Marketing Gyaan

Needs =
Basic
Social Acceptance
Social Envy

Need ---------> Want ---------> Desire

Product
A thi th
Anything
thatt can b
be offered
ff d to
t a market
k t to
t
satisfy a want or need.

Product classifications
Based on durability and tangibility
Non durable
Durable
Services

Definition
Marketing = Meeting needs profitably
Marketing is the management process that
identifies, anticipates and satisfies customer
requirements
q
pprofitably
f
y ((Kotler))
Marketing focuses on the satisfaction of customer
needs, wants and desires
Marketing management is the art and science of
choosing target markets and getting, keeping, and
growing customers through creating, delivering,
and communicating superior customer value.

Marketing Product
.
Brand
Service

Emotional Product
Functional Product
T h i l Product
Technical
P d t

 Marketing Vs Advertising
Advertising is a tool in entire marketing plan

Sales & Distribution

Factory

Carrying
or
Forwarding
A t/
Agent/
State Go down

Stockiest
(District)

Wholesaler
(Town)

Retailer
(Every
street)

Distribution = Availability
Sales = activities involved in providing products or services in
return for money
Off take When customer buys from Retail

Product Planning:
g The Nature and
Contents of a Marketing Plan
Contents of the Marketing Plan

Executive Summary
C
Current
Marketing
M k i Situation
Si
i
Opportunity and issue analysis
Objectives
Marketing strategy
Action programs
Financial projections
Implementation controls

The Marketing
Research Process

Marketing Mix = 4P
4Pss

4 Ps
Product, which includes- packaging design,
branding,
g trademarks, warranties, gguarantees, product
p
life cycles and new product development
Price, which is setting profitable and justifiable
prices
Place, which covers the physical distribution of
goods
Promotion, which encompasses personal selling,
advertising
d
i i andd sales
l promotion
i
7 Ps, to include for services - people, physical
evidence
id
(Interactive
(I t
ti marketing)
k ti ) andd process

Four Ps
Product
Price
Place
Pl
Promotion
-McCarthy
McCarthy

Four Cs
Customer solution
Customer cost
C
Convenience
i
Communication
- Robert Lauterborn

Packaging: The

th
h
5

All the activities of designing and producing

th container
the
t i
ffor a product.
d t

Service
Any act of performance that one
party can offer another that is
essentially intangible and does not
result in the ownership of anything;
its production may or may not
be tied to a physical product.
7 Ps, for services - people, physical evidence
(Interactive marketing) and process

Physical Evidence and Presentation

Place
People
p
Equipment
Communication material
Symbols
Price

Distinctive Characteristics of Services

Intangibility
Inseparability
Variability
y
Perishability

Determinants of Service Quality

Reliability
Responsiveness
p
Assurance
Empathy
Tangibles

Company Orientations Toward

the Marketplace
Target Market
Customer Needs

Stated needs
Real needs
Unstated needs
Delight
li h needs
d
Secret needs

BCG Growth-Share Matrix:

Quadrant Characteristics
30% Star
St

Market
Growth

-10%

Q ti Mark
Question
M k

Earnings: high stable, growing

Cash flow: neutral
Strategy: hold or invest for
growth

Earnings: low, unstable, growing

Cash flow: negative
Strategy: increase market share
or harvest/divest

Cash Cow

Dog

Earnings: high stable

Cash flow: high stable
S
Strategy:
hhold
ld or add
dd market
k
share

Earnings: low, unstable

Cash flow: neutral or negative
S
Strategy:
hharvest/divest
/di

10

1.0
Relative Market Share

.1

Plotting Your SBUs

(
(strategic
i business
b i
units)
i )
30% Star
St

Q ti Mark
Question
M k

C
Market
Growth

A
Cash Cow

Dog

-10%
10

1.0
Relative Market Share

.1

Conventional strategic
g thinkingg suggests
gg
there are four
possible strategies for each SBU:

(1)
( ) Build Share: here the company
p y can invest to
increase market share (for example turning a
"question mark" into a star)
(2) Hold: here the company invests just enough to
keep the SBU in its present position
(3) Harvest: here the company reduces the amount of
i
investment
t
t in
i order
d to
t maximize
i i the
th short-term
h tt
cashh
flows and profits from the SBU. This may have the
effect of turning Stars into Cash Cows.
(4) Divest: the company can divest the SBU by
phasing it out or selling it - in order to use the
resources elsewhere (e.g.
(e g investing in the more
promising "question marks").

