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Kotler

Krasher
Presented by

Chapter 1
Defining Marketing for the New
Realities

- Madhav Chaurasia (PGP/20/391

What is Marketing?

What is Marketed?

What is Marketing
Management?

A Simple Marketing
System

- Madhav Chaurasia (PGP/20/391

Types of Demands
Negative: Pay for avoiding something eg. Fat free milk
Non-existent: Unaware or uninterested in a product
Latent : Product doesnt exist for a certain need
Declining: Frequency of purchasing decreases eg. diaries
Irregular: Seasonal at intervals eg. Umbrellas
Full: All products supplied being bought
Overfull: Supply cant match demand here
Unwholesome: Product bought despite being harmful eg.
Cigarette
Structure of Flows in a Modern Exchange
Economy

Types of Needs
Stated needs:- Customer wants an inexpensive
car
Real needs:- Customer wants a car whose
operating cost, not initial price, is low
Unstated needs:- Customer expects good
service from the dealer
Delight needs:- Customer would like the dealer
to include an onboard GPS system
Secret needs:- Customer wants friends to see
him or her as a savvy consumer.

- Madhav Chaurasia (PGP/20/391

Evolution of Marketing
Production Concept: This concept holds
that customers prefer products that are
inexpensive and widely available.eg.
Micromax

Selling Concept: Customers if left alone


would not buy an organizations products.
Credit Cards

Holistic Marketing Concept: This concept


acknowledges that everything matters in
marketing i.e development, design and
implementation of marketing programs,
processes, and activities that recognize their
breadth and interdependencies.

Marketing Concept: This concept is to


find the right products for your customers
rather than finding the right customers for
you product. Eg. Telecom offers
Product Concept: stresses the fact that
customers prefer products offering the
best quality, performance or other
innovative features. Eg. High end
smartphones

- Madhav Chaurasia (PGP/20/391

The Four Ps

Marketing Management
Tasks
Developing Marketing Strategies and Plans
Capturing Marketing Insights
Connecting with Customers
Building Strong Brands

Modern Marketing
Management
Four Ps
People

Processes

Programs

Performance

Creating Value
Communicating Value
Delivering Value

Conducting Marketing Responsibly for LongTerm Success- Madhav Chaurasia (PGP/20/391

Chapter 2
Developing Marketing Strategies
and Plans

- Madhav Chaurasia (PGP/20/391

Value Delivery
Process

Porters Value
Chain

Customer Value: The gain which the


consumer receives from the benefit is
weighed against the cost which he
pays to acquire that benefit. The
difference between this benefit and
cost is called Customer Value. For eg:
To enjoy the benefit of Subway Burger
you pay Rs.100 as cost, the
satisfaction you gain from this is the
customer value which Subway has
given to you.
Customer Value = Benefits - Cost

Porters Generic Strategies


Overall Cost Leadership

Differentiation

Focus

- Madhav Chaurasia (PGP/20/391

Characteristics of Core Competencies


Source of competitive advantage and makes
maximum contribution to perceive competitive
advantage
High application in a variety of markets
Difficult for competitors to imitate
Levels of Marketing Plan

Corporate Planning
activities

Exampl
Apples
core competency is Design,
es
which its competitors find impossible to
imitate.
Netflixs core competency is Content
Delivery.
Strategic
Implementation
NikesPlanning,
core competency
is Shoe and
design
Control Process

Difference between Mission Statement and Positioning


Statement:
A mission statement describes an institutions purpose and primary
objectives. An internally focused statement, it is meant to drive
leaderships decisions and to provide measures of success. Brand
positioning statement, which is externally focused, describes an
institutions primary and differentiating value in terms of how it
addresses the needs of its target audience. It aligns selling with
the hopes and dreams of its target market, i.e. buying. Metaphor:
Mission statements result from looking in the mirror,
while
brand
- Madhav
Chaurasia
(PGP/20/391

Characteristics of
SBUs

Ansoffs Product-Market Expansion


Grid

The Strategic Planning


Gap

Business Unit Strategic Planning


Process

- Madhav Chaurasia (PGP/20/391

SWOT Analysis

- Madhav Chaurasia (PGP/20/391

- Madhav Chaurasia (PGP/20/391

Chapter 3
Creating Long-Term Loyalty
Relationships

- Madhav Chaurasia (PGP/20/391

Traditional Organization
To
Chart
p
m
an
ag
e
Middle
m
Manageme
en
nt
t

Frontline People
Customers

Modern Customer-oriented Organization


Chart
Customers
Frontline People
To
Middle
p
Managemen
M
t
an
ag
e
m
en
t

Total customer benefit : Perceived value of the bundle of economic, functional and
psychological benefits customer expects from a product. When someone buys a Bentley, it is
not just for transport function. He pays for the comfort, social status, differentiation etc.
Customer perceived value = (Total customer benefit Total customer cost)
It can be improved by Improving total customer benefit, reducing the non-monetary costs
involved and reducing the monetary cost of the product
Total customer cost : Perceived bundle of costs in evaluating, obtaining, using and disposing off
a product. The time spent in comparing the Bentley to a Rolls-Royce, the effort it took to visit
the showroom, the waiting time for delivery are all bundled under customer cost.

- Madhav Chaurasia (PGP/20/391

Brand Loyalty
A deeply held commitment to re-buy or re-patronize a preferred product or service in the
future despite situational influences and marketing efforts having the potential to cause
switching behavior.
Product/Service
Quality
The totality of features and characteristics of a product or service that bear on its ability to satisfy
stated or implied needs.
Performance quality: A phone made by
Conformance quality : Every car in a product line
Apple offers the customer many unique
of Honda would have identical features. They all
features like screen quality, processing
confirm to a standard
speed, camera quality etc. The
performance of the product is what
Customer Lifetime
differentiates it from competitors.
value
Net profit attributed to the entire future relationship with a customer.
When we purchase a printer from HP, it is not just the printer that we pay for. The printer
ink which is a consumable will also be paid for by the customer throughout the life time of
the product.
When a customer walks into a KFC, the manager has to see all the potential future buying
of the customer when seeing his CLV. Obviously the CLV of a customer keeps increasing as
his satisfaction increases.

- Madhav Chaurasia (PGP/20/391

Customer Profitability
A profitable customer is an entity that over time yields a revenue stream exceeding the company
costs by an acceptable amount.
Every customers buying habits are different and so each customer has different profitability to the
firm.
For example, a customer buying a home theatre system is more profitable to Bose or JBL than
someone who buys a pair of earphones.

- Madhav Chaurasia (PGP/20/391

Attracting and Retaining Customers


More cost effective to retain customers than to attract new one
Customer Churn : The number of customers leaving the brand
Modern customers have multiple options. Customer churn rates High
Marketing Funnel : Different stages between a loyal customer and an unaware person.
Building Loyalty
1. Interacting with customers
Ex:-Aftersales calls, Feedback
forms, Customer care calls
etc.
2.Developing loyalty
programs
Ex:-Air miles programs,
Frequency programs, Club
membership programs etc.
3.Creating institutional ties
Ex:-Cash back

- Madhav Chaurasia (PGP/20/391

Brand
Communities
It is a specialized community of consumers and employees whose identification and activities
focus around the brand.
Types of Brand Communities :
1. Arise organically from brand users,such as Atlanta MGB riders club and the Porsche Rennlist
online discussion group.
2. Company sponsored and facilitated, such as Club Green Kids(official kids fan club of the
Boston Celtics) and the Harley Owners Group(H.O.G)
Ways of increasing effectiveness of Brand
Customer
Communities
Databases
1.
2.
3.
4.

Enhance the timeliness of information exchanged


Enhance the relevance of information posted
Extend the conversation
Increase the frequency of information exchanged

Customer Relationship Management(CRM) :- Process


of carefully managing detailed information about
individual customers and all customer touch points
to maximize loyalty.

Database marketing is the process of


building, maintaining and using
customer databases and other
databases to contact, transact with and
build relationship with customers.
Data warehouses are systems on which
data collected from every customer
touch point is catalogued and
maintained.

Data mining is the process of utilizing


the collected data to analyze and
address customer wants and needs in
- Madhav Chaurasia (PGP/20/391
the most optimal fashion.

Chapter 4, 5

- Nikhila G (PGP/20/208)

Supporting Marketing Decisions


What is marketing information
system?
Consists of people,
equipment and procedures
to gather, sort, analyze, and
distribute needed timely,
and accurate information to
marketing decision makers

Political legal
Business
legislation
Growth of specialinterest groups

Types of marketing information?

