Marketing

Management

Why it is supremely important to

have satisfied customers?
1. Buys more & stays loyal
2. Buys additional products as the company
introduces
3. Talks favorably about the company
4. Pays less attention to competing products
5. Costs less to serve then new consumer

The Golden Rule

Rule #1: The customer is always right!
Rule #2: If the customer is wrong, follow
rule #1.
HARRY GORDON SELFRIDGE
Selfridge & Co Ltd, 1909

What is Marketing???
According to AMA
The activity, set of institutions, and
processes for creating, communicating,
delivering, and exchanging offerings that
have value for customers, clients, partners,
and society at large.
According to CIM
"The management process responsible for
identifying, anticipating and satisfying
customer requirements profitably.

What is Marketing???
Marketing is an organizational function and a
set of processes for creating,
communicating, and delivering value to
customers and for managing customer
relationships in ways that benefit the
organization and its stakeholders.

What is Marketing???
According to Philip Kotler
Marketing is a social and managerial
process by which individuals and groups
obtain what they need and want through
creating, offering, and exchanging products
of value with others
Marketing is simply creating and
maintaining demand for you
product

What is Marketing???

Importance of Marketing
Marketing influences many aspects of peoples
daily lives
All goods and services they buy
Stores in which they purchase
Radio and TV programs they consume are paid for
by advertising
CV they produce to impress potential employers

Marketing offers exciting career paths

Marketing is important to every organisation

Importance of Marketing
Marketing concepts and techniques are also
relevant for non-profit companies
Marketing plays a major role in economic
growth and development by
Stimulating research and new ideas, resulting in
new goods and services
Providing choice among products which may
satisfy customers, resulting in fuller employment,
higher incomes and higher standards of living

Scope of Marketing

Goods

Scope of Marketing

Experiences

Scope of Marketing

Events

Scope of Marketing

Persons

Scope of Marketing

Services

Scope of Marketing

Places

Scope of Marketing

Ideas

Scope of Marketing
Information

Scope of Marketing

Organizations

Modern Marketing System

Suppliers
Suppliers

Company
Company
(Marketer)
(Marketer)

Marketing
Marketing
Intermediaries
Intermediaries

End
EndUser
User
Market
Market

Environment

Environment

Competitors
Competitors

What is Marketing Management?

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.

Tasks of MKT Management

Developing marketing strategies

Capturing marketing insights
Connecting with customers
Building strong brands
Shaping market offerings
Delivering value
Communicating value
Creating long-term growth

What is Marketing Plan???

A marketing plan is the central instrument
for directing and coordinating the marketing
effort.
It operates at a
strategic and tactical level.
A marketing plan is a written document that
details the necessary actions to achieve one
or more marketing objectives

Two levels of a Marketing Plan

Strategic
Target marketing
decisions
Value proposition
Analysis of
marketing
opportunities

Tactical

Product features
Promotion
Merchandising
Pricing
Sales channels
Service

Internal Marketing?
Internal marketing is the task of hiring,
training, and motivating able employees who
want to serve customers well

Core Marketing
Concepts

Core Concepts
Need
A state of felt deprivation of some basic
satisfaction
Wants
Are desire for specific satisfiers to fulfill
the needs
Demand
Are wants for specific products that are
backed by an ability and willingness to
buy them

Core Concepts
Market Offering
Some combination of products, services,
information or experiences offered to a market to
satisfy a need or want

Core Concepts
Value
The difference between the benefits a customer
derives from an offering and the cost of those
benefits

A good or service that does not meet a

consumers needs results in low customer
value, even if the price is very low

A higher price may be acceptable if the

desired benefits are obtained

Core Concepts
Very Important to remember
Customer are and will always be value
maximizers

An organisation that offers superior customer

value is likely to win and keep customers

Core Concepts
Customer Satisfaction
The extent to which a products perceived
performance matches a buyers expectations

Core Concepts
Exchange & Transaction
In how many ways ppl can get what they Want??
Four ways people can obtain what they
want
1. Self-production
2. Coercion
3. Begging
4. Exchange

Marketing emerges when

people decide to satisfy
their needs & wants
through exchange

Core Concepts
For exchange to take place
5 conditions must exist

2 parties

Something of value for other

Capable of communication

Free to accept or reject the offer

It is appropriate or desirable to deal

with
the other party

Core Concepts
Markets
Consists of all the potential customers
sharing a particular need or want who
might be willing and able to engage in
exchange to satisfy that need or want
Competition
Includes all the actual and potential rival
offerings and substitutes that a buyer
might consider

Core Concepts
Marketing Channels
The sources/network used by marketers to
reach their customers
1.Communication Channels
2.Distribution Channels
3.Service Channels

Core Concepts
Supply Chain
The larger network used in the delivery of
product, from raw materials to
components to final product to the final
buyer
Marketing Environment
A larger set of surroundings in which
marketing companies operate comprises
of micro and macro forces that affect the
ability of company to serve its customers

Demand Management
Demand States

Demand States
Negative Demand
A major part of market dislikes the product
and may even pay a price to avoid it.
No Demand
Target Consumers may not be interested in
or unaware of the product
Latent Demand
Consumers may share a strong need not
currently satisfied by existing products

Demand States
Declining Demand
demand gradually going down
Irregular Demand
demand that varies on a seasonal, daily or
even hourly basis
Full Demand
organizations face full demand when they
are pleases with their volume of business.

