MARKETING

MANAGEMENT SET I
[MB0030]
ARJUN BHAT
ROLL NO 520913495
01/12/2009
 MARKETING MANAGEMENT SET I

Q 1 Explain BCG Matrix

The BCG Matrix method is the most well-known portfolio management tool. It is
based on product life cycle theory. It was developed in the early 70s by the Boston
Consulting Group. The BCG Matrix can be used to determine what priorities should
be given in the product portfolio of a business unit.

To ensure long-term value creation, a company should have a portfolio of products

that contains both high-growth products in need of cash inputs and low-growth
products that generate a lot of cash. The Boston Consulting Group Matrix has 2
dimensions: market share and market growth. The basic idea behind it is: if a
product has a bigger market share, or if the product's market grows faster, it is better
for the company.

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There are four segments of the BCG Matrix (presented above) where the various
products are placed in the portfolio of the company. These are:-

• Question Marks (high growth, low market share)

o Question Marks have the worst cash characteristics of all, because

they have high cash demands and generate low returns, because of their low
market share.

o If the market share remains unchanged, Question Marks will simply

absorb great amounts of cash.

o These products are in growing markets but have low market share.

o Question marks are essentially new products where buyers have yet
to discover them.

o The marketing strategy

is to get markets to adopt these
products so as to convert them
to Stars for the company.

o Question marks have high demands and low returns due to low
market share.

o These products need to increase their market share quickly or they

become dogs.

o The best way to handle Question marks is to either invest heavily in

them to gain market share or to sell them.

• Stars (high growth, high market share)

o Stars are defined by having high market share in a growing market.

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o Stars are using large amounts of cash. Stars are leaders in the
business. Therefore they should also generate large amounts of cash.

o Stars are frequently roughly in balance on net cash flow.

o Stars are the leaders in the business but still need a lot of support for
promotion and placement.

o If market share is kept, Stars are likely to grow into

cash cows.

• Cash Cows (low growth, high market share)

o Cash cows are in a position of high market share in a

mature market.

o If competitive advantage has been achieved, cash

cows have high profit margins and generate a lot of cash
flow.

o Because of the low growth, promotion and placement investments are

low.

o Investments into supporting infrastructure can improve efficiency and

increase cash flow more.

o Cash cows are the products that businesses strive for.

o Cash Cows are often the stars of yesterday and they are the
foundation of a company.

• Dogs (low growth, low market share)

o Dogs are in low growth markets and

have low market share.

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o Dogs should be avoided and minimized.

o Expensive turn-around plans usually do not help.

o Dogs must deliver cash, otherwise they must be liquidated.

The BCG Matrix and the “one size fits all strategies” notion

The BCG Matrix method can help to understand a frequently made strategy mistake:
having a one size that fits all strategy approach, such as a generic growth target (9
percent per year) or a generic return on capital of 9.5% for an entire corporation.

In such a scenario:

• Cash Cows Business Units will reach their profit target easily. Their
management have an easy job. The executives are often praised anyhow.
Even worse, they are often allowed to reinvest substantial cash amounts in
their mature businesses.

• Dogs Business Units are fighting an impossible battle and, even worse, now
and then investments are made. These are hopeless attempts to "turn the
business around".

• As a result all Question Marks and Stars receive only mediocre investment
funds. In this way they can never become Cash Cows.

These inadequate invested sums of money are a waste of money. Either these SBUs
(Small Business Units) should receive enough investment funds to enable them to
achieve a real market dominance and become Cash Cows (or Stars), or otherwise
companies are advised to disinvest. They can then try to get any possible cash from
the Question Marks that were not selected.

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Other uses and benefits of the BCG Matrix

• BCG matrix helps a company to use the experience curve to its advantage, it
enables the company to manufacture and sell new products at a price that is
low enough to get early market share leadership. Once it becomes a star, it is
destined to be profitable.

• BCG model is helpful for managers to evaluate balance in the firm’s current
portfolio of Stars, Cash Cows, Question Marks and Dogs.

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• BCG method is applicable to large companies that seek volume and

experience effects.

• The model is simple and easy to understand.

• It provides a base for management to decide and prepare for future actions.