Internal records of sales, prices,


inventory levels, orders,
receivables and payables

Marketing intelligence system


Every day information about
developments in the marketing
environment

Analyzing the microenvironment


Needs and trends

Technological
Pace of change
opportunities for
innovation
R&D budgets
regulation of
technological
change

Demographic
Population age mix
ethnic
educational
household patterns

Economic
Consumer
psychology
Income distribution
Income, savings,
debt & credit

Major forces in
macro
environment
Socio-cultural
Values
Subcultures
Natural

- Nikhila G (PGP/20/208)

Forecasting and Demand measurement

Essential
aspects

The market

Market demand

Company
demand and
sales forecasts

Current demand

Potential
market

Market
minimum

Company
demand

Total market
potential

Available
market

Market
forecast

Company sales
forecast

Target market
(served
market)

Market
potential

Sales quota

Area market
potential
Marketbuildup
method

Qualified
available
market
Penetrated
market

Non expansible
vs. expansible
markets
Primary vs.
secondary
demand
Market
forecast

Sales budget
Company sales
potential

Future demand
Many
Forecasting
Methods:
Buyer
intentions
survey
Composite
of sales
force
opinions
Expert
opinion
Past-sales
analysis

- Nikhila G (PGP/20/208)

Forecasting and Demand measurement


Measures of market
demand
Potential
market

Consumers with a
sufficient interest in
a market offer

Available
market

Consumers who
have interest,
income and access
to the offer

Target market

Part of the qualified


available market the
company decides to
pursue

Penetrated
market
Consumers who are
willing to buy the
product

- Nikhila G (PGP/20/208)

Consumer Buying Decision Process


In addition to understanding how these factors influence consumers, marketers must identify
and understand:
Who makes the buying decision
The types of buying decisions
The stages in the buying process

Buying roles
Initiator
Influencer
Decider
Buyer
User

Buying behavior
Complex buying
behavior
Dissonance-reducing
buying behavior
Habitual buying
behavior
Variety-seeking
buying behavior

Buying decision
process
Problem recognition
Information search
Evaluation of
alternatives
Purchase decision
Postpurchase
behavior

- Nikhila G (PGP/20/208)

Consumer Buying Decision Process

Post purchase Behavior:


Consumers expectations are compared to performance
Post purchase satisfaction influences future behavior
Purchasing behavior
Word-of-mouth communications

Marketers should attempt to influence and monitor post purchase


behavior
Post purchase communications reduce dissonance, returns, and order cancellations
Talk with customers to discover new uses for existing products
Investigate methods of product disposal

- Nikhila G (PGP/20/208)

Conducting marketing research

Marketing research Function that links the consumer, customer and public to the
marketer through information information used to identify and define marketing
opportunities and problems

Marketing research firms fall into three categories:


1. Syndicated-service research firms These firms gather consumer and trade
information, which they sell for fee. Ex: Nielsen company, Kantar Group and IRI
2. Custom marketing research firms These firms are hired to carry out specific projects.
They design the study and report the findings
3. Specialty-line marketing research firms These firms provide specialized research
services

Online research
Pros
Online research is inexpensive
Online research is expansive
Online research is fast
Responses tend to be honest and
thoughtful
Online research is versatile

Cons
Samples can be small and skewed
Online panels and communities
can suffer excessive turnover
Online market research can suffer
technological problems and
inconsistencies
- Nikhila G (PGP/20/208)

The marketing research process

Define the
problem
and
research
objectives

Develop
the
research
plan

Collect
the
informatio
n

Analyze
the
informatio
n

Present
the
findings

Make the
decision

- Nikhila G (PGP/20/208)

Develop the research plan

Data sources

Primary data
Secondary data

Research
approaches

Observational
research
Focus group
research
Survey research
Behavioral
research
Research
instruments
Technological
devices

Sampling plan

Sampling unit
Whom should we
survey?
Sample size
How many
people should
we survey?
Sampling
procedure How
should we
choose the

Contact
methods

Mail contacts
Telephone
contacts
Personal
contacts
Online contacts

- Nikhila G (PGP/20/208)

Measuring marketing productivity


Scientific method
Research creativity

Observation, hypothesis, prediction, and testing

Be innovative and focused on results that matter most

Multiple methods

Dont get hooked on one method as the best or only way to do


research

Interdependence of
models and data

The research results (data) is limited by the research method.


Dont be tempted to read too much into the results

Value and cost of


information
Healthy skepticism
Ethical marketing

It is easy to determine the cost of research, but the results have


to be valuable enough so that management will make
decisions based on the the results. Stop doing research once
this threshold has been reached
Be alert to flaws and blind acceptance of myths or urban
legends
Dont mix-up marketing research with lead development or
other sales related activities

- Nikhila G (PGP/20/208)

Chapter 6, 7

- Aparna Prasenan

Chapter 6 : Analyzing Consumer


Markets
Consumer behavior is influenced by 3 factors: Cultural
(culture, subculture, sociaL class), Social (reference
groups, family, social roles and statuses) and Personal
(age, age in life cycle, lifestyle, economic condition,
personality and self concept)
Members in Decision making unit : initiators,
influencers, deciders, buyers and users
Psychological process in consumer behavior are
motivation, perception, learning and memory

- Aparna Prasenan

Buying Decision Process : 5 stage model


consists of problem recognition, information
search, evaluation of alternatives, purchase
decision and post purchase behavior
Successive sets in decision making: Total
set-Awareness set-Consideration set-Choice
set-Decision
Various heuristics or mental shortcuts
used for decision making are conjunctive,
lexicographic and elimination-by-aspects
Brand personality : Human traits that we
can attribute to a brand

- Aparna Prasenan

Chapter 7 : Analyzing Business Markets


Organizational buying is the decision making process
by which formal organizations establish the need for
purchased products and services, then identify, evaluate
and choose among brands and suppliers
Roles in purchase decision process includes Initiators,
Users, Influencers, Deciders, Approvers, Buyers,
Gatekeepers
Stages in buying process (1)problem recognition
(2)general need description (3)product specification
(4)supplier search (5)proposal solicitation (6)supplier
selection (7)order routine specification (8)performance
review
Institutional Markets : Institutes like schools, hospitals
etc that provide goods and services to people in their care

- Aparna Prasenan

Chapter 7 : Analyzing Business


Markets
Difference between business and consumer
markets:

Criteria

Business Market

Consumer Market

No. of buyers

Fewer and larger

More in number

Supplier-customer
relation

More closer

Less closer

Type of buying

Professional buying
involving many experts
and detailed decision
making

A comparatively
simpler decision
making process not
involving experts

Nature of Demand

Derived from
consumer market

Not influenced by
business market

Elasticity of demand

Inelastic

May be elastic or
inelastic

Location of buyers

Geographically
concentrated

Could be widespread

Nature of purchase

Direct from

Mostly through

- Aparna Prasenan

Chapter 8

- Anjali Lakra (PGP/20/314)

AGlobal Firmis acompanywhich has multinational branches and headquarters in many of the
countries.
Whether to go abroad or not?
Risks if going abroad
- Profitability in domestic vs international
- Foreign consumer insights
market
- Foreign business culture
- Companies need larger customers to reach
- Foreign regulations
economies of scale
- International experience
- Wants to reduce dependency in any one
- Changes in economy commercial laws,
market
exchange
rate etc
Deciding
which
markets to enter
- Decides to counterattack global competitors
How many markets to enter- Waterfall approach
in their home markets
Entering one market at a time. Eg BMW, GE, The
- Customers are going abroad and require
Industrialization process has 4 stages :
body shop
international service
1. No regular export activities
Sprinkler approach Entering all markets at once.
2. Export via independent representatives
Eg Microsoft
3. Establishment of one or more sales subsidiaries Born global Online stores
4. Establishment of production facilities abroad
Evaluating Potential Markets- Companies prefer
to sell to neighboring countries because they think
Developing and Developed Markets
they understand the market better. Eg US Mexico,
-Identify niche markets
Canada
-Acquire foreign firms
Psychic proximity Its a term which has at least
-Companies are using knowledge about
three distinct means across the fields of aesthetics,
developing market and applying to domestic
international business/international marketing, and
market
computer science.
-Make innovative products
- Anjali Lakra
(PGP/20/314)
Succeeding in Developing Markets
Brazil
,

Deciding how to enter markets -

nd Direct Export : Indirect exporting to test the waters and then to direct exporting
Indirect exporting Advantage : - Less
Direct exporting Advantage : More returns
investment
1. Domestic based export department Export
- Firm doesnt need to set export department
department operating as its own profit center
- Less risk
2. Overseas sales branch or subsidiary
1. Domestic based export merchants Buy
Separate branch on its on in foreign land
manufactures products and sell it abroad
3. Travelling export sales representatives
2. Domestic based export agents Trading
Home based sales representatives travel
companies negotiate foreign purchases for
abroad to find business
commission
4. Foreign based distributors or agents Hold
3. Cooperative organizations Conduct
limited/exclusive rights to represent the
exporting activities for several producers
company foreign country
4. Export management
companies
manages
Joint Ventures - Ajoint venture(JV) is a
Licensing
licensor issues
a licensefor
a fee to
export
for a entities
fee
business arrangement in which two or more
use companies
its brand and
business
parties agree to pool their resources for the
-licensor has less control over foreign operations
purpose of accomplishing a specific task. Eg
-management contacts, contract manufacturing,
Starbucks - Tata
franchising
Direct Investment - Direct investment, more
Acquisition Buying a foreign company.
commonly referred to as foreigndirect
Hindustan Unilever
investment, refers to aninvestmentin a
business enterprise in a country other than the
investor's country designed to acquire a
- Anjali Lakra (PGP/20/314)
controlling interest in the foreign business

Deciding on Marketing Program

Marketing Adaptation : Adapt according to the


different societies and culture . Product features,
labeling , colors, advertising etc
Eg : McD in India