Demand States
Overfull Demand
Demand higher then the level an
organization can handle
Unwholesome Demand
When there are organized efforts to curb the
consumption of products

4 Types of business
orientations towards
marketing

Production Concept
Consumer will favor those product that are
widely available and low in cost
Managers of production oriented
organizations concentrate on achieving
high production efficiency and wide spread
distribution

Product Concept

Consumer will favor those product that

offer the most quality, performance, or
innovative features

Managers of these organizations focus

their energy on making superior products
and services and improving them overt
time

Selling Concept
Consumer if left alone ordinarily will not
buy enough of the organizations products
The organization must undertake an
aggressive selling and promotion effort
Many organization practice selling concept
when they have over capacity
Their aim is to sell whet they make rather
then what the market buys

Marketing Concept
Key in achieving organizational goals
consist in determining the needs and
wants of target markets and delivering the
desired satisfaction more effectively and
efficiently than competitors

Marketing/Sales Concepts
Starting
Point

Focus

Factory

Existing
Products

Means

Ends

Selling
and
Promoting

Profits
through
Volume

The
The Selling
Selling Concept
Concept

Market

Customer
Needs

Integrated
Marketing

Profits
through
Satisfaction

The
The Marketing
Marketing Concept
Concept

Pillars of Marketing Concept

Customer Needs

Target

Profitability

Market

Coordinated Marketing

Needs
Stated Needs
customer wants an inexpensive car

Real Needs
customer wants a car with low operating cost not
merely initial low cost

Unstated Needs
The customer expects good service from the dealer

Delight Needs
the customer buys a car and receive full fuel tank for
free

Needs
Secret Needs
the customer wants to be seen by the friends as a
value oriented

Coordinated Marketing
Means two things
Various marketing functions must be
coordinated among themselves
Marketing must be coordinated with the
other company departments

Most companies do not embrace the

marketing concept until driven to it by
circumstances
Sales decline
Slow growth
Changing buying patterns
Increasing competition
Increasing marketing expenditures

Regardless of its orientation, marketing

managements crucial task is to create
profitable relationships with customers

Customer Relationship
Marketing
The overall process of building and
maintaining profitable customer
relationships by delivering superior customer
value and Satisfaction

Relationship
Building Blocks

Customer Perceived
value

Difference
between Total
Customer Value
and Total
Customer Cost

Customer
Satisfaction

The extent to
which a products
perceived
performance
matches a buyer's
expectations

Customer
Delivered Value

Total Customer Value

Total Customer Cost

Product
Value

Monetary
Cost

Service
Value

Time Cost

Personnel
value

Energy
Cost

Image
value

Psychic
Cost

Increasing Customer Value

Raise benefits

Reduce Costs

Raise benefits & Reduce Costs

Raise benefits by more then the raise in

costs

Lower benefits by less than the

reduction in cost

Customer Development Process

Suspects
Prospects
Disqualified
Prospects

First Time
Customers
Repeat
Customers
Clients
Members
Inactive or
Ex Customers

Advocates
Partners

Levels of CR Building

Basic Marketing

Reactive Marketing

Accountable Marketing

Proactive Marketing

Partnership Marketing

High Margin
Many
Customers/Distri
butors

Medium Margin Low Margin

Accountable

Reactive

Basic or
Reactive

Medium No. of
Customers/
Distributors

Proactive

Accountable

Reactive

Few
Customers/Distri
butors

Partnership

Proactive

Accountable

Winning Companies
Are able to enhance the value of their
customer base by excelling at the following
strategies

reducing rate of customer defection

Increasing the longevity of the customer

relationship

Enhancing growth potential of each

customer
through share of wallet ,
cross selling & up selling

Making low profitable customer more

Winning Companies

Focusing disproportionate effort on high

value customers

What Customers have today???

A substantial increase in buying power

A greater variety of available products

A great amount of information about

any thing

A greater ease in interacting, placing &

receiving
orders

An ability to compare notes on products

and services

Forces Shaping the New Economy

Digitalization &
Connectivity

Customization &
Customerization

New Economy

New Intermediaries

The Internet
Explosion

Forces Shaping the New Economy

Intranet
The network that connect people in the
company to each other and to the company
network
Extranet
A network that connects a company with its
suppliers and distributors
Internet
Computer network that allows users all over

Forces Shaping the New Economy

Customerization
Leaving it to individual customers to design
the marketing offering
Customization
Taking the initiative to individualize the
marketing offering

E-Business
The use of electronic platforms intranets,
extranets & internet to conduct a companys
business
E-Commerce
Buying and selling processes supported by
electronic means, primarily the internet
E-Marketing
Companys effort to communicate about,
promote and sell products and services ove
the internet

Old Vs New Economy

Old Economy

New Economy

Organize by Products

Organize by Segments

Focus on Profitable Transactions

Focus on Customer Lifetime value

Look at financial scorecard

Look at marketing score card

Focus on shareholders

Focus on Stake holders

Marketing does marketing

Everyone does marketing

Build brands through Adv.

