Marketing people are involved in marketing 10 types of entities: goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.
Goods. Physical goods constitute the bulk of most countries’ production and marketing effort. The United States produces and markets billions of physical goods, from eggs to steel to hair dryers. In developing nations, goods— particularly food, commodities, clothing, and housing—are the mainstay of the economy.
Services. As economies advance, a growing proportion of their activities are focused on the production of services. The U.S. economy today consists of a 70–30 services-to-goods mix. Services include airlines, hotels, and maintenance and repair people, as well as professionals such as accountants, lawyers, engineers, and doctors. Many market offerings consist of a variable mix of goods and services.
Experiences. By orchestrating several services and goods, one can create, stage, and market experiences. Walt Disney World’s Magic Kingdom is an experience; so is the Hard Rock Cafe. Events. Marketers promote time-based events, such as the Olympics, trade shows, sports events, and artistic performances.
Persons. Celebrity marketing has become a major business. Artists, musicians, CEOs, physicians, high-profile lawyers and financiers, and other professionals draw help from celebrity marketers.
Places. Cities, states, regions, and nations compete to attract tourists, factories, company headquarters, and new residents.5 Place marketers include economic development specialists, real estate agents, commercial banks, local business associations, and advertising and public relations agencies.
Properties. Properties are intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds). Properties are bought and sold, and this occasions a marketing effort by real estate agents (for real estate) and investment companies and banks (for securities).
Organizations. Organizations actively work to build a strong, favorable image in the mind of their publics. Philips, the Dutch electronics company, advertises with the tag line, “Let’s Make Things Better.” The Body Shop and Ben & Jerry’s also gain attention by promoting social causes. Universities, museums, and performing arts organizations boost their public images to compete more successfully for audiences and funds.
Information. The production, packaging, and distribution of information is one of society’s major industries.6 Among the marketers of information are schools and universities; publishers of encyclopedias, nonfiction books, and specialized magazines; makers of CDs; and Internet Web sites. Ideas. Every market offering has a basic idea at its core. In essence, products and services are platforms for delivering some idea or benefit to satisfy a core need.
Sunday, June 13, 2010
Saturday, March 6, 2010
WHAT IS AFFILIATE MARKETING
WHAT IS AFFILIATE MARKETING?
It is an application of crowd sourcing. Examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site. The industry has four core players: the merchant (also known as 'retailer' or 'brand'), the network, the publisher (also known as 'the affiliate') and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third parties vendors.
Definition
Revenue sharing between online advertisers/merchants and online publishers/salespeople, whereby compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model.
Information
The advertisers/merchants are typically referred to as affiliate merchants and the publishers/salespeople are referred to as affiliates.
It is a promotion method that can be used to reward partner companies for introducing new clients. It can be seen as a digital form of franchising or as an electronic joint venture. The Merchant normally delivers advertising banners and web links to their affiliates. Also the Merchant grants a commission. Normally in return for a click-through to their website, subscription to their service, or purchase of their products which is generated via these links. Affiliates place a tracking code for these ads into their web pages. Each time a visitor on the affiliate's website clicks towards the website of the Merchant, that transaction is registered online. Compensation for the Affiliate may be made based on:
• Pay per click. A certain value for each visit.
• Pay per lead. A certain value for each registration or for each qualified registration.
• Pay per sale. A certain value for each customer or sale.
ORIGIN OF AFFILIATE MARKETING. HISTORY
Affiliate Marketing can be seen as the modern variant of paying finder's fees to individuals or organizations who introduce new prospects or clients to a business. In July 1996, Amazon.com launched an associates program that became a huge success.
USAGE OF AFFILIATE MARKETING. APPLICATIONS
• Online advertising.
• The approach is most effective when placed in context with quality content.
• Some third parties such as LinkShare, Commission Junction and also Google offer affiliate networks and provide services such as tracking, reporting, affiliate recruiting, payments, sending out end-of-year tax forms, and responses to webmaster queries.
STRENGTHS OF AFFILIATE MARKETING. BENEFITS
For the Affiliate:
• Offer additional products or services to their visitors.
• The opportunity to earn money from their niche audience by up selling or cross selling. Without the need to invest in logistics, financial fulfillment, or back office administration.
For the Merchant:
• No payment is due to an Affiliate until certain results are achieved.
• Typically low-cost and cost-effective.
• Targeted advertising into appropriate niches.
• To get a measurable means of advertising their products or services.
• Extend reach of brand.
LIMITATIONS OF AFFILIATE MARKETING. DISADVANTAGES
• Some affiliate marketers have been accused of spamming to promote their programs. Either in the form of email spamming or by creating multiple websites with the purpose of generating artificial traffic from search engines (spamdexing).
• Websites made up purely or predominantly of Affiliate links are usually regarded negatively as they do not offer any quality content.
