Marketing

Marketing
A management process responsible for
identifying
anticipating
satisfying
customer requirements profitably
Purchase Behaviour
Product
Choice
Brand Choice Dealer Choice
Purchase
Amount
Timing
Payment
Terms

Purchase Decision Process
Problem Recognition Information Search
Evaluation of
Consideration Set
Purchase decision
Consumer State of Mind
Motivation Perception Learning Memory
Consumer State of Being
Social Cultural Economic
Other Stimuli
Political Economic Social Technological
Marketing Stimuli (Mix)
Product Place Price Promotion
Consumer Behaviour Model
Basics
Consumer Focus
Satisfying consumer needs (Maslows Model)
Basic (Level 1 and 2)
Social Acceptance (Level 3)
Social Envy (Level 4)

The Core of Marketing
Need
Felt when there is a conflict between desired state
and the current state e.g. thirst, bath
Want
Manifestation of a need
Specific, man-made, e.g. juice, water
Desire
Strong expression of a want e.g. owning a Harley
Davidson or a Ferrari

Mind your Ps
The Base 4
Product
The basic value proposition
Can be a product or service
Price
Consideration given by the consumer
Includes strategies like offers, discounts
Place
Availability at the right place, right time and in the right quantity
Channels such as the internet, wholesalers or retailers
Promoti
on
Communicating the value proposition and benefits offered by the
product or service to the consumer
Branding, PR, advertising, exhibitions, sales promotions
The 7Ps of Services/B2B Marketing
Physical
Physical evidence for a consumer to know more about the experience of
using a particular service
Vital since the service is essentially intangible and lacks a physical form
Pamphlets, testimonials, brochures
Process
Process followed during delivery of service
e.g. processes followed by McDonalds, process at ICICI bank branches
People
The people in the organization who interface with the consumer
Perception of service quality directly depends on the customer service
provided by the people e.g. banking, insurance, wealth management
Communication Channel
TV
Radio Maximum penetration
Print
Internet
Mobile
Social networks (word of mouth)
ATL/BTL
Above The Line
Promotional activities carried out
through conventional forms of mass media
Television
Radio
Print
Billboards
Below The Line
Non-media advertising
Flex/banners at Points of Purchase
Through The Line (Combination of both)

Consumer Behaviour
Different buying behaviour in different situations
Marketing strategy based on consumer behaviour
Impulsive
Picking (Lays, Bingo, Biscuits)
Unplanned
Low-involvement Products
Variety Seeking
Switching




Consumer Behaviour
Brand Loyal Purchasing
Levis Jeans
Van Heusen shirts
Raymond Suits
Problem Solving
Crocin, D-Cold, Burnol, Dettol
Purposive
B2B, industrial marketing, high involvement
products

STP The Essence
Segmentation (Homogeneity of needs)
Geographic (N, S, E, W)
Demographic (age, gender, income)
Psychographic (traits, values, lifestyles)
Thinkers, Achievers, Strivers, Experiencers
Behavioral (benefit-seeking, loyal, usage rates)

Differentiable (through different marketing mix)
Measurable (in terms of size and profitability)
Accessible (e.g. IT services in N/E regions?)
Actionable (product can be customized to serve)
Demographic Segmentation
SEC - Socio-economic Class (Demographic)
Urban SEC System (SEC A1, A2, B, C,D)
Based on occupation and education of the
head of the household

Rural SEC (R1 to R4) System
Based on the education of the head of the
household and the type of housing
Targeting
Assess segment attractiveness
Market growth, competition, channel
attractiveness
Positioning
Conveying the message of differentiation
Creating Points of Parity and Points of Difference
E.g. Low price, high quality, low calorie, refined
etc.
Positioning of Nirma (low price), Surf Excel Matic
(high-quality), Rolls Royce (premium), Harley
Davidson (iconic American)