P bl
Problems
with
ith the
th B
Boston
t M
Matrix
t i
There is an assumption that higher rates of
profit are directly related to high rates of
market share.
The model is built on the principle of
economies of scale (experience curve). This
may not always be the case.
case New technologies
may provide better profitability.

GE/ Mc Kinsey
y Matrix

Marketing Objective
All objectives should be SMART i.e. Specific,
Measurable Achievable,
Measurable,
Achievable Realistic
Realistic, and Timed
Specific - Be precise about what you are going to
achieve
Measurable - Quantify you objectives
Achievable - Are you attempting too much?
Achievable
Realistic - Do you have the resource to make the
objective happen (men, money, machines,
materials, minutes)?
Timed - State when you will achieve the objective
(within a month? By February 2010?)

Marketing Opportunity Analysis

(MOA)
Can the benefits be articulated to a target market?
Can the target market be reached with cost-effective
media
di andd trade
d channels?
h
l?
Does the company have the critical capabilities to
deliver the customer benefits?
Can the company deliver these benefits better than
any actual or potential competitors?
Will the rate of return meet the required threshold of
investment?

M k ti Environment
Marketing
E i
t
The
The marketing environment consists of
external forces that directly and/or indirectly
impact the organization.
organization
Changes in the environment create
opportunities and threats for the organizations

SWOT Analysis
Strengths and weaknesses are internal
factors.
Opportunities and threats are external
factors, one dont have much control over
them

Opportunity and Threat Matrices

Environmental Analysis
Parameter

Variables

Th/opp

Product

High
Capacity

Threat

Strength

Technology
gy

Opp
pp

Strength
g

Fuel

Threat

Strength

Operators
p

Threat

Strength
g

Labour

Threat

Other brands

Threat

Recession

Threat

Seasonal

Threat

Unions

Opp
pp

Political

Opp

Image

Threat

Functioning

Utility
Demand
p
Acceptance
Micro

Implication

S/ W

The Buying Decision Process

Buying Roles

Initiator
Influencer
Decider
Buyer
User

Buying behavior

Table 7.3: Four Types of Buying Behavior

High Involvement

Low Involvement

Significant Differences
between Brands

Complex buying
behavior

Variety-seeking
buying behavior

Few Differences between

Brands

Dissonance-reducing
buying behavior

Habitual buying
behavior

The Buying Decision Process

Complex Buying Behavior

Dissonance-Reducingg Buyer
y Behavior
Habitual Buying Behavior
Variety-Seeking
y
g Buying
y g Behavior

Loyalty Status

Hard-core

Split loyals
Shifting loyals
Switchers

Buying Behaviour
Pre-planned
Pre
planned purchase/Unplanned
Picking: involves a random choice, buyer picks a brand from the
available brands, and is indifferent to the brand he buys.
Casual
C
l Buying
B i
Variety seeking: low consumer involvement, requires significant
differences between the brands
Impulse buying:
Legalistic behaviour: requires approval from external sources.
Habitual: Habit ggenerallyy forms when the consumers are satisfied
f
with earlier purchases; characterised by absence of information search
and evaluation of alternate brands; occurs both under low and high
involvement purchases.
Sub contracted decision making is one where the buyers obtain a
recommendation from a personal or non personal source with the
intention of purchasing the brand without acquiring attribute-value
information.
information
Thumb rules: Buyers employ simple thumb rules or heuristics when
making repeat decisions.

