Mgt

1. Nature and Scope of Management: Management
Management: the process of dealing with or controlling things or people
The organization and coordination of the activities of a business in order to achieve defined objectives.
Significance and objectives:
Organisational Objectives: Survival, Profit, Growth
Social Objectives: To make available employment opportunities, To save environment from getting polluted, To
contribute in improving living standard
Personal or Individual Objectives: To give deserving remuneration, To provide good working environment, To
provide a share in profit
Human objectives: Employees welfare, Satisfaction of customers, Shareholders satisfaction
Economic objectives: Profit earning, Production of goods, Creating markets, Technological improvement
Managementas a Process:Managementisadistinctprocessconsistingof planning,organizing,actuatingandcontrolling,
performed to determine and accomplish stated objective by the use of human beings and other resources
Management as a Profession: A profession may be defined as an occupation that requires specialized knowledge and
intensiveacademicpreparationstowhichentryisregulatedbyarepresentative body.The essentialsof aprofessionare:
SpecializedKnowledge, Formal Education & Training, Social Obligations, Code of Conduct, Representative Association
FrederickTaylor and ScientificManagement: Taylorbelievedthatall workersweremotivatedbymoney,sohe promoted
the idea of "a fair day's pay for a fair day's work." In other words, if a worker didn't achieve enough in a day, he didn't
deserve to be paid as much as another worker who was highly productive.
Taylor's four principles are as follows:
 Replace workingby"rule of thumb,"orsimple habitandcommonsense,and insteaduse the scientificmethodto
study work and determine the most efficient way to perform specific tasks.
 Ratherthansimplyassignworkerstojustanyjob,matchworkerstotheirjobsbasedoncapabilityandmotivation,
and train them to work at maximum efficiency.
 Monitor worker performance, and provide instructions and supervision to ensure that they're using the most
efficient ways of working.
 Allocate the work betweenmanagersandworkersso that the managersspendtheirtime planningand training,
allowing the workers to perform their tasks efficiently.
Fayol's 14 Principles of Management
 Divisionof Work –Whenemployeesare specialized,outputcanincreasebecause theybecome increasinglyskilled
and efficient.
 Authority –Managers musthave the authoritytogive orders,buttheymustalsokeepinmindthatwithauthority
comes responsibility.
 Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
 Unity of Command – Employees should have only one direct supervisor.
 Unityof Direction – Teamswiththe same objective shouldbe workingunderthe directionof one manager,using
one plan. This will ensure that action is properly coordinated.
 Subordination of Individual Interests to the General Interest – The interests of one employee should not be
allowed to become more important than those of the group. This includes managers.
 Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and
non-financial compensation.
 Centralization – This principle referstohow close employeesare to the decision-makingprocess.Itis important
to aim for an appropriate balance.

2.  Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of
command.
 Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
 Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with
kindness where appropriate.
 Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning
should be a priority.
 Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
 Esprit de Corps – Organizations should strive to promote team spirit and unity.
Management Theory of Elton Mayo
EltonMayo developedamatrix whichhe usedtoillustratethe likelihoodthatagiventeamwouldbe successful.Hismatrix
demonstratesthe role thatvaryingcombinationsof groupnormsandgroupcohesivenessplayinteameffectiveness.The
following are the four combinations of Mayo theory and the effect of each on team dynamics:
 Groups with low norms and low cohesivenessare ineffective; they have no impact, since none of the members
are motivated to excel, according to Mayo's theory.
 Groupswithlownormsandhighcohesivenesshave anegativeimpact,sincefellowmembersencouragenegative
behavior (e.g., gangs).
 Groups withhigh norms and lowcohesivenesshave some degree of positive impactthroughindividual member
accomplishments.
 Groups with high norms and high cohesiveness have the greatest positive impact, Mayo's theory predicts, since
group members encourage one another to excel.
Planning and decision making
Management planning is the process of assessing an organization's goals and creating a realistic, detailed planof action
for meetingthose goals.Muchlike writinga businessplan,amanagementplantakesintoconsiderationshort- andlong-
term corporate strategies.
Management by Objectives - Meaning, Need and its Limitations
The processof settingobjectivesinthe organizationtogive asenseof directiontothe employeesiscalledasManagement
by Objectives.
Need for Management by Objectives (MBO)
 The Management by Objectives process helps the employees to understand their duties at the workplace.
 KRAs are designed for each employee as per their interest, specialization and educational qualification.
 The employees are clear as to what is expected out of them.
 Management by Objectives process leads to satisfied employees. It avoids job mismatch and unnecessary
confusions later on.
 Employeesintheirownwaycontribute tothe achievementof the goalsandobjectivesof the organization.Every
employee has his own role at the workplace. Each one feels indispensable for the organization and eventually
developsafeelingof loyaltytowardsthe organization.Theytendtostickto the organizationfora longerspanof
time and contribute effectively. They enjoy at the workplace and do not treat work as a burden.
 Management by Objectives ensures effective communication amongst the employees. It leads to a positive
ambience at the workplace.
 ManagementbyObjectivesleadstowelldefinedhierarchiesatthe workplace.Itensurestransparencyatall levels.
A supervisorof any organizationwouldneverdirectlyinteractwiththe Managing Director incase of queries.He
would first meet his reporting boss who would then pass on the message to his senior and so on. Every one is
clear about his position in the organization.
 The MBO Process leads to highly motivated and committed employees.

3.  The MBO Processsetsabenchmarkforeveryemployee.The superiorssettargetsforeachof the teammembers.
Each employee is given a list of specific tasks.
Limitations of Management by objectives Process
 It sometimes ignores the prevailing culture and working conditions of the organization.
 More emphasisisbeinglaidontargets and objectives.Itjustexpectsthe employeestoachieve theirtargetsand
meet the objectives of the organization without bothering much about the existing circumstances at the
workplace. Employees are just expected to perform and meet the deadlines. The MBO Process sometimes do
treat individuals as mere machines.
 The MBO process increases comparisons between individuals at the workplace. Employees tend to depend on
nasty politics and other unproductive tasks to outshine their fellow workers. Employees do only what their
superiors ask them to do. Their work lacks innovation, creativity and sometimes also becomes monotonous.
Planning process, types of plans
The process of planning includes the determination of objectives and outlining the future actions that are needed to
achieve these objectives. Various steps that are followed in the process of planning are:
 Identifying the problem
 Gathering information about the activities involved
 Analysis of information
 Determining alternate plans
 Selecting the plan
 Detailed sequence and timing
 Progress check of the plan
Planning Process – Types of the Plans
1. Planning Hierarchy
 Business plans
 SBU plans
 Corporate Plans
 Departmental plans
2. Conceptual planning
Provides some type of the guidance for the planning but the major drawback in this type of the planning is that the
planning unit is not at all visible, whose presence is very much critical in the planning. The conceptual planning must
consist of the following –
 Policy
 Objectives
 Goals
 Procedures
 Rules
 Budgets
 Vision Statement
 Mission
 Variable plans
3. The Plan document
For gettingaplanneddocument,all the abovestepsare performedandduringthis,one particularthingtokeptinmindis
that the plan must start with the broader objectives and must be linked stepbystep to the actionable and the
implementation activity.
4. The program

