MARKETING

Marketing is Business and Business is

marketing
Definitions of MARKETING

 The performance of business activities that direct the flow of

goods and services from producer to consumer.

 Getting the right goods , to the right people in the right place
, at the right time , at the right price , with the right level of
communication profitably.

 Identifying the needs, wants , desires of consumers and

fulfilling them in such a way that the customer is delighted
and the company objectives are met profitably.

 Solving customer problems profitably.

Definitions of MARKETING

 Marketing consists of all activities by which a company

adapts itself to its environment-creatively and profitably
 Marketing is a social and managerial process by which
individuals and groups obtain what they need and want
through creating , offering and exchanging products of
value with others.
 Difference Between Marketing & Sales
 Marketing Sales
1. Focus on customer Focus on seller (product)
2. Is about profit this year is about revenue this week
3. Delighting the customer converting product into cash
4. Both new and repeat New customers is a priority,
customers important not bothered much about
with focus on repeat customers repeat customers.
5. Long term vision Short Term Outlook (week/
month)
 Business Mission SWOT Analysis Goal Formulation

Strategy
Formulation

Business-Strategic Planning Process

Program
Formulation

Implementation

Feedback &
Control
 GOAL FORMULATION

Objective in Quantitative Terms

e.g- To increase market share to 15% in 2 years.

Strategy Formulation
Michael Porter – 3 generic strategies
- Goals indicate what a business unit wants to achieve
- Strategy answers how to get there.
1. Overall cost Leadership :- Texas Instruments, Bajaj Auto
2. Differentiation : Achieving Superior Performance in an important customer benefit
area
e.g. : Quality Leader : Sundaram Fasteners
Style Leader : Porsche Sports Car
Technology Leader : Infosys
3. Focus: One or more narrow market segments, product line , geographical region etc.
Understand the wants and pursue either cost or differentiation
e.g. Arrow Shirts

Beware of Marketing Myopia

SEGMENTATION

Segmentation Base Variables

A) Geographic
 Region North South, East, West
 City Size Major Metros, Sub –Metros, Town

 Climate Hot, cold, humid

B) Psychographic
Conservative, Status Seekers
 Lifestyle
 Personality Extrovert, Introvert, Aggressive
SEGMENTATION

C) Demographic
 Age 0-11,12-19,20-34 etc.
 Sex Male, Female
 Family Size 1-2,3-4,5+
school, Graduate, PG
 Education
Farmer, Professional,
 Occupation
Housewife, Retired
<15k,16-25k,26-35k etc.
 Income Hindu, Muslim, Sikhs,
 Religion Christians
SEGMENTATION

D) Behavioral
 Benefit Quality, Service, Economy, Speed,
Prestige.

 Use Related
Heavy, Medium , Light users
1) Usage Rate:
Unaware, aware, interested
2) Awareness Status
enthusiastic.
Strong, Medium , None
3) Brand Loyalty

 Use-Situational
Leisure, work, Morning, Night
Time/Objective Gift, Fun , Achievement
Positioning

 Positioning starts with the product. But Positioning is not

what you do to a product. Positioning is what you do to the
mind of the prospect.

 Easiest way to get into the mind - Be First

KODAK- Photography
Xerox -- Copier
Hertz --- Rent-a –car
Positioning

6 STEPS IN POSITIONING PROGRAM

 What position do you own
 What position do you want to own?
 Whom must you outgun
 Do you have enough money.
 Can you sustain .
 Do you match your position.
PRODUCT

 Defn: A product is anything that can be offered to a market for

attention, acquisition, use or consumption that might satisfy a want
or need.
e.g. :- Physical Goods :-- Cars, W/M
Services :- Training
Persons :- Michael Jackson
Ideas : - Family Planning

Five Levels of Product

Level 1 : Core Benefit : Fundamental benefit that the

customer is buying . E.g. :- Hotel :-Rest, CTV :- Entertainment
Product
 Level 2:- Generic Benefit : Basic version of the product.
e.g. : Hotel : consists of a building with rooms.
W/M : Metal/plastic body with console
panel

 Level 3 : Expected Product : A set of attributes and

conditions that buyers normally expect and agree when
they purchase the product.
e.g. : Hotel : Clean Bed, soap, towels,
telephone
CTV : Tuning on remote, cable ready.
Product

 Level 4 : Augmented Product : includes additional services

and benefits that distinguishes the company’s offer from
competitor’s offers.
e.g. : Hotel : Complimentary breakfast, Flat CTV,
24 Hrs checkout, etc.

