What Is Marketing?

Marketing refers to activities a company undertakes to promote the buying or selling of a product or

service. Marketing includes advertising, selling, and delivering products to consumers or other
businesses. Some marketing is done by affiliates on behalf of a company.

Product, price, place, and promotion are the Four Ps of marketing. The Four Ps collectively make up the
essential mix a company needs to market a product or service. Neil Borden popularized the idea of
the marketing mix and the concept of the Four Ps in the 1950s.

Product

Product refers to an item or items the business plans to offer to customers. The product should seek to
fulfill an absence in the market, or fulfill consumer demand for a greater amount of a product already
available. Before they can prepare an appropriate campaign, marketers need to understand what
product is being sold, how it stands out from its competitors, whether the product can also be paired
with a secondary product or product line, and whether there are substitute products in the market.

Price

Price refers to how much the company will sell the product for. When establishing a price, companies
must consider the unit cost price, marketing costs, and distribution expenses. Companies must also
consider the price of competing products in the marketplace and whether their proposed price point is
sufficient to represent a reasonable alternative for consumers.

Place

Place refers to the distribution of the product. Key considerations include whether the company will sell
the product through a physical storefront, online, or through both distribution channels. When it's sold
in a storefront, what kind of physical product placement does it get? When it's sold online, what kind of
digital product placement does it get?

Promotion

Promotion, the fourth P, is the integrated marketing communications campaign. Promotion includes a
variety of activities such as advertising, selling, sales promotions, public relations, direct marketing,
sponsorship, and guerrilla marketing.
So why is marketing important? The reasons why you really do need it are as follow -

 Marketing is an effective way of engaging customers

It’s important for your business to engage the customers. Marketing is a tool to keep the
conversation ongoing. Engaging customers is different from pushing your offers. Engaging
involves furnishing your customers with relevant information about your products and your
business as well. It’s all about creating fresh content. Tell your customers what they don’t know.
Let it be interesting and worth their time. Social media is one of the best platforms where you
can engage your customers.

 Marketing helps to build and maintain the company’s reputation

The growth and life span of your business is positively correlated to your business’s reputation.
Hence, it’s fair to say your reputation determines your brand equity. A majority of marketing
activities are geared towards building the brand equity of the company. Your business’s
reputation is built when it effectively meets the expectations of its customers. Marketers use
effective communication, branding, PR and CSR strategies to ensure that a business’s reputation
is maintained.

 Marketing helps build a relationship between business & its customers

Marketing research segments should be based on demographics, psychographics, and consumer
behavior. Segmentation helps the business meet the needs of its customers hence gaining their
trust. The product team ensures the business delivers what’s promised at the right time. This
makes the customers brand loyal. Loyal customers will have the confidence to buy more
products from you. The trust and understanding between the business and its customers make
your commercial activities more.

 Marketing is a communication channel used to inform customers

Marketing informs your customers about the products or services you’re offering them. Through
marketing, the customers get to know about the value of the products, their usage and
additional info that might be helpful to the customers. It creates brand awareness and makes
the business stand out. There’s stiff competition in the market and you need to be a constant
voice to convince the customers. Inform your customers of discounts and other competitive
tricks you intend to use.

 Marketing helps to boosts sales

Marketing utilizes different ways to promote your products or services. Once a product has been
advertised, it’s already on the radar and this increases your chances of selling it. Customers may
want to try your products or services and this will trigger a purchase decision. When customers
are happy about your products or services, they become your brand ambassadors without your
knowledge.

 Marketing creates revenue options

During the startup phase, your options are sparse since you’re mostly cash-strapped. This limits
your options. As your marketing strategies generate more customers and revenue opportunities,
you’ll begin having options. Having options is comparable to having a nice war chest. Having
options will give you the courage you need to penetrate new markets.
 What Is Market Segmentation?

Market segmentation is a marketing term that refers to aggregating prospective buyers into
groups or segments with common needs and who respond similarly to a marketing action.
Market segmentation enables companies to target different categories of consumers who
perceive the full value of certain products and services differently from one another.

Understanding Market Segmentation

Companies can generally use three criteria to identify different market segments:

1. Homogeneity, or common needs within a segment

2. Distinction, or being unique from other groups

3. Reaction, or a similar response to the market

For example, an athletic footwear company might have market segments for basketball players
and long-distance runners. As distinct groups, basketball players and long-distance runners
respond to very different advertisements.

Market segmentation is an extension of market research that seeks to identify targeted groups
of consumers to tailor products and branding in a way that is attractive to the group. The
objective of market segmentation is to minimize risk by determining which products have the
best chances for gaining a share of a target market and determining the best way to deliver the
products to the market. This allows the company to increase its overall efficiency by focusing
limited resources on efforts that produce the best return on investment (ROI).