Stages to the Consumer Buying

Decision Process

Problem recognition (Awareness)

Consideration set
Information search
Evaluation
P rchase
Purchase
Post purchase evaluation

Successive Sets Involved in Customer Decision

M ki
Making

Purchase Utilities
place utility
- The increased usefulness created by marketing through
makingg a product
p
available at the pplace consumers want.
possession utility
- The increased usefulness created by marketing through
making it possible for a consumer to own, use, and consume a
product. It is also called ownership utility.
time utility
- making products available at the time consumers want them
form utility
- sachet, tetra pack etc

Marketing- Changing the Behaviour

LIPS tto HIPS
(Low Involvement Purchases to High Involvement Purchases )

Picking

Variety seeking

Subcontracted (if consumer is not

knowledgeable)

Legalistic

Problem solving (if consumer is

knowledgeable)

Heuristics

Habit

Influencing Buyer Behavior

Maslowss Theory
Maslow

Basic Concepts in Marketing

Segmenting

Targeting

Positioning

 Segmenting
g
g - Dividing
g the market of
potential consumers into homogenous
subgroups assuming similar buying
behavior in each subgroup.
Targeting - Choosing segments to address
based on matching the firm's strengths to
the segments that will place the greatest
value on these strengths and yield the
ggreatest
eatest success.

core competency
It provides customer benefits
It is hard for competitors to imitate
It can be leveraged widely to many products
and markets
markets.
Concept given by - Hamel and Prahalad
(1990):

Broad Socio Economic Classification - Urban

SEC

By Education

By Occupation

A1

Grad & Post Grads

(General & Professional)

B/I/SEP/Officer &Execs
(Sr & Mdl)

A2
B1B2

Grad & Post Grads

(Professional)
SSC+ < Grad

Schooling 5-9 yrs

Shop ownrs, Sup Level,

Ofiicers & Execs (Jr Lvl)
Skld wrkrs, Petty Trdrs,
Clerk,Salesmen
Skld wrkrs, Petty Trdrs,
Clerk,Salesmen

Schooling upto 4 yrs

Illiterate

Skld/Unskld, Petty Trdrs,

Clerks,Salesmen
Skld/Unskld Petty
Skld/Unskld,
Pett Trdrs,
Trdrs

Broad SEC Classification Grid - Rural

SEC

B Ed
By
Education
i

B T
By
Type off House
H

R1

Some College but not Grad.,

Grads & Post Grads

Pucca

R2

SSC/HSC

Semi Pucca

R3

No formal school,
S h li upto
Schooling
t 9th Std

Semi Pucca

R4

Illiterate

Kuchha

Step 3: Evaluate Segment

Attractiveness

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Segmentation Strategy

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Levels and Patterns of Market

Segmentation
Patterns for Market Segmentation
Preference segments
Homogeneous preferences
Diffused preferences
Clustered preferences
Natural market segments
Concentrated
C
t t d marketing
k ti

Flexible Marketing Offerings

Naked solution
Product and service
elements that all
segmentt members
b
value

Discretionaryy options
p
Some segment
members value
Options may carry
additional charges

Basic Market Preference Patterns

Patterns of Target Market Selection

Target Marketing
Target marketing requires marketers to take
three major steps:
Identify and profile distinct groups of buyers
who
h differ
diff iin their
th i needs
d andd preferences
f
(market segmentation).
Select one or more market segments to enter
(market targeting).
For each target
g segment,
g
, establish and
communicate the key distinctive benefit(s) of
the companys market offering (market
positioning).
positioning)

