Ch-1 Core Marketing Concepts1

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Market

The term “Market is originated from Latin

word „Marcatus‟ ware traffic or a place

where business is conducted.

Marketing

It is a societal process by which individuals

and groups obtain what they need and want

through creating, offering, and exchanging

products and services of value freely withothers.

Acc to Philip Kotler ,“Marketing is a humanactivity directed at satisfying needs and wants

through an exchange process”.

Classification of Markets

On the Basis of Area :-

RegionalNational

International

On the Basis of Time:-

Short Period

Long PeriodOn the Basis of transactions

Spot Transactions

Future Transactions

On the Basis of Nature of Goods

Commodity

Capital Securities

•On the Basis of Volume of Business

Wholesaler

Retailer

Difference Between Marketing and

Selling

Marketing focuses on

customer needs

Begins before production

Continues after sale Profits through customer

satisfaction

Long term perspective

Customer first thenproduct

Focuses on seller‟s

Begins after production

Comes to end after sale Profits through sales

volume

Short term perspective

Product first thencustomer

Marketing Management

According to American Marketing

Association :-

Functions of Marketing Management

Assessing the Market opportunities.Planning the market activities.

Evaluating and adjusting the market efforts Marketing research

Advertising Sales Promotion

Sales Planning

MARKETING MANAGEMENT TASKSS.NO STATE OF

DEMAND

MARKETING

FORMAL

1. Negative Demand Reverse the Negative

Demand

Conversional

Marketing

2. Latent Demand Develop demand Developmental Marketing

3. Faltering Demand Revitalize Demand Remarketing

4. Full Demand Maintain Demand Maintenance

Marketing

Conversional Marketing

Negative demand exists for a product

or service when substantial or majority

consumers show a dislike & do not approve it.

Challenge of negative demand to

marketing management is to develop a

Developmental Marketing

Here a substantial number of

customers in the market strongly share

the need for a product/service that does not exist at all .

Example , Growing no. of middle class demand for passenger cars at

affordable prices.

Remarketing

A state in which the demand for a product

or service is less than it used to be & further

decline is expected in the absence of some remedial efforts.

In these days of Hi-tech products , many

traditional products loose demand.

Indian consumers exhibit a strong interest

& desire of fast foods & processed foods

Maintenance Marketing

Full demand is a state in which the

current level of demand for a product

or service is equal to the desired level.

The task of marketing management is

to monitor the demand level continuously & maintain it.

Task is to carrying out marketing

Core Marketing Concepts

Productsand

Services

Value, satisfaction,and quality

Needs, wants,and demands

Exchange, transactions,and relationships

Markets

CoreMarketingConcepts

What Motivates a Consumer

to Take Action?

Needs - state of felt deprivation forbasic items such as food and

clothing and complex needs such asfor belonging. i.e. I am thirsty

Wants - form that a human needtakes as shaped by culture and

individual personality. i.e. I want aCoca-Cola.

What Will Satisfy Consumer‟s

Needs and Wants?

Products -anything that can be offered to a market for attention,acquisition, use or consumption and that might satisfy a need or want.

Services -activities or benefits offered for sale that are essentially intangible and don’t result in the ownership of anything.

How Do Consumers Choose

Choose Among Products and

Services?Customer Value - benefit that

the customer gains from owning

and using a product compared tothe cost of obtaining the product.

Customer Satisfaction - dependson the product‟s perceived

performance in delivering value‟

How do Consumers Obtain

Products and Services?

Exchanges - act of obtaining a desiredobject from someone by offering

something in return.

Transactions - trade of values betweenparties. Usually involves money and aresponse.

Who Purchases Products

and Services?

Market - buyerswho share a

particular needor want that canbe satisfied by a

company’s products or services.