Build brands through Performance

Focus on customer acquisition

Focuson customer retention

No customer satisfaction
measurement

Measure customer satisfaction

Over promise, under deliver

Under promise, over deliver

E-Commerce
Benefits to Buyers

Convenient

Easy & Private

Greater product Access & Selection

Comparative information

Interactive and immediate

E-Commerce
Benefits to Sellers

Customer relationship building

Reduced Cost

Incensing speed and efficiency

Flexibility

Global reach

E-Commerce Domains
Targeted to
Consumers

Targeted To
Business

Initiated
By
business

B2C
Business to
Consumer

B2B
Business to
Business

Initiated
By
Consumer
s

C2C
Consumer to
Consumer

C2B
Consumer to
Business

Winning Markets
through marketoriented strategic
planning

Value Delivery Approach

Core Business Processes

Fulfillment
management

Customer relationship
management

Customer
acquisition

New-offering
realization
Marketsensing

Strategic Planning
The process of developing and
maintaining a strategic fit between the
organizations goals and capabilities and
its changing marketing opportunities

Strategic Planning
Strategic Planning calls for action in 3
key areas
1, Managing companies business as an
investment portfolio
2, Assessing each businesses strength
- Market Growth Rate
-Company position & fit in
market
3, Establishing a strategy for achieving

Strategic Planning

Corporate Strategic Planning

Define corporate mission
Establish SBUs
Assign resources to SBUs
Assess growth opportunities

Defining Corporate Mission

Who is the
customer?
What is
our
business?
What
should our
business
be?

What is of
value to the
customer?

What will
our
business

Establishing SBUs
A business unit that can operate
independently from other units

Unique competitors

A single business
or collection of
related businesses

Leader responsible
for planning and
profitability

Three Characteristics of an SBU:

Defining SBUs
Customer
groups

Customer needs

Technology

Assigning Resources to SBUs

BCG Matrix
High Market
Share
High MKT
Growth

Slow MKT
Growth

Low Market
Share

Assigning Resources to SBUs

LOW

Business Position

MED

HIGH

GE/McKinsey Matrix

LOW

MED

Industry Attractiveness

HIGH

SBU Strategy
1,

Build

2,

Hold

3,

Harvest

4,

Divest

Assessing Growth Opportunities

Strategic Planning Gap

Difference between desired sales &
growth and projected sales is called SPG
Three options for enhancing sales &
minimizing SPG
1, Growth in the current business
(intensive
growth)
2, Build/acquire related business
(integrative growth)
3, Add new unrelated business
(diversification)

Strategic Planning Gap

Intensive Growth
Curre
nt
Marke
New
t
Marke
t

Current
Products
Market

New
Products
Product

Penetration
Strategy

Development
Strategy

Market
Development
Strategy

Diversification
Strategy

Integrative Growth
Backward
Integration

Forward
Integration
Business

Horizontal
Integration
Competitor

Wholesaler

Diversification Growth
w
e
N

y
t
i
n
u
rt
o
p
p
O

Diversification Growth
Three options to diversify
1 Launch product with technical
synergies to existing products which
appeal to different customers
(Concentric Diversification)
2 Launch products different to existing
but which appeal to same customers
(horizontal diversification)
3 Launch products the are totally
unrelated (conglomerate

Corporate Culture
is the shared experiences, stories,
beliefs, and norms that characterize an
organization.

Marketing Innovation
3 Groups
1.Youthful & Diverse Ideas
2.Far Away from HQ
3.New to Industry

Identify and encourage new ideas

Scenario
Analysis

Business Strategic Planning

Process
Internal
Environme
Strength / nt

Business
Mission

Weaknesses
Opportunity /
Threats

External
Environme
nt

GOAL
Formulation

Strategy
Formulation

Program
Formulation

Implementation

Feedback &
Control

SWOT Analysis
Strength
Weaknesses
Opportunities
Threats
Marketing Opportunity
is an area of buyer need or potential
interests in which a company can
perform Profitably
Marketing Opportunity Analysis

Attractiven
ess

Opportunity Matrix
High
Low

High

Low

Success
Probability

Seriousnes
s

Threat Matrix
High
Low

High

Low

Probability of
Occurrence

GOAL Formulation
SMART
Ranked
Specific
Measurable
Consistent
Achievable
Reliable
Realistic
Time Bound

Quantified

Strategy Formulation
1 Over all cost leadership
lowest possible cost so as to price
lower then competition
2 Differentiation
Superior performance in a key area
valued by customers
3 Focus
Focuses on one or more narrow
segments

Strategy Formulation
Strategic Alliances
Product or Service alliances
Promotional Alliances
Logistics Alliances
Pricing Collaboration

Strategic Alliances

The Marketing Process

1. Analyze Marketing
Opportunities

5. Organizing,
implementing & controlling
the marketing effort

2. Research & select

target markets

4. Planning Marketing
Programs

3. Designing
Marketing Strategy

Gathering
Information and
Measuring Market
Demand

Collecting Information
Customers

Competitors

External Factors

MIS

Marketing Information Systems, consist

of people, equipment & procedures to
gather, sort, analyze, evaluate and
distribute needed, timely, and
accurate information to the marketing
Internal Records
decision
makers
Marketing
Research

Insight
Marketing
Intelligence

Internal Records
Order-to-Payment
Cycle
Databases / Data
Mining

Sales Information
Systems

Marketing Intelligence System

Marketing Intelligence systems include

all procedures and sources used by
managers to get every day
Newsinformation
and Trade Publications
about development in the
market

Monitor social media sites

Meet with customers, suppliers,

distributors, and other
managers

Improving MIS
Sales Force

External Experts

Establish industry network

Customer Advisory Panel

Competitors products/open house

seminars/talking to employees

Conducting Marketing

Marketing Research

Is a systematic design, collection,

analysis, and reporting of data and
findings relevant to a particular or
specific marketing situation facing
the company