Limitations of the BCG Matrix

Some limitations of the Boston Consulting Group Matrix include:

• It neglects the effects of synergy between business units.

• Market growth is not the only indicator for attractiveness of a market.

• Sometimes Dogs can earn more cash than Cash Cows.

• The problems of getting data on the market share and market growth.

• There is no clear definition of what constitutes a "market".

• A high market share does not necessarily lead to profitability all the time.

• The model uses only two dimensions – market share and growth rate. This
may tempt management to emphasize a particular product, or to divest
prematurely.

• A business with a low market share can be profitable too.

• The model neglects small competitors that have fast growing market shares.

Thus, basically the BCG Matrix is useful for a company to achieve balance between
the four categories of products a company produces. As a particular industry
matures and its growth slows, all business units become either cash cows or dogs.

The overall goal of this ranking is to help corporate analysts decide which of their
business units to fund, and how much; and which units to sell. Managers are
supposed to gain perspective from this analysis that allowed them to plan with

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confidence to use money generated by the cash cows to fund the stars and, possibly,
the question marks.

***

Q 2 Describe the Marketing Mix for Pepsi?

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Product:

A business needs to consider the products that it produces and the stage of the
product life cycle that a product is at. Marketing strategies will vary according to the
type of product and its stage in the life cycle.

In case of Pepsi, the 300ml bottle and now days the new small or commonly known
as the “chota pepsi” is very much popular. The Pepsi Co. is even thinking of
introducing their new Pepsi-Aha, but presently they are concentrating more on the
normal Pepsi as the rural market is a niche market. Pepsi is even successful in
introducing the big 1-1.5 liter PET bottles in the rural markets. These big bottles are
very popular during big festivals and marriages.

Price:

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Most businesses use a "cost plus" method for setting the prices of their products.
This involves determining unit production costs and then adding in a profit margin.
However, many other factors are involved. Consider "perceived price" (what you
think consumers will be prepared to pay), demand elasticity (is it elastic or
inelastic?), competitors' pricing (can you afford to undercut their prices?), pricing
objectives (what do you want to achieve increased market share? increased profits?
market leadership? etc.)
Example 2 Perfume
‫מ‬ How much does it cost to make?
‫מ‬ Can businesses afford a "price war"?
‫מ‬ Why is Coca Cola so successful?

As far as the pricing goes, the 300 ml Pepsi bottle is priced at Rs. 10. But the
company soon realized that this pricing worked in the urban markets but not in the
rural markets as in the rural markets, Pepsi is not a necessity but a luxury. They
found out that people in the rural markets bought cold drinks only if there was some
occasion. A price point of Rs 10 for a 300 ml bottle has proved a major deterrent: it
has kept away new consumers in the urban and semi-urban pockets, and it has
blanked out the far larger rural markets where annual per capita consumption is less
than a bottle. So the Rs. 10 bottle was not that successful. But their sales increased
after introducing the “chota Pepsi”. This 200ml Pepsi was reasonably priced
between Rs.5- Rs.7. This was a major weapon for the expansion of the rural market.
Pepsi expects the small-size offering to account for 30 per cent of volumes this year
compared with 18 per cent last year.

But there are other areas of concern — principally that the 200
ml offering should not cannibalize 300 ml sales. In that case, there will be no market
growth. That is why pricing could be crucial. Pepsi, for instance, has reckoned that
giving consumers 33 per cent (100 ml) less cola at 50 per cent of the price (Rs 5) is
not a sustainable option and can, at best, be used as an introductory offer.

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The conclusion is based on hard facts. Last year, the beverage giants test-marketed
200 ml bottles at a price of Rs 5. Instead of growth, Pepsi discovered that 300 ml
drinkers merely shifted to the 200 ml variant, the market remained stagnant and
everyone lost money. The conclusion was clear: cutting prices does not necessarily
expand the market.

Place

This generally refers to the physical locations of product sales as well as the
methods of distribution. However, it is also considered to be the "place" or
"position" in the market of the product; refer to information below. Businesses need
to make many decisions related to "place": access, parking, competition, physical
location etc.

