Market Segmentation & Targeting: Product differentiation, Positioning for competitive advantage, Product Decisions: Product Mix, Packaging and Labelling Decisions, Branding, Brand value & Brand Equity. New Product Development, Consumer Adoption Process, Product Life Cycle and marketing mix strategies. Services Marketing and 7Ps framework. Pricing Decisions: Objectives, Factors Affecting Pricing Decisions, Pricing Methods, Price Changes, Pricing Strategies.

2.  A market is the aggregate of consumers of a
given product, theses consumer vary in their
characteristics and buying behavior. It is thus
natural that many different segments occur with
in a market.
 Marketers usually divide the heterogeneous
market for any product into different segments
of relatively homogeneous characteristics.
 The process of fragmenting whole market into
sub-markets is known as market segmentation.

3.  It helps the marketers to distinguish one
customer group from another within a given
market and thereby enables him to decide which
segment should from his target market.
 It enables the marketers to identify the real
needs of the target buyers and to develop
marketing offers that are most suited to each
group.
 It makes the marketing efforts more focused,
more efficient and economic by concentrating on
segments that are most profitable and will be the
customers of the market offers.

4.  It benefits the customer as well, as now they
can buy specialized product that caters to
their specific needs and wants.
 When segmentation attains high
sophistication, customers and companies can
choose each other and stay together for
mutual benefits.

5.  Geographic Segmentation: segmenting
market on the basis of factors like region,
state, district, urban/rural, climate etc.
 Demographic Segmentation: segmenting
customers on the basis of factors like age,
sex, marital status, family size and structure,
race, religion, community, language,
occupation, income, education etc.

6.  Psychographic Segmentation: segmenting
customers on the basis of psychological
factors like personality traits, lifestyle, socio
economic classes, value system, etc. the
marketing researcher, ‘Emanuel Denby’
coined the term Psychographics.
 Behavioral Segmentation: markets can be
segmented on the basis of buyer behaviour
as well as Buying behavior.

7.  Buying Behavior includes:
a) User status: Non-user, Ex-user, potential user, first-
time user, regular user.
b) Usage rate: Bulk buyers, small-scale buyers,
moderate buyers.
c) Benefits: Quality, service, economy, speed.
d) Occasions: Regular, special.
e) Loyalty status: Hard core loyal, split loyal(two or
more brands), shifting loyal, switchers.
f) Readiness stage: Unaware, aware, informed,
interested, desirous, intending to buy.
g) Attitude: Enthusiastic, positive, indifferent,
negative, hostile.

8.  It must be distinguishable from one another.
 Potential demand of the segment is
measurable.
 It is easily accessible and servable.
 It should have a appropriate size i.e.
significant number of buyers.
 It should be profitable.
 It should be growing/durable.
 Segment’s needs should be compatible to the
marketers product utility.

9.  Once the firm has identified the segments, it must
decide how may and which ones to target. In
targeting different segments, the firm must look at
two factors.
i. Segment’s overall attractiveness in terms of size, growth
and profit.
ii. Company’s objectives and resources.
 In choosing a target market, the firm basically
examine alternative possibilities- whether the whole
market has to be chosen for tapping, or only a few
segments are to be targeted.
 It must look at each segments as a distinct
marketing opportunity.

10.  Single Segment Concentration
Through concentrated marketing, a firm tries
to achieve strong market presence. One
segment is selected for serving only one
product.
Example: Zodiac for men’s formal shirts and
ties.
[P1-M1] Product 1 for Market 1

11.  Selective Specialization
A firm selects two or more segments. Even if
the two are not at all related, each promises
to be a money maker. It helps the firm to
diversify the risk.
Example: Sony produces plasma TV as well as
Walkman, the two different types of products
obviously for two different types of markets.
[P2-M1,P3-M2,P1-M3]

12.  Product Specialization
The firm makes a certain product that it sells
to several different market segments.
Example: Super Precision Components supply
small nuts and screws for use in military,
industry and daily use.
[P1-M1,M2,M3] one product to all markets.

13.  Market Specialization
The firm concentrates on serving many needs
of a particular segment.
Example: Company producing all sorts of home
appliances like TV, washing machine,
refrigerator and micro oven for middle class
people. .
[P1,P2,P3-M1] All products for one markets.

