Академический Документы
Профессиональный Документы
Культура Документы
Sanjeev Varshney
What is Marketing?
Marketing is an organizational
function and a set of processes for
creating, capturing*,
communicating, and delivering
value to customers and for
managing customer relationships
in ways that benefit the
organization and its stakeholders.
Something of Value
Conditions for
Communication and Delivery
Exchange
Benefits?
Service
Benefits Price &
Other
• Benefits= Functional Costs
Brand
benefits + Emotional Benefits
Benefits
Value Perception Grid
Price
Reliability
Project Cost
Guarantees
Cost of Operation
Contractual Safeguards
Cost of Maintenance
Training
Discussion question
What do you think are the key features of
your company’s offering that create value?
How Firms Compete on the Basis of
Value
• Constantly changing
consumers
perceptions
• Firms must
constantly monitor
the marketplace in
order to create value
• Understand key
benefits
• Focus on key
benefits
• Eliminate cost of
less strategic
benefits
Trust
• Make Promise
• Keep a Promise
18
Crux of Building Relationship in today’s time is
Customer engagement and creating right customer
experience every time (On all touch points)
19
Building Relationships
Customer-oriented personnel
Every employee represents the firm in the eyes of
the customer.
Employee training programs
Empowered employees
Employees are given more authority to solve
customer problems on the spot.
Teamwork
Emphasizing cooperation over competition
while helping a customer.
20
Marketing Helps Create Value
For example:
• Less toxic products
• More durable products
• Products with reusable or recyclable
materials
Goods
Services Money
Idea
Product
Time
Energy
Place
3 more P’s for Services Marketing
• People
• Process
• Physical evidence
Why is Marketing Important?
Pervasive
Through out the Enriches
organization Society
Sanjeev Varshney
Understanding Consumer
Behavior
consumers make
purchase decisions
Consumer
behavior = HOW
Shopping Good/Services
Convenience Goods/Services
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Types of Buying Decisions
Preferred
Present State
Status
2
Need Recognition
Functional needs
Psychological needs
Stimulus
I know…
Perceived Perceived
Benefits Costs
Discussion question
What is the difference in search time between the following: A wedding gift
for a) coworker, b) your brother, c) your best friend?
Universal Set
Retrieval Set
Evoked Set
Choice
Actual or Perceived Risk
Financial risk
Performance
risk
Psychological
risk
Evaluation of Alternatives:
Evaluate Criteria
Evaluative
Criteria
Determinant
Attributes
Discussion question
What are some of the features of a vacation that would be in your
evaluative criteria?
?
Price
Product
Presentation
Brand
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Postpurchase:
Customer Satisfaction
Customer contact
Encourage feedback
Provide money back guarantee
Build realistic expectations
Demonstrate correct product use
Cognitive
Dissonance
Inner tension that a
consumer experiences
after recognizing an
inconsistency between
behavior and values or
opinions.
Postpurchase: Dissonance
Discussion question
What other ways do firms
reinforce purchase decisions?
Social
Factors
Consumer
Situational Marketing Mix
Decision
Factors Elements
Process
Psychological
Factors
Socio-Cultural Factors
• Social Factors
– Reference group
– Family
– Opinion Leaders
• Cultural Factors
Components of Culture
Values
Language
Myths
Customs
Rituals
Laws
Material artifacts
Subculture
Subculture
A homogeneous group
of people who share
elements of the overall
culture as well as cultural
elements unique to their
own group.
Social Class
Social Class
Income
Education
Wealth
Other Variables
Reference
Groups
Opinion
Leaders
Family
Members
Influences of
Reference Groups
They serve as information sources and
influence perceptions.
• Opinion Leaders:
– Greater Involvement with the product
– Enhanced knowledge and experience with the
product category
– Function primarily through interpersonal
communication & observation
– More gregarious than others
– Expertise & Sociability
• Market Mavens
Social Factors: Family
Single
Young
married
Full nest I
Full nest II
Empty Nest
I
Empty Nest
II
Single Old
Family
• Initiators
• Influencers
• Decision Makers
• Purchasers
• Consumers
Household Decision-Making Process
for Children’s Products
Individual Influences
Personality
Age
Gender Self-Concept
Life Cycle
Lifestyle
Age and Family Life Cycle Stage
Self + Possessions
Maslow’s
Hierarchy
of Needs
A method of classifying human
needs and motivations into five
categories in ascending order of
importance.
Motivation Theory and Marketing
Strategy
An experience changes
Experiential
behavior
• Sensory Meaning
• Semantic Meaning (symbolic associations)
• Episodic Memories
• Schematic Memory
Sensory Short Term Long Term
Memory Memory Memory
Attention Elaborative
Rehearsal
Schematic Memory
Beliefs and Attitudes
An organized pattern of
knowledge that an individual
Belief
holds as true about his or her
world.