Marketing research firms fall into 3

categories
1. Syndicated service research firms

Marketing Research Process

Define the
problem and
research
objective

Develop the
research Plan

Collect the
Information

Analyze the
Information

Present the
Findings

Make the
Decision

Research Objectives
Exploratory
Research

Descriptive
Research

Causal
Research

Gathers preliminary information

that will help define the problem
and suggest hypotheses

Describes things as market

potential for a product or the
demographics and consumers
attitudes
Test hypotheses about causeand-effect relationships

Step 2 Research Plan

Research plan development follows these
steps:
Determining Specific Information Needs
Gathering Secondary information
Planning Primary Data Collection

Information Sources
Secondary
Information that
already exist
somewhere,
having been
collected earlier or
for other purposes

Primary

Data

Both Must Be:

Relevant
Accurate
Current
Impartial

In formation
collected for the
specific purpose
at hand

Research Approach
Observational
Research
Gathering
data by
observing
people,
actions and
situations
(Exploratory)

Survey
Research
Asking
individuals
about
attitudes,
preferences or
buying
behaviors
(Descriptive)

Experimental
Research
Using groups
of people to
determine
cause-andeffect
relationships
(Causal)

Sampling Plan
Sample:- A segment of population selected
for marketing research to represent the total
population
Who???
How Many???
How???

Contact Method
Contact Method
Mail Questionnaire
Online
Telephone Interviewing
Personal interviewing
Group Interviewing

Research Instruments
Research Instruments

Questionnaire
What questions to ask?
Form of each question?
Closed-end
Open-end
Wording?
Ordering?

Mechanical Devices
People Meters
Supermarket Scanners

Marketing Research Process

Implementing the Research Plan

Collecting the
Data

Processing the
Data

Research Plan

Analyzing the
Data
117

Marketing Research Process

Interpreting and Reporting
Findings

Researcher Should Present Important

Findings that are Useful in the Major
Decisions Faced by Management.
Step 1. Interpret the Findings

Step 2. Draw Conclusions

Step 3. Report to Management

118

Market

Market
A set of all actual & potential buyers of
a market offer
Potential Market
Is the set of consumers who profess a
sufficient level of interest in the offer
Available Market
Is the set of consumers who have
interest, income, access to the

Market
Target Market
Part of available market the company
decides to serve
Penetrated Market
Is the set of consumers who are buying
the companys product

Market Demand

Total volume of a product that would be

bought by a defined customer group in
a defined geographic area in a defined
time period under a defined marketing
environment given a defined level of
industry market expenditure

Market Forecast

Only one level of industry marketing

expenditure would occur, the market
demand corresponding to this level is
called the market forecast

Market Potential

The limit approached by market

demand
as
industry
marketing
expenditure approach infinity

Company Demand

Companys estimated share of market

demand at alternative levels of
company marketing effort in a given
time period

Company Sales Forecast

Expected level of company sales given
a certain marketing effort or program

Total Market Potential

The total volume of sales that will be

available to all firms in the industry
over a period of time, given a certain
level of industry expenditure

Q = npq
n= no. of buyers
q=quantity purchased by avg. buyer
p=price of an avg. unit

Measuring Future Demand

Sales Force
Opinions

Past Sales
Analysis

Forecasting

Buyers
Intentions

Expert
Opinions

Measuring Marketing Efficiency

Marketing metrics

External

Awareness
Market share
Relative price
Number of complaints
Consumer satisfaction
Total number of
customers
Perceived quality/esteem
Loyalty/retention
Relative perceived quality

Measuring Dashboard

Analyzing Consumer
Markets

Consumer Market
All individuals and households who buy or
acquire goods and services for personal
consumption
Consumer Buyer Behavior
Buying behavior of final consumers
The central question for marketers is:
How do consumers respond to
various marketing efforts the company
might use?

Factors Influencing Buyer

Behavior
Cultural
Culture
Subculture
Social
class

Social
Reference
groups
Family
Roles
and
status

Personal

Age and
life-cycle
Occupation
Economic
situation
Lifestyle
Personality
and
selfconcept

Psychological
Motivation
Perception
Learning
Beliefs and
attitudes

Buyer

Factors Influencing Buying

Behavior
Cultural factors
Culture
Basic values, perceptions, wants
and behaviors learned from
family and other institutions

Sub Culture
people with shared values
system based on common life
experiences and situations

Social Class
Relatively permanent and ordered
divisions in a society whose members
share similar values, interest and
behaviors

Social Factors

Reference Groups

Family

Role and Status

Personal Factors
Occupation
Economic situation

Personality

Age
Values

Life Cycle Stage

Factors Influencing Buying

Behavior
Psychological Factors
Motivation
Perception
Learning
Beliefs & Attitude

Buying Roles
1,
2,
3,
4,
5,

Initiator
Influencer
Decider
Buyer
User

Four Types of Buying

Behavior
Brand
diferences

High

Significant

Few

Low

Complex
Buying
Behavior

Variety-seeking
buying Behavior

Dissonance
reducing Buying
behavior

Habitual Buying
Behavior

Involvement

Buying Decision Process

How can marketers learn about BDP

stages?
1.How they would act (introspective
method)
2.Interview
recent
purchaser
(retrospective method)
3.Ask consumers who plan to buy
(prospective method)
4.Ask consumers to describe ideal way

Buyer Decision Process

Purchas
e
Evaluation Decisio
Postpurchase
n
of
Behavior
Alternatives
Informatio
n
Search
Need
Recognitio

139

Need Recognition
Im Hungry
State
Where the
Buyers
Needs are
Fulfilled
and the
Buyer is
Satisfied.

