Professional Documents
Culture Documents
Guide For
Summers
2015-2016
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36. What can be defined as the luxury market in India? ................................................................ 68
37. What is defined as BOP Market? .............................................................................................. 69
38. What is integrated marketing communication (IMC)? ............................................................. 69
39. What is so special in marketing of services?............................................................................. 70
40. What is Viral Marketing? .......................................................................................................... 71
41. What is Word Of Mouth Marketing? ........................................................................................ 72
42. What are Porter’s Five Forces? ................................................................................................. 73
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1. MARKETING VS SELLING
Selling: Selling includes the activities that get customers to make a purchase. Selling
is closing sales that make you money. E.g., an insurance agent trying to sell
insurance, a salesperson selling encyclopaedias door to door.
A few things included in selling are: presenting, answering questions, making
suggestions, doing proposals or estimates, addressing concerns, negotiating, and
most important, asking for the sale and then completing the sales agreement, etc.
The Difference: The selling concept takes an inside-out perspective. It starts with the
factory, focuses on the company’s existing products, and calls for heavy selling
and promoting to produce profitable sales. The marketing concept takes an outside-
in perspective. It starts with a well-defined market, focuses on customer needs,
coordinates all the activities that will affect customers, and produces profits through
creating customer satisfaction.
Thus we can say that:
Marketing is money OUT the door (marketing is a cost centre)
Selling is money IN the door (selling is a revenue centre)
Marketing is something that creates a favourable environment for sales to
happen.
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Marketing Selling
Customer Focussed Product Focussed
Product is designed as per customer needs Revenue is generated from the product sold
Profit through customer satisfaction Profit through sales maximization
Emphasis on product planning and developing as Emphasis on selling the product already produced
per customer needs
2. STP
Segmentation: The basic idea of segmentation is to identify the different parameters based on
which you further group your customers into segments which will have common needs or will
respond similarly to a marketing action.
Purchase
Region Gender Personality
Modes
Education Readiness
Cultural
Loyalty Status
Background
Targeting: Once the parameters are decided and the different groups corresponding to each
parameter are decided, the next step for a marketer is to decide upon the groups that he shall
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target to sell his product. The aim for every marketer is to decide upon clearly-defined target
groups before embarking upon marketing their product.
Positioning: Positioning is the act of designing the company’s offering in a way so as to develop
a certain image in the minds of the consumers. It helps create an idea in the minds of the
customers of the experience they will have if they choose the product ahead of others.
Example:
Amazon Kindle
Targeting: Urban, Tier-I and Tier- II cities, Income > 5 lpa, Graduates, Culture-oriented,
Ambitious and information seeking, People seeking a convenient mode of reading and
buying books, Voracious readers and people who read while on the move, People with
high awareness of such a technological product, People enthusiastic and positive about
an alternative way of reading books which makes it more convenient for them
Positioning: An alternative way of reading books which makes it more convenient and
offers a technological solution which feels closest to reading a physical book.
For more details, refer to the Gyan Capsule 2 and Gyan Session 2 sent by MarkSoc.
Product
Methods used to improve differentiate the product or increase sales or target sales more
effectively or to gain competitive advantage
• Extension Strategies
• New Edition
• Improvement
• Changed packaging
• Technology
• Specialized Versions
Product Life Cycle and Customer Life Cycle are also important tools for studying the product.
Price
The price is the amount a customer pays for the product. It is determined by a number of factors
including market share, competition, material costs, product identity and the customer's perceived
value of the product. The business may increase or decrease the price of product if other stores have
the same product.
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There are many ways to price a product. Let's have a look at some of them and try to
understand the best policy/strategy in various situations. The following are the five primary pricing
strategies:
1. Penetration Pricing
The price charged for products and services is set artificially low in order to gain market share. Once
this is achieved, the price is increased. This approach was used Hyundai in US and most airline
companies in India.
2. Price Skimming
This is opposite of Penetration pricing. Charge a high price initially because you have a substantial
competitive advantage or have developed strong loyalty in a set of consumers. However, the
advantage is not sustainable for a long period of time. The high price tends to attract new
competitors into the market, and the price inevitably falls due to increased supply or the pool of
consumers willing to pay the price is exhausted. Example would include Gaming consoles, and latest
launches of books.
3. Premium Pricing
Use a high price where there is uniqueness about the product or service. This approach is used
where a substantial competitive advantage exists. Such high prices are charge for luxuries such as
Cunard Cruises, Savoy Hotel rooms, and Concorde flights.
4. Value Pricing
This approach is used where external factors such as recession or increased competition force
companies to provide ‘value’ products and services to retain sales. For a lot of companies value
pricing simply becomes a long term strategy to keep a high barrier for entry in the category. e.g.
Value meals at McDonalds, Prices offered at Walmart and Big Bazaar.
In this type of pricing, the ROI is calculated in the first place, and the cost is arrived at by back
calculation. This approach is usually used by companies which require a high capital investment like
Automobile manufacturers, electric and gas companies etc.
Premium pricing, penetration pricing, economy pricing, and price skimming are the four main pricing
policies/strategies. They form the bases for the exercise. In addition, the following are few more
pricing strategies.
The list is not exhaustive but these should be enough to answer most summers questions on pricing.
Trial Pricing
This is similar to penetration pricing but differs in the objective. Penetration pricing is used to
increase market share of the brand whereas trial pricing is used to increase trials for a new product|
brand. Eg: Nivea face balm
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Economy Pricing
This is a no frills low price. The cost of marketing and manufacture are kept at a minimum.
Supermarkets often have economy brands for soups, spaghetti, etc.
Psychological Pricing
This approach is used when the marketer wants the consumer to respond on an emotional, rather
than rational basis. For example pricing apparels at 699 or 999; Garnier men’s white face wash at Rs
49
Where there is a range of product or services the pricing reflect the benefits of parts of the range.
For example car washes. Basic wash could be $2, wash and wax $4, and the whole package $6.
Another example could be Gym packages.
Companies will attempt to increase the amount customer spend once they start to buy.
Optional 'extras' increase the overall price of the product or service. For example airlines will charge
for optional extras such as guaranteeing a window seat or reserving a row of seats next to each
other or offering a life insurance.
Where products have complements, companies will charge a premium price where the
consumer is captured. For example a razor manufacturer will charge a low price and recoup its
margin (and more) from the sale of the only design of blades which fit the razor.
