Evaluation and Control of Marketing
LH 2
• Concept of Marketing Control
• Types of marketing Control
• Marketing Control in Nepal

Definition of Marketing
• AMA states in 1985: Marketing is process of planning

and executing conception, pricing, promotion and
distribution of goods and services to create exchanges
that satisfy individual and organizational objectives.
• In 2004 AMA modified: marketing is an organizational
function and set of processes for creating,
communicating and delivering value to customers and
for managing customer relationships in ways that
benefit the organization and its stake holders.

• Dr G.R. Agrawal in 2001 states: marketing
encompasses all the activities aimed at satisfying
needs of the customer through the exchange
relationship to achieve organizational objectives
with social responsibility in a dynamic environment.
• Philip Kotler in 2006 says marketing is the process
by which companies creates values for customers
and built strong customer relationships in order to
capture the value from customer in return.

Core Marketing Concepts
1.Needs, wants and demands:

2.Market segmentation, targeting and
positioning:
3. Offerings and brands:
4. Value and satisfaction:

• 5. Exchanges and relationships
• Exchange and transaction: If exchange is facilitated by
equal value through use of money with specific agreed
conditions, time and place then it is transaction.
• 6. Marketing channels:
• 7. Supply chain
• 8. Competition:
• 9. Marketing environment:
• 10. Market planning

Customer Value
and Satisfaction

Customer Value
• Customer value is perceived as total benefits
minus total costs (total benefits by total costs)
in acquiring, owning, using, maintaining and
disposing that product (Rao 2009:177).

Customer can get variety of benefits
• functional benefits
• image benefit
• services benefits
• personnel benefit

nonmonetary costs
• 1. Time cost:
• 2. Search cost:
• 3. Convenience cost:
• 4. Psychological cost:

Other benefits/value
• Service outcome
• Interaction
• physical environment/assureance
• Functional,
• cultural/social (socially acceptable),
• emotional (brings good mood),
• epistemic (give some education/ knowledge),
• conditional (suits prevailing situation) value
In e-services customer value
1. delivering information in short time and minimum
costs;
2. fulfil all the need of the browsers;
3. privacy of the customer information and passwords
and against hacking;
4. compensation and recovery for service failure, harms
and losses;
5. easy to locate and contact the website are important
factors.

Customer Satisfaction
• Satisfaction is pleasurable feeling resulted

from comparing a product’s perceived
performance to expectations (Kotler
2013:110).
• Fulfilment, contentment, pleasure, feel good,
relief can be satisfying.
Determinants of Customer Satisfaction
• 1. Product & service features:

• 2. Price compared to qualities:
• 3. Consumer emotions during service interaction:
• 4. Attributions for service success or failure:
• 5. Perception of equity
• 6. Others’ perception:
•
• 7. Service recovery, adaptability, spontaneity,
coping
• 8. responsiveness, reliability, assurance,
empathy and tangibles

Outcomes of Customer Satisfaction:
Sequentially
• 1. Quality of life of the customer:
• 2. Customer loyalty:
• 3. Customer referrals, word of mouth
• 4. Brings firm’s profitability and growth
• 5. Which results into national economical healthiness
Value vs. satisfaction
• Meeting expectation satisfies
• But question is who satisfies better among competitor
• Answer is company that delivers higher value satisfies
more
• Customers prefer that company that delivers higher value.
• Value delivered may not meet the expectation level
• Therefore satisfaction and value both are important.
Sushil Awale, Author: Services marketing

Marketing management
philosophies/concepts
• (1) The Production Concept:
• (2) Product Concept:
• (3) Selling Concept:
Sushil Awale, Author: Services Marketing

• (4) Marketing Concept:
• (5) Societal Marketing Concept:
• (6) Holistic Marketing Concept:
• (7) Customer Concept:
Sushil Awale, Author: Services Marketing

Marketing Management
• Traditionally marketing management elements are situation analysis, planning, implementation
and control of marketing activities (Kotler, 1998; Koirala 2011).
• Marketing management is art and science of targeting market and getting, keeping and growing
customers through creating, communicating and delivering superior value (Kotler 2012).
• Marketing management tasks: marketing management concepts(Kotler, 2012)
• 1. Developing marketing strategies and plans: deciding what to do and how to do at corporate,
SBU, Product levels in the company
• 2. Assessing opportunities and customer value: understand what are important to customers.
• 3. Choosing value: deciding the target group and product positioning intentions.
• 4. Designing value: designing the product, service and setting the price
• 5. Communicating value: promoting the product to the target group
• 6. Delivering value: distribution of product on right time and right place.
• 7. Sustaining growth and value: making profit and retaining customer through monitoring,
control, research and development, satisfying customers, delivering values and building
relationship with customers.
* two concept shows the evolution of marketing management
Process of Marketing Management
• Analysis, Planning, Implementation, Control
• Linking old and new concept of marketing
management.

• These tasks can be related to earlier marketing
management concepts i.e. analysis, planning,
implementation, control.
• Assessing opportunities and customer value can be related
to analysis.
• Developing marketing strategies, plans and choosing value
can be related to planning.
• Designing value, Communicating value, Delivering value
can be related to implementation.
• Sustaining growth and value can be related to controlling.

Analysis
• Situation analysis is monitoring environment to
determine SWOT (William Gluck).
• Internal and external environmental factors are analysed.
• Strengths, weakness, opportunities and threats (SWOT)
are realised.
• Use of MIS, research on customer, marketplace help
analyse the situation.
• Situation analysis is desirable and usually takes place
before every step.

Planning
• Plans can be broken down into four levels.
• First corporate level (mission, establishment of divisions and SBU, resource
allocation, assessing growth opportunities: intensive, integrative, diversified,
downsizing, organization’s structure, policies and culture are shaped, innovations
encouraged).
• Second is division level (corporate plan for different region).
• Third is strategic business unit level (products; resources allocation; cost leader,
differentiation, focus and alliance strategies; SBU have different customer,
competitors, materials used therefore different strategy required).
• Fourth is in product level (7Ps: marketing program formulation) planning.
Marketing planning takes place at SBU level for planning product. Marketing
planning usually contains executive summary, table of content, situation analysis,
marketing strategy, financial projections, and control mechanism. Marketing plan
also plans for research and relationship development. (Kotler 2013:49)

Implementation
• 7Ps must be managed (marketing mix)

• organizational structure,
• assigning authority, responsibility,
• schedules, targets and deadlines,
• assigning territories,
• integrated marketing,
• internal marketing, monitoring performance, motivation, rewards and
leadership,
• coordination and cooperation with outside partners,
• building relationship and image are important.
• Skills, sequencing the activities, participations of implementers,
• resource availability,
• organizational climate,

• Following questions are answered in
implementation.
• What needs to be done? (Defining appropriate
action).
• When will it be done? (Scheduling and timing).
• Who will do it (designing clear areas of
responsibility).
• How much will it cost? (Budget planning).

Control
• annual targets,
• efficiency of units and activities,
• setting profitability targets,
• strategic control

Unit 2
Situation
Analysis
Situation analysis
• Situation analysis is monitoring environment
to determine SWOT(William Gluck)
• Situation analysis consist of environment
analysis and internal analysis
• Environment(external) analysis give rise to OP
profile
• Internal analysis give rise to SW profile
(Ramaswami & Namokumari 2013:139)

• Nothing is always right or always wrong.
• What is right or what is wrong depends on the
situation and context.

Scope of Situation Analysis
• Range of situation analysis

• As we have already said situation analysis is monitoring
environment therefore scope of situation analysis can
be studied as competent of environment which forms
the situation.
• Environment can be divided into Internal environment
(company environment), external environment (task
environment and general environment).
• This help to determine SWOT

Internal environment
• consist of factors inside the company, those are mission,

vision, policies, financial resources, human resources,
physical resource, information resource, organizational
culture, organizational structure, company departments
like management (decisions, strategies, plans, policies,
mission of the company), financing (funding marketing
plan), research development (for safe & attractive
product), purchasing, operations (producing &
distributing), accounting (measuring revenue & costs).

• External Environment Analysis
• External environment consists of
task environment and general
(macro) environment.
• The Company’s task environment
consists of the actors close to the
company that affect its ability to
serve its customer are as follows
• (1) Supplies:
• (2) Intermediaries:
• (3) Customers:
• (4) Competitors:
• (5) Publics:
• (a) Financial publics
• (b) Media
• (c) Government
• (d) Citizen action groups (consumer organizations,
environmental groups, minority group).
• (e) Local public
• (f) General Public
• (g) Internal Public Sushil Awale, Author: Service Marketing
Company’s general environment
• (1) Demography:
• study of human population in terms of
• size density,
• location,
• age,
• growth,
• gender,
• race,
• migration,
• occupation.
• World population 7 billion.
• One child each policy in china resulted into six pocket syndrome.
• Gay & lesbian segments.
• India 2.4% area 16.7% of the world (1028.6million population in 2001 but 1593 m by 2050, (china
remains 1392m),
• population of older increasing,
• youth making majority in India Nepal (40%),
• 45% in urban (world),
• growth 1. 16% (Nepal 2017).
• (2) Economic Environment:
• purchasing power
• spending pattern.
• income,
• prices,
• savings,
• debt,
• credit availability,
• Economic system (free market, centrally planned, mixed),
• economic policies (monetary policy, fiscal policy, industrial
policy),
• Business cycles,
• Natural resources,
• Regional Economic groups (SAARC,ASEAN, EU, NAFTA, LAFTA).
• WTO, IMF, WEF, G8

• (3) Natural Environment:
• natural resources
• Pollution: chemical, nuclear ,water, soil & food, plastic,
packaging therefore regulating agencies, green movement,
ecological safer products, recyclable packaging, material,
components, better pollution controls & more energy efferent
operations.
• global warming,
• raw materials,
• water,
• oil, coal, minerals,
• Nepal biologically and geographically most diversified country,
• greatest water resources,
• rugged mountains, natural beauty, and herbal plants.

• (4) Technological Environment:
• new technologies,
• Investment
• Transfer
• Rate of change
• Internet
• digital
• Smart T.V.,
• credit cards
• dishwashers,
• AC,
• photocopy,
• pen drive
• birth control pills,
• satellites,

• (5) Political Environment:
• laws,
• governments,
• judiciary,
• legislature,
• pressure groups
• Result: fair competition, fair trade, environment
protection, product safety, truth in ad, consumer privacy,
packaging, labelling, pricing, social welfare.
• Norway bans trading stamps, contests premiums.
• (6) Cultural Environment:
• norms values,
• perception,
• preferences
• behaviour
• knowledge,
• customs, traditions,
• religion,
• language,
• symbols,
• food,
• drink clothes,
• dress,
• materials & services.Sushil Awale, Author: Service Marketing
• usually macro environment is uncontrollable
• some companies take a proactive steps
influence legislations, polices and
environmental forces through hiring lobbyists,
staging media events (advertorials), press
lawsuits, file complaints with regulators, use
creative ideas to face, tackle the challenges.

Macro Environment Trends
• Westernization:
• Foreign employment:
• Foreign education:
• Internet:
• Urbanization:

• Liberalization:
• Globalization:
• Corruption:
• Instability:
• Pollution:
• Departmental stores:

Corporate and Division
Strategic Planning,
Business Unit Strategic
Planning and
Marketing Planning
Corporate strategic plan
• Corporate level engage in situation analysis,

• decides on mission, objectives setting ( decides what should
be done, performance, profit, growth rate, competitive
position, productivity, flexibility of business portfolio, human
resource and corporate image of the corporation, market
position)
• building strategies [establishment of SBUs, determining its
performance, resources allocations, assessing growth
opportunity {intensive growth (Ansoff’s product market
matrix: market penetration, market development, product
development, diversification), integrative growth,
diversification growth, downsizing and divesting older
business}, markets, Sushil
products toService
Awale, Author: serve].
Marketing
• Second is division level plan (is corporate plan
for different region or different generic
product category).
• Divisional plan is corporate plan for each
region (Asia or Europe or Africa etc) or for
each generic product (electronics or food
grains or clothing or automobiles separately).

Strategic Business Unit plan
• Analysis
• Objectives could be amount of profit/revenue, market
share, image, growth, market position, customer loyalty
rate.
• Strategies could be designing product mix (product lines
and product items to launch), porters generic strategy (cost
leadership strategy, differentiation strategy, focus strategy),
alliance strategy, research and development strategy etc.
• Strategic plan as in corporate level is designed in SUB level
here.

Marketing plan
• In product level planning marketing

department decides on its marketing
objectives, marketing strategies and marketing
programs. Marketing planning takes place at
product level. In every SBU’s marketing
department marketing planning take place at
product level. Marketing plans are made for
products. (Kotler, 2013)

marketing planning
• marketing department engages in situation analysis review/help establishment of business
mission;
• objectives formulation [in terms of sales, awareness, profit, revenue, market position, market
share (market standing), productivity, market position, customer loyalty, satisfaction level,
customer perception in product line, product, brand levels; which opportunity to pursue after
SBU analysis, services to offer, innovation intentions, image];
• strategies development {segmentation, targeting, positioning, Generic strategy of Porter(cost,
differentiation, focus) Strategic alliances, deciding on product lines, product forms, brands to
offer, Research and Development}
• marketing program (7Ps)/implementation (organizing, departmentalization, assigning authority
and responsibility, action plan: what/who/when/where/how, supervision, motivation: award/
punishment, budget, control);
• Control/performance{performance like income, profits, market share, satisfaction, loyalty, brand
power/equity, customer perceived value, effectiveness of promotion, sales force, distribution are
controlled by adjusting these elements to objectives and through annual control, efficiency
control, profitability control and strategic control (marketing audit) using tools like market share
analysis, marketing cost analysis, credit control, control on price cuts, budgetary control, ratio
analysis, contribution margin analysis, marketing information inputs and warning signals}.
• In marketing planning same strategic planning tasks takes place in SUB level (Ramaswami
2013:133) Sushil Awale, Author: Service Marketing
Marketing Plan: Managerial
Framework
• Managerial framework: Strategic planning at corporate
level and marketing plan at SUB/product level
(Ramaswami and Nomokumari 2013:133)
• Marketing planning related to corporate planning.
• Marketing plan contribute in meeting corporate objectives
• Success of marketing plan make corporation successful
• Revenue and growth of organization is materialized at SUB
level/marketing planning
• Marketing plan shape the fortune of SUB.
• Marketing at SBU level feed corporate office.

Techniques for identifying marketing
opportunities-SBU Model, BCG model, GE model
• An SBU may be a business unit within a larger corporation, or it may be a
business unto itself.
• Every SBU have different objectives, customer, competitor, resource need,
strategy and CEO responsible for meeting its objectives.
• SBU model help evaluate business on two dimensions: attractiveness of
the market and strength of the firm.
• Help decide resource allocation
• Help use positive cash flows from one unit to other and company can
capitalize on growth opportunities.

SBU model
• An autonomous division or organizational unit,
• Is small enough to be flexible
• Is large enough to exercise control over most of the factors affecting its long-term
performance.
• Because strategic business units are more in number and smaller in size, this allow
the owning corporation to respond quickly to changing economic or market
situations.
• A strategic business unit (SBU) is a profit centre which focuses on product offering
and market segment.
• SBUs typically have a discrete marketing plan, analysis of competition, and
marketing campaign.
• SBU may be a business unit within a larger corporation, or it may be a business
unto itself or a branch.
• Corporations may be composed of multiple SBUs, each of which is responsible for
its own profitability.

• SBUs are able to affect most factors which influence their
performance.
• Managed as separate businesses, they are responsible to a
parent corporation.
• General electric has 49 SBUs.
• There are three factors that are generally seen as determining
the success of an SBU 1.the degree of autonomy given to each
SBU manager, 2.the degree to which an SBU shares functional
programs and facilities with other SBUs, and 3. The manner in
which the corporation adopts to new changes in the market.

BCG matrix model
• is a chart that was created by
Bruce D. Henderson for the
Boston Consulting Group in 1968 to help
corporations to analyze their business units,
that is, their product lines. This helps the
company allocate resources and is used as an
analytical tool in brand marketing,
product management, strategic management,
and portfolio analysis.
• Market Growth rate = Individual Sales this
year – Individual sales last year/ Individual
Sales last year
• Relative market share= company
share/industry leader share

• Dogs - Dogs have low market share and a low
growth rate and thus neither generate nor
consume a large amount of cash. However,
dogs are cash traps because of the money tied
up in a business that has little potential. Such
businesses are candidates for divestiture.
• Strategic choices: Retrenchment, divestiture,
liquidation

• Question marks - Question marks are growing rapidly and thus
consume large amounts of cash, but because they have low market
shares they do not generate much cash. The result is a large net cash
comsumption. A question mark (also known as a "problem child") has
the potential to gain market share and become a star, and eventually
a cash cow when the market growth slows. If the question mark does
not succeed in becoming the market leader, then after perhaps years
of cash consumption it will degenerate into a dog when the market
growth declines. Question marks must be analyzed carefully in order
to determine whether they are worth the investment required to
grow market share.
• Strategic choices: Market penetration, market development, product
development, divestiture

• Stars - Stars generate large amounts of cash because of their
strong relative market share, but also consume large amounts
of cash because of their high growth rate; therefore the cash in
each direction approximately nets out. If a star can maintain its
large market share, it will become a cash cow when the market
growth rate declines. The portfolio of a diversified company
always should have stars that will become the next cash cows
and ensure future cash generation.
• Strategic choices: Vertical integration, horizontal integration,
market penetration, market development, product
development

• Star products all have rapid growth and dominant market
share. This means that star products can be seen as market
leading products. These products will need a lot of investment
to retain their position, to support further growth as well as to
maintain its lead over competing products. This being said, star
products will also be generating a lot of income due to the
strength they have in the market. The main problem for
product portfolio managers it to judge whether the market is
going to continue to grow or whether it will go down. Star
product can become Cash Cows as the market growth starts to
decline if they keep their high market share.

• Cash cows - As leaders in a mature market, cash cows exhibit a return
on assets that is greater than the market growth rate, and thus
generate more cash than they consume. Such business units should
be "milked", extracting the profits and investing as little cash as
possible. Cash cows provide the cash required to turn question marks
into market leaders, to cover the administrative costs of the company,
to fund research and development, to service the corporate debt,
and to pay dividends to shareholders. Because the cash cow
generates a relatively stable cash flow, its value can be determined
with reasonable accuracy by calculating the present value of its cash
stream using a discounted cash flow analysis.
• Strategic choices: Product development, diversification, divestiture,
retrenchment

• A completed matrix can be used to assess the strength of your
organization and its product portfolio. Organizations would ideally like
to have a good mix of cash cows and stars. There are four assumptions
that underpin the Boston Consulting Group Matrix:
• If you want to gain market share you will need to invest in a
competitive package, especially through the investment in marketing
• Market share gains have the potential to generate a cash surplus due
to the effect of economies of scale.
• The maturity stage of the product life cycle is where any cash surplus
is most likely to be generated.
• The best opportunities to build a strong market position usually occur
during a market’s growth period.