14.  Full Market Coverage
The firm attempts to serve all customer groups
with all the products they can provide.
Example: In carbonated soft drink market, Coca-
Cola follows Full Market Coverage approach to
their product-market matrix. They have Thums-
Up, Coca-Cola, Limca, Sprite, Fanta that are
different tastes and are consumed by different
types of people. The company even made its
entry into other drinks segments like mineral
water (Kinley) and tea (Georgia).
[P1,P2,P3-M1,M2,M3] All products for All
markets.

15.  Positioning is the act of fixing the locus of
the product offer in the minds of the target
customers.
 In positioning, the firm decides how and
around what parameters, the product offers
has to be placed before the target customers.
 It facilitates the brand to get through the
mind of target customer.
 The result of positioning is the successful
creation of a customer focused value
preposition.

16.  Positioning a product can be possible by way of
differentiation. There are certain Point-of-
Difference (PoD) and certain Point-of-Parity (PoP)
of each product.
 PoDs are attributes or benefits, a customer
strongly associates with a brand, and believe they
could not find to the same extent with a
competitive brand. Creating identifiable and
unique PoDs is a real challenge in terms of
competitive brand positioning.
 PoPs are associations that are not necessarily
unique to the brand but may in fact, be shared
with other brands.

17.  Positioning means putting the product in a
predetermined orbit.
 It connects product offering with target
segment.
 It is a continuous never ending process.
 It can be best done by generating clear PoDs.

18.  Product is a bundle of utilities consisting of
various product features and accompanying
services, offered to the consumer.

19.  Before pricing, promotion and distribution, a
firm has to decide its product that he is going
to market to the customer.
 A product is a bundle of utilities consisting of
various product features and accompanying
services, which the buyer may accept as
offering satisfaction of wants and needs.
 Without deciding a product, no firm can
decide its business activity.
 Product planning is the starting point for the
entire marketing programme in a firm.

20.  “The act of making out and supervising the
search, screening, development and
commercialization of new product; the
modification of existing lines; and the
discontinuance of marginal or unprofitable
items.”- by AMA

21.  Evaluation of idea, concept and the customer
needs
 Evaluation of company resources
 Finding out customer specifications
 Developing the product
 Testing the product
 Marketing the product
 Evaluating the result

22.  It becomes the basis for marketing
programme.
 It enables a firm to sustain and beat
competition
 Minimizes risk of product failure
 Instrument of growth
 Reduce the cost of production and marketing
the product by cost planning and appropriate
marketing mix

23.  It involves deciding :
a) Product design, size and features
b) Name, color, variants, brand, packaging
c) Guarantees and services of the product
d) Quality, durability, repairing
e) Pricing

24.  Product planning and developing
 Product line
 Product standardization
 Product branding
 Product style
 Product packaging
 Product policies are concerned with defining
the type, volume and timing of the products
that are offered by a company for sale.
 Product policies are applicable for existing and
new products.

25.  It is the total products offered by the
company for sale.
 It is defined as the composite of products
offered for sale by a firm or a business.

26.  Product line is a group of products closely
related because they satisfy a class of needs,
are used together, sold from same place and
fall with in given price range.

27.  Width: It refers to how many different product
lines the company carries.
 Depth: It refers to how many variants are
offered of each product in the product line.
 Length: It refers to the total number of items
in the product mix. It can be calculated by
adding depth of all the product lines.
 Consistency: it refers to how closely the
various product lines are in end use,
production requirements, distribution
channels, or some other ways.

48.  The fundamental reason for changing
product mix (adding or eliminating products)
is due to the change in market demand which
occurs due to the following factors:
1. Population increase
2. Changes in the level of income of the buyers
3. Changes in consumer’s buying behaviour
4. Marketing influencing due to competition
5. Marketing influences due to competition
6. Economic conditions

49.  Product Development involves the adding,
dropping and modification of item
specifications in the product line for a given
period of time by way of technical changes
and environmental changes.