Porter Model - Competitive Analysis

Entry Barrier
.
Technology
Production Related

Capital
Entry Barrier

Govt. Related

Channel
Marketing Related

Brand

Competitive Rivalry
(intra industry rivalry)
This is most likely to be high where entry is
likely; there is the threat of substitute
products, and suppliers and buyers in the
market attempt to control. This is why it is
always
l
seen in
i the
th center
t off the
th diagram
di
This will determine the:
Market structure
Market conduct
Market
M k t performance
f

Market structure
Characteristics of the market
No. of players
Demand
Degree of seller and buyer concentration

What influences competition

E t condition
Entry
diti
Product differentiation
Flow of information

Market conduct

Pattern of behaviour in adapting to markets

Methods employed to determine prices
Sales promotion
P d
Predatory
or exclusionary
l i
tactics
i directed
di
d
against established rivals and new entrants

Market performance
Results
Profitability

Positioning

Act of designing the companys

g and image
g to occupy
py
offering
a distinctive place in the mind of
g market.
the target

Positioning
Positioning is all about 'perception.
The
The term 'positioning'
positioning refers to the consumer
consumer'ss
perception of a product or service in relation to its
p
competitors.
Products or services are 'mapped' together on a
p
g map'.
p This allows them to be
'positioning
compared and contrasted in relation to each other.
Marketers decide upon
p a competitive
p
pposition
which enables them to distinguish their own
products from the offerings of their competition
(h
(hence
the
h term ''positioning
i i i strategy').
')

Positioning Matrix

Premi m
Premium
Value for
money

Cheap
p

Types of positioning
Generic positioning New product.
Differentiate on needs

Attribute positioning Growth market

Differentiate on attributes

Emotional positioning Mature market

Differentiate
iff
i on iintangible
ibl attributes/
ib
/ brand
b d
image

Buying behaviour to Positioning

Low
differences
between
brands
High
differences
b
between
brands

Low uncertainty
of untried brands
Eg: salt, cement
Buying beh:
Picking

High uncertainty of
untried brands
Eg: Textiles
Buying beh:
Habit

Eg: Soaps
Buying beh:
Variety seeking

Eg:Pharmaceuticals
Buying beh:
Problem solving

Repositioning
Gift Item
It

Sweet

Snack
Kid
Adult/Youth

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Defining Associations
Points-of-parity
Points-of-difference
(PODs)
((POPs))
Attributes or benefits
Associations that are
consumers strongly
not necessarily unique
associate with a brand,
to the brand but may
positively evaluate, and
be shared with other
b li
believe
they
th could
ld nott
b d
brands
find to the same extent
with a competitive
brand

Differentiation Strategies

Product

Personnel

Channel

Image

Designing Competitive
Strategies

Designing Competitive Strategies

Market-Leader Strategies
Expanding the Total Market
New Users
Market-penetration strategy
New-market segment strategy
Geographical-expansion strategy

New Uses
More Usage

Defendingg Market Share

S

Designing Competitive Strategies

Defense Strategies

Position
P
iti Defense
D f
Flank Defense
Preemptive
ee pt ve Defense
e e se
Counteroffensive Defense
Mobile Defense

Market
k broadening
b d i
Principle of the objective
Principle of mass
Market diversification

Contraction Defense
Planned contraction
(Strategic withdrawal)

Designing Competitive Strategies

Brand-extension strategy
Multibrand strategy
Heavy
H
advertising
d
i i andd
media pioneer
Aggressive sales force
Effective sales promotion
Competitive toughness
Manufacturing efficiency
and cost cutting
Brand-management
B d
t system
t

Designing Competitive Strategies

Market-Challenger Strategies
Defining the Strategic Objective and
Opponent(s)
It can attack the market leader
It can attack firms of its own size that are not
doing the job and are underfinanced
It can attack
tt k small
ll local
l l andd regional
i l firms
fi

Choosing a General Attack Strategy

Attack Strategies

Designing Competitive Strategies

Choosing a Specific Attack
Strategy

Price-discount
Lower price goods
Prestige goods
P d proliferation
Product
lif i
Product innovation
Improved services
Distribution innovation
Manufacturing cost reduction
Intensive advertising promotion