• Communication Situation
– What you hear
• Purchase Situation
– When and Where
• Usage Situation
– How
• Disposition Situation
– What now
Five Classes of Situational Influence
• Individual characteristics
– Perceived risk (social cost, financial cost, time cost,
efforts cost)
– Shopping orientation (utilitarian/recreational)
• Market characteristics
• Retailer characteristics
– Outlet image
– Retailer brands
– Retail advertising
– Outlet location and size
Summary:
Understanding Consumer Behaviour
• Most decisions a Consumer Make are
emotional and not rational and hence
important to hit his/her emotional mind
• For this it is important to understand why a
consumer wants to buy the product and
hence what will influence him.
• Important to get the consumer insight
• Then create an imagery to sell the product
and create associations
Marketing Strategy
Sanjeev Varshney
Strategic Planning is…
the managerial process of creating
and maintaining a fit between the
organization’s objectives and
resources and the evolving market
opportunities.
1
The Strategic Marketing Planning
Process
Discussion question
What do you think are the keys to
McDonald’s sustainable advantage?
Cost
Types of Product/Service
Competitive Differentiation
Advantage
Niche
Cost Competitive Advantage
New Service
Government Subsidies
Delivery Methods
Examples of Product/Service
Differentiators
Brand names
Strong dealer network
Product reliability
Image
Service
Niche Competitive Advantage
Copyrights
Locations
Equipment
Technology
Skills and
Assets Customer Service
of an
Organization Promotion
Step Two: Conduct a Situation
Analysis Using SWOT
2. Situation Analysis
Segmentation
Targeting
Positioning
Increase
Growth Grow Lower Increase Improve
Average
Market market Channel Profit Marketing
Selling
Demand Share Costs Margin Efficiency
price
Growth Strategies
Build
Hold
Harvest
Divest
Portfolio Matrix for a Large Computer
Manufacturer
Market attractiveness
High
Business Position 3
Effective Strategic Planning
Identify several
techniques that help
make strategic
planning effective
Techniques for Effective Strategic
Planning
Continual Management
Creativity
attention commitment
Effective
Strategic
Planning
Bridging Gap between Strategic &
Tactical Planning
Strategic Planning
• Strategic Planning for the Total Company
• Strategic Marketing Planning
• Sales Force Strategy
Sales Forecast
• At Corporate level
• Regional Level
• Territory level
Developing Sales Forecast
• Types of sales Forecast
– Product level
– Time Period
– Geographic area
– Channel wise
– Account wise
– Matrix forecasts
Magic Matrix
Product1 Product2 Product3 Spares
T1 T2
Dealer R1
1 R2
R3
Dealer
2
Dealer
3
Total
Factors Influencing the sales Forecast
• Marketing plans
• Conditions within the Industry
• Market Conditions
• General Business Conditions
Develop sales Budget
• Methods for Developing Sales Budget
– Percentage of Sales Method
– Objective & Task Method
Sanjeev Varshney
What is Segmentation & Why
we have to segment the
market?
Market segmentation is the process of
dividing the total market for a good or
service into several smaller, internally
homogeneous groups.
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
Personal
Characteristics
Using Multiple Segmentation
Methods
• Start with One method of segmentation
• Introduce other method at this stage to have
better understanding of the segment
• This can be used to establish better marketing
mix for the group
Example:
Young: 15-35
Urban & Cosmopolitan:
Lets see an Example
Step 3: Evaluate Segment
Attractiveness
Substantial
Reachable
Identifiable
Segment
Attractiveness
Profitable Responsive
Discussion question
When would these women all be in the same segment? When would
they be in different segments?
• Size matters
• Not profitable
Customers must:
• React positively to
firm’s offering
• Move toward the firms
products/services
• Accept the firm’s
value proposition
Discussion question
Nike is very successful at selling sports related goods. Would
consumers accept personal care products from Nike? Why or why not?
Snack
Kid
Adult/Youth
Each time the positioning is changed the target segment is different. Even the
method of segmentation has changed.
Can you identify story boards for each one of them.
Possible approaches of
Positioning
• Attributes Attributes, India Gate
• Price/ Quality Price/ Quality, Excellence
• Competitors Airtel, Tide, Ariel
• Application Oat Meal ads (Food vs Diet)
• Product User Parker pens
• Product Class BMW “ The Ultimate Driving Machine”
Salient
Attributes
Positioning
Value Symbols
Strategy
Competition
Lets Review these ads of Airtel
• What is the Value here ?
• What are the salient attributes focused
upon?
• What is the symbol ?
• What is the symbol now?
Symbol
Can be used as
a positioning
tool
Values
Lifestyle
Cultural Norms
Demographic Factors
People are the basis for any market
• Demographic characteristics relate to buyer
behavior
• Demographic cohorts have their own
needs, values, and consumption patterns.
What should you look for:
1. Population growth
2. Population composition
3. Population Distribution
4. Household structure
5. Household/Individual consumption patterns etc
Some of the Data Banks we can Use: NCAER reports, BBDO Data, India
Census
Economic Factors
Consumers’
Income
Purchasing
Power
Inflation
Recession
Income
Distribution
Technological Development :
Research
Pure research that aims to
confirm an existing theory or to
Basic Research learn more about a concept
phenomenon.
How interdependent is
the industry?