50.  Introducing new products is difficult as it involves
long rang planning.
 The following factors are considered in this regard
I. Customer’s needs should be identified which are still
unmet with existing products.
II. Competing and substituted products should be
examined in terms of money, material and time for
deciding new product development.
III. Strength of the company should be examined in terms of
money, material and time for deciding NDP.
IV. Scope of product line and profitability should be
considered in terms of cost and price.
V. Expected demands should be forecasted in order to
estimate the market size and production volume to be
started.
VI. It should review its technical backup, R&D dpt. costs,
manpower available.

51.  Idea generation
 Idea screening
 Business analysis
 Concept development
 Testing
 Commercialization

52.  Idea generation: the NDP process starts with
the search for ideas that are new and
innovative and that can help in fulfilling the
unmet needs of the customers. New ideas can
be generated from the following sources.
a) Brainstorming with customers
b) Evaluating competitors product
c) Talking to distributors and retailers
d) Professional research specialists advice
e) Websites for getting new ideas from customers
and feedback on existing products

53.  Idea Screening: all ideas collected are evaluated in-
depth to eliminate those inconsistent with the
product policies and objectives of the firm.
 Some ideas may be good and profitable but cannot
be considered because of the lack of resources of
production.
 The main intention of this phase is only to eliminate
unsuitable ideas as quickly as possible. This involves
1. Visualizing idea into a product concept.
2. Collecting facts and view to decide if this concept is a
feasible business proposal.
3. Assessing each idea concept in terms of production cost,
utility to the customer and expected demand for it in the
market.

54.  Business Analysis: It is the extension of idea
screening.
 Management needs to prepare sales, cost and
profit projections to determine whether the
product satisfies the company objectives. If
they do, then only the concept can move to
the development stage.
 Company uses Break-even Analysis (BEA) and
Risk Analysis to find out the optimum cost,
price and expected profits.

55.  Concept Development: During this stage, the
‘idea-on-the-paper’ is turned into a
‘product-in-hand’.
 It establishes development plans, arrange for
research and development work to bring out
a workable prototype that can put to use for
testing.

56.  Testing: Testing is to assess whether the
product meets the technical and commercial
objectives envisaged in the original
proposals. There are 3 types of tests usually
conducted.
1. Concept testing
2. Product testing
3. Test Marketing

57.  Commercialization: product is launched
market wide and thus, commences its life-
cycle.

60.  Just as customers have their life cycle,
product are also mortal, they flourish for a
time, then decline and die. To say that a
product has a life cycle is to assert that:
1. Product have a limited life.
2. Product sales pass through distinct phases, each
posing different challenges, opportunities and
problems to the marketer.
3. Profits rise and fall at different stages of PLC.
4. Product require different marketing, financial and
human strategies in each stage of it’s life cycle.

62.  Introduction:
a) It can be considered as the birth stage in which
the product evolves out of production and
launched in the market for the customers to buy it
the first time.
b) It is a period of slow sales growth,
c) Profits are non-existent because of delivery of
heavy expenditure on advertisement and selling.
d) The profits will be very low or negative as part of
the investment is to be recouped in other selling
and logistic expenditures.

63.  Growth:
a) This is the period of rapid market acceptance and
substantial profit improvement.
b) Repeat sales starts and brand awareness is on a high
in the market.
c) It is here that similar other new products begin to
appear in the market and offer competition.
d) Prices remain where they are or fall slightly, depending
on how fast demand increases.
e) Companies maintain their promotional expenditures at
the same or at a slightly increased level to maintain
position in the market.
f) Firms must watch for a change from an accelerating to
a decelerating rate of growth in order to prepare new
strategies.

64.  Maturity:
a) This stage faces slowdown in sales growth because the
product has achieved acceptance by most potential
buyers.
b) Profits stabilize or decline because of increased
competition.
c) Sales flatten because of market saturation.
d) During this stage, the manufactures introduce new
models of product or bring discounts or freebies to
promote their brands with a view to retaining their
position in the market.
e) In economic terms, it is a stage where supply exceeds
demand.
f) Some of promotional efforts and selling tactics may
lengthen the span of this stage but they will not avoid
declining stage to come.