Here sellers combine several products in the same package. This also serves to move old stock.
Videos and CDs are often sold using the bundle approach.
Promotional Pricing
Pricing to promote a product is a very common application. There are many examples of
promotional pricing including approaches such as BOGO (Buy One Get One Free) or giving 20% off,
etc.
Price Discrimination
Price Discrimination is a pricing strategy where identical or largely similar goods or services are
transacted at different prices by the same provider in different markets. Example – Different costs of
soft drinks at different channels.
Cost Plus – Cost-plus pricing is a pricing method used by companies. It is used primarily because it is
easy to calculate and requires little information. There are several varieties, but the common thread
in all of them is that one first calculates the cost of the product, and then includes an additional
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amount to represent profit. Cost-plus pricing is often used on government contracts, and has been
criticized as promoting wasteful expenditures.
The method determines the price of a product or service that uses direct costs, indirect costs, and
fixed costs whether related to the production and sale of the product or service or not. These costs
are converted to per unit costs for the product and then a predetermined percentage of these
costs is added to provide a profit margin.
Loss Leader – Loss leader or leader is a product sold at a low price (at cost or below cost) to
stimulate other, profitable sales. It is a kind of sales promotion, in other words marketing
concentrating on a pricing strategy. The price can even be so low that the product is sold at a loss. A
loss leader is often a popular article. How one makes profit is by selling other products or services
along with this and making net overall profit. Eg: Supermarkets selling one thing at exceptionally low
price and hence inviting footfall. These people end up buying a lot many things making an overall
profit for the supermarket owner.
Place
A channel of distribution comprises a set of institutions which perform all of the activities utilised to
move a product and its title from production to consumption.
Place is also known as channel, distribution, or intermediary. It is the mechanism through which
goods and/or services are moved from the manufacturer/ service provider to the user or consumer.
There are six basic 'channel' decisions:
Do we use direct or indirect channels? (e.g. 'direct' to consumer, 'indirect' via a wholesaler).
Single or multiple channels.
Cumulative length of the multiple channels.
Types of intermediary.
Number of intermediaries at each level (e.g. how many retailers in Southern India).
Which companies as intermediaries to avoid 'intra-channel conflict' (i.e. in-fighting between
local distributors).
Market segment - the distributor must be familiar with your target consumer and segment.
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Changes during the product life cycle - different channels can be exploited at different
points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were sold
via a few specific stores.
Producer - distributor fit - Is there a match between distributors’ policies, strategies, image,
and yours? Look for 'synergy'.
Qualification assessment - Establish the experience and track record of your intermediary.
Training - How much training and support will your distributor require?
Promotion
Another one of the 4P's is 'promotion'. This includes all of the tools available to the marketer for
'marketing communication'. As with Neil H.Borden's marketing mix, marketing communications has
its own 'promotions mix.' Think of it like a cake mix, the basic ingredients are always the same.
However if you vary the amounts of one of the ingredients, the final outcome is different. It is the
same with promotions. You can 'integrate' different aspects of the promotions mix to deliver a
unique campaign. The elements of the promotions mix are:
Personal Selling
Sales Promotion
Public Relations
Direct Mail
Trade Fairs and Exhibitions
Advertising
Sponsorship
Let us look at the individual components of the promotions mix in more detail. Remember all of the
elements are 'integrated' to form a specific communications campaign.
1. Personal Selling
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Personal Selling is an effective way to manage personal customer relationships. The sales person
acts on behalf of the organization. They tend to be well trained in the approaches and techniques of
personal selling. However sales people are very expensive and should only be used where there is a
genuine return on investment. For example salesmen are often used to sell cars or home
improvements where the margin is high.
2. Sales Promotion
Sales promotion tends to be thought of as being all promotions apart from advertising, personal
selling, and public relations. Sales promotion is of two type – consumer promotions (targeted at
consumers) and trade promotions (targeted at retailers to ensure they buy more of the product to
be kept in the store).
Examples of consumer promotion include the BOGO promotion. Others include couponing, money-
off promotions, competitions, free accessories (such as free blades with a new razor), introductory
offers (such as buy digital TV and get free installation), and so on.
Examples of trade promotion include – trade schemes, free gifts to retailers on purchase of
particular amount of SKU, extra SKUs when purchase crosses a particular number etc.
Public Relations is defined as 'the deliberate, planned and sustained effort to establish and maintain
mutual understanding between an organization and its publics' (Institute of Public Relations). It is
relatively cheap, but certainly not cheap. Successful strategies tend to be long- term and plan for all
eventualities. All airlines exploit PR; just watch what happens when there is a disaster. The pre-
planned PR machine clicks in very quickly with a very effective rehearsed plan.
4. Direct Mail
Direct mail is very highly focussed upon targeting consumers based upon a database. As with all
marketing, the potential consumer is 'defined' based upon a series of attributes and similarities.
Creative agencies work with marketers to design a highly focussed communication in the form of a
mailing. The mail is sent out to the potential consumers and responses are carefully monitored. For
example, if you are marketing medical text books, you would use a database of doctors' surgeries as
the basis of your mail shot.
Such approaches are very good for making new contacts and renewing old ones. Companies will
seldom sell much at such events. The purpose is to increase awareness and to encourage trial. They
offer the opportunity for companies to meet with both the trade and the consumer.
6. Advertising
Advertising is a 'paid for' communication. It is used to develop attitudes, create awareness, and
transmit information in order to gain a response from the target market. There are many
advertising 'media' such as newspapers (local, national, free, trade), magazines and journals,
television (local, national, terrestrial, satellite) cinema, outdoor advertising (such as posters, bus
sides).
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7. Sponsorship
Sponsorship is where an organization pays to be associated with a particular event, cause or image.
Companies will sponsor sports events such as the Olympics or Formula One. The attributes of the
event are then associated with the sponsoring organization.
The elements of the promotional mix are then integrated to form a unique, but coherent campaign.
Process
Physical Evidence
What is significant about services is the relative dominance of intangible attributes in the
make-up of the “service product”. Services are a special kind of product. They may require
special understanding and special marketing efforts. The need for the extension is due to the high
degree of direct contact between the providers and the customers, the highly visible nature
of the service process, and the simultaneity of the production and consumption. While it is
possible to discuss people, physical evidence and process within the original-Ps framework (for
example people can be considered part of the product offering) the extension allows a more
thorough analysis of the marketing ingredients necessary for successful services marketing.