4. Wheneveranyactivityiscarriedout,itiscarriedouttoachieve one thingorthe other.Butthe resultsthatone expectsto
be obtainedmustbe achievedinthe properframe of the time,sothattheycanbe usedatthe righttime forvariousother
activities. Hence, in order to get the results within the certain time frame, a program is drawn.
Organizing
The major functions that a manager completes can be categorized into four different functions, known as planning,
organizing, leading,and controlling; a fifth functionof staffing also appearsin some management literature. This lesson
will focuson the secondmanagerial function,knownasorganizing.The organizingfunctioniscarriedoutonce a plan,or
an outline for how to achieve some organizational goal, is in place. Many believe organizing is the most critical of
managerial functions because of its ability to help or hinder an organizational plan and thus profoundly affect
organizational success.
Types of Organizations
 Line organisational structure.
 Staff or functional authority organisational structure.
 Line and staff organisational structure.
 Committee organisational structure.
 Divisional organisational structure.
 Project organisational structure.
 Matrix organisational structure and
 Hybrid organisational structure.
Direction
4 Types of Direction in Formal Communication
 Downward communication
 Upward communication
 Lateral or horizontal communication
 Diagonal or crosswise communication
Decision making process
 Identify Problems
 Seek Information
 Brainstorm Solutions
 Choose an Alternative
 Implement the Plan
 Evaluate Outcomes
Staffing
Staffing pertains to recruitment, selection, development and compensation of subordinates
Nature of Staffing Function
 Staffing is an important managerial function- Staffing function is the most important mangerial act along with
planning,organizing,directingandcontrolling.Theoperationsof thesefourfunctionsdependuponthemanpower
which is available through staffing function.
 Staffingisapervasive activity- Asstaffingfunctioniscarriedoutbyall mangersandinall typesof concernswhere
business activities are carried out.
 Staffingisa continuousactivity- Thisisbecause staffingfunctioncontinuesthroughoutthe lifeof anorganization
due to the transfers and promotions that take place.

5.  The basisof staffingfunctionisefficientmanagementof personnels- Humanresourcescanbe efficientlymanaged
by a systemorproperprocedure,thatis,recruitment,selection,placement,traininganddevelopment,providing
remuneration, etc.
 Staffing helps in placing right men at the right job. It can be done effectively through proper recruitment
procedures and then finally selecting the most suitable candidate as per the job requirements.
 Staffingisperformedbyall managersdependinguponthe nature of business,size of the company,qualifications
and skillsof managers,etc.Insmall companies,the topmanagementgenerallyperformsthisfunction.Inmedium
and small scale enterprise, it is performed especially by the personnel department of that concern
Motivation
Often,people confuse the ideaof 'happy'employeeswith'motivated'employees.These maybe related,butmotivation
actuallydescribesthe level of desireemployeesfeel toperform, regardlessof the level of happiness.Employeeswhoare
adequately motivated to perform will be more productive, more engaged and feel more invested in their work. When
employees feel these things, it helps them, and thereby their managers, be more successful.
Expectancy Theory
Expectancytheoryoutlinesthe connectionemployeesexpectbetweeneffortandreward.If an employee doesverywell
and puts forth additional effort, they will likely expect to be rewarded accordingly.
Leadership Styles:
 Visionary. Thisstyle is mostappropriate whenan organizationneedsanew direction.Itsgoal is to move people
towards a new set of shared dreams.
 Coaching. This one-on-one style focuses on developing individuals, showing them how to improve their
performance, and helping to connect their goals to the goals of the organization.
 Affiliative. This style emphasizes the importance of team work, and creates harmony in a group by connecting
people to each other.
 Democratic. This style draws onpeople’sknowledge andskills,andcreatesagroup commitmenttothe resulting
goals. It works best when the direction the organizationshouldtake is unclear, and the leader needs to tap the
collective wisdom of the group.
 Pacesetting. In this style, the leader sets high standards for performance. He or she is “obsessive about doing
things better and faster, and asks the same of everyone.”
 Commanding. This is classic model of “military” style leadership – probably the most often used, but the least
often effective. Because it rarely involves praise and frequently employs criticism, it undercuts morale and job
satisfaction.
General Principles of Effective Communication
 Keeping track of the team
 Keeping the team informed of project progress
 Anticipate time spent on communication
 Formal v. informal
 Agree how decisions will be reached
 Ensure people commit to communication
 Version control
Barriers to effective communication
 The use of jargon. Over-complicated, unfamiliar and/or technical terms.
 Emotional barriersand taboos.Some people mayfindit difficulttoexpresstheiremotionsandsome topicsmay
be completely 'off-limits' or taboo.

6.  Lack of attention,interest,distractions,orirrelevancetothe receiver.(Seeourpage BarrierstoEffectiveListening
for more information).
 Differences in perception and viewpoint.
 Physical disabilities such as hearing problems or speech difficulties.
 Physical barrierstonon-verbal communication.Notbeingable tosee the non-verbal cues,gestures,postureand
general body language can make communication less effective.
 Language differences and the difficulty in understanding unfamiliar accents.
 Expectations and prejudices which may lead to false assumptions or stereotyping. People often hear what they
expect to hear rather than what is actually said and jump to incorrect conclusions.
 Cultural differences. The norms of social interaction vary greatly in different cultures, as do the way in which
emotions are expressed. For example, the concept of personal space varies between cultures and between
different social settings.
 See our page on Intercultural Awareness for more information.
Controlling
A management control system (MCS) is a system which gathers and uses information to evaluate the performance of
different organizational resources like human, physical, financial and also the organization as a whole in light of the
organizational strategies pursued.
Managementcontrol systeminfluencesthe behaviorof organizational resourcestoimplementorganizational strategies.
Management control system might be formal or informal.
Controlling as a Process
 Establishing standards to measure performance
 Measuring actual performance
 Comparing performance with the standard
 Taking corrective action
Marketing management
Marketing management is the organizational discipline which focuses on the practical application of marketing
orientation,techniquesandmethodsinsideenterprisesandorganizationsandonthe managementof a firm's marketing
resources and activities.
Marketing Mix: The marketing mix is a business tool used in marketing and by marketers. The marketing mix is often
crucial whendeterminingaproductorbrand's offer,andisoftenassociatedwiththe fourP's:price,product,promotion,
and place.

7. Role and relevance of segmentation and positioning
Market segmentation
 Market segmentation involvesgrouping your various customers into segments that have common needs or will
respond similarly to a marketing action. Each segment will respond to a different marketing mix strategy, with
each offering alternate growth and profit opportunities.
 Some different ways you can segment your market include the following;
 Demographics which focuses on the characteristics of the customer. For example age, gender, income bracket,
education, job and cultural background.
 Psychographicswhichreferstothe customergroup'slifestyle.Forexample,theirsocial class,lifestyle,personality,
opinions, and attitudes.
 Behaviour which is based on customer behaviour. For example, online shoppers, shopping centre customers,
brand preference and prior purchases.
 Geographical locationsuchascontinent,country,state, province, city or rural that the customer group resides.
Targeting
 SegmentationtargetingandpositioningbusinessAftersegmentingthe marketbasedonthe differentgroupsand
classes, you will need to choose your targets. No one strategy will suit all consumer groups, so being able to
develop specific strategies for your target markets is very important.
 There are three general strategies for selecting your target markets:
 UndifferentiatedTargeting:Thisapproachviewsthe marketasone groupwithnoindividualsegments,therefore
using a single marketing strategy. This strategy may be useful for a business or product with little competition
where you may not need to tailor strategies for different preferences.
 ConcentratedTargeting: Thisapproachfocusesonselectingaparticularmarketniche onwhichmarketingefforts
are targeted. Your firm is focusing on a single segment so you can concentrate on understanding the needs and
wantsof thatparticularmarketintimately.Smallfirmsoftenbenefitfromthisstrategyasfocusingonone segment
enables them to compete effectively against larger firms.