65.  Decline:
a) Sales show a fast declining trend and profits
erode.
b) Competition become severe and even loyal
customers switches to new products of
competitors.
c) It is the ending phase of product’s life cycle.
d) Company reduces the marketing expenditure,
liquidate the product from weak markets, cut the
prices to clear stocks, reduce advertising and
sales promotion to minimal level to retain hard-
core loyal.
e) A product should be eliminated when it does not
find a proper place in a firm’s product line.

66.  Brand: Brand name is a part of brand consisting
of a word, letter, group of words comprising a
name or punchline which is intended to identify
the goods or services of a seller and to
differentiate them from those of competitors.- by
AMA
 Branding: is the management process by which a
product is branded. It a general term covering
various activities such as giving brand name to a
product like Amul, designing a brand mark,
establishing and popularizing it.

67.  Trade Mark: When a brand name or brand mark
is registered and legalized, it becomes a trade
mark. It provide a legal protection to brand for
its exclusiveness.
 Patents: patents are public documents conferring
certain rights, privileges and titles to the use of
technical inventions such as a new process, a
new product or a new machine. When a new
invention is made, it is registered for patents so
that an exclusive right is obtained by the inventor
to use it. No unauthorized person can make
commercial or personal use of a clearly defined, a
new and useful technological invention.

68.  Brands are valuable intangible assets for
company’s identity.
 Brands may expand market coverage, provide
protection to the new product, extend an
image.
 It help in product identification.
 It denotes quality, style and value of a
product to the customer.
 It eliminates imitation of original products.
 It provide legal protection to copying.
 It help in advertising and packaging.

69.  Brands equity helps marketing programmes
to effectively establish product in the market.
 It helps in price differentiation of products.
 Brads speaks of the manufactures’ business
strategy.
 Brands name is a child of advertisement and
trade marks is the legal guardian of brand
name.

70.  Thomas F Schutte has classified brand into two
categories in his book, “The Semantic of
Banding.” These are :
1. Manufacture’s Brands
a. National Brand
b. Regional Brand
c. Family Brand
2. Distributer’s Brands: it emphasizes on the identity of
dealers and retailers.
a. Private Brand
b. Store Brand
c. Dealer Brand
d. House Brand

71.  Today branding is such a strong marketing
force that it is difficult for a product to
survive without a brand name.
 4 general strategies used for deciding a
brand name, for a firm’s product or service
are:
1. Individual names:
HUL Lux, Rexona in soaps
Kwality Walls in ice-cream
Surf Excel in detergents.

72. 2. Blanket Family names:
TATA TATA Salt, TATA Tea, TATA Steal etc
3. Separate Family Names for all Products
The Aditya Birla Group in India uses Hindalco for
aluminum product , Ultra Tech for Cement, Grasim
and Grivera for suitings.
4. Corporate Name Combined with Individual
Product Names
Sony : Sony Braviera , Sony Cyber Shot, Sony Vaio
Honda: Honda city car , Honda Activa, Honda Motors

73.  “Packaging is the process of covering,
wrapping or creating goods into a package. It
involves designing and producing the
container for a product.”
 Packing is often remarked as “a silent
salesman” because of its advertising appeal,
identifying power, attractive looks and
intrinsic value.

74.  Primary Package: a bottle containing
syrup .
 Secondary Package: cardboard box
containing bottle of syrup.
 Shipping Package: a corrugated box
containing dozens of boxes.

75. 1. Product Identification
2. Protection from Damages
3. Promotion tool
4. convenience

76.  Labeling is the display of label in a product. A
label contains information about a product on
its container, packaging, or the product itself.
 It also has warnings in it. For e.g. in some
products, it is written that the products
contain traces of nuts and shouldn’t be
consumed by a person who’s allergic to nuts.
 The type and extent of information that must
be imparted by a label are governed by the
relevant safety and shipping laws.

77. Basis for
Comparison
Brand Equity Brand Value
Meaning
Brand Equity is the
worth of the brand
that a firm earns
through consumer
consciousness of
the brand name of
the specific product,
instead of the
product itself.
Brand Value is the
economic worth of
the brand, wherein
the customers are
readily willing to pay
more for a brand, to
get the product.
What is it?
Attitude and
Willingness of the
consumer towards
the brand.
Net present value of
forecasted cash
flows

78. Basis for
Comparison
Brand Equity Brand Value
Derived from Customers
Product and Service
Quality, Channel
relationships,
Availability, Price
and Performance,
Advertising, etc.
Indicates
Success of the
brand
Total financial value
of the brand.