ActualBuyers

PotentialBuyers

Different Types of Markets

On the basis of Purchasing & Consumption

a) Consumer Marketb) Industrial Market

On the basis of Products in Trade

a) Basic Goods Marketb) Intermediary Goods Market

Consumer Goods Market

On the basis of Magnitude of Selling

Marketing Management Philosophies

Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept

Consumers favor products that areavailable and highly affordable

Improve production and distribution

Consumers favor products that offerthe most quality, performance, and

innovative features

Consumers will buy products only if the company promotes/ sells theseproduct

Focuses on needs/ wants of targetmarkets & delivering satisfaction better than competitors

Focuses on needs/ wants of targetmarkets & delivering superior value

Society’s well-being

The Production Concept

One of the oldest concept in business.Consumers will favor those products &

services that are readily available and highly

affordable.

Therefore, management should focus on

improving production and distribution efficiency.

This concept is the guiding marketing

philosophy.

The Product Concept

It assumes that consumers will favor

products that offer the most in quality, performance and innovative features.

Thus an organization should devote its full energy to offer quality products &

services.

This concept assumes that consumers will not

buy a company’s products unless it

undertakes selling & promotion efforts.This concept is typically practiced in case of

non-essential goods as buyers do not normally

think of buying these products & tend to postpone them.

The company has to be good at tracking down ros ective bu ers throu h advertisin

The Selling Concept

The Marketing Concept

It emphasizes that a company can achieve its goals by determining the needs and wants of target buyers (markets) and

delivering the desired satisfactions more effectively and efficiently than competitors.

The marketing concept starts with well

defined -:a) Target market

b) Consumer needs

c) Aspirations

The Societal Marketing Concept

1. This emphasises that the key task of the company is not only to determine the needs

& wants of the target market & delivering

the desired satisfaction but also to

maintains or enhance the consumer’s and

the society’s well being. 2. Societal Marketing Concept differs from

marketing concept in respect of the

following -:

Marketing Concept Societal Marketing

Concept1. Consumers express

needs & wants

Consumers

unexpressed interest

2. Consumers interestfirst & then

Societies well being& interest- strive to

Societal Marketing Concept

Society(Human Welfare)

Consumers(Wants)

Company(Profits)

SocietalMarketing

Concept

Marketing & Sales Concepts Contrasted

FactoryExistingProducts

Sellingand

Promotion

Profitsthrough

Volume

MarketCustomer

IntegratedMarketing

Profitsthrough

Satisfaction

The Selling Concept

The Marketing Concept

StartingPoint

Focus Means Ends

The Marketing Process

Contd…

The marketing process consists of the

following activities-:

a) Analysing Market Opportunities

b) Selecting Target Markets

c) Developing marketing Mix

d) Managing the Marketing Effort

Contd..

At the centre there are customers & our objective will be to build a strong relationship.

First step is market segmentation, targeting

& positioning, to decide which customers the company should serve & how ?

Process identifies-: Total target market

Divide them into smaller segments

Select most romisin se ments

Contd..

Next step is to design a marketing mix (product. price, place & promotion)

For selecting best marketing mix company

engage itself into-:

Marketing analysis

Planning

Implementation

Control Activities

INTEGRATED MARKETING

When all the company’s departments work together to serve the customers interests the

result is “INTEGRATED MARKETING”

Integrated marketing takes place at 2 levels

Various Marketing Various

Organisational

Functions

External Vs Internal Marketing

EXTERNAL

Marketing

Directed at people

outside thecompany

INTERNAL

Task of

successfully

hiring, training, &motivating able

employees who

want to serve the‟

PROFITABILITY

In case of private firms, the major

goal is profit

In case of non-profit & public

organisations, the major goal is

surviving & attracting enough

unds to er orm their work.

Why organisations prefer marketing concept ?