8.  Multi-Segment Targeting: This approach is used if you need to focus on two or more well defined market
segments and want to develop different strategies for them. Multi segment targeting offers many benefits but
can be costlyasitinvolvesgreaterinputfrommanagement,increasedmarketresearchandincreasedpromotional
strategies.
 Priorto selectingaparticulartargetingstrategy,youshouldperforma cost benefitanalysisbetweenall available
strategies and determine which will suit your situation best.
Positioning
Positioningisdevelopingaproductandbrandimage inthe mindsof consumers.Itcanalsoincludeimprovingacustomer's
perception about the experience they will have if they choose to purchase your product or service. The business can
positivelyinfluence the perceptionsof itschosencustomerbase throughstrategicpromotionalactivitiesandbycarefully
defining your business' marketing mix.
Effective positioninginvolvesagoodunderstandingof competingproductsandthe benefitsthatare soughtby yourtarget
market. It also requires you to identify a differential advantage with which it will deliver the required benefits to the
market effectively against the competition. Business should aim to define themselves in the eyes of their customers in
regards to their competition.
BCG Matrix & product Life Cycle

9. The Boston Consulting Group Matrix
The BCG matrix methodis basedon the product life cycle theorythat can be usedto determine whatprioritiesshouldbe
giveninthe product portfolio of abusinessunit.Toensure long-termvalue creation,acompanyshouldhave aportfolioof
products that contains both high-growthproducts in needof cash inputs and low-growth products that generate a lot of
cash. It has 2 dimensions:marketshare and market growth.The basic ideabehinditis that the biggerthe marketshare a
product has or the faster the product's market grows, the better it is for the company.
Placing products in the BCG matrix results in 4 categories in a portfolio of a company:
• Cash Cow - a businessunitthathas a large marketshare ina mature,slow growingindustry.Cashcowsrequire
little investment and generate cash that can be used to invest in other business units.
• Star - a business unit that has a large market share in a fast growing industry. Stars may generate cash, but
because the market is growing rapidly they require investment to maintain their lead. If successful, a star will
become a cash cow when its industry matures.
• QuestionMark(orProblemChild) - abusinessunitthathasa small marketshare inahighgrowthmarket.These
business units require resources to grow market share, but whether they will succeed and become stars is
unknown.
• Dog - a businessunitthathasa small marketshare inamature industry. A dogmaynotrequire substantialcash,
but ittiesupcapital that couldbetterbe deployedelsewhere.Unlessadoghas some otherstrategicpurpose,it
should be liquidated if there is little prospect for it to gain market share.
Brand Building Strategies
The 3 Steps to Building a Winning Brand Strategy
Step 1: Set yourself apart.
Why should people buy from you instead of from the same kind of business across town? Think about the intangible
qualitiesof yourproductor service,usingadjectivesfrom “friendly”to“fast” and everywordin between.Yourgoal isto
own a position in the customer’s mind so they think of you differently than the competition.
“Powerful brandswill ownaword—likeVolvo[owns] safety,”saysLauraRies,anAtlanta-basedmarketingconsultantand
co-authorof The 22 Immutable Lawsof Branding:How toBuildaProductorService intoaWorld-ClassBrand.Whichword
will your company own? A new hair salonmight focus on the adjective “convenient” and stay open a few hours later in

10. the eveningforcustomerswhowork late—somethingnootherlocal salonmight do.How will yoube differentfromthe
competition? The answers are valuable assets that constitute the basis of your brand.
Step 2: Know your target customer.
Once you’ve defined your product or service, think about your target customer. You’ve probably already gathered
demographic information about the market you’re entering, but think about the actual customers who'll walk through
your door. Who is thisperson,and what is the one thinghe or she ultimatelywantsfromyourproduct or service?After
all, the customer is buying it for a reason. What will your customer demand from you?
Step 3: Develop a personality.
How will you show customers every day what you’re all about? A lot of small companies write missionstatementsthat
say the company will “value” customers and strive for “excellent customer service.” Unfortunately, these words are all
talk, and no action. Dig deeper and think about how you’ll fulfill your brand’s promise and provide value and service to
the people youserve.If you promise quickservice,forexample,whatwill “quick”meaninside yourcompany?Andhow
will you make sure service stays speedy? Along the way, you’re laying the foundation of your hiring strategy and how
future employeeswill be expectedtointeractwithcustomers.You’re alsocreatingthe template foryouradvertisingand
marketing strategies.
Pricing objectives
Some of the more common pricing objectives are:
 maximize long-run profit.
 maximize short-run profit.
 increase sales volume (quantity)
 increase monetary sales.
 increase market share.
 obtain a target rate of return on investment (ROI)
 obtain a target rate of return on sales.
Customer Relationship Management including the concept of Relationship Marketing
Customerrelationshipmanagement(CRM) is an approach to managinga company’sinteractionwithcurrentand future
customers.Itofteninvolvesusingtechnologytoorganize,automate,andsynchronize sales,marketing,customerservice,
and technical support.
CRM is a customer-orientedfeature withservice response basedoncustomerinput,one-to-one solutionstocustomers'
requirements, direct online communications with customer and customer service centers that are intended to help
customers solve their issues. It includes the following functions:
 Salesforce automation,whichimplementssalespromotionanalysis,automatesthe trackingof a client'saccount
history for repeated sales or future sales, and сoordinates sales, marketing, call centers, and retail outlets.
 Data warehouse technology, used to aggregate transaction information, to merge the information with CRM
products, and to provide key performance indicators.
 Opportunity management which helps the company to manage unpredictable growth and demand, and
implement a good forecasting model to integrate sales history with sales projections.[2]
 CRMsystemsthattrack andmeasure marketingcampaignsovermultiple networks,trackingcustomeranalysisby
customer clicks and sales
Relationship marketing was first defined as a form of marketing developedfrom direct response marketing campaigns
which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions

11. As a practice, relationship marketing differs from other forms of marketing in that it recognizes the long term value of
customer relationships and extends communication beyond intrusive advertising and sales promotional messages.
Withthe growth of the internetandmobile platforms,relationshipmarketinghascontinuedtoevolveandmove forward
astechnologyopensmore collaborative andsocial communicationchannels.Thisincludestoolsformanagingrelationships
with customers that goes beyond simple demographic and customer service data. Relationship marketing extendsto
include inbound marketing efforts, (a combination of search optimization and strategic content), PR, social media and
application development.
Basic and Augmented stages in New Product Development
Level One: Core Product
Level one is the most basic level and simply looks at what people set out to buy and what benefits the producer would
like theirproducttoofferbuyers.Forexample acameraisexpectedtotake picturesbutthere maybe otherbenefitsthat
the producer wants the buyer to enjoy such as a wide lens, face recognition and high definition videos. So prior to
designing any product designers should list the core benefits the product needs to provide.
Level 2: Actual Product
Level twoisabouttranslatingthe listof core productbenefitsintoaproductthatpeoplewill buy.Theremaybe competitor
productsofferingthe same benefitssothe aimat thisstage isto designa productthat will persuade people topurchase
your product. Kotler states that this can involve deciding on the quality level, product and service features, styling,
branding and packaging. For example Apple's iPhone design has enabled it to become a smart phone market leader so
that bySeptember2012 it wasable to launchthe iPhone 5,the 5th versionof thisproduct.There are othersmartphones
on the market but Apple has managed to design a product which people pre-order and camp overnight outside Apple's
retail stores so that they can be the first ones to buy the product.
Level 3: Augmented product
Level three involves deciding the additional non tangible benefits that a product can offer. Competition at this level is
basedaroundaftersalesservice,helplines,warranties,free/cheapdeliveryandsoon.In otherwordsitis thingsthatthe
product does not do but customers may find them useful. Non tangible benefits such as product warranties offer
customers peace of mind and demonstrate the manufacturer has faith in the quality of its product. In fact the ubiqtous
use of some augmentedbenefitshave turnsome level threebenefitsintoacustomerexpectationforexamplecustomers
expect cars to have manufacturer warranties.