It’s the most important P in the cola wars — Place. And nothing evokes more
passion in Pepsi and Coke than distribution. Major innovation is underway on the
distribution front at Pepsi, pre-selling being the biggest of all. It’s been successfully
test marketed in Bangalore, Baroda and Coimbatore — and may soon roll out
nationally.

In case of the distribution network, there is no involvement of wholesalers in the

distribution of products. It is more like an agent network. The companies have
divided the country into various regions and established a franchisee in each region.
The franchisees have their own bottling plants and manage all the day-to-day
operations. However, of late, the soft drinks companies have started setting up
company owned bottling units have been acquiring some of its franchise bottles.

In the current system, the strike rate in the Delhi market is about 40 per cent, which
can be improved to 80 per cent in the peak season, claims a franchise director. The

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result for Pepsi could be significant savings. “Colas service just 7.5-8 lakh accounts
compared to the other FMCG players who service three times the number.
Innovation in our distribution system will take us closer to the 21 lakh figure,” says
Vats, a franchise director.

Pepsi believes in direct distribution whereas Coke doesn’t. It mainly concentrates

on dealers and most importantly cutting costs. “There are plenty of innovations
possible in distribution that can cut costs”, says a Pepsi official.

The company has developed special freezers that allow its products to stay chilled
despite power cuts of three to four hours. It will also use traditional iceboxes to sell
its product in rural India. For the rural markets, Pepsi is looking at the wholesale
route since the logistics of direct distribution are too huge to handle in the interiors.

Promotion

This refers to the promotion of the product to the target market. This is achieved
through a combination of: advertising: use of electronic and print media. The
"reach" (how many people will see the advert), frequency (how many times will I
advertise the product?) and impact of the advertising must also be evaluated.

Personal selling: what happens in the "shop", contact between sales people and
consumers or customers. Sales promotion: use of gimmicks and incentives e.g.
competitions.

Sponsorship and promotional licensing: including specific products sold under

license that promotes the business (e.g. football jumpers).
Publicity or public relations: "adversarial" in local papers or special promotional
materials.

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Due to the cola wars promotion, and advertising has always been an integral part for
both the cola cos: Pepsi and Coke. But for the first time perhaps in the history of
cola wars, the strategies of the two giant cos are diverging in India. Whether it’s
business or product strategies or the critical distribution game plan, the archrivals
are taking roads that do not meet. Mr. Bakshi of Pepsi Co. is bringing a change in
their distribution and marketing strategies. Now days where Coke is concentrating
more on the 200ml bottle, Mr. Bakshi of Pepsi says “The 200ml bottle gets zero
demand in the rural market.” He is concentrating on the 1.0 liter bottles of Pepsi.
The Pepsi Co. had used an excellent marketing strategy here. During the Lagaan
mania they were distributing free tickets in the rural markets along with their 1.5-
liter PET bottles. Pepsi made this 1.5-liter PET bottle very famous for their special
festive occasions and marriage.

Well the popularity of the product has also increased due to their advertisements or
basically famous cricket and bollywood personalities endorsing this product. For
instance the Sachin “Aala re Aala” advertisement where even he is wearing a mask
along with those rural kids. Or you can even take the new Sachin and Amitabh
Bachchan advertisement where both of them say “ Yeh Dil Maange More!!!!!!!”
Sachin has done many advertisements for Pepsi in the span of 10 years.

Pepsi’s rural market advertisement- Pepsi has unveiled a major campaign in

Andhra Pradesh, roping in top Telugu film star, Pawan Kalyan, even as the star's
elder brother, Chiranjeevi, is into pushing Coca-Cola's Thums Up. Pawan Kalyan,
however, ruled out any rivalry between him and his brother. Though he will sing
Yeh Dil Maange more, his brother will say Yeh Dil Maange no more. “We have our
lives and we have our own choices,” he said on the possible in-house cola feud.

Pepsi also kicked off a rural campaign, spread over two months. Decorated Pepsi
vans will roll out into market of the State. Every consumer drinking a Pepsi from
these vans will get to play a game and win prizes. These include Pawan Kalyan
memorabilia, T-shirts, autographed posters and calendars.

