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Preface
FOMO is an ever-growing and ever-nagging fear that generally gets
the better of all the B - School students during the first few days of
college. The pressure of not being lost in the crowd, of not knowing
what the person sitting beside knows, or the sense of helplessness
one experiences because of not being aware of the nitty gritty of the
field of Management or their intended specialization can be a huge
dampener for many.
But don’t worry; we’ve got your back!
To help you in your preliminary preparation, we have put together
the basics of Marketing that we feel would arm you appropriately
before classes begin with full gusto.
We present to you Marketing 101 – our unofficial resource book
developed and curated for all first year students at NMIMS, Mumbai
with the intention of apprising them with the basics of Marketing.
We strongly encourage you to refer as many resources and external
readings as possible, over and above this resource book and your
regular course outlines, to make sure that you put your best foot
forward.
An attempt to include a few key online resources, tools and material
has been made in the Appendix, and may be used as a starting point
to enhance your marketing knowledge base.
PS: Please note, it must be noted that this guide is by no means a
replacement of your course material and should not be used for your
academic purposes.
Cheers!
Not just Marketing – the official Marketing Cell at NMIMS, Mumbai
(2018-2019)
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1.What is ‘Marketing’?
In the words of Peter Drucker:
“The aim of Marketing is to make Selling superfluous”.
Some other definitions:
1. Marketing is about identifying and meeting human and social needs. In
simple terms, it is meeting needs profitably.
2. Marketing is an art and science of choosing target markets and getting,
keeping and growing customers through creating, offering and freely
exchanging products and services of value with others
The typical goal of marketing is to generate interest in the product/service
and create leads or prospects who will purchase that product/service.
Marketing activities include:
• Consumer research to identify the needs and wants of the customers
Product development:
o Designing innovative products to meet existing or latent needs
• Advertising the products to raise awareness and build the brand
• Pricing products and services to maximize long-term revenue
2.What is ‘Selling’?
On the other hand, sales activities are focused on converting prospects to actual
paying customers. Sales involve directly interacting with the prospects to
persuade them to purchase the product.
Marketing thus tends to focus on the general population (or, in any case, a large
set of people) whereas sales tend to focus on individuals or a small group of
prospects.
3.How do they differ?
The selling concept takes an inside-out perspective. It starts with the factory,
focuses on the company‘s existing products, and calls for heavy selling and
promoting to produce profitable sales.
The marketing concept takes an outside-in perspective. It starts with a well-
defined market, focuses on customer needs, coordinates all the activities that will
affect customers, and produces profits through creating customer satisfaction.
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Marketing Selling
Emphasis on product planning and
development
Emphasis on selling the product already
produced
Profit through customer satisfaction Profit through sales volume maximization
Customer focused Product focused
Management is profit oriented Management is sales volume oriented
Depends on sales to close leads Depends on marketing to generate leads
Emphasis on consumer needs wants Emphasis is on the product
4.Need, Want, and Demand:
Need:
Human needs are the basic requirements and include food, clothing and shelter.
Without these humans cannot survive. An extended part of needs today has
become education and healthcare. Generally, the products which fall under the
needs category of products do not require a push. Instead the customer buys it
themselves. But in today‘s tough and competitive world, many brands have come
up with the same offering satisfying the needs of the customer that even the
needs category product has to be pushed in the customers’ mind.
Examples of needs category products / sectors:
Agriculture sector, Real Estate, FMCG
Maslow’s Hierarchy of Needs:
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Types of Needs:
1. Stated needs:
The customer wants an inexpensive car.
2. Real needs:
The customer wants a car whose operating cost, not initial price is low.
3. Unstated needs:
The customer expects good service from the dealer.
4. Delight needs:
The customer would like the dealer to include an on board GPS navigation
system.
5. Secret needs:
The customer wants friends to see him or her as a savvy consumer
Want:
The form taken by a human need as shaped by culture and individual
personality.
Wants are a step ahead of needs and are largely dependent on the needs of
humans themselves. For example, you are thirsty and hence you need water to
quench that thirst. But you will drink only Bisleri bottled water - is a need.
Examples of wants category products / sectors:
Hospitality industry, Electronics, Consumer Durables, FMCG
Demand:
People want to choose products that provide the most value and satisfaction for
their money. When backed by buying power, wants become demands.
The basic difference between wants and demands is desire. A customer may
desire something but he may not be able to fulfill his desire.
Example of demands:
Cruises, BMW, 5 star hotels etc.
Needs, wants and demands are a very important component of marketing
because they help the marketer decide the products which he needs to
offer in the market.
These distinctions shed light on the frequent criticism that ―marketers
create needs or ―marketers get people to buy things they don‘t want.
Marketers do not create needs:
1. Needs pre-exist marketers.
2. Marketers, along with other societal factors, influence wants.
3. They might promote the idea that a Mercedes would satisfy a person‘s need
for social status.
4. They do not, however, create the need for social status.
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5.Consumer vs. Customer
The terms "consumer" and "customer" are often used interchangeably, but a
consumer and customer are not always the same entity. In essence, consumers
use products while customers buy them. In general, your marketing efforts should
be geared toward the consumer, rather than the customer.
For example, the Refrigerator at your home would be bought by your parents and
you would have played a small in the decision making of the same; but the
washing machine might be operated by you hence your parents are the
‘customers’ and the whole family including you are the ‘consumers’.
Consumers are just one sub group of customers.
Consider this example with a Philips mixer. If a restaurant buys a Philips mixer
grinder (blender) for making juice to serve its patrons, then the restaurant is just
a customer and NOT a consumer. But if you go and buy a Philips mixer grinder to
make juice for your children at home, you are a consumer.
What does this example mean? It means that if you buy a product for any
commercial purposes you are not a consumer. If you buy a product purely for
your own consumption, you are a consumer.