12. Test Marketing Concepts
Concept testing (or market testing) is the process of using quantitative methodsand qualitative methods to evaluate
consumerresponse toaproductideapriorto the introductionof aproductto the market.It can alsobe usedto generate
communication designed to alter consumer attitudes toward existing products.
Why is Concept Testing Important?
Concept testing reshapes and refines ideas so they have greater potential for market acceptance. Specifically, concept
testing:
 Indicates concentrated segments of the population to which the product appeals
 Assesses the relative appeal of alternative product ideas/configurations/positionsand features desirable to the
targeted market segments
 Provides necessary information for developing the product and its promotion, distribution and pricing
Concept testing providesinsight for designing a more optimal product or service. Whenmade actionable, concepttests
allowyoutolaserfocusonyourproductsand priorities.Concepttestshave the abilitytoimprove yourproduct,shiftyour
priorities and increase your product-market match.
Concept Testing Methods
 New Product Concept Tests
 Product Modification or Upgrade Tests
 Migration Path Tests
 Pricing and Incentives Tests
Objectives of Advertising
 Trial: the companieswhichare in theirintroductionstage generallyworkfor thisobjective.The trial objectiveis
the one which involves convincing the customers to buy the new product introduced in the market. Here, the
advertisersuse flashyandattractive adstomake customers take a look on the products and purchase for trials.
 Continuity: this objective is concerned about keeping the existing customers to stick on to the product. The
advertisers here generally keep on bringing something new in the product and the advertisement so that the
existing customers keep buying their products.
 Brand switch: this objective is basically for those companies who want to attract the customers of the
competitors.Here,the advertiserstrytoconvince the customerstoswitchfromthe existingbrandtheyare using
to their product.
 Switching back: this objective isforthe companieswhowanttheirpreviouscustomersback,whohave switched
to their competitors. The advertisers use different ways to attract the customers back like discount sale, new
advertise, some reworking done on packaging, etc.
Importance of Advertising
 Advertising is important for the customers
 Advertising is important for the seller and companies producing the product
 Advertising is important for the society
Market segmentationisa marketingstrategywhichinvolvesdividingabroadtargetmarket intosubsetsof consumers,
businesses,orcountrieswhohave,orare perceivedtohave,commonneeds,interests,andpriorities,andthen
designingandimplementingstrategiestotargetthem.Marketsegmentationstrategiesare generallyusedtoidentify
and furtherdefine the targetcustomers,andprovidesupportingdataformarketingplanelementssuchaspositioningto
achieve certainmarketingplanobjectives.Businessesmaydevelopproductdifferentiationstrategies,oran

13. undifferentiatedapproach,involvingspecificproductsorproductlinesdependingonthe specificdemandandattributes
of the targetsegment.
Types ofmarket segmentation
Geographicsegmentation
Marketerscan segmentaccordingtogeographiccriteria—nations,states,regions,countries,cities,neighborhoods,or
postal codes.The geo-clusterapproachcombinesdemographicdatawithgeographicdatatocreate a more accurate or
specificprofile.Withrespecttoregion,inrainyregionsmerchantscansell thingslikeraincoats,umbrellasand
gumboots.Inhot regions,one cansell summerclothing.A small businesscommoditystore maytargetonlycustomers
fromthe local neighborhood,while a largerdepartmentstore cantargetitsmarketingtowardsseveral neighborhoodsin
a largercity or area, while ignoringcustomersinothercontinents.Geographicsegmentationisimportantandmaybe
consideredthe firststeptointernational marketing,followedbydemographicandpsychographicsegmentation.
Demographic segmentation
Segmentationaccordingtodemographyisbasedonvariablessuchasage,gender,occupationandeducationlevel or
accordingto perceived benefitswhichaproductor service mayprovide.Benefitsmaybe perceiveddifferently
dependingonaconsumer'sstage inthe life cycle.Demographicsegmentationdividesmarketsintodifferentlifestage
groupsand allowsformessagestobe tailoredaccordingly.
Behavioral segmentation
Behavioral segmentationdividesconsumersintogroupsaccordingtotheirknowledgeof,attitude towards,usage rate,
response,loyaltystatus,andreadinessstage toa product.There isan extra connectivitywithall other marketrelated
sources.Behavioral segmentationdividesbuyersintosegmentsbasedontheirknowledge,attitudes,uses,orresponses
concerninga product.Many marketersbelieve thatbehaviorvariablesare the beststartingpointforbuildingmarket
segments.
Psychographic segmentation
Psychographicsegmentation,whichissometimescalledlifestyle,ismeasuredbystudyingthe activities,interests,and
opinions(AIOs) of customers.Itconsidershowpeople spendtheirleisure,andwhichexternal influences theyare most
responsive toandinfluencedby.Psychographicsare veryimportanttosegmentation,because psychographicsidentify
the personal activitiesandtargetedlifestylethe targetsubjectendures,orthe image theyare attemptingtoproject.
Mass mediahas a predominantinfluence andeffectonpsychographicsegmentation.Lifestyleproductsmaypertainto
highinvolvementproductsandpurchase decisions,tospecialityorluxuryproductsandpurchase decisions.
Occasional segmentation
Occasionsegmentationfocusesonanalyzingoccasions,independentof the customers,suchasconsideringCoke for
occasionsof beingthirsty,havingdinnerorgoingout,withouttakingintoconsiderationthe differencesanaffluentand
middle-classcustomerwouldhave duringtheseoccasions.
Segmentationby benefits
Segmentationcantake place accordingtobenefitssoughtbythe consumerorcustomer.
Cultural segmentation
Cultural segmentationisusedtoclassifymarketsaccordingtocultural origin.Cultureisastrong dimensionof consumer
behaviorandisusedto enhance customerinsightandasa componentof predictive models.Cultural segmentation
enablesappropriate communicationstobe craftedtoparticularcultural communities,whichisimportantformessage
engagementinawide range of organisations,includingbusinesses,governmentandcommunitygroups.Cultural
segmentationcanbe appliedtoexistingcustomerdatatomeasure marketpenetrationinkeycultural segmentsby
product,brand,channel as well astraditional measuresof recency,frequencyandmonetaryvalue.These benchmarks
forman importantevidence-base toguide strategicdirectionandtactical campaignactivity,allowingengagementtrends
to be monitoredovertime.
Multi-variable accountsegmentation
In SalesTerritoryManagement,usingmore thanone criteriontocharacterize the organization’saccounts,suchas
segmentingsalesaccountsbygovernment,business,customer,etc.andaccountsize or duration,inefforttoincrease
time efficiencyandsales volume.

14. Salespromotion isone level ortype of marketingaimedeitheratthe consumeror at the distributionchannel (inthe
formof sales-incentives).Itisusedtointroduce new product,clearoutinventories,attracttraffic,andto liftsales
temporarily.
Salespromotionisone of the five aspectsof the promotional mix.(The other4parts of the promotional mix are
advertising,personal selling,directmarketingandpublicity/publicrelations.) Mediaandnon-mediamarketing
communicationare employedforapre-determined,limitedtimetoincrease consumerdemand,stimulate market
demandor improve productavailability.Examplesincludecontests,coupons,freebies,lossleaders,pointof purchase
displays,premiums,prizes,productsamples,andrebates
Salespromotionscanbe directedateitherthe customer,salesstaff,ordistributionchannel members(suchasretailers).
Salespromotionstargetedatthe consumerare calledconsumersalespromotions.Salespromotionstargetedatretailers
and wholesaleare calledtrade salespromotions.Somesale promotions,particularlyoneswithunusualmethods,are
consideredgimmicksbymany.
Salespromotionincludesseveral communicationsactivitiesthatattempttoprovide addedvalue orincentivesto
consumers,wholesalers,retailers,orotherorganizationalcustomerstostimulateimmediate sales.These effortscan
attemptto stimulate productinterest,trial,orpurchase.Examplesof devicesusedinsalespromotioninclude coupons,
samples,premiums,point-of-purchase(POP) displays,contests,rebates,andsweepstakes.
Salespromotionisneededtoattract newcustomers,toholdpresentcustomers,tocounteractcompetition,andtotake
advantage of opportunitiesthatare revealedbymarketresearch.Itismade up of activities,bothoutsideandinside
activities,toenhance companysales.Outside salespromotionactivitiesinclude advertising,publicity,publicrelations
activities,andspecial salesevents.Inside salespromotionactivitiesincludeswindow displays,productandpromotional
material displayandpromotionalprogramssuchaspremiumawardsand contests.
Sale promotionsoftencome inthe formof discounts.Discountsimpactthe wayconsumersthinkandbehave when
shopping.The type of savingsanditslocationcan affectthe wayconsumersview aproductand affecttheirpurchase
decision. The twomostcommondiscountsare price discounts(“onsale items”) andbonuspacks(“bulkitems”).Price
discountsare the reductionof an original sale bya certainpercentage while bonuspacksare dealsinwhichthe