79.  Services Marketing as an organizational
function and a set of processes for
identifying or creating, communicating, and
delivering value to customers and for
managing customer relationship in a way
that benefit the organization and stake-
holders.-by AMA
 “Any act or performance one party can offer
to another, that is essentially intangible and
dose not result in the ownership of
anything”

81.  Private Non-profit Sector
◦ Museums, charities, temples, colleges, hospitals,
health care centers.
 Manufacturing Sectors
◦ Computers operators, accountants, legal staff.
 Government Sectors
◦ Courts, employment exchange, loan agencies,
police, fire department, postal services.
 Retail Sectors
◦ Cashiers, clerks, sales people, customer care
representatives, service engineers

82.  Intangibility
 Inseparability
 Variability
 Perishability

83.  Health Spa-Day Spa
 Market Research-Neilson
 Real Estate-GMR
 Car Rental Services-Avis India
 Advertising and PR- Ogilvy
 Credit Cards-HDFC Platinum Card
 Internet Banking-SBI
 Retailing –Future Group (Big Bazaar)

84.  It provide a reliable methodology for
measuring customer satisfaction on the basis
of evaluating 5 quality parameters:
1. Tangible
2. Reliability
3. Responsiveness
4. Assurance
5. Empathy

85. 1. Understanding the nature of service
2. Understanding the customer’s expectations
of service
3. Developing service marketing mix
4. Organizing delivery channels
5. Pricing services
6. Promotion
7. Achieving differentiation
8. Measuring service quality
9. Monitoring customer satisfaction

86.  Price is the only element of marketing mix
that generates revenue.
 It is the most important determinant of the
profitability of business by way of sales
volume.
 It is competition that contributes the
maximum to the importance of pricing.
 Consumers compare prices of various
products to decide a particular brands to
purchase.

87. 1. Maximum current Profit
2. Maximum Long-term Profit
3. Companies Survival
4. Maximum market Penetration
5. Maximum Market Skimming
6. Product-Quality Leadership

88.  These factors can be economic,
psychological, quantitative or qualitative in
nature.
1. Internal Factors: Related to firm
a. Corporate objectives of the firm
b. Image sought by the firm through pricing
c. Price elasticity of demand of the product
d. Costs of manufacturing and marketing
e. Stages of the product life cycle
f. Intensity of competition
g. The characteristics of the product
h. Volume of production and economies of scale

89.  These factors can be economic,
psychological, quantitative or qualitative in
nature.
2. External Factors: Related to macro
environment of the firm
a. Market composition
b. Buyer’s attitude towards product
c. Bargaining power of customers
d. Competitor’s pricing policy
e. General state of economy
f. Government controls and regulations
g. Societal considerations

90. 1. Setting the pricing objective.
2. Determining the demand elasticity for price,
estimating the total demand in the market .
3. Estimating costs of manufacturing and
marketing.
4. Analyzing competitor’s costs, prices and offers.
5. Selecting a pricing method, keeping in mind the
market share, price image for brand, type of
customer segment, life cycle stage of the
product.
6. Selecting the final price.
7. Periodical review of sales as well as adjusting
price to the demand.

91.  Pricing methods or strategy is a route to
achieving the desired pricing objectives.
 There are several methods of pricing which
are classified into various groups.
1. Cost-based pricing
a) Mark-up pricing
b) Target rate of return
c) Absorption cost pricing
d) Marginal cost pricing

92.  Pricing methods or strategy is a route to
achieving the desired pricing objectives.
 There are several methods of pricing which
are classified into various groups.
2. Demand/market based pricing
a) Skimming pricing
b) Penetration pricing
3. Competition oriented pricing
a) Premium pricing
b) Discount pricing

93.  Pricing methods or strategy is a route to
achieving the desired pricing objectives.
 There are several methods of pricing which
are classified into various groups.
4. Perceived-Value pricing
5. Differential pricing
6. Affordability-based pricing
7. Psychological pricing