Sales Decline

Slow Growth

Changing Buying Patterns

Increasing Competition

Increasing Marketing

Expenditures

Customer Value

It is the difference between Total Customer

Value & Total Customer Cost

TCV-: It is the bundle of benefits

customer’s expect from product & services

TCC-: It is the bundle of costs customer’s

expect to incur in evaluating, obtaining &

CUSTOMER VALUE

•PRUDUCT VALUE

•SERVICES VALUE

•PERSONNEL VALUE

•IMAGE VALUE

•MONETARY COST

•TIME COST

•ENERGY COST

•PSYCHIC COST

CUSTOMER

DELIVERED

CUSTOMER SATISFACTION

“Customer satisfaction is a person’s

feelings of pleasure or

disappointment resulting from comparing a products perceived

performance (outcome) in relation to his/her expectations.”

TOOLS FOR TRACKING & MEASURING

COMPLAINT & SUGGESTION SYSTEMS

Customer centeredorganisations makes it easy forits customers to deliver

suggestions & complaints.Example-: Hotels & Restaurants

provide forms for guests to

report likes & dislikes

TOOLS FOR TRACKING & MEASURING

GHOST SHOPPING

Companies can hire persons to

pose as potential buyer’s toreport their findings on strong& weak points they experienced

in buying the company’sproducts.

LAST CUSTOMER ANALYSIS

MARKET ORIENTED STRATEGIC

PLANNING

It is the managerial process for

developing & maintaining a viable fit

between the organisations objective,skills & resources & its changing

market opportunities.

The aim of strategic planning is to ’

Marketing Mix

It is the set of marketing tools that the

firm uses to pursue its marketing

objectives in the target market. According to Philip Kotler ,“ The

marketing mix is the set of controllable ,tactical , marketing tools that the firm

blends to produce the response it wants

in tar et market .”

Contd..

Marketing Mix Consists of -:

PRODUCT PRICE

PLACE PROMOTION

M k i Mi V i bl

Marketing-Mix Variables

PRODUCT

Most basic Marketing Tool

It is the firm’s tangible offer to the market which includes the product quality,features, design, branding, & packaging.

Leasing, delivery, repair, & training arealso the part of product offering.

The amount of money that customers

pay for the product .

Price should commensurate with the

offer’s perceived value. If it is not,buyer’s will turn to competitors

products.

Another key Marketing-Mix tool

Includes the various activities the company undertakes to make the product accessible &

available to target customers.

Company must identify, recruit, & link various

marketing facilitators to supply its products &

services efficiently to the target market.

PROMOTION

It includes all the activities the company undertakes to communicate &

promote its product to the target market

Company has to hire, train, &

motivate salespeople.

MARKETING ENVIRONMENT

DEFINITION

According to Philip Kotler , “ A

company’s marketing environment

consists of the actors and forces outside marketing that affect

management’s ability to build and maintain successful relationships with

target customers .”

MICRO ENVIRONMENT

The microenvironment consists of the actors close to the company that affect its ability to serve its customers.

This Includes -:(1) The company- goals, mission, vision,

administration

(2) The suppliers – raw materials, spares, semi finished goods

(3) The marketing intermediaries-

Microenvironment

MACRO ENVIRONMENT

The macro environment consists of the following larger societal forces

that affect the microenvironment.

This Includes -:

(1) Demographic – Density, location, age, gender, occupation etc.

(2) Economic – size of market, disposable income, willingness to spend etc.

(3) Natural – ecological system, prevention of environment pollution

(4) Technological – communication systems, online shopping etc.

(5) Political – system of govt., centre govt., legislative agencies etc

(6) Legal – laws of land, public & consumer protection acts

(7) Cultural.- culture, values, beliefs, customs, traditions etc

Macro Environment

Opportunities

Examples of Opportunities Posed by Marketing Environment in India

1. The New Economic Policies of the Government of India ingeneral.

2. The New Industrial Policy.

3. Liberalisation of industrial licensing.

4. Foreign Exchange Regulation Act (FERA) and Monopolies andRestrictive Trade Practices Act (MRTP) liberalization.

5. Curtailment of and disinvestments in public sector.

6. The New Trade Policy – lowering of import tariffs, abolition of import licenses, convertibility of rupee, globalisation, etc.

