Crasher on Marketing Basics

Marketing Cell, IIM Calcutta

This Presentation is.

Meant to showcase key concepts/fundae in S&M. Give you lots of stuff to talk about in interviews A reasonably comprehensive revision tool To help you understand what to expect in your summers.

This Presentation is NOT

Meant to replace a textbook / your own curiosity An excuse not to read up any other stuff for your mar interviews.
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A note on the Selection Procedure

Shortlisting (Generally Form based)
Number of shortlisted candidates vary widely. Extended /Last minute Shortlists common.

Group Discussions
Groups of 6-10, Topics can be ANYTHING ! 6 Generally companies pick 2-5 per GD group for the 2interview. Read up on current affairs/marketing fundae/recent economic events et al.
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A note on the Selection Procedure.

Interviews
No fixed pattern /type of Question /Syllabus A company may administer 1-4 interviews before 1hiring. Both Personals and Technical Personals Largely based on your CV/Stuff you filled on the form/ Standard Personals Questions Technical Mostly Conceptual stuff (what this crasher aims to cover) + Topical Stuff (Read up Newspapers, Brand Equity etc for this)
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Contents
Basic marketing fundae overview Brands Distribution concepts Sales Marketing Advertising (incl. media) Consumer Behavior Retail Rural marketing fundae. Market research Indian FMCG sector Companies
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Core Concepts of Marketing

Target Markets & Segmentation Needs, Wants and Demands Product or Offering Value and Satisfaction

Exchange & Transactions Relationships & Networks

Marketing Channels

Supply Chain Competition Marketing Environment

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The Four Ps vs. The Four Cs

Marketing Mix Product
Customer Solution Place

Convenience

Price

Promotion

Cost

Communication
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Intensive Growth Strategies: Ansoffs Product/Market Expansion Grid

Existing products Existing markets 1. Market penetration New products 3. Product development

New markets

2. Market development

4. Diversification
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Four Types of Buying Behavior

High Involvement Low Involvement VarietySeeking Behavior Habitual Buying Behavior

Significant differences between brands

Few differences between brands

Complex Buying Behavior DissonanceReducing Buying Behavior

Defense Strategies
(2) Flank defense

Attacker

(3) Preemptive defense

(4) Counteroffensive defense

(1) Position defense Defender (5) Mobile defense

(6) Contraction defense

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Attack Strategies
(4) Bypass attack (2) Flank attack (1) Frontal attack Attacker (3) Encirclement attack Defender

(5) Guerilla attack

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Specific Attack Strategies

PricePrice-discount Cheaper goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing cost reduction Intensive advertising promotion
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Steps in Segmentation, Targeting, & Positioning

6. Develop Marketing Mix for Each Target Segment 5. Develop Positioning for Each Target Segment 4. Select Target Segment(s) 3. Develop Measures of Segment Attractiveness 2. Develop Profiles of Resulting Segments Market Positioning

Market Targeting

1. Identify Bases for Segmenting the Market

Market Segmentation

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Bases for Segmenting Consumer Markets

Geographic
Region, City or Metro Size, Density, Climate

Demographic
Age, Gender, Family size and Fife cycle, Race, Occupation, or Income ...

Psychographic
Lifestyle or Personality

Behavioral
Occasions, Benefits, Uses, or Attitudes
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Positioning is...
the act of designing the companys offering and image to occupy a distinctive place in the target markets mind.
Kotler

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Product Mix
Width - number of different product lines Length - total number of items within the lines Depth - number of versions of each product Product Mix all the product lines offered

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What is a Brand?

User

Culture

Personality

Attributes

Benefits

Values

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An Overview of Branding Decisions

Branding Decision BrandSponsor Decisio n Manufacturer brand Brand No brand Distributor (private) brand Licensed brand BrandName Decision Individual brand names Blanket family name Separate family names Companyindividual names BrandStrategy Decision Line extension Brand extension Multibrands New brands Cobrands BrandRepositioning Decision

Repositioning No repositioning

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Brand Strategies
Product Category
Existing New

Brand Name

Existing

Line Extension Multibrands

Brand Extension New Brands

New

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How a Distributor Reduces the Number of Channel Transactions

1 2 3

4 5 6
7 8 9

A. Number of contacts without a distributor MxC=3X3=9

= Manufacturer

= Customer
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How a Distributor Reduces the Number of Channel Transactions

1 Store 2 5

B. Number of contacts with a distributor MxC=3+3=6

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= Manufacturer

= Customer

= Distributor 21

Consumer Marketing Channels

0-level channel

Mfr.
1-level channel

Consumer

Mfr.
2-level channel Wholesaler Mfr. 3-level channel Wholesaler Mfr.

Retailer Consumer

Retailer Consumer

Jobber

Retailer Consumer
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Channels of Sales Promotions

MANUFACTURER
Push Trade Promotions RETAILER Push Retail Promotions CONSUMER
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Consumer Promotions
Pull

Consumer Promotion
Consumer-Promotion Objectives Entice Consumers to Try a New Product Lure Customers Away From Competitors Products Get Consumers to Load Up on a Mature Product Hold & Reward Loyal Customers Consumer Relationship Building Consumer-Promotion Tools

Samples

Coupons
Cash Refunds Price Packs Premiums

Advertising Specialties Patronage Patronage Rewards Rewards

Contests
Sweepstakes Games

Point-of-Purchase Point Displays

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Advertising: The Marketing Communications Mix

Advertising
Sales Promotion
Any Paid Form of Non-personal Presentation by an Identified Sponsor.

Short-term Incentives to Encourage Trial or Purchase. Protect and/or Promote Companys Image/products.