Designing Competitive Strategies

Choosing a Specific Attack
Strategy

Price-discount
Lower price goods
Prestige goods
P d proliferation
Product
lif i
Product innovation
Improved services
Distribution innovation
Manufacturing cost reduction
Intensive advertising promotion

Designing Competitive Strategies

Market-Follower Strategies
Innovative imitation
(Product imitation)
Product innovation
Four Broadd Strategies:
i

Counterfeiter
Cloner
Imitator
Adapter

Designing Competitive Strategies

Market-Nicher Strategies
High margin versus high
volume
Nicher Specialist Roles
End-user specialist
Value-added reseller

Vertical-level specialist
Customer-size
Customer
size specialist
Specific-customer specialist
Geographic specialist
Product or product
product-line
line
specialist

ProductProduct-feature
specialist
Job
Job--shop specialist
Quality
Quality--price specialist
Service specialist
Channel specialist

Balancing Customer and Competitor

Orientations
Competitor-centered company
Customer
Customer-centered
centered company

What is a New Product?

Really
innovative

Significantly
different

Imitative

N P
New
Product
d t IIntroductions
t d ti
Pioneers or breakthroughs
First movers

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Diffusion of Innovation

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

C
Concept
tT
Testing
ti
Concept is a brief
written description of
th product
the
d t
Customers reactions
d t
determine
i whether
h th or
not it goes forward
Triggers the marketing
research process

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Timing of Market Entry

First entry
Parallel entry
Late entry

Product Life Cycle

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

PLC term
tipping pointthe transition between
introduction and g
growth when the pproduct
either gains market acceptance or must exit
the market. The majority
j y off new products
p
fail at this point.

Different Levels of Benefits

(Laddering)

Expected product
Generic or Core
Product or Service or Service
(S i fi )
(Satisfiers)
(Must)

Augmented
or Enhanced
Products
or Services
(Delights)

Potential Product
or Service
(True insights)

Th Ri
The
Rings M
Model
d l off P
Product/Service
d t/S i Att
Attributes
ib t (L
(Levitt)
itt)

Product Mix and Product Line

The product mix is the set of all products offered for sale
by a company.
A product mix has two dimensions:
Breadth - the number of product lines carried.
carried
Depth - the variety of sizes, colors, and models
offered within each product line.
A product line is a broad group of products, intended for
similar uses and having similar characteristics.

What Makes a Brand?

URLs
Brand
name

Branding

Logos and
symbols

Jingles
Slogans
g

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Characters

Brand Equity

The differential effect that brand

g has on consumer
knowledge
response to the
g of that brand.
marketing

Brand Equity
CRM
Programs:
Are they able
to create
Brand
Associations

2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Measuring Brand Equity

Brand Audits: Consumer Focused exercise
Brand Tracking
Brand Valuation

Brand Roles in a Brand Portfolio

Fl k
Flankers

C hC
Cash
Cows

Low-end
Entry-level

High-end
g
Prestige

Brand Portfolio roles

Strategic brands - TCS is a strategic brand of
TATA
Linchpin brands - Park Avenue, linchpin brand
for Raymond; because it has extended the
Raymonds credibility in different businesses
from ready -to- wear trousers to mens toiletries
Silver bullet: A silver bullet is a brand or subbrand that positively influence the image of
another brand; ex: when IBM ThinkPad was
launched
Cash cow brand:

Packaging
g g

Primary
Pi
package
k
Secondary package
Example:
E
l off Packaging
P k i that
th t has
h helped
h l d the
th brand
b
d
successful
2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Pricing - Price Cues

Left to right pricing ($299 versus $300)

Odd number discount perceptions
Even number value perceptions
E di prices
Ending
i
with
i h 0 or 5
Sale written next to price

Inelastic and Elastic Demand

Brand Leader Responses to

Competitive Price Cuts

Maintain price
M i i price
Maintain
i andd add
dd value
l
Reduce price
Increase price and improve quality
Launch a low-price
low price fighter line

Pricing Objective
a) Survival
b) Maximize current profit: assumes firm has
knowledge
g of demand and cost functions firm mayy
sacrifice long-term performance
q
estimatingg onlyy
c)) Maximize current revenue: requires
the demand function
d) Maximum Sales growth: low pricing to penetrate
market; market-penetration pricing.
e) Maximum market skimming: charge high initially
and then lower prices, market-skimming pricing.