• BCG Matrix in Identifying Opportunities
• SBU life cycle can also be traced in BCG Matrix. Generally SBU first appears as a question
mark, after substantial investment it becomes stars in second stage, when market growth
slows stars turn into cash cows in third stage, when market share is also declined cash cow
becomes dogs. Organizations generally have following four options.
• Build: means making investment to increase the market share of SBU. Build plan is
suitable for question marks that have ability to become the stars.
• Hold: this means defending and protecting the market share with average level of
investment. Hold plan is suitable for cash cows.
• Harvest: this means no more investment rather cutting the unnecessary costs, minimising
the costs to collect as much cash possible from market before SBU is divested/liquidised.
Harvest plan is set for weak cash cows that possess risk of becoming dogs latter. Question
marks which is showing low potential can also be planed for harvesting
• Divest: this means liquidating or selling the business that is unprofitable and do not have
potential for growing back. Divest is planned for most of the dogs. Money recovered from
divestment of dogs can be used for stars and question marks.

GE Matrix
• GE Matrix - Foundation •Developed by Mckinsey in 1970 •Also
Popular as “Directional Policy Matrix”
• The GE matrix analyzes market attractiveness and competitive
strength to determine the overall strength of an SBU.
• External factors of market attractiveness that affect a business
include market size, market growth, entry barriers, segmentation,
and overall risk.
• Internal factors of competitive strength include assets, competencies,
brand strength, profit margins, innovation, and quality.
• The GE matrix can also be used to determine if an organization
should enter a market or if it should reposition a product line or
brand within a market.

According to following original as follows
• Scenarios in Marketing: From Vision to

Decision
• By Gill Ringland, Laurie Young

• Market Attractiveness
• Market attractiveness deals with different external factors. These factors can
include such things as market size, market growth rate, and market profitability.
External factors that can affect market attractiveness also include pricing trends,
competitive intensity, overall risk, and entry barriers. Other considerations
regarding market attractiveness include what if any opportunities there are to
differentiate products and services, demand variability, segmentation,
distribution structure, and technology development.
• Competitive Strength
• Competitive strength focuses on internal factors and the ability of the SBU to
overcome specific issues with the market and competitors. Different internal
factors that need to be considered include assets and competencies, brand
strength, market share, market share growth, and customer loyalty. Other factors
that should be considered include relative cost position, profit margins,
innovation, quality, financial resources, and management strength.

• GE’s Model in Identifying Opportunities
• Invest and Grow: In the nine cell matrix, the SBUs located in the upper left corner have high
overall attractiveness and these SBUs are suitable for further investment and growth.
• Protect: The diagonal grey cells have medium overall attractiveness and are suitable for
protecting the SBUs current position. The organization should concentrate on building on its
strong factors and improving on its weak factors.
• Harvest: The three cells on the lower right indicate overall low attractiveness. The SBUs
falling in this category have very low chance of improving their market attractiveness and
competitive position. Some organizations adopt product up gradation, repositioning market
diversification, and rationalization to improve the SBUs positions with some investments.
These strategies sometimes work but very often don’t show good results. The appropriate
strategy for the two cells which shows medium level performance in terms of either market
attractiveness or business unit strength is harvesting. Harvest strategy involves milking cash
with reduced level of investments.
• Divest: The one cell in the right lower corner is in the hopeless situation with both factors at
the lowest level. The best strategy for this Category of SBUs is to quickly divest the business.

• Strategic Implications
• Resource allocation recommendations can be made to grow, hold, or harvest a strategic
business unit based on its position on the matrix as follows:
• Grow strong business units in attractive industries, average business units in attractive
industries, and strong business units in average industries.
• Hold average businesses in average industries, strong businesses in weak industries, and weak
business in attractive industries.
• Harvest weak business units in unattractive industries, average business units in unattractive
industries, and weak business units in average industries.
• There are strategy variations within these groups. For example, within the harvest group the
firm would be inclined to quickly divest itself of a weak business in an unattractive industry,
whereas it might perform a phased harvest of an average business unit in the same industry.
• While the GE business screen represents an improvement over the more simple BCG growth-
share matrix, it still presents a somewhat limited view by not considering interactions among
the business units and by neglecting to address the core competencies leading to value
creation. Rather than serving as the primary tool for resource allocation, portfolio matrices are
better suited to displaying a quick synopsis of the strategic business units.

Purpose of analysis
• For investment
• For adding products
• For divesting

• Nature of Marketing Plan
• Marketing planning must be related to corporate planning.
• Marketing plan contribute in meeting corporate objectives
• Success of marketing plan make corporation successful
• Revenue and growth of organization is materialized at SBU level through
marketing planning
• Marketing plan shape the fortune of SBU.
• Marketing plan is set by marketing department in SBU.
• For success of marketing plan marketing must not just be organized but be
instilled in whole corporation. Every person in the organization must be customer
oriented, marketing oriented.
• People in marketing department are full time marketers and people in other
departments must be considered as part-time marketers.
• Marketing at SBU level feed corporate office.

• Contents of a Marketing Plan
•
• According to Kotler (2013) and Cravens (2011) marketing plan consist of following
elements.
• 1. Executive summary: This section is a short summary of the plan's major thrust,
goals and recommendations. It is for the use of top management.
• 2. Current marketing situation analysis: This section provides background data for
several past years on:
• Market situation: size, growth, customer needs and buying behavior of each segment.
• Product situation: sales, price, profit for each item in the product line.
• Competitive situation: major competitors in terms of size, market share and
marketing strategies.
• Distribution situation: size and importance of each distribution channels.
• Macro environment situation: Broad trends regarding demographic, economic,
technological, political, legal, social, cultural forces.

• 3. SWOT analysis
• Strengths/Weakness Analysis: They come from the internal environment of
marketing (Objectives, Policies, resources, structure, and marketing mix).
• Opportunities/Threats Analysis: They come from the external environment
consisting of political, economic, socio cultural, technological, demographic,
natural, global forces.
• Issue analysis: Opportunities of Competitive advantage are pinpointed with
reference to SWOT analysis.
• 4. Objectives:
• Financial objectives: Profit objectives (net Profit, rate of return) for example,
earn 15% on capital employed.
• Market position
• Marketing objectives: Sales volume and market share, satisfaction level,
awareness level, loyalty rate, relationship strength.

• 5. Marketing Strategy: This section defines the broad marketing strategy to achieve
objectives. It mainly deals with market segmentation, targeting, positioning (STP). It
can also consider low cost or quality leadership or technological innovation. Generic
strategy of Porter (cost, differentiation or focus stragegies), strategic alliances,
deciding on product lines, product forms, brands to offer, research and development
etc is planned in this stage.
• 6. Marketing Program/Action Plans:
• What will be done? Various actions and activities of 7Ps.
• When will it be done? Time frame for each activity.
• Who will do it? Divisions, sections or individuals responsible.
• How much will it cost? Budget for each activity. Financial resources, human resources,
information resources, physical resources, are allocation are planed here.
• Package of supporting action plans become marketing program.
• Marketing program is mainly about designing 7Ps elements (product, price,
distribution, promotion, people, process and physical evidence) in actionable way.

• 7. Forecasts and Budgets (financials): This section forecasts the
expected outcome of the marketing plan in terms of profit and
loss. A budget is prepared accordingly with for each month,
quarter and year to fulfill estimates. It is based on relative
projected sales and cost estimates to earlier years.
• 8. Controls: This section outlines the control mechanism for
monitoring the plan's progress. Operation of feedback system,
monitoring methods, performance measurement, and corrective
measures takes place.
• 9. Contingency plans: Contingency plans (plan B, plan C…) are
also prepared on the basis of different future scenario building.

Marketing mix
• Right combination of marketing tools(7Ps)
• 4Ps for goods marketing (product, price,
promotion, place)
• 7Ps for service marketing (product, price,
promotion, place, people, process, physical
evidence)

• Four Ps Four Cs
• Product Customer Solution
• Price Customer Cost
• Place Customer Convenience
• Promotion Communication

Summary of marketing planning
• review/establishment of business mission
• Developing strategic plan at corporate level
• Develop the marketing plan at SBU level
• situation analysis,
• objectives
• strategies
• marketing plan
• marketing program(marketing mix)
• Forecast and budget
• Action plan
• Control/performance
• Contingency plan/scenario building

Unit 3: Marketing Information System And
Demand Forecasting
• Marketing Information
System (MIS):MIS is
using people,
equipments and
procedures to gather,
sort, analysis, evaluate
and distribute needed,
timely and accurate
information to marketing
decision makers.

(I) Internal database:
• Internal data is electronic collection of
information obtained from data sources
within the company.
• Like from various department
• Some times may need surveys on employees.
• Internal data bases accessed quickly &
cheaply.
• Internal data Problems: it is collected not for
marketing and data ages quickly.

(II) Marketing Intelligence:
• Marketing Intelligence is systematic collection of & analyses of publicly
available information.
• quizzing own employers,
• Bench marking competitors' products,
• reaching the internet,
• larking around industry tradeshows,
• searching rivals trash bins/parking lots,
• knowing thought suppliers,
• resellers, customers,
• annual reports, publication,
• press releases advertisements of competitors,
• spying, employing actors,
• talking to off duty employees

(III) Marketing Research:
• Marketing Research is systematic design, and analyses and reporting of data
relevant to specific marketing
• market potential,
• markets share,
• effectiveness of pricing,
• product, distribution,
• promotion, advertising research,
• sales research(efficiency of sales personnel,
• sales potentials ,
• efficient distribution ,
• forecasting future sales)
• motivational research
• attitude research

Marketing research process
• (1) Defining the problem & research objectives:

• (2)Developing the research plan: source
(primary/ secondary). Approaches
(observation /survey/experimental).
Methods (mail /phone /personal interview /
online interview), sampling(unit, size,
procedure). Instrument(questionnaire,
mechanical instruments )

• (3) Implementing the research plan:
(collecting /processing/ analysis):through
research staff or out agencies. Monitoring
research activities is important to obtain
unbiased, accurate information form
information collectors

• (4) Interpreting and reporting the findings
(conclusion and recommendation to specified
units of the company): researcher and
managers must sit to gather to interpret the
findings .

4th component: Information Analysis(decision support system-DSS)
1. data bank (lazar, register, books, computer

hard and soft drives)
2. statistical bank
3. model bank (synthesis of inter relationships
to prescribe the right course of actions): e.g.
BCG/GE Matrix, markov model, queuing
model, game theory, heuristics,X2/chai-
square test.

BCG MATRIX MODEL

Marketing Research System:
• Marketing Research is systematic design, and
analyses and reporting of data relevant to
specific marketing

• $31billion globally spent on research in
2010(world association of opinion and
marketing research professionals)
• 20% growth rate.
• Generally 1-2% of sales spent on research.

Research service can be received from
• Research agencies
• Professors
• Students
• Using internet
• Checking out rivals
• Tapping into marketing partner expertise

Research firm falls into three category
• Syndicated service research firms: regular

collection
• Custom marketing research firms: hired for
specific project.
• Specialty-line marketing research firms:
provide specialized/particular research
services

Marketing research process
• (1) Defining the problem &

research objectives:
• Problem is gap between
actual state and desired state
• identify problem and needed
information for providing
solutions.
• set research objectives on
specific information needed .
• research objectives could be
exploratory or descriptive or
causal research designs

• Symptoms should not be confused for problem
• sale decline is just a symptom problem could be inferior quality,
ineffective promotion, unaffordable price, poor supply chain.
• Low productivity may be symptom
• All reasons for sales decline could not be explored therefore using
experts, secondary data, discussing with managers, qualitative
research help sort most probable problem should be explored.
• Managerial problem is confusion on what to do, research problem
is what to be searched.
• Why is to be researched
• What is to be researched

(2)Developing the research plan:
• Research design: (exploratory,

descriptive, experimental,
qualitative, quantitative, pure,
applied, observation, survey, case)
• Approaches (observation
/survey/experimental/focus
group/ ethnographic/ qualitative:
indirect)
• Methods (mail/phone /personal
interview/online interview),
• Data sources (primary/
secondary).
• sampling(unit, size, procedure).
• Instrument(questionnaire,
mechanical instruments )
• Analytical tools
Quantitative and Qualitative Information
• Quantitative – based on numbers – 56% of 18

year olds drink alcohol at least four times a
week - doesn’t tell you why, when, how
• Qualitative – more detail – tells you why, when
and how!. About satisfaction, value, feelings,
friendliness, empathy, SERVOQUAL scale.
• Not everything that counts can be counted and
not everything that can be counted
counts(Einstein)

• (3) collecting the information
• collecting /processing/ analysis is also known
as implementation the research plan
• through research staff or out agencies.
• Adjusting to society, monitoring, motivating,
research activities is important to obtain
unbiased, accurate information.

4: analyze the information
• Tabulation
• Graphic presentation
• Statistical tools
• Decision models
• Hypothesis testing
• IT software
• SPSS
Descriptive vs. inferential tools
Descriptive
• Central tendency: mean, median mode,
• percentage, rank , frequency, standard deviation, variance.
Inferential: Parametric and non parametric
• Parametric(if population parameters known):
f test, t test, z test, pearson correlation, regression, factor
analysis, cluster analysis, descriinant analysis, anova
• non parametric
Chai -square, Spearman correlation

• (5) Interpreting and reporting the findings
(conclusion and recommendation to specified
units of the company): researcher and
managers must sit to gather to interpret the
findings .
• Summary, findings, conclusions,
recommendations, discussions, implications.

6: make the decision
• May use information
• May discard
• May carry out another research

Area of research
• 1. Product Research
• It studies the color, size, shape, quality,
packaging, brand name and price of the
product. It also deals with product
modification, product innovation, product life
cycle, etc. The product is modified (changed)
as per the needs and wants of the consumers.
Therefore, the product will not fail in the
market.
2. Consumer Research
• It studies the consumers needs, wants, likes,

dislikes, attitude, age, sex, income, location;
buying motives, etc. This data is used to take
decisions about the product, its price, place
and promotion.

3. Packaging Research
• It improves the quality of the package. It

makes the package more attractive. It makes
the package more convenient for the
consumers. It reduces the cost of packaging. It
selects a suitable method for packaging. It also
selects suitable packaging material.

4. Pricing Research
• It selects a suitable method of pricing. It fixes

the price for the product. It compares the
companies price with the competitor's price. It
also fixes the discount and commission which
are given to middlemen. It studies the market
price trends. It also studies the future price
trends.

5. Advertising Research
• It fixes the advertising objectives. It also fixes

the advertising budget. It decides about the
advertising message, layout, copy, slogan,
headline, etc. It selects a suitable media for
advertising. It also evaluates the effectiveness
of advertising and other sales promotion
techniques.

6. Sales Research
• It studies the sales outlets, sales territories,

sales forecasting, sales trends, sales methods,
effectiveness of the sales force, etc.

7. Distribution Research
• It selects a suitable channel for the product. It

fixes the channel objectives. It identifies the
channel functions like storage, grading, etc. It
evaluates the competitor's channel.

8. Policy Research
• It evaluates the effectiveness of the marketing

policies, sales policies, distribution policies,
pricing policies, inventory policies, etc.
Necessary changes, if any, are made in these
policies.

9. International Marketing Research
• It collects data about consumers from foreign

countries. It collects data about the economic
and political situation of different countries. It
also collects data about the foreign
competitors. This data is very useful for the
exporters.

10. Motivation Research
• It studies those factors that motivate

consumers to buy a product. It mainly finds
out, Why the consumers buy the product? It
also finds out the causes of consumer
behaviour in the market.

11. Market Research
• Market research studies the markets, market

competition, market trends, etc. It also does
sales forecasting. It estimates the demand for
new products. It fixes the sales territories and
sales quotas.

12. Media Research
• Media research studies the merits and

demerits of each media. It selects a suitable
media for advertising. It does media planning.
It also studies media cost. It helps in sales
promotion and to avoid wastage in
advertising.

• Ad Tracking – periodic or continuous in-market research to monitor a
brand’s performance using measures such as brand awareness, brand
preference, and product usage. (Young, 2005)
• Advertising Research – used to predict copy testing or track the efficacy
of advertisements for any medium, measured by the ad’s ability to get
attention (measured withAttentionTracking), communicate the
message, build the brand’s image, and motivate the consumer to
purchase the product or service. (Young, 2005)
• Brand equity research — how favorably do consumers view the brand?
• Brand association research — what do consumers associate with the
brand?
• Brand attribute research — what are the key traits that describe the
brand promise?

• Brand name testing - what do consumers feel about the names of the products?
• Commercial eye tracking research — examine advertisements, package designs,
websites, etc. by analyzing visual behavior of the consumer
• Concept testing - to test the acceptance of a concept by target consumers
• Coolhunting - to make observations and predictions in changes of new or existing
cultural trends in areas such as fashion, music, films, television, youth culture and
lifestyle
• Buyer decision making process research — to determine what motivates people to
buy and what decision-making process they use; over the last decade,
Neuromarketingemerged from the convergence of neuroscience and marketing,
aiming to understand consumer decision making process
• Copy testing – predicts in-market performance of an ad before it airs by analyzing
audience levels of attention, brand linkage, motivation, entertainment, and
communication, as well as breaking down the ad’s flow of attention and
flow of emotion. (Young, p 213)

• Customer satisfaction research - quantitative or qualitative studies that yields an
understanding of a customer's satisfaction with a transaction
• Demand estimation — to determine the approximate level of demand for the
product
• Distribution channel audits — to assess distributors’ and retailers’ attitudes toward
a product, brand, or company
• Internet strategic intelligence — searching for customer opinions in the Internet:
chats, forums, web pages, blogs... where people express freely about their
experiences with products, becoming strong opinion formers.
• Marketing effectiveness and analytics — Building models and measuring results to
determine the effectiveness of individual marketing activities.
• Mystery consumer or mystery shopping - An employee or representative of the
market research firm anonymously contacts a salesperson and indicates he or she is
shopping for a product. The shopper then records the entire experience. This
method is often used for quality control or for researching competitors' products.

• Positioning research — how does the target market see the brand relative to competitors? -
what does the brand stand for?
• Price elasticity testing — to determine how sensitive customers are to price changes
• Sales forecasting — to determine the expected level of sales given the level of demand. With
respect to other factors like Advertising expenditure, sales promotion etc.
• Segmentation research - to determine the demographic, psychographic, and behavioural
characteristics of potential buyers
• Online panel - a group of individual who accepted to respond to marketing research online
• Store audit — to measure the sales of a product or product line at a statistically selected store
sample in order to determine market share, or to determine whether a retail store provides
adequate service
• Test marketing — a small-scale product launch used to determine the likely acceptance of the
product when it is introduced into a wider market
• Viral Marketing Research - refers to marketing research designed to estimate the probability
that specific communications will be transmitted throughout an individual's Social Network.
Estimates of Social Networking Potential (SNP) are combined with estimates of selling
effectiveness to estimate ROI on specific combinations of messages and media.

Demand Forecasting: Current and Future Market Demand
• Demand forecasting guide planning in various

departments
• Concept of need, drive, want, demand
• Can prepare 90 different types of demand
estimates for six different product levels, five
space levels, and three time periods.

