Module I: Marketing for the 21st Century

Marketing

What is it ?

Definition of Marketing

Marketing is the activity,

set of institutions, and

processes

for creating, communicating, delivering, and exchanging

offerings that have value for customers, clients, partners, and society at large. (Approved 2017)

[American Marketing Association]

Kotler and Keller define Marketing management as

the art and science of choosing target markets and

getting,

keeping, and

growing customers through

creating,

delivering, and

communicating superior customer value.

Kotler and Keller also draw a line between

• Social definition [what role marketing plays in society]

- Marketing is a societal process by which

individuals and groups

obtain what they need and want through

 creating,

offering, and

freely exchanging products and services of value with others.

• Managerial Definition [Selling is only the tip of the marketing iceberg ] – Takes Peter Drucker’s viewpoint as

There will always, one can assume, be need for some selling. But the aim of marketing is

‘to make selling superfluous’. The aim of marketing is to know and understand the customer so well that the
product or service fits him and sells itself.

Ideally, marketing should result in a customer who is ready to buy. All that should be needed then, is to make the
product or service available.

10 types of entities

Goods Eg. Physical goods such as car

Services Hair cut
Events Time based event such as major trade shows, artistic performances
Experience A week at the baseball camp with renowned retired baseball player
Persons Operah Winfrey Talk Show, Coffee with Karan, Kaun Banega Crorepati
Places Portraying LasVegas as an adult playground
Properties means intangible rights of ownership of physical or financial property.
Organisations Museum, performing arts organisations, corporations and non profits all use
marketing to boost their public images and to compete for audiences and funds.
Information and Thomson Reuters EBSCO Proquest [different information of interests and offers.
Processes
Ideas Charles Revson of Revlon once observed In the factory we make cosmetics, in the
drugstore we sell hope.

Who markets ?

MARKETERS AND PROSPECTS

• A marketer is someone who seeks a response—attention, a

purchase, a vote, a donation—from another party, called the prospect. If two parties are seeking to sell
something to each other, we call them both marketers.

[Kotler and Keller, 2014]

Demand States

Negative demand

Consumers dislike and may even pay to avoid it. [Critical illness detection test, Coffin, Surgery ]

Nonexistent demand

unaware. [Protein Supplements, Revital for fatigue ]

Latent demand

a strong need that cannot be satisfied by an existing product. [Gaming Machines, Flawless Computers ]

Declining demand

begin to buy less frequently or not at all. [ Mobile Phone Variant ]

Irregular demand

seasonal , monthly, weekly, daily, or even hourly basis.

[ seasonal - Chyawanprash , Air conditioners , Umberella etc]

Full demand

adequately buying all products [Groceries ]

Overfull demand

buy the quantity more, than can be satisfied. [Liquor, JK Rowling’s Harry Potter ]

Unwholesome demand

attracted to products that have undesirable social consequences. [ Cigarette consumption ]

In each case, marketers must identify the underlying cause(s) of the demand state and determine

a plan of action to shift demand to a more desired state.

Structure of flows in the modern exchange economy

A Market System

Key Markets

• Consumer Markets

org. selling mass consumer goods and services eg juices, cosmetics, athletic shoes, and air travel

• Business Markets

org. selling business goods and services

• Global Markets

Orgs in the global marketplace

 • Nonprofit and Governmental Markets

Org. selling to nonprofit organizations

Key Marketing Concepts

Need

Needs are the basic human requirements such as for air, food, water, clothing, and shelter.

Want

The alternative without threat of survival

Demand

Special want with an ability to pay

Source: Kotler and Keller, 2016

1. Stated needs
car for commutation
2. Real needs
car whose operating cost, not initial price, is low.
3. Unstated needs
The customer expects good service from the dealer.
4. Delight needs
would like the dealer to include an onboard GPS system
5. Secret needs
The customer wants friends to see him or her as a savvy consumer

Source: Kotler and Keller, 2016

Offerings and Brands

Orgs. address customer needs by

putting forth a value proposition [ a set of benefits that satisfy those needs] .

The intangible value proposition is made physical by

~ an offering, which can be a combination of

products,

services,

information, and

experiences.

Offerings and Brands

A brand is

an offering from a known source.

Eg. McDonald’s

It carries many associations in people’s minds that make up its image:

hamburgers,

cleanliness,

convenience,

courteous service, and

golden arches

Organisations strive to build a brand image with as many strong, favorable, and unique brand associations as possible.