People
People are the most important element of any service or experience. Services tend to be
produced and consumed at the same moment, and aspects of the customer experience are altered
to meet the 'individual needs' of the person consuming it. Most of us can think of a situation
where the personal service offered by individuals has made or tainted a tour, vacation or
restaurant meal. Remember, people buy from people that they like, so the attitude, skills and
appearance of all staff need to be first class. Some ways in which people add value to an
experience, as a part of the marketing mix, are - training, personal selling and customer service.
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Process
Process is another element of the extended marketing mix, or 7P's.There are a number of
perceptions of the concept of process within the business and marketing literature. Some see
processes as a means to achieve an outcome, for example - to achieve a 30% market share a
company implements a marketing planning process.
Another view is that marketing has a number of processes that integrate together to create an
overall marketing process, for example - telemarketing and Internet marketing can be
integrated. A further view is that marketing processes are used to control the marketing mix, i.e.
processes that measure the achievement marketing objectives. All views are understandable, but
not particularly customer focused.
For the purposes of the marketing mix, process is an element of service that sees the customer
experiencing an organization’s offering. It's best viewed as something that your customer
participates in at different points in time. Here are some examples to help your build a picture of
marketing process, from the customer's point of view.
Example - Going on a cruise - from the moment that you arrive at the dockside, you are greeted;
your baggage is taken to your room. You have two weeks of services from restaurants and evening
entertainment, to casinos and shopping. Finally, you arrive at your destination, and your
baggage is delivered to you. This is a highly focused marketing process.
Physical Evidence
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Paperwork (such as invoices, tickets and despatch notes)
Brochures
Furnishings
Signage (such as those on aircraft and vehicles)
Uniforms
Business cards
The building itself (such as prestigious offices or scenic headquarters)
Mailboxes and many others
A sporting event is packed full of physical evidence. Your tickets have your team's logos printed on
them, and players are wearing uniforms. The stadium itself could be impressive and have an
electrifying atmosphere. You travelled there and parked quickly nearby, and your seats are
comfortable and close to restrooms and store. All you need now is for your team to win!
Some organizations depend heavily upon physical evidence as a means of marketing
communications, for example tourism attractions and resorts (e.g. Disney World), parcel and mail
services (e.g. UPS trucks), and large banks and insurance companies (e.g. Lloyds of London)
Product Decisions
The term "product" refers to tangible, physical products as well as services. Here are some examples
of the product decisions to be made:
>Product Variety >Quality > Design > Features > Brand name > Functionality > Styling > Returns
> Safety > Packaging > Repairs and Support > Warranty > Accessories and services > Price Decisions
> Pricing strategy (skim, penetration, etc.) > Suggested retail price/List price > Volume
discounts and wholesale pricing > Cash and early payment discounts > Allowances > Credit Terms
and Payment period > Seasonal pricing > Bundling > Price flexibility > Price discrimination
Distribution is about getting the products to the customer. Some examples of distribution decisions
include:
> Distribution channels > Market coverage (inclusive, selective, or exclusive distribution) >
Assortments > Locations > Specific channel members > Inventory management >
Warehousing > Distribution centers > Order processing > Transportation > Reverse logistics
Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of marketing
communication, that is, the communication of information about the product with the goal of
generating a positive customer response. Marketing communication decisions include:
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> Promotional strategy (push, pull, etc.) > Advertising > Personal selling & sales force > Sales
promotions > Public relations & publicity > Marketing communications budget > Direct
marketing
The 7-Ps or Extended Marketing Mix of Booms and Bitner is a Marketing Strategy tool that expands
the number of controllable variables from the four in the original Marketing Mix Model to seven.
The Traditional Marketing Mix model was primarily directed and useful for tangible products. The 7-
Ps model is more useful for services industries and arguably also for knowledge-intensive
environments. The additional 3 Ps are:
People
An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting
the right staff and training them appropriately in the delivery of their service is essential if the
organisation wants to obtain a form of competitive advantage. Consumers make judgments and
deliver perceptions of the service based on the employees they interact with. Staff should have the
appropriate interpersonal skills, aptitude, and service knowledge to provide the service that
consumers are paying for.
Process
Refers to the systems used to assist the organisation in delivering the service. E.g at McDs ,you get a
burger in 2 min. What was the process that allowed you to obtain an efficient service delivery?
Banks that send out Credit Cards automatically when their customers old one has expired again
require an efficient process to identify expiry dates and renewal. An efficient service that replaces
old credit cards will foster consumer loyalty and confidence in the company.
Physical Evidence
Where is the service being delivered? Physical Evidence is the element of the service mix which
allows the consumer again to make judgments on the organisation. If you walk into a restaurant
your expectations are of a clean, friendly environment. On an aircraft if you travel first class you
expect enough room to be able to lay down!
Physical evidence is an essential ingredient of the service mix, consumers will make perceptions
based on their sight of the service provision which will have an impact on the organisations
perceptual plan of the service.
We must remember that the 4p/7p are from the sellers point of view. From the buyers point of view
we have:
Solution: How can I solve my problem? Information: Where can I get information from? Value: What
is my total sacrifice to get the solution? Access: Where can I find it?
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4. AL RIES AND JACK Z TROUT ON POSITIONING
A product's position is how potential buyers see the product. Positioning is expressed relative to the
position of competitors. The term was coined in 1969 by Al Ries and Jack Trout in the paper
"Positioning" is a game people play in today’s me-too market place" in the publication Industrial
Marketing. It was then expanded into their ground-breaking first book, "Positioning: The Battle for
Your Mind".
Positioning is something (perception) that happens in the minds of the target market. It is the
aggregate perception the market has of a particular company, product or service in relation to their
perceptions of the competitors in the same category. It will happen whether or not a company's
management is proactive, reactive or passive about the on-going process of evolving a position.
But a company can positively influence the perceptions through enlightened strategic actions.
In marketing, positioning has come to mean the process by which marketers try to create an image
or identity in the minds of their target market for its product, brand, or organization. It is the
'relative competitive comparison' their product occupies in a given market as perceived by the target
market.
Re-positioning involves changing the identity of a product, relative to the identity of competing
products, in the collective minds of the target market.
De-positioning involves attempting to change the identity of competing products, relative to the
identity of your own product, in the collective minds of the target market.
The above page may answer a lot of “go to market” strategy questions for the students.
