March 1, 2022

2019july [tnc-pdf-viewer-iframe file=”https://knecnotes.co.ke/wp-content/uploads/2022/03/2019july-1_OCR.pdf” width=”100%” height=”800″ download=”false” print=”false” fullscreen=”true” share=”true” zoom=”true” open=”true” pagenav=”true” logo=”true” find=”true” current_view=”true” rotate=”true” handtool=”true” doc_prop=”true” toggle_menu=”true” toggle_left=”true” scroll=”true” spread=”true” default_scroll=”0″ default_spread=”0″ language=”en-US” page=”” default_zoom=”auto” pagemode=”none” iframe_title=””](1)_OCR

2018nov_O[tnc-pdf-viewer-iframe file=”https://knecnotes.co.ke/wp-content/uploads/2022/03/2018nov_OCR.pdf” width=”100%” height=”800″ download=”false” print=”false” fullscreen=”true” share=”true” zoom=”true” open=”true” pagenav=”true” logo=”true” find=”true” current_view=”true” rotate=”true” handtool=”true” doc_prop=”true” toggle_menu=”true” toggle_left=”true” scroll=”true” spread=”true” default_scroll=”0″ default_spread=”0″ language=”en-US” page=”” default_zoom=”auto” pagemode=”none” iframe_title=””]CR

2017ju[tnc-pdf-viewer-iframe file=”https://knecnotes.co.ke/wp-content/uploads/2022/03/2017july_OCR.pdf” width=”100%” height=”800″ download=”false” print=”false” fullscreen=”true” share=”true” zoom=”true” open=”true” pagenav=”true” logo=”true” find=”true” current_view=”true” rotate=”true” handtool=”true” doc_prop=”true” toggle_menu=”true” toggle_left=”true” scroll=”true” spread=”true” default_scroll=”0″ default_spread=”0″ language=”en-US” page=”” default_zoom=”auto” pagemode=”none” iframe_title=””]ly_OCR

2013ju[tnc-pdf-viewer-iframe file=”https://knecnotes.co.ke/wp-content/uploads/2022/03/2013july_OCR.pdf” width=”100%” height=”800″ download=”false” print=”false” fullscreen=”true” share=”true” zoom=”true” open=”true” pagenav=”true” logo=”true” find=”true” current_view=”true” rotate=”true” handtool=”true” doc_prop=”true” toggle_menu=”true” toggle_left=”true” scroll=”true” spread=”true” default_scroll=”0″ default_spread=”0″ language=”en-US” page=”” default_zoom=”auto” pagemode=”none” iframe_title=””]ly_OCR

The last category of products mentioned as the industrial goods classification involves the materials ( raw materials such as wood, cooper, aluminum) and parts (tiers, computer chips) , capital items such as installations and equipment (cranes, bulldozers), accessory equipment (hand tools, computers, calculators), process materials (food preservatives), operating supplies ( papers, pencils, oil). Other ways of Product Classifications 1. Consumer product: Product bought by final consumer for personal consumption. There are four types of consumer goods. 2. Convenience Product: Consumer product that the customer usually buys frequently, immediately, & with a minimum of comparisons and buying effort. Convenience Products Is a relatively inexpensive and frequently purchased. The buyer spends little time in planning the purchase of a convenience item or in comparing available brands or sellers. 3. Shopping Product: Consumer good that the customer purchase after the process of selection. It requires characteristically compares on such bases as suitability, quality, price, and style. e.g. clothing, Appliances, Furniture, Men‘s Suites, Bicycles, Cellular Phones etc 4. Specialty Product: Consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. Examples of specialty products are: Unique Sports Cars, Rare imported wine, Specific type of antique china Special handcrafted furniture etc. 5. Unsought product: Consumer products that the consumer either does not know about or do not want to think normally before buying. It has some emotional feelings. e.g. donations. 6. Industrial Product: Product bought by individuals and organization for further processing or for use in conducting a business. 7. Materials and parts: Raw materials are the basic materials that actually become part of the product. They are provided form mines, forests, oceans, farms and recycled solid wastes. 8. Capital Items: Capital items consist of office accessories and operating materials. 9. Supplies: Supplies facilitate productions, but they do not become part of he finished product. Paper, pencils, oils, cleaning agents and paints are examples. 10.Industrial Services: Industrial services include maintenance and repair services such as machinery repair and business advisory services such as legal, management, consulting, advertising, marketing research services. These services can be acquire internally as well as externally. Classifying products into meaningful categories helps marketers decide which strategies and methods will help promote a business‘s product or service. Many types of classification exist. For example, marketers might categorize products by how often they are used. One-time-use products, such as vacation packages, require completely different marketing strategies than products customers use repeatedly, such as bicycles. Product classification helps a business design and execute an effective marketing plan. The key is to categorize your products in ways that make sense for your business. This allows you to, for example, design separate marketing campaigns for each category of product you offer. The alternative of using a one-size-fits-all marketing plan is often less effective than implementing several highly targeted plans. No simple recipe exists for categorizing products and services, but there are some common product classifications in marketing: convenience, shopping, specialty and unsought products