Public Relations Personal Selling Direct Marketing

Personal Presentations.
Direct Communications With Individuals to Obtain Immediate Response.
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Advertising: Steps in Marketing Communication

Identifying Target Segments Determining Communications Objectives Designing the Message Selecting Channels of Communication Establishing the Budget Determining the Communications Mix Measuring Results Managing the Communications Process
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Advertising Media :Definitions + Characteristics

Media channels Media vehicles Media planning Reach Effective reach Frequency Circulation Rating points OTS

Dailies Magazines Television Radio Cinema. Cinema. Outdoor. Outdoor. Point of Purchase
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Strategic Media Planning

:How do you go about designing a Promotion Campaign ?
Whom? The process starts with definition of the target segments in terms of demographic factors Psychographic factors Behavioural factors Role What? Characteristics of the product and the brand, the purpose of the campaign and the creative task at hand Where? The geographical location / town class When? Seasonality, which would determine scheduling of the campaign by time of day / day of the week or month How often? Communication objectives reach, frequency / OTS, rating points etc.
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Advertising Trends
Clutter. Costs UP, Effectiveness DOWN. Rise of the Internet. Television advertising becoming highly fragmented. Using Celebrities. The future of print advertising. Controversies :Tobacco, Liquor, Sex etc. Advertising Agencies and Client Relations.

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Consumer Behavior: Model of

Buying Behavior
Marketing Other stimuli stimuli
Product Price Place Promotion Economic Technological Political Cultural

Buyers Buyers decision characteristics process

Cultural Social Personal Psychological Problem recognition Information search Evaluation Decision Post-purchase behavior

Buyers decisions
Product choice Brand choice Dealer choice Purchase timing Purchase amount
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Consumer Behavior:
Consumer Buying Roles
User
Key Family Decision Roles

Initiator

Buyer

Influencer

Decider

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Consumer Behavior: Consumer Buying

Problem recognition
Information search Evaluation of alternatives Purchase decision Post-purchase behavior
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Process

Retail: The Indian Context

India has 12 million retail outlets, of all formats (by far the highest worldwide.) Its a $180billion market. VPO is among the lowest. Hence competition is fierce, fragmentation pervasive and profitability a constant ? Retailing forms just 3% or so. (Compare with 98% in Australia and 50-90% in most others) 50 The Future Group is the dominant player [100 stores, 1000crores]. RPG, and a few others. Reliance ! 3000 stores ,almost 15000crores invested. Franchising/Independent/Chain/Co-ops Franchising/Independent/Chain/Co Foreign players still not allowed into India. [Metro..]
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Retail Store Formats

Paan-Biri/Convenience Paan-Biri/Convenience Kirana/Grocery/Mom-andKirana/Grocery/Mom-and-Pop Department Store Discount Store Speciality Store Supermarkets Hypermarkets Megamall [1m sq.ft +] Category Killer/Power Retailer Warehouse/Membership Club/Store
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Retail Trade Characteristics

Variables :Pricing, depth, number of categories, brands, Displays, service levels, density, positioning of the chain, location. Average sales prop. to the Size of the store. Impulse purchases Touch and Feel Positives: A huge employment generator, brings down prices ,more convenient. Negatives: Uproots local shopkeepers ? Pressure on the FMCG Companies for margins. Store brands. Loyalty programs Culture Counts. [Walmart in Germany]

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Rural Markets in India

73% of the Indians live in rural areas. One thirds of the premium luxury goods are now sold in the rural market Two thirds of the middle-income households are now in the middlerural market. 1% increase in rural income = increase of Rs. 10,000 crores in buying power HLLs sales turnover in rural market is over 5,000 crores ! High variation from area to area, owing to differences in lifestyles, beliefs, consumption patterns and buying power

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Marketing Mix for Rural Markets

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Rural Markets in India :Trends and Issues

Livelihood of over 33% is not from agriculture Share of expenditure on food items is going down over time Significant increase in the real per capita expenditure on education. Rural woman is coming out of the closet Awareness of the rural consumer is on the rise Rapid industrialization and availability of other sources of income have driven the rural consumers to the mainstream market Extremely Low usage/penetration Largely a distribution war rather than a promotion or price war Levels of Literacy Lack of Proper Communication and infrastructure facilities Low Per Capita Income
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Rural Markets :The Tactics.

Keep SKUs small , price it cheap and position it on value for money Focus on distribution and market presence and not on competition Segment the market Understand the rural consumer and tailor promotional activities accordingly Work around poor infrastructure and distribution bottlenecks. Select appropriate channels
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Defining the Problem & Research Objectives

Exploratory Research Sheds light on problem suggest solutions or new ideas.

Descriptive Research

Ascertain magnitudes.

Causal Research

Test cause-and-effect relationships. Tests hypotheses about causeand-effect relationships.

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Research Approaches
Observational Focus-group Focus

Survey
Behavioral Experimental
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Data Sources
Depth Interviews Focus Group Surveys Video Tapes ,TRP Monitors and other Electronic DC Devices. Internal Sources Government Publications Periodicals and Books Commercial Data On-Line On Associations Business Information 42

The Marketing Research Process

Defining the problem and research objectives Developing the research plan Collect the information

Present the findings

Analyze the information

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Good Marketing Research...

Is scientific Is creative Uses multiple methods Realizes interdependence of models & data Acknowledges the cost & value of information Maintains healthy skepticism Is ethical

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Some of your options

P&G HUL ITC CocaCoca-Cola Godrej ML Alshaya Diageo Nokia Cadburys Dabur Marico GSK Pepsi Asian Paints Nestle Coats J&J CP

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Best of Luck for Summers !

For any queries, please feel free to contact Mayank (W-413 || C: 9748662249||) (W46