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7. BCG MATRIX
Dogs: Low Market Share / Low Market Growth : In these areas, your market presence is
weak, so it's going to take a lot of hard work to get noticed. Also, you won't enjoy the scale
economies of the larger players, so it's going to be difficult to make a profit.
Stars: High Market Share / High Market Growth : Use large amounts of cash; they are
the leaders in business so they should produce large amounts of cash as well. These are fantastic
opportunities, and you should work hard to realize them.
Question Marks (Problem Child): Low Market Share / High Market Growth :
These are the opportunities no one knows what to do with. They aren't generating much revenue
right now because you don't have a large market share. But, they are in high growth markets so the
potential to make money is there. Question Marks might become Stars and eventual Cash Cows, but
they could just as easily absorb effort with little return. These opportunities need serious thought as
to whether increased investment is warranted.
IMPORTANT – One of the questions asked in last year’s Summers process was “the BCG matrix for
Reckitt Benckiser”. It is doubtful that this question will come up again, but it is still something that
students would want to be mindful of.
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8. ANSOFF MATRIX
The Ansoff Product-Market Growth Matrix is a marketing tool created by Igor Ansoff and first
published in his article "Strategies for Diversification" in the Harvard Business Review (1957). The
matrix allows marketers to consider ways to grow the business via existing and/or new products, in
existing and/or new markets – there are four possible product/market combinations.
Ansoff Matrix
Existing Products New Products
Existing
Market Product Development
Markets
Penetration
New
Market Diversification
Markets
Development
Market Penetration - the firm seeks to achieve growth with existing products in their
current market segments, aiming to increase its market share.
Market Development - the firm seeks growth by targeting its existing products to new
market segments.
Product Development - the firms develops new products targeted to its existing market
segments.
Diversification - the firm grows by diversifying into new businesses by developing new
products for new markets.
The matrix illustrates, in particular, that the element of risk increases the further the strategy moves
away from known quantities - the existing product and the existing market. Thus, product
development (requiring, in effect, a new product) and market extension (a new market) typically
involve a greater risk than `penetration' (existing product and existing market); and diversification
(new product and new market) generally carries the greatest risk of all. In his original work, which
did not use the matrix form, Igor Ansoff stressed that the diversification strategy stood apart from
the other three.
While the latter are usually followed with the same technical, financial, and merchandising resources
which are used for the original product line, diversification usually requires new skills, new
techniques, and new facilities. As a result it almost invariably leads to physical and
organizational changes in the structure of the business which represent a distinct break with past
business experience. For this reason, most marketing activity revolves around penetration. The
market penetration strategy is the least risky since it leverages many of the firm's existing resources
and capabilities. In a growing market, simply maintaining market share will result in growth, and
there may exist opportunities to increase market share if competitors reach capacity limits.
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However, market penetration has limits, and once the market approaches saturation another
strategy must be pursued if the firm is to continue to grow.
Market penetration
Market penetration is the name given to a growth strategy where the business focuses on selling
existing products into existing markets.
Market penetration seeks to achieve four main objectives:
Maintain or increase the market share of current products – this can be achieved by a
combination of competitive pricing strategies, advertising, sales promotion and perhaps
more resources dedicated to personal selling
Secure dominance of growth markets
Restructure a mature market by driving out competitors; this would require a much more
aggressive promotional campaign, supported by a pricing strategy designed to make the
market unattractive for competitors
Increase usage by existing customers – for example by introducing loyalty schemes A
market penetration marketing strategy is very much about “business as usual”. The
business is focusing on markets and products it knows well. It is likely to have good
information on competitors and on customer needs. It is unlikely, therefore, that this
strategy will require much investment in new market research.
Market development
Market development is the name given to a growth strategy where the business seeks to sell its
existing products into new markets.
• New geographical markets; for example exporting the product to a new country
• Different pricing policies to attract different customers or create new market segments
For example, Lucozade was first marketed for sick children and then rebranded to target athletes.
This is a good example of developing a new market for an existing product. Again, the market need
not be new in itself; the point is that the market is new to the company.
Product development
Product development is the name given to a growth strategy where a business aims to
introduce new products into existing markets. This strategy may require the development of new
competencies and requires the business to develop modified products which can appeal to existing
markets.
For example, McDonald's is always within the fast-food industry, but frequently markets new
burgers. Frequently, when a firm creates new products, it can gain new customers for these
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products. Hence, new product development can be a crucial business development strategy for firms
to stay competitive.
Diversification
Diversification is the name given to the growth strategy where a business markets new products in
new markets. This is an inherently more risk strategy because the business is moving into markets in
which it has little or no experience. For a business to adopt a diversification strategy, therefore, it
must have a clear idea about what it expects to gain from the strategy and an honest assessment of
the risks.
Virgin Cola, Virgin Megastores, Virgin Airlines, Virgin Telecommunications are examples of new
products created by the Virgin Group of UK, to leverage the Virgin brand. This resulted in the
company entering new markets where it had no presence before.
Now let's define what is - Customer 2 Customer and Word Of Mouth. Customer 2 Customer as
defined by Philip Kotler:
"Customer 2 Customer includes all activities involving interaction between consumers.
Customer 2 Customer activities include auctions between consumers that are facilitated by firms
such as e-bay, personal, classified ads, ad games etc."
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experience.
This illustration proves only one aspect of Customer 2 Customer i.e. Word of mouth. Now
coming to the second aspect, i.e. C2C's role in consumer decision making:
Often we find that in a consumer decision process several individuals get involved. Each of them
plays an influencing role. At times, more than one role may be played by an individual. These roles
are:
1. Initiator
This is the person who sows the seed in a prospective customer's mind to buy the product.
This person may be a part of the customer's family like spouse or parents. Alternatively the
person may be a friend, a relative, a colleague or even the sales person.
2. Influencer
Influencer is a person within or outside the immediate family of the customer who
influences the decision process. The individual perceived as an influencer is also perceived
as an expert. In consumer durable sale the dealer plays an influencing role.
3. Decider
He is the person who actually takes the decision. In a joint family often it's the head of the
family or the elders in the family who take a decision. But in nuclear and single families
and with the increase in the literacy among women and number of working couples, one
finds more often than not, decisions are joint. Husband, wife and even the entire family
taking the decision, particularly on major purchases, is quite common in urban and metro
areas. The decider/s considers both economic and non-economic parameters before
selecting a brand.