A typical FMCG firm will refer to the retailer or the dealer as the customer and the
end user as a consumer.
Customers and consumers are considered to be important targets for the
marketers to generate sales and revenue. It is the customer who makes the
purchase but more often influenced by the consumer.
6.Segmentation, Targeting and Positioning
Not everyone likes the same cereal, restaurant, college, or movie. Therefore,
marketers start by dividing the market into segments. They identify and profile
distinct groups of buyers who might prefer or require varying product and service
mixes.
After identifying market segments, the marketer decides which present the
greatest opportunities—what are its target markets.
For each, the firm develops a market offering that it positions in the minds of the
target buyers as delivering some central benefit(s). Volvo develops its cars for
buyers to whom safety is a major concern; positioning its vehicles as the safest a
customer can buy.
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Segmentation:
The process of defining and subdividing a large homogenous market into clearly
identifiable segments having similar needs, wants, or demand characteristics. Its
objective is to design a marketing mix that precisely matches the expectations of
customers in the targeted segment. Few companies are big enough to supply the
needs of an entire market; most must breakdown the total demand into
segments and choose those that the company is best equipped to handle.
Four basic factors that affect market segmentation are: IMAA
1. Clear identification of the segment
2. Measurability of its effective size
3. Its accessibility through promotional efforts
4. Its appropriateness to the policies and resources of the company
Bases for Segmentation:
1. Geography
2. Demographics
3. Psychographics
4. Behavioral
5. Benefits Sought
Example:
The Adventure Travel Company is an online travel agency that organizes
worldwide adventure vacations. It has split its customers into three segments,
because it's too costly to create different packages for more groups than this.
Segment A is made up of young married couples, who are primarily interested in
affordable, eco-friendly vacations in exotic locations. Segment B consists of
middle-class families, who want safe, family-friendly vacation packages that make
it easy and fun to travel with children. Segment C comprises upscale retirees, who
are looking for stylish and luxurious vacations in well-known locations such as
Paris and Rome.
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Targeting:
After segmenting the market based on the different groups and 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.
Three general strategies for selecting your target markets:
1. Undifferentiated Targeting:
This approach views the market as one group with no individual segments,
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.
2. Concentrated Targeting:
This approach focuses on selecting a particular market niche on which marketing
efforts are targeted. Your firm is focusing on a single segment so you can
concentrate on understanding the needs and wants of that particular market
intimately. Small firms often benefit from this strategy as focusing on one
segment enables them to compete effectively against larger firms.
3. 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 costly as it involves greater input from
management, increased market research and increased promotional strategies.
Bases for Targeting:
1. Market size – Sustainability
2. Expected growth – Future potential
3. Competitive position – Attractiveness
4. Cost of reaching the segment – Accessibility
5. Compatibility with the organization’s objectives & resources
Example:
The Adventure Travel Company analyzes the profits, revenue and market
size of each of its segments. Segment A has profits of $8,220,000, Segment
B has profits of $4,360,000, and Segment C has profits of $3,430,000. So, it
decides to focus on Segment A, after confirming that the segment size is big
enough (it's estimated to be worth $220,000,000/year.)
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Positioning:
Positioning is developing a product and brand image in the minds of consumers.
It can also include improving a customer's perception about the experience they
will have if they choose to purchase your product or service. The business can
positively influence the perceptions of its chosen customer base through strategic
promotional activities and by carefully defining your business' marketing mix.
Effective positioning involves a good understanding of competing products and
the benefits that are sought by your target 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.
Example:
The Adventure Travel Company markets itself as the "best eco-vacation service
for young married couples" (Segment A).
It hosts a competition on Instagram® and Pinterest® to reach its desired
market, because these are the channels that these people favor. It asks
customers to send in interesting pictures of past eco-vacations, and the best one
wins an all-inclusive trip. The campaign goes viral and thousands of people send
in their photos, which helps build the Adventure Travel Company mailing list. The
company then creates a monthly e-newsletter full of eco-vacation destination
profiles.
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Elements of positioning:
1. Target Audience:
For whom the product is intended
2. Points of Parity (POP):
Attributes similar to other products in the category. Points of parity are
important because customers expect basic offerings from a category. POPs
are also often used to nullify the advantage (POD) that the competitor might
have over you.
3. Points of Difference (POD):
Attributes that differentiates the products from others in the category. The
more the number of PODs the better is the positioning. PODs should satisfy
the following three criteria:
1. It should be desired by the customer
2. It should be sustainable by the producer
3. It should be different from the competitor’s offerings
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7.Marketing Mix (4/7 P’s of Marketing)
Once a marketing strategy is developed, there is a "Four P Formula" the business
activities should be continually evaluated and re-evaluated. These seven are:
product, price, promotion, and place. The extended version of this Four P formula
is called the Marketing 7 P Formula. As products, markets, customers and needs
change rapidly, these seven Ps must be continually revisited to make sure the
business is on track and achieving the maximum results possible in today's
marketplace.
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Product:
A product is any tangible object or an intangible service. Intangible products are
often service based like the tourism industry & the hotel industry or codes-based
products like cell-phone top ups, services like that of a carpenter, hair dresser
etc. Typical examples of tangible objects are cars, cell phones.
There are five levels of product:
1. Core Product:
This is the basic product and the focus is on the purpose for which the product is
intended.
For example: A warm coat will protect you from the cold and the rain.
2. Basic product:
Represents all qualities of a product.
For example: For a warm coat this is about fit, material, rain repellent ability,
high-quality fasteners
3. Expected Product:
It is the product you have to have.
That coat should be really warm and protect from the weather and the wind and
be comfortable when riding a bicycle.
4. Augmented Product:
This refers to all the additional factors which sets the product apart from that of
the competition.
For example: Is that warm coat in style, its color trendy and made by a
well-known fashion brand?
5. Potential Product:
This is about augmentations and transformations that the product may
undergo in the future.