• Note that most people don't purchase during their first visit to a website. A cookie can ensure that a referral is registered. If the referred person makes a purchase on a future visit, the original referrer will still be credited for the sale.
TYPES OF AFFILIATE WEBSITES
Affiliate websites are often categorized by merchants (i.e., advertisers) and affiliate networks. There are currently no industry-wide accepted standards for the categorization. The following types of websites are generic, yet are commonly understood and used by affiliate marketers.
• Search affiliates that utilize pay per click search engines to promote the advertisers' offers (i.e., search arbitrage)
• Comparison shopping websites and directories
• Loyalty websites, typically characterized by providing a reward system for purchases via points back, cash back
• CRM sites that offer charitable donations
• Coupon and rebate websites that focus on sales promotions
• Content and niche market websites, including product review sites
• Personal websites (This type of website was the reason for the birth of affiliate marketing; however, such websites are almost reduced to complete irrelevance compared to the other types of affiliate websites.)[citation needed]
• Weblogs and website syndication feeds
• E-mail list affiliates (i.e., owners of large opt-in -mail lists that typically employ e-mail drip marketing) and newsletter list affiliates, which are typically more content-heavy
• Registration path or co-registration affiliates who include offers from other merchants during the registration process on their own website
• Shopping directories that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updates
• Cost per action networks (i.e., top-tier affiliates) that expose offers from the advertiser with which they are affiliated to their own network of affiliates
• Websites using adbars (e.g. Adsense) to display context-sensitive, highly-relevant ads for products on the site.
• Final Remark
• At the top and bottom of this page, you can see a remarkable example. You can find some well-known Affiliate Marketing companies which advertise here themselves via this method.
It is an application of crowd sourcing. Examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site. The industry has four core players: the merchant (also known as 'retailer' or 'brand'), the network, the publisher (also known as 'the affiliate') and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third parties vendors.
Definition
Revenue sharing between online advertisers/merchants and online publishers/salespeople, whereby compensation is based on performance measures, typically in the form of sales, clicks, registrations, or a hybrid model.
Information
The advertisers/merchants are typically referred to as affiliate merchants and the publishers/salespeople are referred to as affiliates.
It is a promotion method that can be used to reward partner companies for introducing new clients. It can be seen as a digital form of franchising or as an electronic joint venture. The Merchant normally delivers advertising banners and web links to their affiliates. Also the Merchant grants a commission. Normally in return for a click-through to their website, subscription to their service, or purchase of their products which is generated via these links. Affiliates place a tracking code for these ads into their web pages. Each time a visitor on the affiliate's website clicks towards the website of the Merchant, that transaction is registered online. Compensation for the Affiliate may be made based on:
• Pay per click. A certain value for each visit.
• Pay per lead. A certain value for each registration or for each qualified registration.
• Pay per sale. A certain value for each customer or sale.
ORIGIN OF AFFILIATE MARKETING. HISTORY
Affiliate Marketing can be seen as the modern variant of paying finder's fees to individuals or organizations who introduce new prospects or clients to a business. In July 1996, Amazon.com launched an associates program that became a huge success.
USAGE OF AFFILIATE MARKETING. APPLICATIONS
• Online advertising.
• The approach is most effective when placed in context with quality content.
• Some third parties such as LinkShare, Commission Junction and also Google offer affiliate networks and provide services such as tracking, reporting, affiliate recruiting, payments, sending out end-of-year tax forms, and responses to webmaster queries.
STRENGTHS OF AFFILIATE MARKETING. BENEFITS
For the Affiliate:
• Offer additional products or services to their visitors.
• The opportunity to earn money from their niche audience by up selling or cross selling. Without the need to invest in logistics, financial fulfillment, or back office administration.
For the Merchant:
• No payment is due to an Affiliate until certain results are achieved.
• Typically low-cost and cost-effective.
• Targeted advertising into appropriate niches.
• To get a measurable means of advertising their products or services.
• Extend reach of brand.
LIMITATIONS OF AFFILIATE MARKETING. DISADVANTAGES
• Some affiliate marketers have been accused of spamming to promote their programs. Either in the form of email spamming or by creating multiple websites with the purpose of generating artificial traffic from search engines (spamdexing).
• Websites made up purely or predominantly of Affiliate links are usually regarded negatively as they do not offer any quality content.
• Note that most people don't purchase during their first visit to a website. A cookie can ensure that a referral is registered. If the referred person makes a purchase on a future visit, the original referrer will still be credited for the sale.
TYPES OF AFFILIATE WEBSITES
Affiliate websites are often categorized by merchants (i.e., advertisers) and affiliate networks. There are currently no industry-wide accepted standards for the categorization. The following types of websites are generic, yet are commonly understood and used by affiliate marketers.