Value and Satisfaction

The buyer

chooses

offerings ~ perceived to deliver the most value i.e. =

Sum ( tangible + intangible benefits + costs )

Value, a central marketing concept, is primarily a combination of quality, service, and price (qsp), called the customer value
triad. Value perceptions increase with quality and service but decrease with price. We can think of marketing as the
identification, creation, communication, delivery, and monitoring of customer value. Satisfaction reflects a person’s
judgment of a product’s perceived performance in relationship to expectations. If the performance falls short of
expectations, the customer is disappointed. If it matches expectations, the customer is satisfied. If it exceeds them, the
customer is delighted.

Source: Kotler and Keller, 2016

Value and Satisfaction

Marketing Channels

To reach a target market, the marketer uses three kinds of marketing channels.

Communication channels to deliver and receive messages from target buyers and include newspapers, magazines,
radio, television, mail, telephone, billboards, posters, fliers, CDs, audiotapes, and the Internet.

Beyond these,

firms communicate through the look of their retail stores and

Web sites and other media.

Marketers are increasingly adding dialogue channels such as

e-mail,

blogs, and

toll-free numbers

to already familiar monologue channels such as ads.

Value and Satisfaction

Marketing Channels

Distribution channels to display, sell, or deliver the physical product or service(s) to the buyer or user.

These may be direct via the Internet, mail, or mobile phone or telephone, or

indirect through distributors, wholesalers, retailers, and agents as intermediaries.

Service channels to carry out transactions with potential buyers, the marketer also uses service channels that
include warehouses, transportation companies, banks, and insurance companies. Marketers clearly face a design challenge
in choosing the best mix of communication, distribution, and service channels for their offerings.

Source: Kotler and Keller, 2016

We make and deliver value to the customer through

PAID, OWNED, AND EARNED MEDIA

We can group communication options into three categories.

• Paid media

include TV, magazine and display ads, paid search, and sponsorships, all of

which allow marketers to show their ad or brand for a fee.

• Owned media are

communication channels marketers actually own, like a company or brand

brochure, Web site, blog, Facebook page, or Twitter account.

• Earned media

are streams in which consumers, the press, or other outsiders voluntarily

communicate something about the brand via word of mouth, buzz, or viral

marketing methods.

IMPRESSIONS AND ENGAGEMENT

 • Impressions, which occur when consumers view a communication, are a useful metric for tracking the scope or
breadth of a communication’s reach that can also be compared across all communication types. The downside is
that impressions don’t provide any insight into the results of viewing the communication.

• Engagement is the extent of a customer’s attention and active involvement with a communication. It reflects a
much more active response than a mere impression and is more likely to create value for the firm. Some online
measures of engagements are Facebook “likes,” Twitter tweets, comments on a blog or Web site, and sharing of
video or other content. Engagement can extend to personal experiences that augment or transform a firm’s
products and services.

Source: Kotler and Keller, 2016

SUPPLY CHAIN

• The supply chain is a channel stretching from raw materials to components to finished products carried to final
buyers.

Source: Kotler and Keller, 2016

The 4 Ps
central instrument for directing and coordinating the marketing effort.

• Two Levels

The strategic marketing plan

lays out the target markets and the firm’s value proposition, based on an analysis of

the best market opportunities.

The tactical marketing plan specifies the marketing tactics, including

product features,

promotion,

merchandising,

pricing,

sales channels, and

service.

The Marketing Plan

The Planning Implementing and Controlling Cycles of a Marketing Plan

a Marketing Plan usually consists

• Executive summary

• table of contents.

• Situation analysis.

This section presents relevant background data on sales, costs, the market,

competitors, and the macro-environment. How do we define the market, how big is it, and

how fast is it growing? What are the relevant trends and critical issues? Firms will use all

this information to carry out a SWOT analysis.

• Marketing strategy.

Here the marketing manager defines the mission, marketing and financial

objectives, and needs the market offering is intended to satisfy as well as its competitive
positioning. All this requires inputs from other areas, such as purchasing, manufacturing,

sales, finance, and human resources.

• Marketing tactics.

Here the marketing manager outlines the marketing activities that will be undertaken to execute the

marketing strategy.

The product or service offering section describes the key attributes and benefits that will appeal to target
customers.
 The pricing section specifies the general price range and how it might vary across different types of

customers or channels, including any incentive or discount plans.

The channel section outlines the different forms of distribution, such as direct or indirect.

The communications section usually offers high-level guidance about the general message and media
strategy.