8
Competitive Factors
Competition for Global Competition
Market Share
and Profits • More foreign firms
are entering Indian
market.
• Firms must work
harder to maintain • Foreign firms in
profits and market India now compete
share. on product quality.
8
Case in Point: IKEA
• In your groups carry out Market Environment
Analysis for entry of IKEA in Indian market and
develop your strategy to succeed in the
market.
Time: 20 min
Situation Analysis Using SWOT
2. Situation Analysis
Market
Potential
Sales
Potential
Universe
Estimating Market & Sales Potential
• Customer analysis is the starting point
– Who buys the product
– Who uses the product
– What is the profile (demographics, lifestyle etc.)
– What are the buying habits
• Identify the Market Factor
• Survey of Buyer Intention
• Test markets
Demand forecasting entails estimating
sales of a product during some future
time period.
• A sales forecast is an estimate or probable sales for one company’s
brand of the product during a stated time period in a specific market
segment and assuming the use of a predetermined marketing plan.
– It is based on a specific marketing plan.
– It can be expressed in dollars or product units.
– It is best prepared after market potential and sales potential have
been estimated.
– It typically covers a 1-year period.
– Marketing goals and broad strategies must be established before a
sales forecast is made.
– Once it is made, it becomes a key controlling factor in all
operational planning throughout the company.
Predictions of market demand may be based on techniques
ranging from guesses to statistical models.
Common methods include:
• Market-factor analysis—demand for a product is assumed to be related to
the behavior of certain sales activity.
• Survey of buyer intentions—a sample of current or potential customers are
asked how much of a particular product they would buy at a given price
during a specified future time period.
• Test marketing—a firm markets its product in a limited geographic area,
measures sales, and then projects the company’s sales over a larger area.
• Past sales and trend analysis—a flat percentage increase is applied to the
volume achieved last year or to the average volume of the past few years.
• Sales-force composite—a bottom-up method consisting of collecting
estimates of sales for the future period from all salespeople.
• Executive judgment—obtaining opinions regarding future sales volume
from one or more executives.
Market Factor Index
• Example:
Buying Power Index = (5I+2P+3R)/10
I: Percentage of Disposable personal
income in the area
P: Percentage of Indian population in the
area
R: Percentage of Indian retail sales in the
area
Estimating Market Potential: Exercise
• In your groups discuss and come out with
method/s to go about estimating market
potential for following products:
– AC’s (window/split) in Kolkata
– Men formal and casual wear in mid-end category
(Rs. 800-Rs 1500).
Time: 10 min
Product , New Product
Development & Brand
Management
Sanjeev Varshney
Product
Set of tangible
and intangible
attributes May be a good,
service, place,
person, or idea
Want-satisfaction
in the form
of benefits
Product
More Than a Set of Attributes
A Product is
much more than
a set of physical
attributes
Classification of Goods
Consumer Goods
•Shopping Goods
•Convenience goods
•Specialty goods
Business Goods
•Raw material
•Fabricating goods
•Installations
•Accessory equipments
•Operating supplies
Importance of Product Innovation
Requirement
for growth
“Innovate or Die”
Benefits of
Satisfy the new products
changing Diversify
needs of firm’s risk
consumers
Really Significantly
innovative different
Imitative
New Product Introductions
• Pioneers or breakthroughs
• First movers
Compatibility
Factors
Relative Affecting
Observability
Advantage Product
Diffusion
Trialability
Identify
the Business Prototyp
Idea Screenin Commer
strategic Analysis: e Market
role of the
Generati g of cializatio
Concept Develop Tests
new on Ideas n
testing ment
products
Internal R&D
Customer R&D
Input Consortia
Sources of Ideas
Brainstorming Licensing
Competitors
Products
1. Prototype
2. Alpha testing
3. Beta testing
Promotion
Price
Satisfaction of
Customer acceptance
technical requirements
Compatible Fit
with company’s
environmental marketing
standards structure
Middleman’s Criteria
for New Products
Good
relationship Compatible
with distribution
producer policies,
practices
Satisfy key
financial
criteria
Organizing for Product
Innovation
TYPES OF ORGANIZATIONS
Product-planning Committee
New-product department or team
Brand manager
SHIFTING ARRANGEMENTS
Product Life Cycle
Theoretically they
are bell shaped
but in reality they
can take many
shapes.
Retailing &
Market Product Marketing Merchandising
Augmented
Expected or Potential Product
Generic or Core product Enhanced or Service
Product or Service or Service Products (True insights)
(Must) (Satisfiers) or Services
(Delights)
Walter Landor
What Makes a Brand?