• Search affiliates that utilize pay per click search engines to promote the advertisers' offers (i.e., search arbitrage)
• Comparison shopping websites and directories
• Loyalty websites, typically characterized by providing a reward system for purchases via points back, cash back
• CRM sites that offer charitable donations
• Coupon and rebate websites that focus on sales promotions
• Content and niche market websites, including product review sites
• Personal websites (This type of website was the reason for the birth of affiliate marketing; however, such websites are almost reduced to complete irrelevance compared to the other types of affiliate websites.)[citation needed]
• Weblogs and website syndication feeds
• E-mail list affiliates (i.e., owners of large opt-in -mail lists that typically employ e-mail drip marketing) and newsletter list affiliates, which are typically more content-heavy
• Registration path or co-registration affiliates who include offers from other merchants during the registration process on their own website
• Shopping directories that list merchants by categories without providing coupons, price comparisons, or other features based on information that changes frequently, thus requiring continual updates
• Cost per action networks (i.e., top-tier affiliates) that expose offers from the advertiser with which they are affiliated to their own network of affiliates
• Websites using adbars (e.g. Adsense) to display context-sensitive, highly-relevant ads for products on the site.
• Final Remark
• At the top and bottom of this page, you can see a remarkable example. You can find some well-known Affiliate Marketing companies which advertise here themselves via this method.
Tuesday, March 2, 2010
PRODUCT LIFE CYCLE: CONCEPT AND SIGNIFICANCE
Every product passes through four stages in its life namely, introduction, growth, maturity and decline. The concept of Product Life Cycle (PLC) highlights that sooner or later all products die and that if an entrepreneur wishes to sustain its revenues, he must replace the declining products with the new ones.
Every firm makes sales forecasts during introduction, growth, and maturity stages of the PLC. To achieve the sales target, it formulates promotional, pricing and distribution policies. Thus the concept of PLC facilitates integrated marketing policies relating to product, price, promotion and distribution
The advantages of forecasting the life cycle of a product to a firm are as follows:
1. When the PLC is predictable, the entrepreneur must be cautious in taking advance steps before the decline stage, by adopting product modification, pricing strategies, distinctive style, quality change, etc.
2. The firm can prepare an effective product plan by knowing the PLC of a product.
3. The entrepreneur can find new uses of the product for the expansion of market during growth stage and for extending the maturity stage.
4. The entrepreneur can adopt latest technological changes to improve the product quality, features and design.
STAGES IN PRODUCT LIFE CYCLE
The product moves through the four stages namely, introduction, growth, maturity and decline. As the product moves through different stages of its life cycle, sales volume and profitability change from stage to stage as shown in the figure below. The entrepreneur’s emphasis on the marketing mix elements also undergoes substantial changes from stage to stage. A brief discussion of the marketing strategies in different stages of the PLC is given below:
Introduction: The first stage of a product life cycle is the introduction or pioneering stage. Under this state the fixed costs of marketing and production will be high, competition is almost non-existent, markets are limited and the product is not known much. Prices are relatively high because of small scale of production, technological problems and heavy promotional expenditure. Profits are usually non-existent as heavy expenses are incurred for introducing the product in the market.
To introduce the product successfully, the following strategies may be adopted:
a. Advertisement and publicity of the product. ‘Money back’ guarantee may be given to stimulate the people try the product.
b. Attractive gift to customers as an ‘introductory offer’.
c. Attractive discount to dealers.
d. Higher price of product to earn more profit during the initial stages.
Growth: The sales as well as the profits increase rapidly as the product is accepted in the market. The promotional expenses remain high although they tend to fall as a ratio to sales volume. Quite often, smaller firms move into the market during the growth phase. With their flexibility they can move very quickly and capture a valuable part of the market without the huge investment risks of the development phase. In this stage, the competition increases and distribution is greatly widened. The marketing management focuses its attention on improving the market share by deeper penetration into the existing markets and entry into new markets. Sometimes major improvements also take place in the product during this stage.
The following strategies are followed during the growth stage:
a. The product is advertised heavily to stimulate sale.
b. New versions of the product are introduced to cater to the requirements of different types of customers.
c. The channels of distribution are strengthened so that the product is easily available wherever required.
d. Brand image of the product is created through promotional activities.
e. Price of the product is competitive.
f. There is greater emphasis on customer service.
Maturity: The product enters into maturity stage as competition intensifies further and market gets stabilized. There is saturation in the market as there is no possibility of sales growth. The product has been accepted by most of the potential buyers. Profits come down because of stiff competition and marketing expenditures rise. The prices are decreased because of competition and innovations in technology. This stage may last for a longer period as in the case of many products with long-run demand characteristics. But sooner or later, demand of the product starts declining as new products are introduced in the market. Product differentiation, identification of new segments and product improvement are emphasized during this stage. In order to lengthen the period of maturity stage, the following strategies may be adopted:
a. Product may be differentiated from the competitive products and brand image may be emphasized more.
b. The warranty period may be extended.
c. Reusable packaging may be introduced.
d. New markets may be developed.
e. New uses of the product may be developed.