15. consumerreceivesmore forthe original price.Manycompaniespresentdifferentformsof discountsinadvertisements,
hopingtoconvince consumerstobuytheirproducts.
Consumersalespromotion types
 Price deal:A temporaryreductioninthe price,suchas 50% off.
 Loyal RewardProgram: Consumerscollectpoints,miles,orcreditsforpurchasesandredeemthemforrewards.
 Cents-off deal:Offersabrandat a lowerprice.Price reductionmaybe a percentage markedonthe package.
 Price-pack/Bonuspacksdeal:The packagingoffersaconsumera certainpercentage more of the productforthe
same price (forexample,25percentextra).Thisisanothertype of deal “inwhichcustomersare offeredmore of
the product forthe same price
 Coupons:couponshave become astandardmechanismforsalespromotions.
 Loss leader:the price of a popularproductistemporarilyreducedbelow costinorderto stimulate other
profitable sales
 Free-standinginsert(FSI):A coupon bookletisinsertedintothe local newspaperfordelivery.
 Checkoutdispensers:Oncheckoutthe customerisgivenacouponbasedonproductspurchased.
 Mobile couponing:Couponsare available onamobile phone.Consumersshow the offeronamobile phone toa
salespersonforredemption.
 Online interactive promotiongame:Consumersplayaninteractivegame associatedwiththe promotedproduct.
 Rebates:Consumersare offeredmoneybackif the receiptandbarcode are mailedtothe producer.
 Contests/sweepstakes/games:The consumerisautomaticallyenteredintothe eventbypurchasingthe product.
 Point-of-saledisplays:-
 Aisle interrupter:A signthatjutsintothe aisle fromthe shelf.
 Dangler:A signthatswayswhena consumerwalksbyit.
 Dumpbin: A binfull of productsdumpedinside.
 Biddingportals:Gettingprospects
 Glorifier:A small stage thatelevatesaproductabove otherproducts.
 Wobbler:A signthat jiggles.
 LipstickBoard:A board onwhichmessagesare writtenincrayon.
 Necker:A couponplacedon the 'neck' of a bottle.
 YES unit:"your extrasalesperson"isapull-outfactsheet.
 Electroluminescent:Solar-powered,animatedlightinmotion.
 Kidseatfree specials:Offersadiscountonthe total diningbill byoffering1free kidsmeal witheachregular
meal purchased.
 Sampling:Consumersgetone sampleforfree,aftertheirtrial andthencoulddecide whethertobuyor not.
Advertisinginbusinessisaformof marketingcommunicationusedtoencourage,persuade,ormanipulateanaudience
(viewers, readersorlisteners;sometimesaspecificgroup) totake or continue totake some action
Marketing researchis "the processor setof processesthatlinksthe consumers,customers,andenduserstothe
marketerthroughinformation — informationusedto identifyanddefinemarketingopportunitiesandproblems;
generate,refine,andevaluatemarketingactions;monitormarketingperformance;andimprove understandingof
marketingasa process.Marketingresearchspecifiesthe informationrequiredtoaddress these issues,designsthe
methodforcollectinginformation,managesandimplementsthe datacollectionprocess,analyzesthe results,and
communicatesthe findingsandtheirimplications."
It isthe systematicgathering,recording,andanalysisof qualitativeandquantitativedataaboutissuesrelatingto
marketingproductsandservices.The goal of marketingresearchistoidentifyandassesshow changingelementsof the

16. marketingmix impactscustomerbehavior.The termiscommonlyinterchangedwithmarketresearch;however,expert
practitionersmaywishtodraw a distinction,inthatmarketresearchisconcernedspecificallywithmarkets,while
marketingresearchisconcernedspecificallyaboutmarketingprocesses.
Marketingresearchisoftenpartitionedintotwosetsof categorical pairs,eitherbytargetmarket:
 Consumermarketingresearch,and
 Business-to-business(B2B) marketingresearch
Or, alternatively,bymethodological approach:
 Qualitative marketingresearch,and
 Quantitative marketingresearch
Consumermarketingresearchisaformof appliedsociologythatconcentratesonunderstandingthe preferences,
attitudes,andbehaviorsof consumersinamarket-basedeconomy,anditaimstounderstandthe effectsand
comparative successof marketingcampaigns.The fieldof consumermarketingresearchasastatistical science was
pioneeredbyArthurNielsenwiththe foundingof the ACNielsenCompanyin1923.
Thus,marketingresearchmayalsobe describedasthe systematicandobjective identification,collection,analysis,and
disseminationof informationforthe purpose of assistingmanagementindecisionmakingrelatedtothe identification
and solutionof problemsandopportunitiesinmarketing.
RETAILING AND WHOLESALING.
RETAILING
Retailingisthe actof sellingproductsorservicestopeoplefortheirpersonal,nonbusinessuse.A retailerisabusiness
that specializesinthe actof retailingprimarily.Withsuchabroad definition,the typesof retailersare vastandare
categorizedbasedontheirdifferentcharacteristics.The distinctive characteristicsandexamplesthatare mostrelevant
to me as a consumerare below:
Amount of Service
The amount of service thatisofferedfroma retailerattractsdifferentconsumersasdifferentconsumersand products
beingsoldrequire differentlevelsof service:
 Self-serviceretailers-customerswhoare willingtofindthe itemstheywantandcompare the pricesof similar
productsby themselvestosave bothtime andmoney(i.g.Target,Walmart,andSafeway)
 Limited-service retailers- customersshopontheirownbuthave a higheravailabilityof service fromsales
assistantsdue tothe increasedamountof productavailable (i.g.Macy’s,Lowe’s,andStaples)
 Full-service retailers- customersare givenmore attention,asthisstyle isusuallyapartof high-endstores
carryingmore specialtygoodsthatcustomersneedadvice with(i.gBloomingdales,Cartier,andSurLa Table)
Product Line
The numberand diversityof productsthattheyoffertoconsumerscanalso categorize retailers.
 Specialtystores- retailersthatsell averynarrow selectionof productsbuthave a deeparray of variationswithin
each of those productlines,recentlyincreasedinpopularity(i.g.NorthFace,Steve Madden,Apple)
 Departmentstores- these storescarryalarge varietyof differentproductlinesandare viewedasamore flexible
versionof specialtystores,oftendifferentiatedonlevel of service (i.g.JCPenny’s,Bloomingdales,Bergdorf
Goodman)
 Supermarkets- theseretailersare the mostfrequentlyvisitedandoperate onmostlyself-service astheyare
designedtofulfillconsumersgroceryandhouseholditemsneedswiththeirhighvolumesof product(i.g.
Ralph’s,Safeway,andGroceryOutlet)
 Convenience stores-reatilersthatcarry a low volume of conveniencegoodsthathave accommodatinglocations
and hoursfor consumersbuthave relativelyhigherpricesonitems(i.g.QuikTrip,Pilot,andCircle K)