URLs
Brand
name
Logos and
Branding symbols
Jingles
Slogans Characters
No promotion
Brand Brand
Awareness Brand Equity Association
Brand
Loyalty
Brand Brand
Asset - Liability = Brand
Score Score Equity
Brand Asset Score Card
Brand Rltv Very Below Avera Above Very Brand
assets Imp Low avg ge (50) Avg High Assets
(0) (25) (75) (100) Score
BA 20% X 20
EC 10% X 5
BL 20% X 15
PLE 30% X 15
PP 20% X 10
OBA 100% 65
BA – Brand Awareness
EC- Emotional Connectedness
BL – Brand Loyalty
PLE – Product Line extensions
PP – Price Premium
Brand Liabilities Score Card
Brand Rltv Very Below Avera Above Very Brand
Liabilit Imp Low avg ge (50) Avg High Assets
ies (0) (25) (75) (100) Score
CD 20% X 4
PF 10% X 4
QP 20% X 10
PRSI 30% X 0
NA 20% X 4
OBL 100% 22
CD- Customer Dissatisfaction
PF – Product failures
QP – Questionable Practices
PRSI – Poor Record on Social issues
NA – Negative Associations
Brand Loyalty
• Brand Recognition
• Brand Preference
• Brand Insistence (Luxury Products like
Rolex Watches etc)
Protecting a Brand Name
Product
counterfeiting
Generic usage
Xerox
Branding Strategies
Manufacturer
Brand
or National Generic
Brand
Ownership
Store or
Private
Label
Corporate or Brand
Individual
Family Brand Names
Corporate
& Product
Line Brand
Synergy Marketing
among costs
the products are lower
Evaluate consumer
Evaluate the fit between
perceptions of the
the product class
attributes of the core brand
of the core brand
and seek out extensions
and the extension.
with similar attributes.
• Primary package
• Secondary package
Example: of Packaging that has helped the brand
successful
Multiple packaging
Sanjeev Varshney
Price is a Signal
Customers Costs
Value
Company
Objectives Competition
Channel
Members
Variable Costs
– Vary with production
volume
Fixed Costs
– Unaffected by production
volume
Total Cost
– Sum of variable and fixed
costs
• Oligopoly
• Monopoly
• Pure
Pricing
Cost Based Value Based
Strategies
Competition
Based
Consumer perceptions
Reference
pricing
Odd prices
Lacking experience,
consumers use price as
an indicator of quality
Products/brands that
consumers have little
knowledge about, price
becomes crucial
Discussion question
Whine ranges in price from under Rs. 200 a
bottle to over Rs. 2000 a bottle. How do you
know which to choose?
Price skimming
Penetration Pricing
Seasonal Cash
Discounts Discounts
Quantity
Discounts
Price
lining
Pricing Tactics
for
Consumers
Leader Price
pricing bundling
Markdowns
Seasonal
discounts
Sanjeev Varshney
Go-to-Market Strategy
• A game plan for reaching and serving the right
customers in the right markets, through the right
channel, with the right products and the right value
proposition.
Purpose is to create a powerful, winning total
customer experience that will:
• Attract, win and retain the most desirable customers
• While driving high sales and market share growth
• At the lowest possible cost
Ingredients of a Winning GO-
TO-MARKET Strategy
• Selection of right market
• Understand your customer (customer
insight)
• Selection of right Channel
• Right product with right value proposition
Extended problem Brand enters the consideration set and also help in
solving information search and evaluation by increasing the
credibility by acquiring technical knowledge
Framework for Designing the
Channel Objective
Variables Dimensions of the Channel
Objective, which is likely to be
influenced
Consumer Role of the channel in decision
making
Positioning Type of outlet
Channel
Segmentation: Channel
Power: Identify
Recognise and respond to target Conflict: Identify
sources for all
customers service output actual and
channel
demands potential sources
members
Degree of Commitment:
Manage/ Defuse Conflict:
Distribution alliance? &
Ownership ?
• Effectiveness
– Delivery (how the channel meet demands)
– Stimulation (how well it stimulates latent demand)
• Efficiency
– Productivity (measure of physical efficiency)
– Profitability (measure of financial efficiency)
• Equity
– Service to problem ridden market or disadvantged
market
Profitability Analysis
NMC =
Volume X [ End user price X (1-%channel
cost)-COG]-Marketing Expenses
• Fulfilling delivery
promises
• Meeting customer
expectations
• Reliant on an
efficient supply
chain
Sales Force
Brand
Management
Retailer
Shopper Consumer
(one who involves (one who identifies
in the act of the need
purchase and
buys
and decides
about the product)
• Global Perspective
• Technology Revolution
• CRM
• Sales force Diversity
• Team selling approach
• Managing Multi-channels
• Partner Relationship Management
• Ethical and social issues
• Data analytics
• Sales Professionalism
Need for Change
• Increase the base of the customer and
build relationships
• Tap the Potential of the sales person
• Improve the level of engagement of the
sales person
Operational Decisions in Sales
Management
• Sales Force Recruitment
• Territory Design
• Target Setting
• Sales force Motivation
• Managing the Channel
• Performance Evaluation and designing the career
path
• Training and developing the sales force
Personal Selling as Promotion
Flexible Goal is
sale
Focused Costly
Difficult to
Minimize
attract quality
waste
people
Personal Selling and Marketing
Strategy
• Can customize the message
for a specific buyer
• Assists in creating strong
supply chain relationships
• Increased customer loyalty
through relationship selling
• Gather research input from
customers
• Crucial to the success of
CRM
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
When Personal Selling is Used
PRODUCT
MARKET Value not apparent
High unit cost
Concentrated:
Technical
Geographically
Requires demonstration
In few industries Fitted to customer’s need
In several Introductory stage
Selling Systems
Centers Selling
Global
Sales Teams
Changing Patterns in Personal
Selling
Relationship
Selling Telemarketing
Internet
Automation
Selling
Aligning the Personal Selling Process
with the B2B Buying Process
Market
Potential Assimilation
Estimation
Training
Work Load
Analysis Motivation
Compensation
Man Power
Supervision
Planning
Performance Evaluation
Recruiting and Selecting
Salespeople
• Personality
• Optimism
• Resilience
• Self-motivation
• Empathy
• Tied to the
reward structure
• Evaluation
measures can
be either
objective or
subjective
Sanjeev Varshney
Go-to-Market Strategy
• A game plan for reaching and serving the right
customers in the right markets, through the right
channel, with the right products and the right value
proposition.
