Understanding Consumers and Product Management

The marketing stimuli are received by the potential consumer along with the other stimuli already existing in the environment. These stimuli may be social, economic, cultural, technological or political in nature. At the point of receiving the marketing stimuli, the consumer already has a certain mental, emotional and psychological frame of mind developed over the years by his cultural, religious, social, family and psychological background. However, most of these factors (or buyer characteristics) exert their influence at the sub-conscious level so that the consumer is not really aware of their existence or working.

Knowledge of consumer behaviour is helpful to the marketer in understanding the needs of his different consumer segments and developing appropriate marketing strategies for each. It is also useful for the marketer in developing an understanding of how consumers respond to the various marketing stimuli, which he/she provides in terms of the product, price, promotion and place. If the marketer can correctly identify the stimuli that evoke a positive response in the consumer, he/she can very easily design effective marketing strategies using these stimuli.

Motivation: Strong, unfulfilled need which spurs a person to take action for his satisfaction.

Perception: Process of selection, organisation and interpretation of stimuli into cohesive, coherent picture.

Stimulus: An input to any one of the five senses.

Attitudes: Enduring and learned tendencies to act in a particular consistent way with regard to a given object or idea.

Belief: A descriptive thought that an individual has about a product, service, idea or practice.

Learning: Process of applying results of past experiences to evaluate a new situation or modify future behavior.

Demographics: Objective and easily measurable characteristics of a population such as age, income, education, occupation, sex and marital status.

Psychographics: The technique of measuring lifestyles using psychographic characteristics such as attitudes, opinions and interests.

Lifestyle: An individual’s pattern of living in the world as expressed by the manner in which he/she spends money and time on various activities and interests, and the opinion that he/she holds.

Reference group: A group that serves as a point of reference or comparison for an individual in the matter of forming value, attitudes or behaviour.

Sub-culture: ‘Culture within a culture’; distinct groups of people grouped on the basis of nationality, religion, geographic region or race and having their own distinct motives, values and behaviour patterns.

Social class: Division in a society comprising people sharing the same social status, values, beliefs, attitudes and exhibiting a distinct preference for certain products and brands.

Diffusion of innovation: Process by which the acceptance of an innovation (or product, service or idea) is spread by communication to members of a society and the adoption of the innovation in terms of actual purchase of the product.

source : Unit 3 BMK501 WOU ONLINE COUSE MATERIAL

Current marketing situation

An important point that you should remember here is that marketing planning, like any other planning process, is an iterative process and has to be done on a continuing basis. In other words, what is needed is constant monitoring, redefinition, adaptation and re-evaluation of objectives and strategy, its implementation and control in an effort to obtain maximum payoff from ever-changing market situations.

Market situation: Data on the target market served like the size and growth of  the market for the past several years, and customer needs, perceptions and buying behavior trends. 

Product situation: Data on sales, prices, contribution margins and net profits for each major product for the past several years. 

Competitive situation: Data on major competitors in respect of their size, goals,  market share, product quality, marketing strategies and other relevant characteristics that is likely to help in understanding and predicting their behaviour.

Distribution situation: Data on the number and value of the units sold in each  distribution channel together with the changes that are taking place in the power and importance of each channel and also the changes in the trade relations mix like prices trade terms, etc., required to motivate channel members. 

Macro-environment situation: Data on changing trends in respect of political/legal, technological, demographic, economic and socio-cultural factors having a bearing on the company’s products. 

This matrix shows the strategic aspects in the overall marketing plan and their inter-relatedness. It also emphasizes the way in which the marketing mix decisions should be approached i.e., by combining the marketing strategy decisions with the marketing mix decisions. To help you to further understand the relationship between marketing mix and marketing strategy, we are listing below some of the appropriate and matching marketing mix variables that may be decided upon in the context of marketing strategy decisions. 

Product: Options, models to be marketed, modifications for specific target market (if any), product simplification, invention, service and warranty system, spare parts. 

Price: Skimming vs. penetration, price relative to current and potential competition.(Skimming means charging an initial high price for a new product to capitalise on the novelty value of the product while penetration pricing refers to the practice of charging an initial low price for a new product to gain an entry into a competitive market).

Promotion: Budget, theme, media, timing. If major resources are to be committed, include plan for measurement of promotional effectiveness, feedback from the marketplace and marketing research.

Distribution channels: Mode of market entry, functions to be performed by channel members, margins, promotional allowances (if any), short-term  vs. long-term commitments

source: Unit 2 : Marketing Planning and Organisation- Marketing Management WOU online course material

BIRDS-EYE VIEW OF MARKETING STRATEGY

Every marketing decision is both an opportunity and a risk on which a product’s success or failure can hinge. Integrated marketing management, underpinned by Big Data, is the approach that can increase ROI through a multi-channel analysis and a more effective way to measure campaign return.

Marketing vs. Sales

Marketing and sales are both aimed at increasing revenue. They are so closely intertwined that people often don’t realize the difference between the two. Indeed, in small organizations, the same people typically perform both sales and marketing tasks. Nevertheless, marketing is different from sales and as the organization grows, the roles and responsibilities become more specialized.

Sales vs Marketing Activities

The typical goal of marketing is to generate interest in the product and create leads or prospects. Marketing activities include:

• consumer research to identify the needs of the customers
• product development – designing innovative products to meet existing or latent needs
• advertising the products to raise awareness and build the brand.
• pricing products and services to maximize long-term revenue.

On the other hand, sales activities are focused on converting prospects to actual paying customers. Sales involves directly interacting with the prospects to persuade them to purchase the product.

Marketing thus tends to focus on the general population (or, in any case, a large set of people) whereas sales tends to focus on individuals or a small group of prospects.

Comparison chart

	Marketing	Sales
Approach	Broader range of activities to sell product/service, client relationship etc.; determine future needs and has a strategy in place to meet those needs for the long term relationship.	makes customer demand match the products the company currently offers.
Focus	Overall picture to promote, distribute, price products/services; fulfill customer's wants and needs through products and/or services the company can offer.	fulfill sales volume objectives
Process	Analysis of market, distribution channels, competitive products and services; Pricing strategies; Sales tracking and market share analysis; Budget	Usually one to one
Scope	Market research; Advertising; Sales; Public relations; Customer service and satisfaction .	Once a product has been created for a customer need, persuade the customer to purchase the product to fulfill her needs
Horizon	Longer term	Short term
Strategy	pull	push
Priority	Marketing shows how to reach to the Customers and build long lasting relationship	Selling is the ultimate result of marketing.
Identity	Marketing targets the construction of a brand identity so that it becomes easily associated with need fulfillment.	Sales is the strategy of meeting needs in an opportunistic, individual method, driven by human interaction. There's no premise of brand identity, longevity or continuity. It's simply the ability to meet a need at the right time.

Reference: http://www.diffen.com/difference/Marketing_vs_Sales