For example: A warm coat that is made of a fabric that is as thin as paper and
therefore light as a feather that allows rain to automatically slide down.
Price:
The price is the amount a customer pays for the product. It is determined by a
number of factors including market share, competition, material costs, product
identity and the customer's perceived value of the product. The business may
increase or decrease the price of product if other stores have the same product.
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Place:
Place is the location or kind of outlet a product is sold at and it also includes the
channel/distribution. Channel is the mechanism through which goods and/or
services are moved from the manufacturer/ service provider to the user or
consumer.
There are six basic 'channel' decisions:
1. Direct or indirect channels
(E.g. 'direct' to consumer, 'indirect' via a wholesaler)
2. Single or multiple channels
3. Cumulative length of the multiple channels
4. Types of intermediary
5. Number of intermediaries at each level
(E.g. how many retailers in Southern India)
6. Which companies as intermediaries to avoid 'intra-channel conflict'
(i.e. in-fighting between local distributors)
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Promotion:
This includes all of the tools available to the marketer for 'marketing
communication'. As with Neil H. Borden's marketing mix, marketing
communications has its own 'promotions mix.' Think of it like a cake mix, the
basic ingredients are always the same. However if you vary the amounts of one
of the ingredients, the final outcome is different. It is the same with promotions.
You can 'integrate' different aspects of the promotions mix to deliver a unique
campaign.
The elements of the promotions mix are:
1. Personal Selling
2. Sales Promotion
3. Public Relations
4. Direct Mail
5. Trade Fairs and Exhibitions
6. Advertising
7. Sponsorship
The Promotions Mix:
Let us look at the individual components of the promotions mix in more detail.
Remember all of the elements are 'integrated' to form a specific communications
campaign.
1. Personal Selling:
Personal Selling is an effective way to manage personal customer relationships.
The sales person acts on behalf of the organization. They tend to be well trained
in the approaches and techniques of personal selling. However sales people are
very expensive and should only be used where there is a genuine return on
investment. For example salesmen are often used to sell cars or home
improvements where the margin is high.
2. Sales Promotion:
Sales promotion tends to be thought of as being all promotions apart from
advertising, personal selling, and public relations. Sales promotion is of two type
– consumer promotions (targeted at consumers) and trade promotions (targeted
at retailers to ensure they buy more of the product to be kept in the store).
Examples of consumer promotion include the BOGO promotion. Others include
couponing, money-off promotions, competitions, free accessories (such as free
blades with a new razor), introductory offers (such as buy digitalTV and get free
installation), and so on.
Examples of trade promotion include – trade schemes, free gifts to retailers on
purchase of particular amount of SKU, extra SKUs when purchase crosses a
particular number etc.
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3. Public Relations (PR):
Public Relations is defined as 'the deliberate, planned and sustained effort to
establish and maintain mutual understanding between an organization and its
publics' (Institute of Public Relations). It is relatively cheap, but certainly not
cheap. Successful strategies tend to be long- term and plan for all eventualities.
All airlines exploit PR; just watch what happens when there is a disaster. The pre-
planned PR machine clicks in very quickly with a very effective rehearsed plan.
4. Direct Mail:
Direct mail is very highly focused upon targeting consumers based upon a
database. As with all marketing, the potential consumer is 'defined' based upon a
series of attributes and similarities. Creative agencies work with marketers to
design a highly focused communication in the form of a mailing. The mail is sent
out to the potential consumers and responses are carefully monitored. For
example, if you are marketing medical text books, you would use a database of
doctors' surgeries as the basis of your mail shot. 5. Trade Fairs and Exhibitions
Such approaches are very good for making new contacts and renewing old ones.
Companies will seldom sell much at such events. The purpose is to increase
awareness and to encourage trial. They offer the opportunity for companies to
meet with both the trade and the consumer.
6. Advertising:
Advertising is a 'paid for' communication. It is used to develop attitudes, create
awareness, and transmit information in order to gain a response from the target
market. There are many advertising 'media' such as newspapers (local, national,
free, trade), magazines and journals, television (local, national, terrestrial,
satellite) cinema, outdoor advertising (such as posters, bus sides).
7. Sponsorship:
Sponsorship is where an organization pays to be associated with a particular
event, cause or image. Companies will sponsor sports events such as the
Olympics or Formula One. The attributes of the event are then associated with
the sponsoring organization.
The elements of the promotional mix are then integrated to form a unique, but
coherent campaign.
Process:
Process is another element of the extended marketing mix, or 7P's.There are a
number of perceptions of the concept of process within the business and
marketing literature. Some see processes as a means to achieve an outcome, for
example - to achieve a 30% market share a company implements a marketing
planning process.
Another view is that marketing has a number of processes that integrate together
to create an overall marketing process, for example - telemarketing and Internet
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marketing can be integrated. A further view is that marketing processes are used
to control the marketing mix, i.e. processes that measure the achievement
marketing objectives. All views are understandable, but not particularly customer
focused.
For the purposes of the marketing mix, process is an element of service that sees
the customer experiencing an organization’s offering. It's best viewed as
something that your customer participates in at different points in time. Here are
some examples to help your build a picture of marketing process, from the
customer's point of view.
Example - Going on a cruise - from the moment that you arrive at the dockside,
you are greeted; your baggage is taken to your room. You have two weeks of
services from restaurants and evening entertainment, to casinos and shopping.
Finally, you arrive at your destination, and your baggage is delivered to you. This
is a highly focused marketing process.
Physical Evidence:
Physical evidence is the material part of a service. Strictly speaking there are no
physical attributes to a service, so a consumer tends to rely on material cues.