Purpose is to create a powerful, winning total
customer experience that will:
• Attract, win and retain the most desirable customers
• While driving high sales and market share growth
• At the lowest possible cost
Ingredients of a Winning GO-
TO-MARKET Strategy
• Selection of right market
• Understand your customer (customer
insight)
• Selection of right Channel
• Right product with right value proposition
Extended problem Brand enters the consideration set and also help in
solving information search and evaluation by increasing the
credibility by acquiring technical knowledge
Framework for Designing the
Channel Objective
Variables Dimensions of the Channel
Objective, which is likely to be
influenced
Consumer Role of the channel in decision
making
Positioning Type of outlet
Channel
Segmentation: Channel
Power: Identify
Recognise and respond to target Conflict: Identify
sources for all
customers service output actual and
channel
demands potential sources
members
Degree of Commitment:
Manage/ Defuse Conflict:
Distribution alliance? &
Ownership ?
• Effectiveness
– Delivery (how the channel meet demands)
– Stimulation (how well it stimulates latent demand)
• Efficiency
– Productivity (measure of physical efficiency)
– Profitability (measure of financial efficiency)
• Equity
– Service to problem ridden market or disadvantged
market
Profitability Analysis
NMC =
Volume X [ End user price X (1-%channel
cost)-COG]-Marketing Expenses
• Fulfilling delivery
promises
• Meeting customer
expectations
• Reliant on an
efficient supply
chain
Sales Force
Brand
Management
Retailer
Shopper Consumer
(one who involves (one who identifies
in the act of the need
purchase and
buys
and decides
about the product)
• Global Perspective
• Technology Revolution
• CRM
• Sales force Diversity
• Team selling approach
• Managing Multi-channels
• Partner Relationship Management
• Ethical and social issues
• Data analytics
• Sales Professionalism
Need for Change
• Increase the base of the customer and
build relationships
• Tap the Potential of the sales person
• Improve the level of engagement of the
sales person
Operational Decisions in Sales
Management
• Sales Force Recruitment
• Territory Design
• Target Setting
• Sales force Motivation
• Managing the Channel
• Performance Evaluation and designing the career
path
• Training and developing the sales force
Personal Selling as Promotion
Flexible Goal is
sale
Focused Costly
Difficult to
Minimize
attract quality
waste
people
Personal Selling and Marketing
Strategy
• Can customize the message
for a specific buyer
• Assists in creating strong
supply chain relationships
• Increased customer loyalty
through relationship selling
• Gather research input from
customers
• Crucial to the success of
CRM
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
When Personal Selling is Used
PRODUCT
MARKET Value not apparent
High unit cost
Concentrated:
Technical
Geographically
Requires demonstration
In few industries Fitted to customer’s need
In several Introductory stage
Selling Systems
Centers Selling
Global
Sales Teams
Changing Patterns in Personal
Selling
Relationship
Selling Telemarketing
Internet
Automation
Selling
Aligning the Personal Selling Process
with the B2B Buying Process
Market
Potential Assimilation
Estimation
Training
Work Load
Analysis Motivation
Compensation
Man Power
Supervision
Planning
Performance Evaluation
Recruiting and Selecting
Salespeople
• Personality
• Optimism
• Resilience
• Self-motivation
• Empathy
• Tied to the
reward structure
• Evaluation
measures can
be either
objective or
subjective
Sanjeev Varshney
Balbir Pasha Campaign
Campaign Roll Out
Creation of an Icon
Creating a Buzz
Response to the Campaign
Indicators to Success
• Increased risk perception among those
exposed to the campaign (17%-43%)
• Increased Tendency to discuss HIV/AIDS
with others (50% discussed)
• Increase in number of people accessing
HIV/AIDS prevention products and
services (retail sales tripled and so does
no of calls of helpline no’s, increase in
usage last time)
Why was Balbir Pasha
Campaign Successful?