7. Fiscal and monetary reforms, banking sector reforms, capitalmarket reforms.

8. Removal or phasing out of subsidies.

9. Encouragement to foreign direct investment (FDI).

10.Dismantling of price controls and introduction of market-driven

price environment.

Examples of Threats Posed By MarketingEnvironment In India

1.Entry of Multi-National Companies (MNCs)into the Indian market on a large scaleincreases the competition for products andservices.

2.„Survival of the fittest‟ rule forces many

weaker and small-scale companies to closedown due to non-viability.

3.Big players start buying smaller playersthrough mergers and acquisitions.

4.Removal of subsidy affects profitability andviabilit of man industries. (Fertiliser

Threats

MARKETING&

GLOBALISATION

Globalisation

How Globalisation Starts

The developed capitalistic nations

pronounced the globalisation of world

economy & world markets.Many foreign economies deregulated &

encouraged market forces to operate freely

They claimed to create a new world order

through the free market system – free

movement of products, technology, services

REGULATION

The rich nations (G-8) proposed the

World Trade Organisation (WTO) as a

mechanism to regulate world trade.The WTO , combined with the powers

of other world agencies like World Bank (WB) & the International

Monetary Fund (IMF) , began forcing

the develo in countries to o en their

I t f Gl b li ti I di I di

Impact of Globalisation Indian on India

India opted for economic reforms to match the

global changes.

The reform process was initiated in the 1990s & then the congress govt. declared a new

policy on economic reforms which popularly

known as “New Economic Policy, 1991” (NEP’ 1991).

Features of NEP’1991 -:

Contd..

NEP’ 1991

Liberalisation Privatisation GlobalisationMarket

Economy

Full freedomfor entrepreneurs

to enter any Market orIndustry

Private Sectorinvited to play

vital role in theeconomy

Integration of domesticeconomy

with globaleconomy

Allowing themarket

forces to operatefreely. Less

intervention of the State.

PLANNING

Planning is a managerial activity which is a basic requirement for all organisations.

Based on overall plan, each division of the organisation will have to determine its own

Key elements of Planning Activity -:

a) Timing

LEVELS OF PLANNING

In an organisation planning is done at

different levels -:

a) Strategic Planning

b) Tactical Planning

c) Operational Planning

St t i Pl i

“Strategic Planning is the overall corporate

planning. This plan typically covers the

company’s long -range goals & dictates the direction of all departments & divisions

within the company.”

According to Philip Kotler -:

“Strategic Planning is the process of

Strategic Planning

Tactical Planning

“Tactical planning involves specifying

details which pertain to the

organisations activities for a specific

period of time, usually one year”

Features -: A tactic is a means by which a strategy

is implemented

OPERATIONAL PLANNING

“This is done by supervisory

managers & it focuses its attention

on activities of narrower scope & short duration of all the marketing

planning activities.”

Example -:

BASIS STRATEGY TACTICS

Level of

formulation &

Implementati

Top management Lower level

Management

Time Element Continuous &

Irregular

Continuous

Periodic basis

The Time Longer Shorter

Basic Elements of Strategic Planning

There are five basic elements of Strategic

Planning -:

1.Mission

2.Strategic Business Units (SBUs) 3.Objectives

4.Strategic Planning Tools

MISSION

It is a statement in which, the organisation

define

a) Its business b) What makes it different from competitors

c) What consumers it serves d) What needs it satisfies

e) What type of products it offers

Indicates boundaries or an or anization’s

Strategic Marketing Planning

MarketCompetitive

Profitability

Decide thenature &

scope oforg.

Determinevarious

activitiesthat makeup the

totaloperations

of acompany

Product mixgrids

Macro Levelto Micro

• Based onthe goalsof an org.

Strategic Business Units (SBUs)

Strategic Business Units.

Characteristics of SBUsIt may be brand, or a product line or

separate division of the company.

It is having distinct mission and objectives.