Standardized Marketing Program Same


worldwide
and Adapted marketing program Vary
Global
similarities
and differences
according
to the consumers
1) Individualism Vs Collectivism , High versus low power distance, Masculine vs Feminine, Weak vs
Strong uncertainty avoidance
Global Communication strategies
obal product strategies
Product standardization High end products benefit Communication Adaption (Changing
because quality and prestige can be marketing similar
communication for each market) and
across different countries . Internet companies also
Dual Adaption(changing communication
benefit. Eg Google
and product for each market)
Product Adaptation Strategies 1) Straight
Global Adaptations Adapt
extension : Same product in every market . Eg : Camera
communications that are legally and
2) Product adaptation Launching regional, country, city,
culturally acceptable
Global
Pricing Strategies
retailer
Brand
Element Adaptation Same jingles,
version
Price Escalation - A disparity
use worldwide
or not
3) slogans
Product to
invention
Backward
invention, forward
inpricingwhere goods have higher
invention
Product standardization High end products benefit
costs in a foreign market than in the
because quality and prestige can be marketing similar
domestic market due to transportation
across different countries . Internet companies also
and exporting
costs.
Three
choice for
setting prices in
benefit. Eg Google
different countries
Product Adaptation Strategies 1) Straight
1) Set a uniform price everywhere
extension : Same product in every market . Eg : Camera
2) Set market based price in each
2) Product adaptation Launching regional, country, city,

Transfer Prices : Its the setting of thepricefor goods and services sold between controlled (or
related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent
company, thecostof those goods paid by the parent to the subsidiary is thetransfer price.
Dumping" is a kind of predatory pricing,
Country of Origin Effects
especially in the context of international trade. It
Building Country Images : Countries are being
occurs when manufacturers export a product to
marketed as
another country at a price either below the price
any other brand. Eg : VisitBritains campaign
charged in its home market or below its cost of
where Chinese tourists had to rename Britain's
The concept of anarm's lengthtransaction
production.
Consumer perceptions of country of origin:
iconic
street
allows the market to ensure that both parties in
People hold some preconceived notion about the
the deal are acting in their own self-interest and
products origin country. Eg : Made in China
are not subject to any pressure or duress from
The more favourably a countrys image, the more
the
other
party.
Agrey market(sometimes called a
prominently the Made in____ label should be
parallelmarket, but this can also mean other
things; not to be confused with a
blackmarketor agreyeconomy) is the trade of
a commodity through distribution channels that
are legal but unintended
the original
Counterfeit
Products by
Duplicating
of
manufacturer.
products
Global Distribution
Strategies
Channel Entry and Channel
Differences

shown.
Certain countries enjoy a reputation for certain
goods Japan for automobiles, France for luxury
goods.

- Anjali Lakra (PGP/20/314)

Chapter 9, 10

- Chitvan Agarwal

A market segment consists of a group of customers who share a similar


set of needs and wants. The marketers task is to identify the
appropriate number and nature of market segments and decide which
one(s) to target

Two broad groups of variables to segment consumer


markets:
Descriptive characteristics
Geographic
Demographic
Psychographic

Behavioral considerations

Consumer responses to benefits


Usage occasions Brands
- Chitvan Agarwal

Geographic : divides the market into geographical units such as

nations, states, regions, counties, cities, or neighborhoods.


The company can operate in one or a few areas, or it can operate in all
but pay attention to local variations One reason demographic variables
are so popular with marketers is that theyre often associated with
consumer needs and wants. Another is that theyre easy to measure.

EXAMPLES :
NIKEs initial success comes from engaging target consumers through
grassroots marketingefforts such as sponsorship of local school teams,
expert-conducted clinics, and provision of shoes, clothing, and equipment.
CITIBANK provides different mixes of banking services in its branches
depending on neighborhood demographics.

- Chitvan Agarwal

Demographic : Divide the market on variables such as age, family size,


family life cycle, gender, income, occupation, education, religion, race,
generation, nationality, and social class.
One reason demographic variables are so popular with marketers is that
theyre often associated with consumer needs and wants. Another is that
theyre easy to measure.

EXAMPLES
Colgate offers three main lines of products to target kids, adults,
and older consumers.
Pampers divides its market into prenatal, new baby (05 months),
baby (612 months), toddler (1323 months), and preschooler (24
months+).

- Chitvan Agarwal

Psychographic : buyers are divided into different groups on


the basis of psychological/personality traits, lifestyle, or values

EXAMPLES :
Auto mobile makers such as Maruti target consumers by
launching models based on the lifestyle of working class such as
Swift ( Robust yet hatchbacks) and Ertiga ( Family car for families
for non nuclear families )
Spirit makers target Young working class and the elite class based
on the alcohol consumption ( heavy as well as light ) through
diverse products ranging from non expensive to very expensive

- Chitvan Agarwal

Behavioural :

buyers are divided according to the roles they play in


taking the decision to buy a certain product or not
Initiator
Influencer
Decider
Buyer
User

EXAMPLES : assume a wife initiates a purchase by requesting a new


treadmill for her birthday. The husband may then seek information
from many sources, including his best friend who has a treadmill
and is a key influencer in what models to consider. After presenting
the alternative choices to his wife, he purchases her preferred
model, which ends up being used by the entire family. Different
people are playing different roles, but all are crucial in the decision
process and ultimate consumer satisfaction.
- Chitvan Agarwal

Porters Five Forces


Michael porter has identified five forces that determine the intrinsic longrun attractiveness of A market or market segment:
1. Threat of intense segment rivalry
unattractive if it already contains numerous, strong, or aggressive competitors unattractive if its stable or
declining lead to frequent price wars, advertising battles, and new-product introductions
2. Threat of new entrants
Depends on entry barrier and exit barriers when both entry and exit barriers are high, profit potential is high, but
firms face more risk because poorer-performing firms stay in and fight it out
3. Threat of substitute products
when there are actual or potential substitutes for the product.
4. Threat of buyers growing bargaining power
buyers possess strong or growing bargaining power better defense is developing superior offers that strong buyers
cannot refuse
5. Threat of suppliers growing bargaining power
the companys suppliers are able to raise prices or reduce quantity supplied best defenses are to build win-win
relationships with suppliers or use multiple supply sources.
- Chitvan Agarwal

Levels of
segmentation
1. Mass Marketing : the firm ignores segment differences and goes after the whole market with one
offer
. appropriate when all consumers have roughly the same preferences and the market shows no
natural segments
Examples:
General Motors (vehicle market)
Coca-Cola (nonalcoholic beverage market)
2.

Multiple segment Marketing : firm selects a subset of all the possible segments, each
objectively attractive and appropriate

With product specialization, the firm sells a certain product to several different market segments.
With market specialization, the firm concentrates on serving many needs of a particular customer
group, such as by selling an assortment of products only to university laboratories

- Chitvan Agarwal

Levels of
segmentation
3.

Single Segment Marketing : the firm markets to only one particular segment

the firm gains deep knowledge of the segments needs and achieves a strong market presence
If it captures segment leadership, the firm can earn a high return on its investment
Examples:
Porsche
BMW
4.
Individual Marketing : Customerization combines operationally driven mass customization with
customized marketing in a way that empowers consumers to design the product and service offering
of their choice
Examples:
Dell
Harley Davidson
- Chitvan Agarwal

Positioning

Positioning is the act of designing a companys offering and


image to occupy a distinctive place in the minds of the
target market.The goal is to locate the brand in the minds
of the consumer to maximize the potential benefit to the
firm.
A good positioning strategy
Clarifies brand essence
Identifies the goals it helps consumer achieve
Shows a unique way of identifying these goals
Takes consumer insights into account

- Chitvan Agarwal

Requirements for a good positioning

Determining frame of reference (FoR) with respect to target


market and competition
Identifying Points of Parity (PoP) and Points of Difference (PoD)
Creating brand mantra to summarize positioning and essence of
brand

1. Frame of reference : Identyfying companies that have the same


product or substitute
Eg. Pepsi knows Coca-Colas Dasani is a major bottled-water
competitor for its Aquafina
Wells Fargo knows Bank of America is a major banking competitor

- Chitvan Agarwal

Requirements for a good positioning

2. Points of difference : Attributes or benefits that consumer strongly associates


with brand , positively evaluate and believe that they could not find same extent
with a competitive brand
Eg. Luis Vuitton may seek a point of difference as having most stylish handbags
Energizer may seek a point of difference as having the longest lasting battery
3. Points of Parity : Benefits that are not necessarily unique to the brand but may
infact be shared with other brand
Eg. Visa and American express both compete for being the most widely available
card as well convenient card

- Chitvan Agarwal

Straddle Postioning
A company straddles two FoRs with one set of PoDs and PoPs
PoDs for one category become PoPs for the other and vice versa
Subway Restaurant Positioning Healthy, tasty sandwiches
PoP on taste, PoD on health w.r.t. quick-serve restaurants
PoP on health, PoD on taste w.r.t. health food restaurants

Brand Mantra
Articulation of heart and soul of brand and related to brand
essence and brand promise
Designing a brand mantra
Communicate
Simplify
Inspire

- Chitvan Agarwal

Chapter 11

- Anjali Lakra (PGP/20/314)