• Consumer Insight
• Building of intrigue
• Optimal media mix
• Link with the on-ground activities
• Infiltration into popular Culture
• Hard hitting messages
Balbir Pasha Campaign
• Principle of the Campaign:
– Targeting
– Integration
– Information
• Campaign Objectives
– Attitudinal Change
– Changing Social Norms
– Behavioral Change
Promotion and Marketing
Promotion is the element in an organization’s marketing
mix that serves to inform, persuade, and remind the
market regarding the organization and/or its products.
– It includes all the means by which a company communicates
directly with potential customers.
– It is an attempt to influence feelings, beliefs, or behavior.
– It is an attempt to shift the demand curve for a firm’s goods or
services
Shifting Demand for a Product
Price
Demand Demand
without without
promotion promotion
Quantity Quantity
b. Changing the shape
a. A shift in the demand
(or elasticity)
curve to the right.
of the demand curve.
The Promotional Campaign
• A campaign theme is the promotional
appeal dressed up in a distinctive,
attention-getting form that expresses the
product’s benefits.
• The promotional elements are coordinated
in a strategy called integrated marketing
communications.
• A complete campaign includes the
evaluation of results against objectives.
Integrated Marketing
Communication
• Integrated Marketing Communication
(IMC) is a strategic business process used
to plan, develop, execute and evaluate
coordinated communication with an
organization’s publics.
• The IMC approach takes an audience
perspective when planning and
coordinating the organization’s
communication activities
Integrated Marketing
Communications
Communication channel
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Elements of the IMC
• Awareness of target audience’s information sources.
• Understanding of what the audience knows and believes
that relates to the desired response.
• Use of a mix of promotional tools, each with specific
objectives, linked to a common goal.
• Coordinating personal selling, advertising, sales
promotion, and public relations to communicate
continuous flow of information.
The AIDA Model
Objectives of IMC
• Provide Information
• Increase Demand
• Differentiate the product
• Accentuate the Products value
• Stabilize sales
Corporate blogs
Online games
Text messaging
Comprehend NA (10%)
(77%) 2%
Awareness No Intentions (32%)
(54%) 8%
No exposure (37%)
37%
PULL STRATEGY
Communications Mix
The Promotion Budget
There are four common approaches to
promotion budgeting:
• Percent of Sales
• All Available Funds
• Following the Competition
• By Task or Objective
Measuring Success
Frequency
Reach
Web tracking
software
Online couponing
Online referring
Inform Remind
Persuade
Pretesting
Tracking
Posttesting
Company’s sales force and its brand managers are often at odds over
trade promotion
Sales force asks for more trade promotion money to push the product on
retailers shelf, where as brand manager wants money for consumer
promotion and advertising
Some Other Costs
• Promotion might decrease Long term
brand loyalty
• Inevitable distributed to wrong consumers
• Costs of special production runs, extra
sales force effort and handling
requirements
• Irritant to retailers: who may ask extra
trade allowances or refuse to cooperate
PLC versus Sales Promotion
Activity
Product Life Cycle Phase
Shows
Training High Med Low
Premiums Med High High
Website High Low Low
POP Med High Med
Displays
Rebates Low Med High
Distribution Objective & Sales
Promotion
PLC Stage Distribution Sales Promotion
Objective
New product Trial Consumer promotion + Trade
launch Promotion
Growth Stage Market Trade promotion
expansion
Maturity Availability Trade promotion + Consumer
promotion
Decline Availability Trade promotion
Process Technology
Functional Organization
Geographic
Product-or Brand management Organization
Market Management Organization
Matrix Management organization
Interactive
External
Marketing
Marketing
Company Employees
Internal
Marketing
Environment
Philosophy Goals
Comprehensive
review and evaluation
Performance of the marketing function Strategies
in an organization
Financial Organization
Resources Human Structure
Resources
Heading Rating (1- Comment
7)/Metrics
Environment (Political,
Economical, Legal,
cultural etc.)
Goals
Strategies
Organizational Structure
Human Resources
Financial resources
Performance
Philosophy
Marketing Performance Indicators
Market Share
Sales Turnover
Market Reach
Salesman Performance
No of calls
Conversion ratio
Leads (Hot , Warm & Cold)
Inventory turnover (Average value of stock & stock
turnover)
Credit performance
Line fill ratio
Case fill ratio
Inventory shrinkage/sales
Market penetration
Product Basket Analysis (Average Basket Size & Bill Value)
The 80-20 Principle
Profitability control
Efficiency control
Strategic control
Sales analysis
Market share analysis
Sales-to-expense ratios
Financial analysis
Market-based scorecard analysis
Step 1: Identify functional expenses
Step 2: Assign functional expenses to
marketing entities
Step 3: Prepare a profit-and-loss statement for
each marketing entity
Ledger Expenses
Allocating Costs
Indirect Costs
Other
Expenses
($20)
Annual Plan Control:
Sales analysis, Market Share analysis, Sales-to-
expense ratios and financial analysis
Profitability Control:
Profit and loss statement for each marketing entity
Efficiency Control:
Customer satisfaction analysis, NPS, CLTV, service
status etc.