17.  Superstores- storesthatare similartosupermarketsandofferamore diverse assortmentof productsand
services(i.g.Walmart,Target,andBarnesandNoble)
 Categorykillers- storesthatare extremelylarge andcarry a verydiverse assortmentof a minimal productline
(i.g.Petco,Lowe’s,andBestBuy)
 Service retailers- productbeingofferedisaservice (i.g.hotels,banks,schools,restaurants,movie theaters,
mechanics,drycleaners)
Relative Prices
One of the easiestwaysforretailerstobe classifiedisbythe variedpricestheyoffer.Normally,the pricesoffered
correlate directlywiththe qualityof the goodsor servicesofferedbythe retailers
 Discountstores- offerstandardmerchandise atlowerpricesbysellingathighvolumesandofferingfew services
to consumers,typicallyutilize warehouses(i.g.TargetandWalmart)
 Off-price retailers- extremelylowpricesandhighvolumesof products
a. Independentoff-priceretailers-divisionsof largerretail storesthatare usuallyownedbyretail chains(i.g.Marshalls,
TJ Maxx,and Overstock.com)
b. Factoryoutlets- retailersownedbythe name brandfirmsthatofferlowerpricedversionsof itsproductsto
consumers,usuallygroupedtogetherintheirownfactoryoutletmalls(i.g.CamarilloPremiumOutlets-NorthFace,Nike,
Kate Spade,andBanana Republic
3. Warehouse clubs- oftenrequirecustomerstohave membershipsinordertopurchase large volumesof productat
extremelylowpricesinbare-boneswarehouse environments(i.g.CostcoandSam’sClub)
Organizational Approach
Finally,retailerscanbe categorizedbasedonthe organizational structure thattheyare basedupon:
1. Corporate chains- twoor more retailingoutletsthatare controlledandownedbyacommonentity(i.g.restaurants
and hotels
 Voluntarychains- retailersthatare sponsoredbyaretailerandbuyscommon merchandise asa group (i.g.
insurance companies)
 Retail cooperatives- independentretailersthatuse jointownedwholesalelocationswithjointmerchandising
and promotionefforts(i.g.Ace Hardware)
2. Franchise organizations- aretailerthathasa contract witha wholesaler,manufacturer,,service organization,or
independentpersonwhoownsthe righttoconduct businessinmore thanone location(i.g.Starbucks,JambaJuice,
Domino’s)
RETAILER MARKETING STRATEGIES

18. WHOLESALING
As opposedtoretailing,wholesalingisthe act of sellingproductsorservicesforthe use inbusinesses.Thatbeingsaid,
the wholesalingdiversityismuchmore narrowthan that of the retailingindustry.The typesof wholesalersare listedand
described below:
 Merchant wholesalers- wholesalersthatare independentlyownedandplace theirnamesonthe productsthat
are soldbythem
 Brokers- wholesalerswhomake the connectionsbetweenbuyersandsellersbyassistingandnegotiating,butdo
not applytheirnamestothe products
 Agent- aconsistentlyusedwholesalerwhopreformsaminimal amountof functionsforabuyeror sellerand
doesnotplace theirname on the products
 Manufacturer’ssalesbranchesandoffices- wholesalersthatutilize buyersandsellersratherthanrelyingon
independentwholesalers
Current trendsin marketing management
Modern trends in marketing include relationship marketing, business or industrial marketing, and societal marketing .
Modern marketing is also inseparable from the digital realm. E-marketing and online marketing are essential tools for
modern firms. Internet marketing is sometimes considered to be broad in scope, not only referring to the Internet, but
also includinge-mail andwirelessmediaaswell as drivingaudiencesfromtraditional methodslike radiosandbillboards
to Internet properties or landing pages.
Relationship Marketing
Relationship marketing was first developed through direct response marketing campaigns emphasizing customer
retentionandsatisfaction,ratherthana dominantfocuson salestransactions.Relationshipmarketingdiffersfromother
forms of marketing in recognizing the long-term value of relationships and extending communication beyond intrusive
promotional messages. Relationship marketing refers to a short-term arrangement where the buyer and seller have an
interestinprovidingamore satisfyingexchange.Thisapproachtriestotranscendthe simple post-purchase exchange with
a customer to make a deeper connection by providing a holistic, personalized experience to create stronger ties.
Relationshipmarketingisoftenappliedwhenthereare competitive alternativesforcustomerstochoose fromandwhen
there is an ongoing and periodic desire for the product or service.
Business/Industrial Marketing
Businessmarketingisthe practice of sellingproductsand servicestoother companiesor organizationsthateitherresell
them,use themascomponentsinproductsorservicestheyoffer,oruse themtosupporttheiroperations.Alsoknownas
industrial marketing, business marketing is at times called business-to-business marketing, or B2B marketing
Societal Marketing
Societal marketingholds that the organization's task is to determine the needs, wants,and interests of a target market
and to deliver satisfactionmore effectively and efficientlythan competitors in a way that preserves or enhances social,
ethical,andecological well-being.Itislinkedwithcorporate social responsibilityandsustainabledevelopment.The main
focusof societal marketingisoncustomersatisfactionandthe welfare of societyatlarge,whichcan be attainedthrough
providingeco-friendlyproducts--forexample,thosethatremove social and environmental ills like drugs and pollution.
Greenmarketingis the marketingof productsthat are presumedtobe environmentallypreferable toothers.Thusgreen
marketing incorporates a broad range of activities, including product modification, changes to the production process,
sustainable packaging, as well as modifying advertising.

19. Export Marketing: The buyer of such goods and services is referred to an "importer". EXPORT MARKETING. 5. Export
marketingmeansexportinggoodstoothercountriesof the worldasperthe procedures framedbythe exportingcountry
as well as by the importing country.
Domestic marketing
Domestic marketing is about doing all of the above tasks within the confines of the local or domestic/home market.
What is export marketing?
Exportmarketingisabout marketingacrossnational borders.All the basicprinciplesof marketingcanbe appliedtoboth
domestic and export marketing, the latter is far more challenging because when entering a new country/market, the
marketerwill have todeal witha differentkindof customerinaforeignenvironmentwithlawsandregulationsthatmay
differ radically from those of the domestic market. Even in a world that is moving towards increasing similarities in
consumertastes,marketingmethods,productionprocessesandbusinesspractices,thereare still asignificantnumberof
differences between international markets to make selling to them challenging - see figure below.
Marketing can be definedasthe processof managingthe efficientandeffective utilisationof a firm'sresourceswiththe
aim of understandingandmeetingthe opportunitiesandthreatsin a dynamicenvironmentinsucha way that the firm's
market offering(s) lead to the satisfaction of consumers' needs and wants so that the objectives of the enterprise, the
consumer and society are achieved."
The Internet as a Marketing Medium
The Internetoffersastartlingsetof advantagesas a marketingmedium.Technologyadvances,consumerfamiliarityand
vendor innovation will inevitably drive both marketing programs and customer interaction to center on the Internet.
Marketersneedtobeginnowanactive explorationof theirkeyinitiativesinlightof where andhow toapplythe Internet's
power. The Internetisalreadyan important,andperhaps transformational,marketingmediumforbusiness-to-business
and business-to-consumer markets.
Differentkindof internetmarketingtechniqueslistedbelow worktoreach more and more people oninternetanddrive
interested people to the website and allow to compete more effectively.
Email Marketing
It isthe easy,effective andaffordable waytokeepcustomersattractand comingback to one site.Thisisa formof direct
permission based relationship marketing, which uses E-mail as a means of communicating messages to the target
audience. An email marketing campaign allows businesses to promote a new product, send information about an
upcoming corporate event or share important news about their business, products and services using attractive email