The non-durable category consists of tangible goods that are low priced and purchased frequently such as shampoos, deodorants, etc. Compared with these ones, the durable goods are also tangible goods but are targeted for many uses. For this category, more personal selling is required as well as guarantee to be provided, resulting in higher margin. Relevant example can be the couches or chairs.

Product refers to anything that can be offered to a marketer for attention, acquisition, use or consumption that might satisfy a want or need. A product is a set of tangible and intangible attributes, which may include packaging, color, price, quality, brand and seller‘s services and reputations. In every part of the world there are different systems of product classification. The concept of ―product classification‖ consists of dividing products according to specific characteristics so that they form a structured portfolio. In general, manufacturers use an informal product classification system but there are also many standardized methods of product classification devised by various industry organizations. A basic product classification can be made based on consumer and business products. The consumer products are afterwards divided based on preference for shopping habits or durability and tangibility. The business products are the industrial goods.

A product is like a human being. It is born, grows up fast, matures and then finally passes away. The product life cycle discusses the stages which a product has to go through since the day of its birth to the day it is taken away from the market. However, the basic difference in case of human beings and products is that a product has to be killed by someone. Either the company (to bring better products) or by competition (too much external competition). There are several products in the market which have lived on since ages (Light Bulbs, Tubelights), whereas there are others which were immediately taken off the shelf (HD DVD).Thus the Product life cycle deals with four stages of a products life. Products typically go through four stages during their lifetime. Each stage is different and requires marketing strategies unique to the stage. Stage 1 – Introduction of the product The stage 1 is where the product is launched. A product launch is always risky. You never know how the market will receive the product. There have been numerous failures in the past to make marketers nervous during the launch of the product. The length of the introduction stage varies according to the product. If the product is technological and receives acceptance in the market, it may come out of the introductory phase as soon as it is launched. Whereas if the product is of a different category altogether and needs market awareness, it may take time to launch. This stage involves introducing a new and previously unknown product to buyers. Sales are small, the production process is new, and cost reductions through economies of size or the experience curve have not been realized. The promotion plan is geared to acquainting buyers with the product. The pricing plan is focused on first-time buyers and enticing them to try the product. Characteristics of Introductory stages of Product life cycle 1. Higher investment, lesser profits 2. Minimal Competition 3. Company tries to Induce acceptance and gain initial distribution 4. Company needs Promotions targeted towards customers to increase awareness and demand for product 5. Company needs Promotions targeted towards channel to increase confidence in the product Stage 2: Growth of the product Once the introductory phases are over, the product starts showing better returns on investment. Your customers and channels begin responding. There is better demand in the market and slowly the product starts showing profits. This is a stage where competition may step in to squash the product before it has completely launched. Any marketing mistakes done at this stage affect