Strategic Control:
Net marketing contribution, Marketing ROS,
Marketing ROI
Measurement Process Metrics Result Metrics
Perspective (during ) (end)
Internal •Product defects •Sales revenues
Company Metrics •Late deliveries •Percent Gross
•Late payments Profit
•Inventory •Net profit before
Turnover tax
•Return on assets
External •Customer •Relative market
Marketing Awareness share
Metrics •Customer •Market share
satisfaction •Customer
•Perceived Retention
performance •Revenue per
•Intent to customer
repurchase
Market Growth Strategy (new customers)
Market Share strategy
Customer Revenue Strategy
Cost Reduction Strategy
Advertising strategy
Channel Strategy
Net Marketing Contribution:
Average
Market * Market Channel Percent Marketing
* Selling * * -
Demand Share Discount Margin Budget
price
Increase
Growth Grow Lower Increase Improve
Average
Market market Channel Profit Marketing
Selling
Demand Share Costs Margin Efficiency
price
Financial Performance Metric s
•Profit & Profitability Return Metrics
•Cost & Productivity Metrics
•Asset Management Metrics
Marketing
Adjust,
Strategy MS,
MB &
PO
Performance
Plan
Performance Performance
Review Gap
Designing Organizational Processes and
systems with a focus on Consumer.
The bigger question to ask is who is at the
centre of the organisation and business.
Why are we in Business ? Or what is the
Purpose of Business ?
To provide good service to customers
Happy customer brings in long term
profitability & Long term sustainability
A happy customer is key to Stakeholder
Happiness
Helps develop society at large
Empower Encouraging
Frontline Right
behaviour
Operational leadership
Strategy
Internal Marketing
Execution/Implementation
Persuasion Negotiation
Politics Tactics
Evaluation
What have you achieved ?
How have your achieved ?
Internal Customers
Internal Market
Segmentation
designed to provide
want-satisfaction to customers
Supplementary Services
By providing good
customer service,
firms add value to
their products and
services.
Factors
Affecting
Intangible Variable
Product
Diffusion
Perishable
Provide
Support
& Incentives
• Manage customer
expectations
• Promise only what
you can deliver
• Communicate service
expectations
Increase Resolving
Listening to
Service Problems
Customers
Recovery Quickly
Providing a
Fair Solution
• Transaction-based marketing
– Buyer and Seller exchanges characterized by limited
communications and little or no ongoing relationship
between the parties
• Relationship marketing
– Development and maintenance of long-term, cost-
effective relationships with individual customers,
suppliers, employees, and other partners for mutual
benefit
Building Relationships With Customers
500
Building Relationships
Trust
• Make Promise
• Keep a Promise
501
Building Relationships
Customer-oriented personnel
Every employee represents the firm in the eyes of
the customer.
Employee training programs
Empowered employees
Employees are given more authority to solve
customer problems on the spot.
Teamwork
Emphasizing cooperation over competition
while helping a customer.
502
Crux of Building Relationship in today’s time is
Customer engagement and creating right customer
experience every time (On all touch points)
503
The progression of economic value
from Commodities to Experience
Differentiated Stage
Experience
Deliver
Competitive Service
Position
Make
Goods
Extract
Undifferentiated Commodities
Market Premium
Pricing
Designing memorable experience
• Internal marketing
– Managerial actions that help all members of
the organization understand and accept their
respective roles in implementing a marketing
strategy
• Employee satisfaction
Basic Foundations of Relationship
Marketing
• Making promises
• Enabling Promises
• Keeping Promises
The Relationship Marketing Continuum
• Lifetime value of
Assessing
customer: the revenues Costs &
and intangible benefits that Benefits
a customer brings to the
seller over an average
lifetime, less the amount of
Measure- Structuring
money which must be spent ment & Relationships
to acquire, market to, and Evaluation
service the customer
Relationship Marketing :
Database Marketing
• Record consumer transactions and behaviour
• Observe trends and classify customers into
groups
• Select the best customers or groups (remember
80:20 principle)
• Calculate the life time value of their business
• Create a meaningful dialogue that builds a
genuine loyalty
• Use this to increase share of wallet/bill
value/cross-sell and up-sell or even increase
Positive word of mouth and frequency of visit
Components of CRM Framework
• Operational CRM
– Involves front office customer touch points and
focuses on capturing information
– Back end of this plugs into ERP systems and supply
chain management software
• Analytical CRM
– Works on data collected from operational CRM to
understand consumer behavior better
– Involves data warehousing and data mining
• Collaborative CRM
– Facilitates interactions between customers and
companies and between members of the company
Benefits of CRM
• Helps to manage customer expectations
– Increasing affluence
– Greater awareness
– Customer diversity
• Better technological advances
• Reduces organizations dependence on
periodic surveys to gather data
• Service Benefits of CRM: most customers
do not complaint
5% increase in retention had impacts as high as 95% on the
net present value delivered by customers
Repeat customers generate twice as much gross income as
new customers
Goals of CRM
• Build long term and profitable relationships
with chosen customers
• Getting closer to those customers at every
point of contact with them.