20. newslettertostayinregulartouchwiththemandbuildstrongcustomerrelationships.Itisbestwaytokeepintouch.Itis
easy to start and quick to see the result with real time reports
Interactive advertising
Use of banner ads, Flash presentations and other interactive media to elicit active participation from recipients. They
promote productsandservicesandeducate prospects.If well crafted,interactiveadvertisingallowstoengage consumers
in direct and personal ways. And, they enable a sophisticated dialogue between organizationand prospects whi chmay
affect buying decisions.
Blog marketing
A blog is a regularly updated collection of content like blogger.com, wordpress.com, indianbloggers.com and
blogs.hindustantimes.com. From a business marketing view, blogs offer many benefits. Blogs provide an easy way to
introduce fresh, relevant content to the website on a regular basis.
It alsoprovidesreal time genuine informationtothe informationseekers.Freshcontentattractsmore attentionfromthe
search engines.
Social Media Marketing
Social Media such as Facebook, twitter, Linkedin,Google+, etc are emerging as big markets.There are sponsored pages
on facebook of different companies, groups and individuals. Facebook flash their ads on individual member’s profile
accordingto theirdemographywhen the userclickorlike these pagesfacebookispaidandthe individual’sinformationis
accessible to the sponsor. Sponsors also run many contests and activities to gain attention or clicks.
Search Engine Optimization
It is the process of bringing business name on the first page of search engines like Google, Yahoo, Bing, etc. All of the
Internetusersuse searchenginesasthat is the primary methodto findinformation/productorservicesonline.Statistics
Says:More than8 outof 10 internetuserslookonsearchenginestofindproductorservicestheywanttobuyand80% of
searchers clicks on first page result on Google. So Search Engine Optimization is definitely worth the effort for all the
websites those are serious about their business because customers are now looking online for service.
Pay Per Click (PPC) advertising
Withthisthe keywordsone believesprospectswouldtype inthe searchbarwhenlookingforsimilarproductsorservices.
For example, if one sell sofas,he would bid on the keyword"sofa", hoping a user would type those words in the search
engine,see hisad,clickitandbuy.These adsare calledsponsoredlinksorsponsoredadsandtypicallyappearnexttothe
natural (alsoknownas“organic”) resultsonasearchpage.Moneyispaid forthe adonlywhenthe userclicksonit.Google
AdWords and Yahoo! Search Marketing (formerly Overture) are currently the largest PPC providers.
General classificationofconsumers
Personal Consumers
Thistype of consumerisan individual consumerwhobuyproductsor servicesforownuse,orfor family,orfor
householduse.Finishedproductsare purchasedbypersonal consumerandthe purchasesare done insmall quantities.
Organisational Consumers
Thistype of consumercan be a business,government, profitornon-profitorganisation,oragencywhopurchasesgoods
or servicesfororganisationtofunctionorforresale purpose.Purchasesare done inthe formof raw-materialsthatare
processedtofinishedgoodsandofferedforsale tootherconsumers.
Impulse Consumers
Thistype of consumerdounplannedpurchases.Purchasingaparticularproductwasnot a priority,butwhenthe
consumerencounterthatproduct,he makesswiftbuyingdecision.Impulse consumerpurchase whatseemsgoodatthe
time.
NeedBased Consumer
Thistype of consumerhasa specificintentiontopurchase aparticulartype of product.Need-basedConsumerisdriven
by a specificneed.He makesbuyingdecisionwhenhe actuallyneedthatproductandnot anyothertime.
Discount DrivenConsumers

21. Thistype of consumersdopurchaseswhentheygetsome lucrative offerordiscount.Theirbuyingdecisionishighly
basedon offersordiscounts.
Habitual Consumers
Personwhoishabitual tothe usage or consumptionof akindof product iscalledhabitual consumer.Forexample -
personwhosmoke.
Motivation
Maslow’s Hierarchy of Needs Theory
One mustsatisfylowerlevelbasicneedsbeforeprogressingontomeethigherlevelgrowthneeds.Once theseneedshave
been reasonably satisfied, one may be able to reach the highest level called self-actualization.

22. Every person is capable and has the desire to move up the hierarchy toward a level of self-actualization. Unfortunately,
progress is often disrupted by failure to meet lower level needs. Life experiences, including divorce and loss of job may
cause an individual to fluctuate between levels of the hierarchy.
Maslownotedonlyoneinahundredpeoplebecome fullyself-actualizedbecause oursocietyrewardsmotivationprimarily
based on esteem, love and other social needs
Physiological needs
Physiological needsare the physicalrequirementsforhumansurvival.If these requirementsare notmet,the humanbody
cannot function properly and will ultimatelyfail. Physiological needsare thought to be the most important; they should
be met first.
Air,water,andfoodare metabolicrequirementsforsurvivalinall animals,includinghumans.Clothingandshelterprovide
necessary protection from the elements. While maintaining an adequate birth rate shapes the intensity of the human
sexual instinct, sexual competition may also shape said instinct.[2]
Safety needs
Withtheirphysical needsrelativelysatisfied,the individual'ssafetyneedstake precedence anddominate behavior.Inthe
absence of physical safety – due to war, natural disaster, family violence, childhood abuse, etc. – people may (re-
)experience post-traumatic stress disorder or transgenerational trauma. In the absence of economic safety – due to
economiccrisisandlackof work opportunities–these safetyneedsmanifestthemselvesinwayssuchasa preferencefor
job security, grievance procedures for protecting the individual from unilateral authority, savings accounts, insurance
policies,reasonabledisabilityaccommodations,etc.Thislevel ismorelikelytobe foundinchildrenbecausetheygenerally
have a greater need to feel safe.
Safety and Security needs include:
 Personal security
 Financial security
 Health and well-being
 Safety net against accidents/illness and their adverse impacts
Love and belonging
Afterphysiological andsafetyneedsare fulfilled,the thirdlevel of humanneedsisinterpersonal andinvolvesfeelingsof
belongingness. This need is especially strong in childhood and can override the needfor safety as witnessed in children
whoclingto abusive parents.Deficiencieswithinthislevelof Maslow'shierarchy –due to hospitalism,neglect,shunning,
ostracism,etc. – can impact the individual'sabilitytoform and maintainemotionallysignificantrelationshipsin general,
such as:
 Friendship
 Intimacy
 Family
According to Maslow, humans need to feel a sense of belonging and acceptance among their social groups, regardless
whetherthese groupsare large or small.For example,some large social groupsmay include clubs,co-workers,religious
groups, professional organizations, sports teams, and gangs. Some examples of small social connections include family
members,intimate partners,mentors,colleagues,andconfidants.Humansneedtolove andbe loved –bothsexuallyand
non-sexually –by others.[2] Many people become susceptible toloneliness,social anxiety,andclinical depressioninthe
absence of this love or belonging element.This needfor belonging may overcome the physiological and security needs,
depending on the strength of the peer pressure.
Esteem