the product considerably as the product is being exposed to the market and bad news travels fast. Thus special care has to be taken in this stage to ensure competition or bad decisions do not affect the growth stage of the product. In this stage, sales grow rapidly. Buyers have become acquainted with the product and are willing to buy it. So, new buyers enter the market and previous buyers come back as repeat buyers. Production may need to be ramped up quickly and may require a large infusion of capital and expertise into the business. Cost reductions occur as the business moves down the experience curve and economies of size are realized. Profit margins are often large. Competitors may enter the market but little rivalry exists because the market is growing rapidly. Promotion and pricing strategies are revised to take advantage of the growing industry. Characteristics of Growth stage of Product life cycle 1. Product is successfully launched 2. Demand increases 3. Distribution increases 4. Competition intensifies 5. Company might introduce secondary products or support services. 6. Better revenue generation and ROI Stage 3: Maturity stage of the product In this stage the market becomes saturated. Production has caught up with demand and demand growth slows precipitously. There are few first-time buyers. Most buyers are repeat buyers. Competition becomes intense, leading to aggressive promotional and pricing programs to capture market share from competitors or just to maintain market share. Although experience curves and size economies are achieved, intense pricing programs often lead to smaller profit margins. Although companies try to differentiate their products, the products actually become more standardized One of the problems associated with maturity stages in a technologically advanced environment is the problem of duplication. Not only is the product available in duplicate markets, but also there are several competing products which arise with the same features and capabilities. As a Along with competition, Penetration pricing becomes a weapon for competitors. Competitors sell products with the same features at lesser prices thereby trying to penetrate in the market. Nonetheless, The sales of a product (especially sales from return customers) is at its peak point during the maturity stages. The growth of sales may be lesser, but the sales revenue of the organization is maximum during the maturity stage of product life cycle. Characteristics of Maturity stages of Product life cycle 1. Competition is high 2. Product is established and promotion expenditures are less 3. Little growth potential for the product 4. Penetration pricing, and lower profit margins 5. The major focus is towards extending the life cycle and maintaining market share 6. Converting customers product to your own is a major challenge in maturity stage Stage 4: Decline Stage 1 product, 10 competitors, minimum profits, huge amount of manpower and resources in use – A typical scenario which a product might face in its last stage. In this stage the expenditures begin to equal the profits or worse, expenses are more than profits. Thus it becomes a typical scenario for the product to exit the market. It also becomes advantageous for the company as the company can use resources it was spending on the declining product on an altogether different project. In this stage buyers move on to other products and sales drop. Intense rivalry exists among competitors. Profits dry up because of narrow profit margins and declining sales. Some businesses leave the industry.

It states that, people will buy more at lower prices and buy less at higher prices other things remaining the same. When a price of a commodity increases, quantity demanded increases keeping other things constant. There is an inverse relationship between the price of a good and demand. 1. As prices fall, we see an expansion of demand. 2. If price rises, there will be a contraction of demand.

