basic marketing

Definitions of MARKETING

• The performance of business activities that direct the flow of goods and services from producer to consumer.

• Getting the right goods , to the right people in the right place , at the right time , at the right price , with the right level of communication profitably.

• Identifying the needs, wants , desires of consumers and fulfilling them in such a way that the customer is delighted and the company objectives are met profitably.

• Solving customer problems profitably.

STP• Segmentation: -- is essentially the identification of subsets of

buyers within market who share similar needs and who demonstrate similar buyer behavior. The world is made up from billions of buyers with their own sets of needs and behavior. Segmentation aims to match groups of purchasers with the same set of needs and buyer behaviors.

• Targeting -- After the market has been separated into segments, the marketer will select a segment or series of segments and target them.

• Positioning: is the act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customers’ mind.

Requirements for effective segmentation

• Measurable : The size , purchasing power and profile of the segments can be measured. Certain segmentation variables are difficult to measure. E.g It is difficult to find the size of segment of teenage smokers who smoke primarily to rebel against their parents.

• Accessible .: The segment can be effectively reached and served. Suppose a perfume company finds that heavy users of its brand are single women who are out late at night and frequent bars . Unless these women live or shop at certain places and are exposed certain media , they will be difficult to reach.

Requirements for effective segmentation

• Substantial : The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program. e.g It would not be worthwhile for an automobile manufacturer to develop cars for persons who are shorter then 4 feet.

• Differentiable : segments are conceptually distinguishable and respond differently to different marketing mix elements and programs . If married and unmarried women respond similarly to sale of fur coats , they don’t constitute separate segments.

• Actionable : Effective programs can be formulated for attracting and serving the segments. For e.g A small airline identified 7 market segments but its staff was too small to develop separate marketing programs for each segment

SEGMENTATION

Segmentation Base• Geographic• Region

• City Size

• Climate

• Psychographic • Lifestyle

• Personality

Variables

North South, East, West

Major Metros, Sub –Metros, Town

Hot, cold, humid

Conservative, Status Seekers

Extrovert, Introvert, Aggressive

SEGMENTATION

C) Demographic• Age• Sex• Family Size• Education• Occupation

• Income• Religion

0-11,12-19,20-34 etc.

Male, Female

1-2,3-4,5+

school, Graduate, PG

Farmer, Professional,

Housewife, Retired

<15k,16-25k,26-35k etc.

Hindu, Muslim, Sikhs,

Christians

SEGMENTATION

D) Behavioral• Benefit

• Use Related 1) Usage Rate: 2) Awareness Status

3) Brand Loyalty

• Use-Situational

Time/Objective

Quality, Service, Economy, Speed, Prestige.

Heavy, Medium , Light usersUnaware, aware, interestedenthusiastic.Strong, Medium , None

Leisure, work, Morning, NightGift, Fun , Achievement

Patterns of target Market SelectionSingle Market Concentration

M1 M2 M3

P1

P2

P3

P2M1

Patterns of target Market SelectionSelective Specialisation

M1 M2 M3

P1

P2

P3

P2M1

P3M2

P2M3

Patterns of target Market SelectionMarket Specialization

M1 M2 M3

P1

P2

P3

P2M1

P1M1

P3M1

Patterns of target Market SelectionProduct Specialisation

M1 M2 M3

P1

P2

P3

P2M1 P2M2 P2M3

Patterns of target Market SelectionFull Coverage

M1 M2 M3

P1

P2

P3

Full Market CoverageUndifferentiated Marketing -- Coca-colaDifferentiated Marketing-- IBM, G.M, Ford,

Positioning

• Positioning starts with the product. But Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect.

• Easiest way to get into the mind - Be First

KODAK- Photography

Xerox -- Copier

Hertz --- Rent-a –car

Positioning

6 STEPS IN POSITIONING PROGRAM

• What position do you own

• What position do you want to own?

• Whom must you outgun

• Do you have enough money.

• Can you sustain .

• Do you match your position.

Positioning Strategies

• Attribute Positioning

• Benefit Positioning

• Use /Application Positioning

• User Positioning

• Competitor Positioning

• Quality / Price Positioning

• Product category Positioning

PRODUCT

• Defn: A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.

e.g. :- Physical Goods :-- Cars, W/M

Services :- Training

Persons :- Michael Jackson

Ideas : - Family Planning

Five Levels of Product

Level 1 : Core Benefit : Fundamental benefit that the customer is buying . E.g. :- Hotel :-Rest, CTV :- Entertainment

Product

• Level 2:- Generic Benefit : Basic version of the product. e.g. : Hotel : consists of a building with rooms. W/M : Metal/plastic body with console panel

• Level 3 : Expected Product : A set of attributes and conditions that buyers normally expect and agree when they purchase the product.

e.g. : Hotel : Clean Bed, soap, towels, telephone

CTV : Tuning on remote, cable ready.