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Explaining the reason for choosing Pawan Kalyan to endorse Pepsi, Mr. Rohit Ohri,
Director HTA, Pepsi's ad agency, said Pepsi and Pawan Kalyan were going to be an
ideal combination. “Both are so youthful, energetic and fun-loving,” he said. Mr.
Vijay Shanker Subramaniam, Vice-President (Marketing), Pepsi Foods Ltd, said the
company was starting an “aggressive campaign” in Andhra Pradesh. Apart from the
van operations, which were flagged off by Pawan Kalyan, other campaigns have
been lined up throughout the year.

Later, Pawan Kalyan presented a cheque for Rs 5 lakh to Mr. Mehmood Ali, a
mechanic with the Andhra Pradesh State Road Transport Corporation for winning
Pepsi's Mera number ayega campaign.

Lastly, we all know that though Coke ranks 1st with 57 % of the market share
(which includes Thums –up too), Pepsi ranks 2nd with 43% of the market share. The
Pepsi Co. has fought a bitter struggle upwards starting from a zero market share.
When Pepsi entered the market in 1989, they faced the daunting task of pacifying
Indian swadeshi activists alone. Their trucks were smashed and offices ransacked so
as to dissuade them from entering the Indian market. Whereas when Coke entered
(or re-entered) the Indian market in 1993, the situation had been smoothed out by
Pepsi already, and the atmosphere was extremely conducive to foreign
multinationals coming to India. Therefore, though Coke ranks 1st, it got this position
only after introducing the Parle products who already had a 70% market share at that
point of time. Presently Pepsi Co. is also concentrating on its other products like
slice, mirinda and aquafina. Their next aim is to popularize their other products like
sodas, then the new Pepsi Aha- the apple drink and beat coke to become the new
market leader.
***

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Q 3 Choose any well known company & study the micro and macro environment for
the same.
I would like to take the example of Pepsi co and study the micro ad macro
environment for the same.

The Micro environment consists of the following factors:

1. The suppliers:

The suppliers for PepsiCo India include the bottle suppliers for the soft drinks.
These include the Pet bottles and the Glass bottles. One of the most vital products
required in the operation is Refrigerator. PepsiCo does not manufacture the
refrigerators; instead they are supplied by different vendors who get time bound
contracts from the company.

2. Marketing Intermediaries

PepsiCo India provides the salt to all the bottling plants in the Country that carry out
the bottling operations.

COBO: These are Company owned bottling operations operating directly under the
Company. Out of 32 bottling plants, PepsiCo owns 15.

FOBO: These are Franchise owned bottling operations. R K Jaipuria group does all
the franchisee-bottling operations for PepsiCo India; currently R K J Group has 17
bottling plants for Pepsi.

Warehouses: These are Company or franchisee owned warehouses spread over

various locations that cover the respective territories and come under the purview of
their respective Area or Territory Offices. Stocks are sent from the bottling plants to

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these warehouses, from where they are sent to the C & F centers and Distributor
Points.

C & F Centers: These are the biggest centers in the distribution network and
receive proper assistance from the Company (either COBO or FOBO). The C & F
center is owned by a private player and not by the Company. The vehicles (Delivery
Vans) are owned by the Company, and the Salesmen at the C & F points are on the
Company Payroll.

Distributors: These are small, compared to C & F centers. Everything at the

Distributor point owned and managed by the distributor, even the salespersons are
on the Distributors payroll.

Wholesalers: These are smaller than C & F centers and Distributor points and get
the stock directly from the Company or Franchisee. They get their stock directly
from the Company and thus get special rates and extra discounts from the Company.

Slums: They are generally smaller than the Wholesalers are. However, they get
special discounts from the C & F centers and Distributor points.

All the different players in the distribution channel namely C & F centers,
Distributor points, Wholesalers and Slums have different designated markets and are
not supposed to operate in the market designated to any other player.

Retailer: Retailers are the most important chain in the distribution channel of Pepsi
as they are the only point of contact with the customers. Retailers get their stock
from all the other channel members in the distribution channel.