American Marketing Association defines a brand as a name, term, sign, symbol, or design, or a
combination of them, intended to identify the goods and services of one seller or group of sellers and
differentiate
them
those of other competitors. "
Brands Role
forfrom
Firms
Brands Role for Consumers
Simplify product handling by helping organize
promise between the firm and the consumer
inventory and accounting records.
means to set consumer expectations
Protected through registered trademarks etc
takes on personal meaning to consumers
Signal of quality
becomes an important part of their identity
Scope of Branding Creating differences, mental structure to help consumers organize knowledge . A
successful brand makes itself a indispensable part of consumers lives
Brand Equity It is the added value endowed to products and services with consumers. It reflects the
way consumers think , feel , act and helps firm to differentiate the product and charge a premium.
3 key ingredients of customer based brand
Customer Brand Equity The differential effect
equity
brand knowledge has on consumer response to
1) It arises from differences in consumer
the marketing of that brand.
response. If no difference then the product
Positive Brand Equity When customer react
is competing on price.
favorably to the brand
2) Difference in response is due to brand
Negative Brand Equity When customer react less
knowledge- all thoughts , feelings, and
to the brand
unique brand associations
Brand Promise Marketers vison of what the brand must3)
beBrand
and do
for consumers
equity
is reflected in purchase
decision . Stronger brands = greater
revenue
- Anjali Lakra (PGP/20/314)

Brand Asset Valuator BAV Model to measure Brand Equity


Advertising agency Young and Rubicam (Y&R) developed a model of brand equity called Brand Asset
Valuator (BAV)
Based on research with almost 200,000 consumers in 40 countries
4 key componentsor pillars of brand equity, according to BAV
Differentiation and
Differentiationmeasures the
Relevance combine to
degree to which a brand is seen
determine Brand
as different from others.
Strength.
Relevancemeasures the
These two pillars point
breadth of a brands appeal.
to the brands future
Esteemmeasures how well the
value, rather than just
brand is regarded and respected.
reflecting its past.
Knowledgemeasures how
Esteem and Knowledge
familiar and intimate consumers
together create Brand
are with the brand.
Stature, a report card
Brand Strength and Brand Statureon
performance.
is past
combined
to form a
Power Grid
It depicts the stages in the cycle of brand development
New brands show low levels on all four pillars.
Strong new brands tend to show higher levels of
Differentiation than Relevance and low on Esteem and
Knowledge
Leadership brands show high levels on all four pillars.
Declining brands show high Knowledge, relative to a
- Anjali Lakra (PGP/20/314)

Developed by: Millward Brown and WPP


BRANDZ model of brand strength is the Brand Dynamics pyramid .
Brand building involves a sequential series of steps, where each
step is contingent upon successfully accomplishing the previous
step. The objectives at each step, in ascending order, are as
follows:
Presence. Do I know about it?
Relevance. Does it offer me something?
Performance. Can it deliver?
Advantage. Does it offer something better than others?
Bonding.
Nothing else
beats
it. relationships with the brand,
Bonded consumers
build
stronger
spend more of their category expenditures on the brand than those
at lower levels of the pyramid. More consumers are found at the
lower levels.
Marketers has to develop activities and programs that help

consumers
move up the
pyramid.
Brand
resonance
model
- Brand building as an ascending,
sequential series of steps, from bottom to top.
Ensuring identification of the brand with customers, an
association of the brand in customers minds with a specific

product class or customer need


Establishing the totality of brand meaning in the minds of
customers by strategically linking a host of tangible and

intangible brand associations


Eliciting the proper customer responses in terms of brand
related judgment and feelings
Converting brand response to create an intense, active loyalty

Emphasizes on the duality of brandsthe


rational route to brand building is the left-hand
side of the pyramid, whereas the emotional
route is the right-hand side.
Brand salience - How recognizable is the brand
when making purchase or consumption
Brand performance - Meeting customers
functional needs.
Brand imagery - Extrinsic properties including
the ways in which the brand attempts to meet
customers psychological or social needs.
Brand judgments - focus on customers own
personal opinions and evaluations.
Brand feelings - Customers emotional
responses to the brand
Brand resonance - Extent -toAnjali
which
Lakracustomers
(PGP/20/314)

There are 3 main sets of brand


Developing Brand Elements
equity drivers:
1. Companies do a due diligence,
Brand Elements(Identities
eliminate, debate and test the
making up the brand) Names,
probable names on their radar
Logo, Symbol, Characters, Jingle, before fixing
Packaging etc- e.g. Packaging of 2. Deploy marketing research
Toblerone chocolates or Absolut
agencies to test brand names within
Vodka.
the targeted market segment to
The Products and Servicesand
ascertain its effectiveness.
all accompanying marketing
3. Brand elements play brandactivities and supporting
building roles. Memorable or
marketing programs.
meaningful brand elements can
Other associationsindirectly
reduce the burden on marketing
Design Holistic Marketing Activities
transferred to the brand.
communications to build awareness
1.Brands are not built by advertising alone. Customers come to know a
and link brand associations.
brand through a range of contacts and touch points: personal
observation and use, word of mouth, interactions with company
personnel, online or telephone experiences, and payment transactions.
2. ABrand Contactis any information-bearing experience a customer or
prospect has with the brand.
3.Marketers can create brand contacts and build brand equity by: Clubs,
Consumer Communities, Trade Shows, Event Marketing, Sponsorships,
Factory Visits, Public Relations & Press Releases
4. While designing brand building marketing programs, there are 3 most
important things to consider :
1. Personalization
2. Integration
3. Internalization

Brand Building Criteria


MemorableShould be easy to
memorize and therefor recall. Short
names stick quickly. E.g. Nike, Tide, Ola
Cabs, Lux.
Meaningful Should bring credibility or
suggest product ingredient. E.g. Sugar
Free Low Calorie Sweetner, Khadi Gram
Udyog.
Likeability Aesthetically appealing.
e.g. Mozilla Firephone, Sunfeast.
Brand Defence Criteria
Transferable Brand should be able to
extend itself to different products and
product categories, different
geographies. E.g. Maggi 2 minute
Noodle, Tomato Ketchup, Soup, Masala
etcAdaptable Should be able to adapt
with changing times. E.g. Mircosoft,
Apple.
Protective Should not be easy to copy
Internal
Branding
Activities that
and should
be legally protected.
Though
inform
and
inspire
employees
about
at times brands become generic names
brands
(e.g. Xerox, Bisleri, Dalda) but they
Principles
1) Choose
the right identity.
moment
should notlose
their individual
2) Link external and internal marketing
3) Bring brand alive- Anjali
for employees
Lakra (PGP/20/314)

Managing Brand Equity


1) Brand Reinforcement Focuses
Devising a Branding Strategy
onmaintainingtheBrand Equityby keeping the brand
Three main choices
alive among both the existing and new customers.
1) Develop new brand elements
2) Brand Revitalization A marketing strategy adopted
2) Apply existing brand elements
when the product reaches the maturity stage of product life
3) Combination of old and new brand elements
cycle, and profits have fallen drastically. It is an attempt to
bring the product back in the market and secure the sources
of equity i.e. customers.
Branding Decisions
Alternative Branding Strategies Individual or family brand names,
Corporate umbrella or company brand names, Sub Brand Name,
House of Brands Vs Branded House
Brand portfoliois used to encompass all these entities under
one umbrella. Often, each of thesebrandshas its own separate
trademarks and operates as an individual business entity.
Brand Extensionis the use of an
established brand name in new product
categories.

Advantages Improved odds of success,


positive feedback effects, Disadvantages
Line extension trap, brand dilution ,
preemptive cannibalization

Customer Equity
Value of potential future revenue generated by a
company's customers in a lifetime. A company with high
customer equity will be valued at a higher price than a

Brand dilutionis the weakening of


abrandthough its overuse. This frequently
happens as a result of ill-judgedbrandextension.
Price cutting that increases volumes but moves
abranddown-market can be similarly damage
- Anjali Lakra (PGP/20/314)
abrand.

Chapter 12

Growing the Core


Make the core of brand as distinct as possible
Drive distributions through both existing and new
channels
Offer the core product in new formats

Protecting Market Share


Proactive Marketing: Looks ahead to needs of customer may
have in future and respond enthusiastically
Defensive Marketing: Aim of defensive marketing is to reduce
probability of attack, divert attacks to less threatened area
and lessen their intensity.

Position defence
Flank defence
Pre-emptive defence
Counteroffensive defence
Mobile defence
Contraction defence

Increasing Market Share


The cost of buying higher market share through
acquisition may far exceed its revenue value , following
consideration to me made :

The probability of provoking antitrust action


Economic Cost
The danger of pursuing the wrong marketing activities
The effect of increased market share n actual and perceived
quality

Market Challenger Strategy


A market challenger must first define its strategic
objective , it must then decide whom to attack :
Attack the market leader : High risk High Payoff
Attack firms of its own size that are not doing the job and
underfinanced : Low risk Moderate return
Attack small local and regional firms : Low risk low return
Attack Status quotient : By contrasting its services with others

Choosing a General Attack Strategy


Frontal Attack: The attacker matches its opponents
product, advertising, price and distribution
Flank Attack: Identifying shifts that develops gaps to
develop in market, then rushing to fill it
Encirclement Attack: Capture wide slice of territory by
launching a grand offensive on several fronts
Bypass Attack: Bypassing enemy to attack easier market
Guerrilla Attack: consist of small, intermittent attacks,
conventional and unconventional. Expensive but less than
frontal, typically backed by stronger attack

Market Follower Strategies


Cloner: The cloner emulates the leaders products,
name and packaging with slight variations.
Imitator: The imitator copies some things from the
leader but differentiates in packaging, advertising,
pricing or location
Adaptor: Takes the leaders products and improves
them. May choose a new market.