Types of market
• Demand is generated from market.
• Potential market: interested customer
• Available market: who have interest, income,
access and qualification.
• Target market
• Penetrated market

Vocabulary of demand (Kotler)
• Major concepts: market demand and company demand

• Market demand: for a product is the total volume would be
bought by defined customer group in a defined area, in defined
time period, in defined marketing environment, under a defined
marketing program.
• Demand function: demand is not a fixed number but function of
stated conditions.
• Market minimum: is demand without market stimulating
expenditure
• Market potential: is volume of sales beyond which additional
expenditure will not stimulate profitable demand. Is resulted from
highest level of industry expenditure.

• Sensitivity of demand: is distance between market minimum and
market potential.
• Expansible market: can be affected by additional marketing
expenditure
• Non expansible market; is not much (profitable) affected by
additional expenditure
• Market penetration index: comparison of current and potential
market demands. Low MPI high chance of industry growth
• Share penetration index: is comparison of current market share and
potential market share. Lower the SPI high chance if company growth
• Market forecast: is market demand corresponding to industry
marketing expenditure.

• Product penetration percentage: percentage of ownership or use of
product in a population. Lower the PPP higher the market potential
• Company demand: is company’s estimated share of market demand at
“alternative levels” of company marketing effort in given time period.
• Company sales forecast: expected level of sales based on “chosen
marketing plan in assumed marketing environment”.
• Sales quota: sales goals set for product line, company division, sales
representative
• Company sales potentials: is highest sales limit approached by company
demand as company marketing effort increase relative to that of
competitors(some of their customer never switch).
• Sales budget: is expected value of sales(to help making purchasing of
materials, production, cash flow decisions)

Estimating current demand
• Is concern with total market potential, area market potential

and total industry sales and market shares.
1. Total market potential= potential number of buyers
*average quality purchase by the buyer* the price.
2. Chain ratio method
• Market potential for ice cream among urban adults= urban
population above 18 years* personal discretionary income
per capita* average % of discretionary income spend on
food* Average % of amount spent on food that is spent on
dairy products* expected% of amount spent on diary product
that will be spent on ice cream.

2. Area market potential: market potential for different cities, states, nations
Market built up method (for business customer): identifying all potential buyers and
estimating their potential purchases.
Multiple factor index method (for consumer): considers demand as function of certain
elements). E.g.
• Medicine buying index (list of % of expected medicine sale in different cities of
Nepal) for say Kathmandu= (a*population Kathmandu as a % population of Nepal)+
(b* per capita income of Kathmandu as % of per capita income of Nepal)+(c* number
of doctors in Kathmandu as a % of number of doctors in Nepal)
• Brand development index= brand sales/ category sales. If result is less than one
there is chance of brand development.
• 3. Industry sales and market share
• Requires identifying competitors and estimating competitors’ sales and won sales.
Trade associations, syndicated agencies publish these figures too.

Estimating future demand
• Generally three stage

1. macro economic forecast(FDI, per capita,
investment, saving, interest, stability)
2. industry forecast(GDP, substitutes, entry/exit
barrier, customer, supplier, trends, GNP)
3. company forecast (competition, PLC, SBU
Model hints, position, industry trend)

Specifically forecasts are based on 3
• What they say? (1. Buyers, . 2sales persons, 3.

experts)
• What they do? (Putting product to 4. test
market)
• What they have done? (Analyzing records of
past, 5. time series or 6. statistical demand
analysis)

Survey of buyers’ intentions:
• Asking
• on probability of buying,
• Based on present and future personal
finances,
• Based on expectation about economy
• carried out for plants, equipments, material,
durables, new products or when advanced
planning is required.
Composite of sales force opinions:
• used when buyer interviewing is impractical.
• Must adjust sale person’s optimism/ pessimism,
• recent success or failure,
• economic developments in the country,
• marketing plans of the company,
• motivation to make company set less sales quotas,
• lack time to estimate correctly,
• may not be considered worthwhile.
• To motivate company must provide sales force with their past
estimates and actual sales,
• companies assumptions on business outlook,
• competitors behavior, marketing plan.

Expert opinion:
• dealers, suppliers, consultants, economic
forecasting firms, trade associations are experts.
• Dealers posses same strength and weakness as
sales forces.
• Invite experts for group discussing method,
• pooling of individual estimates (analyst combine
into single estimate),
• Delphi method (individual estimates with
assumptions are revised by company).
Past sales analysis:
• time series (trend, cycle, seasonal, erratic).
• Exponential smoothing(projecting sales by combining
average sales of past and present sales, giving more
weight age to latter).
• Statistical demand analysis (measuring level of impact
of each from set of the casual factor on sale level).
• Econometric analysis (building sets of equations that
describe the system and proceeding to fit the
parameters statistically).

Market test method
• useful when answer not available from earlier
methods, for new products, for testing new
channel, for testing new territory
• Simulated test
• Controlled test
• Standard test

Trends in Marketing Information Technology in
Nepal and Global Markets
• They also use “press cutting services” which provide
cutting of newspapers that are of interest to the company.
• Consulting firms in the private sector have mushroomed
to provide market research services. They lack
capabilities.eg AC Neilson, ad agencies, consultancies
• Most do not feel necessary
• Lack internal data due most business are run by family
• Lack of knowledge
• No proper filing or computerized system, no cooperation
among departments

• More media but information contradicts
• Internet, libraries, virtual libraries, face book, twitter, LinkedIn,
Skype, annual report, Annual general meetings, census, trade-
fair, students research work are the major sources.
• Talking to stake holders, partners is less, few journals irregular
• Research Problems not identified
• Lack of skilled researcher
• Cannot afford modern mechanical instruments, technology
equipment
• Depends Mostly on secondary data
• Survey questionnaire , interview, is mostly used

• Major research area is sales, product, customer
• Due competition realizing the need of MIS
• CRS: contraceptive retail sales company is 1st to conduct
research in 1980
• In 1982 Surya Nepal followed
• Gorkha brewery stared in 1988
• Ace institute of management, National open college, Wlink,
KFC, Nanglo bakery café and most banks and multinational
companies, big business houses are considering MIS
• E- governance is stared, MRP, electroonic voting in the pipe
line

Additional Trends in Marketing Information Technology in Global Markets are
• Blogging:
• Computerized Presentations:
• Customer Relationship Management (CRM)
Systems:

• Email Communication:
• Email Marketing:
• Graphic Design Software:

• Websites:
• Social Media:
• Viral marketing
• Influencer marketing
• Buzz marketing
• Real-time marketing(pop ups)

Additional technologies
• Cctv, mobile- memo, calendar, calculator, galleries,
app. etc., computer, laptop, palm top, iPod,
galvanometer, satellite, barcode, ATM, modern
mode of transportation, warehousing, inventory
management, order processing, material handling,
information management, chips attached to
product, counter, sensor to TV/ devices, metal
detectors, modern TV, internet, kiosk, video
conferencing, CD, pen drive, Bluetooth, cloud,

Unit 4 : Identifying market segment, target
and positioning strategies
• Market is sum of actual and potential
customer(Kotler)
• Market segmentation is breaking the total
market into groups where each group members
have similar characteristics.
• Market having the most opportunities is the
target market
• Product must be planned, positioned and
delivered.
Market research to identify customers
• Market research consist of
• Customer: who, what, where, when, how, to
whom, why
• Competitor: numbers, offerings, market share,
growth, potential, competition type/ level, SWOT
• Industry: size, growth, potential, SWOT, stability,
entry effects, infrastructure, channels,
contribution to GDP

Bases for Segmenting Consumer Markets.
• (1) Geographic Segmentation:

• Dividing into nation,
• regions,
• states,
• zone,
• district,
• cities, town, and neighborhood,
• urban, suburban, and rural.
• Climate
(2) Demography Segm:
• Age,
• gender,
• family size,
• family life cycle stages,
• income,
• occupation,
• education,
• religion,
• race, generation, nationality, ethnicity.
(3) Psychographic Segm:
• Social class: higher-class, middle class, lower
class.
• Life style: reflected in interests, opinion,
activities
• Personality (compulsive, gregarious,
authoritarian, ambitious)
• Perception
• Motives

• VALS Framework and Segment[edit]
• Innovator. These consumers are on the leading edge of change, have the highest incomes, and such high self-esteem and abundant resources that
they can indulge in any or all self-orientations. They are located above the rectangle. Image is important to them as an expression of taste,
independence, and character. Their consumer choices are directed toward the "finer things in life."
• Thinkers. These consumers are the high-resource group of those who are motivated by ideals. They are mature, responsible, well-educated
professionals. Their leisureactivities center on their homes, but they are well informed about what goes on in the world and are open to new
ideas and social change. They have high incomes but are practical consumers and rational decision makers.
• Believers. These consumers are the low-resource group of those who are motivated by ideals. They are conservative and predictable consumers
who favor American products and established brands. Their lives are centered on family, community, and the nation. They have modest incomes.
• Achievers. These consumers are the high-resource group of those who are motivated by achievement. They are successful work-oriented people
who get their satisfaction from their jobs and families. They are politically conservative and respect authority and the status quo. They favor
established products and services that show off their success to their peers.
• Strivers. These consumers are the low-resource group of those who are motivated by achievements. They have values very similar to achievers
but have fewer economic, social, and psychological resources. Style is extremely important to them as they strive to emulate people they admire.
• Experiencers. These consumers are the high-resource group of those who are motivated by self-expression. They are the youngest of all the
segments, with a median age of 25. They have a lot of energy, which they pour into physical exercise and social activities. They are avid
consumers, spending heavily on clothing, fast-foods, music, and other youthful favorites, with particular emphasis on new products and services.
• Makers. These consumers are the low-resource group of those who are motivated by self-expression. They are practical people who value self-
sufficiency. They are focused on the familiar-family, work, and physical recreation-and have little interest in the broader world. As consumers, they
appreciate practical and functional products.
• Survivors. These consumers have the lowest incomes. They have too few resources to be included in any consumer self-orientation and are thus
located below the rectangle. They are the oldest of all the segments, with a median age of 61. Within their limited means, they tend to be brand-
loyal consumers.

• Below are brief descriptions of the OCEAN traits:
• Openness to Experiences/Openness: People at the high end of the scale enjoy questioning
norms and conventions. They like to play with ideas, have vivid imaginations and enjoy
adventures. In contrast, the relatively conventional people at the other end of the scale
prefer the concrete to the abstract and the known to the unknown.
• Conscientiousness: People who are high on the trait of conscientiousness like order and
plan ahead. They don’t become distracted and are not reckless and tend to achieve high
levels of success. On the downside, they can be compulsive perfectionists and workaholics.
• Extraversion: Many extroverts are talkative, enthusiastic, cheerful and energetic. They can
also be assertive.
• Agreeableness: People who are agreeable have an interpersonal warmth and embody
compassion, generosity and kindness. People low on this trait are honest, blunt and not
particularly concerned with protecting other’s feelings.
• Neuroticism: This term refers to people who are easily stressed and find it hard to remain
calm in tense situations. They tend to worry a lot about what lies ahead or what has just
occurred.

(4) Behavioral Segm:
• Based on knowledge, attitude, use or response to a product.
• occasion(regular ,/special occasion buying).
• benefit(quality, service, economy, convenience, speed),
• user status(nonuse, ex-user, potential user, 1st time user, regular
user).
• usage rate(light, medium, heavy user: 20% eats 80%).
• Loyalty(completely loyal, loyal, somewhat loyal use 2-3 brands, not
loyal – always buys on sales).
• readiness (unaware, aware, informed, interested, desirous, intending
to buy).
• Attitude(enthusiastic, positive, indifferent, negative, hostile)
• Use situation: of meal, furniture, appliances, china, auto

(5) Multiple Segmentation Base:
• like Geo-demographic, use of multi variables
for segmentation for smaller, better targeting
the market.

ases for segmenting business markets.
• 1. Geographically

2.behavioural
• benefit seeking,
• user status,
• uses rate,
• loyalty status

3. In Demographic:
• Type of sector: agri, manu, service

• Types of industry (Agriculture, Forestry, Fishing,
Mining And Constructions. Transportations &
Communication. Finance & Insurance. Real-
estate, Hotel/Restaurant.
• Govt organization/non govt orgn).
• Size of customer (cottage &
small/Medium/large/government very large)
4. Operating variable:
• Technology:
labor/machine/automated/computer/robotic
• User/ non user status:
• Usage rate (Heavy, Medium, light,).
• Services needs (like needs before sales
service/after sales service/warranties,
guarantee/installation, repair).
• customer capabilities: need many or few
services. Sushil Awale, Author: Service Marketing
5. Purchase related variable:
• purchasing function organization (centralized,
decentralized, individual, committee or purchase
department). Purchase structure: engineering , finance,
marketing procurement, CEO. Purchase
documentations (direct purchase/with documentations
– quotations, contracts, tenders). Negotiation period
long -Aircrafts /short for paper & pencil). Relationship:
desirable or profitable. Policies: leasing, contract,
system purchase, seal bidding, documentation.
Purchase criteria: seeking quality, service, price.

6. situational factors
• Urgency: or slow need

• Specific application: should focus on certain
application or all application of the product
• Size of the order
• Purpose of use

7. personal characteristics
• Attitude toward risk: risk taking or avoiding

• Buyer seller similarity: in values, people
• Loyalty: loyal or non loyal

Steps for Market Segmentation Process
• In their book The

Portable MBA in
Marketing, Alexander
Hiam and Charles D.
Schewe identified six
steps that companies
should take in the
market segmentation
process.

1. The first step is to determine the boundaries of the market.
• definition of their business, basic needs of

consumers. Size of market

2. The second step in the process is to decide which
variables to use in segmenting the market.
• Based on competitors, experiences, related

variables, exploratory research

3. The third step in the market segmentation
process is actually collecting and analyzing
data,

The fourth step is to develop a detailed
profile
• size of the segment,
• market growth/potential
• Competition
• related to buying behavior
• what are their core needs,
• what they currently buy,
• what brands they buy,
• how loyal are they
• What , why, when, where, how,
whom, who, income
• Demographics, psychographic
• Variables not considered early

• “Segment profiles enable marketers to develop
products that will satisfy customers, design
communication messages that will appeal to
the market segment, and develop an effective
distribution plan that will assist in distributing
the products and services” (Botha, Bothma
, & Brink, 2004).
• Help identify similarity and difference among
segments.
5. segment evaluation and segment targeting.
Evaluation based on
• Resources of company
• Objectives of company
• Requirements
• Five forces
• PLC
• Differentiability of market
• Differentiability of product
• Competitor
• Size and growth of market
Selection methods
• Mass
• Differentiated
• Niche
• Micro
• Single
• Multiple
• Product specialization
• Market specialization
6. The sixth and final step is to develop a product and marketing plan that will
appeal to the selected market segment (positioning)

Target marketing
• Is based on following
two things(Kotler
2013:203)
• Effective segmentation
criteria: SADAM,
• Evaluating and selecting
the market segments

Effective segmentation criteria: SADAM
• Measurability:
• divisible:
• Accessible:
• substantial:
• Actionable:

Evaluating and selecting the market
segments
Evaluation depends on
• Porter five forces
• firm’s objectives
• resources
• Sales, competition, cost

Selection can be
• full market coverage

• Multiple segment specialization
• Single segment concentration
• Individual marketing
• Ethical choice of market targeting /Socially
responsible target Marketing

Segmentation, Mass Marketing, & One-to-
One Marketing
Customer 1 Customer 1 Offering A Customer 1

Customer 2 Offering A Customer 2 Offering B Customer 2
Customer 3 Customer 3 Offering C Customer 3
Offering
Customer 4 Customer 4 Offering D Customer 4
Customer 5 Offering B Customer 5 Offering E Customer 5
Customer 6 Customer 6 Offering F Customer 6
Mass marketing Segment-based marketing One-to-one marketing

Segment selection strategy
• Undifferentiated
(Mass) Marketing:
• Differentiated
Marketing:
• Concentrated (Niche)
Marketing:
• Micromarketing:
Local Marketing:
Individual Marketing:

choosing a target marketing strategy depends also on
• product variability,
• product’s life cycle stages of the firm,
• market variability,
• competitors’ strategies

Developing and communicating Positioning strategy
• Product’s position is the way the product is

defined by consumer on important attributes.
• The place the product occupies in consumers
mind relative to competing products.

Product Position
• The way the product is defined by consumers
on important attributes-
• “Products are created in the factory, but

brands are created in the mind.”

Product Position Samples
• Nissan March and Honda Jazz: economy
• Mercedes and Cadillac: luxury

Product Position Samples
• Porsche and BMW: performance
• Volvo: safety

Positioning process
• (1) Identifying Possible Competitive
Advantages:

• (2) Choosing the right competitive advantages:
• (a) Importance to target buyer
• (b) Must be distinctive
• (c) Superior benefit then others
• (d) Must be communicable & visible to buyer
• (e) Preemptive: hard to copy
• (f) Affordable
• (g) Profitable to company
•

• (3) Selecting an overall Positioning Strategy:
• (a) More for more:
• (b) More for same
• (c) Same for less
• (d) Less for much less
• (e) More for less

• (4) Developing a Positioning Statement:
• To (target segments and need) our (bound) is
(concept) that (point of difference).

Developing a Positioning Statement
State the product’s
membership in a
Positioning statement sample: category
• “To busy, mobile professionals who need to
always be in the loop, Blackberry is a wireless
connectivity solution that gives you an easier,
more reliable way to stay connected to data,
people, and resources while on the go.”
Show its point of

difference from
other members of
the category
• (5)Communicating & delivering the chosen
position:

Segmentation in Nepal
• In Nepal education market is segmented into preschool, primary school, high school, Plus two, A-
level, higher education. Even higher education market is segmented on the basis of subjects like
science, management, humanities, engineering, medicine, education etc.
• Restaurants are segmented into Dance Restaurant, Gajal Restaurant, Family Restaurant, Fast Food
Resturant, Tanduri Restaurants, Chinese Restaurant, Peddlers (Thela), Newari Restaurant, Thakali
Restaurant, Sekuwa Restaurant etc.
• Banks have targeted it services to different segments like for childern (Bal Bachat Khat), for women
(Nari Bahat Khata), for old (Bridda Bachat Khata), for student (Bidyarthi Bachat Khata). Bank Loans
are divided into home loan segment, auto loan segment, industrial loan segment, personal loan
segment etc. Brick manufacturer produce variety of brick for variety of market segment.
• Brick manufacturers produce bricks for building walls, for building partition, for fences, for mixing
into concrete slab, for roofing, for flooring, for classic traditional look (used in temples and ancient
monuments).
• Different Carpets, garment products are targeted for Nepalese market and foreign markets
separately.
• Different types of groceries (general store, super market, departmental store, malls, consumer
cooperatives) provide services for different market segments.

• Nepal electricity authority charge different rates according to power use volume.
• Telecom companies have segmented its market as land-land user, prepaid mobile user
and post paid mobile user services. Internet service providers (dialup, cable, ADSL, wi-
zoom, fiber) have variety of service for variety of customers. They have segmented
market on the basis of volume and use timing (night surfing is charged less).
• Author of this book had experienced dentist targeting market on the basis of social
class. Some dental services are available on the street (just like barber shop) some
dentist provide the five star hotel comfort to its clients.
• Hospitals are specializing in different services for different customers. Ohm Hospital is
specializing in gynecology; B&B Hospital is specializing in orthopedic, Bal Maitre
Hospital, Ishan Hospital and Kanti Hospital in child care, Neuro Hospital in nerve
related diseases.
• In transportation services taxi, bus, aero plane, car reservation services are targeted to
different segments. Even airlines have segmented its market into domestic passengers
or international passengers or economy class, business class, luxury class etc.