CRM
Customer Campaign
management management
Introduction – Customer Journey
Map (CJM)
Visual or graphic interpretation of the overall story from an
customer’s perspective.
Moments
Emotions of Truth
How to build a Customer Journey
Map
• Step 1: Identify the "personas“.
• Different Personas Different Profiles
• Step 2: Identify the different stages when a customer interacts with the airlines
• Step 3: Plot the expectations customers have of airlines at each of the touch points in the
journey map.
How to build a Customer Journey
Map (Contd…)
Sanjeev Varshney
Some of the Issues
• Services Marketing & Relationship Marketing
• International/Global Marketing
• Sales Force Management
• Development of Channel Partners
• B2B Marketing
Services Marketing
HR issues in Services Sector
• What is the crux of Customer satisfaction ?
• How many to hire (capacity problem for effective and
efficient servicing) and of what quality(competencies)?
• What process to follow (what is the right process to prove
good quality service?
• How to standardize functioning of employees
(Benchmarking)
• How to train and on what to train the employees?
• How to control and check for performance and working of
employees?
• Empowerment to what extent ?
• Motivation and Reward
What is Relationship Marketing ?
Comparing Transaction-Based Marketing and
Relationship Marketing Strategies
HR Issues in Relationship Marketing
• How to separate personal and professional
relationship
• Rewards mechanism
• Developing interpersonal skills
• Process orientation
• New Business development
• Use of technology
International Marketing
Factors Affecting International Trade
Consumer
Technology
Preferences
Marketing Trade
Capability Barriers
Subsidized
Tax Structure
Industries
Strategic Planning for
International Marketing
Global
Strategy
Regional
Strategy
Local
Strategy
Structures for Operating
in Foreign Markets
Exporting
Contract
Directly, or Joint Wholly
Company Licensing Manufactur
through Ventures & Owned
Sales Foreign ing by MNC’s
Import- Strategic Subsidiarie
Branches Producers Foreign
Export Alliances s
producers
Middlemen
Low High
Involvement Involvement
Abroad Abroad
Designing the Marketing Mix
Market Research
Product
Planning
Advertising
Pricing
Distribution Systems
International Product & Communication
Strategies
Product
Do Not Change Adapt product Develop
Co Product New product
m
m Do Not Change Straight Product
Communications extensions Adaptation
un
Product
ica Invention
tio Adapt Communication Dual
ns Communications Adaptation Adaptation
Organizational Issues in International
Markets
• Issue of centralization versus decentralization
in terms of marketing strategy and policies
• Roles and responsibilities of sales and
marketing people working at different level
• Reporting structures
• Issues of coordination and control
• Localization vs. Globalization
Sales Force Management
HR issues in Sales Force Management
• Selection & Recruitment
• Training
• Territory management
• Target setting
• Motivation and Compensation
• Evaluation
• Coaching and Mentoring –Development plans
Recruiting and Selecting Salespeople
• Personality
• Optimism
• Resilience
• Self-motivation
• Empathy
Difficult
Least Likely to Resolve
Territory Management : Methods for deciding
sales territories
• Break-down method
– Based on sales forecast
• Geographic territory allocation
• Workload basis of territory allocation
– Number of accounts
– Sales call frequency needed
– Sales call time
– Distance covered
– Market conditions
Issues Involved with territory design
• Low coverage
– Less time to motivate the channel members
– Less time to handle customer complaints
– Less time to carry out training and development exercises
– Difficulty in meeting targets
• Excess coverage
– Over control
– Low targets-so underutilization of resources and capabilities
– General grievance
Territory allocation & PLC
• Introductory phase: Geographic method
• Growth Phase: Break Down Method
• Maturity Phase: Work load basis
Managing Territorial Coverage
• Routing
– Daily routes to be designed taking number and kind of clients on
such routes into account
• Scheduling
– Days and frequency for covering these routes/customers
• Productivity
• Effective coverage
• Time Management
– Coverage as well as
– effectiveness
Motivating and Compensating
Salespeople
Type of Selling
• Tied to the
reward structure
• Evaluation
measures can be
either objective
or subjective
Behavioral Results
Sales person
performance
Professional
Profitability
development
Sales = Days worked X Call rate X Batting average X Average order size
Salesperson
Motivation
Expected
performance
Sales person
skill/ aptitude Performance Reward
Perceived Evaluation allocation
Task difficulty Performance
-economic
condition Outcome Sales
Behaviour
Unexpected
Events
Relationship
Knowledge Reputation
Competence
•Convincing
•Multiplication
clients to •People Business:
of successful
outsource Creation of a
projects
certain tasks personal level
•Use of the
•Identifying •Continuity of
strong networks
new service contact persons
between clients
needs
Different Level of Marketing In
Professional Firms
• Contact Marketing
• Credibility Marketing
• Corporate Level Marketing
Knowledge Management for Better
Client Service
Industry (Profession)
Organization
(Professional Service
Firm)
Technical Individual
Profession) Knowledge
Knowledge
about Customers
Knowledge Management for Client
Servicing
Standardisation Individualisation
Engagement
All the Best
sanjeev varshney@xlri.ac.in