Decline: This stage is characterized by either the product’s gradual displacement by some new products or change in consumer buying behaviour. The sales fall down sharply and the expenditure on promotion has to be cut down drastically. The decline may be rapid with the product soon passing out of market or slow if new uses of the
product are found. Profits are much smaller and companies need to assess their investment policies, looking towards investing in newer and more profitable product lines. As far as possible, attempts should be made to avoid the decline stage. But if it has started, the following strategies may be useful:
a. The promotion of the product should be selective. Wasteful advertising should be avoided.
b. The product model may be abandoned and all the good features may be retained in the new model of the product.
c. Economical packaging should be introduced to revive the product.
d. The manufacturer may seek merger with a strong firm.
Every firm makes sales forecasts during introduction, growth, and maturity stages of the PLC. To achieve the sales target, it formulates promotional, pricing and distribution policies. Thus the concept of PLC facilitates integrated marketing policies relating to product, price, promotion and distribution
The advantages of forecasting the life cycle of a product to a firm are as follows:
1. When the PLC is predictable, the entrepreneur must be cautious in taking advance steps before the decline stage, by adopting product modification, pricing strategies, distinctive style, quality change, etc.
2. The firm can prepare an effective product plan by knowing the PLC of a product.
3. The entrepreneur can find new uses of the product for the expansion of market during growth stage and for extending the maturity stage.
4. The entrepreneur can adopt latest technological changes to improve the product quality, features and design.
STAGES IN PRODUCT LIFE CYCLE
The product moves through the four stages namely, introduction, growth, maturity and decline. As the product moves through different stages of its life cycle, sales volume and profitability change from stage to stage as shown in the figure below. The entrepreneur’s emphasis on the marketing mix elements also undergoes substantial changes from stage to stage. A brief discussion of the marketing strategies in different stages of the PLC is given below:
Introduction: The first stage of a product life cycle is the introduction or pioneering stage. Under this state the fixed costs of marketing and production will be high, competition is almost non-existent, markets are limited and the product is not known much. Prices are relatively high because of small scale of production, technological problems and heavy promotional expenditure. Profits are usually non-existent as heavy expenses are incurred for introducing the product in the market.
To introduce the product successfully, the following strategies may be adopted:
a. Advertisement and publicity of the product. ‘Money back’ guarantee may be given to stimulate the people try the product.
b. Attractive gift to customers as an ‘introductory offer’.
c. Attractive discount to dealers.
d. Higher price of product to earn more profit during the initial stages.
Growth: The sales as well as the profits increase rapidly as the product is accepted in the market. The promotional expenses remain high although they tend to fall as a ratio to sales volume. Quite often, smaller firms move into the market during the growth phase. With their flexibility they can move very quickly and capture a valuable part of the market without the huge investment risks of the development phase. In this stage, the competition increases and distribution is greatly widened. The marketing management focuses its attention on improving the market share by deeper penetration into the existing markets and entry into new markets. Sometimes major improvements also take place in the product during this stage.
The following strategies are followed during the growth stage:
a. The product is advertised heavily to stimulate sale.
b. New versions of the product are introduced to cater to the requirements of different types of customers.
c. The channels of distribution are strengthened so that the product is easily available wherever required.
d. Brand image of the product is created through promotional activities.
e. Price of the product is competitive.
f. There is greater emphasis on customer service.
Maturity: The product enters into maturity stage as competition intensifies further and market gets stabilized. There is saturation in the market as there is no possibility of sales growth. The product has been accepted by most of the potential buyers. Profits come down because of stiff competition and marketing expenditures rise. The prices are decreased because of competition and innovations in technology. This stage may last for a longer period as in the case of many products with long-run demand characteristics. But sooner or later, demand of the product starts declining as new products are introduced in the market. Product differentiation, identification of new segments and product improvement are emphasized during this stage. In order to lengthen the period of maturity stage, the following strategies may be adopted:
a. Product may be differentiated from the competitive products and brand image may be emphasized more.
b. The warranty period may be extended.
c. Reusable packaging may be introduced.
d. New markets may be developed.
e. New uses of the product may be developed.
Decline: This stage is characterized by either the product’s gradual displacement by some new products or change in consumer buying behaviour. The sales fall down sharply and the expenditure on promotion has to be cut down drastically. The decline may be rapid with the product soon passing out of market or slow if new uses of the
product are found. Profits are much smaller and companies need to assess their investment policies, looking towards investing in newer and more profitable product lines. As far as possible, attempts should be made to avoid the decline stage. But if it has started, the following strategies may be useful:
a. The promotion of the product should be selective. Wasteful advertising should be avoided.
b. The product model may be abandoned and all the good features may be retained in the new model of the product.
c. Economical packaging should be introduced to revive the product.
d. The manufacturer may seek merger with a strong firm.