Needs Arising
From:
Internal Stimuli

Hunger
External
StimuliFriends

Information Search
Two Levels of search arousal
1.Heightened Attention
2.Active Information

The Buyer Decision Process

Step 2. Information Search
Personal
Personal Sources
Sources
Commercial
Commercial Sources
Sources
Public
Public Sources
Sources
Experiential
Experiential Sources
Sources

Family, friends, neighbors

Most effective source of
information
Advertising, salespeople
Receives most information from
these sources
Mass Media
Consumer-rating groups
Handling the product
Examining the product
Using the product

The Buyer Decision Process

Step 3. Evaluation of Alternatives

Consumer May Use Careful
Calculations & Logical Thinking

Consumers May Buy on Impulse and

Rely on Intuition
Consumers May Make Buying Decisions
on Their Own.
Consumers May Make Buying Decisions
Only After Consulting Others.

Marketers Must Study Buyers to Find

Out How They Evaluate Brand

The Buyer Decision Process

Step 4. Purchase Decision
Purchase Intention

Desire to buy the most preferred brand

Attitude
s of
Others

Unexpecte
d
Situational
Factors

Purchase Decision

Buying Decision
In executing a purchase decision a
consumer may take up to 5 sub
decisions
1.Brand Decision
A
B
2.Vendor Decision
3.Quantity Decision
4.Timing Decision
5.Payment-Method Decision

Postpurchase Satisfaction

Delighted

Satisfied
Dissatisfied

Loyal
Stay or
Go
Defect

Post purchase Actions

Stages in the Adoption

Process
Awareness: Consumer is aware of
product, but lacks information.
Interest: Consumer seeks
Information about new product.
Evaluation: Consumer considers
trying new product.
Trial: Consumer tries new
product on a small scale.
Adoption: Consumer decides
to make regular use of product.

Early Majority
Innovators

Percentage of Adopters

Adoptors Categories

Early
Adopters

34%

Late Majority

16%

13.5%
2.5%

Early

Laggards

34%

Time of Adoption
Late

Identifying Market
Segments and Selecting
Target Markets

Evolution of marketing strategy

3 stages
1.Mass Marketing
2.Product-Variety Marketing
3.Target Marketing

Target Marketing:- The process of

evaluating market segments
attractiveness and selecting one or more
segments to enter

Strategic Target Marketing

1. Identify and profile distinct groups of
buyers (market segmentation).
2. Select one or more market segments
to enter (market targeting).
3. For each, establish and communicate
benefits of offering (market
positioning).

Why Target Market???

1.Helps identify marketing opportunities
better
2.The seller can develop right offer for
the right market
3.The price, distribution & adv. Can be
adjusted to reach the consumers
effectively
4.They can focus on buyers whom they
have
the
greatest
chances
to

Market
Segmentation
1. Identify
Segmentation
Variable &
segment the
market
2. Develop profiles of
resulting segments
Market
Positioning
5. Identify possible
positioning
concepts
6. Select, develop &
communicate the

Market Targeting
3. Evaluate the
attractiveness of
each segment
4. Select the target
segment

Levels of MKT Segmentation

1.Mass Marketing
2.Segment Marketing
3.Niche Marketing
4.Local Marketing
5.Individual Customer Marketing

Patterns of MKT Segmentation

1. Homogeneous preference
2. Diffused Preference
3. Clustered Preference

Major Segmentation Methods

Geographic

Demographic

Psychographic

Behavioral

Enthusiastic

Positive

Indifferent

Negative

Hostile

Psychographic Segmentation

Behavioral Segmentation
Usage occasions
User status
Usage rate
Buyer-readiness
Loyalty status

User and
Usage

Effective Segmentation
To be useful segments must be;
1.Measurable
2.Substantial
3.Accessible
4.Differentiable
5.Actionable

Evaluating Segments

Two major factors

1.Company Objectives & Resources
2.Overall attractiveness of the segment
Over all attractiveness
1,Size , Growth, profitability, scale economies

Structural Attractiveness

Entry
Barriers

Barriers & Profitability

Low

High

Low

Low Stable
returns

Low Risky
returns

High

High, Stable
returns

High risky
returns

Exit Barriers

Target MKT Selection

M1

M2

M3

P1
P2
P3

Single Segment concentration

Target MKT Selection

M1

M2

M3

P1
P2
P3

Selective Specialization

Target MKT Selection

M1

M2

M3

P1
P2
P3

Product Specialization

Target MKT Selection

M1

M2

M3

P1
P2
P3

Market Specialization

Target MKT Selection

M1

M2

M3

P1
P2
P3

Full Market Coverage

Dealing with Competition

Competitor
Companies that satisfy the same
customer need
Marketers need to avoid Marketing
Myopia and stop defining competition
in traditional industrial and category
terms
Strategic Group
All firms following the same strategy in

Based on the degree of product

substitution we can identify levels of
competition
1. Brand Competition
2. Industry Competition
3. Form Competition
4. Generic Competition

What to Keep a Tab on???