There are many examples of physical evidence, including some of the following:
1. Packaging (considered in the product dimension in the traditional 4Ps)
2. Internet/web pages
3. Paperwork (such as invoices, tickets and dispatch notes)
4. Brochures
5. Furnishings
6. Signage (such as those on aircraft and vehicles)
7. Uniforms
8. Business cards
9. The building itself (such as prestigious offices or scenic headquarters)
10.Mailboxes and many others
A sporting event is packed full of physical evidence. Your tickets have your team's
logos printed on them, and players are wearing uniforms. The stadium itself could
be impressive and have an electrifying atmosphere. You travelled there and
parked quickly nearby, and your seats are comfortable and close to restrooms
and store. All you need now is for your team to win! Some organizations depend
heavily upon physical evidence as a means of marketing communications, for
example tourism attractions and resorts (e.g. Disney World), parcel and mail
services (e.g. UPS trucks), and large banks and insurance companies (e.g. Lloyds
of London)
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8.Branding
Brands are different from products in a way that brands are what the consumers
buy, while products are what companies make.
Brand is an accumulation of emotional and functional associations. Associations are
nothing but the images and symbols associated with the brand or brand benefits,
such as, The Nike Swoosh, The Apple Ringtones, etc.
Brand is a promise that the product will perform as per consumer’s expectations.
To a consumer, a brand means and signifies:
1. Source of product
2. Delegating responsibility to the manufacturer of product
3. Lower risk
4. Low search cost
5. Quality symbol
6. Deal or pact with the product manufacturer
7. Symbolic device
A brand simplifies a consumer’s purchase decisions. Over a period of time,
consumers discover the brands that satisfy their wants. If the consumers recognize
a particular brand and have knowledge about it, they make quick purchase decision
and save lot of time. Also, they save search costs for product. Consumers remain
committed and loyal to a brand as long as they believe and have an implicit
understanding that the brand will continue meeting their expectations and perform
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in the desired manner consistently. As long as the consumers get benefits and
satisfaction from consumption of the product, they will more likely continue to buy
that brand.
To a seller, a brand means and signifies:
1. Basis of competitive advantage
2. Way of bestowing products with unique associations
3. Way of identification to easy handling
4. Way of legal protection of products ‘unique traits/features
5. Sign of quality to satisfied customer
6. Means of financial returns
A brand connects the four crucial elements of an enterprise: customers, employees,
management and shareholders.
9.Brand Equity:
A brand's power derived from the goodwill and name recognition that it has earned
over time, which translates into higher sales volume and higher profit margins
against competing brands.
5 Stages of Brand Experience:
Brand equity is typically the result of brand loyalty, and with brand loyalty comes
increased market share. In fact, there are 5 stages of brand experience that lead to
positive brand equity:
1. Brand awareness: Consumers are aware of the brand.
2. Brand recognition: Consumers recognize the brand and know what it offers
versus competitors.
3. Brand trial: Consumers have tried the brand.
4. Brand preference: Consumers like the brand and become repeat
purchasers. They begin to develop emotional connections to the brand.
5. Brand loyalty: Consumers demand the brand and will travel distances to find
it. As loyalty increases so do emotional connections until there is no adequate
substitute for the brand in the consumer’s mind.
Perceived Quality
Perceived Quality refers to the customer‘s perception about the total quality of the
brand. While evaluating quality the customer takes into account the brands
performance on factors that are significant to him and makes a relative analysis
about the brand‘s quality by evaluating the competitor‘s brands.
Other Proprietary Brand Assets:
Patents, Trademarks and Channel Inter-relations are proprietary assets. These
assets prevent competitors attack on the organization. They also help in maintaining
customer loyalty as well as organization‘s competitive advantage.
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Brand Positioning:
Brand positioning refers to ―target consumer‘s reason to buy your brand in
preference to others. It ensures that all brand activity has a common aim; is guided,
directed and delivered by the brand‘s benefits/reasons to buy. It focuses at all
points of contact with the consumer.
Brand positioning must make answer the following questions:
1. Is it unique / distinctive vs. competitors?
2. Is it significant and encouraging to the niche market?
3. Is it appropriate to all major geographic markets and businesses?
4. Is the proposition validated with unique, appropriate and original products?
5. Is it sustainable - can it be delivered constantly at all points of contact with
consumer?
6. Is it helpful for organization to achieve its financial goals?
7. Is it able to support and boost up the organization?
In order to create a distinctive place in the market, a niche market has to be
carefully chosen and a differential advantage must be created in their mind. Brand
positioning is a medium through which an organization can portray its customers
what it wants to achieve for them and what it wants to mean to them. Brand
positioning forms customers’ views and opinions.
It is the single feature that sets your service apart from your competitors. For
instance, Kingfisher stands for youth and excitement. It represents brand in full
flight.
Brand Extension:
Brand extension refers to the expansion of the brand itself into new territories or
markets. For instance, if a soft drink manufacturer unveils a line of juices or bottled
water products under its company name, this would constitute an example of brand
extension. The brand, or company, is an established name, and so the name alone
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can serve to drive customers to try new products completely unrelated to the older
product lines.
Line Extension:
Line extension refers to the expansion of an existing product line. For instance, a
soft drink manufacturer might introduce a "Diet" or "Cherry" variety to its cola line,
while a toy manufacturer might introduce new characters or accessories in its line of
action figures. In short, line extension adds variety to its existing product for the
sake of reaching a more diverse customer base and enticing existing customers with
new options.
Benefits:
A line extension can reinvigorate a product line, bringing it back into the public
awareness by drawing new customers and higher profits. A brand extension can
increase profits by allowing manufacturers to tap into new markets and offer
increased diversity in their inventory. Line extensions and brand extensions both
allow companies to promote new products with reduced promotional costs because
the new lines or brands benefit from being part of an established name.
Risks:
Any time a company introduces a new brand or line, the company name could
become tarnished if the product proves to be an immense failure. Consumers might
feel less inclined to support the company's new products in the future. So each new
extension, in some way, carries the reputation of the entire company, and that can
backfire. Extensions can also cause intra-firm competition, wherein conflict arises
among different divisions of a company.