Sources Of Marketing research
Marketing research is the means by which the information necessary to run a business is obtained.
It is the gathering, recording, and analysis of all facts about problems relating to the transfer and sale of goods and services from producer to consumer.
Marketing information can be collected from the following sources:
Primary Sources
1. Customers: Consumers being the final users of products or services can be an invaluable source of primary data. A representative sample of consumers may be selected and information obtained from them regarding the quality, design, package, price, etc. of the firm’s products.
2. Dealers: The dealers can provide information about the marketing policies of the competitors.
3. Salesman: Salesmen remain in personal contact with the customers. They can, therefore, supply data to the marketing manager relating to the buying habits and preferences of customers.
Secondary Sources
1. Press: Newspapers like the Economic Times and Magazines like Business Today and trade directories regularly publish data about various industries.
2. Government Publications: Bulletins, periodicals, journals and magazines of different ministries and departments of the Central and State Government.
3. Publications of financial institutions: Publications of Reserve Bank of India, public financial institutions and commercial banks.
4. Foreign governments and international agencies: Publications of agencies like the United Nations, the World Bank, the ILO, UNCTAD and the IMF.
5. Publications of trade associations: Trade associations and Chambers of Commerce collect and publish useful data for the benefit of their members.
6. Private concerns and research institutions: Business data published by research institutes like National Council of Applied Economic Research, Indian Institute of Foreign Trade, etc.
It is the gathering, recording, and analysis of all facts about problems relating to the transfer and sale of goods and services from producer to consumer.
Marketing information can be collected from the following sources:
Primary Sources
1. Customers: Consumers being the final users of products or services can be an invaluable source of primary data. A representative sample of consumers may be selected and information obtained from them regarding the quality, design, package, price, etc. of the firm’s products.
2. Dealers: The dealers can provide information about the marketing policies of the competitors.
3. Salesman: Salesmen remain in personal contact with the customers. They can, therefore, supply data to the marketing manager relating to the buying habits and preferences of customers.
Secondary Sources
1. Press: Newspapers like the Economic Times and Magazines like Business Today and trade directories regularly publish data about various industries.
2. Government Publications: Bulletins, periodicals, journals and magazines of different ministries and departments of the Central and State Government.
3. Publications of financial institutions: Publications of Reserve Bank of India, public financial institutions and commercial banks.
4. Foreign governments and international agencies: Publications of agencies like the United Nations, the World Bank, the ILO, UNCTAD and the IMF.
5. Publications of trade associations: Trade associations and Chambers of Commerce collect and publish useful data for the benefit of their members.
6. Private concerns and research institutions: Business data published by research institutes like National Council of Applied Economic Research, Indian Institute of Foreign Trade, etc.
Marketing myopia
Short sighted and inward looking approach to marketing that focuses on the needs of the firm instead of defining the firm and its products in terms of the customers' needs and wants. Such self-centered firms fail to see and adjust to the rapid changes in their markets and, despite their previous eminence, falter, fall, and disappear. This concept was discussed in an article (titled 'Marketing Myopia,' in July-August 1960 issue of Harvard Business Review) by Harvard Business School emeritus professor of marketing, Theodore C. Levitt (1925-), who suggests that firms get trapped in this bind because they omit to ask the vital question, "What business are we in?"
Featured Tip
In 1960, a professor at the Harvard Business School named Ted Levitt published an article in the Harvard Business Review entitled "Marketing Myopia." In the article, Levitt suggested that the most important question for any marketer is, "What business are you really in?" Levitt had examined a long list of successful, profitable sectors, such as the railroad industry in the early 1900s and the motion picture industry in the late 1940s, that had been blindsided by new competitors and run into severe financial problems as a result. His conclusion: Many of these industries simply misdefined the business they were in. The railroads thought of themselves as being in the railroad industry instead of transportation, and motion picture studios saw themselves in the movie business instead of entertainment.
Featured Tip
In 1960, a professor at the Harvard Business School named Ted Levitt published an article in the Harvard Business Review entitled "Marketing Myopia." In the article, Levitt suggested that the most important question for any marketer is, "What business are you really in?" Levitt had examined a long list of successful, profitable sectors, such as the railroad industry in the early 1900s and the motion picture industry in the late 1940s, that had been blindsided by new competitors and run into severe financial problems as a result. His conclusion: Many of these industries simply misdefined the business they were in. The railroads thought of themselves as being in the railroad industry instead of transportation, and motion picture studios saw themselves in the movie business instead of entertainment.
NATURE OF NEEDS
A human need is a state of felt deprivation of some basic satisfaction. (food, clothing, shelter, safety, belonging, esteem etc.)
Abraham Maslow noticed that some needs take precedence over others. For example, if you are hungry and thirsty, you will tend to try to take care of the thirst first. After all, you can do without food for weeks, but you can only do without water for a couple of days! Thirst is a “stronger” need than hunger. Likewise, if you are very thirsty, but someone has put a choke hold on you and you can’t breathe, which is more important? The need to breathe, of course. On the other hand, sex is less powerful than any of these. Let’s face it, you won’t die if you don’t get it!