In general companies should study/monitor
3 variables when monitoring competition
6. Market Share
7. Share of Mind
8. Share of Heart

Classes of Competition
1.Strong Vs Weak Most companies focus
on weak competitors-this requires fewer
resources
2.Close Vs Distant Competitors-most
companies compete with competitors
that resemble them the most
3.Good Vs bad Competitors-A company
would support good competitors & attack
bad competitors

Market Members
Market
leader

Market
challenge
r

Market
nichers

Market
follower

Market Leader Staying No.1

1. Expand total market demand
2. Protect current market share
3. Increase market share

Expanding total Market

New Customers
More Usage
New product uses

Protect Share
Offensive Strategy
Proactive
Marketing

Defensive Strategy

Defense Strategies

To Maintain Market
Position Defense- build superior brand
power
Flank Defense- introduce new brands
Preemptive Defense- Attack before the
enemy starts its offence
Counteroffensive Defense-the leader
can meet the attacker frontally, or hit its
flank
Mobile Defense-stretches domain over

Market Challenger
Define objectives and opponent(s)
Choose general attack strategy
Choose Specific attack strategy

Objectives and
Opponents

Attack:
Market leader
Weaker, similar size firms
Smaller local or regional
firms

General attack strategies

Frontal attack
Flank attack
Encirclement attack
Bypass attack
Guerrilla attack

Runner-Up
Runner-Up Firms
Firms that
that Want
Want
to
to Hold
Hold Their
Their Share
Share Without
Without
Rocking
Rocking the
the Boat
Boat

Follow
Follow
Closely
Closely

Follow
Follow at
at aa
Distance
Distance

Firms
Firms that
that Serve
Serve Small
Small Segments
Segments
Not
Not Pursued
Pursued by
by Other
Other Firms
Firms

End-User
End-User
Specialist
Specialist

Geographic
Geographic
Market
Market
Specialist
Specialist

Customer-Size
Customer-Size
Specialist
Specialist

Service
Service
Specialist
Specialist

Common Reaction Profiles

1.Laid-back Competitor- do not react
quickly or strongly to a competitor move
2.Selective Competitor-only react to a
certain types of attacks
3.The Tiger-Reacts swiftly & strongly to
any competitive move
4.Stochastic Competitor-do not exhibit a
predictable reaction pattern

Product Lifecycle
Products have a limited life
Sales pass through stages
Profits rise, then fall
Different strategies needed

MKTNG Strategies- Growth

1. It improves product quality, adds new
product features, and improve styling
2. It introduces new models & flanker
products
3. It enters new market segments
4. It increases its distribution coverage &
enters new distribution channels
5. It shifts from product awareness
advertising to product preference
advertising
6. It lowers prices to attract the next layer

MKTNG Strategies- Maturity

Three strategies, Market, Product &
Marketing Mix Modification

Market Modification
Volume = no. of users x usage rate
No. of brand users can be increased in 3
ways
1. Convert Non Users
2. Enter New Market Segments
3. Win Competition Customers

MKTNG Strategies- Maturity

Usage can be increased in 3 ways
1. More frequent use
2. More usage per occasion
3. New & more varied Uses

Product Modification
1. Features
2. Quality
3. Style

MKTNG Strategies- Decline

1. Identify weak products or services
2. Determine Marketing Strategies
-Increase Investment
-Maintaining Investment
-Decreasing Investment
-Harvesting
-Divesting

Positioning &
differentiating
the market offering
through
Product Life Cycle

There are 4 broad ways to think about

differentiating a company offer
The firm can create value by offering
something that is
1. Better
2. Newer
3. Faster
4. Cheaper

Differentiation
the act of designing a set of meaningful
differences to distinguish the companys
offer from competitors offers
Product Differentiation
Services Differentiation
Personnel Differentiation
Image Differentiation

Product Differentiation
At one extreme are products with little
possibility of differentiation
Chicken, steel, aspirin
On the other spacterm are product with
limitless possibilities of differentiation
Automobile, furniture etc
The main product differentiators are
Features, Performance, Conformance,
Durability, Reliability, Style, Design

Features
Are characteristics that supplement the
products basic functioning

Performance
Refers to the levels at which the products
primary characteristics operate

Conformance
The degree to which a products design and
operating characteristics come close to the
target standard

Durability
Is a measure of the products expected
operating life

Reliability
Is a measure of the probability that a
product will not malfunction or fail within a
specified time period

Repair-ability
Measure of the ease of fixing a product that
malfunctions or fail

Style
Describes how well the product looks and
feels to the user

Design
All of the above qualities are design
parameters

Service Differentiation
When product can not be easily
differentiated, the key to competitive
success often lies in services augmentation
& quality

Delivery
Refers to how well the product or service is
delivered to the customer

Installation
Refers to the work done to make a product

Customer Training
Refers to training the customers
employees to use the vendors equipment
properly & efficiently

Consulting Service
Refers to data, information system,
advising service that the seller offers free
or for a price to buyer

Repair
Describes the quality of repair service

Personnel Differentiation
Companies can gain a string competitive
advantage through hiring and training
better people than their competitors

Image differentiation
Buyers respond differently to company &
brand images. Hence identity & image
needs to be differentiated
Identity comprises the ways that a
company aims to identify or position itself
or its products

Image is the way the public perceives the

company or its products

Identity can be built by;

Symbols
Slogans
Written and audio/visual Media
Special attributes
Events & Sponsorships

Differences are Stronger if

1. Important-delivers a highly valued
benefit to a sufficient no. of buyers
2. Distinctive
3. Superior
4. Preemptive-the difference cannot be
easily copied
5. Affordable
6. Profitable

Positioning
The act of designing a company's offer and
image so that it occupies a distinct and
valued place in the target consumers mind

According to Rise & Trout

Well known brands hold a distinctive
positions in the mind of consumers, and it
will be hard for competitors to claim these
positions

A competitor has 3 alternative

1, Strengthen its current position in the
mind of consumers
2, To grab a position currently un
occupied
position
3, de-position or re-position the
competition in
the consumers mind

How Many Ideas to Promote???