Product Mix:
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10. Product Life Cycle:
The Product Life Cycle (PLC) describes the stages of a product from launch to being
discontinued. As we will see in the example, the product lifecycle can be reviewed
across an entire category, or in the context of an individual company product. It is a
strategic tool that helps companies plan for new product development and refine
existing products
There are 4 stages shown in the table below to the lifecycle process, although
decline can be avoided by reinventing elements of the product. It is also recognized
that some products never move beyond the introduction phase whilst others move
through the life cycle much faster than others.
The stages of PLC:
1. Introduction:
Introducing a new product where it's unknown and is a fresh face in the
market. The price is often higher as distribution is limited, and promotion is
personalized.
2. Growth:
Here, the product is being bought and with volume, the price declines.
Distribution increases and promotion focuses on product benefits
3. Maturity:
Here, the product competes with alternatives and pricing drops. Distribution
becomes intense (it’s available everywhere) and promotion focuses on the
differences to competitors’ products.
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4. Decline:
The product is reaching the end of its life and faces fewer competitors. The
price may rise and distribution has become selective as some distributors have
dropped the product. Promotion aims to remind customers of its existence.
How can I use this model?
When reviewing your business, you need to understand which stage your
products or services have reached across your portfolio of all products which can
be assessed in terms of market share and growth using the BCG Matrix model.
Reviewing the product of portfolio enables marketers to plan for new products,
reinvent existing products or discontinue products that are in serious decline.
An example of the Product Lifecycle model
This example shows how the yoghurt product category has moved through the
product life cycle by remixing elements of the marketing mix. Examples of stages
and how PLC evolved:
1. Introduction:
• Yoghurt available in health food stores
• Functional and plain packaging
• Promoted as a health food
2. Growth:
• Yoghurt now available in supermarket chiller cabinets
• Packaging gets a makeover
• New flavors introduced; Strawberry and Vanilla
3. Maturity:
• Product re-invented with added fruit, added muesli, added chocolate!
• Packaging changes into different shapes and sizes
• Promoted as a fun snack and a luxury treat
4. Decline:
• Ad campaign evoking brand association through remembrance and fondness
• Brand available at select retail megastores only
A tip is to review customer feedback continuously, to ensure your products
don’t reach the end of their shelf life, carry out regular customer surveys.
Get feedback and find out what works, what doesn’t and why.
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11. Different Types of Marketing:
Business to consumer marketing (B2C):
Business to consumer marketing is when a business markets products to a
consumer market. A consumer is a buyer of products that are not business
related. B2C products include goods and services such as food, clothes, cars,
houses, phone services, credit repair services, etc.
A B2C sale is to an individual. That individual may be influenced by other factors
such as family members or friends, but ultimately it‘s a single person that pulls
out their wallet. B2C features a large target market, single step buying process
and shorter sales cycle.
B2C marketing strategy helps the business house in directly targeting the
customers. Different marketing channels used:
BTL (Below the line) campaigns: Address consumers in malls or other public
places by conducting events, Door-to-door marketing, Newspaper, television and
radio online advertising like Podcasts
Business to business marketing (B2B):
Practice of commercial businesses, governments and institutions facilitating the
sale of their products or services to other companies or organizations that in turn
resell them, use them as components in products or services they offer, or use
them to support their operations. A typical B2B customer can be:
Companies that consume products or services.
Example: Automakers who buy gauges to put in their cars
Government agencies - this includes center, state and local governments
Institutions - schools, hospitals and nursing homes, churches and charities
Resellers - wholesalers, brokers and industrial distributors
Different marketing channels used:
1. Specific trade shows
2. Publications of industry reports related to the products
Business marketing and Consumer marketing:
In B2C, B2B and B2G marketing situations, the marketer must always:
Successfully match the product/service strengths with the needs of a definable
target market, position and price to align the product/service with its market,
often an intricate balance, and communicate and sell it in the fashion that
demonstrates its value effectively to the target market.
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12. Important Strategic Models:
SWOT:
A SWOT analysis (alternatively SWOT matrix) is a structured planning method
used to evaluate the strengths, weaknesses, opportunities, and threats involved
in a project or in a business venture. A SWOT analysis can be carried out for a
product, place, industry or person. It involves specifying the objective of the
business venture or project and identifying the internal and external factors that
are favorable and unfavorable to achieve that objective
Strengths:
Characteristics of the
business or project that give it an
advantage over others.
Weaknesses:
Characteristics that place the
business or project at a
disadvantage relative to others
Opportunities:
Elements that the
project could exploit to its advantage
Threats:
Elements in the environment
that could cause trouble for the
business or project
Porter’s five forces model:
What is this model and why is it used?
1. Model used to study the attractiveness (profit potential) of different industries
2. Helps in identifying the sources of competition in an industry or sector
What are the five forces?
1. Intensity of competitive rivalry
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Threat of new entrants
5. Threat of substitutes
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Things to be kept in mind while using this model:
1. Used only at the level of individual business units(Strategic business units or
SBUs) and not at the level of the whole organization
2. These five forces are not independent of each other
3. Understanding the connections between these forces is very important
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PESTEL framework:
Why do we need this model?
1. To show some of the macro-environmental factors that affect
organizations
2. These factors can affect strategies and some of the ways in which
organizations seek to handle aspects of their environment
How are the factors categorized?
Based on 6 types:
1. Political
2. Economic
3. Social
4. Technological
5. Environmental
6. Legal
On what parameters do we analyze the above factors?
We can analyze the PESTEL framework of any organization based on the
parameters listed below:
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BCG Matrix:
What is the BCG matrix?