 Level 5: Potential Product: All augmentations and

transformations that the product might ultimately undergo in
the future.
e.g. : Computer compatible TV (which can operate at
room temperatures)
BRANDING
 “Products don’t sell , Brands sell”
The ultimate aim of product manager must be to
convert the product into a successful brand.

Japanese Name : TOKYO TSHUSIN KOGYO

KABUSHIKI KAISHA
English name : Tokyo Telecommunications
Engineering company
BRANDING
 CITIBANK : The citi never sleeps.
 HSBC : The world’s local bank.
 Canara Bank: Growing to serve. Serving to grow.
 L’OREAL: Because you’re worth it.
 Maybelline: May be she’s born with it. May be its Maybelline.
 GO GOA : 365 days on a holiday.
 Kerala : God’s own country.
 Retreat : city ends. Life begins.
 KL : VISION CITY
 Malaysia : Truly Asia.
 Singapore : Singapore Roars
 Hong Kong: Live it up.
BRANDING
 BPL : Believe in the best.
 Videocon : Bring home the leader
Technology for health and Pleasure.
 Sansui :Better then the best
Born in Japan . Entertaining the world.
 LG :Digitally yours.
 Nokia :Connecting people
 Motorola : Intelligence everywhere.
 Ceat Tyres : Born Tough.
 Femina : For the woman of substance.
For generation W.
BRANDING

 Orange : Wherever you go, our network follows.

 Reliance India Mobile : Kar lo Duniya Mutthi Mein.
 Aaj Tak : Sabse Tej.
 Chevrolet optra : The new name for luxury.
 Santro Xing : The sunshine car.
 Tata Indigo: Spoil Yourself.
 Mitsubishi Lancer: Always in control.
 Raymond : For the complete man.
 Tata Salt : Desh ka namak.
 Louis Philippe: The upper crest.
 BRANDING
 Defn:- A name ,symbol, design which is intended
to identify the goods ,services of one company and
to differentiate the goods from those of
competitors.

BRAND NAME DECISION

 Individual Brand Name : P & G :- Ariel, Pantene
 A Blanket Family Name : Philips
 Company Name combined with individual product names:-

Britannia 50-50
Videocon Bazoomba
BRANDING

Brand Strategy
 Line Extension
 Brand Extension
 Multi Brand
 New Brands
PRICING
 Differential Pricing : Same brand is sold at different
prices/different times to consumers.

 Competitive Pricing : Prices are set to exploit competitive

position.

 Product Line Pricing : Related brands are sold at prices

that exploit mutual dependencies.
Pricing
 DIFFERENTIAL PRICING :

1) Periodic Discounting : - “Skimming Strategy”

Cater to early adopters ----after that the price reduced to cater
to the next group of buyers.
e.g. : BPL MOBILE/ORANGE.

2) Second Market Discounting : “Dumping” --Firm’s selling

Price in foreign market is below its average cost in home
country. (e.g. dumping by china)
Pricing
 B) COMPETITIVE PRICING :

1) Penetration Pricing : Price substantially below main

competitors. (AKAI, AMUL)

2) Geographic Pricing : In same country prices

different to
take advantage of sales tax/transportation savings.
 Pricing
 Product Line Pricing :
1) Complementary Pricing :

Captive Pricing : Razor & Blades, Cameras & Films , Auto

&
Spare Parts, VCD Player & Software.

Two Part Pricing : Service Industry :-

Fixed + variable usage fee (MTNL)
Entry fee + every ride /game/place
separate pricing :-- SENTOSA ISLAND (SINGAPORE)
2) PREMIUM PRICING : Basic & Deluxe Hotel
rooms, Front & Tear
Auditorium seats, Basic & Deluxe cars:-

Firms make profit on Premium versions

Pricing
 Product Line Pricing
3) Product Bundling : Season pass cheaper then daily tickets
Car + accessories , the price is lesser then
if each item is bought separately.

4) Image Pricing : Firms bring out an identical version of its

current product with a different name/packaging and a
higher price. The intention is to signal quality.
Promotion mix / IMC
 Advertising
 Sales Promotion
 Personal Selling
 PR and publicity
 Direct marketing
Sales promotion
Consumer Promotion
(Manufacturer point of view)
 To increase sales of self brand
 To divert attention from competition brands.
 Enables manufacturers to adjust to periods of low demand.
 Induce customers to try new products/brands.

Customer point of view.