Product Life Cycle Marketing


Strategies
Limited life
Sales pass through different stages, each posing
different challenges, opportunities and problems
Profits rise and fall at different stages of product life
Products require different marketing, financial,
manufacturing, purchasing and human resource
startegies in each stage

Product Life Cycle


Introduction: Slow sales growth as
product newly launched in market.
Profits non-existent as heavy
expenses on product introduction
Growth: Rapid market acceptance
and substantial profit improvement
Maturity: Slowdown in sales growth
as has achieved acceptance. Profits
stabilize and increase in competition
Decline: Sales show a downward
drift and profits erode

Chapter 13

Brands can be differentiated on the basis of many


variables, such as
Personnel: Companies can have better trained
employees
Channel: Companies can more effectively and
efficiently design their distribution channels coverage,
expertise and performance
Image: Companies can craft powerful, compelling
images
Service: Ease to order, delivering, maintenance etc
Product: Design, Performance, Durability, Quality and
features

The customer will judge the offering by three


basic elements: product features and quality,
service mix and quality and price

Product levels: The Customer-Value


Hierarchy
Core benefit - the service or benefit
the customer is really buying
(marketers benefit providers)
Basic product - to turn the core benefit
into a basic product
Expected product - a set of attributes
and conditions buyers normally expect
when they purchase this product
Augmented product - exceeds
customer expectations (differentiation)
Potential Product , distinguishing offers
to satisfy customers

Product classifications
Nondurable goods: tangible goods normally consumed in new
state or a few uses (beer and soap). These goods are consumed
quickly and purchased frequently. Appropriate strategy: make
them available in many locations, charge only a small mark-up,
and advertise heavily to induce trial and build preference
Durable goods: tangible goods that normally survive many uses
(refrigerators, clothing). Appropriate strategy: require more
personal selling and services, command a higher margin, and
require more sells guarantees
Services: intangible, inseparable, variable, and perishable
products. Appropriate strategy: require more quality control,
supplier credibility, and adaptability (haircuts, legal advice)

Product levels: The Customer-Value


Hierarchy
Example:
Core product: The client is looking for transportation from one place to another
Actual Product: The brand of the car, its looks and design etc
Expected Product: Decent mileage, proper engine, inflated tires etc
Augmented Product: After-sale services, insurance policy etc
Potential Product: May run more smoothly as it wears off a little

Product differentiation
Form any products can be differentiated in form (the size, shape,
or physical structure)
Features Most products can be offered with varying features that
supplement their basic function. The marketer must be aware of
customer value versus company cost for each potential feature.
Each company must decide whether to offer feature customization
at a higher cost or a few standard packages at a lower cost
Customization marketers can differentiate products by making
them customized to individual
Mass customization is the ability of a company to meet each
customers requirements (to prepare on a mass basis individually
designed products, services, programs and communications)

Product differentiation (continued)


Performance quality - most products are established at one of
four performance levels: low, average, high or superior.
Performance quality is the level at which the products primary
characteristics operate. The manufacturer must design a
performance level appropriate to the target market and
competitors performance levels
Conformance quality buyers expect products to have a high
conformance quality, which is the degree to which all the
produced units are identical and meet the promised specifications
Durability is a measure of the products expected operating life
under natural or stressful conditions, is a valued attribute for
certain products

Product differentiation (continued)


Reliability buyers normally will pay a premium for
more reliable products. Reliability is a measure of the
probability that a product will not malfunction or fail
within a specified time period
Reparability is a measure of the ease of fixing a
product when it malfunctions or fails
Style describes the products look and feel to the
buyer

Service Differentiation
Ordering ease: how easy it is for the customer to place an order
with the company
Delivery: how well the product or service is brought to the
customer. It includes speed, accuracy and care throughout the
process. Two tools that help the delivery process are: Quick
Response Systems (QRS) and Global Positioning System (GPS)
Installation: the work done to make a product operational in its
planned location
Customer training: training the customers employee to use the
vendors equipment properly and efficiently
Customer consulting: data, information system and advice
services that the seller offer to buyers

Service Differentiation (continued)


Maintenance and repair: service program for helping
customers keep purchased products in good working
order
Return: product returns in two ways:
Controllable returns results from problems, difficulties or errors
of the seller or customer and cam mostly be eliminated with
proper strategies and programs.
Uncontrollable returns cant be eliminated by the company in
the short-run through any of the aforementioned means.

Product and Brand Relationship


The Product Hierarchy
1. Need family: underlies the existence of a product family. PERSONAL CARE
2. Product family: product classes that can satisfy a core need with reasonable
effectiveness. COSMETICS, SKIN CREAMS
3. Product class: a group of products within the product family recognized as
having a certain functional coherence. HAIR CLEANING AGENTS
4. Product line: a group of products class that are closely related because they
perform a similar function, are sold to the same customer groups. SHAMPOOS
5. Product type: a group of items within a product line that share one of several
possible forms of the product. DANDRUFF CONTROL SHAMPOOS
6. Item: a distinct unit, distinguishable by size, price, appearance or some other
attribute. A SACHET OF CLINIC ALL CLEAR

Product System and Mixes


Width: how many different product lines the company
carries
Length: the total number of items in the mix
Depth: refers to how many variants are offered of each
product in the line
Consistency: how closely related the various product
lines are in end use, production requirements,
distribution channels or some other way

Product-Line Length
Line Stretching - occurs when a company lengthens
its products line beyond its current range. The company
can strength its line down-market, up-market or both
ways.
Down-Market - A company positioned in the middle market
may want to introduce a lower-priced line
Up Market Stretch - Companies may wish to enter the high
end of the market to achieve more growth, to realize higher
margins, or simply to position themselves as full line
manufactures
Two Way Stretch - Companies serving the middle market

Co-Branding and Ingredient


Branding
Marketers often combine their products with products
from other companies in various ways. In co-branding
also called dual branding or brand bundling two or
more well-known brands are combined into a joint
product or marketed together in some fashion.
Co-branding can generate greater sales, reduce cost of
product introduction, and may be a valuable means to
learn about consumers and how other companies
approach them.

Packaging, Labelling,
Warranties and Guarantees
Packaging: We define packaging as all the activities of designing and
producing the container for a product. Well-designed packages can build
brand equity and drive sales. The package is the buyer's first encounter
with the product and is capable of turning the buyer on or off.
Labelling: The label may be a simple tag attached to the product or an
elaborately designed graphic that is part of the package. It might carry
only the brand name, or a great deal of information. Even if the seller
prefers a simple label, the law may require more
Warranties and Guarantees: All sellers are legally responsible for
fulfilling a buyer's normal or reasonable expectations. Warranties are
formal statements of expected product performance by the manufacturer.
Products under warranty can be returned to the manufacturer or
designated repair centre for repair, replacement or refund

Chapter 14

- Anshul Goswami

What is a Service?

Distinctive Characteristics of Services

A service is any act


of performance that
one party can offer
another that is
Service Sectors
essentially
intangible and does
not result in the
ownership of
anything; its
production may or
may not be tied to a
well
and product.
at what stage can you evaluate of the service
physical

Service Mix

Determinants of Service Quality

Factors Leading to Customer Switching Behavior


Pricing
Inconvenience
Core Service Failure
Service Encounter Failures
Response to Service Failure
Competition
Ethical Problems

mproving Service Quality


Surprising customers
Listening
Fair play

Reliability

Teamwork

Basic service

Employee research Service design


Servant leadership Recovery

Involuntary
Switching
Matching
Demand
and Supply
Supply side
Demand side
Differential pricing Part-time employees
Nonpeak demand Peak-time efficiency
Complementary
services

Increased consumer
participation

Reservation systems Shared services


Facilities for future

Three Types of Marketing in Service Industries

Developing Brand Strategies


for Services

Choosing
Brand Elements
Establishing Image
Dimensions
Devising Branding
Strategy

Service-Quality Model & the


Gaps That Cause
Unsuccessful Service
Delivery

Root Causes of Customer


Failure

Solutions to Customer Failures


Redesign processes and redefine customer
roles to simplify service encounters
Incorporate the right technology to aid
employees and customers
Create high-performance customers by
enhancing their role clarity, motivation,
and ability
Encourage customer citizenship where
customers help customers

Chapter 16

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

- Anshul Goswami
(PGP/20/315)

Chapter 17, 18

- Anupama (PGP/20/318)

Role of Marketing
Communications
Marketing communications are the means by
which firms attempt to inform, persuade, and
remind consumers, directly or indirectly, about the
products and brands they sell.
Marketing communication also works by
showing consumers how and why a product is used,
by whom, where, and when.
Marketing communication allows company to
link their brand to people, places, events,
experiences, feelings, and things
- Anupama (PGP/20/318)

Marketing Communications Mix


The marketing communications mix (promotions mix) consists
of eight modes:
Advertising
Sales Promotion
Events and experience
Online and social media marketing
Mobile Marketing
Public relations and publicity
Personal selling face to face intervention
Direct Marketing mail, telephone or fax
- Anupama (PGP/20/318)