Pricing
g Method
a) Mark-up pricing: adding a standard markup to the product's
cost
b) Target-Return pricing: Price that will yield the cos ROI.
c) Perceived-value pricing: pricing on the basis of buyers
perceptions of value,
value not the seller's cost,
cost as the key to pricing.
pricing
d) Value pricing: Charging a fairly low price for a high-quality
offering.
e) Going-rate pricing: the firm bases its prices largely on
competitor's prices.
Sealed-bid
Sealed
bid pricing: the firm bases its price on expectations of
f)
how competitors will price rather than a relation to the firms costs
or demand.

Adapting a price
Geographical pricing
Price discounts and allowances
Promotional pricing: to stimulate early
purchase
price discrimination
Product-mix pricing

Product-mix pricing: Six Types

Product-line pricing: Pricing is done after considering the products in

the product line.
Optional-feature pricing: a basic stripped down product with optional
features made available separately.
separately
Captive-product pricing: pricing razor cheap and blades costly. Camera
and film.
Two-part pricing: Fixed fee + variable usage fee. E.g cellular fees.
Amusement parks.
Byproduct pricing: pricing by-products to recover some of the costs in
production of the main products.
Product-bundling pricing: Products offered as a bundle at a
consolidated price. Normally, the sum of individual prices is much
higher that that of the bundled product.

Marketing Channels

Sets of interdependent organizations

involved in the process of making a
product or service available for use
or consumption.

Channels and
Marketing Decisions
B dD
Brand
Decision
i i = S
Store Decision
D i i =
Pull
Push
Strategy
Strategy

Consumer Marketing Channels

Channel Integration and Systems

Vertical marketing
systems
Corporate VMS
Administered VMS
Contractual VMS
Horizontal marketingg
systems
Multichannel systems

Types of Advertising:
ATL Above the Line: Deals with ads
controlled centrally. Includes organized
mass media and including internet
advertisement. ATL is usually handled by
the designated ad agency.
BTL Below the Line: Controlled locally, but
g creations etc. come from central
designs
authority. Locals have power to influence
p y scheme and decide where to place
p
display
what.

The Five Ms of Advertising

Advertising Objectives
Informative
advertising
g

Persuasive
advertising
g

Reminder
advertising

Reinforcement
advertising

Factors to Consider in Setting an

Ad
Advertising
i i Budget
B d
Stage in the product life cycle
Market
a e sshare
aea
and
d co
consumer
su e base
Competition and clutter
Advertising frequency
Product substitutability

Major Media Types

Newspapers
Television
Direct mail
Radio
Magazines

Outdoor
g
Yellow ppages
Newsletters
Brochures
Telephone
Internet

Place Advertising

Billboards
Public spaces
Product placement
Point-of-purchase

International Product and

Communication Strategies

Five Modes of Entry into Foreign

Markets
Indirect
exporting

Direct
exporting

Licensing

Joint
ventures

Commitment, Risk, Control, Profit Potential

Direct
investment

Buzz Word
Marketing Myopia

- Theodore Levitt

Concept of looking inwards and improving

your own product with the mindset
that customers would buy it. It does not
consider the customers need as the decisive
factor before launching a product.

 Metamarket

- Mohan Sawhney

A cluster of complementary products and

services that are closely related in the minds of
consumers but are spread
p
across a diverse set of
industries.