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SECSSMARKETING COMPENDIUM
CONTENTS
WHAT IS MARKETING? ...................................................................................................................................... 4
SALES VS MARKETING ....................................................................................................................................... 4
CONSUMER BEHAVIOR ..................................................................................................................................... 7
SEGMENTATION, TARGETING AND POSITIONING ............................................................................................ 7
MARKETING MIX ............................................................................................................................................. 11
PUSH VS PULL MARKET ................................................................................................................................... 19
PRODUCT MIX – LENGTH, BREDTH ................................................................................................................. 20
PRODUCT LIFE CYCLE ...................................................................................................................................... 22
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SECSSMARKETING COMPENDIUM
WHAT IS MARKETING?
Marketing is about identifying and meeting human and social needs. In simple terms, it is meeting needs
profitably.
Formal definition as per The American Marketing Association: 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.
SALES VS MARKETING
Wants
• Wants are need satisfiers. They are described in terms of objects that will satisfy needs
• Wants are shaped by culture, society and individual personality
E.g. A hungry person in Australia
may want a hamburger, chips and a cola while someone from Singapore may want noodles and
someone from the South Pacific region may want mango, coconuts and beans
• Thus, wants are not mandatory part of life. You DON’T need a good smelling soap. But you
will definitely use it because it is you want
• Demands are wants backed by consumer purchasing power i.e. wants for specific products backed
by an ability to pay for them
• Companies must measure not only how many people want their product but how many are willing
and able to buy it
• Customers view products as bundles of benefits and choose products that give them the
best bundle for their money
Desire is the basic difference between wants and demands. A customer may desire something but he
may not be able to fulfil it.
Example: My Demand is to have a Domino’s Pizza, but my desire is to have a Pizza Hut Pizza
CONSUMER BEHAVIOR
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.
Segmentation
It is the process of defining and subdividing a large market into clearly identifiable segments having similar
needs, wants, or demand characteristics i.e. dividing a whole into parts based on various criteria like
geography, demography, behaviour, gender, personality etc. Why do we need segmentation?
Not all individuals have similar needs. A male and a female would have varied interests and liking towards
different products. A kid would not require something which an adult needs. A school kid would have a
different requirement than an office goer. Market segmentation helps the marketers to bring together
individuals with similar choices and interests on a common platform.
Segmentation is done along the following factors:
Targeting:
Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on
one or a few key segments consisting of the customers whose needs and desires most closely match your
product or service offerings. It can be the key to attract new business, increasing your sales or profitability.
An example of segmentation and targeting:
1. GSKCH has segmented the consumers based on age and targeted each segment with specific
products
Positioning:
Positioning is defined as the act of designing the company’s offering and image to occupy distinctive place
in the target market’s mind.
Positioning is all about ‘perception’. As perception differs from person to person, so do the results of the
positioning map e.g. what one perceives as quality, value for money in terms of worth, etc. will be different
to any other person’s perception. However, there will be similarities in certain cases.
Inexpensive
Overnight
Delivery
Speed
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. For example when purchasing
a toothpaste, a customer will expect that it should have freshness as well as it tastes well.
3. Points of Difference (POD): Attributes that differentiates the products from others in the category.
The more the number of PODs the better the positioning. PODs should satisfy the following criteria
Apple introduced the fingerprint scanner to unlock device in the iPhone models. This was a POD
until Samsung and all other manufacturers used the same technology to make it into a POP, thus
nullifying Apple’s unique POD
MARKETING MIX
Its purpose is to make a marketing strategy for a new market or an existing market.
Price
Total Customer Benefit is the perceived monetary value of the bundle of economic, functional and psychological
benefits customers expect from a given market offering because of the product, service, people and image.
Total customer cost is the complete packet or fees a customer expects to pay in the researching, buying,
obtaining and maintaining of a given product or service including monetary, time, energy, and psychological costs.
Can you think of the factors that you considered while deciding to buy your last smart phone?
Product – Benefits
Products provide benefits, and it is for these benefits that they are bought by customers. These
benefits may be classified into three types:
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.
Example of 4 Ps
Product Price
(Nestlé’s bestselling product)
Starting Price of Kit Kat remains unchanged
Shape - Chocolate bars with different as Rs. 5 but the quantity changed.
numbers of fingers 2, 3 or 4. It uses psychological pricing – 13 gm Perk is
Variants – Nestle KitKat ice-cream (America, priced Rs. 5 but 6 gm KitKat is priced Rs. 5.
UK, France and Ireland), Nestle KitKat This tricks people into buying KitKat without
Drumsticks (Malaysia and Australia), Caramac realizing they get less chocolate for more
(2005) price.