3. Customers

The target customer for PepsiCo is primarily the youth. But, because of increasing
competition from Coke PepsiCo has expanded its target customer base which now
includes people who are prospects for beverages beyond the CSD category. PepsiCo
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has started targeting this segment by offering products in the Non- CSD category,
these include fruit based non-carbonated drinks, juice based drinks, energy drinks,
sports drinks, snack food (from the snack food division i.e. ‘Frito Lay’).

4. Competitors

The real competition is between Pepsi and Coke. Presence of competition will
ensure expansion of the market by collective efforts, which is growing at a rate of
25% annually. There is tremendous potential considering the per capita consumption
of India, which is a measly 0.6 liters as compared to US where it is 83.5 liters.
Presently Pepsi has stolen a march over its rival because of its marketing efforts.

5. The company

It is to be borne in mind that not only in case of Pepsi but also in case of any other
considerably large business enterprise, though the main object of the business is to
make profit, which results from the expansion of markets coupled with intensive
marketing efforts. But for the success of the marketing objectives, firstly an overall
functional strategy of the company should be formulated, which covers all the
functional areas / departments of the company like human resource, finance, law etc
and secondly, there should be effective coordination among all the departments to
ensure that the attainment of all departmental goals ultimately would result in the
achievement of the goals of the organization.

6. Publics

The publics involved may be subdivided in to channels, investment houses, radio

stations, newspapers, general public and also internal publics include directors of the
company & other staff.

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The Macro Environment of Pepsi consists 0f the following factors:

1. Demographic / Economic Environment:

Demographic environment comprises of people of different ages and class. This

helps the Company in identifying specific target market for specific products.
Similarly, economic environment helps the Company in deciding how much to
spend and accordingly price the products. Pepsi distributes its products considering
this in mind. Cans are distributed in areas that have more youth population and two
lt. bottles are distributed in areas that have more no. of families. 200 ml bottles are
primarily distributed in areas with lower income group people.

2. Technical / Physical Environment:

Technical and physical environment refers to the technical capabilities and the
infrastructural capabilities and requirements of the Company. Pepsi has access to the
best technology for its products and it uses the same technology worldwide for its
products. This was instrumental in helping Pepsi handle the pesticide controversy.

3. Political / legal Environment:

This is one of the most important factors that a company needs to consider while
starting, establishing and expanding operations in any country. Legal Environment is
important because a company needs to confirm to the laws of the land and carry out

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its operations accordingly. While political environment is important as it can play an

important in forming opinions regarding the company. This is the reason why Pepsi
operates in India in collaboration, initially it started its operations in India with
Punjab Government and then it started its operations in the carbonated and non-
carbonated beverage segment in collaboration with RKJ group.

4. Social / Cultural Environment:

This plays an important role in determining the acceptability of the product

according to the socio cultural norms of the market and the effect the company has
on each of these. Companies need to be very careful about this issue as people are
very sensitive about their culture and may not tolerate any infringement. This
determines the ingredients (of the products) and the type advertisement and
promotions used by the Company. Because of these factors, Pepsi primarily uses
Bollywood stars and Cricket stars in India as they are the biggest celebrities and role
models and are widely accepted.

5. Natural Environment

Natural disasters like floods, earthquakes, cyclones etc affect the businesss of the
company. Due to such disaster difficulties may arise in logistics & thus the company
may find difficulties both in the supply side and the demand side. The company may
have to modify its strategies accordingly.

***

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Q 4 Write a short note on Consumer Buying Behaviour

Consumers are individuals, households or businesses who use the products. The
Consumer Buying Behavior is influenced by several factors and thus it is a
challenging task for a marketer to understand the need, buying behaviour before
developing the product and the marketing programme.

Characteristics affecting Consumer Behaviour

I Cultural Factors

1. Culture is the combination of customs beliefs and values of consumers in a

particular nation. Majority of Indians are vegetarians and a company selling
non vegetarian products should analyse these values of the consumer. Ex:
KFC added vegetarian burgers to their menu in India.

2. Subcultures are part of the culture comprising, geographic regions,

religions, nationalities and racial groups. The value system of these groups
differ from others. Ex: Offering special dishes during festivals to attract
people to come to hotels, to enable them to spend time with their family
without wasting time in food preparation.