23. All humans have a need to feel respected; this includes the need to have self-esteemand self-respect. Esteem presents
the typical human desire to be accepted and valued by others. People often engage in a profession or hobby to gain
recognition. These activities give the persona sense of contribution or value. Low self-esteem or an inferiority complex
mayresultfromimbalancesduringthislevelinthe hierarchy.Peoplewithlowself-esteemoftenneedrespectfromothers;
theymay feel the needto seekfame or glory.However,fame or glorywill not helpthe personto buildtheirself -esteem
until they accept who they are internally. Psychological imbalances such as depression can hinder the person from
obtaining a higher level of self-esteem or self-respect.
Most people have aneedforstable self-respectandself-esteem.Maslow notedtwoversionsof esteemneeds:a"lower"
versionanda"higher"version.The "lower"versionof esteemisthe needforrespectfrom others.Thismayinclude aneed
for status, recognition,fame, prestige, and attention. The "higher" versionmanifests itself as the need for self-respect.
For example, the person may have a need for strength, competence, mastery, self-confidence, independence, and
freedom. This "higher" version takes precedence over the "lower" version because it relies on an inner competence
established through experience. Deprivation of these needs may lead to an inferiority complex, weakness, and
helplessness.
Maslow statesthatwhile he originallythoughtthe needsof humanshadstrictguidelines,the "hierarchiesare interrelated
rather than sharplyseparated".[5] Thismeansthatesteemandthe subsequentlevelsare not strictlyseparated;instead,
the levels are closely related.
Self-actualization
"What a man can be, he must be."[10] This quotation forms the basis of the perceived need for self-actualization. This
level of needreferstowhata person'sfull potential isandthe realizationof thatpotential.Maslow describesthislevelas
the desire to accomplish everything that one can, to become the most that one can be.[11] Individualsmay perceive or
focuson thisneedveryspecifically.Forexample,one individualmayhave the strongdesire tobecome anideal parent.In
another,the desiremaybe expressedathletically.Forothers,itmaybe expressedinpaintings,pictures,orinventions.[12]
As previously mentioned, Maslow believed that to understand this level of need, the person must not only achieve the
previous needs, but master them.
Self-transcendence
In hislateryears,Maslowexploredafurtherdimensionof needs,while criticizinghisownvisiononself-actualization.[13]
The self onlyfindsitsactualization in giving itself to some higher goal outside oneself, in altruism and spirituality.[14]
The two-factor theory (Herzberg's motivation-hygiene theory and dual-factor theory)
To better understand employee attitudes and motivation, Frederick Herzberg performed studies to determine which
factors in an employee's work environment caused satisfaction or dissatisfaction. He published his findings in the 1959
book The Motivation to Work.
The studies included interviews in which employees where asked what pleased and displeased them about their work.
Herzbergfoundthat the factors causing job satisfaction(andpresumablymotivation) were differentfromthose causing
job dissatisfaction. He developed the motivation-hygiene theory to explain these results. He called the satisfiers
motivators and the dissatisfiers hygiene factors, using the term "hygiene" in the sense that they are considered
maintenance factors that are necessary to avoid dissatisfaction but that by themselves do not provide satisfaction.
The followingtable presentsthe topsix factorscausingdissatisfactionandthe topsix factorscausingsatisfaction,listedin
the order of higher to lower importance.
Factors Affecting Job Attitudes

24. Leading to Dissatisfaction Leading to Satisfaction
Company policy Achievement
Supervision Recognition
Relationship w/Boss Work itself
Work conditions Responsibility
Salary Advancement
Relationship w/Peers Growth
Herzbergreasonedthatbecause the factors causingsatisfactionare differentfromthose causingdissatisfaction,thetwo
feelings cannot simply be treated as opposites of one another. The opposite of satisfaction is not dissatisfaction, but
rather, no satisfaction. Similarly, the opposite of dissatisfaction is no dissatisfaction.
While at first glance this distinction between the two opposites may sound like a play on words, Herzberg argued that
there are two distinct human needs portrayed. First, there are physiological needs that can be fulfilled by money, for
example, to purchase food and shelter. Second, there is the psychological need to achieve and grow, and this need is
fulfilled by activities that cause one to grow.
From the above table of results, one observes that the factors that determine whether there is dissatisfaction or no
dissatisfaction are not part of the work itself, but rather, are external factors. Herzberg oftenreferred to these hygiene
factors as "KITA" factors,where KITA is an acronymfor Kick In The A...,the process of providingincentivesora threat of
punishment to cause someone to do something.Herzberg argues that these provide only shortrun successbecause the
motivatorfactorsthat determine whetherthere issatisfactionorno satisfactionare intrinsictothe job itself,anddonot
result from carrot and stick incentives.
Douglas McGregor Motivational Theory
Theory X
Accordingto Dr. Kumi Mark, if organizational goalsare to be met,'Theory X' managersmust relyheavilyonthe threatof
punishmenttogainemployee compliance.Whenpracticedthistheorycanleadtomistrust,highlyrestrictive supervision
and a punitive atmosphere.The 'TheoryX'managerbelievesthatall actionscanbe traced,and the responsibleindividual
needs a direct reward or a reprimand according to the action's outcomes. This managerial style is more effective when
used to motivate a workforce that is not inherently motivated to perform. It is usually exercised in professions where
promotionisinfrequent,unlikelyorevenimpossible andwhere workersperformrepetitive tasks.One majorflawof this
management style is that it limits employee potential and discourages creative thinking.
Theory
A 'TheoryY' managerbelievesthatgiventhe rightconditions,mostpeople will wanttodowell atwork.Theybelievethat
the satisfaction of doing a good job is a strong motivation. Many people interpret 'Theory Y' as a positive set of beliefs
aboutworkers.A close readingof 'The HumanSide of Enterprise'revealsthatMcGregorsimplyarguesformanagerstobe
open to a more positive view of workers and the possibilities that this creates. He thinks that 'Theory Y' managers are
more likelythan'TheoryX' managersto developa climate of trust withemployeesrequiredforemployee development.
This would include managers communicating openly with subordinates, minimizing the tension in superior-subordinate
relationships,and creating a comfortable environment in which subordinates can develop and use their abilities. This
environment would include shared decision-making responsibilities so that subordinates have a say in decisions that
influence them.
Theory X and Theory Y combined
For McGregor, Theory X and Y are not opposite ends of the same continuum, but rather two different continua in
themselves.

25. Accordingto McGregor, an assumptionthatunderlies'TheoryX'is that these individualsdisliketheircareers.Becauseof
this,'TheoryX' supposesthatinorderforemployeestobe productive,theyrequiresupervision.Contrarily,anunderlying
assumption of 'Theory Y' is that individuals not only like their careers but are also willing to take on some amount of
professional responsibility. Because of this, 'Theory Y' supposes that people do not need to be shadowed constantly in
order to perform their job to the best of their ability.
Understanding the Theories
Your management style is strongly influenced by your beliefs and assumptions about what motivates members of your
team:If youbelievethatteammembersdislikework,youwilltendtowardsanauthoritarianstyleof management;Onthe
otherhand,if youassume thatemployeestake pride indoingagoodjob,youwilltendtoadoptamore participativestyle.
Theory X
Thisassumesthatemployeesare naturallyunmotivatedanddislike working,andthisencouragesanauthoritarianstyle of
management.According tothisview,managementmustactivelyintervene togetthingsdone.Thisstyle of management
assumes that workers:
 Dislike working.
 Avoid responsibility and need to be directed.
 Have to be controlled, forced, and threatened to deliver what's needed.
 Need to be supervised at every step, with controls put in place.
 Need to be enticed to produce results; otherwise they have no ambition or incentive to work.
X-Type organizations tend to be top heavy, with managers and supervisors required at every step to control workers.
There is little delegation of authority and control remains firmly centralized.
McGregor recognized that X-Type workers are in fact usually the minority,and yet in mass organizations, such as large
scale production environment, X Theory management may be required and can be unavoidable.
Theory Y
This expoundsaparticipative style of managementthatis de-centralized.Itassumesthat employeesare happyto work,
are self-motivated and creative, and enjoy working with greater responsibility. It assumes that workers:
 Take responsibility and are motivated to fulfill the goals they are given.
 Seek and accept responsibility and do not need much direction.
 Consider work as a natural part of life and solve work problems imaginatively.