Firms will often develop a separate communication plan to provide the detail necessary for agencies and other
media partners to effectively design the communication program.

• Financial projections.

include

a revenue / sales forecast [ forecasted sales volume by month and product category]

an expense forecast [ the expected costs of marketing, broken down into finer categories. and

a break- even analysis [ estimates how many units the firm must sell monthly

(or how many years it will take) to offset its monthly fixed costs and average per-unit variable costs.

A more complex method of estimating profit is risk analysis which gives us three estimates

( optimistic, pessimistic, and most likely) for each uncertain variable affecting profitability, under an assumed
marketing environment and marketing strategy for the planning period.

The computer simulates possible outcomes and computes a distribution showing the

• range of possible rates of returns and their probabilities.

Implementation controls

The last section outlines the controls for monitoring and adjusting implementation of the plan.

Typically, it

spells out the goals and budget for each month or quarter so management can review each period’s
results and take corrective action as needed.
Module II - Consumer Behavior

Required Information for Marketing

• Consumer Research

• Market Segmentation, Targeting and Positioning

• The Marketing Mix (4 Ps)

– Product or service

– Price

– Place

– Promotion

Factors influencing (or determinants of) consumer behaviour

• Cultural

• Social

• Personal

• Psychological

• Economical

Cultural

Culture

Subculture

Social Class

Social

Family

Reference
Role and Status

Personal

Age

Income

Occupation

Life Style

Personality

Psychological

Motivation

Involvement

Perception

Learning

Beliefs and attitude

Economical

Personal Income , Discretionary income and disposable income

Family income

Income Expectations from future

Liquid assets and consumer credit

Government Policy

Level of standards of living

Business vs Consumer Market

Market Segment
Market Segmentation Bases – Consumer Markets

Demographic

Age

Income

Gender

Occupation

Education

Marital Status

etc

Geographic

Region

Population Density

Types of Area

Climate
Behavioural

Occasion

Event

Benefits

Socio Cultural

Culture

Subculture

Social Class

Social Group

Religion

Family and Life Cycle Stage

Psychological

Needs

Personality

Perception

Learning

Attitude

Lifestyle

Usage Rate

Usage Rate

Awareness

Brand Loyalty
The practice of market targeting involves three steps

Evaluating the market segments

Selecting the market segments

Deciding the target strategy

Five different patterns of targeting

Single Segment Concentration - Org selects single segment and concentrate on that

Product Specialisation - Org specialises in marketing a single product and sells it to several segments.

Market Specialisation - Org. serves many needs of particular customer gp

Product Market Specialisation - Org selects number of segments for number of products

Full Market Coverage - Org serves all customer gp with all the products they might need.

five key criteria:

• Measurable. [size, purchasing power, and characteristics]

• Substantial. [large and profitable enough]

• Accessible.

• Differentiable. [ conceptually distinguishable and respond differently to different marketing-mix elements and
programs]

• • Actionable. Effective programs can be formulated for attracting and serving the segments.

Market Targeting

Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market
segment:
The threats these forces pose are

1. Threat of intense segment rivalry

A segment is unattractive if it already contains numerous, strong, or aggressive

2. Threat of new entrants

The most attractive segment is one in which entry barriers are high and exit barriers are low.

3. Threat of substitute products

A segment is unattractive when there are actual or potential substitutes for the product.

4. Threat of buyers’ growing bargaining power

A segment is unattractive if buyers possess strong or growing

5. Threat of suppliers’ growing bargaining power

A segment is unattractive if the company’s suppliers are able to raise

While Targeting and evaluating

firm must consider two factors:

 the segment’s overall attractiveness and

the company’s objectives and resources.

Positioning

Positioning

is the act of designing a company’s offering and image

to occupy

a distinctive place in the minds of the target market.

Positioning requires :

(1) determining a frame of reference by identifying the target market and relevant competition,

(2) identifying the optimal points of parity and points of difference brand associations given that frame of reference,
and

(3) creating a brand mantra to summarize the positioning and essence of the brand.

Positioning - competitive frame of reference

competitive frame of reference

• defines which other brands a brand competes with and therefore which brands should be the focus of competitive
analysis.