1. A tool that allows an organization to classify and evaluate products and
services of its business
2. It is a decision making tool in order to balance the activities of a company
among those which make profits, those who ensure growth, those which
constitute the future of the firm or those who are its heritage
3. It positions products or services of the company based on market growth
and market share of the product/service
Question marks:
They do not generate profits unless the company decides to invest resources
to maintain and even increase the market share (become potential stars).
They have a high demand for liquidity and the company must ask the
question: Invest or give up the product?
Stars:
These are promising products for the company, they even can be considered
as leaders of the industry. The strategy is to boost these products by
appropriate investments to monitor the growth and maintain a position of
strength. These products require a large amount of cash but also contribute
to the company's profitability. They are becoming progressively cash cows
with market saturation.
Cash Cows:
These are products or services which are mature and which generate
interesting profits and cash, but need to be replaced because the future
growth will be lower. They must therefore be profitable because they can
finance other activities in progress (including stars and question marks)
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Dogs:
These products are positioned in a declining market and highly competitive
and that the company wants to get rid of soon as they become too expensive
to maintain. The company must minimize the dogs. The company must
decide whether it still injects liquidity, otherwise it will eliminate the dogs in
the near future.
Example of BCG Matrix for ITC:
1. Question Marks: Sunfeast Yippee Noodles
2. Stars: Aashirwaad Aata / Classmates
3. Cash cows: Wills cigarettes
4. Dogs: John players
13. Integrated Marketing Communication (IMC):
IMC is the development of marketing strategies and creative campaigns that
weave together multiple marketing disciplines (paid advertising, public relations,
promotion, owned assets, and social media) that are selected and then executed
to suit the particular goals of the brand.
Instead of simply utilizing various media to help tell a brand's overall story, with
IMC, marketing leverages each communication channel's intrinsic strengths to
achieve a greater impact together than each channel could achieve individually.
It requires the marketer to understand each medium's limitation, including the
audience's ability/willingness to absorb messaging from that medium.
Why is IMC required over Traditional Advertising?
1. Decreasing message impact and credibility: The growing number of
commercial messaging made it increasingly more difficult for a single
message to have a noteworthy effect.
2. Decreasing costs of databases: The cost of storing and retrieving names,
addresses and information from databases significantly declined. This
decline allowed marketers to reach consumers more effectively.
3. Increasing client expertise: Clients of marketing and public relations
firms became more educated regarding advertising policies, procedures and
tactics. Clients began to realize that television advertising was not the only
way to reach consumers.
4. Increasing mergers and acquisitions of agencies: Many top public
relations firms and advertising agencies became partners or partnered with
other communication firms. These mergers allowed for more creativity, and
the expansion of communication from only advertising, to other disciplines
such as event planning and promotion.
5. Increasing global marketing: There was a rapid influx in advertising
competition from foreign countries. Companies quickly realized that even if
they did not conduct business outside their own country, they were now
competing in global marketing.
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6. Increasing media and audience fragmentation: With the exception of
the decline of newspapers, media outlets, such as magazines and television
stations, increased dramatically from 1980 to 1990. Additionally, companies
could use new technologies and computers to target specialized audiences
based on factors such as ethnic background or place of residence.
7. Increasing number of overall products: Manufacturers flooded retailers
with a plethora of new products, many of which were identical to products
that already existed. Therefore, a unique marketing and branding approach
was crucial to attract customer attention and increase sales.
What are the components of IMC?
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Thus, IMC is nothing but ONE VOICE, ONE MESSAGE, and ONE STRATEGY
Example:
1. Vodafone‘s ZooZoo Campaign:
This Campaign was showcased on all the different channels:
YouTube, Television, Websites, Journal Blogs, and Billboards.
2. Airtel: Har Ek Friend Zaroori Hota hain
3. ICICI bank: Bande Acche Hain
4. Cadbury: Kuch Meetha Ho Jaaye
5. Tata Tea: Jaago Re
6. Seagram Imperial Blue: Men Will be Men
14. Digital Marketing:
Digital Marketing is the practice of promoting products and services using digital
distribution channels to reach consumers in a personal and cost-effective manner.
• Key components to master Digital Marketing:
1. Brand Identification and Consistency: It is important to identify what your
brand stands for; that’s the story you will be telling to your customers. This
story will help you decide the words, phrases and concepts you’ll use in Search
Engine Optimization
2. Search Engine Marketing: Over 85% of consumers use a search engine (No
prizes for guessing which one) before buying, according to a report from
Felishman-Hillard. Search Engine marketing is the low hanging fruit of digital
marketing. Because you only pay for the advertising when someone clicks on
the link, it has one of the healthiest ROI ratios.
3. Content Optimization: It is important to provide valuable and original
content on all your digital platforms. Marketers today need to ensure that
websites are optimized to be responsive enough to adapt to any device and
browser.
4. Social Media Outreach: The interactive nature of social media is of
paramount importance to brands. Through it, marketers are able to initiate
discussions about their industry, products or brands. Facebook obviously, is
the king – the medium with the largest impact and presence. For businesses
based on visual representation, Pinterest works better. For those based on
information, Twitter or Medium may be good choices. Google + is one network
that must never be ignored, since it aggregates features from all other social
media.
5. Sales leads and conversion: One of the key objectives of digital marketing
must be to gather customer information. Building a customer base across
many mediums is vital to build relations with the consumer in the long term.
Analytics software such as Google analytics has opened up a whole new world
of demographic targeting.
6. Mobile Marketing: Mobile marketing is multi-channel online marketing
technique focused at reaching a specific audience on their smart phone,
tablets, or any other related devices through websites, E mail, SMS and
MMS, social media or mobile applications.
Mobile marketing can provide customers with time and location sensitive,
personalized information that promotes goods, services and ideas
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• Digital Marketing Glossary:
1. Click-Thru Rate (CTR):
The percentage of people who actually click on a link (e.g., in an e-mail
message or sponsored ad) after seeing it.