Companies can segment markets in several ways:

 Geographically by region or area

 Demographically by age, gender, family size, income, or life cycle

 Psychographically by social class, lifestyle, or personality

 Behaviorally by benefit, use, or response

Examples of Market Segmentation

Market segmentation is evident in the products, marketing, and advertising that people use
every day. Auto manufacturers thrive on their ability to identify market segments correctly and
create products and advertising campaigns that appeal to those segments.

Cereal producers market actively to three or four market segments at a time, pushing traditional
brands that appeal to older consumers and healthy brands to health-conscious consumers,
while building brand loyalty among the youngest consumers by tying their products to, say,
popular children's movie themes.
 Understanding Market Segments

A market segment is a category of customers who have similar likes and dislikes in an otherwise
homogeneous market. These customers can be individuals, families, businesses, organizations,
or a blend of multiple types. Market segments are known to respond somewhat predictably to a
marketing strategy, plan, or promotion. This is why marketers use segmentation when deciding
a target market. As its name suggests, market segmentation is the process of separating a
market into sub-groups, in which its members share common characteristics.

To meet the most basic criteria of a market segment, three characteristics must be present.
First, there must be homogeneity among the common needs of the segment. Second, there
needs to be a distinction that makes the segment unique from other groups. Lastly, the
presence of a common reaction, or a similar and somewhat predictable response to marketing,
is required. For example, common characteristics of a market segment include interests,
lifestyle, age, gender, etc. Common examples of market segmentation include geographic,
demographic, psychographic, and behavioral.

What is Segmentation ?

Segmentation refers to a process of bifurcating or dividing a large unit into various small units
which have more or less similar or related characteristics.

Market Segmentation

 Market segmentation is a marketing concept which divides the complete market set up into
smaller subsets comprising of consumers with a similar taste, demand and preference.

 A market segment is a small unit within a large market comprising of like minded individuals.

 One market segment is totally distinct from the other segment.

 A market segment comprises of individuals who think on the same lines and have similar
interests.

 The individuals from the same segment respond in a similar way to the fluctuations in the
market.

Basis of Market Segmentation

 Gender

The marketers divide the market into smaller segments based on gender. Both men and women
have different interests and preferences, and thus the need for segmentation.

Organizations need to have different marketing strategies for men which would obviously not
work in case of females.

A woman would not purchase a product meant for males and vice a versa.
 The segmentation of the market as per the gender is important in many industries like
cosmetics, footwear, jewellery and apparel industries.

 Age Group

Division on the basis of age group of the target audience is also one of the ways of market
segmentation.

The products and marketing strategies for teenagers would obviously be different than kids.

Age group (0 - 10 years) - Toys, Nappies, Baby Food, Prams

Age Group (10 - 20 years) - Toys, Apparels, Books, School Bags
Age group (20 years and above) - Cosmetics, Anti-Ageing Products, Magazines, apparels and so
on

 Income

Marketers divide the consumers into small segments as per their income. Individuals are
classified into segments according to their monthly earnings.

The three categories are:

High income Group

Mid Income Group
Low Income Group

Stores catering to the higher income group would have different range of products and
strategies as compared to stores which target the lower income group.

Pantaloon, Carrefour, Shopper’s stop target the high income group as compared to Vishal Retail,
Reliance Retail or Big bazaar who cater to the individuals belonging to the lower income
segment.

 Marital Status

Market segmentation can also be as per the marital status of the individuals. Travel agencies
would not have similar holiday packages for bachelors and married couples.

 Occupation

Office goers would have different needs as compared to school / college students.

A beach house shirt or a funky T Shirt would have no takers in a Zodiac Store as it caters
specifically to the professionals.

Types of Market Segmentation

 Psychographic segmentation

The basis of such segmentation is the lifestyle of the individuals. The individual’s attitude,
interest, value help the marketers to classify them into small groups.
 Behaviouralistic Segmentation

The loyalties of the customers towards a particular brand help the marketers to classify them
into smaller groups, each group comprising of individuals loyal towards a particular brand.

 Geographic Segmentation

Geographic segmentation refers to the classification of market into various geographical areas.
A marketer can’t have similar strategies for individuals living at different places.

Nestle promotes Nescafe all through the year in cold states of the country as compared to
places which have well defined summer and winter season.

McDonald’s in India does not sell beef products as it is strictly against the religious beliefs of the
countrymen, whereas McDonald’s in US freely sells and promotes beef products.

A set-up where two or more parties (also called buyers and sellers) are engaged in transaction of
goods and services in exchange of money is called a market.

At the market place the sellers sell their goods to the consumers (buyers) in exchange of
money.

Let us go through the following examples:

Nokia offers wide range of handsets for both males as well as females.

The handset for females would be sleeker and more colourful as compared to sturdy handsets
for males. Males generally do not prefer stylish handsets.

The organizations can’t have similar products for all individuals.

Perfumes and deodorants for females have a sweet fragrance whereas perfumes for males have
a strong fragrance.