 Enables customers to have a better understanding of real prices.
 Consumers feel good that they get value for money deals.
Sales Promotion

Consumer Promotion Tools:

 Samples : Free samples with TOI , Mid-day, Filmfare.
 Coupons: FMCG companies: 15% discount coupon or some
rupees off for the next purchase.
 Price Packs: Pack of 2 or more at reduced price.
 Banded Pack : Two related products banded together
(toothpaste with toothbrush, VCD player with software.)
 Contests : Answer a few questions, write a slogan.
 Free Trials: Free auto drives.
 Warranties: 3 yr on CTV, 7 yrs on compressor.
Sales Promotion

 Scratch ’n’ win offer:

 Money back offer
 Loyalty promotion: Frequent Flyer programs
 Cross promotion: Two related product categories
promoting together , mostly the second product is free.
 Tie-in promotion : used in conjunction with consumer
durables wherein total is lower then if bought separately.
Dealer promotion Tools
 Annual Schemes
 Quarterly schemes:
 Scratch ’n’ win scheme:
 Distribution

 Retailing : Consists of the activities involved in selling

goods and services to ultimate consumers. A retail sale is
one in which the buyer is an ultimate consumer and the
buying motive for a retail sale is always personal or family
satisfaction derived from the final consumption of item
being purchased.
 Wholesalers: Wholesaling is concerned with the activities
of those persons or establishments which sell to retailers
and other merchants , and/or to industrial , institutional and
commercial users , but who don’t sell in significant
amount to ultimate consumers.
Distribution Strategies
 EXCLUSIVE DISTRIBUTION : Distributing through
company outlets or franchisee e.g. : LG PLAZA, HONDA
Showrooms:- only company products are available.

 INTENSIVE DISTRIBUTION : Placing the products in

as many outlets as possible.
Products : Soaps, cigarettes, soft drinks , BPL MOTS etc.
( each outlet has various brands )
Distribution Strategies
 SELECTIVE DISTRIBUTION :
Here companies select a combination of Exclusive
distribution (only company’s products) & Intensive
Distribution (some important outlets which are multibrand
outlets)
e.g. SAMSUNG , VIDEOCON
GOODS-SERVICES CONTINUUM

PURE GOODS Goods Service Pure

Related Related Services

Pizza-Food Banking
Televisions service Legal Services
Financing-car
Lipstick Bus-Transport Image Consulting
Warranty-mixer
oven equipment - Hairstyling
Service contract-
car leasing
computer
Hotel room-
Lodging
 Differences between Goods and services

Goods services Tangible Intangible Homogeneous

Variable/heterogeneous Production and distribution
Production, distribution and
are separated from consumption consumption are simultaneous
processes.
A thing An activity or a process
core value produced in factory core value produced in buyer
seller interactions
can be stocked cannot be stocked
Transfer of ownership no transfer of ownership
customers donot participate customers participate in the
in the production process production process
Services Marketing

 Defn: A service is any act or performance that one party

can offer to another that is essentially intangible and
doesn't result in the ownership of anything . Its production
may or may not be tied to a physical product.

E.g : Airlines, hotels,banks,insurance,brokers , real estate

companies, police,post office, colleges,hospitals.
Services Marketing
Characteristics of service

 Intangibility
 Inseparability
 Perishability
 Variability
Services Marketing

 Intangibility : Cannot be seen , tasted,felt, heard or

smelled before purchase.
“Tangibilize the intangible”
e.g HDFC bank
1) People : quick service,courteous,helpful
2) Machinery : state of the art ATMs, WAN network etc
will connote modern and effective bank.
3) Place : Exterior, Interior ambience : should connote class.
Services Marketing

 Inseparability: Services are typically produced and

consumed simultaneously.
 Perishability: Services cannot be stored.
Unused electric power, idle seats in bus, train
represent business which is lost forever.