There are mainly 8 types of demands which have to be taken into consideration during demand forecasting. The various types of demands, and how to tackle the challenges for marketers in these various demands, is discussed below. Negative Demand – Negative demand is a type of demand which is created if the product is disliked in general. The product might be beneficial but the customer does not want it. For example – Dental work where people don‘t want problems with their teeth and use preventive measures to avoid the same. Insurance, which people should have but they delay buying an insurance policy. Similarly, people would like to avoid heart attacks and hence may pay for a full body check up where the results might be negative, but still the customer has to pay. The marketer has to solve the issue of no demand by analyzing why the market dislikes the product and then counter acting with the right marketing tactics. Unwholesome demand – Unwholesome demand is the other side of Negative demand. In negative type of demands, customer does not want the product even though product might be necessary for the customer. But in unwholesome demand, the customer should not desire the product, yet the customer wants the product badly. Best example of unwholesome demand are cigarettes, alcohol, pirated movies, guns etc. No demands – Certain products face the challenge of no demand. The best example for the same can be education courses where there is very low demand or no demand at all. Such cases are very hard to counter. Latent Demand – Latent demand is, as the name suggests, a demand which the customer realizes later. Thus, while buying the product, he might not desire some features. But later on, he might think about those features and buy the product. The best example of latent demand are normal phones vs smart phones. People nowadays want more and more features in the smartphone. They might settle for a normal phone, but then later on they get the itch to buy a smart phone. Similarly, people might buy a petrol car. But most likely their second car will be a diesel car. A marketing managers job is to find out the features which people might be looking for later and market them to the customer in such a manner that he immediately wants them. Declining demand – Declining demand is when demand for a product is declining. For example, when CD players were introduced and IPOD came in the market, the demand for walkman went down. Although there was still a demand for the product, the demand was a declining demand. A marketers job in such a case to think ways to revive the product so that the demand is not declining. Irregular demand – Irregular demand can be demand which is not consistent. The best example of irregular demand is seasonal products like umbrellas, air conditioners or resorts. These products sell irregularly and sell more during peak season whereas their demand is very low during non seasons. The best way to counter irregular demand is to introduce incentives for the customer to buy the product. Full demand – In an ideal environment, a company should always have full demand. Full demand means that the demand is meeting the supply potential of the company. It also means that the markets are happy with the products of the company and that people want to buy from the same company. The marketing challenge in this type of demand is to maintain the same level of interest in the product and the company. Overfull demands – Overfull demands happen when the companies manufacturing capacity is limited but the demand is more than the supply. This can be observed in the cement industry occasionally. Generally, most cement industries have limited manufacturing capacity. And hence, brand switching in cement industry is high. Many companies use de marketing techniques to counter act overfull demands. This is because if the company keeps marketing, but it is not able to supply the material, then the company might suffer badly in brand equity. Above are the 8 types of demand which a marketing manager has to forecast and manage at all times. Each type of demand has its own challenges and the marketing manager needs to be quick on his feet to manage all the different type of demands.

Change in Fashion: Is an inevitable consequence of advancement of civilization. Results of demand forecasting have short lasting impacts especially in a dynamic business environment. Consumers’ Psychology: Results of forecasting depend largely on consumers‘ psychology, understanding which itself is difficult. Uneconomical: Requires collection of data in huge volumes and their analysis, which may be too expensive for small firms to afford. Estimation process may take a lot of time, which may not be affordable. Lack of Experienced Experts: Accurate forecasting necessitates experienced experts, who may not be easily available. Forecasting by less experienced individuals may lead to erroneous estimates. Lack of Past Data: Requires past sales data, which may not be correctly available. Typical problem in case for a new product.

The Demand forecasting process of an organization can be effective only when it is conducted systematically and scientifically. 1. Setting the Objective: Refers to first and foremost step of the demand forecasting process. An organization needs to clearly state the purpose of demand forecasting before initiating it. Setting objective of demand forecasting involves the following: 1. Deciding the time period of forecasting whether an organization should opt for short term forecasting or long-term forecasting 2. Deciding whether to forecast the overall demand for a product in the market or only for the organizations own products 3. Deciding whether to forecast the demand for the whole market or for the segment of the market 4. Deciding whether to forecast the market share of the organization 2. Determining Time Period: Involves deciding the time perspective for demand forecasting. Demand can be forecasted for a long period or short period. In the short run, determinants of demand may not change significantly or may remain constant, whereas in the long run, there is a significant change in the determinants of demand. Therefore, an organization determines the time period on the basis of its set objectives. 3. Selecting a Method for Demand Forecasting: Constitutes one of the most important steps of the demand forecasting process Demand can be forecasted by using various methods. The method of demand forecasting differs from organization to organization depending on the purpose of forecasting, time frame, and data requirement and its availability. Selecting the suitable method is necessary for saving time and cost and ensuring the reliability of the data. 4. Collecting Data: Requires gathering primary or secondary data. Primary‘ data refers to the data that is collected by researchers through observation, interviews, and questionnaires for a particular research. On the other hand, secondary data refers to the data that is collected in the past; but can be utilized in the present scenario/research work. 5. Estimating Results: Involves making an estimate of the forecasted demand for predetermined years. The results should be easily interpreted and presented in a usable form. The results should be easy to understand by the readers or management of the organization.