• Hotel industries have segmented markets for its star hotel services, non star hotel services (3
star, five star etc.) and resorts. Shoe manufactures have segmented its market as leather shoe
market, sport shoe market, sleeper market, ladies sandals etc.
• In Nepal market segmentation is not systematic and not based on research in general.
Geographic and demographic market segmentation variables are more popular in Nepal.
Psychographic variables to segment the market are rarely used. Nepalese business circle lack
awareness on business market segmentation. Generally Nepalese considers only two market
one consumer market and second business market (industrial market) in general. All businesses
are considered as one type of market. There is lack of socially responsible segmentation in
Nepal. Street food foods are targeted to price sensitive which is unhygienic. Rotten vegetables
and bad meats are supplied to restaurants. (Agrawal, 2014)
• Instant noodles market has been broken down to vegetable, non vegetable segments, small
packet using segment, big packet using segment. Surya Nepal’s Cigarette has been targeted
according to class and personality. Surya International brand of cigarette for upper class,
Shikhar brand of cigarette for young middle class, Khukuri brand of cigarette for labors lower
middle class. Many markers of confectionary product package their product for special occasion
like Dashain, Loshar, Tihaar, Janai Purnima, Fathers Day Mothers Day, Valentine’s Day etc.

Unit 5: Competitive Analysis
• Competition is the activity or condition of
striving to gain or win something by
defeating or establishing superiority over
others.(Oxford)

competitors is likely when
• There are high profit margins in the industry
• There is unmet demand (insufficient supply) in
the industry
• There are no major barriers to entry
• There is future growth potential
• Competitive rivalry is not intense
• Gaining a competitive advantage over existing
firms is feasible
• Dissatisfaction with the existing suppliers
common sources of new competitors are
• Companies competing in a related product/market

• Companies using related technologies
• Companies already targeting the target prime
market segment but with unrelated products
• Companies from other geographical areas and
with similar products
• New start-up companies organized by former
employees and/or managers of existing companies

Competitive analysis covers five key topics
(Michael Knowles)
• Your company's competitors.
• Competitor product summaries.
• Competitor strengths and weaknesses.
• The strategies used by each competitor to
achieve their objectives.
• The market outlook.

Types of competition (William Stanton, William
M Pride, O C Ferrell, G R Agrawal):
1. Industry competition
2. Market competition

Industry competition
• Based on industry structure: monopoly,

monopsony, oligopoly, imperfect competition,
perfect completion.
• Based on industry barrier: entry barrier, exit
barrier, mobility(switching to another
business) barrier
• Based on cost efficiency
• Based on globalization context.

Barriers to Entry
• Economies of size - The need for a large volume of production and sales to
reach the cost level per unit of production for profitability is a barrier to entry.
• Capital intensive - A large capital investment per unit of output in facilities
tends to limit industry entry.
• Intellectual property - Patents and other types of proprietary intellectual
property are very effective in limiting industry entry.
• High switching costs - The tendency for buyers of an industry’s products to
be reticent about switching to a new supplier tends to limit entry.
• Established brand identity - Industries dominated by branded products are
difficult to enter due to the large amount of time and money required to create
a competing branded product.
• Permitting requirements - Industries where permitting and licenses are
required to establish production tend to have limited entry.
• Government standards - Industries where rigid industry standards exist tend to
have limited entry.

Barriers to Exit
• Investment in specialist equipment - Investments in
specialized equipment that cannot readily be used in
other industries tends to be an impediment to leaving the
industry.
• Specialized skills - Highly specialized skills by industry
participants that cannot be utilized in other industries
tend to be an impediment to leaving the industry.
• High fixed costs - High levels of dedicated fixed costs
tend to be an impediment to leaving an industry
• Employees/govt
• Contract with suppliers

Market competition
• Price and non-price(product, promotion, placement) competition

• Generic level competition: competing for same disposable income of
buyer. E.g. Competition among bike, computer, fridge.
• Class level: competing to satisfy same need(drink). E.g. Competition
among cold drink, tea, coffee, beer.
• Category level: competing for satisfying same need from same product.
E.g. Competition among water, carbonated drink, juice.
• Form level: competing for satisfying same need of same target group
based on size and flavor. Competition among jumbo coke, cane coke, diet
coke or competition among Fanta, coke, sprite etc.
• Brand level: competing for satisfying same need, to same target group,
same customer. E.g. completion among Pepsi, coke, thumbs-up. offering
similar product

Model given by Chan Kim and Renée Mauborgne of INSEAD ("Institut Européen d'Ad
ministration des Affaires" or European Institute of Business Administration) in their book Blue
Ocean Strategy 2005.
Analyzing key competitors
• The sheer size of industries makes each and
every competitor analysis impractical.
• Concentrating on key competitors is a viable
alternative.

Process
• 1. Define competitive arena for generic, specific and variant
product-markets:
• Due to change in technology, change in customer taste, change
in market forces, industrial structure, value added chain
competitive arena may change (Cravens and Piercy, 2010).
• Substitute product may come as very strong competitor if
heavy research and development is pursued (Ramaswamy and
Namokumari, 2013).
• Competitors might appear due to customer perception,
customer attitude, customer behaviour and various types of
other customer demands (Clark and Montgomery, 1999)

• Understanding competitive arena through
• market needs,
• market change,
• gap analysis,
• product line extension possibilities,
• environmental changes,
• value addition ideas,
• supply chain consideration,
• vertical/horizontal integration,
• new law
• possible alliances

• Making profile of the industry,
• analysis of the value chain,
• supply-chain of competitors,
• analysis of Michael Porter’s five competitive
forces

2. Identifying key competitors
• marketing strategy will position the company's

marketing offer against the marketing offers of
these competitors.
• Setting criteria for the selection of the key
competitors is the best way to make a considered
choice,
• Two important criteria are
1. Companies serving the same markets.
2. Companies successful in meeting demand.
• Serving same markets:
• Product types can compete for the same target markets if they are close
substitutes.
• Successful companies:
• Serving the same markets is a necessary but not sufficient criterion for
identifying key competitors.
• Analyses should also concentrate on those competitors that are likely to
have the greatest impact on a company's sales. Successful competitors
are most likely to meet this criterion.
• Indicators of size and growth in sales, market share, and profitability
are typically used in this context.
• Having once identified key competitors, management should not
assume that they will remain in that position forever.

3. Describing key competitors' capabilities
• Through published sources,

• interviews with those familiar with the
competitor
• personal observation.
key competitor’s
• marketing strategies
• Tactics
• management styles
Financial size and strength of competitors
• Typical income statement and balance sheet data are

sought for this purpose.
• more creative means may sometimes have to be
employed to estimate financial strength- counting the
number of advertisements run in a certain time period,
examining bond ratings, or keeping track of the number of
sales personnel in overlapping sales territories.
• financial profile may give the analyst a rough idea of how
resources are allocated to such components of the key
competitor's marketing program as advertising, product
research and development, and personal selling.

• Key competitors' objectives and capability.
• Only with forewarning can a company develop appropriate offensive or
defensive strategies. Specific competitor characteristics that should be
profiled are;
• Mission and business objective
• Market share position and trends
• Management capabilities and limitations
• Technical and operating capabilities
• Target market strategies
• Marketing objectives
• Marketing offer, strategies and tactics
• Access to key resources.
• The profile can then be searched for insights into the potential actions of
each competitor.
• The result is a picture of the way in which a key competitor strives to
reach markets and positions itself against competition.
• Periodically updating the profile of a key competitor will provide a
historical picture of the decision –making style and trend/tendencies of
its management. Sushil Awale, Author: Service Marketing
4. Evaluating key competitors
The information gathered allows an analyst to evaluate a key competitor's strengths and
weaknesses.
• Competitor coverage;
• extensive coverage of competitor is indicated by the placing of high priorities on specific
market segment and by correspondingly high allocation of marketing effort to them .
• In contrast, limited coverage is revealed when viable market segments are found that are
not targeted by a key competitor's or at least have more demand then is indicated by the
competitor's target market priority.
• Consider market coverage strategy.
• Meeting market requirements
• Marketing program of competitor
• This analysis helps management uncover the strength (important market requirements met
well)
• and weaknesses (important market requirements met poorly) of each key competitor's
technical and marketing strategy and tactics/tactics.
• Here External/market/impliment perspective is analyzed(step 3 internal only)

5. Predicting key competitors' further
marketing action;
• since it takes considerable time to fully implement new strategies and tactics,
management should be able to base many such predictions on patterns or
trends in past marketing actions of key competitors.
• other techniques are needed to complement trend analyses because some
changes are very new which cannot be spotted by historical trends.
• competitor intelligence system is needed, monitoring key competitors'
marketing research; analyzing key competitors' probable response, given
their management styles, to anticipated changes in market conditions;
interviewing key competitors' suppliers, distributors, and customers; and
hiring away key competitors' managers.
• In strategy meetings, it is expected of these '' shadow'' executive that be able
to present their best judgment as to how their particulars '' shadow'' will
respond to strategic moves being considered.
• Competitor reactions: laidback, selective, tiger, stochastic.

• Laid Back Reaction: it is slow or no reaction to competitors’ attacks.
Company with loyal customer does this. When company is short of
resources they are bound to react in this manner too.
• Selective Reaction: these companies react to selective attacks of company.
They react by cutting price or by increasing promotion. Here there is high
chance of price war.
• Tiger Reaction: these competitors reacts fast and furiously (strongly) to any
attacks of company. These types of attacks are common when there is
competition in brand level, when there is less differences among
competing products like Coke vs. Pepsi, news papers(Kantipur vs. Nagaric)
• Stochastic Reaction: this is unpredictable reaction to the company’s attack.
Competitor might react mildly to strong attacks and strongly to weak
attacks. This type of reaction is common from small competitors.

Strategic Response to Competition
• Competitive strategies for market leaders

• Market Challenger Strategies
• Market –Follower Strategies
• Market-Nicher Strategies

Competitive strategies for market leaders
• A market leader has the largest market share

and usually leads in price changes, new-
product introductions, distribution coverage,
and promotional intensity.
• 1. Expanding Total Market Demand
• 2. Protecting Market Share
• 3. Increasing Market Share

1. Expanding Total Market Demand
• In general, the market leader should look for new customers or more usage from
existing customers.
• NEW CUSTOMERS a company can search for new user among three groups;
those who might use it but do not (market penetration strategy), those who have
never used it (new-market segment strategy ),or those who live elsewhere
(geographical –expansion strategy).
• MORE USAGE marketers can try to increase the amount, level, or frequency of
consumption.
• Additional opportunities to use the brand The repainting of houses coincides
with Diwali, Dashain, or other festivals, so paint brands increase their
advertisement and market stimulation effort during the festival season. Another
might be to provide consumers with better information about when they first
used the product or need to replace it(marks and signal appearance e.g. in
toothbrush),
• New ways to use the brand. E.g. Vicks. Dairy Milk: Kuch Mitha Ho Jaye

2. Protecting Market Share
• While trying to expand total market size, the dominate firm must activity defend its
current business; Boeing against Airbus, and Google against yahoo And Microsoft. How
can the leader do so? The most constructive response is continues innovation. The
front-runner should lead the industry in developing new products and consumer
services, distribution effectiveness, and cost cutting.
• PROACTIVE MARKETING; in satisfying customer need, we can draw a distinction
between responsive marketing, anticipative marketing, and creative marketing. A
responsive marketer finds the stated need and fell it. An anticipative marketer looks
ahead to need customers may have in the near future. A creative marketer discovers
solutions customers did not ask for but to which they enthusiastically respond.
Successful companies instead proactively shape the market to their interests. Instead of
trying to be the best player, they change the rules of the game.
• A company needs two proactive skills; (1) Responsive anticipation: to explore customer
need and address. (2) Creative anticipation: to predict customer need that customer do
not realize until offered. Companies need to practice "uncertainty management."
Companies that are too risk-averse won't be winner.

• DEFENSIVE MARKETING; the aim of defensive
strategy is to reduce the probability of attack, divert
attacks to less-threatened areas and lesson their
intensity. Speed of response can make an important
difference to profit. A dominant firm can use the six
defense strategies
1. Position defense: occupying the most desirable
market space in consumer's minds,
2. Flank defense: erecting outposts to protect weak
front.
3. Preemptive defense;
• A more aggressive maneuver is to attack first, perhaps with
guerrilla action across the market-hitting one competitor
here, another there-and keeping everyone off balance. E.g.
USA army in Arab.
• Another is to achieve broad market envelopment that signals
competitor not to attack. State bank of India's focus on
expanding their network in the vast rural hinterland of over
100,000 villages
• to introduce a stream of new products and
• announce in advance (selling vapourware).

4. Counteroffensive defense; meet the attacker frontally
and hit its flank, or
• lunch a pincer movement so it will have to pull back
• crushing a competitor by subsidizing lower prices for the
vulnerable product with revenue from its more
profitable products,
• prematurely announce a product upgrade to prevent
customers from buying the competitor's product.
• lobby legislators to take political action to inhibit the
competition.
5. Mobile defense; stretches its domain over new territories
through market broadening and market diversification.
• "petroleum" companies are seeking to recast themselves as
"energy" companies(market broadening ). This change
required them to research the oil, coal, nuclear,
hydroelectric, and chemical industry.
• Market diversification shift the company's focus into
unrelated industries .
• Acknowledging growing curbs on cigarette smoking, the
tobacco giant ITC started focusing on fast-moving consumer
products and food business.
6. Contraction defense: they give up weaker
markets and reassign resources to stronger
ones.

3. Increasing Market Share
• Ways to Increase Market Share

• Share of preference - can be increased through
product, pricing, and promotional changes.
• Share of voice - the firm's proportion of total
promotional expenditures in the market. Thus,
share of voice can be increased by increasing
advertising expenditures.
• Share of distribution - can be increased through
more intensive distribution.
Shafer's tips for snatching more market share:
• Stay relevant through innovation.

• Respond to customers -- fast.
• Use customers' ideas.
• Snap/buy up competitors.
• Be more flexible.

Extra
• cost of buying higher market share through acquisition may far exceed its
revenue value, a company should consider four factors first;
• The possibility of attracting legal action for violating the competition act or
anti trust law. Eg Microsoft and intel monopoly was challenged.
•
• Economic cost; the cost of gaining further market share might exceed the value
•
• The danger of pursing the wrong market activities: because rivals meet the
price cut or offer other values so buyer don’t, switch.
•
• The effect of increased market share on actual and perceived quality; some
mobile phone service providers attracted more subscribers than their service
capacity

Competition in Nepal
• In Nepal competition is only considered in brand level.
• They only consider competition like Coke vs Pepsi,
Colgate vs Pepsodent.
• Nepalese companies have not yet realized the
competition between coffee and whisky though some
restaurant and bar started offering coffee lounge.
• Nepalese do not consider broad competitive arena yet.
Companies take competitors in general, they do not
consider their status whether they are market leader or
market challenger or market follower or market incher.

• Pricing and promotion is most used tool to tackle the
completion in Nepal, there is rarely non price competition in
Nepal.
• There is lack of research for competitive analysis. Nepalese lack
proactive marketing they are more of reactive marketer.
• Nepalese do not consider future consequences, competitions
further reactions to company’s actions etc.
• Unhealthy completions prevail in Nepal. Nepalese open
boarder to India, non requirement of visa for Indians, low
morale and corruption in security force, corruption in judiciary
system, smuggling etc have made fair competition difficult.

• Since the advent of the democracy in 1990
Nepal have entered into open market. Nepal
has been full member of WTO 2010.
• Many multinational companies have poured in
banking sector, education sector, healthcare
sector, telecom sector, air transportation sector,
hotel and restaurant industry
• but Nepalese companies not been able to
compete in international markets
• Nepalese Industry completions tend to be oligopoly in
nature.
• Cartelling and syndicate system prevail in Nepalese
industries.
• Few companies try to keep the grip of the whole industry
often.
• Most of the Nepalese businesses are market follower; they
tend to follow cloner strategy, counterfeit strategy, imitator
strategy.
• Nepalese companies lack research, intelligence, use of
consultancy service to manage the competition.

Unit 6: Implementation of Marketing
Program: product strategies
Concept and Components of

Marketing Program
• Done in chapter one and chapter three

Need for Product Innovations
• 1. Technology innovations: New technological developments make exiting products obsolete.
Marketing must innovate products to replace old technology with new technology.
• 2. Market leadership: Organizations develop and introduce innovative products to maintain
market leadership. They invest significant amount of money for research and development.
• 3. Competitive response: This is the age of intense competition. Marketing must anticipate the
innovative actions of its competitors. Product innovation is needed to gain competitive
advantage by being First in the market.
• 4. Changing customer preferences: This is mainly due to changing needs, tastes and
preferences of customers. Product innovations are needed to meet changing customer
preferences.
• 5. Environment adoption: Environmental forces related to politics, law, economics, culture and
society keep on changing. Product innovations are needed to adapt to environment changes.
• 6. Failure of new products: Marketing is faced with high failure rate of new products. Products
innovations are needed to stay in the market.
• 7. Use waste materials/by-product launch

Types of New Products
• 1. Product innovations: Innovations are unique or original products that are new to the
world. They satisfy needs that are not being satisfied before. Innovations are costly, risky and
time consuming. Only 10% of new products are truly innovative. About75% of new innovative
products fails.
• 2. Product modification: Existing products are modified and improved. Customers perceive
them significantly different from existing products. The objective is to defend market share.
Modification can be in terms of quality function, and benefits.
• Quality modification improves dependability and durability of the product, it improves the
existing product.
• 3. Product imitation: Imitations are products that are new to the organization but old to the
market. They are “me too” products. They represent copy of imitation- SUNSIGHT soap for
SUNLIGHT soap, PODREJ for GODREJ furniture and BANBAN for BOURBON biscuits.
• New products can be developed in the organizations own laboratories by cross functional
teams. Outsides independent research firms can also be contracted to develop new products.
• 80% of new consumer packaged goods fail in the USA they are mostly product imitations
(Agrawal, 2009)

Types of New Services
• 1. Major or radical innovations: are new services for markets as yet undefined. E.g. broadcasting television, mobile telephone
services, internet, Facebook, twitter, search engine, catering, Kindergarten school.
• 2. Major process innovations: consist of using new processes to deliver existing core product in new ways with additional
benefits. E.g. university of phoenix offering courses online or in rented facilities which are non traditional ways of service process.
• 3. Process line extension: is adding new method of delivery, new channel of distribution like banking service available online as
well, education services available online, university establishing constituent campus and franchising as well in addition to its own
central campus.
• 4. Supplementary service innovation: is improving facilitating service or enhancing service to core service. It can be like adding
parking facilities, agreeing to accept credit cards/debit cards at the retail store (Lovelock 2010).
• 5. Start-up business: consist of new services for a market that is already served by existing products that meet the same generic
needs. E.g. BBA (against existing product BBS).
• 6. New services for currently served market: represent attempts to offer existing customers of the organization a service not
previously available from the company (may be available from other company). E.g. Airlines offering internet. Here new product
could be out of prevailing product line.
• 7. Service line extensions: represents addition in existing service line. E.g. Airline offering new routes. Nepal airlines offering new
flight (routes) Kathmandu to New York every Friday. Here new service is additional new product in the prevailing product line. It is
related to prevailing product line.
• 8. Service improvements: here new service comes in the form of changed features on current services. E.g. Faster service, more
convenient process, extended hours of services, additional facilities in the product, bank deposit service with new interest rates
and facilities, college with new teacher or new classrooms or new management. This kind of new service is very common.
• 9. Style changes: changing product visibility. E.g. change in colour, logo, homepage, package, physical environment etc.