 Variability: Services are highly variable , since they

depend on who provides them and when and where they
are provided.
Perishability
 Empty seats in a stadium for a cricket match cannot be carried over to
provide more seating in the next match.
 Empty seats in a 10.30 Sahara airlines flight from Mumbai to Delhi cannot
be carried over to provide more seating in next flight.
 In a bank, hours on weekdays when tellers are idle cannot be stored and
used for Saturday when long lines are forming
INCONSISTENCY (variability)
 Indian airlines doesn't give the same quality of service on its each flight.
 The performance of an artist in a theater is not of the dame standard in each
performance.
 The front office manager in a hotel doesn't provide the same quality of
service to each customer he deals.
 Detailed list of characteristics of services
 Intangibility
 Perishability
 Inseparability
 Variability/heterogeneity
 Ownership:(consumers cannot own the services)
 Simultaneity: either users go to the service provider (beauty parlor) or
providers go to the users:----> channel of distribution is short
 Quality measurement
 Nature of demand : demand fluctuates considerably by season and by
day of the week and even hour of the day e.g : public transport has
maximum traffic during peak morning and evening hours
Restaurant have peak lunch and dinner times Heavy rush
during Diwali /april, may school holidays for trains etc.
 Physical Evidence

 Customers judge the service quality through the physical evidence

 defn : The environment in which the service is delivered and where the
firm and the customers interact;and any tangible commodities that facilitate
performance or communicate the service.
 Physical evidence enhances customer’s perception of quality.
 The general elements of physical evidence include (Organisational
Physical facilities)(service scape) 1) Exterior facilities
Exterior design Signage Parking Landscape
Surrounding environment
 Physical evidence

 2) Interior Facilities .Interior design Equipment Signage

Layout Air quality/temperature
 3) Other tangibles Business cards Stationery Billing
statements Reports Employee dress/uniform Brochures
Physical Evidence - customer point of view
SERVICE Physical Evidence Other Tangibles
Airlines Airline lounges Tickets
Duty free shops Embarkation cards
Terminal Exteriors Uniformed employees
Air plane exterior Food
Air plane interior beverages
décor
seats
ambience
music
Theme Park Gate area Brochures
Parking area Tickets
Signage costumed characters
Layout uniform
Rides
Lighting
Music
Insurance Interiors Policy document
décor Brochures
seats Periodic statements
ambience
 People

 Service encounter : For service marketers, the core of the service element is
the interaction between those providing services and the customer , which is
known as service encounter. Carlzon(1987) described this interaction as
“moment of truth “.
 To achieve customer satisfaction appropriate processes are designed to
ensure that the service encounter meets customer expectations.
 To deliver the satisfactory services , the employees of a company have tio
play an important role.
 Employees must possess personal qualities , ability to understand and satisfy
customer needs , flexibility , skills and knowledge.
 Friendly and warm employees increase customer loyalty.
 The management in order to deliver satisfactory service must develop jobs
to satisfy individuals needs of employees and address following issues:---
PEOPLE
 A) Employees : Recruitment Training
Motivation Team Work
 B) Customers Education Training
 C) Communicating Culture and values D)
Employee Research
People
 Employees
Customer perceives quality of service from appearance, interpersonal
behavior , attitude of contact personnel.
The frontline managers are the impression makers of an organization
In many services like hair dressing, ticketing, legal
services, medical services, child care, it is the contact employee who is
delivering service .
 The employees should be developed to deliver the quality dimensions
Reliability, Assurance, Tangibles, Empathy and Responsiveness.
 PROCESS

 Process is the way of undertaking transaction , supplying information

and providing services in a way which is acceptable to the customer
and effective to the organization.
 Services are rendered and experienced simultaneously.(Inseparability).
It is the process through which consumers interact with service
provider.
E.g Tourism : booking systems for travel and accommodation.,
use of credit cards for payments, design of queuing system at visitor
attraction.
 While designing a process , the process designer has to maintain a
balance between functionality, security , aesthetics and ease of use by
customer..
 Critical Moments : Customer remains an integral part from pre-
consumption stage through to post-visit feedback.
 By monitoring service encounters it is possible to design service delivery
systems which guide the interaction between 1) front-line staff and
customers 2) front-line and support staff 3) pre-delivery, delivery,
post delivery 4) staff and suppliers. The above concept is called service
blueprinting .
 Service Blue Print : is a visual portrayal of a service plan. It is a
detailed map or flow chart. This is a technique which is used when
planning a new or revised process and prescribing how it ought to function.
Preparation of Blue Print : 1) Represent the service in the form of its
molecular structure. 2) Break down the process into logical steps.
3) Recognize the variability in the process 4) Identify the back stage
elements in the process
 Blue Print of Gents barber -.
front stage

Greet customer Direct Ask cut ask Receive Thank customer

on arrival customer to customer hair customer payments on departure.
waiting for for product
area haircut requirments
requiremnts

back stage

select
opening times furniture
training and update m eet prepare
order on style laundry towel sales rep cash statement
newspaper And apron
magazines bank transfer.
sweep and
clear hair