Maslow took this idea and created his now famous hierarchy of needs. Beyond the details of air, water, food, and sex, he laid out five broader layers:
1) Physiological needs. These include the needs we have for oxygen, water, protein, salt, sugar, calcium, and other minerals and vitamins. They also include the need to maintain a pH balance (getting too acidic or base will kill you) and temperature. Also, there’s the needs to be active, to rest, to sleep, to get rid of wastes (CO2, sweat, urine, and feces), to avoid pain, and to have sex.
2) Safety and security needs. When the physiological needs are largely taken care of, this second layer of needs comes into play. You will become increasingly interested in finding safe circumstances, stability, and protection. You might develop a need for structure, for order, some limits. Looking at it negatively, you become concerned, not with needs like hunger and thirst, but with your fears and anxieties. In the ordinary adult, this set of needs manifest themselves in the form of our urges to have a home in a safe neighborhood, a little job security and a good retirement plan and a bit of insurance, and so on.
3) Love and belonging needs. When physiological needs and safety needs are, by and large, taken care of, a third layer starts to show up. You begin to feel the need for friends, a sweetheart, children; affectionate relationships in general, even a sense of community. Looked at negatively, you become increasing susceptible to loneliness and social anxieties.
In our day-to-day life, we exhibit these needs in our desires to marry, have a family, be a part of a community, a member of a church, a brother in the fraternity, a part of a gang or a bowling club. It is also a part of what we look for in a career.
4) Esteem needs. Next, we begin to look for a little self-esteem. Maslow noted two versions of esteem needs, a lower one and a higher one. The lower one is the need for the respect of others, the need for status, fame, glory, recognition, attention, reputation, appreciation, dignity, even dominance. The higher form involves the need for self-respect, including such feelings as confidence, competence, achievement, mastery, independence, and freedom. Note that this is the “higher” form because, unlike the respect of others, once you have self-respect, it’s a lot harder to lose! The negative version of these needs is low self-esteem and inferiority complexes. Maslow felt that these were at the roots of many, if not most, of psychological problems. In many countries, most people have what they need in regard to their physiological and safety needs. Almost everyone, more often than not, has quite a bit of love and belonging, too. It’s a little respect that often seems so very hard to get!
All of the preceding four levels he calls deficit needs, or D-needs. If you don’t have enough of something -- i.e. you have a deficit -- you feel the need. But if you get all you need, you feel nothing at all! In other words, they cease to be motivating. As the old blues song goes, “you don’t miss your water till your well runs dry!”
Maslow also talks about these levels in terms of homeostasis. Homeostasis is the principle by which a furnace thermostat operates: When it gets too cold, it switches the heat on; when it gets too hot, it switches the heat off. In the same way, our body, when it lacks a certain substance, develops a hunger for it; when it gets enough of it, then the hunger stops. Maslow simply extends the homeostatic principle to needs, such as safety, belonging, and esteem that we don’t ordinarily think of in these terms. Under stressful conditions, or when survival is threatened, we can “regress” to a lower need level.
These things can occur on a society-wide basis as well: When society suddenly flounders, people start clamoring for a strong leader to take over and make things right. When the bombs start falling, they look for safety. When the food stops coming into the stores, their needs become even more basic. If one has significant problems along one’s development -- a period of extreme
insecurity or hunger as a child, or the loss of a family member through death or divorce, or significant neglect or abuse -- one may “fixate” on that set of needs for the rest of one’s life.
Abraham Maslow noticed that some needs take precedence over others. For example, if you are hungry and thirsty, you will tend to try to take care of the thirst first. After all, you can do without food for weeks, but you can only do without water for a couple of days! Thirst is a “stronger” need than hunger. Likewise, if you are very thirsty, but someone has put a choke hold on you and you can’t breathe, which is more important? The need to breathe, of course. On the other hand, sex is less powerful than any of these. Let’s face it, you won’t die if you don’t get it!
Maslow took this idea and created his now famous hierarchy of needs. Beyond the details of air, water, food, and sex, he laid out five broader layers:
1) Physiological needs. These include the needs we have for oxygen, water, protein, salt, sugar, calcium, and other minerals and vitamins. They also include the need to maintain a pH balance (getting too acidic or base will kill you) and temperature. Also, there’s the needs to be active, to rest, to sleep, to get rid of wastes (CO2, sweat, urine, and feces), to avoid pain, and to have sex.
2) Safety and security needs. When the physiological needs are largely taken care of, this second layer of needs comes into play. You will become increasingly interested in finding safe circumstances, stability, and protection. You might develop a need for structure, for order, some limits. Looking at it negatively, you become concerned, not with needs like hunger and thirst, but with your fears and anxieties. In the ordinary adult, this set of needs manifest themselves in the form of our urges to have a home in a safe neighborhood, a little job security and a good retirement plan and a bit of insurance, and so on.