Product Development
• Product concepts
• Product line and product mix
• New product
New product development process
• Idea generation
• Idea screening
• Concept development and testing
• Marketing strategy
• Business analysis
• Product development and testing
• Marketing testing
• Commercialization

Product Line and Product Mix Strategies
• Product Line Decisions

• Product line is a group of products that are closely related because they
function in similar manner are sold to the same customer groups, are
marketed through same type of outlets or fall within given price ranges.
• Lengthen is 2 ways:
• 1. Line stretching, upward, downward or both directing according to
market growth. e.g. Toyota stretching upward by offering new Lexus,
deluxe model. Mercedes launching Mercedes C class in cheaper prices
to face down ward attack by Japanese cheaper cars
• 2. Line filling – adding more items within the present range of the line
for profits, satisfying dealers, using excess capacity, plugging holes to
keep out competitors, eg Sony’s solar walkman, waterproof walkman,
CD walkman, ultra light walkman models in audio player line.

Product Mix Strategies
• Product mix (product assortment) is the set of all product lines and items
that a particular seller offers for sale.
• Product mix has 4 Dimensions
• 1. Width (number of product line): e.g. P & G offer 5 lines that is
Personal & beauty, house & home, health and wellness, baby & family,
pet nutrition & care products.
• 2. Length: total items company counts within its product mix. P&G has
250 items.
• 3. Depth: number of versions offered of each product e.g. toothpaste in
16 variety.
• 4. Consistency: how closely related the various product lines are in end
uses, production requirements, distribution channels or some other way
– e.g. all products going through same channel is consistent

Developing and establishing a brand positioning (process)
• All marketing strategy is built on segmentation, and

targeting, and positioning (STP).
• Positioning is the act of designing a company’s offering
and image to occupy a distinctive place in the minds
of the target market. The goal is to locate the brand in
the minds of consumers to maximize the potential
benefit to the firm.
• The result of positioning is the successful creation of
a customer- focused value proposition, a strong
reason why the target market should buy the product.
1. Determining a competitive frame of reference
• The competitive frame of reference defines which

other brands a brand competes with and therefore
which brands should be the focus of competitive
analysis.
• Deciding to target certain type of consumer can define
the nature of competition, because certain firms have
decide to target that segment in the past(or plan to do
so in the future ),or because consumer in that
segment may already look to certain products or
brands in their purchase decisions.

• IDENTIFYING COMPETITORS: A good starting
point in defining a competitive frame of
reference for brand positioning is to
determine category membership-the product
or sets of products with which a brand
competes and which function as close
substitutes.
• consider industry competition vs. market
competition
• ANALYZING COMEPTITORS:
• Comparing on key success factors and position against weak factor
of competitor. Refer table 9.2 in Kotler
• Once company has identified its main competitors and their
strategies, it must ask:
• What is each competitor seeking in the marketplace?
• What drives each competitor's behavior?
• Many factor shape a competitor's objectives, including size, history,
current management, and financial situation.
• If the competitor is a division of a larger company, it's important to
known whether the parent company is running it for growth or for
profits, or milking it.

2. Identifying Optimal Points-Of-Difference and Points-of-Party
• Once marketers have fixed the competitive frame of

reference for positioning by defining the customer,
target market and the nature of the competition;
they can define the appropriate point-of-difference
and point-of party associations.
• POINT- OF DIFFERENCE Point-of –difference (PODs)
is attributes or benefits that consumers strongly
associate with a brand, positively evaluate, and
believe they could not find to the same extent with a
competitive brand.
Three criteria determine functioning as a point-of-difference
• Desirable to consumer. Consumer must see the brand association as personally

relevant to them. The west in Stamford hotel in advertised that if was the world's
tallest hotel, but a hotel's height is not important to many tourist. Consumers must
also be given a compelling reason to believe and an understandable rationale for why
the brand can deliver the desire benefit. Mountain Dew may argue that it more
energizing than other soft drinks and support this claim by nothing that it has a higher
level of caffeine. Substantiates can also come in the form of patented, branded
ingredients, such as NIVEA Wrinkle Control Crème with Q10 co-enzyme or Herbal
Essences hair conditioner with Hawafena.
• Deliverable by the company. The company must have the internal resources and
commitment to feasibly and profitably create and maintain the-brand association in
the minds of consumer. The product design and marketing offering must support the
desired association. The ideal brand association is preemptive, defensible, and difficult
to attack.
• Differentiating from competitors. Finally, consumers must see the brand association as
distinctive and superior to relevant competitors.

• Choosing the right competitive advantages:
• (a) Importance to target buyer
• (b) Must be distinctive
• (c) Superior benefit then others
• (d) Must be communicable & visible to buyer
• (e) Preemptive: hard to copy
• (f) Affordable
• (g) Profitable to company
• POINT-OF-PARTY Points-of-parity (POPs), on the other hand, are attribute
or benefit associations that are not necessarily unique to the brand but may
in fact be shared with other brands
• Category points-of-party are attributes or benefits that consumers view as
essential to legitimate and credible offering within a certain product or
service category. In other words, they represent necessary-but-not
sufficient-conditions for brand choice.
• Competitive points of parity are association designed to overcome
perceived weakness of the brand. This may be required to either (1) negate
competitors perceived point of difference (2) negate perceived vulnerability
of the brand as a result of its own point of difference(arises when customer
feels good means bad in something else). Eg consumer perceive Complain is
calcium(tall) therefore may need to focus as heath drink with milk/protein.
Matching price, service, sales promotion though high end product.

More ideas for POPs/PODs
• One good way to uncover key competitive points-of-
parity is to role-play competitors' positioning and infer
their intended points-of-difference.
• Competitor's PODs will, in turn, suggest the brand's
POPs.
• Consumer research into the trade-offs consumers
make in their purchasing decision can also be
informative.
• Average on weak part(pop) strong on unique part(pod)
e.g. Dettol vs. Savlon ( antiseptic with burn feel free)
• POINT-OF-PARTY VERSUS POINTS-OF-DIFFERENCE For an
offering to achieve a point-of-parity on a particular attribute or
benefit, a sufficient number of consumers must believe the
brand is '' good enough'' on that dimension. There is a zone or
range of tolerance or acceptance with points-of-parity. The
brand doe not literally need to be seen as equal to
competitors, but consumer must feel it does well enough on
that particular attribute or benefit. If they do, they may be
willing to base their evaluations and decision on other factors
potentially more favorable to the brand. Often, the key to
positioning is not so much achieving a point-of-difference as
achieving points of parity!

• MULTIPLE FRAMES OF REFERENCE It is not uncommon for a brand to identify
more than one actual or potential competitive frame of reference, if competition
widens or the firm plans to expand into new categories. For example, Café Coffee
Day could define very distinct sets of competitors, suggesting different possible
POPs and PODs as a result.
• Quick-serve restaurants and convenience shop (McDonald's). Intended POD's
might be quality, image, experience, and variety; intended POP's might be
convenience and value.
• Supermarket brands for home consumption (NESCAFE). Intended PODs might be
quality, image, experience, variety, and freshness; intended POPs might be
convenience and value.
• Local Cafes. Intended PODs might be convenience and service quality; intended
POPs might be quality, variety, price, and community.
• Note that some potential POPs and PODs for café Coffee Day are shared across
competitors; other are unique to a particular competitors.

• Under such circumstances, marketers have to decide what to do. There
are two main options with multiple frames of reference. One is to first
develop the best possible positioning for each type or class of
competitors and then see whether there is a way to create one combined
positioning robust enough to effectively address them all. If competition
is too diverse, however, it may be necessary to prioritize and then choose
the most important set of competitors to serve as the competitive frame.
• Finally, if there are many competitors in different categories or
subcategories, it may be useful to either develop the positioning at the
categorical level for all relevant categories (''quick-serve restaurants'' or
supermarket take-home coffee'' for Café Coffee Day) or with an exemplar
from each category (McDonald's or NESCAFE for Café Coffee Day).
•

• STRADDLE POSITIONING Occasionally, a company will be
able to straddle to frame of reference with one set of
points-of-differences and points-of-parity. In these cases,
the point-of-differences for one category become point-
of-parity for the other and vice versa. Subway restaurant
are positioned as offering healthy, good-testing sandwich.
This positioning allows the brand to create a POP on taste
and a POD on health with respect to quick-serve
restaurant such as McDonald's and, at the same time, a
POP on health and a POD on tested with respect to health
food restaurants and café.

3. Choosing POPs and PODs
• Marketers typically focus on brand benefits in choosing the point-of-party and
point-of-difference that make up their brand positioning.
• Brand attributes generally play more of a supporting role by providing '' reason
to believe'' or “proof points'' as to why a brand can credibly claim it offers
certain benefits.
• For choosing specific benefits as POPs and PODs to position a brand,
perceptual maps may be useful. Perceptual maps are visual representations of
consumer perceptions and preference. They provide quantitative portrayals of
market situations and the way consumers view different product, services, and
brands along various dimensions. By overlaying consumer preference with
brand perceptions, marketers can reveal '' holes'' or opening'' that suggest
unmet consumer needs and marketing opportunities.
•
• Figure

• By making its image more contemporary, Brand A could move to 'A to
target consumers in segment 1 and achieve point-of-parity- on
imagery and maintain its point- of-difference on taste profile with
respects Brand B.
• By changing its taste profile to make it lighter, Brand A could move to
A'' to target consumer in Segmentn2 and achieve a point-of-parity on
taste profile and maintain its point-of-difference on imagery with
respect to Brand C.
• Deciding which repositioning is most promising, A’ or A'', would
required detailed consumer and competitive analysis on host of
factors-including the resources, capabilities, and likely intentions of
competing firms--to choose the markets where consumers can
profitably be served.

4. Brand Mantras
• A brand mantra is an articulation of the heart and soul of the brand and is closely
related to other branding concepts like '' brand essence'' and '' core brand
promise.''
• Brand mantras are short, three-to five-word phrases that capture the irrefutable
essence or sprit of the brand positioning.
• Their purpose is to ensure that all employees within the organization and all
external marketing partners understand what the brand is most fundamentally to
represent with consumers so they can adjust their actions accordingly.
• Brand mantras are powerful devices. They can provide guidance about what
products to introduce under the brand, what ad campaigns to run, and where and
how to sell the brand.
• Brand mantras must economically communicate what the brand is and what it is
not.
• Opportunities that were not consistent with the brand mantra—no matter how
appealing- should be rejected.

Brand Mantra e.g.
• Disney: Fun Family Entertainment,
• Ritz-Carlton: Ladies & Gentlemen Serving
Ladies & Gentlemen,
• BMW: Ultimate Driving Machine.
(According to David Bell from Wharton,
University of Pennsylvania)

• Brand mantra shows brand manta consists of
product benefits, user, and emotional appeal
in following matrix

• Designing A Brand Mantra Brand mantras are designed with internal purpose
in mind. A brand slogan is an external translation that to creatively engage
consumers.
• Although Nike's internal mantra was '' authentic athletic performance,'' its
external slogan was
• “Just Do It”
• Here is the three key criteria for a brand mantra.
• Communicate. A good brand mantra should define the category (or
categories) of business for the brand and set the brand boundaries. It should
also clarify what is unique about the brand.
• Simplify. An effective brand mantra should be memorable. For that, it should
be short, crisp, and vivid in meaning.
• Inspire. Ideally, the brand mantra should also stake out ground that is
personally meaningful and relevant to as many employees as possible.

5. Establishing Brand Positioning
• Action match Words

• 7Ps: marketing program
• One helpful schematic to do so is a brand- positioning bull's-eye. Constructing a
bull's- eye for the brand ensure that no steps are skipped in its development.
• Establishing the brand positioning in the marketplace require that consumers
understand what the brand offers and what makes it superior competitive
choice
• consumer need to understand in which category or categories it completes and
its points-of-parity and points-of-difference with respect to those competitors.
• Presumably, consumers need to know what a product is and what the function
it serves before deciding whether it is superior to the brands against which it
competes.
• For new products, initial advertising often concentrates on creating brand
awareness, and subsequent advertising attempts to create the brand image.

COMMUNICATING CATEGORY MEMBERSHIP: awareness
• Announcing category benefits. To reassure consumers that a

brand will deliver on the fundamental reason for using a
category, marketers frequently use benefits to announce
category membership.
• Comparing to exemplars; when Tommy Hilfiger was unknown,
advertising announced his membership as a great US designer
by association him with Geoffrey Beene , Stanley Blacker, Calvin
Klein, and Perry Ellis, who were recognized members of that
category.
• Relying on the product descriptor; the product descriptor that
follows the brand name is often a concise means of conveying
category origin. E.g. BMW ultimate driving machine.

COMMUNICATING POPS and PODS
• one common difficulty in creating a strong, competitive brand
positioning is that many of the attribute or benefits that make up the
POPs and PODs are negatively correlated.
• low price vs. high quality
• powerful vs. safe
• taste vs. low calories
• strong vs. refined
• nutritious vs. good tasting
• ubiquitous vs. exclusive
• efficacious vs. mild
• varied vs. simple

• moreover, individual attribute and benefits often have positive and negative
aspect. the brand's heritage could suggest experience, wisdom and expertise. On
the other hand, it could also imply being old-fashioned and not up-to-data.
• Unfortunately, consumer typically want to maximize both of the negatively
correlated attribute or benefits. the best approach clearly is to develop a product
or service that perform well on both dimensions.
• Some marketer have adopted other approaches to address attribute or benefit
trade-offs; launching two different marketing campaigns, each one devote to a
different brand attribute or benefit;
• linking themselves to any kind of entity(person, place , or thing)that possesses
the right kind of equity as a means to establish an attribute or benefit as a POP
or POD ;
• even attempting to convince consumers that the negative relationship between
attributes and benefits, if they consider it differently, is in fact positive.

• Hypothetical Starbuck coffee example (Kotler,
2013) of bulls eye next slide

Product Life Cycle: Have five stages
• Introduction:
• Growth Stage:
• Maturity Stage:
• Decline Stage:

maturity
growth Decline stage
Product
development
stage Introduction
S
A
L
E
S
Sales
Profit
0 TIME
Losses/inve
stment

Characteristics introduction Growth Maturity decline
Sales Low sales Rapidly rising Peak sales Declining sales
Costs High cost per Average cost per Low cost per Low cost per
customer customer customer customer
Profits negative Rising profits High profits Declining

profits
Customers Innovators, Early Middle Laggards16%
first2.5%customer adaptors13.5% majority68%
Competitors few Growing number Stable number Declining

, beginning to number
decline
Marketing Create product Maximize market Maximize Reducing

objectives awareness and trial share profit while expenditure
defending and milk the
market share brand
Marketing strategies Introduction stage Growth stage Maturity stage Decline stage
Product Offer the basic Offer product Diversify brand Phase out weak
product extension, and models items
warranties,
services
Price Use cost plus Price to Price to match Cut price
penetrate market or beat the
competitors
distribution Build selective channel Build extensive Build more Go selective:

distribution intensive Phase out un
distribution profit out lets
Advertising Build product Build awareness Stress brand Reduce the level
awareness among and interest in the differences and needed to
early adaptors and mass market benefits retain hard core
dealers loyal
Sales promotion Use heavy sales Reduce to take Increase to Reduce to

promotion to entice advantage of encourage minimal level
trial heavy consumer brand switching
demand
Reasons for repositioning
• Missed objective
• Competition
• To attract New customer
• Change in customer taste
• Change in technology
• Changing value(trading up and trading down)

Repositioning in various stages
• Mostly in maturity stage because it is most challenging to marketers.

• Through introduction of new product versions,
• reaching new customers (non user, new segment, snatch competitors
customer),
• new use methods/uses
• New marketing program
• new use occasions.
• Targeted to Middle majority 68%.
• product differentiation, for different user(multiple competitive frame
of reference), for different uses.
• Reverse Positioning, Breakaway Positioning takes place

Tries to position/reposition following
• In decline stage options like
• wait for others to leave,
• harvest,
• divest,
• Liquidize
• prune
• rejuvenate through repositioning, like in PLC (Style).
• Need to focus emotionally attached, hard core brand loyal,
laggards (16% last customers).
• Niche marketing
• In growth stage new features added,

• made product more interesting.
• Repositioning to grab the interest of customer.
• Repositioned to adopters (14%).
• POPs are used. changing the value offered

• In introduction stage due competition,
• customer’s negative response,
• Quick change in technology (idea/tech change by
lunching time in long R&D process) may need
repositioning.
• Targeted to innovators (2%).
• POPs used.
• simple, benefits, awareness positioned.
• Stealth Positioning takes place
branding strategies and policies
• 1. Brand Extension Strategy/ Family Brand Strategy: affect the

images of other products in family branding. Brand extension fall
under two categories
• Line Extension: if brand extension is for the product line (to
launch same product with different forms, flavor, ingredients,
color, package sizes) then it is called line extension. This is also
sometimes called Brand Variants Strategy
• Category extension: if brand extension is undertaken to launch
different product category (to launch different product like
electronics, automobile, garments, food grains) it is call category
extension.

• 2. Sub Brand Strategy: Sub brand is using combination of existing brand
elements and new elements while company is running product extension.
For example Toyota Lexus, Toyota Corolla, Toyota Camry, Maruti Suzuki Alto,
Maruti Suzuki Swift, Maruti Suzuki Baleno, Maruti Suzuki Gypsy, Jumbo Coke,
Diet Coke etc. In this strategy company name legitimize the new product and
individual name individualizes (customize) the new product.
• 3. Licensed Brand Strategy:
• 4. Individual Brand Strategy/Single Brand Strategy:
• Some time to protect the important flagship brands company must launch
flankers (fighter brands) to tackle the competitor’s brand therefore
individual branding used in this case too. (for details check the case of
Smirnoff vodka in the topic Responding To Price Change Strategy of this
book).

• 5. Branding Strategy on the Basis of Ownership
• Manufacturer's brand: This brand is owned and controlled by
the manufacturer. Manufacturers' brands are mostly national
brands that are promoted by the manufacturers nationally and
internationally. The channel members normally do not promote
the manufacturers' brands.
• Distributor’s Brand or Private Brand or Store Brand or Local
Brand: This brand is created, owned and controlled by
distributors, wholesalers, and large retail institutions. Small
manufacturers of garments, shoes, and fashion goods etc. are
unable to pay the heavy costs of promotion and therefore allow
the dealers to put their brand name on the product.