Marketing communications
Mix
Advertising

Sales
Promotion

Public
Relations

Personal
Selling

Direct
Marketing

Mobile
Marketing

Events and
Experience

Direct and
Database
Marketing

Print and
broadcast ads

Contests,
games,
sweepstakes,
lotteries

Press kits

Sales
Presentations

Catalogs

Text messages

Sports

Catalogs

Packagingouter

Premiums and
gifts

Speeches

Sales meetings

Mailings

Online
Marketing

Entertainment

Mailings

Packaging
inserts

Sampling

Seminars

Incentive
programs

Telemarketing

Social Media
Marketing

Festivals

Telemarketing

Brochures and
booklets

Fairs and trade


shows

Annual reports

Samples

Electronic
Shopping

Arts

Electronic
shopping

Posters and
leaflets

Exhibits

Charitable
donations

Fairs and trade


shows

TV Shopping

Causes

TV Shopping

Directories

Demonstrations

Sponsorships

Fax mail

Factory tours

Fax

Display signs

Low-interest
financing

Publications

E-mail

Company
Museums

Catalogs

Pointofpurchase
displays

Trade-in
allowances

Community
Relations

Voice mail

Street Activities

Audiovisual
material

Coupons
Rebates

Identity Media

Symbols and
Logos

Tie-ins

Company
magazine
- Anupama (PGP/20/318)

Communication Process Models

The target audience may not receive the intended message for any of three
reasons:
Selective
Attention

Selective
Distortion

Selective
Retention

- Anupama (PGP/20/318)

Micro Model of Responses


Hierarchy of EffectsTheory

Thehierarchy of effects modelis


amodelwhich tells advertisers to make an
advertisement in such a way that the customer
goes through all these six stages namely
awareness, knowledge, liking, preference,
conviction and purchase.

- Anupama (PGP/20/318)

Developing Effective
Communication

- Anupama (PGP/20/318)

Factors in Setting
Communications Mix
Type of product market
Buyer readiness stage
Product life cycle stage

- Anupama (PGP/20/318)

Buyer Readiness Stage

- Anupama (PGP/20/318)

Measuring Communication
Results

- Anupama (PGP/20/318)

Developing and Managing an


Advertising Program
Five Ms of Advertisements:
Mission
Money
Message
Media
Measurement

- Anupama (PGP/20/318)

Developing and Managing an


Advertising Program
Setting the Advertising Objectives Advertising
goal (Objective)
Advertising objectives at different stages in Hierarchy of
Effects
Informative advertising
Persuasive advertising
Reminder advertising
Reinforcement advertising
- Anupama (PGP/20/318)

Developing and Managing an


Advertising Program
Deciding on the Advertising Budget
Five factors to consider when setting the advertising budget:
Stage in the product life cycle
Market share and consumer base
Competition and clutter
Advertising frequency
Product substitutability

- Anupama (PGP/20/318)

Developing and Managing an


Advertising Program
Developing the Advertising Campaign
Message generation and evaluation
Creative development and execution
Television Ads
Print Ads
Radio Ads
Social-responsibility review

- Anupama (PGP/20/318)

Deciding on Media and


Measuring Effectiveness
Reach, Frequency, and
Impact
Media selection
How many exposures, E*, will
produce audience awareness A*
depends on the exposures

Total number of exposures (E)


where R = reach, F =
frequency Known as Gross
Rating Points (GRP)
Weighted number of exposures
(WE) where R = reach, F =
frequency, I = average impact
- Anupama (PGP/20/318)

Deciding on Media and


Measuring Effectiveness
Choosing Among Major Media
Types
Target-audience media habits

Alternative Advertising
Options
Place advertising

Product characteristics

Billboards

Message characteristics

Public Spaces
Product placement

Media planners consider:

Cost

Point of purchase (P-O-P)


Evaluating Alternative
Media
- Anupama (PGP/20/318)

Choosing Among Major Media


Types

- Anupama (PGP/20/318)

Choosing Among Major Media


Type

- Anupama (PGP/20/3

Deciding on Media and


Measuring Effectiveness
Selecting Specific
Media Vehicles
Audience size measures:
Circulation
Audience
Effective audience
Effective ad-exposed audience

Deciding on Media Timing &


Allocation
Macroscheduling- Scheduling ad in relation
to seasons and business cycles
Microscheduling: calls for allocating
advertising expenditures within a short period
to obtain maximum impact

The timing pattern should consider


the following 3 factors:

Audience quality
Audience attention probability
Editorial quality

Buyer turnover- rate at which a new buyer


enters the market.
Purchase frequency- number of times
during the period that the average buyer buys
the product.
- Anupama (PGP/20/318)
Forgetting rate

Deciding on Media and


Measuring Effectiveness
In launching a new product, the
advertiser has to choose among:
Continuity
Concentration spending al
money in single period
Flighting seasonal advertising
Pulsing continuous advertising
at low weight levels reinforced
periodically by waves of heavier
activity.
- Anupama (PGP/20/318)

Evaluating Advertising
Effectiveness
Impact on Awareness, Knowledge or preference
Communication-Effect Research
Copy testing
Consumer feedback method
Example questions:
What is the main message you get from this ad?
What do you think they want you to know, believe,
or do?
How likely is it that this ad will influence you to
undertake the implied action?

Sales-Effect Research
Share of advertising expenditures
Share of voice
Share of consumers minds and hearts
Share of market
Historical approach
Experimental design

What works well in the ad and what works poorly?


How does the ad make you feel?
Where is the best place to reach you with this
message?
Portfolio tests
Laboratory tests For Print Ads For Broadcast Ads.
In-home tests Trailer test Theater tests On-air
tests

- Anupama (PGP/20/318)

Sales Promotion
Promotion offers incentive to buy Consumer promotion
Trade promotion Sales-force promotion
It consists of a diverse collection of incentive tools, mostly
short term, designed to stimulate quicker or greater
purchase of particular products or services by consumers
or the trade.
Advertising offers a reason to buy and sales promotion offers
an incentive to buy.

- Anupama (PGP/20/318)

Sales Promotion
Factors contributing to the rapid growth of
sales promotion, particulary in consumer
markets.
Internal factors:
o Acceptance by top management
o Product managers more qualified to use it
o Greater pressure to increase sales
External Factors:
o Increase in number of brands
o Use by competitors o Similar brands

Purpose of sales promotion


Attract new triers
o users in same category
o users in other categories
o frequent brand switchers not
likely to turn loyal
In case of high brand dissimilarity, sales
promotion can alter market shares
permanently.

o Price oriented consumers


o More deals from manufacturers
o Decline in advertising efficiency due to rising
costs
o Media clutter o Legal restraints
- Anupama (PGP/20/318)

MAJOR DECISIONS IN SALES


PROMOTION
Establishing Objectives : The specific objectives for sales promotion vary with the
target market.
Selecting Consumer Promotion Tools : The promotion planner should take into
account the type of market, sales promotion objectives , competitive conditions ,and
each tools ( eg. samples, coupons etc.) cost effectiveness.
Selecting Trade Promotion Tools : To persuade the retailer or wholesaler to carry
the brand o To persuade the retailer or wholesaler to carry more units than the
normal amount o To induce retailers to promote the brand by featuring , display, and
price reductions o To stimulate retailers and their sales clerks to push the product
Selecting Business and Sales Force Promotion tools
Developing the Program : In deciding a particular incentive ,marketers should
consider the size of the incentive, establish conditions for participation, duration of
promotion, choose a distribution cycle, timing of promotion & the total sales
promotion budget
Pretesting the Program
Implementing and Controlling the Program :

- Anupama (PGP/20/318)

Events and Experiences


Events Objectives
To identify with a particular target market or lifestyle
To increase awareness of company or product name
To create or reinforce perceptions of key brand image
associations
To enhance corporate image
To create experiences and evoke feelings
To express commitment to the community or on social
issues
To entertain key clients or reward key employees
To permit merchandising or promotional opportunities
- Anupama (PGP/20/318)

Major Sponsorship Decisions


Choosing events
Designing sponsorship program- Event creation
Measuring sponsorship activities
Direct tracking of sponsorship-related promotions (Web data, call center data,
online event statistics, other consumer engagements)
Qualitative research (on-site/in-market, pre/post, and
participant/nonparticipant, using a proprietary model for brand equity transfer and
subsequent impact on purchase intent)
Quantitative analysis (analytics to link sponsorship to brand awareness, sales,
and retention and to optimize tactics in sponsorship activation that maximize ROI)

Creating Experiences

"The idea is not to sell something, but to demonstrate how a brand can enrich a
customer's life.
Inviting prospects and customers to visit their headquarters and factories.