3) Love and belonging needs. When physiological needs and safety needs are, by and large, taken care of, a third layer starts to show up. You begin to feel the need for friends, a sweetheart, children; affectionate relationships in general, even a sense of community. Looked at negatively, you become increasing susceptible to loneliness and social anxieties.
In our day-to-day life, we exhibit these needs in our desires to marry, have a family, be a part of a community, a member of a church, a brother in the fraternity, a part of a gang or a bowling club. It is also a part of what we look for in a career.
4) Esteem needs. Next, we begin to look for a little self-esteem. Maslow noted two versions of esteem needs, a lower one and a higher one. The lower one is the need for the respect of others, the need for status, fame, glory, recognition, attention, reputation, appreciation, dignity, even dominance. The higher form involves the need for self-respect, including such feelings as confidence, competence, achievement, mastery, independence, and freedom. Note that this is the “higher” form because, unlike the respect of others, once you have self-respect, it’s a lot harder to lose! The negative version of these needs is low self-esteem and inferiority complexes. Maslow felt that these were at the roots of many, if not most, of psychological problems. In many countries, most people have what they need in regard to their physiological and safety needs. Almost everyone, more often than not, has quite a bit of love and belonging, too. It’s a little respect that often seems so very hard to get!
All of the preceding four levels he calls deficit needs, or D-needs. If you don’t have enough of something -- i.e. you have a deficit -- you feel the need. But if you get all you need, you feel nothing at all! In other words, they cease to be motivating. As the old blues song goes, “you don’t miss your water till your well runs dry!”
Maslow also talks about these levels in terms of homeostasis. Homeostasis is the principle by which a furnace thermostat operates: When it gets too cold, it switches the heat on; when it gets too hot, it switches the heat off. In the same way, our body, when it lacks a certain substance, develops a hunger for it; when it gets enough of it, then the hunger stops. Maslow simply extends the homeostatic principle to needs, such as safety, belonging, and esteem that we don’t ordinarily think of in these terms. Under stressful conditions, or when survival is threatened, we can “regress” to a lower need level.
These things can occur on a society-wide basis as well: When society suddenly flounders, people start clamoring for a strong leader to take over and make things right. When the bombs start falling, they look for safety. When the food stops coming into the stores, their needs become even more basic. If one has significant problems along one’s development -- a period of extreme
insecurity or hunger as a child, or the loss of a family member through death or divorce, or significant neglect or abuse -- one may “fixate” on that set of needs for the rest of one’s life.
four Ps of marketing mix
A brief description of the four elements of marketing mix is as follows:
1. Product: The first element of marketing mix is product. A Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.
Products include physical objects, services, events, persons, places, ideas or mixes of these.
This element involves decisions concerning product line, quality, design, brand name, label, after sales services, warranties, product range, etc.
Products and services are broadly classified into consumer products and industrial products.
Consumer products are bought for final consumption;
Industrial products are bought by individuals and organizations for further processing or for use in conducting business.
Other ways of classifying products are as follows:
a. Convenience products: These are consumer products that the customer buys very frequently, without much deliberation. They are low priced of low value and are widely available at many outlets. They may be further subdivided as:
Staple Products: Items like milk, bread, butter etc. which the family consumes regularly. Once in the beginning the decision is programmed and it is usually Carried on without change.
Impulse Products: Purchase of these is unplanned and impulsive. Usually when the consumer is buying other products, he buys these spontaneously for e.g. Magazines, toffees and chocolates. Usually these products are located where they can be easily noticed.
Emergency products: Purchase of these products is done in an emergency as a result of urgent and compelling needs. Often a consumer pays more for these. For example while traveling if someone has forgotten his toothbrush or shaving kit; he will buy it at the available price.
b. Shopping products: These are less frequently purchased and the customer carefully checks suitability, quality, price and style. He spends much more time and effort in gathering information and making comparisons. E.g. furniture, clothing and used cars.
c. Specialty products: These are consumer goods with unique characteristics / brand identification for which a significant group of buyers is willing to make a special purchase effort. For example, Mitsubishi Lancer, Ray ban glasses.
d. Unsought product: These are products that potential buyers do not know exist or do not yet want .For example Life Insurance, a Lawyers services in contesting a Will.
A product has both tangible and intangible components. While buying a product, the customer does not merely look for the physical product, but a bundle of satisfaction. Thus the impact that any product has upon a buyer goes well beyond its obvious characteristics. There is a psychological dimension to all customer purchases; what a customer thinks about a product is influenced by far more than the product itself.
2. Price:
The second element is the price, which affects the volume of sales. It is one of the most difficult tasks of the marketing manager to fix the right price. The variables that significantly influence the price of a product are: demand of the product, cost, competition and government regulation.