• Co-Brand Strategy: Co-Brand joins two brands which will result into stronger brand,
additional value of the brand, larger market then individual brand’s market, reduce the
marketing costs. Examples of Co-Brands are Maruti Suzuki, Nabil Three Star, NIC Asia; each of
these co-brands are made through joining two companies.
• 7. Brand Variants Strategy: In brand variants strategy specific brand lines supplied to specific
retailers or distribution channels. This is result of pressure retailers put on manufacturers to
provide distinctive offering to match particular local customer needs. For example Shoe
Company may supply its low end shoes to mass merchandisers and higher priced items to
specialty shoe shop.
• 8. No Branding Strategy:
• 9. Brand Image Building Strategy: in Brand Image Building Strategy organization builds its
corporate image. Corporate image eventually result into success of individual product of the
company. Companies like Sony, Bajaj, CG, Hulas are using this strategy.
• 10. Rebranding Strategy: when brand gets bad name rebranding is done to rejuvenate the
product, to reposition the product. When product reach the saturation period product is sold
under new brand name to revitalize. To give new appeal to the product rebranding is
necessary.

• 11. Fabricating Parts and Material Branding Strategy: Fabrication parts
mean manufactured goods that become part of another product following
subsequent manufacturing. With Fabricating Parts and Material Branding
Strategy sellers develops market preferences to its branded parts or
materials. This strategy is effective in two conditions
• When item product is also a consumer good that is bought for
replacement purpose. For example spark plugs, batteries, bulbs, AC, music
player for car.
• When item is key part of finished product. For example Intel
microprocessor in PC, Dolby Noise Reduction Units in cinema halls.
• 12. Generic Brand Strategy: For price sensitive customers Generic Brand
Strategy is popular. In Generic branding products are simply leveled chicken,
peanut, butter, cheese, milk, bun, egg, mushroom and so no. Here products
are leveled by name of the product.

Product and branding in Nepal
• Product concept
• Goods dominate the product concept in Nepal.
• Services are getting important as products.
• Ideas are gradually being accepted as a product. Family planning ideas as a product has been
widely marketed. So are environment protection and human rights.
• The concept of organization as a product has been largely lacking.
• Type of Product
• The consumer products dominate Nepalese marketing, especially the convenience and
shopping product.
• Industrial raw materials for manufacturing are mostly imported. Almost all the capital goods
are imported.
• Product Life Cycle
• They lack awareness about the need for effectively managing every stage of the product life
cycle.
• Nepal is experiencing shorter product life cycles. Recently, some manufactures have started
product modification at the maturity stage.

• New Product Development
• Nepalese organizations lack research and development base. Product
innovations are rare. Product modifications are increasing.
• New products are mostly me too products which are copies of Indian and
Chinese products.
• Test marketing before commercialization is generally lacking.
• The failure rate of new products in Nepal is high.
• Product Mix
• Big houses like Jyoti, Golchha, Chaudhary Groups are constantly adding new
lines. Chaudhary group has added health, education and energy lines.
• Line featuring (product versions) is not emphasized.
• Service marketing is in the initial stage. However, star hotels in Nepal have
been concerned about people and physical environment variables.

• Packaging
• However, innovations in packing are generally lacking. Imitations of Indian
or Chinese packages abound in the market.
• Plastic dominate the packaging materials, especially polythene bags for
consumers to carry products.
• Packaging materials are mostly imported. Nepalese organizations
manufacture tin, paper, cardboard, plastic package on a limited scale.
• Packing has been used in Nepal for promotion purposes too
• Some organizations use packaging for product differentiation. For
example NEBICO biscuit uses separate packaging for normal and gift
packs.
• Reusable environmental friendly packaging strategy is missing.
• will assume importance in Nepalese marketing in coming years.

• Labelling
• The implementation of consumer protection act since April 1998 has prescribed strict labelling
requirements consisting of :
• – Name and address of manufacturer.
• – Ingredients of the product, quantity, weight.
• – Quality certification mark.
• – Operating or use instructions and effects of use.
• – Price, batch number, date of expiry
• – Guarantee information for electronics, hardware, etc
• – Safety precautions for hazardous and fragile products.
• – Other, as specified from time to time.
• New laws compel to mention importer on the label
• However, the legal provisions have not been enforced effectively. With the opening up of the
economy to foreign investment, information communication revolution, invasion of cable
television in consumer's homes and growing professionalization, it is expected that product
strategies

• Branding Practices
• Most manufactured products are branded in Nepal. Agricultural products
remain largely unbranded although branding of Rice (Makhan, Hulas) and
Pulses (Dugar, Hulas) is increasing. Name is the popular form of branding.
• Most brands in Nepal are individual brands. Nepal has 47 brands of cooking oil.
Family brands are catching up, for example Hulas biscuits, rice, pulses, flour,
wires, steel utensils, GI sheets.
• Manufacturer's brands are popular, brand licensing is also catching up, for
example Frooty, Hot Breads, KFC
• Brand is simply taken as name and symbol in Nepal. Branding is interpreted as
naming (Namakaran) in most of the Nepalese marketing book. Brand as
Identify or Quality Assurance is newer concept to Nepalese business. Hulas
Vaye Aru Kina Khojne, 2pm, Wokhati soap, Chiso Vanekai Cocacola, Chito
Vaneko Worldlink etc are some of the praiseable cases of brand in Nepal.

• Author (Nepalese) of this book not only introduce himself as First Author of Service Marketing
in Nepal and SMS greeting on festivals as Service Marketing Author, but also have been
teaching service marketing in most of the college, publishing most of the research articles on
service marketing, authored most of the books in service marketing, created the Google group
and facebook page as Services Marketing Scholars to crate the identify of Pioneer in Service
Marketing of Nepal. Here author is trying to create his identity, branding of himself.
• Hulas has been practicing brand extension naming hulas on all its product. Chaudhary Group
and Surya Nepal is using individual brand on each of their products. NIC Asia, Nabil Three Star
using co-branding strategy. Instant noodle 2pm coin the brand name to give impression that
their noodle is eaten at 2pm (as Khaja). Wokhati soap it trying to give the impression that this
soap cures skin diseases. Global College of Management is trying to give the impression it is of
global standard. Tribhuvan University Central Department of Management organizes programs
like Walkthon 2017, Homecoming 2018 for their alumni to brand it as different department
(Campus). Sometime ago telecom named Mero Mobile tried to create the customer attachment
and ownership through its brand name. MARS Advertising Agency named as the abbreviation of
Marketing, Adverting and Research Solutions. Ace institute of management named itself to give
the impression that it is the best. Laxmi Development Bank derived its name from god of
money Laxmi.

• Family brands are catching up in Nepal like
Hulas, CG, Panchakanya, Jagadamba, Dabur etc.
Private brands are also appearing like Bhat-
Bhateni Sugar, Bhat-Bhateni Almonds, Nuts,
Spices, Grains etc. Licensed brands are also
popular in Nepal. For example Coca Cola, Pepsi,
Sprite, KFC, Wimpy, Hotbreads, LG, Panasonic,
Tribhuvan University Affiliates Colleges,
Pokhara University Affiliated Colleges.
• Brand ambassador are very much used in Nepal. Celebrity
comedians Madan Krishna Shrestha and Haribamsa Acharya are
brand ambassador for Sanima Bank and Shikhar Insurance;
cricketer and current captain of Nepal national cricket team Paras
Khadka who has represented National Life Insurance Company Ltd,
ABC Choice Noodles, clothing brand UFO, European automobile
brand Fiat and cricket gear producer SM Company; and prominent
actor Rajesh Hamal, the face of Wai Wai noodles, Dabur
Chyawanprash, and Cosmic Yin Yang, Nepal’s first motorbike, Indica
Easy Hair Colour, Jagadamba Group, among others; celebrity media
person Bhusan Dahal brand ambassador for JagdambaUltra
Premium OPC cement; Manisha Koirala for NIC Asia Bank.

• Anmol KC has been roped in as the ambassador of Pro-Style hair oil for three
years paying 10 lakh per year. Miss Nepal 2010, Sadichha Shrestha, was the
face of Everest Bank Limited (EBL), which, upon appointing Shrestha as its
brand ambassador, also launched “Sadichha Deposit” to infiltrate the youth
market and encourage sound investment from an early age while also
creating a collective fund for the underprivileged youth. Bank of Kathmandu
Lumbini (BoKL) has appointed renowned Nepali actors and social workers
Sitaram Kattel and Kunjana Ghimire, popularly known as ‘Dhurmus’ and
‘Suntali’ as their official brand ambassadors. Actress Melina Manandhar to
represented Dabur Real juice; athletes Jumanu Rai and Deepak Bista to
represented Dabur Glucose D; singer Nima Rumba was the face of the
company´s Pro Style Hair Oil. Bimal Gharti Magar, Player of Nepal's National
Football Team as the Brand Ambassador of Life Insurance Corporation Nepal
Limited (LICN) and Xtep, China's leading sportswear brand.

Pricing strategies/policies
• Product life cycle strategies
• Product mix strategies
• Differentiated strategies
• Price adjustment strategies
• Psychological strategies
• Geographical strategies
• Promotional strategies
• International strategies
• Price change strategies

Geographical Pricing
• FOB,
• Base point pricing,
• uniform,
• zonal,
• fright absorption pricing

Price Discount and allowances
• Most companies will adjust their list price and

give discounts and allowances for early
payment, volume purchases, functional
discount and off-session buying.

Promotional pricing
• Loss leader pricing

• Special event pricing
• Cash rebates
• Low interest financing
• Longer payment terms.
• Warrantees and service contract
• Psychological discounting:

Differentiated pricing
• Companies often adjust their basic price to accommodate differences in customers,

products, locations, and so on.
• Price discrimination occurs when a company sells a product or service at two or more
price that do not reflect a proportional difference in costs. In first- degree price
discrimination, the seller charges a separate price to each customer depending on the
intensity of his or her demand. In second –degree price discrimination, the seller charges
less to buyers who buy a large volume.
• Customer segment pricing
• Product-form pricing. Different versions of the product are priced differently but not
proportionately to their respective costs, for example, laptops are normally priced much
higher than a desktop with same /similar configurations.
• Image pricing: happen in cosmetics and garments
• Channel pricing: coco-cola carries a different price depending on weather it is purchased
in a fine restaurant , a fast- food restaurant , or vending machine.
• Location pricing
• Time pricing

• The airline and hospitality industries use yield management
systems and yield pricing, by which they offer discounted but
limited early purchases, higher-priced late purchases, and the
lowest rates on unsold inventory just before it expires. Airlines
charge different fares to passenger on the same flight,
depending on the seating class; the time of day (morning or
night coach);the day of the weak(workday or weekend); the
season; the person’s company, past business , or status (youth,
military, senior citizen); and so on. Smart pricing takes off,” for
more on how companies are using software packages that
provide real-time controlled tests of actual consumer response
to different pricing schedules. Eg priceline.com

Managing the price change for market sustainability
• Companies to raise or reduce price change accordingly with

situations.
• Initiating price cuts
• Several circumstances must lead a firm to cut prices. One is
excess plant capacity;
• to stop falling market share.
• Companies sometimes initiate price cuts in a drive to
dominate the market through lower costs. Either the
company starts with lower costs than its competitors or it
initiates price cuts in the hope of gaining market share and
lower costs.
Initiating price increases
• Cost Inflation
• Over Demand.
• Tax Increase

The price can be increased in the following ways.
• Delayed quotation pricing: price is not set until product is finished or delivered.
• Escalator clauses. The company requires the customer to pay today’s price and
all or part of any inflation increase that takes place before delivery .Escalator
clauses are found in contracts for major industrial projects, like aircraft
construction and bridge building.
• Unbundling
• Reduction of discount
• A company need to decide whether to raise its price sharply on-time basis or to
raise it by small amounts several times. Generally, consumers prefer small price
increases on a regular basis to sudden, sharp increases.
• Several techniques help consumers avoid sticker shock and a hostile reaction
when prices rise; one is that a sense of fairness must surround any price
increase, and customers must be given advance notice so they can do forward
buying or shop around. Sharp price increases need to be explained in
understandable terms. Making low - visibility price moves first is also a good
technique: eliminating discounts , increasing minimum order sizes, and
curtailing production of low- margin products are some examples: and
contracts or bids for long- term projects should contains escalator clause based
on a such factors as increase in recognized national price indexes.
Responding to competitors' price changes
in a homogenous products market

when decreases
• firm should search for ways to enhance its
augmented product
• If it cannot find any, it will have to meet the price
reduction.
when raises
• ,other firms might not match it unless the
increases will benefits the industry as a whole.
In non homogeneous product markets
• a firm has more latitude.
• It needs to consider the following issues;
(1) why did the competitor change the price?
• To steal the market,
• to utilize excess capacity,
• to meet changing cost conditions,
• or to lead on industry- wide price change?
(2) Does the competitors plan to make the price change temporary or permanent?
(3)What will happen to company's market share and profits if it does not respond?
• Are other companies going to respond?
(4) What are the competitors' and other firms' responses likely to be to each
possible reaction?

Brand leaders can respond in following ways
• Maintains Price; The leader might maintain its price and profit margin, believing
that (1) It would lose too much profit if it reduced its price, (2) it would not lose
much market share, and (3) it could regain market share when necessary.
• Maintains price and add value; the leader could improving its product, services
and communications. The firm may find it cheaper to maintain price and spend
money to improve perceived quality then to cut price and operate at a lower
margin.
• Reduce price; the leader might drop its price to match the competitor's price. It
might do so becomes (1) its costs fall with volume, (2) It will lose market share
because the market is price sensitive, and (3) I will be hard to rebuild market
share once it is lost.
• Increase price and improve quality; The leader might raise its price and
introduce new(cheaper) brands to bracket/surround the attacking brand
• Launch a low- price fighter line;

Response depends on situations.
• the company has to considered the product's
stage in the life cycle,
• it importance in the company's portfolio,
• the competitor's intentions and resources,
• the market's price and quality sensitivity,
• the behavior of costs with volume,
• and the company's alternative opportunities.

• An extended analysis of alternatives may not
be feasible when the attack occurs. The
company may have to react decisively within
hours or days. It would make better sense to
anticipate possible competitors' price
changes and to prepare contingent
responses.

Another issue is to how to get paid
• countertrade.
• Barter.
• Compensation deal. The seller receives some percentage of the
payment in cash and the rest in products. A British aircraft
manufacturer sold planes to Brazil for 70 percent cash and the rest in
coffee.
• Buyback arrangement. The seller Seles a plant, equipment, or
technology to another country and agrees to accept as partial
payment products manufactured with the supplied equipment.
• Offset. The seller receives full payment in cash but agrees to spend a
substantial amount of the money in that country within a stated time
period. Pepsi sold in rubles and vodka bought back from Russia.

Pricing Practices in Nepal
• Pricing objectives
• Status quo-oriented pricing objective is dominant in Nepal. Most Nepalese products are imitation of Indian products. Price competition is avoided by charging the prevailing market price to meet competition. Survival is the pricing objective for
carpet and readymade garment industries because of declining demand.
• Profit-oriented pricing objective is pursued in terms of satisfactory profit. Specified target return is generally not considered as an objective.
• Sales-oriented pricing objectives are emerging, for example increase in market share is the objective in instant noodle industry and liquor industry.
• Nepalese products are generally poor in quality. Some marketers follow low pricing objective by producing low quality products to imitate high quality imported products.
• Factors Affecting Price Determination
• Costs are the most important factor in price determination. Because of high import content and rugged terrain, most Nepalese products have high costs of production.
• Promotion is emerging as an important factor in determining price. The popularity of television and radio has increased for promotion.
• Competition from Indian and Chinese products is getting important in price determination. Cross border smuggling also affects price.
• Low volume of market demand also affects price. Nepal is a small fragmented market where economics of scale are difficult to achieve.
• Government controls also affect price. Public enterprises, especially utilities like electricity, telephone and water, follow government directives to set price. Some products can be subject to administered price. Support prices are fixed for
agricultural products like sugarcane, wheat, rice by the government.
• Methods of Setting Price
• Competition oriented pricing method is dominant in Nepal to meet competition.
• Sealed bid pricing method is used by the government and NGOs for awarding contracts.
• Cost-plus method is generally used by small manufacturers . Break-even pricing is poorly practiced.
• Pricing Policies and Strategies
• Flexible price policy is widely used in Nepal. Price discrimination is done according to customer, place and time. Discounts are also used to make the price flexible, Allowances are also used . Recently, Philips Television used this modality.
• Geographical pricing policy is also popular. Uniformed delivered price policy is used by Nepal Lever, Coca Cola and Pepsi. Zone price is used by Nepal Oil Corporation. Base point price is used for bulky products like iron, cement, bricks etc.
• Product mix pricing policy has not caught up in Nepal. Nepal Telecommunications Corporation uses a two-part price policy—cheaper price from 9PM to 9AM.
• Price response strategies are common in Nepal to meet the competition. Product life cycle pricing strategies have been gradually emerging. But the Psychological pricing strategies have remained neglected in Nepalese marketing.
• – Some industries form cartels to adopt one price policy for the product. In Nepal, this is found for iron rods, washing soar, beer, cold drinks, transport syndicates.
• Future Perspective
• Global organizations have emerged in Nepal. The World Trade Organization (WTO) has been working toward a liberalized trade regime. Nepal is a member of WTO. All these factors will have significant effect on pricing policies and strategies in
Nepal. Competition will be everywhere.
• Factor affecting pricing in Nepal
• Promotion costs like expenses for advertising, sales promotion and publicity. These costs vary according to promotional needs of the product. Marketers create different images for their brands in order to establish them in better competitive
positions. The images may be based on economy, efficiency, prestige, status etc. Such brand images are often treated as assets (brand equities). Creation of different images involves different level of communication expenditures that must be
included in the cost of the product. Management can exercise some control on these costs.
• The type of competition the organization face in the market determines the price of the product. If the competition is at the level of product form, there are no close substitutes, and hence, there is more pricing freedom for the marketer. If the
competition is in terms of generic product, the marketer has to closely watch the price and competitors’ offers. If the competition is at the level of brands, consumers can easily switch brands based on their relative price and values, and hence
the marketer is forced to sell the product at the prevailing market prices for similar brands.
• Government control on the price level and legislation regarding price regulations are important variable in the pricing milieu. In Nepal, the government exercises price control on such products as sugar, wheat, bread etc., which are largely sold by
the private sector. The government is more sensitive on the price of products marketed by the private sector than those marketed by the public sector. In such a situation, the price setter has to evaluate the sensitivity of the public authorities
while pricing the product.
• An organization often has to consider the interests of the marketing intermediaries in the price. Resellers expect a fair share from the price as mark-ups, commissions and incentives. In Nepal, intermediaries exploit the producers especially in
agriculture sector.
• Social concerns on prices are normally represented by the voices of consumer associations. Thus, in a market where these associations are working actively to protect consumers' interests, the marketer has to take into account their concerns
and possible reactions in price setting. The consumer associations in Nepal are very weak, politically motivated, and less concerned with the consumer welfare, and hence, marketers need not take them as a pricing variable.

