1. Why do we segment? a. Because customers are In not homogenous b. We do not have resources to serve all customers 2. Positioning 3.

Marketing definition The way we are present in the mind of the customer Offering value to customer for profit. The end goal of

marketing is to create a monopoly. 4. Forecasting time 5. One can a. Anticipate and manipulate the environment b. React to an unanticipated environment 6. Decision = conceptual clarity(anticipated part) +contextual familiarity (unanticipated part) 7. Decisions must be made after forecasting knowing full well that there will be an element of uncertainty Selecting models All models are erroneous We must select if we want to build an aggregated or disaggregated model Aggregated model 1. We aggregate a number of causal factors into a single term and forecase 2. Good when the momentum is strong and we do not expect significant changes in the market 3. When used appropriately errors(observed-forecasted) are less Disaggregated model 1. Use a number of causal factors chain their effects(either additively or multiplicatively) o Since this involves predicting a number of factors error in the forecast may increase o Used when we expect shifts in the market and we need to know what are the factors we need to account for o Multiplicative model all the factors are completely independent. Else we must take an additive model and factor in the interaction effects. Value of good information Confidence building measures Exercise to figure out the opportunity size with respect to

1. Use multiple methods and models 2. Use multiple sources of information If the forecasts converge, then we build confidence on that forecast Steps in disaggregated modelling 1. Define the market 2. Divide tee total industry demand into its main components 3. Forecast the drivers of demand in each segment 4. Conduct sensitivity analysis Beyond forecasting, we must make the investment decision 1. Make the investment versatile 2. Break the investment up into smaller pieces Industrial pricing We can charge different prices to different customers. Usually price differences exist between sectors/industries or between firms in the same industry. Relationships are important if this is to be sustained. Hence in a B3B situation its important to manage the human relations component. (multiple parties who make a decision : influencer, gatekeeper, decision maker, buyer, etc. maintain relations with each of them) vs commodity pricing

Cannot charge a different price. The product is commoditised Depending on where we are in the PLC, we will make a decision to o If product is in the introductory phase(bottom of the PLC) give importance to relationships, if we are committed to staying in the market o o o If product is in the growth phase, differentiate the product. SPM strategy If product is in maturing phase, less commitment to the market. If product is in shakeout phase or you are not committed to the market, adopt reactive strategies e.g. price wars Four features of a brand 1. Should have a name /identity 2. Should be associated with a unique and relevant benefit 3. Should have adequate visibility 4. Should be consistently delivered (credibility)

The first three are the planning phase and the last one is the implementation phase. The last one is often most important since it is the touch point with the customer Most important factors for market share considerations 1. Order of entry 2. Positioning First mover advantage (.27 ) even though you are not first mover, can knock off

the first mover through strong positioning (branding) (4 points). Important in the growing market since consumer preferences are decided in this phase. PULL strategy since consumer will pull you product for use 3. Share of voice (2 points) once market becomes saturated and

brand loses its brandness share of voice becomes most important. Commoditised market. PUSH strategy. includes advertising, grabbing shelf space, promotions, price competition, utilising capacity by offloading to nonbranded products, etc. characterised by store brand proliferation, creation of separate brands/organisations to make sure that the branded products are not perceived as mixed with the unbranded ones. To make sure that the brand doesnt lose out on brandness 1. Firms will create other brands to defend their position brand fortification strategy. Portfolios are built to protect the core brand. 2. Product line extensions are also done. Process of adoption: AIDA model for medium to high involvement product. Measure Word-Of-Mouth In case of low involvement product : Trial repeat: Trial rate x Repeat rate= market share Long term aim is to increase repeat rate given a trial rate and then increase penetration to improve trial rate to sustain in the market. Trial rate increase by: Push strategies Repeat rate increase by: Delivery. Pull strategies Must be sensitive to cultural implications in a new market. Market share = base share +incremental share In mature markets, base share is a function of the long term equity of the firm and is a reflection of all its marketing decisions in the past vis--vis its competitors. Incremental share is a function of the sales promotions and advertising spends.

Market_share = f (marketing mix, marketing mix of competitors, base_volume) Once base volume is constant, marketing mix becomes important. Then how to decide on marketing mix? = ROMI (Return On Marketing Investment) Take moving average and factor in exogenous variables as additions. Symptoms of an undifferentiated market place 1. Low HHI 2. Commoditisation 3. Not max capacity utilisation 4. Everyone has same price line Way to fight this: move your cost line down; increase efficiency and deliver more value by reducing price. If increase price after a decrease, you will give the idea that you are bleeding. So the most efficient player, the largest player will survive. The industry must resist this as a whole. Otherwise price wars. Lobbying is important when debate is political. Appeal to the individual and get a buy in. How to differentiate an un-differentiable product/service? (Differential pricing, II degree price discrimination prevent leakage self selectivity) 1. Peak load pricing 2. Geographical segmentation 3. Volume discounts 4. Two part pricing 5. Bundling 6. Metering When scope for reinvention is low, penetrate market with lower prices. Idea is to maximise the future discounted cash flows arising out of a pricing strategy. This is better than marginal pricing, constant return on sales, cost plus pricing and constant prices. When scope of reinvention is high skim the market. DIAGRAMS TO REMEMBER 1. IDEATION FUNNEL 2. PRICE BENEFIT RELATIONSHIP (Value=Benefit/Price) In the price benefit diagram, first try to increase benefits. Once benefits are saturated, price will drop. Then the entire referent line will shift rightwards

3. EDLP vs Hi Lo vs APP 4. Product innovation, quality decline 5. Penetration pricing vs demand in low innovation and high innovation categories 6. Bass cancer model of demand growth V=Y1 *(Qm-Q) + Y2 * (Qm-Q)*Q Then apply the initial market penetration condition(exponential usually) Then apply the experience curve to cost(from experience)