Many marketers advocate promoting only
one idea, a company should develop a USP
for every brand and stick to it
Not every marketer agrees to single benefit
positioning, Double benefit positioning or
even triple benefit positioning can also be
successful at times
However as companies increase the no of
claims they make about their brands they
risk disbelief and loss of clear positioning,
there are four major positioning errors

Under-positioning
Buyers have a vague idea of the brand ,
they dont really sense anything special
about it

Over-positioning
Buyers may have too narrow an image of
the brand

Confused Positioning
Buyers may have a confused image of the
brand because of company making too

Doubtful-positioning
Buyers may find it doubtful to believe the
brand claims in view of the product
features

Positioning Strategies
There are at least 7 possible positioning
strategies
Attribute positioning-the company
positions itself on an attribute
Benefit positioning-the product I

Use/Application positioning
User positioning
Competitor positioning
Product category positioning
Quality /Price positioning

To say that products have a life cycle is to

assert 4 things
1. Products have a limited life
2. Product sales passes through distinct
stages
3. Profits rise & fall at different stages
4. Product require different marketing,
financial, manufacturing, purchasing &
human resources strategies in each life-

PLC Stages
1.Introduction-a period of slow sales
growth as the product is introduced in
the market, profits are non existent
because of heavy marketing
expenditures
2.Growth-a stage of rapid market
acceptance and substantial profit
improvement
3.Maturity-a period of slowdown in sales
growth because the product has

4.Decline-the period when sales show a

downward drift and profits erode
Three specific categories of Life cycle
Style: is a basic mode of expression
appearing in a filed of human endeavor,
a style can last for generations
Fashion: is a current accepted or popular
style in a given field, fashion pass
through four stages, distinctiveness,
emulation, mass-fashion, decline

Fad-are the fashion that comes quickly into

publics view, are adopted with great zeal
and decline very fast

MKTNG Strategies- Introduction

Promotion
High
low
Slow
Skimming
Strategy

low

Rapid
Penetration
Strategy

Slow
Penetration
Strategy

Price

High

Rapid
Skimming
Strategy

Developing
Pricing
Strategies and
Programs

Price

The amount of money charges for a

product or service, or the sum of the
values that consumers exchange for
the benefits of having or using the
product or service

Pricing
Process of determining what a company will
receive in exchange for its products

Two types of Pricing

1.Fixed Pricing
2.Dynamic Pricing
Cost

Cost

Cost

Price

Only element of MIX that represents

revenue
One of the most flexible

How Companies Price

Product-line
Managers
(w/guidance)

Small Business
Owner

Pricing
Department

Setting the Price

6 Select Final Price
5
4
3
2

Price Method

Competitor
Analysis
Estimate
Costs

Determine
Demand
Pricing Objective

Factors Affecting Pricing

Two types of factors affect pricing

decisions
1.Internal factors
-Marketing Objectives
-Marketing Mix Strategy
-Costs
-Organizational Considerations

1.External factors
-The market and demand
-Competitors Costs, Prices and Offers

Pricing Objectives
Survival
Maximum Current Profit
Maximum Market Share
Maximum Market Skimming
Product-Quality Leadership
Other Objectives

Determining Demand
Price sensitivity
Estimating demand curves
Price Elasticity of Demand

Estimating Costs
Types of costs

Fixed Costs
(overhead)

Variable Costs

Total Costs

Competitors offers
Price
Costs

Reaction

Worth to Customer

General Pricing Approaches

Three types of general approaches
1.Cost based pricing
2.Buyer based approach
3.Competitor based approach

Cost Based Pricing

Cost-Plus Pricing
Adding a standard markup to the cost of
the
product

Cost Based Pricing

Target Profit Pricing
The price at which a firm will make the
desired
profit

Buyer Based Pricing

Setting price based on buyers perception of
the value rather then on the sellers cost
1.Value Pricing Offering just the right
combination of quality and good services at
a fair price

Competitor Based Pricing

Setting price based on the prices competitors
charge for similar products

New Product Pricing Strategy

Two broad strategies available to companies
when they introduce a product in the
market

1.Market skimming Pricing

Setting a high price to skim
maximum revenues layer by layer from
the segments
willing to pay the high
price The company makes fewer but

profitable sales

New Product Pricing Strategy

Market Penetration Pricing
Setting a low price in order to attract a
large no. of buyers and a large market
share

The company makes large but

less profitable sales

Product Mix Pricing Strategy

When product is a part of a large product

mix the pricing strategies have to be
changed, 5 options exist

1.Product Line Pricing

Setting the price steps b/w various
products in a product line based on cost
differences, customer evaluations of
different features and
competitors
prices

Product Mix Pricing Strategy

Optional Product Pricing

The pricing of optional or accessory

products
along with a main product

Captive Product Pricing

Setting the price of products that
must be used
along with a main
product, such as blades for a razor
and film for
a camera

Product Mix Pricing Strategy

By Product Pricing
setting a price for by product in
order to make the main products
price more
competitive
Product Bundle Pricing
Combining several products and offering
the

bundle at a reduced price

Price Adjustment Strategies

Six types of strategies

1.Discount
A straight reduction in price on purchase
during a stated period of time
2. Allowance
Promotional money paid by manufacturers
to retailers in return for an agreement to
feature
the manufacturers product in
some way

Price Adjustment Strategies

3.Segment Pricing

Selling a product or service at two or

more prices, where the difference in
prices is not
based on differences in
costs
4. Psychological Pricing
A pricing approach that considers
the
psychology of prices and not simply
the
economics; the price is used to say
something about the product

Price Adjustment Strategies

5. Promotional Pricing
Temporary pricing to boost sales

Reason For Price Changes

1.Price Cuts
Excess capacity
Falling market share
Dominate market through lower
1.Price Increase
Cost inflation
Over demand

Competitor Moves

Designing and Managing

Integrated Marketing

Role of Marketing Comm.