- Anupama (PGP/20/318)

Public Relations
PR involves a variety of programs designed to promote
or protect a companys image or its individual products.
PR Dept generally performs the following
functions:
Press Relations
Product Publicity
Corporate Communication
Lobbying
Counseling
- Anupama (PGP/20/318)

Marketing Public Relations


It plays an important role in the following
tasks:

Launching new products

Repositioning a mature product


Building interest in a product
category
Influencing specific target groups
Defending products that have
encountered public problems

Major Decisions in Marketing PR

Publications
Events
Sponsorship
News
Speeches
Public service activities
Identity media

Building the corporate image in a


way that reflects favorably on its
products
- Anupama (PGP/20/318)

Chapter 19, 20

- Akshay Nikhil (PGP/20/256)

Categories of online marketing communications: Web sites, search ads, display ads, and e-mail
Advantages:
Variety of online communications
Easy to recognise effect of efforts, through data on unique visitors, clicks
Contextual placement: ads only on related web sites, or based on keywords

Disadvantages:
Consumers can screen out messages
Possibility of bogus clicks
Hacking fears

Digital ad spending in 2013: USD42.8bn, TV ads: USD40.1bn

- Akshay Nikhil (PGP/20/256)

Online Marketing Communications Options:


Websites: 7Cs of a web site: Context, Content, Community, Customization, Communication, Connection,
Commerce
Search Ads: paid search, pay-per-click ads

Search Engine Optimization (SEO): the process of maximizing the number of visitors to a particular website
by ensuring that the site appears high on the list of results returned by a search engine

Display Ads: Small boxes containing text and/or picture that companies pay to place on relevant web sites
Interstitials: Ads that pop up between page changes within or across web site(s)

E-mail: They are cheap, but more effective than social media. Problem arises with spam filters
Social Media:
Online communities and forums: created by consumers or sponsored by companies for primary research
Blogs
Social Networks:
May not be as effective in attracting new users and driving brand penetration
Consumers engage with media, charities, fashion, and not with consumer goods
Two-way conversations rarely happen

Word of Mouth: Online and offline. Viral Marketing is a form of online "word of mouse", that encourages
consumer to pass along company-developed products and services or audio, video, or written information to others
online
- Akshay Nikhil (PGP/20/256)

Customer loyalty ladder:


Satisfaction: sticks with your brand as long as expectations are met
Repeat Purchase: Returns to buy again
Word of mouth/buzz: Tells others about you
Evangelism: convince others to purchase
Ownership: feels responsible for continued success of your organisation
Mobile Marketing:
Uniquely tied to one user
Is on virtually all the time
Immediate consumption can happen due to mobile payment system
Highly interactive, allows for geo-tracking, picture and video taking
For effective mobile marketing programs:
Ad should occupy only 50% of the screen
Limit ad to a pair of phrases
Logo in the corner of mobile ad frame
Just one or two bright colors
- Akshay Nikhil (PGP/20/256)

Direct Marketing
Use of consumer-direct (CD) channels to reach and deliver goods and services to customers without
using marketing middlemen. Channels include direct mail, catalogue marketing, telemarketing,
interactive TV, kiosks, web sites, and mobile devices
Benefits:
help you build relationships with new customers.
test the appeal of your product or service.
tell you which marketing approaches reach your target market.
provide customers with compelling content they can share with potential customers.
increase sales
Direct Mail: Sending an offer, announcement, reminder to an individual customer using highly
selective mailing lists. It permits target market selectivity, can be personalized, is flexible, and
allows early testing and response measurement. (Its not an e-mail)
Catalogue Marketing: Catalog marketing is a sales technique used by businesses to group
many items together in a printed piece or an online store, hoping to sell at least one item to the
recipient. Consumers buy directly from the catalog sender by phone, return envelope or online
using information in the catalog.
Telemarketing: Use of telephone and call centres to attract prospects, sell to existing
customers and provide service
- Akshay Nikhil (PGP/20/256)

Customer Database
An organized collection of comprehensive information about individual customers or prospects that
is current, accessible, and actionable for lead generation, lead qualification, sale of a product or
service, or maintenance of customer relationships
Database Marketing: Process of building, maintaining and using customer database to
contact, transact, and build customer relationships
Uses of Database:
To identify prospects
To decide which customer should receive a particular offer
To deepen customer loyalty
To reactivate customer purchases
To avoid serious customer mistakes
Downsides:
Some situations are not conducive to database marketing
Requires large investment
Employees may resist becoming customer-oriented
Not all customers want a relationship with the company

- Akshay Nikhil (PGP/20/256)

Sales force
Tasks:
Prospecting
Targeting
Communicating
Selling
Servicing
Information Gathering
Allocating
Sales Force Structure:
1. A strategic market sales force assigned to major accounts
2. A geographical sales force
3. A distributor sales force calling and coaching distributors
4. An inside sales force marketing and taking orders online and via phone
- Akshay Nikhil (PGP/20/256)

Sales force Size: Based on workload


Sales force compensation: Fixed, variable,
expense allowance, and benefits
Managing the Sales Force:
Focus on recruiting and selecting reps
Training and supervision
Productivity : Using sales time efficiently
Sales Technology: Use of electronics, company website, social media
Motivation: Intrinsic and extrinsic rewards. Sales quotas are
problematic
Evaluation: Information taken from sales reports
- Akshay Nikhil (PGP/20/256)

Personal Selling
The six steps:
1.Prospecting and Qualifying
2.Pre-approach (learning about the prospect and purchasing process)
3.Presentation and Demonstration
4.Overcoming Objections
5.Closing
6.Follow-up and Maintenance
Relationship Marketing
Relationship marketing is a facet of customer relationship management (CRM) that
focuses on customer loyalty and long-term customer engagement rather than shorterterm goals like customer acquisition and individual sales.
- Akshay Nikhil (PGP/20/256)

Chapter 21

- Bishal Naskar (PGP/20/322)

Marketing Channel
A marketing channel system is the particular set of interdependent
organizations involved in the process of making a product or service available
for use or consumption.
One of the chief roles of marketing channels is to convert potential buyers to
profitable customers.
In managing its intermediaries , the firm must decide how much effort to
devote to push and to pull marketing
A push strategy uses the manufacturers sales force, trade
promotion money, and other means to induce intermediaries to carry,
promote, and sell the product to end users.
A pull strategy uses advertising, promotion, and other forms of
communication to persuade consumers to demand the product from
intermediaries.

Multichannel marketing
is typically employed by most successful
companies today, using two or more communication channels to reach
customer segments in one market area. For example HP uses its sales force
to to sell to large accounts, outbound telemarketing to sell to medium sized
accounts, direct mail with an inbound phone number to sell to small
accounts, retailers to sell to still smaller accounts and the Internet to sell
specialty items.

Companies
are
increasingly using digital
distribution
strategies,
selling directly online to
customers
through
emerchants who have their
own websites. In doing so
companies are seeking to
achieve
omnichannel
marketing,
in which
multiple channels work
together seamlessly and
match
each
target
customers preferred ways
of doing
business ,
delivering
the
right
product information and
customer service online,
in store or on the phone.

- Bishal Naskar (PGP/20/322)

The Hybrid Grid


Clearly, companies
need to think through
their channel
architecture and
determine which
channels should
perform which
functions.
The grid consists of
major marketing
channels (as rows) and
the major channel
tasks to be completed
(as columns). The grid
illustrates why using
only one channel is
not efficient.
- Bishal Naskar (PGP/20/322)

Marketing Channel Flows

- Bishal Naskar (PGP/20/322)

Consumer Marketing Channels

Industrial Marketing Channels

- Bishal Naskar (PGP/20/322)

Channel Levels
A zero-level channel, also called a direct marketing channel, consists of a
manufacturer selling directly to the final customer. Example: mail order,
online selling, TV selling etc.
A one-level channel contains one selling intermediary, such as a retailer.
A two- level channel contains two intermediaries, typically a wholesaler
and a retailer.
A three level channel contains three intermediaries.

Channel Design Descisons


Analyzing Customer Needs and
Wants
Establishing Objectives and
Constraints
Identifying Major Channel
Alternatives
Evaluating Major Channel
Attributes

Channels
normally
describe
a
forward
movement of products
from their source to
user, but reverse flow
channels
are
also
important:
To reuse products or
containers
(exrefillable
chemical
carrying drums)
To refurbish products
for resale (ex- circuit
boards or computers)
To recycle products
To dispose of products
packaging

- Bishal Naskar (PGP/20/322)

Establishing the Channel


Objectives & Constraints

Identifying major
channel alternatives
Types of Intermediaries

Channels objectives
vary with product
characteristics.
Channel design must
take into account the
strengths &
weaknesses of
different types of
intermediaries.
Channel design is also
influenced by the
competitors
channels.
Channel design must
also adapt to the
larger environment.

Depends on the service outputs


desired by the target market & the
channels transactions costs. The
company must search for the channel
alternative that promises the most
long-run profitability.