PESTLE Framework
Used in SWOT analysis for strategic planning,
marketing planning, product development
Political
Tax laws, trade tariffs, trade restrictions
Economic
Growth rate, interest rates, inflation
Social
Health consciousness, attitudes, acceptance
Technological
Legal
Environmental
Porters 5 Forces Model
The Mother of all 2X2s
BCG Matrix Explained
Applications
Brand marketing, Product management
Strategic management, Portfolio Planning
Cash Cows
Low growth and "mature" market
To be "milked" continuously with as little
investment as possible
E.g. Dettol antiseptic, ITC Cigarettes
Dogs
Low growth, low market share
Should be hived off or divested e.g. ITC Infotech
Question Marks (Problem Child)
High growth, low market share
Analyze carefully in order to determine whether
they are worth the investment required to grow
market share e.g. Fiama De Wills, Vivel, Sunfeast
Rising Stars
Invest: High growth, high market share
Hotels and Agri-business for ITC Group
Limitations
Linkage between market share and profitability is
questionable
A low market share product may actually be very
profitable and vice versa

Ansoff Growth Matrix
e.g. Dettol tried to promote its disinfectant as a
medical antiseptic as well as a household cleaning
product (market development)
ITC Bingo chips (product development)
Virgin Group (diversification)
The Product Life Cycle
A product has a limited life during which it poses
different challenges these have to be managed
Introduction Phase (Innovators)
Costs high (promotion and marketing)
Sales volume low
No/little competition
Demand has to be created
Growth Phase (Early Adopters)
Reduced costs due to economies of scale
Sales volume increases significantly
Competition increases with few new players in establishing
market
Maximize market share
Maturity Phase (Majority)
Costs are very low
Sales volume peaks
Increase in competitive offerings
Prices tend to drop due to the proliferation of
competing products
brand differentiation, feature diversification
Industrial profits go down
Saturation and Decline Phase (Laggards)
Costs become counter-optimal
Sales volume decline or stabilize
Prices, profitability diminish
Profits through cost cutting
Focus on production/distribution efficiency rather
than increased sales

Sales and Distribution
Customer
Retailer
Offtake / Tertiary Sale
Wholesaler
Stockist
Secondary Sale
Carrying and Forwarding Agents
Primary Sale
Colgate Palmolive Factory
Stock Transfer
Sales and Distribution N/w
Statistics
HUL
4,000 stockists
6.3 million retailers
Entire urban population + 250 million rural
consumers
Marico
1,000 distributors
2,500 stockists
1.6 million retailers
18 million Indian households
Sales Objectives
Place of the Marketing Mix
Target-driven (push strategy)
Making the product available at the right
place, right time and right quantity
Other Segmentation Models

Globals
Strivers
Seekers
Aspirers
Deprived (Bottom of
Pyramid)
Project
Shakti,
Swasthya
Chetna
Smaller
stock
keeping
units (SKU)
Customizin
g products
& services
for the
lesser
privileged
Marketing Warfare
Defensive
Only the market leader should consider
Best defensive strategy is the courage to attack
yourself
Blocking strong competitive moves
E.g. Colgate Dental Cream Market leader
consistently defensive positioning v/s Close-up,
Pepsodent
Built up defenses on all price points and varieties

Attack
Usually practiced by challenger(s) to the market
leader
Attack a weakness in the leaders position
Car rental firm Avis attacked market leader Hertz
with purely offensive strategies.
Avis talked of being perfect because of the
number two tag
Burger King claims its burgers are bigger and taste
better than McDonald's
Have It Your Way Campaign attacks McDonald's
inflexible consistent production line

Flanking
Practiced by the other smaller players
Flanking move played in uncontested territory
Tactical surprise is the key
Pursuit (follow-up) is equally important
Types
Geographical
Segmented
Nirmas exclusive foray in the low-price segments

Guerilla
Usually implemented by firms who are smaller
in market position/resource base than the
firm they attack
Find a segment of the market small enough to
defend
No matter how successful you become, never
act like the leader
Be prepared to leave at a moment's notice
Babool, Chandrika, Medimix
Marketing Myopia
Be customer-oriented rather than product-oriented
Hollywood
Faced an increased competition from television
Business of entertainment rather than movie-
making
Cadburys
Business of spreading joy (rather than chocolate
making)
Coca-Cola
Business of quenching thirst
Drops of Joy positioning
India FMCG Snapshot
Company Sales Revenue YoY (%) QoQ (%)
Colgate
Palmolive
4076 16.2 4.2
Dabur 6040 16.0 -0.4
Godrej
Consumer
3616 26.3 33.0
HUL 42157 21.1 11.1
ITC 38997 18.4 -0.9
Marico 6009 28.1 28.5
Nestle 10356 23.5 -5.1
Tata Tea 11356 12.3 -3.6