2. Cost-Per-Acquisition (CPA):
Represents the ratio of the total cost of a pay-per-click (PPC) campaign to the
total number of leads or customers, often called “CPA” or “conversion cost.”
3. Cost-Per-Click (CPC):
A method of paying for targeted traffic. For a fee, sites like Google or
Facebook direct traffic to your site. You agree to pay a set amount for every
click.
4. CPM:
This is the “cost-per-thousand” views of an advertisement. Often, advertisers
agree to pay a certain amount for every 1,000 customers who see their ad,
regardless of conversion rates or click-thrus. The “M” in “CPM” is derived from
the Latin word for 1,000
5. Inbound Link:
A link from another website directed to yours, also known as a “backlink.”
Related marketing areas that focus on inbound links include link popularity,
social media and online PR, all of which explore ways to collect quality links
from other websites.
6. Landing Page:
A stand-alone Web page that a user “lands” on, commonly after visiting a paid
search-engine listing or following a link in an email newsletter. This kind of
page often is designed with a very specific purpose (i.e. conversion goals) for
visitors
7. Open-Source Software:
Computer software with a special license that allows users in the general
public to edit and improve the source code. Famously exemplified in the
Firefox Web browser and Wikipedia encyclopedia, it is an example of the kind
of collaboration that is encouraged under the Web 2.0 ethos. Contrast with
closed, propriety software that does not share its codebase beyond an
exclusive group of authorized developers.
8. Pay-Per-Click:
Also known as “PPC,” this type of paid search marketing involves placing
advertisements that run above or besides (and occasionally below) the free
search-engine listings on Google, Bing, and Yahoo!. Typically, to get the
highest position among these ads, website owners place a per-click bid. It’s
not uncommon to participate in a bidding war for coveted top spots. For
example, if a website’s listing is among the top 3 advertisements on a page,
the same ad appears in the same location on partner websites. Some
marketing firms, including Fathom, provide bid management services to get
the most value for each search term.
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9. RSS:
“Really simple syndication” is the process by which content such as blog posts
or podcasts can be updated regularly and syndicated to subscribers in feeds.
RSS feeds enable users to access content updates from various outlets—e.g.
their favorite blogs, news sites, and digital audio/video providers—all in one
central location.
10. Search-Engine Marketing (SEM):
A phrase sometimes used in contrast with “SEO” to describe paid search
activities, SEM may also more generally refer to the broad range of search-
marketing activities, either paid or organic.
11. Search-Engine Optimization (SEO):
The process of using website analysis and copy/design/structural adjustments
to ensure both the highest possible positioning on desired search-engine
results pages and the best experience for a given site’s users
12. User-Generated Content:
Commonly abbreviated as “UGC,” it is any piece of content created by a
member of a given website’s audience for use on that website and sometimes
to be freely distributed on the Web. Wikis (and Wikipedia) are examples of
UGC.
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15. Go-to-Market Strategy:
A go-to-market strategy (GTM strategy) is an action plan that specifies how a
company will reach customers and achieve competitive advantage. The purpose
of a GTM strategy is to provide a blueprint for delivering a product or service to
the end customer, taking into account such factors as pricing and distribution. A
GTM strategy is somewhat similar to a business plan, although the latter is
broader in scope and considers such factors as funding.
16. What is defined as BOP Market?
The bottom of the pyramid is the largest, but poorest socio-economic group.
Although they don’t have a high purchasing power parity, but by their sheer number
there is a lot of money in the market. Contrary to the popular view, BOP consumers
are getting connected and networked. They are rapidly exploiting the benefits of
information networks. Distribution access to the BOP markets is very difficult and
therefore represents a major impediment for the participation of large firms and
MNCs. Initiatives like E-choupal (ITC) and Shakti (HUL) are a part of it.
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17. What is Viral Marketing?
Viral Marketing is known as a word of mouth or these days with the increased use of
the internet “word of mouse” with the objective of marketing the product of a
company via tools such as social media networking sites like Orkut, Facebook, social
media sharing sites such as YouTube etc. or sites which have a social connect such
as Twitter, BlogSpot etc.
In short it can be defined as any strategy which uses individuals to pass on a
marketing message to others; creating scope for exponential growth in the
company’s spread of the intended message.
Companies could even use non-internet mediums such as phone SMS etc. t market
their products.
The two basic differentiators of viral marketing from other marketing mediums are:
1. It is rather inexpensive in its use and also value for money since at times it
may be more effective a marketing tool than contemporary marketing
media. For example: Cadbury using the Gorilla advertising campaign
2. Its uses the basic tenet of a virus in its spreading i.e. its spreads from one
person to another just as a virus would spread.
Prominent examples of viral marketing are:
1. When Hotmail launched, much of its early success was due to the virality of
the sign-line that it attached to every outgoing email inviting the recipient
to join. One of the earliest examples of viral marketing on the internet
2. Subservient Chicken - the creepy webcam site made for a Burger King
campaign allowed people to control a guy in a chicken suit. It went viral
almost instantly and for a few weeks was everywhere
3. Will It Blend - One of the most recent best viral marketing campaign
examples, Blendtec’s will it blend video series shows scientists testing if
various household items will blend in their super-powerful blender. This
campaign leveraged the popularity of online video sharing sites
4. Dove Evolution Video - Part of a campaign by Dove, this video showed how
models’ beauty is often artificial, and really struck a chord with its intended
audience of female viewers
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18. What is Word Of Mouth Marketing?
Definition:
Word of mouth is a reference to the passing of information from person to
person. Originally the term referred specifically to oral communication (literally
words from the mouth), but now includes any type of human communication,
such as face to face, telephone, email, and text messaging.
Characteristics of Word of Mouth:
Word of mouth also takes many forms online or off-line. Three noteworthy
characteristics are:
1. Credible: People trust others they know and respect, word of mouth can be
highly influential.
2. Personal: Word of mouth can be a very intimate dialogue that reflects
personal facts, opinions, and experiences.