Be a separately identifiable business Have a distinct mission

Have separate competitors

Have a separate group of executives

Strategic planning models used in assessing the existing businesses:

BCG matrix

GE matrix

BCG matrix( Boston Consultancy

BCG matrix( Boston ConsultancyGroup)

identify company’s SBUs position in the market.

strength,

weaknesses, opportunities and threats

Growth share matrix”

2 x 2 4 quadrants

Company’s Relative Market Share

Cash cows Dogs

Question marks

High Low

Company s Relative Market Share

M a r k e t g r o w t

h r a t e

Contd..

Axis components:1. Market growth rate: The rate at which market

is growing

2. Relative market share: Market share of the

SBU divided by the market share of the largest

competitor.

Model components:

Star : This category represents the high

market share and high industry growth.

SBUs in this category require large investment

Contd…

Question Mark: This category represents

high market growth and low market share.

SBUs in this category has two options, either to invest heavily and bring them to star position

or divest / liquidate from that position.

Dogs: SBUs in this category generates less

cash for the company as it operates in low

growth and low market share.

Usually companies will not invest in this

GE / McKinsey Matrix

GE/McKinsey Matrix is another great

portfolio analysis tool developed by

McKinsey & Company in the 70s.First-class consultants like McKinsey &

Company and CEOs and COOs like to use

them to better assess their business units.

Consultants would plot the business units

in the chart and decide whether they should

GE MATRIX

GE Matrix (General Electric)

Management can use the GE business

matrix to classify SBU‟s on the basis of

two factors -:

a. Market / Industry Attractiveness :might be determined by such factors

as the rate of industry growth, thenumber of competitors in an industry,and the weakness of competitors

within an industry.

GE M t i

GE Matrix

Invest strategy In this position SBU

a. Should receive ample resources

b. Should be supported by well financedmarketing efforts.

Protect strategy SBU’s in this position should

a. Allocate the resources selectively.

Harvest strategy

a. SBUs should not receive substantial newresources and if required, sell them.

Divest strategy a. SBUs which falls into this category

should not receive any resources and sell it

GE Matrix

Marketing Planning

“ Marketing Planning is the direction of company‟s marketing efforts & resourcestowards present marketing objectives of -:

GrowthSurvivalMinimisation of risksMaintaining status quo

Profit maximizationService to customersDiversification

Image building & so on.” “

MARKETING PLAN

“ The Marketing plan is the detailed

scheme of the marketing strategies

& activities associated with each product’s marketing mix.”

“ Marketing plan is the document of

uture course o action that s ells

MARKETING PLANNING PROCESS

Marketing Planning Process

1) Assessing Opportunities & Threats

2) Establishing Marketing Objectives

3) Framing marketing strategies & Polici

4) Programming Operations

5) Developing Marketing Mix

6) Designing Resource Mobilization Plan

7) Monitoring the Operations

Step-1 Assessing Opportunities &

p g ppThreats

Assesses major threats & opportunities that the product might face.

It helps management to anticipate

important positive or negative developments

that might have impact on the firm & its

strategies.

Major steps are -:

Step-2 Establishing Marketing

An objective is a temporary estimate of

desirable future result that cannot be

predicted with accuracy but is achievable through efforts

It states the marketing objectives that the company would like to attain

during the plan’s term and discuss key

issues that will a ect their attainment

Step-2 Establishing Marketing Objectives

Step-3 Framing marketing strategies &

It outlines the broad marketing logic by

which the business unit hopes to achieve its

marketing objectives & the specifics of -:a) Target markets

b) Positioning

c) Market expenditures etc.

It outlines specific strategies for each

Step 3 Framing marketing strategies &

Policies

Step-4 Programming

This step spells out how marketing strategies will be turned into specific action programs.

These are based on the input of policies &

strategies

Various operations can be -:1) Product mix Plan

2) Sales force Plan

3) Adv. & sales promotion Plan

p g gOperations

Step-5 Developing Marketing

It involves the integration of various

activities & the critical evaluation of

sub-plans in relation to others in terms of costs incurred & benefits derived.