Number of Intermediaries
Exclusive
Selective
Intensive

Terms and Responsibilities


of Channel Members
Price policy
Condition of sale
Distributors territorial rights
Mutual services and responsibilities

Evaluating major
channel alternatives
Economic Criteria
The first step is to
determine whether a
company sales force or a
sales agency will produce
more sales.
The next step is to
estimate the costs of
selling different volumes
through each channel.
The final step is comparing
sales & costs.
Each channel will produce a
different level of sales &
costs.
Control Criteria
The agents may concentrate on
other customers products or
they may lack the skills to handle
our products.
Adaptive Criteria
The channel members must
Naskar
make some- Bishal
degree
of (PGP/20/322)

The Value-Adds vs. Costs of


Different Channels

Break-Even Chart for the Choice


Between a Company Sales Force
and Manufacturers Sales Agency

- Bishal Naskar (PGP/20/322)

Channel-Management
Decisions
After a company has chosen a channel
system, it must select, train, motivate,
and evaluate individual intermediaries
for each channel. It must also modify
channel design and arrangements over
time. As the company grows, it can also
consider channel expansion into
international markets.
Selecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members

Channel Power
Channel power is the ability to alter channel members
behavior so they take actions they would not have
taken otherwise. Manufacturers can draw on the
following types of power to elicit cooperation:
Coercive:
Coercive power means that the manufacturer
threatens to withdraw a resource or terminate a
relationship if intermediaries fail to cooperate.
Reward :
Reward power includes when the manufacturer offers
intermediaries an extra benefit for performing specific
acts or functions.
Legitimate
Legitimate power includes the manufacturer
requesting a behavior that is warranted under the
contract.
Expert
Expert power means the manufacturer has special
knowledge the intermediaries value. Once the
intermediaries acquire this expertise, however, expert
power weakens.
Referent
Referent power means the manufacturer is so highly
respected that intermediaries are proud
to be (PGP/20/322)
- Bishal Naskar

Channel Integration and


Vertical marketing
systems
Systems
A vertical marketing system (VMS), by contrast, includes the producer, wholesaler(s), and
retailer(s) acting as a unified system. One channel member, the channel captain, owns or
franchises the others or has so much power that they all cooperate

Corporate VMS
A corporate VMS combines successive stages of production and distribution under single
ownership

Administered VMS
An administered VMS coordinates successive stages of production and distribution through
the size and power of one of the members. Manufacturers of dominant brands can secure
strong trade cooperation and support from resellers

Contractual VMS
A contractual VMS consists of independent firms at different levels of production and
distribution, integrating their programs on a contractual basis to obtain more economies
or sales impact than they could achieve alone. Sometimes thought of as value-adding
partnerships (VAPs), contractual VMSs come in three types: wholesaler-sponsored
voluntary chains, retailer cooperatives, and franchise organizations.

Horizontal marketing systems

- Bishal Naskar (PGP/20/322)

E-Commerce
Pure-click
Brick-and-click
E-commerce uses a Web site to transact or
facilitate the sale of products and services online.
Online retailers compete in three key aspects of a
transaction:
(1) Customer interaction with the Web site,
(2) Delivery
(3) Ability to address problems when they occur.
We can distinguish between pure-click companies,
those that have launched a Web site without any
previous existence as a firm, and brick-and-click
companies, existing companies that have added
an online site for information or e-commerce.

M-Commerce
The widespread penetration of cell phones
and smart phonesthere are currently more
mobile phones than personal computers in the
worldallows people to connect to the
Internet and place online orders on the move.
Many see a big future in what is now called mcommerce (m for mobile). The existence of
mobile channels and media can keep
consumers connected and interacting with a
brand throughout their day-to-day lives. GPStype features can help identify shopping or
purchase opportunities for consumers for their
MARKETING
favorite brands.
PRACTICES

ADVERTISING
AND
PROMOTION

GEOFENCING

Target customers
with a mobile
promotion
(app+GPS)

- Bishal Naskar (PGP/20/322)

Channel
Conflict
Channel conflict is generated when
one channel members actions
prevent another channel from
achieving its goal.
Channel coordination occurs when
channel members are brought
together to advance the goals of the
channel, as opposed to their own
potentially incompatible goals.
Horizontal channel conflict occurs
between channel members at the
same level.
Vertical channel conflict occurs
between different levels of the
channel. Multichannel conflict exists
when the manufacturer has
established two or more channels
that sell to the same market.

Causes

Goal
incompatibilit
y

Unclear roles
and rights

Differences
in perception

Intermediarie
s
dependence
on
manufacturer

Strategic justification
Dual compensation
Superordinate goals

Strategies for
Managing
Channel Conflict

Employee exchange
Joint memberships
Cooptation
Diplomacy
Mediation
Arbitration
Legal recourse
- Bishal Naskar (PGP/20/322)

Chapter 22

- Sumit Jha (PGP/20/355)

RETAILING - 1
Retailing includes all the
activities involved in selling
goods or services directly to
final consumers for personal,
nonbusiness use.
TYPE OF RETAILERS- Store
retailers, Non store retailers,
retail organizations
4 Levels of Service at store
retailers
- Sumit Jha (PGP/20/355)

RETAILING - 2
Non Store retailing has been growing much
faster than store retailing because of ecommerce and m-commerce

- Sumit Jha (PGP/20/355)

RETAILING - 3
Corporate retailing achieves economies of
scale, greater purchasing power, wider brand
recognition and better trained employees than
Types
of Corporatestores
retail
independent
organizations
Corporate chain store
Voluntary chain
Retailer cooperative
Consumer cooperative
Franchise organization
Merchandising conglomerate

- Sumit Jha (PGP/20/355)

FRANCHISING SYSTEM
A franchising system is a system of
individual franchisees, a tightly knit group of
enterprises whose systematic operations are
planned, directed, and controlled by the
operations franchisor.
The franchisor owns a trade or service mark
and licenses it to franchisees in return for
royalty payments
The franchisee pays for the right to be part of
the system
The franchisor provides its franchisees with a

- Sumit Jha (PGP/20/355)

EVOLVING RETAIL
Changes in the retail
environment
New retail forms and combinations
Growth of intertype competition
Competition between store-based
and non-store-based retailing
Growth of giant retailers
Emergence of fast retailing
Decline of middle market retailers
Growing investment in technology
Global profile of major retailers

Retailers Marketing Decisions

Target market

Channels

Product assortment

Procurement

Prices

Services

Store atmosphere

Store activities

Communications

Locations
- Sumit Jha (PGP/20/355)

MANAGING RETAIL
Retail Category
Management
Define the category
Figure out its role
Assess performance
Set goals
Choose the audience
Figure out tactics
Implement the plan

Tips for Increasing Sales in Retail Space

Keep shoppers in the store

Honor the transition zone

Dont make them hunt

Make merchandise available to the reach and touch

Note that men do not ask questions

Remember women need space

Make checkout easy

- Sumit Jha (PGP/20/355)

PRIVATE LABELS
A Private-Label Brand (also called a
reseller, store, house, or distributor brand) is a
brand that retailers and wholesalers develop
Private labels are ubiquitous
Consumers accepts private labels
Private-label buyers come from all
socioeconomic strata
Private labels are not a recessionary
phenomenon
Consumer loyalty shifts from manufacturers to - Sumit Jha (PGP/20/355)

WHOLESALING
WHOLESALING includes all the activities in selling goods or services to those who
buy for resale or business use

Wholesaling Functions
Selling and promoting
Buying and assortment building
Bulk breaking
Warehousing
Transportation
Financing
Risk bearing
Market information
Management services and
counseling

Major Wholesaler types

Merchant

Full-service

Limited-service

Brokers and agents

Manufacturers

Specialized

- Sumit Jha (PGP/20/355)

MARKETING LOGISTICS
Market Logistics includes planning the infrastructure to meet demand,
then implementing and controlling the physical flows of materials and
final goods from points of origin to points of use to meet customer
requirements at a profit
Market Logistics Planning- 1) Deciding the companys value
proposition to its customers 2) Deciding the best channel design and
network strategy
3) Developing operational excellence 4) Implementing the solution
Integrated Logistics System- This includes materials management,
material flow systems, and physical distribution, aided by information
technology
Market Logistics- 1) Sales forecasting 2)Distribution Scheduling
3)Production Plans 4) Finished-Goods Inventory Decisions 5) Packaging
6) In-Plant Warehousing 7)Shipping-Room processing 8)Outbound
Transportation 9)Field Warehousing 10)Customer Delivery and Servicing
- Sumit Jha (PGP/20/355)

LOGISTICS DECISIONS
QUESTIONS
How to handle orders?
Where to stock?
How much to stock?
How to ship?

OPTIMAL ORDER QUANTITY

FACTORS to MARK
1) Transportation 2)
Containerization

- Sumit Jha (PGP/20/355)

Chapter 23

- Sonalika Kumari

Trends and Internal Marketing

IMPORTANT SHIFTS
IN MARKETING
Reengineering
Outsourcing
Benchmarking
Supplier partnering
Merging
Customer partnering
Globalizing
Flattening
Focusing
Justifying
Accelerating
Empowering
Broadening
Monitoring
Uncovering

Types of product
teams

- Sonalika Kumari

Socially Responsible
Marketing

Adherence to
laws

Sustainability: The ability to meet humanitys


needs without harming future generetaions.
Coca Cola, AT&T and DuPont have even
installed Chief Sustanability officers

C
S
R

Written code of
ethics
Social conscience
Some top rated
companies:Whole
foods, Walt Disney,
Coca cola, Johnson and

- Sonalika Kumari

Socially Responsible Marketing

Select a focus area


Evaluate your institutional will and resources
Analyze your competitors cause positioning
Choose your partners carefully
Dont underestimate the name of your programits key to the identity of your campaign
To create a sustainable and effective program, start by developing a cross-functional strategy team.
Leverage both your assets and those of your partner(s) to bring the program to life.Assets may include volunteers,
cash and in-kind donations, special events, in store presence, partner resources and marketing/advertising support
Communicate through every possible channel.
Go local.National programs reach the grass tops, but true transformation begins at the grassroots.
Innovate

10 tips
for
Cause
Related
Brandin
g

Social Marketing by non profit or government organisations furthers cause, such as


say no to drugs or exercise more and eat better.

Social
Marketi
ng

- Sonalika Kumari

Marketing Implementation and


Control

Marketing Implementation is the process that turns marketing plans into action assignments and
ensures they accomplish the plans stated objectives. Strategy addresses what and why of
marketing activities; implementation addresses the who, where,when and how.

- Sonalika Kumari