Unit 8: channel and logistics
• Physical distribution
• Channel of distribution

Channel design decisions
Analyzing customer need
• Size/quantity
• Delivery time
• Spatial Convenience
• Product variety
• Service backup

Establishing objective(regarding service level)
and constraints
• Objectives vary with product
characteristics(appropriate channel/service
required/distance to shop short if bulky items)
• Economic cycle need short to save cost
• Legal regulation restrictions
• Desired services from intermediaries

Identify major channel alternatives
• Types of intermediaries
• Number of intermediaries(exclusive, selective,
intensive)
• Terms and responsibility of channel
members(price, conditions, territorial rights,
mutual obligations)

Evaluating major channel alternatives
• Economic criteria regarding channels
• Control and adaptive criteria

Channel Dynamics (Changes)
• 1. Structural dynamics(emergence of new channel

structures like corporate vertical channel,
administered vertical channel, contractual vertical
channel, horizontal channel, multi channel system )
• 2. Behavioural dynamics: is concerned with changes
in role and power relationship of channel
participants, which lead to cooperation or conflict.
Cooperation leads to adaptation. Conflicts can
dysfunction. Behavioural dynamics, variables are as
follows
Structural dynamics
• Conventional channel: with unknown producers,
wholesalers, retailers
• Vertical channel: fixed, known, networking
• Corporate vertical: channel owned by producer
• Administered vertical: network maintained by influencing
channel member
• Contractual vertical: regulated by contract
• Horizontal: among partners, companies, alliances,
networking in same level
• Multi channel: using multiple available channels
Behavioral dynamics
• a) Channel role: every channel member has to play its role for smooth operation of the channel. Change in
role as leader or follower among the channel participants brings change.
• b) Channel power: channel power results out of the control exercised by the channel participant and the
leadership position of a participant in the channel system. Channel power is ability to influence and control
the channel. Source of power is as follows
• Reward: ability to provide financial and other benefits, facilities to channel members
• Coercion: ability to punish, harm other channel members, like manufacturer stop supplying to wholesaler, or
retailer not selling manufacturer’s product or with holding sales money
• Referent: members may desire to join manufacturer of well-known brand and achieve power by becoming
the dealer of popular brand
• Expertise: experience, expertise of a channel member in particular area is the power.
• Legitimate: legal provisions, ownership of brand provide such power
• c) Channel conflict: due to dissimilar characteristics and varied objectives of channel members channel
conflict arises.
• vertical conflict: between different level of channel. Between wholesaler and retailer on profit, promotional
costs
• horizontal conflict: between same level of the channel like conflict among retailers on territory, customer
switching.
• multi channel conflict: between two or more channel systems on price, territory.

Causes of Conflicts among Channel Members
• Causes of conflict are as follows:

• goal incompatibility among channel members (high sales Vs High
profit)
• unclear roles, unclear territory,
• Perceptual differences: particular discount may be adequate for
manufacturer but retailer may perceive inadequate.
• Over dependency: on single channel and manufacturer, when no
alternatives, exploitation and monopoly prevails , which result in
conflict
• ideological difference due to different values, attitude, perceptions
• poor communication

Channel Conflict Management
• Due to dissimilar characteristics and varied objectives of channel members
channel conflict arises. Managed in following ways
• Conciliation: through bargaining , mediation, arbitration
• Channel restructuring: redesigning the channel
• Goal modification: changing the goal itself for compromise, bringing
consensus among channel members
• Politics: forming association to pressurize and force to come to a solution
• Expansion of resources: increase in discounts, commission, promotional
campaign
• Improve communication gaps by arranging effective vertical (among top and
lower level) and horizontal (among same level) communication mechanism.
• Through competition
• Let cool down/ being indifferent.

Logistics Management Decisions
• (1) Transportation: Choice affects price, delivery performance, speed, consistency. Product safety. Modes of
transportation as follows
• (A) truck: 41% used. flexible in routing and time schedules. Faster and efficient for short distances. It can
delivers at the exact site.
• (B) Railway: 37% uses. cost efficient. carrying large amount of bulk products like coal, sand, farm & forestry
products over a long distance
• (C) water carrier: 10% uses. Use ship and barges (boat), cost very low. Useful for bulky, low value, non
perishable product, like coal, grain, oil, sand, metal etc. this is slowest mode of transportation. Is affected by
weathers.
• (D) Pipelines: For petroleum, gas, chemicals, water. This mode is mostly used by owner to ship their own
products.
• (E) Air carrier: 1% use. Cost very high but high speed too. For products like fresh fish, flower, jewelers,
perishable items, high value, low bulk item. This mode reduces inventory, packaging & warehousing cost.
• (F) Internet: through satellite, cable modem, telephone transfers the product like software, music, education,
news,
• *Intermodel transportation is combining two or more modes of transportation, which performs better than
the single model of transportation.
• * While choosing the mode of transportation factor like speed, dependability, availability, cost, consistency
and safety should be considered.

• (2) Warehousing:
• (3) Inventory Management: is Balancing, carrying
too little (resulting in costly emergency shipment,
production )too much inventory(higher carrying cost
& stock obsolescence). Optimum inventory, use of
economic order quantity tools. now a days “just in
time” logistic which require accurate forecasting and
stock arrives exactly when needed. Use of smart tags
(to track the product, within the supply chain), smart
shelves (which scan and reorder automatically).
• (4) Logistic Information Management:
• (5) Order processing (Orders can be
submitted in many ways:
• (6) physical, material handling:

Distribution System in Nepal
• Market intermediaries: Wholesalers and retailer are dominant market intermediaries in Nepal.
Agents are gradually emerging. Stockbrokers, which number about three dozen, are active in the
stock exchange. Big manufactures have sales representatives.
• Due to globalization and liberal economic policies of the government, facilitators are growing.
There are more than 32 commercial banks with 500 branches by 2012. The insurance companies
have grown in number. So have their agents. Advertising agencies number more than 1000.
• Channel structure: Chanel structure for consumer products in Nepal is largely traditional. About
89% of manufactures use two level channel consisting of wholesaler and retailer. The channel
structure is skewed in favour of urban areas. Specialty retailers are growing in hardware, books,
electronics.
• Direct channel (door -to- door) is used for distribution of fresh agricultural products. About half a
dozen chain restaurant under THE BEKERY CAFE brand have appeared which directly sell fast food.
Telemarketing is emerging. SKY SHOPS have appeared on television. Mail order is yet to make its
mark.
• One level channel is also used. Dairy Development Corporation used it to sell milk through retail
booths.
• Three level channel is used by big manufactures who establish a separate company to act as sole
agent.

• Channel structure for industrial products is generally one level consisting of distributors. Some manufactures sell direct.
• Services are generally provided through direct channel. Insurance and advertising services are provided mainly through
agents.
• Types of wholesalers and retailers: Independent wholesale merchants dominate the marketing channel. Semi
wholesalers are increasing in urban localities.
• Convenience stores dominate the retail channel. Specialty retail store are emerging. Departmental stores, such as Blue
bird, Central, Kasthamandap, Bhat Bhatini, are operating in Kathmandu. Bishal Bazaar is a shopping centre.
Supermarkets are increasing. There are no discounts stores. Consumer cooperatives abound but they lack effectiveness
and public supports
• Channel dynamics: Administered vertical channel system is represented by global companies- Nepal lever, Pepsi, Coca-
Cola. Manufactures control the channel through leadership role and size.
• Contractual vertical channel system is represented by franchise- Benetton and Hot Breads are example. The channel
system is likely to grown in coming year.
• Conflicts are common in market channel. They are generally vertical conflicts between different levels caused by
unclear roles (territorial disputes) and perceptual differences related to financial matter (Discounts, allowances)
• Manufacturers and channels: Nepalese manufactures do not provide much marketing support to channel members.
Nor do they provide training to channels. They are more concerned about selling products and less interested in
developing channels.
• Physical distribution: Awareness is lacking about its potential for cost saving. It is not used as a tool for providing better
customer services.

• Order processing is mostly manual. Computerized systems are few. Delays and mistakes in order
processing have adversely affected customer satisfaction.
• Warehousing largely performs storage function. If is represented by manufacture and private godowns.
Nepal does not yet have public warehouse which perform product movement activities.
• Public enterprises like Janakpur Cigarette Factory, Nepal Food Corporation, National Trading limited have
regional and zonal warehouse to distribute goods.
• Material handling is generally non mechanical. Some factories use cranes and fork lift trucks but the
technology is not up to date.
• Inventory management is the weak aspect of Nepalese marketing.
• Transportation costs are high in Nepal. The difficult terrain of the country adds to transportation costs.
• Most manufactures use contract carrier and common carrier for movement of goods. However,
organizations do own delivery vans for local movement of goods.
• Trucks are widely used for the movement of goods.
• The sea is about 1000 kilometers away from Nepal. It is used for the movement of bulky goods imported
to or exported from Nepal. Rivers have not been harnessed for transportation purposes.
• The number of foreign airline operating in Nepal is increasing. Inter-modal transport is also used for
export. Carpets use truck and ship. Readymade garments and handicrafts use airplanes, ship and trucks.
• Animals and human porters are still very important for the movement of goods in the mountain.

Unit 9: Integrated marketing communication

Promotion and integrated marketing communication
• Marketing communication/promotion:
• Persuasive communication is marketing
communication. –Jim Blyth

• Communication marketing mix:
• Communication marketing mix is the set of marketing communication variables which
organization blends to achieve the promotional goal in a definite target market.
• Components of promotion:
• Advertising: Advertising is any paid form of non-personal communication by an identified
sponsor. it is planned and controllable tool
• Publicity and public relation
• Publicity: It is any unpaid form of communication appears as news, feature articles etc. it
generate favorable/unfavorable image of the company and indirectly stimulate sales. It is
gained organizing social, unique events. Good relations with journalists are important here.
• Public relation: It is used to promote favorable relationship with key stakeholders such as
employees, media, government, community and customers to enhance the image of the
company and gain favorable impressions.
• Sales promotion: It refers to short term incentives to encourage trial or repeat purchase of
products. To encourage consumer and trader storage of stock of products which minimize
producers’ storage costs. It also helps clearing of soon expiring products.

• Types of sales promotion:
• Consumer Promotion focuses on consumers. E.g. free sample, coupon,
gift, buy one get one free, demonstrations, lottery etc
• Trade promotion (Sales promotion focusing on traders, wholesalers,
retailers) E.g. dealer loader, dealer listing, sales contest, decoration
contest, trade fare etc. Sales force promotions
• Personal selling:
• Direct marketing: It is direct persuasion by manufacturing to specific
customers. E.g. Mail-order, website, telephone, telemarketing, use of
internet and email,, mobile, SMS, brochure/ leaflet distribution. It is
direct, immediate, one on one, two way, for relationship marketing, for
customized message and product. it is enhanced by modern database
facilities. Direct marketing is marketing without intermediaries.

• Integrated marketing communication(IMC) is integration and coordination of
various communication tools and messages to make communication more
effective, promotional tools complimenting each other, bringing synergy. Each
tool is supporting and matching to other tool. Each message is supporting the
other message that compamy is transmitting.
• Integrated marketing communication is coordination and integration of various
marketing communication tools, avenues and sources with in the company into
the seamless program that maximizes the impact on the consumers and other
end user at minimal cost.-Kenneth E. Clow, Donald Baack
• Marketing communication mix is the starting point of integrated marketing
communication.
• It is integration of communication mix with marketing mix.
• All the communication need providing from single window/ad agency is also
part of IMC.

Managing the Integrated marketing communications process
• American Marketing Association defines

integrated marketing communication (IMC)
as planning process designed to assure that all
brand contacts received by a customer or
prospect for product, service, or organization
are relevant to that person and consistent
over time.”

Six criteria to evaluate IMC according to Kevin Keller
• Coverage: Coverage is the proportion of the audience reached

by each communication option employed, as well as how much
overlap exists among communication options. In other words,
to what extent do different communication options reach the
designated target market and the same or different consumers
making up that market
• Contribution: Contribution is the inherent ability of a marketing
communication to create the desired response and
communication effects from consumers in the absence of
exposure to any other communication option. How much does a
communication affect consumer processing and build
awareness, enhance image, elicit responses, and induce sales?

• Commonality: Commonality is the extent to which common association are reinforced
across communication options; that is, the extent to which information conveyed by
different communication options share meaning.
• Complementarity: Communication options are often more effective when used in
partnership. Complementarity relates to the extent to which different associations and
linkages are emphasized across communication options. Different brand associations
may be most effectively established by capitalizing on those marketing
communication options best suited to eliciting a particular consumer response or
establishing a particular type of brand association.
• Versatility: The ability of a marketing communication to work at two levels-effectively,
communicating to consumers who have or have not seen other communications.
• Cost: Marketers must weigh evaluations of marketing communications on all these
criteria against their cost to arrive at the most effective and efficient communications
program.
• IMC should improve the company’s ability to reach the right customers with the right
message at the right time and in the right place.

Developing promotional strategy
• Steps in Developing Effective Communication:

• Identify target audience:
• Determine communication Objectives:
• Nature of product: Consumer product(emotonal message),
industrial product(rational, profitable, customized),
convenicence/shoping/speciality products, perishable/long
lasting products. Servcies( imagery, vivid,
testimonials).examples of the products given in four
chambers of head and heart model also demonstrate the
requirement of different message strategy for different
products.
• Selecting Creative Platform
• Message Design : Approach may be USP- Unique Selling
Proposition, Brand image, Positioning, Resonance.
• Creative issues: Sought (detail ad) and unsough (short ad).
• Advertising appeals
• Rational – Quality, Profit,convenience,economy,health,safty
• Emotional – Love, homour, sex
• Visualization
• Copywriting
• Layout and Production
• Message source (presentation)

• Selection channels
• Personal channels (salesforce, experts, social members)
• Non personal channels (Media, Events )
• Media vehicles :Indoor, outdoor, direct, display
• (direct marketing: direct/own media, nonpublic, immediate, customized, interactive)
• Establish budget
• Affortable method –What is possible
• Incremental method –Every years
• Percentage of sales method
• Competitive parity method
• Objectives and task method – Specifying accordingly with objective and strategy.
• Decide marketing communication mix: According with objectives, nature of product,
customer, profuct life cycle, budget, strategy pull/push
• Measure result: Interms of communication, revenue, cost , MARS.

Promotional Strategy
• Promotional strategies provide long term

direction and scope to promotional aspects of
marketing. They affect the selection of promotion
mix. They can be: 4
• 1. Push or pull Strategy
• Promotion strategy can be push strategy or pull
strategy
• Push strategy:
• Pull strategy:
• 2. Interpersonal or Mass Promotion Strategy
• a) Interpersonal Strategy: This strategy emphasizes personal selling as a tool for face to
face promotion.
• b) Mass Promotion Strategy: This strategy emphasizes advertising, publicity and sales
promotion tools for non-personal promotion.
• 3. Product Life Cycle Promotion Strategy
• This strategy modifies promotion mix at different stages of product life cycle.
• Introduction Stage: Advertising, publicity and personal selling exhibition are emphasized to
build product awareness. Promotion budget is high. Sales promotions done to encourage
trial
• Growth Stage: Advertising and public relations continued to build brand preference. Sales
promotion is reduced. Promotion budget is increased to pull the customers.
• Maturity stage: Sales promotion is done to encourage band switching. Advertising is done
to strengthen brand loyalty, remind. Channel promotion is done to push the product.
• Decline stage: Advertising is done to reinforce, remind loyal customers. Promotion budget
is minimal.

• 4. Competitive Response Strategy
• The promotion tools budgets are designed with a view to respond to competitor’s moves. The strategies can
be:
• Meet competition strategy: promotion budget is set to match the competitor’s budgets. The promotion
budget tools used also match the competitor’s tools. For example, Coke’s cap prizes are matched by Pepsi’s
cap prizes.
• Above competition strategy: promotion budget is set above the competitor’s budget level. For example,
Mayos entered the Nepal market with much higher promotion budget than Wai- Wai noodles or Mero
mobil(Ncell) against NTC
• Below competition strategy: the promotion budget is set below the competitor’s budget level. The
promotion tools are directed at loyal customers.
• 5. e- commerce strategy
• This strategy uses promotion for direct marketing. Middlemen are not used. Internet and websites are used
for promotion purposes. It is non- personal in nature. The main promotional tool used is internet advertising.
• This strategy is gaining importance in modern marketing.
• 6. Co- operative Promotion Strategy
• Co- operative advertising and sales promotion is done by manufacturer and channel members together. This
facilitates cost sharing .group of college giving common advertisement for +2 programs in Nepal 2010

Promotion Practices in Nepal
• Promotion Function: The function of promotion in Nepal is largely information and
persuasion. The reminding and reinforcement aspects are neglected. The post purchase
stage of buying process has virtually remained untouched by promotion.
• Promotion Mix: Promotion mix decisions in Nepalese marketing emphasize advertising
and sales promotion. Publicity has remained neglected. Personal selling is traditional
and lacks professional approach. The determination of promotion mix suffers from:
• Lack of clear-cut promotion objectives.
• Lack of proper consideration to the nature of product and target market in selecting the
promotion tool.
• Neglect of the stage of product life cycle in designing promotion mix.
• Lack of adequate promotion budget.
• Unclear promotion strategy.
• Advertising: Advertising is the most popular promotion tool in Nepal. It is growing at
about 15% per annum. It is widely used by business, government and social
organizations.

• Nepalese marketers use a variety of media for advertising.
• Print media: In 2005, Nepal had 4049 newspapers. About 70% of them were in Nepali language. But only about 15% are coming
out regularly. The total circulation is 225,000. Kathmandu valley accounts for about 50% of total circulation. About 12% of the
total population read newspapers. The government owned Gorkhapatra is the oldest newspaper-more than 100 years old. It
devotes 20% space to ads. The Kantipur has the largest daily circulation of about 100,000. The private newspapers are growing.
Rural areas have largely remained illiterate and un reached by print media. Newspapers are widely used by Nepalese marketers
for advertising.
• Visual Media: Billboards, Posters and electrical display signs are getting popular in Kathmandu and other major towns. Point of
purchase displays are also used. The use of visual media is increasing . (Box 12-6) Kathmandu alone has 2000 billboards.
• Audio Media: Radio Nepal, started in 1951, is government owned. It reaches to almost all parts of the country -90% gross reach,
70% effective reach. Nepalese marketers use radio Nepal for advertising. Radio Sagarmatha started FM broadcast in May 1997 in
the private sector. Today there are about 50 FM stations. Radio is the most effective media of advertising in Nepal.
• Audio-visual Media: Nepal Television, established in 1985, has become a powerful audio-visual media for advertising. Its reach is
about 65% of population and 50% of land area. The commercials are increasing. About 60% ads are nationally produced and 40%
are produced in India. Nepal also has private TV companies.
• Videotapes of Indian movies overwrite advertising messages of Nepalese products. About 300 cinema halls also show slides and
shorts ad films at the beginning and during intermission of film shows.
• Advertising Agencies: There are more than 1000 advertising agencies in Nepal. The first agency “Nepal Advertisers” was
established in 1961. The agencies get about 15% commissions from the media. They generally collect ads from organizations and
deliver them to media. About 85% of all ads are channelled through the ad agencies. The ad agencies have poor technical and
professional capabilities for production and development of programs. The messages tend to be copycats of Indian ads.
• Some agencies, for example Stimulus ad, have been creative in advertising of social causes related to education of girl child,
family planning, maternal and child health. International agencies like J. Walter Thompson and MARG have entered Nepal.