EXAMPLE -:

Advertising Plan needs to think about

Step 5 Developing Marketing Mix

Step-6 Designing Resource Mobilization

Step 6 es g g esou ce ob at o

This is basically an implementationstage

Resource mobilization plan portrays -:

a)Quantum of resources

b)Types of resourcesc)Costs of resources

to be used to implement the master plan

Step-7 Monitoring the Operations

Control is the counter side of planning.

Control will be used to monitor progress &

allow higher management to review implementation results & spot products that

are not meeting their goals.

Monitoring has four major aspects

1) Fixing the standards

Marketing Information System

DEFINITION

According to Prof. Cundiff, Still & Govani

“ Marketing Information System (MIS) is an

organised set of procedures, information

handling, routines & reporting techniquesdesigned to provide information required

for making marketing decisions.”

According to Kotler

“ A marketing information system is a

continuing and interacting structure of

NEED OF MARKETING INFORMATION

Because of Dynamic & Highly competitive environment theorganisations are undercontinuous threat & to survive

they need to be updated withthe recent information.

Need of MIS arises because of underlinedreasons -:

Knowledge of consumer demand

Growing complexity of marketing

Benefits Of MIS

It allows marketing managers to carry outtheir analysis, planning, implementation& control responsibilities more effectively.

It ensures effective tapping of marketingopportunities & enables the company todevelop effective safeguard against

emerging marketing threats.It provides marketing intelligence to the

firm & helps in early spotting of changing

trends.

Types of Marketing Information

A Marketing information System supplies 3 types of information -:

a)Recurrent Informationb)Monitoring Information

c)Problem Related or Customized

Information

Recurrent Information

It is the data that MIS supplies periodically at a weekly, monthly, quarterly or annually.

This includes data such as -:a)Sales data

b)Market Share

c)Sales call reports

d)Inventory Levels

e)Payables & Receivables

Monitoring Information

It is the data obtained from regular scanning of certain sources such as trade

journals & other publications.

Relevant data from external data is

captured to monitor changes & trends related to marketing situation

Problem Related or Customized Information

It is the information which is developed in response to some specific requirement

related to a marketing problem or any other particular data requested by a manager.

Primary Data or Secondary Data are collected through survey research in

response to a specific need.

COMPONENETS OF MIS

Marketing Information System

Analytical

Marketing System

Internal

Reports System

MarketingResearch System

MarketingIntelligence System

Marketing Managers ( AnalysisPlanning

ImplementationControl)

Marketing Environment ( Target MarketsMarketing ChannelsCompetitors PublicsMacro Environment)

M a r k e t i n g D e c i s i o n s a n

d C o m m u n i c a t i o

COMPONENETS

INTERNAL REPORT SYSTEM

MARKETING INTELLIGENCE

SYSTEMMARKETING RESEARCH

SYSTEM

ANALYTICAL MARKETING

SYSTEM

INTERNAL REPORT SYSTEM

The internal accounting system involvesusing marketing data available from withinthe company as a means of indicating thecost effectiveness of the firm.

Relationship of internal forces & theirrelationship to good information

management influence the decisionmaking.

Internal data includes-:

1) Operation reports- prod’ schedules,

MARKETING INTELLIGENCE

SYSTEM

It involves the collection & analysis of publicly available information about

competitors & developments in the marketing

information.Goal of Marketing intelligence is to improve

strategic decision making, assesses & track

competitors actions & provide early warning of opportunities & threats.

MARKETING RESEARCH SYSTE

It provides intense but short lived insight into particular areas of marketing.

Marketing research information includes -:

a) Buyer behaviour

b) Product or Brand preferences

c) Product Usage

d) Advertising Awareness

ANALYTICAL MARKETING SYSTEM

Application of scientific methodology & quantitative techniques to business or other

operating problems.