It is important to note that the people who play these roles seek different values in the product or
service. The perception of the value is to a large extent influenced by their prior experience of
others, media reports and the marketing cues created by the firm. These values, which may also
be referred to as, market value is the potential of a product or service to satisfy customer's needs
and wants.
The most common and widely used example of C2C marketing is Ebay. Ebay provides sellers a
platform to freely hawk their goods as well as interact with customers. These sellers themselves
are non-business individuals.
A real-life example is auctions, where sellers, who were initially customers themselves, sell goods
that they have bought to other individual customers.
For this the company can hire people who can reach out to the general public as company
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representatives. These representatives can address customers at public places, such as shopping
malls or districts and make them aware about company’s products and services by distributing
flyers containing company’s information or by handing over various forms of promotional materials.
The company’s representatives also undertake door to door marketing to promote company
products or services. B2C marketing also involves advertising through newspapers, television and
radio for better communication.
With the advent of internet, B2C marketing not only helps in developing a direct contact between
the consumer and business house but also allows the businessman to advertise and sell his
products and services in an easy manner
Examples
A family is at home on a Sunday night and is watching television. An advertisement appears that
advertises home delivered pizza. The family decides to order a pizza.
Walking down a supermarket aisle, a single man aged in his early 30's sees a hair care product that
claims to reduce dandruff. He pick's the product and adds it to his shopping cart.
A pensioner visits her local shopping mall. She purchases a number of items including her favourite
brand of tea. She has bought the same brand of tea for the last 18 years.
A B2B sale is to an organization. B2B describes commerce transactions between businesses, such as
between manufacturer and a wholesaler, or between a wholesaler and a retailer. The volume of
B2B transactions is much higher than the volume of B2C transactions. The main reason is that in any
supply chain, there will be many B2B transactions, e.g. involving subcomponent or raw materials,
and only on B2C transaction, i.e. the finished good’s sale to customer. B2B Marketing is driven
purely on the basis of fewer, but larger, customers. It is very necessary to be able to customize
offering based on the buyer’s needs.
Some B2B Marketing Strategies:
B2B Branding – Closely align corporate brands, divisional brands and product/service brands
and to apply brand standards to material often considered informal such as email and other
correspondence.
Product – cost-saving or revenue-producing benefits of products/services should factor
throughout product development and marketing cycle.
People – Usually, the target market for business products are smaller and have more
specialized needs. Thus, there can be multiple influencers on purchase decision, and these
need to be marketed to as well.
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Pricing – Business markets can pay premium prices if the pricing and payment terms are
structured well. This is particularly true in the case of a strong brand.
Promotion – Specific trade shows, analysts, publications, blogs and retail/wholesale
outlets tend to be fairly common to each industry/product area. In essence, with proper
knowledge of your industry/product, the promo strategy almost writes itself.
Place -- The importance of a knowledgeable, experienced and effective direct (inside or
outside) sales force is often critical in the business market. If you sell through distribution
channels also, the number and type of sales forces can vary tremendously and your success
as a marketer is highly dependent on their success.
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Affordability
Acceptability Awareness
Availability
Acceptability
Nokia 1100, LG Sampoorna TV (run way hit, with 100,000 sales in very first year), HUL Pure-IT are the
few examples of how MNC’s are customizing their products for rural markets with the aim of low
price, high quality. The insurance companies are not lagging behind in tapping this market. They are
tailoring made their products; HDFC Standard LIFE topped private insurers by selling policies worth
Rs3.5 crore in total premium. The company tied up with non-governmental organizations and
offered reasonably-priced policies in the nature of group insurance covers. Innovation is the key.
Availability
Ensuring availability of the product or service is another challenge with poor infrastructure. Coke
strategy “Coke is available where, even water is not available”, is successful via their popular hub &
spoke distribution model, where they are giving low cost ice-boxes to distributors. HUL is ensuring
availability of products by using unconventional transport methods like tractors, bullock-carts and
even boats in the backwaters of Kerala.
Affordability
Rural market is low price, high volume market, and companies like HUL has addressed it by
launching Lifebuoy atRs.2 for 50 gm. Cavinkare’s Chik shampoo for 50 paisa (the innovator of
shampoo sachets), Britannia Tiger Biscuit for Rs.5, Marico’s Parachute for Rs.1, are the examples of
how FMCG companies targeting rural market with low pricing strategy.
Awareness
Radio, TV, street plays, remains the medium to advertise. Example: Coca-Cola uses a combination of
TV, cinema and radio to reach 53.6 per cent of rural households. It doubled spending on advertising
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on Doordarshan, which alone reached 41 per cent of rural households. Tag lines like “thanda matlab
Coca-cola”, “what an idea sirjee”, creates rural feel.
Case-in-point: Follow the link below to read about Kan Khajura Tesan, one of the most innovative
solutions for rural awareness started by HUL.
http://www.afaqs.com/news/story/41226_Kan-Khajura-Tesan-The-Full-Story
Conclusion
The rural market has immense potential to deliver welfare activities through new business models,
and companies have realised this. Various projects taken up by the private sector such as ITC’s e-
Choupal, HUL’s Project Shakti, Microsoft’s Project Shiksha and Google’s Internet bus among various
others, are assisting in generating not only awareness but also exploring the ways to get into this still
untapped market.
Consumer
Cost
Convenience
Communication
Consumer – The principle of four C’s of marketing states that your customer should be your prime
focus. Unlike the traditional marketing mix where the primary focus is on Products, in the 4 C’s
model, the primary focus is on the customer. Thus the companies which follow this model believe in
making products which satisfy their customers. They are generally ready to offer customizable
products and because they have a general set of target customers, this principle is only applicable
for smaller market segments and not for mass markets. For mass markets, the traditional marketing
mix can be used. Questions that need to be asked is Who is your customer - or prospective
customer? What are their needs? Where do they live; where do they work; and what do they do for
fun? Where do they get information?
Cost – Cost is equivalent to Pricing in the traditional marketing mix. Cost is a very important
consideration during consumer decision making and hence in the 4 C’s principle, the cost variable is
given special attention. The 4 C’s model generally plans on the basis of Customers and not products.
And hence they have to plan the cost of the product on the basis of their customer. If you are
targeting a SEC A segment, then the costing of the product needs to be premium to have proper
psychological positioning. On the other hand, if your product is for the SEC B and SEC C classes, then
it needs to have a lower costing. Thus over here, costing of the product depends on the customer.