• The total advertising business in Nepal is about Rs. 3 billion per annum.
• Legal Provisions: Legal provisions regarding advertising has remained scattered in various Acts of law. Censor is
needed for advertising in government media. In the past, the tax laws were detrimental to advertising growth.
At present total expenditure on advertising is tax deductible if value added tax has been paid. Legal provisions
generally favour government media.
• Ethical Dilemma: Consumer and social well being is neglected by Nepalese advertising. Deceptive ads that
cheat consumers are not controlled effectively. The government has banned tobacco and liquor ads from radio
and TV since February 1999.
• Non branding: Many agricultural products are sold unpacked and unbranded in Nepal. Many of manufactured
products are imitations or duplications of Indian brands. This has constrained advertising.
• Management Attitude: Nepalese management’s attitude towards advertising has remained lukewarm. They
expect instant increase in sales through advertising. They prefer price cutting, higher trade commissions and
aggressive personal selling to advertisement. Public enterprises treat advertising as a public relations activity.
• Sales Promotions: The popularity of sales promotion has increased over the last 20 years. It is highly used by
noodles, soap, tea, biscuits and soft drink industries. But the government regulations prohibit sales promotion
for cigarettes, beer and liquor.
• Objectives: Sales promotion in Nepal is generally consumer oriented. But the objective of such promotion is to
increase sale rather than attract new customers or launch new products. Objectives of trade promotion are off
season sales and increase reseller’s inventories. Pepsi and Coca Cola launch similar sales promotion to offset
competition. Sales force promotion has remained very much neglected.

• Methods of Sales Promotion:
• Consumer promotion: The most popular methods are coupons, premiums (gifts), price off, contests
and prize. Free samples, rebates are not popular. Advertising specialties are used by most of the
business firms.
• Trade Promotion: Free goods, price off, allowances and contests are popular methods.
• Sales personnel promotion: Bonus and commission, contests and gifts are used.
• Program Development: Sales promotion program in Nepal are not properly developed and
implemented. The same methods get repeated year after year. Creativity is lacking. Some programs
last for longer periods. Innovative schemes are rare.
• Publicity and public Relations: Publicity has remained an overlooked promotion tool in Nepal. It is
not professionally managed.
• Tools of publicity: News release sand press conferences are major tools of publicity. Publications are
rare in Nepalese enterprises. Organizations generally hire a working journalist for publicity purposes
on a part time basis.
• Uses of Publicity: Organizations in Nepal use publicity to announce performance, new policies and
products. They also use it to counter negative publicity. It is used on an ad-hoc basis and is not a
continuous process.
• Use of public relations activities are also increasing.

• Personal Selling: Marketing in Nepal is very much selling oriented. Personal selling occupies
an important place in the promotion mix. The reasons for its importance are:
• Geographically fragmented markets.
• Inability of small organizations to incur big ad outlays.
• Distribution systems directed toward wholesaler, semi wholesalers and retailers which
require personal selling.
• High importance to relationship building.
• Personal selling in Nepal lacks professionalism. The salespersons are not properly trained to
practice professional selling. The salesperson has a low status in the Nepalese organizations
and the society. The salaries are low.
• The entry of consumer goods – oriented global organizations like Nepal Lever, Colgate-
Palmolive, Smith Kline Beecham, Pepsi and coco Cola indicates bright future for various
promotions tools in Nepal. The private sector banks like Grind lays Bank, NABIL Bank and
Himalayan Bank have given great importance to sales promotion. The entries of international
ad agencies like J. Walter Thompson, Marg are good ones for quality improvements of
promotion. The advent of Internet has facilitated advertising through websites

• Hoarding Board Advertisement in Nepal
• The ban on TV and Radio advertising for liquor and cigarettes has made hoarding board
important. They support and reinforce the newspaper ads in busy intersections of roads.
• Almost 90% roof tops of Kathmandu are being used for housing 2000 hoarding board ads.
About one dozen ad agencies are engaged in this business.
• The total turnover from hoarding boards all over Nepal is about Rs. 60 Million. In
Kathmandu alone, it is Rs. 40 million. The rent varies from Rs. 60 to 90 per square feet.
The prime space is in Durbar Marg, Sundhara, Thapathali and sky bridges.
• Khetaan group spends Rs. 10 million annually on hoarding board ads. Glocha Organization
and Surya Tobacco have separate unit to deal with hoarding boards.
• Hoarding boards are subject to municipality tax.
• However, proper planning is needed regarding hoarding boards. They are also hazard
prone and increase road accidents.
• The government has decided to ban them since October 2004 from the vicinity of cultural
and religious areas and royal palace.

• Examples of Sales Promotion in Nepal
• Pepsi and Coke caps carry various prizes. Pepsi offered one kg. Gold in recent sales promotion. Recently it has
offered one lakh rupees prize.
• Glassses, key chains, peanuts are offered free for beer and liquor purchase. Several caps needed for getting
glass.
• Wai-Wai and Mayos noodles put cash and coupons in its package. Hulas Biscuits also put coupon in biscuit
pack. Horlicks biscuits have 25% extra quantity.
• Mabacos bread provided free steel plate for 30 bread wrappers.
• Kantipur newspaper organized a contest for new customers. Prizes for lucky winners included: Motor Bike,
Television set, washing machine, free air tickets, carpets, sit length, dinners. The prizes were sponsored by
various organizations. One free calculator was given on the spot to each new customer.
• Gorkhapatra provided “Yuva Munch” or “MUNA” free to new customers.
• Himalayan Bank insures its saving account holders for Rs. 50,000 for accidental death.
• Kissan soap provided one free soap for 12 wrappers.
• Liril soap provided one soap case free with two bars of soap.
• Exhibitors provide door prizes consisting of free tickets to Bangkok, Hongkong, London to lucky winners as gate
prizes.
• Airlines provide 10% discount for round trip travel.
• Many shops in Kathmandu give price off (Special discount 10% or SALE) during festivals.

Unit 10: Marketing Evaluation and Control
• Concept of Marketing evaluation and control

• Marketing costs can amount to as much as a
quarter of a company’s total operating budget.
• Control is the last stage in the marketing
management cycle.
• levels of control below.

• The evaluation step of a marketing plan focuses on analyzing quantitative and
qualitative metrics associated with the implementation and strategy. Quantifiable
metrics are those to which numbers can be attached, such as the numbers of sales
leads obtained, customers reached and dollar amounts achieved. Qualitative factors
include measures of customer satisfaction. Evaluating the marketing plan means
looking at the data and examining whether or not the company achieved its strategy
objectives from the implementation phase. If it did, the steps can be replicated for
future success. If not, changes can be made to improve performance and results.
• Marketing control is the process by which firms assess the effects of their marketing
activities and programs and make necessary changes and adjustments.
• No marketing process, even the most carefully developed, is guaranteed to result in
maximum benefit for a company. In addition, because every market is changing
constantly, a strategy that is effective today may not be effective in the future. It is
important to evaluate a marketing program periodically to be sure that it is achieving
its objectives. (Kotler)

Evaluation and Feedback System in
Marketing Decision Making
• system is predetermined process made of various components working
together for particular purpose. If one component fails others are affected.
System brings the synergy. System can be studied in the form of input (raw
materials, human resources, information, capital, land, building, technology,
entrepreneurship), processing (integration of marketing mix, management
principles, environment), out put (products, services, feedback, complains,
rewards, profits, environmental situations, customer satisfaction, social
responses etc). In its most basic form, feedback is information. A feedback
system, in the context of performance technology, is a means of
communication whereby the performer, whether it is an individual or a group,
receives information that guides their future actions, in order to achieve a
desired outcome. Feedback systems can be used as part of an intervention in
organizations to increase awareness and improve performance (Brian
Stumme).evaluation and feedback system can be studied in following two
perspectives.

7 Ways to Evaluate Your Marketing Plan
by Robert Morello
http://smallbusiness.chron.com/7-ways-evaluate-marketing-plan-58331.html
• ROI
• Sales Numbers
• Customer Response
• Expansion
• Partner Response
• Salespeople
• Competitor Response

Define Feedback in Marketing Shicara Hollie
https://study.com/academy/lesson/what-is-feedback-in-marketing-definition-systems-examples.html
• There are several feedback strategies, but we

will specifically address two:
• app technology and
• focus groups.

Customer Feedback, Customer Service - September 24, 2013 By Ross Beard.
http://blog.clientheartbeat.com/customer-feedback/
So there are some benefits of why customer feedback is important to your business,
now let’s take a look at 19 actionable strategies to get feedback from customers.
• 1. Customer Surveys
• 2. Behavioral Insight Surveys
• 3. Telephone Surveys
• 4. Mobile Surveys
• 5. Feedback Forms
• 6. Focus Groups
• 7. Usability Testing
• 8. Monitor Social Media
• 9. Quarterly Business Reviews
• 10. Website Activity
• 11. Community Groups and Discussion Boards
• 12. Customer Feedback Portals
• 13. Personal Emails
• 14. Suggestion Boxes
• 15. Customer Feedback Widgets
• 16. Customer Reviews
• 17. Live Chat
• 18. In-app feedback
• 19. Email and Ticket Closing Surveys

Requirements for Effective Evaluation of Marketing Program
• Objectives must be set

• Development of short term/ long term plan
• Objectives must be SMART
• Must specify exactly what performance to monitor, set standards, and collect
data
• Must compare performance to standard
• Must find out the causes of problem/deviation
• Feedback and evaluation must be regular
• Evaluation must be done by independent body as much as possible
• Advance planning and agreement (between researcher and manager) on
what is acceptable what is not
• Agreement on what should be the objective of marketing
• Must measure objectives of company, customer and social concern

• Feedback system must be built
• Use following Sources for evaluation: Situation analysis and needs assessments,
Baseline surveys, Service statistics and training records, Monthly, quarterly, and
annual reports, Regular program document reviews (e.g., proposals, budgets,
reports, studies), Interviews with staff and community members, Focus group
discussions, Exit interviews, Surveillance, site reports, Inventories, Evaluation
reports, Annual work plans, Strategic, sustainability, business, or marketing plans,
Observations, Supervisory visit reports, Self-assessments, Special studies, Census,
Demographic and Health Surveys, Household Surveys, Audience surveys and
feedback, Tracking studies.
• use of key performance indicators (KPIS):depending on your industry, you may also
have certain specific metrics which determine success, these could include: market
share analysis, sales analysis, quality control, financial results, market research,
marketing information systems, CRM, new customers acquired, retention, service
levels, brand awareness, competitor performance, benchmarking, profitability.

• Must also consider independent external organization’s reports on evaluation, customer
satisfaction, survey, indexes must be considered
• Feedback must be quickly gathered
• Action must be taken based on feedback to encourage feedback
• Prompt Actions on feedback is necessary
• Other variables must be controlled as much as possible to check the effect of particular variable.
• Areas of evaluation could be environment, product, market, marketing program, specific
marketing mix
• Need MIS
• Cost and benefit of the evaluation must be analyzed
• Interpretation of information must be done together (manager and researcher)
• Must distinguish problem from symptoms
• Must determine normal and abnormal fluctuations/variability
• Information needed in advance to prepare for future.
• Also need to evaluate better than planned performance to further exploit the favorable situation.

• Measure marketing outcomes from the consumers'
points of view
• Meet statistical and technical criteria required of all
measurement systems
• Plan ahead and design a response-attribution
infrastructure to support all:Each level within the
hierarchy should be well defined and understood by
stakeholders prior to campaign implementation.
• Create control groups for a more-accurate
measurement of campaign lift
• Define relevant measurement metrics
• metrics must correlate the marketing activities
(cause) with the marketing performance,
financial results, and customer impact (effect).
• Define specific attribution rules by campaign:
what result into what
• Automate and use visual reporting and analytic
tools: ppt, graph, cctv, blackbox
• Gap analysis
Methods of Marketing Control
• Table 21.7 lists four types of needed marketing

control: annual-plan control, profitability
control, efficiency control, and strategic
control.
•

Annual-Plan Control
• Annual-plan control ensures the company achieves the sales,
profits, and other goals established in its annual plan. First,
management sets monthly or quarterly goals. Second, it monitors
performance in the marketplace. Third, management determines
the causes of serious performance deviations. Fourth, it takes
corrective action to close gaps between goals and performance. This
control model applies to all levels of the organization. Top
Management sets annual sales and profit goals; each product
manager, regional district manager, sales rep is committed to
attaining specified levels of sales and costs. Each period, top
management reviews and interprets the results. Marketers today
have better marketing metrics for measuring the performance of
marketing plans (see Table below for some samples).

Profitability Control
• Companies should measure the profitability of their
• Product wise
• Territory wise
• customer segment wise
• trade channel wise
• order size wise
• to help determine whether to expand, reduce, or
eliminate any products or marketing activities.

• Efficiency Control
• Are there more efficient ways to manage the sales force,
advertising, sales promotion, and distribution? Some
companies have established a marketing controller position
to work out of the controller’s office but specialize in
improving marketing efficiency. Their marketing controllers
examine adherence to profit plans, help prepare brand
managers’ budgets, measure the efficiency of promotions,
analyze media production costs, evaluate customer and
geographic profitability, and educate marketing staff on the
financial implications of marketing decisions.

Strategic Control
Each company should periodically reassess its
strategic approach to the marketplace
• marketing audit.
• marketing excellence reviews
• ethical/social responsibility reviews

The Marketing Audit
• A marketing audit is a comprehensive,
systematic, independent, and periodic
examination of a company’s or business
unit’s marketing environment, objectives,
strategies, and activities,
• determining problem areas and opportunities
and recommending

examines six major components
• marketing environment audit,
• marketing strategy audit,
• marketing organization audit,
• marketing systems audit(R&D, Planning, MIS,
Control systems),
• marketing productivity audit,
• marketing functions audit.

• Part I: Marketing Environment Audit Macro environment The marketing environment
audit is to two ways, the first one is the macro environment and the second one is the
task environment. In macro environment we have some subdivisions. 1. Demographic 2.
Economic 3. Environmental 4. Technological 5. Political 6. Cultural Task environment 1.
Markets 2. Customers 3. Competitors 4. Distribution and dealers 5. Suppliers 6. Facilitators
and marketing firms 7. Public
• Part II: Marketing Strategy Audit 1. Mission of the Business 2. Marketing Objectives and
Goals 3. Strategy
• Part III: Marketing Organization Audit 1. Formal Structure 2. Functional Efficiency 3.
Interface Efficiency
• Part IV: Marketing Systems Audit 1. Marketing Information System (MIS) 2. Marketing
Planning Systems 3. Marketing Control System 4. New-product Development System
• Part V: Marketing Productivity Audit 1. Profitability Analysis 2. Cost-effectiveness Analysis
• Part VI: Marketing Function Audit 1. Products 2. Price 3. Distribution 4. Advertisement,
Publicity, Sales Promotion and Direct and Marketing 5. Sales Force

The Marketing Excellence Review
• distinguish among poor, good, and excellent
business
• indicating where business stands
• highlight where changes could help the firm

Type of Control Prime Responsibility Purpose of Control Approach
Annual-plan control Top management; middle • To examine whether the • Sales analysis
management planned results are being • Market-share analysis
achieved • Sales-to-expense ratios
• Financial analysis
• Market-based scorecard
analysis
Profitability control Marketing controller • To examine where the Profitability by:

company is making and • Product
losing money • Territory
• To evaluate and improve • Customer
the spending • Segment
• Trade channel
• Order size
Efficiency control Line and staff • Efficiency and impact of Efficiency of:
management; marketing marketing expenditures • Sales force
controller • Advertising
• Sales promotion
• Distribution
Strategic control Top management; • To examine whether the • Marketing effectiveness

marketing auditor company is pursuing its rating instrument
best opportunities with • Marketing audit
respect to markets, • Marketing excellence
products, and channels review
• Company ethical and
social responsibility
review

Marketing Control in Nepal
• Excluding some of the multinationals, marketing control is very
poor in Nepal.
• In Nepal most of the company plans but only few companies
monitor and control.
• Concept of control is generally understood as punishment and
strictness.
• Rewards, trainings, motivation, recognitions are not realized as
controlling devices.
• Root cause of the problem, root cause of deviation from the plan is
rarely well analyzed.
• Most of the times problems are wrongly identified therefore
prescription (remedy) do not work.

• Nepal government plans and policies even constitution in
made to international standards but Nepal remained least
developed because poor implementation.
• Poor implementation occurs due to poor monitoring and
control.
• setting realistic targets,
• taking action for correction all lack in Nepal.
• It is very difficult to reinforce the rule regulation, new plan,
even many times court decisions in Nepal. Due to the
corruption there is no fair monitoring and reinforcement.
Therefore there is no fair completion in Nepal.

• Monitoring department lack human and other resources mostly in
the government office as well as in private sector. Due to this
Nepal government generally institute the particular fix technology
rather than monitoring performances of various technologies.
• Likewise Nepal police checks drunk or not drunk but do not check
the level of alcohol which may be in acceptable level because it is
very difficult to reinforce the tolerable alcohol level. Tolerable level
of alcohol is very easily manipulated through bribe or source force.
• Nepalese companies measure the results but could not decide
whether that result is qualified or not. Setting the valid target
level, fulfilling the requirement before operation of control system
is lacking in Nepal.

• Most of the government institutions are centralized in Nepal
therefore control is been difficult to achieve.
• Control is considered as only CEO’s job.
• Devices for monitoring like Electronic attendances, CCTV etc
are not accepted in most of the government educational
institutions.
• Marketing audit is strange term for most of the Nepalese.
• Gap analysis, leakage management, efficiency control is very
poor.
• control limited to profitability control and annual plan
control, sales control.

• Computerization, database management is taking the
slow pace.
• Nepal also lacks the competent human resource for
conducting marketing control.
• Nepalese companies could not afford the latest efficient
tools and technology for effective control.
• There is no any marketing audit agency yet in Nepal.
• Due to the growing competition from global players
Nepalese companies are susceptive to control system
now.
Mahatma Gandhi

Thank you
• Any questions???
• You can find me in following
• 9851049491
• bricksushil@gmail.com; sushil@fomcdmtu.edu.np
• Facebook page
• Messenger
• Viber
• Twitter
• YouTube
• Skype
• LinkedIn
• Google group (google plus)


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Welcome

Marketing Management for MBS 2020

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• AMA states in 1985: Marketing is process of planning

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1.Needs, wants and demands:

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• Satisfaction is pleasurable feeling resulted

• 1. Product & service features:

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• 7Ps must be managed (marketing mix)

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• Range of situation analysis

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• consist of factors inside the company, those are mission,

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• Corporate level engage in situation analysis,

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• In product level planning marketing

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