Operation researchers use mathematical models

in their analysis

These models are used for -:

1) Media Selection

MARKEITNG RESEARCH

According to AMA (American Marketing Association)

“ Marketing Research is the function which links the consumer, customers, & public to

the marketer through information –

information used to identify & define marketing opportunities & problems ;

generate, refine, evaluate marketing actions

monitor mar etin er ormance &

FEATURES OF MARKETING RESEARC

IT IS A SYSTEMATIC PROCESS - It has to

be carried out in a stepwise & systematic

manner & the whole process needs to be

planned with a clear objective.

IT SHOULD BE OBJECTIVE – It is

important that the methods employed &interpretations are objective. The research

should not be carried out to establish an

opinion nor should it be intentionally suited

OBJECTIVES OF MARKETING

RESEARCH

Marketing Research may be conductedfor different purposes -:

1) To understand why customers buy a product.

2) To forecast the probable volume of future

sales or expected market share.

3) To assesses competitive strengths &

strategies.

RESEARCH

MARKETING RESEARCH PROCESS

Marketing Research Process

1) Define the Problem & Research

2) Develop the Research Plan & Designs

3) Collect the Information

4) Analyze the Information

7) Present the Findings

SAMPLING

Sampling is a selection of units from the entire group called the population or universe of

interest.

Choosing small no. of items picked up from a

large no. of items, that sample will tend to

possess almost the same characteristics as the larger or the whole group of items

A sampling plan must indicate -:

1) Sampling Unit (Respondents)

Classification of Sampling Techniques

Sampling Techniques

Nonprobability

Sampling Techniques

Probability

Sampling Techniques

ConvenienceSampling

JudgmentalSampling

QuotaSampling

SnowballSampling

SystematicSampling

StratifiedSampling

ClusterSampling

Other SamplingTechniques

Simple RandomSampling

Convenience Sampling

Convenience sampling attempts toobtain a sample of convenientelements. Often, respondents areselected because they happen tobe in the right place at the righttime.

use of students, and members of socialorganizations

mall interce t interviews without ualif in

Quota Sampling

Quota sampling may be viewed astwo-stage restricted judgmentalsampling.The first stage consists of developing control

categories, or quotas, of population elements.In the second stage, sample elements are

selected based on convenience or judgment.

PROBABILIT Y

SAMPLING

TECHNIQUE S

Simple Random Sampling

Each element in the population has aknown and equal probability of selection.

Each possible sample of a given size (n)

has a known and equal probability of

being the sample actually selected.

This implies that every element is

selected independently of every other

element.

Systematic Sampling

The sample is chosen by selecting arandom starting point and then pickingevery ith element in succession from thesampling frame.

The sampling interval, i, is determined by dividing the population size N by thesample size n and rounding to the nearest

integer.

If the ordering of the elements produces acyclical pattern, systematic sampling may decrease the re resentativeness of the

Stratified Sampling

A two-step process in which thepopulation is partitioned intosubpopulations, or strata.

The strata should be that where every population element should be assigned toone and only one stratum and nopopulation elements should be omitted.

Next, elements are selected from eachstratum by a random procedure, usually SRS.

The elements within a stratum should be

as homogeneous as possible, but the

Cluster Sampling

The target population is first divided intosubpopulations, or clusters.

Then a random sample of clusters is

selected, based on a probability samplingtechnique such as SRS.

For each selected cluster, either all the

elements are included in the sample (one-stage) or a sample of elements is drawnprobabilistically (two-stage).

Elements within a cluster should be as

SOURCES OF DATA

MARKETINGRESEARCH

PRIMARY DATA

SECONDRY DATA

Primary vs. Secondary Data

Primary Data are originated by aresearcher for the specific purposeof addressing the problem at hand.

The collection of primary datainvolves all six steps of themarketing research process

Secondary Data - which havealready been collected for purposes

Ch-1 Core Marketing Concepts1

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