Ask what will your product (or service) cost? How does this compare? What effect will the cost of
your product have on its perceived value (or position) in the competitive marketplace? And most
importantly, what are customers willing to pay?
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Communication – The concept of communication remains same for both, the traditional marketing
mix as well as for the 4 C’s of marketing. Off course, the marketing communications for a company
following the 4 C’s of marketing is completely different as it needs a completely different
Segmentation, targeting and positioning. As said before, the 4 C’s of marketing are generally used
for Niche products. The media vehicles used for marketing communications for a mass product and
that for a niche product are different. A niche marketing company might use more of BTL rather than
ATL whereas in a mass marketing company, ATL communications are very important. Ask yourself;
How will you communicate your offering to customers? What modes of communication are available
to you (or your client)? Which will be most effective ... and what will be the strategic mix of
communications?
All in all, the traditional marketing mix model helps a company define its strategy more efficiently.
However, the 4 C’s model, although not much different, really helps if you are a customer oriented
firm.
ATL (Above the Line): All advertising done through a mass medium like print, TV, cinema etc is ATL.
BTL (Below the Line): All advertising that can be targeted to our TG is termed as BTL. In other words
all advertisements where we can limit the visibility to a particular group of people based on our
desire is termed as BTL advertising. This generally includes means other than the five major media -
the press, television, radio, cinema and outdoors; below-the-line advertising employs a variety of
methods - direct mail, sponsorship, merchandising, trade shows, exhibitions, sales literature and
catalogues, and so on. Below the line promotions are becoming increasingly important within the
communications mix of many companies, not only those involved in FMCG products, but also for
industrial goods. Consumer activations in specific locations are also an important new type of BTL.
With the increasing pressure on the marketing team to achieve communication objectives more
efficiently in a limited budget, there has been a need to find out more effective and cost efficient
ways to communicate with the target markets. This has led to a shift from the regular media based
advertising.
Above the line is much more effective when the target group is very large and difficult to define. But
if the target group is limited and specific, it is always advisable to use BTL promotions for efficiency
and cost-effectiveness.
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"Through the line" refers to an advertising strategy involving both above and below the line
communications in which one form of advertising points the target to another form of advertising
thereby crossing the "line". An example would be a TV commercial that says 'come into the store to
sample XYZ product'. In this example, the TV commercial is a form of "above the line" advertising
and once in the store, the target customer is presented with "below the line" promotional material
such as store banners, competition entry forms, etc.
https://www.youtube.com/watch?v=ts_4vOUDImE
2. ING Vysya Bank also launched a social responsibility campaign, which started on the Internet
and moved to on-ground. It launched a website, www.kidzzbank.com, to educate children
about the importance of saving money and investing. Later, the initiative was taken to
underprivileged children in South India.
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3. Classmate launched the Classmate Man of the Match campaign in 2011. The CMOM activity
worked simply. It allowed the target group to earn 'runs' or points on purchase of Classmate
stationery products. Participants with the maximum number of runs got a chance to meet
Classmate's brand ambassador Yuvraj Singh, and be gratified with Pune Warriors India
merchandise (the IPL team that Classmate was partnering at the time). The campaign made
major use of roadshows and tie ups with CCD to increase its on ground reach.
4. Most of the educational institutes like Career Launcher, Time and PT are holding informative
workshops and free tests for students which give a direct interaction of these institutes with
the target customer, and hence, a suitable platform to sell themselves.
5. Most of the pharmacy companies do BTL promotion by getting shelf-space through doctors
to display their products or by giving away free calcium tablets again through doctors,
knowing that for a patient a personal advise from a doctor would hold more value as
compared to a commercial advertisement.
6. When Vivel launched its Facebook page, it came out with an application that could give
personalized skin care solution. The application was designed in a manner to subconsciously
position Vivel as a skin care expert in the mind of its consumers. Apart from this there was
an option of requesting a free sample. This received a good response amongst consumers
with a total of more than 6500 requests of free sample in the first weekend of the
application launch. Campaign is still up and running at http://www.facebook.com/itcvivel
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7. ‘Igen’ – A cigarette brand was built through below the line marketing efforts. The brand of
cigarette was promoted through organizing parties for the BPO employees on weekly basis
and collecting their database and then making the cigarette available at their door steps, the
exercise was continued for quite a few months and a strong database and customer base
was developed for the brand among the BPO employees.
8. In the media space, Sab TV, the comedy channel from MSM India, devised an interesting
route to reach media planners and buyers during the launch of Bhootwala Serial, India's first
horror comedy. Breaking the clutter, promoters dressed in scary ghostly costumes went
across all agencies like Zenith Optimedia, Lodestar, Lintas Media Group, Starcom, Madison,
Maxus, Mindshare and Mindshare Fulcrum.
A brand is a name or trademark connected with a product or producer. Brands have become
increasingly important components of culture and the economy, now being described as "cultural
accessories and personal philosophies".
A brand is the essence or promise that a product, service or company will deliver or be experienced
by a buyer.
Harley Davidson is a great brand because Harley Davidson motorcycle owners rarely switch to
another brand. Nor do Apple Macintosh users want to switch to Microsoft. The brand amounts to a
contract with the customer regarding how the product will perform.
Richard Branson’s Virgin brand is about fun and creativity. These attributes are projected in all of
Virgin’s marketing activities. Some of Virgin Atlantic’s Airways’ flights include massages, live rock
bands, and casinos. Flight attendants are fun-loving and enjoy joking with the passengers. Branson
uses public relations to project his daring, such as attempting to fly around the world in a hot-air
balloon. To launch Virgin Bride (bridal wear), Branson dressed up in drag as a bride.
Philips as a Brand talks about “Sense and Simplicity”. This is reflected in nearly every product of the
company.
The tagline, logo, personality, association, name, etc. are brand elements and together constitute to
the brand identity.
Some people distinguish the psychological aspect of a brand from the experiential aspect. The
experiential aspect consists of the sum of all points of contact with the brand and is known as the
brand experience. The psychological aspect, sometimes referred to as the brand image, is a
symbolic construct created within the minds of people and consists of all the information and
expectations associated with a product or service.
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Brand name
The brand name is often used interchangeably within "brand", although it is more correctly used to
specifically denote written or spoken linguistic elements of any product. In this context a "brand
name" constitutes a type of trademark, if the brand name exclusively identifies the brand owner as
the commercial source of products or services.