3. Social class: These are permanent groups in the society whose members
have common liking. According to Mckinsey Consumer Report Indian
consumers can be divided in to 5 categories;
a) Deprived: People earning less than Rs 90,000 per annum. They are
the poorest people. They do seasonal work and less skilled or semi –
skilled.

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b) Aspires: their annual earning is between Rs 90,000 to Rs 2,00,000. it

consists of small shop keepers, industrial workers, small land holding
farmers. Half of their goes in meeting basic amenities and food.
c) Seekers: They earn between Rs 2,00,000 & Rs. 5,00,000. This group
consists of fresh workers, middle level workers, businessmen. This
group varies widely on the age, attitude and other factors.

d) Strivers: They belong to the group who earn between Rs 5,0,000 to

Rs 10,00,000. People in this category are considered very successful.
This group consists of businessmen, senior government officials,
large farmers and professionals. Their earnings are enough to fulfill
their aptitude for materials. They are leading the consumption led
growth in India.

e) Global Indians: They are earning more than Rs 10,00,000. it consists

of senior government officials, professionals, business people and top
business executives. They buy international brands and take
international cuisine.

II Social Factors
Humans are social animals; they get influenced by others in their opinions.
Marketers like to identify such influential persons or groups of consumers.
Generally such groups can be divided in to two:
Reference Groups: They are used to evaluate and determine the nature of a given
individual or other group’s characteristics and sociological attributes. “Reference
Groups act as a frame of reference to which people always refer to evaluate their
achievements, their role performance, aspirations & ambitions.

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Family: Indian people give lot of importance to family. People discuss with their
family before purchasing valuable items. Thus companies either use the whole
family or the kids in their promotion.

III Personal factors

Individual factors like age, occupation, lifestyle, and personality influence the
consumer decision making. Personality is the image of people’s traits. Traits include
dominance, self confidence, autonomy, defensiveness, adaptability and
aggressiveness.

IV Psychological factors
Motivation
Abraham Maslow’s “Need Hierarchy Theory”

Maslow saw human needs in the form of a hierarchy, ascending from the lowest to
the highest and he concluded that when one set of needs is satisfied, this kind of
need cases to be a motivator. As per his theory the needs are:

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a) Physiological needs: These are important needs to sustain human life. Like
food , water, shelter etc and unless these needs were satisfied to a certain
level, no other motivating factor worked.

b) Security or Safety Needs: These are the needs to be free from physical
danger and of the fear of loosing a job, property food or shelter.

c) Social Needs: Human beings always strive to be in the society. They need
affection, acceptance & friendship.

d) Esteem Needs: Esteem needs include power, prestige status self confidence
needs. It includes both internal esteem factors and external esteem factors.

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e) Need for Self actualization: These needs are of the highest category in his
hierarchy. It is drive to become what one is capable of becoming. It is to
maximize one’s potential and to achieve something.

Marketer is interested in finding what state of need hierarchy the consumer is in and
what type of product is to be developed to suit his needs. The companies then
highlight the same need in their products.

Perception:
It is the process of acquiring, interpreting, selecting and organizing sensory
information.
The marketing implication of the definition is that the marketer researchews his
consumer profile and communicates the product or service messages either through
radip, demo or television. By seeing, hearing or experiencing the product, the
consumer will develop an image in his mind. It may be:

a) Selective attention
They develop perception about the product only after complete analysis. This is
very difficult to handle as they require more information.
b) Selective Distortion:
The consumer herein will have a predisposition about the organization and will
interpret the message as they like. If the consumer understands the wrong
message in the right way, it is beneficial for the company while if the consumer
interprets the right message in the wrong way it will be harmful to the company.

c) Selective Retention:
Consumer will not remember all the points informed by the company. He / She
may remember the good points of the company and forget the negative points of
the company.

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***

Q 5 Company A has homogenous consumer preferences in the market. Company B

sells different variants of soap. Company C is a small firm with constrained
resources. What do you think is the most suitable market coverage strategy for all
the three companies.

Selecting target market segments

Depending upon the emerging patterns of market segmentation, homogenous

preference as in case of soft drinks sale by Pepsi & Coca-Cola. Diffused perferance
(as in case of automobile market) and clustered preference (market showing natural
segments as in case of occupation having an impact on the types of clothes worn. A
company chooses its market segmentation strategy.