3. Timely: It occurs when people want it to and when they are most interested,
and it often follows noteworthy or meaningful events or experiences.
Whose Word of Mouth Matters?
According to Mintel, 34% of US Internet users who bought a product or service
based on a recommendation got that tip from a friend or relative, while one-
quarter bought based on advice from a spouse or domestic partner. A
recommendation from someone familiar and trust-worthy is the easiest path to a
product sale, link or new subscriber. This is because, recommendations are
generally perceived as incentive-free, unlike the obvious motivation of
advertisers, who may over-promise in a bid to increase sales.
Difference between Word of Mouth and Viral marketing
The major different between word-of-mouth marketing and viral is that word-of-
mouth is often driven by you the marketer or business owner and viral marketing
driven by the passion of your consumers and its success does not depend on you.
How to increase the power of WOMM:
1. Leverage Existing Social Networks. Online communities have a tightly knit
group of users who can help to increase brand awareness for the product. Tap
into these communities with tools or content targeting their specific sub-culture
and you are likely to get a lot of attention.
2. Target the Influencers. Look for individuals who are trend-setters or
authorities on a specific topic. They should preferably be individuals who have
many personal connections or a large and loyal audience. If these people spread
your message, your website or product will very easily be disseminated within a
targeted group of potential users. Identify these influencers, build a relationship
with them and market through their existing sphere of social influence.
Examples of influencers include celebrities, power users on social websites and
popular webmasters or bloggers with many loyal supporters.
3. Exclusivity and Scarcity. Many websites or businesses launch virally by
offering a limited number of site invites. Some dangle the bait of limited edition
products or temporal discounts. Combine this with influencer marketing and you’ll
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have an excellent method to disseminate brand awareness for new websites,
products or services. Exclusivity invites curiosity and scarce products generate
consistent demand and conversation.
4. Micro-Market. While online viral marketing leverages the interconnectedness
of the web to spread unique content or user-supported promotional schemes,
micro-marketing focuses on marketing to the individual by providing highly
customizable products. Nike and Puma’s Mongolian Buffet are examples of micro-
marketing schemes which allow you to design and purchase your own unique
sneaker online
5. Industry Marketing. Instead of focusing directly on customers, focus on the
people who can build your brand. Make your mark within a niche community (like
Sphinn) to build relationships and leverage-able connections. Get
recommendations from others in the similar industry to be mentioned, promoted
or included in an industry-specific ranking or recommendations list.
Successful examples:
1. Gmail:
Google did no marketing, they spent no money. They created scarcity by
giving out Gmail accounts only to a handful of "power users." Other users who
aspired to be like these power users aspired for a Gmail account and this
manifested itself in their bidding for Gmail invites on eBay. Demand was
created by limited supply; the cachet of having a Gmail account caused the
word of mouth, rather than any marketing activities by Google.
2. Tupperware popularization
Unsuccessful examples:
1. Hotmail:
Hotmail "piggybacked" on personal emails from one person to another to
publicize their free email service. At a time when few people had email, the
first and only free email service in the marketplace was appealing and novel --
hence their rapid adoption and spread. But the Hotmail users did not
voluntarily pass it on; they had no choice about Hotmail adding the "sign up"
link at the end of their personal emails.
2. McDonald's Lincoln Fry:
A fake blog was discovered, and it generated lots of negative word of mouth
and little participation.
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19. What Is Consumer Behaviour?
Consumer behaviour is the study of how individuals, groups, and organizations
SELECT, BUY, USE and DISPOSE OFF goods, services, ideas, or experiences to
satisfy their needs and wants.
A consumer’s buying behaviour is influenced by cultural, social and personal
factors with cultural factors exerting the broadest and deepest influence.
20. Distribution Strategies:
Depending on the type of product being distributed there are three common
distribution strategies available:
1. Intensive distribution: Used commonly to distribute low priced or
impulse purchase products.
Ex: chocolates, soft drinks.
2. Exclusive distribution: Involves limiting distribution to a single outlet.
The product is usually highly priced, and requires the intermediary to
place much detail in its sell.
Ex: Sale of vehicles through exclusive dealers.
3. Selective Distribution: A small number of retail outlets are chosen to
distribute the product. Selective distribution is common with products
such as computers, televisions household appliances, where consumers
are willing to shop around and where manufacturers want a large
geographical spread.
Ex: Whirlpool selling majority of its appliances through select dealers.
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21. Distribution models:
There are two types of distribution models used in the B2C (Business to
Consumer) industry. These include the following:
• Direct - Indirect
In an indirect model there might be any number of intermediaries. Some of the
intermediaries are:
• C&FA- Carrying and Forwarding Agents:
A CFA normally undertakes the following activities:
1. Receiving the goods from the factories or premises of the manufacturer /
firm
2. Warehousing these goods
3. Receiving dispatch orders from the manufacturer / firm
4. Arranging dispatch of goods as per the directions of the
manufacturer or firm by engaging transport on his own or through
the authorized transporters of the manufacturer / firm
5. Maintaining records of the receipt and dispatch of goods and the stock
available at the warehouse
• Distributor:
An entity that buys noncompeting products or product lines, warehouses
them, and resells them to retailers or direct to the end users or customers.
Most distributors provide strong manpower and cash support to the supplier
or manufacturer's promotional efforts. They usually also provide a range of
services (such as product information, estimates, technical support, after-
sales services, credit) to their customers
• Super Stockist / Stockist / Sub Stockist:
The Stockists are region wise agents who store products of a company. They
may or may not be exclusive.
• Whole seller:
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Person or firm that buys large quantity of goods from various producers or
vendors, warehouses them, and resells to retailers.
• Retailer / Dealer:
The retailer is end customer. This person will stock many competing goods
and sells the products to the end consumer.
Ex: Distribution System of Dabur