Feature - chocolate + Biscuit, It’s available in price Rs. 5, Rs. 10, Rs. 15, Rs.
crunchy Package – red & white 50
Competitors - Perk, Munch
Place Promotion
Have a break, have a kit kat
KitKat is available at retail stores, super
market etc. It is also available at
websites like Big Basket, Grofers etc. Online – Facebook, Instagram, Twitter
Produced in - 21 countries websites that asks the visitors to take a
Available in - nearly 100 countries break and have a KitKat
Offline - newspapers, magazines,
billboards, posters, televisions, various
places made for people to rest between
their work to have a break
Exclusive Ads - “Have a Break, Have a
KitKat” ads in 90s, “Dancing Panda” in 1987
Extended Ps
In case of a service 3 more Ps are added to
the marketing Mix, together they make 7 Ps
for an extended marketing mix of a service .
1. Product
2. Price
3. Place
4. Promotion
5. People
6. Physical Evidence
7. Process
Process
A process involves customers at every step and it is used to give quality services. Efficient
process ensures that the service is perceived as being dependable by the target segment.
1. Flow of activities 2. Number of steps
3. Level of customer involvement
Eg. A highly focused marketing process of going on a cruise – When we arrive we are greeted
and our baggage is taken to our room. We have a week of services from restaurants and
entertainment, to casinos and shopping.
Physical evidence
It is the material part of a service. As, there are no physical attributes to a service, so a consumer
tends to rely on material cues.
1. Uniforms 2. Office/showroom
3. Packaging 4. Business cards
5. Internet/web pages 6. Signage (e.g. for defense)
7. Paper work (e.g. invoices, tickets)
E.g. Tourism Industry (Essel World), Telecom corporate packs (Vodafone, Airtel, Jio), large
banks and insurance companies (SBI, HDFC)
People
People are used to produce and consume service or experiences. Customers buy from people
they like, so the attitude, skills and appearance of all staff need to be first class.
1. Employee 2. Employee customer Interaction
3. Training 4. Remuneration
5. Communication Culture and values
Eg. A tour guide or restaurant waiter/manager can affect our experience to travel or eat
Example
Acceptability Affordability
• Came up with a new product, • Quantity that Colgate offered
Colgate Ayurvedic Tooth powder consumer was much higher than
targeting rural rich and the competitor at the same price
consuming class • Price was set low for
• Came up with a sachet of tooth market penetration
powder for rural population • 50 gm – Rs 20 (Current Price)
who buy in smaller lots
4 As
Availability Awareness
• In 1998 Colgate 6 million • Colgate created awareness
people in 20k people by melas, door to door
• Tying up with initiatives like E- selling, haats, sampark
choupal and Disha to campaign, vans, free dental
strengthen distribution network checkups, free samples
Brand Personality
Specific mix of human traits that we can attribute to a particular brand
The theory is that consumers are more likely to choose brands with which they can associate their own
personalities. Brands are generally positioned in the following 5 traits:
Some marketers carefully orchestrate brand experiences to express brand personalities. For example, Axe,
the popular deodorant, caters to consumers who want others to view them as attractive and appealing.
These traits may vary depending on the socio-economic factors in different geographies with different
people.
Eg.
Japan lacks ‘Ruggedness’ and has Peacefulness instead
China lacks ‘Ruggedness’ and ‘Sincerity’ and has ‘Joyfulness’, ‘Traditionalism’ and ‘Trendiness’ instead
Pull Push
Advertisements: Radio, TV, Print Ad, Online Sales promotion: Trade promotions - buy one
get one free
Consumer Promotion: 30% extra Pricing offers: Get 1000 Rs. Off on purchase
above Rs. 10000
PR & Publicity: Non-paid, online blogs, press releases, Personal: Face to face sales push
etc.
Events and Experiences: mall activations Direct to consumer: Tele marketing
Product Line
A product line is a group of products within the product mix that are closely related, either because they
function in a similar manner, are sold to the same customer groups, are marketed through the same types
of outlets or fall within given price ranges.
Example: For HUL Soaps is one product line.
Product Development Stage: This is the stage where the product is conceived and developed. This stage is
characterized by high R&D costs and losses in the form of manufacturing costs.
Introduction Stage: This is the stage where products are introduced to the market. This stage is
characterised by high marketing costs since the company invests a lot in creating awareness for the
product. Sales growth is slow in this stage due to which the company experiences huge losses during this
period. Due to the inability to continuously sustain losses, the failure at this stage is the highest.
UberEATS is an online food delivery platform started by Uber. It has been
recently introduced to the market and is currently in the introductory
phase.
Growth Stage: This stage is marked by a sharp increase in sales and the product becomes profitable in this
stage. Company spends on marketing to strengthen market share and capture market share. This stage also
experiences competition from new entrants who now see value in entering the segment. This
stage also experiences the highest profits.
Maturity Stage: This stage sees stagnation in profits and the sales after growing for a certain
period start going down. Companies often spend a lot on innovation and promotions to sustain
this stage as long as possible. This is also a stage that is characterised by strong competition
since the segment is now an established one. A product might be in this stage for months or for
decades.
LED TVs are currently in the maturity stage, coming up with
new features and innovation to sustain their sales.
Decline Stage: This is the stage when players start moving out of the segment because it has
been replaced by better and more lucrative alternatives. Companies reduce their marketing
spends and do not invest in innovations and the product sells by itself. The sales in this stage
continuously decrease until the product goes obsolete