A. Undifferentiated Marketing: It is a market coverage strategy in which the

company treats the target market as one and does not consider that there are
different market segments that exhibit uncommon needs. The company
focuses on the centre of the target market to get the maximum advantage.
The feature “one product – for all segments” calls for presenting one
marketing mix for the target market. Ex: The Coca Cola company sells
Coke, Limca, Thums –up etc. and does not distinguish the target audience.

B. Differentiated Marketing: It is a market coverage strategy in which the

company goes for prop er market segmentation as depicted by its analysis of
the total market. The company therefore, goes for several products or several
segments approach which calls at preparing different marketing mixes for
different segments. This strategy is followed by Hindustan Lever Limited
which sells different soaps and each of them has its own market.

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C. Concentrated Marketing: It is a market coverage strategy in which the

company follows ‘one product – one segment’ principle. Ex: Ashok Leyland
produces large chassis of machine which can be used for buses and trucks.
The manufacturer gets maximum knowledge about the segment’s needs and
therefore acquires special reputation. This strategy can also help a small
company against a large corporation because the small company can create
niches in its one –product one – segment approach by providing maximum
varieties.

Choosing a Market Coverage strategy

The below table depicts an overview of the three market coverage strategies
will help to choose one for a particular company.

Focus Undifferentiated Differentiating Concentrated

Marketing Marketing Marketing
Product One/ Few Many One/Few
Segment All Many One / Few
Marketing Mix One Many One/Few

Given the comparison of different coverage strategies, it is easy to locate the

relevant strategies as shown in the table below:
Undifferentiated Differentiating Concentrated
Marketing Marketing Marketing
Constrained firm More suitable Least suitable Most suitable
resources
Common usage Most suitable More suitable Least suitable
products
Different need Least suitable Most suitable More suitable
satisfying products

It can clearly be seen from the above table, the firm’s resources and the product’s
requirement in its present form (by all or few) would decide the choice of a

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particular market coverage strategy. For example, Coca Cola starts segmenting the
soft drinks market and targets family. Pepsi cannot ignore it because it would be
suicidal for them (segmentation would provide differentiation of products more
easily)
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Q 6 Explain the various bases for positioning a product in a market.

Bases for positioning a product

Overcoming the positioning difficulties enables the company to solve the marketing
mix problem. Thus seizing the “high quality position “ requires the firm to produce
high quality products, charge a high price, distribute through high class dealers and
advertise in high quality media vehicles.

The bases for positioning strategies that are available are:

1. Attribute Positioning: a company positions itself on the basis of an attribute

as size or number of years in existence. Sunfeast positions its snacky brands
as bigger lighter & crisper.

2. Benefit Positioning: The product is positioned as a leader in a certain

benefit.

Automotive :Hyundai Santro

Headline: India’s best loved family car is now also india’s simplest car to drive.
Sub Head: Hyundai introduces Santro Zip plus Automatic No shifting gears, No
clutch, No problems.
Base line: The simplest car to drive (positioning)

3. Application Positioning: Positioning the product as the best for some use or
application. Ex: Kenstar positioned its product as unexpectedly cold.

4. User Positioning: Positioning a product as best for a user group. Ex: Parle –
G positioned a boy in its advertisement as a Rock star. This advertisement
mainly targets mainly kids and boys.

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5. Competitor Positioning: The product claims to be better in some way than

that of a named competitor. Ex: The baseline of Mathrubhumi says” In the
wake of ABC results, Mathrubhumi celebrates the addition of 33,960 copies,
while nearest competitor laments a loss of 7,258 copies. Planners take note”
it is directly mentioning its and the competitor’s sales of newspaper.

6. Product category positioning: The product is positioned as the leader in a

certain product category.Ex: Bajaj CT 100 was positioned as leader in entry
segment bikes.

7. Quality or price positioning:The product is positioned as offering the best

value. Ex: The vegetable oil brand Dhara positioned itself as ‘anokhi
shuddatha, anokha asar’ this means company offers unique purity and unique
effect.

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