IDENTIFYING COMPETITORS

A good starting point in defining a competitive frame of reference for brand positioning is to determine
category membership

• i.e. the products or sets of products with which a brand competes

IDENTIFYING COMPETITORS –

by SWOT and other measures

After - competitive frame of reference

Then define

Points-of-difference (PODs) are attributes or benefits that consumers strongly associate with a brand, positively evaluate,
and believe they could not find to the same extent with a competitive brand.

eg. Apple (design, ease-of-use, and irreverent attitude),

Nike (performance, innovative technology, and winning)

Points-of-parity (POPs), on the other hand, are attribute or benefit associations that are not necessarily unique to the
brand but may in fact be shared with other brands.

eg. All distinct value additions to the basic offering

Brand Mantra

A brand mantra is
 An articulation of the heart and soul of the brand

closely related to other branding concepts like “brand essence” and “core brand promise.”

short, three- to five-word phrases that capture the irrefutable essence or spirit of the brand positioning.

Eg. Disney’s brand mantra - “fun family entertainment”

Their purpose is to ensure

that all employees and external marketing partners understand what the brand is most fundamentally to
represent with consumers so they can adjust their actions accordingly.

Source : (Kotler 2016)

Source: Kotler 2016

Brand and Product

Module – III – Managing Product

Product –

Goods [Tangible ] + Services [ Intangible ]

However, in literature

Products and Goods are used interchangeably.

Definitions –

• A product is

‘anything’ we can offer to a market for

attention,

acquisition,

use, or

consumption that

might satisfy a need or want.

Thus, a product may be

a physical good like a cereal, tennis racquet, or automobile;

a service such as an airline, bank, or insurance company;

a retail outlet like a department store, specialty store, or supermarket;

a person such as a political figure, entertainer, or professional athlete;

an organization like a nonprofit, trade organization, or arts group;

a place including a city, state, or country; or even

an idea like a political or social cause.

New Product – The concept

The NPD process encompasses a series of stages and gates, and is normally referred to as a Stage-Gate process .

Each stage represents a distinct set of related activities, normally grouped into the following five stages:

(1) strategic planning,

(2) concept generation,

(3) Pre-technical evaluation,

 (4) Technical development, and

(5) Commercialization.

Lastly the Product launch finally the process of product life-cycle management (PLCM)

Classification of Products – Kotler’s

A : On the basis of usage -

Nondurable goods [ normally consumed in one or a few uses]

eg. beer and shampoo.

Durable goods [ normally survive many uses]

eg. refrigerators, machine tools, and clothing.

Services [ intangible, inseparable, variable, and perishable products ]

normally require more quality control,

supplier credibility, and

adaptability.

Eg. include haircuts, legal advice, and appliance repairs.

B : Consumer Goods Classification

Shopping Goods –

Furniture, Clothing etc

Speciality Goods –

Car like Mercedes, Select Men’s Suit, Designer Collection

Unsought Goods –

Life Insurance, Gravesstones, Coffin, cemetery plots etc.

Five Levels of products

 Product Mix

To understand product mix we need to understand the product hierarchy.

The Product Hierarchy

stretches from basic needs to particular items that satisfy those needs.

six levels of the product hierarchy, using life insurance as an example:

1. Need family—The core need that bases the existence of a product family.

Example: security.

2. Product family— product classes satisfying core need (with significant effectiveness).

Example: savings and income.

3. Product class— product group within the product family recognized as having a certain functional coherence,
also known as a product category.

Example: financial instruments.

4. Product line— product group within a product class

Example: life insurance.

5. Product type—A group of items within a product line that share one of several possible forms of the product.
Example: term life insurance.

6. Item (also called stock-keeping unit or product variant)—A distinct unit within a brand or product line
distinguishable by size, price, appearance, or some other attribute.

Example : Prudential renewable term life insurance.

Product Life Cycle

A Product life cycle (PLC) which is a depict of a product’s survival in market has four assertions –

i.e. a product

1. Has a definite life

2. Sales goes through different stages depending upon the opportunities available

3. Profit increase or decrease corresponding to different stages

4. Required different strategic push at different stages of the life cycle relating to finance, procurement,
manufacturing and human resource strategies

Typically

A PLC is a bell shaped structure and is divided into four stages –

Introduction— Sales - slow growth

Product - introduced in the market.

 Profits - nonexistent

Growth— Sales - moderate to fast growth

Product - accepted rapidly

Profit - substantial and improving

Maturity— Sales - slowdown but not negative

Product - achieved maximum acceptance (amongst potential buyers).

Profits - stabilize or decline (because of increased competition).

Decline— Sales - negative drift

Product - either decrease or stagnant acceptance

Profits - eroding or ending

Source : Kotler 2016

Module IV – part of assignment / PSDA