A marketer can’t have similar strategies for all consumers.

The process of creating small segments comprising of like minded individuals within a broad
market refers to market segmentation. Market segmentation helps in the division of market into
small segments including individuals who show inclination towards identical brands and have
similar interests, attitudes and perception.

Need for Market Segmentation (Why Market Segmentation?)

Not all individuals have similar needs. A male and a female would have varied interests and
liking towards different products. A kid would not require something which an adult needs. A
school kid would have a different requirement than an office goer. Market Segmentation helps
the marketers to bring together individuals with similar choices and interests on a common
platform.

 Market Segmentation helps the marketers to devise appropriate marketing strategies and
promotional schemes according to the tastes of the individuals of a particular market segment.
 A male model would look out of place in an advertisement promoting female products. The
marketers must be able to relate their products to the target segments.

 Market segmentation helps the marketers to understand the needs of the target audience and
adopt specific marketing plans accordingly. Organizations can adopt a more focussed approach
as a result of market segmentation.

 Market segmentation also gives the customers a clear view of what to buy and what not to buy.
A Rado or Omega watch would have no takers amongst the lower income group as they cater to
the premium segment. College students seldom go to a Zodiac or Van Heusen store as the
merchandise offered by these stores are meant mostly for the professionals. Individuals from
the lower income group never use a Blackberry. In simpler words, the segmentation process
goes a long way in influencing the buying decision of the consumers.

An individual with low income would obviously prefer a Nano or Alto instead of Mercedes or
BMW.

 Market segmentation helps the organizations to target the right product to the right customers
at the right time. Geographical segmentation classifies consumers according to their locations. A
grocery store in colder states of the country would stock coffee all through the year as
compared to places which have defined winter and summer seasons.

 Segmentation helps the organizations to know and understand their customers better.
Organizations can now reach a wider audience and promote their products more effectively. It
helps the organizations to concentrate their hard work on the target audience and get suitable
results.

teps in Market Segmentation

1. Identify the target market

The first and foremost step is to identify the target market. The marketers must be very clear
about who all should be included in a common segment. Make sure the individuals have
something in common. A male and a female can’t be included in one segment as they have
different needs and expectations.

Burberry stocks separate merchandise for both men and women. The management is very clear
on the target market and has separate strategies for product promotion amongst both the
segments.

A Garnier men’s deodorant would obviously not sell if the company uses a female model to
create awareness.

Segmentation helps the organizations decide on the marketing strategies and promotional
schemes.
 Maruti Suzuki has adopted a focused approach and wisely created segments within a large
market to promote their cars.

Lower Income Group - Maruti 800, Alto

Middle Income Group - Wagon R, Swift, Swift Dzire, Ritz
High Income Group - Maruti Suzuki Kizashi, Suzuki Grand Vitara

Suzuki Grand Vitara would obviously have no takers amongst the lower income group.

The target market for Rado, Omega or Tag Heuer is the premium segment as compared to
Maxima or a Sonata watch.

2. Identify expectations of Target Audience

Once the target market is decided, it is essential to find out the needs of the target audience.
The product must meet the expectations of the individuals. The marketer must interact with the
target audience to know more about their interests and demands.

Kellogg’s K special was launched specifically for the individuals who wanted to cut down on their
calorie intake.

Marketing professionals or individuals exposed to sun rays for a long duration need something
which would protect their skin from the harmful effects of sun rays. Keeping this in mind, many
organizations came with the concept of sunscreen lotions and creams with a sun protection
factor especially for men.

3. Create Subgroups

The organizations should ensure their target market is well defined. Create subgroups within
groups for effective results.

Cosmetics for females now come in various categories.

 Creams and Lotions for girls between 20-25 years would focus more on fairness.

 Creams and lotions for girls between 25 to 35 years promise to reduce the signs of
ageing.

4. Review the needs of the target audience

It is essential for the marketer to review the needs and preferences of individuals belonging to
each segment and sub-segment. The consumers of a particular segment must respond to similar
fluctuations in the market and similar marketing strategies.

5. Name your market Segment

Give an appropriate name to each segment. It makes implementation of strategies easier.

A kids section can have various segments namely new born, infants, toddlers and so on.

6. Marketing Strategies
 Devise relevant strategies to promote brands amongst each segment. Remember you can’t
afford to have same strategies for all the segments. Make sure there is a connect between the
product and the target audience. Advertisements promoting female toiletries can’t afford to
have a male model, else the purpose gets nullified.

A model promoting a sunscreen lotion has to be shown roaming or working in sun for the
desired impact.

7. Review the behavior

Review the behavior of the target audience frequently. It is not necessary individuals would
have the same requirement (demand) all through the year. Demands vary, perceptions change
and interests differ. A detailed study of the target audience is essential.

8. Size of the Target Market

It is essential to know the target market size. Collect necessary data for the same. It helps in
sales planning and forecasting.