Brand identity
A product identity, or brand image are typically the attributes one associates with a brand, how the
brand owner wants the consumer to perceive the brand - and by extension the branded company,
organization, product or service. The brand owner will seek to bridge the gap between the brand
image and the brand identity. Effective brand names build a connection between the brand
personalities as it is perceived by the target audience and the actual product/service. The brand
name should be conceptually on target with the product/service (what the company stands for).
Furthermore, the brand name should be on target with the brand demographic. Typically,
sustainable brand names are easy to remember, transcend trends and have positive connotations.
Brand identity is fundamental to consumer recognition and symbolizes the brand's differentiation
from competitors.
Poorly executed extension of brand to new product categories can jeopardize current image
of parent brand.
The image and financial figures of parent brand may be endangered due to the failure of
strategy implementation.
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It may cannibalize sales of the parent brand.
Line Extension: A product line extension is the use of an established product’s brand name for a new
item in the same product category. Line extensions happen when the brand launches the new
product in the same category targeting a new segment through new forms, colors, added
ingredients, package sizes etc. Product Extensions help in the growth stage of PLC.
Examples:
A line can comprise related products of various sizes, types, colors, qualities, or prices. Line depth
refers to the number of product variants in a line. Line consistency refers to how closely relate the
products that make up the line are. Line vulnerability refers to the percentage of sales or profits that
are derived from only a few products in the line.
When you add a line extension that is of better quality than the other products in the line, this is
referred to as trading up or brand leveraging.
A Word of Caution - Although we might tend to think that Line Extension leads to more sales due
because of more products and the company is anyways leveraging the brand equity that it has
created. But it can sometime lead to drop in sales too, because it creates confusion in the minds of
the consumer as to what the brand means. On example of that is 7Up. It became popular as a Lemon
Uncola but in 1978 introduced many flavours such as 7Up Gold and Cherry 7Up and various diet
versions too. As a result its sales dropped from 5.7% of the soda beverage market to 4.2%.
There are at least three perspectives from which to view brand equity:
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Financial - One way to measure brand equity is to determine the price premium that a brand
commands over a generic product. For example, if consumers are willing to pay $100 more for a
branded television over the same unbranded television, this premium provides important
information about the value of the brand. However, expenses such as promotional costs must be
taken into account when using this method to measure brand equity.
Brand extensions - A successful brand can be used as a platform to launch related products. The
benefits of brand extensions are the leveraging of existing brand awareness thus reducing
advertising expenditures, and a lower risk from the perspective of the consumer. Furthermore,
appropriate brand extensions can enhance the core brand. However, the value of brand extensions
is more difficult to quantify than are direct financial measures of brand equity.
Consumer - based - A strong brand increases the consumer's attitude strength toward the product
associated with the brand. Attitude strength is built by experience with a product. This importance
of actual experience by the customer implies that trial samples are more effective than advertising in
the early stages of building a strong brand. The consumer's awareness and associations lead to
perceived quality, inferred attributes, and eventually, brand loyalty.
However, brand equity is not always positive in value. Some brands acquire a bad reputation that
results in negative brand equity. Negative brand equity can be measured by surveys in which
consumers indicate that a discount is needed to purchase the brand over a generic product.
In his 1989 paper, Managing Brand Equity, Peter H. Farquhar outlined the following three stages that
are required in order to build a strong brand:
1. Introduction - introduce a quality product with the strategy of using the brand as a platform
from which to launch future products. A positive evaluation by the consumer is important.
2. Elaboration - make the brand easy to remember and develop repeat usage. There should be
accessible brand attitude, that is, the consumer should easily remember his or her positive
evaluation of the brand.
3. Fortification - the brand should carry a consistent image over time to reinforce its place in
the consumer's mind and develop a special relationship with the consumer. Brand
extensions can further fortify the brand, but only with related products having a perceived
fit in the mind of the consumer.
Building brand equity requires a significant effort, and some companies use alternative means of
achieving the benefits of a strong brand. For example, brand equity can be borrowed by extending
the brand name to a line of products in the same product category or even to other categories. In
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some cases, especially when there is a perceptual connection between the products, such
extensions are successful. In other cases, the extensions are unsuccessful and can dilute the original
brand equity.
Brand equity also can be "bought" by licensing the use of a strong brand for a new product. As in line
extensions by the same company, the success of brand licensing is not guaranteed and must be
analysed carefully for appropriateness.
Different companies have opted for different brand strategies for multiple products. These
strategies are:
Single brand identity - a separate brand for each product. For example, in laundry detergents
Procter & Gamble offers uniquely positioned brands such as Tide, Cheer, Bold, etc. Also
known as House of Brands Strategy.
Umbrella branding/ family branding - all products under the same brand. For example, Sony
offers many different product categories under its brand.
Multi-brand categories - Different brands for different product categories. Campbell Soup
Company uses Campbell's for soups, Pepperidge Farm for baked goods, and V8 for juices.
Family of names - Different brands having a common name stem. Nestle uses Nescafe,
Nesquik, and Nestea for beverages.
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16. Brand Rituals
Brand ritual is the performance of an act by the consumers as defined by the brand (Owners). These
days brand rituals are a common strategy adopted by marketers. Some rituals become a part of our
behaviour over time. Few examples are as follows:
1. Cadbury Oreo: - Oreo‘s “Twist Lick Dunk” is a very popular ritual among kids.
2. Close up: - The HA-HA thing which we do by holding our palm in front of our mouth to check
the fresh breath.
3. Pepsi My can: - The way they hold the can in the ads to ask the viewers to do the same.
4. Kitkat: - Push the chocolate out of the paper wrap. Pull your thumb across the lines between
the chocolate bars. Break it. Unwrap and eat.
5. Tequila Shots: - The trademark way of consuming tequila with salt and lemon wedges.
6. Bru Cappuccino: - Sip, Lick... Ummm..!! Denoted how to enjoy the cool drink and the coffee
froth.
7. Wrigley's Chiklets: - Shake the box of chewing gums 2 make that chik-chik noise.
8. Ponds Googly Woogly wooksh:- Squeeze both the cheeks of the person who has used
Ponds cold cream
9. Boomer: - the bubble that everyone started making while chewing the gum.
10. Horlicks: - Epang Opang Jhapang. Try and make a chocolate shake with Horlicks by using
their freebie and this technique.