The pricing policies mainly followed by the small firms are:
a. Competitive pricing: This method is used when the market is highly competitive and the product is not differentiated significantly from the competitor’s products.
b. Skimming-the-cream pricing: Under this pricing policy, higher prices are charged during the initial stages of the introduction of a new product. The aim is to recover the initial investment quickly. This policy is quite effective when the demand for a product is likely to be more inelastic with respect to price in its early stages; to segment the market into segments that differ in price elasticity of demand and to restrict the demand to a level, which a firm can easily meet.
c. Penetration pricing: Under this policy, prices are fixed below the competitive level to obtain a larger share of the market. Penetration pricing is likely to be more successful when the product has a highly elastic demand; the production is carried out on a large scale to achieve low cost of production per unit; and there is strong competition in the market.
3. Promotion:
Promotion refers to the various activities undertaken by the enterprise to communicate and promote its products to the target market. The different methods of promoting a product are through
1. Advertisement,
2. Personal selling,
3. Sales promotion
4. Publicity.
5. Direct selling
6. Interactive marketing
4. Place or Physical Distribution:
Place mix or delivery mix is the physical distribution of products at the right time and at the right place. It refers to finding out the best means of selling, sources of selling (wholesaler, retailers, and agents), inventory control, storage facility, location, warehousing, transportation, etc.
1. Product: The first element of marketing mix is product. A Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.
Products include physical objects, services, events, persons, places, ideas or mixes of these.
This element involves decisions concerning product line, quality, design, brand name, label, after sales services, warranties, product range, etc.
Products and services are broadly classified into consumer products and industrial products.
Consumer products are bought for final consumption;
Industrial products are bought by individuals and organizations for further processing or for use in conducting business.
Other ways of classifying products are as follows:
a. Convenience products: These are consumer products that the customer buys very frequently, without much deliberation. They are low priced of low value and are widely available at many outlets. They may be further subdivided as:
Staple Products: Items like milk, bread, butter etc. which the family consumes regularly. Once in the beginning the decision is programmed and it is usually Carried on without change.
Impulse Products: Purchase of these is unplanned and impulsive. Usually when the consumer is buying other products, he buys these spontaneously for e.g. Magazines, toffees and chocolates. Usually these products are located where they can be easily noticed.
Emergency products: Purchase of these products is done in an emergency as a result of urgent and compelling needs. Often a consumer pays more for these. For example while traveling if someone has forgotten his toothbrush or shaving kit; he will buy it at the available price.
b. Shopping products: These are less frequently purchased and the customer carefully checks suitability, quality, price and style. He spends much more time and effort in gathering information and making comparisons. E.g. furniture, clothing and used cars.
c. Specialty products: These are consumer goods with unique characteristics / brand identification for which a significant group of buyers is willing to make a special purchase effort. For example, Mitsubishi Lancer, Ray ban glasses.
d. Unsought product: These are products that potential buyers do not know exist or do not yet want .For example Life Insurance, a Lawyers services in contesting a Will.
A product has both tangible and intangible components. While buying a product, the customer does not merely look for the physical product, but a bundle of satisfaction. Thus the impact that any product has upon a buyer goes well beyond its obvious characteristics. There is a psychological dimension to all customer purchases; what a customer thinks about a product is influenced by far more than the product itself.
2. Price:
The second element is the price, which affects the volume of sales. It is one of the most difficult tasks of the marketing manager to fix the right price. The variables that significantly influence the price of a product are: demand of the product, cost, competition and government regulation.
The pricing policies mainly followed by the small firms are:
a. Competitive pricing: This method is used when the market is highly competitive and the product is not differentiated significantly from the competitor’s products.
b. Skimming-the-cream pricing: Under this pricing policy, higher prices are charged during the initial stages of the introduction of a new product. The aim is to recover the initial investment quickly. This policy is quite effective when the demand for a product is likely to be more inelastic with respect to price in its early stages; to segment the market into segments that differ in price elasticity of demand and to restrict the demand to a level, which a firm can easily meet.
c. Penetration pricing: Under this policy, prices are fixed below the competitive level to obtain a larger share of the market. Penetration pricing is likely to be more successful when the product has a highly elastic demand; the production is carried out on a large scale to achieve low cost of production per unit; and there is strong competition in the market.
3. Promotion:
Promotion refers to the various activities undertaken by the enterprise to communicate and promote its products to the target market. The different methods of promoting a product are through
1. Advertisement,
2. Personal selling,
3. Sales promotion
4. Publicity.
5. Direct selling
6. Interactive marketing
4. Place or Physical Distribution:
Place mix or delivery mix is the physical distribution of products at the right time and at the right place. It refers to finding out the best means of selling, sources of selling (wholesaler, retailers, and agents), inventory control, storage facility, location, warehousing, transportation, etc.
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