Product

• Level 4 : Augmented Product : includes additional services and benefits that distinguishes the company’s offer from competitor’s offers.

e.g. : Hotel : Complimentary breakfast, Flat CTV, 24 Hrs checkout, etc.

• Level 5: Potential Product: All augmentations and transformations that the product might ultimately undergo in the future.

e.g. : Computer compatible TV (which can operate at room temperatures)

• Product width : Different Product categories the company is in

• Product Length : In each product category how many products

are available

• Product depth : Variants that are offered for each product.

Product Strategies

1) Downward Stretch

2) Upward Stretch

3) Two-way Stretch

BRANDING• Defn:- A name ,symbol, design which is intended to

identify the goods ,services of one company and to differentiate the goods from those of competitors.

BRAND NAME DECISION • Individual Brand Name : P & G :- Ariel, Pantene• A Blanket Family Name : Philips• Company Name combined with individual product names:- Britannia 50-50 Videocon Bazoomba

PRICING Srategies

• Differential Pricing : Same brand is sold at different prices/different times to

consumers.

• Competitive Pricing : Prices are set to exploit competitive position.

• Product Line Pricing : Related brands are sold at prices that exploit mutual dependencies.

• Promotional pricing :

Promotion

• Advertising

• Sales Promotion

• Personal Selling

• PR and publicity

• Direct marketing

Promotion Advertising : is any paid form of non personal presentation and promotionof ideas goods, services by an identified sponsor

Direct Marketing : Use of mail, telephone and other non personal contacttools to communicate with or solicit a response from specific customers andprospects.

Sales Promotion : Short term incentives to encourage trial or purchase of aproduct/service

PR : A variety of programs designed to promote and protect a company’simage or its individual products.

Personal selling : Face – to face interaction with one or more prospectivepurchasers for the purpose of making sales.

Sales promotion

Consumer Promotion

(Manufacturer point of view)• To increase sales of self brand• To divert attention from competition brands.• Enables manufacturers to adjust to periods of low demand.• Induce customers to try new products/brands.

Customer point of view.• Enables customers to have a better understanding of real prices.• Consumers feel good that they get value for money deals.

Sales Promotion

Consumer Promotion Tools:

• Samples : Free samples with TOI , Mid-day, Filmfare.

• Coupons: FMCG companies: 15% discount coupon or some rupees off for the next purchase.

• Price Packs: Pack of 2 or more at reduced price.

• Banded Pack : Two related products banded together (toothpaste with toothbrush, VCD player with software.)

• Contests : Answer a few questions, write a slogan.

• Free Trials: Free auto drives.

• Warranties: 3 yr on CTV, 7 yrs on compressor.

Sales Promotion

• Scratch ’n’ win offer:

• Money back offer

• Loyalty promotion: Frequent Flyer programs

• Cross promotion: Two related product categories promoting together , mostly the second product is free.

• Tie-in promotion : used in conjunction with consumer durables wherein total is lower then if bought separately.

Distribution

• Retailing : Consists of the activities involved in selling goods and services to ultimate consumers. A retail sale is one in which the buyer is an ultimate consumer and the buying motive for a retail sale is always personal or family satisfaction derived from the final consumption of item being purchased.

• Wholesalers: Wholesaling is concerned with the activities of those persons or establishments which sell to retailers and other merchants , and/or to industrial , institutional and commercial users , but who don’t sell in significant amount to ultimate consumers.

Distribution Strategies

• EXCLUSIVE DISTRIBUTION : Distributing through company outlets or franchisee e.g. : HONDA Showrooms:- only company products are available.

• INTENSIVE DISTRIBUTION : Placing the products in as many outlets as possible.

Products : Soaps, cigarettes, soft drinks ( each outlet has

various brands )

Distribution Strategies

• SELECTIVE DISTRIBUTION :

Here companies select a combination of Exclusive distribution (only company’s products) & Intensive Distribution (some important outlets which are multibrand outlets)

e.g. SAMSUNG , VIDEOCON