Inform

Persuade
Remind

Marketing Communication Mix

Word-of-Mouth

Advertising
Direct and Interactive
Marketing

Sales
Promotion
Public Relations and Publicity

Sales Force

Communication Process

Response Hierarchy Models

Fragility of Communication Process

Probability

Awareness

50%

Knowledge

50%

Liking

50%

.5 X .5 X .5 X .5 X .5 X .5 = 1.56%
Preference

50%

Conviction

50%

Purchase

50%

Steps in dev. Effective Communications

Identify target
audience

Determine
objectives

Design
communications

Decide on
media mix

Establish budget

Select channels

Measure results

Manage IMC

Identifying The Target Audience

Deciders or Influencers

Current Users

Potential Buyers

Identifying Objectives
Category Needs

Brand Purchase
Intention

Brand Attitude

Brand Awareness

Identifying Objectives

Awareness
Knowledge
Liking
Preference
Conviction
Purchase
Purchase

Designing Communications

What to say?
(Message Strategy)

Who should say it?

(Message source)

How to say it?

(Creative Strategy)

Select Channels

Personal
Communications

Non Personal(Mass)
Communications

Establish Budget
Competitive-Parity

Affordable Method

Objective-and-Task

Percentage-of-Sales

Factors in Setting the Mix

Type of Product
Market

Buyer-Readiness
Stage
Product Life-Cycle
Stage

Managing Mass
Communications:

Advertising, Sales
Promotions, Events and
Experiences, and Public
Relations

What is Advertising???

Advertising is Any Paid Form

of Non personal Presentation
and Promotion of Ideas,
Goods, or Services by an
Identified Sponsor.

5Ms of Advertising

Advertising Objective
Persuad
e

Inform

Specific Communication Task

Accomplished with a Specific
Target Audience
During a Specific Period of Time

Reinforce
Remind

Factors Affecting Adv Budget

Factors to be
considered when
setting the advertising
budget:
Stage in the product
life cycle,
Market share,
Competition and
clutter,
Product differentiation.

Advertising Elasticity

Advertising
Budget

Awareness

Developing Advertising Campaign

Creative Strategy

Message Strategy

Message Execution

Testimonial
TestimonialEvidence
Evidence
Scientific
Scientific Evidence
Evidence
Technical
TechnicalExpertise
Expertise

Slice
Sliceof
ofLife
Life

Typical
Message
Execution
Styles

Personality
PersonalitySymbol
Symbol

Lifestyle
Lifestyle
Fantasy
Fantasy
Mood
Moodor
orImage
Image

Musical
Musical

Media Decisions
Step 1. Decide on Reach, Frequency,
and Impact
Step 2. Choosing Among Major Media Types
Media Habits of Target Consumers,
Nature of the Product, Types of Message, Cost

Step 3. Selecting Specific Media Vehicles

Specific Media Within a Given Type, i.e. Magazines.

Must Balance Media Cost Against Media Factors:
Audience Quality & Attention, Editorial Quality

Step 4. Deciding on Media Timing

Scheduling of Advertising Over the Course of a Year

Pattern of Ads: Continuity or Pulsing

Evaluating Advertising Effectiveness

Copy Testing
(pretest, post-test)

Sales-effects

Sales Promotion

A Mass Communication
Technique That Offers ShortTerm Incentives to Encourage
Purchase or Sales of a
Product or Service.
Offers Reasons to Buy Now.

Short term

Stimulate Sales

Rapid Growth of Sales Promotion

Rapid growth in the industry has been achieved
because:
Product managers are facing more pressure to
increase their current sales,
Companies face more competition,
Advertising efficiency has declined,
Consumers have become more deal oriented.

Objectives of Sales Promotion

Product trial

Increase
repurchase

Reward
Brand switching

 Get retailers to:

carry new items and more inventory,
advertise products,
give products more shelf space, and
buy product ahead.

Sales Promotion

Consumer

Trade

Sales
Force

Major CP tools

Samples
Coupons
Cash refunds
Prices off
Premiums
Prizes

Loyalty rewards
Free trials
Cross-promotions
Point-of-purchase
displays
Demonstrations

Major TP tools

Price off
Advertising allowances
Display allowances
Free goods

Public Relations

Public Relations Involves Building Good

Relations With the Companys Various
Publics by Obtaining Favorable
Publicity, Building Up a Good Corporate
Image, and Handling or Heading Off
Unfavorable Rumors, Stories, and
Events.

Promote

Monitors attitudes

Five Functions of PR

Protect
Image

1. Press relations
2. Product publicity
3. Corporate
communications
4. Lobbying
5. Counseling

Publicity
Launch new products
Repositioning a mature product
Building interest in a product category
Influencing specific target groups
Manage brand crisis
Build corporate image