11. Corona Beer: - Consume the beer with a slice of lemon.
2. (Heinz)Complan vs (GSK) Horlicks: Complan has never been an aggressive player compared
to the market leader Horlicks. This explains the reason why such a powerful brand is
languishing in a distant position of 15% market share compared to the 60 % share of
Horlicks. While Horlicks has been breaking new grounds with a series of variants aiming at
the entire family segment, Complan was lying low all these years. The major happening for
this brand in 2008 was the launch of the new flavor Kesari Badam . In the promotional front,
the brand was in a low key mode continuing with the extension of its earlier campaign
focusing on EXTRA growth.
Article: http://www.mouthshut.com/diary/fecjmqtqm/COMPLAN-vs-HORLICKS
Ad: www.youtube.com/watch?v=LcbLBJSTtQg
3. (Nestle) Munch vs (Cadbury) Dairy Milk: Fighting with advertisements is not new in the
Indian consumer market. First we saw two cola companies making ads against each other,
then came two hot beverage products doing this and now it’s the turn for the chocolates -
Dairy Milk vs Nestle Munch.
Article: http://vettyofficer.blogspot.com/2009/08/dairy-milk-vs-nestle-munch-ad-war.html
http://themanmeetsabharwalblog.com/?tag=dairy-milk
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4. (Coca Cola) Sprite vs (Pepsi) Mountain Dew: Sprite came up with an ad hitting on mountain
dew’s jingle.
Ad: http://www.youtube.com/watch?v=QRIwkKF2cm8
5. Kotex v/s whisper: Whisper has the highest market share in the product segment & Kotex
attacking the no. 1 brand came up with the ad campaign which showed, don't whisper be
loud. This was to directly attack the Whisper Brand.
6. HUL v/s Eureka Forbes: Eureka Forbes making mockery of the Pureit Mascot, ie the guy in
the yellow raincoat. There is a case filed by HUL regarding the same in the high court.
7. Sony vs Nintendo
8. AMD vs INTEL
9. Huggies vs Pampers
10. Energizer vs Duracell
11. CCD vs barista
12. BMW vs Mercedes Benz
(You can read up on them online yourself for your own knowledge)
Ambush Marketing
Ambush Marketing is the practice by which a rival company attempts to associate its products with
an event or activity that already has official sponsors.
The term was coined by marketing strategist Jerry Welsh, while he was working as the manager of
global marketing efforts for American Express in the 1980s.
American Express: In 1986, credit card company American Express—rival to official sponsor Visa
Inc., began a marketing campaign in Asia promoting merchandise from a fictitious "Olympic Heritage
Committee", supposedly based in Switzerland. American Express halted the campaign following
complaints by the International Olympic Committee.
Pepsi vs Coca Cola: Pepsi's 'Nothing Official About It' campaign in World Cup 96 after Coca Cola
became the official sponsor. One of its effects was the stringent anti-ambush marketing laws that
cricketers had to sign in 2002.
Nike completely hijacked the 2014 Football World Cup with its strong branded content thanks to the
fact that it had some of the most popular footballers signed to its name. Few people remember that
Adidas was the official ball sponsor of the WC.
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18. Buyer Decision Process
Research suggests that customers go through a five-stage decision-making process in any purchase.
This is summarized in the diagram below:
This model is important for anyone making marketing decisions. It forces the marketer to consider
the whole buying process rather than just the purchase decision (when it may be too late for a
business to influence the choice).
The model implies that customers pass through all stages in every purchase. However, in more
routine purchases, customers often skip or reverse some of the stages.
For example, a student buying a favorite hamburger would recognize the need (hunger) and go right
to the purchase decision, skipping information search and evaluation. However, the model is very
useful when it comes to understanding any purchase that requires some thought and deliberation.
The buying process starts with need recognition. At this stage, the buyer recognizes a problem or
need (e.g. I am hungry, we need a new sofa, I have a headache) or responds to a marketing stimulus
(e.g. you pass Starbucks and are attracted by the aroma of coffee and chocolate muffins).
An “aroused” customer then needs to decide how much information (if any) is required. If the need
is strong and there is a product or service that meets the need close to hand, then a purchase
decision is likely to be made there and then. If not, then the process of information search begins.
The usefulness and influence of these sources of information will vary by product and by customer.
Research suggests that customers value and respect personal sources more than commercial
sources (the influence of “word of mouth”). The challenge for the marketing team is to identify
which information sources are most influential in their target markets.
In the evaluation stage, the customer must choose between the alternative brands, products and
services.
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How does the customer use the information obtained?
An important determinant of the extent of evaluation is whether the customer feels “involved” in
the product. By involvement, we mean the degree of perceived relevance and personal importance
that accompanies the choice.
Where a purchase is “highly involving”, the customer is likely to carry out extensive evaluation.
High-involvement purchases include those involving high expenditure or personal risk – for example
buying a house, a car or making investments.
Low involvement purchases (e.g. buying a soft drink, choosing some breakfast cereals in the
supermarket) have very simple evaluation processes.
To manage the post-purchase stage, it is the job of the marketing team to persuade the potential
customer that the product will satisfy his or her needs. Then after having made a purchase, the
customer should be encouraged that he or she has made the right decision.
Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative
efforts of a "for profit" business and a non-profit organization for mutual benefit. The term is
sometimes used more broadly and generally to refer to any type of marketing effort for social and
other charitable causes, including in-house marketing efforts by non-profit organizations. Cause
marketing differs from corporate giving (philanthropy) as the latter generally involves a specific
donation that is tax deductible, while cause marketing is a marketing relationship generally not
based on a donation. The creation of the term "cause-related marketing" is attributed to American
Express, and it was coined to describe efforts to support locally based charitable causes in a way that
also promoted business. The term was then used to describe the marketing campaign led by
American Express.
In 1983 for the Statue of Liberty Restoration project, a penny for each use of the American Express
card, and a dollar for each new card issued was given to the Statue of Liberty renovation program.
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Over a four-month period, $2 million was raised for Lady Liberty, transaction activity jumped 28 %
and the concept that doing good was good for business, was born.
Attracting and Retaining Customers: Companies that have engaged in Cause –Related Marketing
reports that those efforts help attract and build long- term relationships with customer. For
Example, affinity credit cards, in which a non-profit organization benefits each time a consumer,
uses the card to make a purchase, help credit card companies develop long term relationships with
consumers.
Market Differentiation: For many companies, Cause- Related Marketing has helped them to
create an alternative and distinctive approach to brand advertising. CRM can help
companies distinguish themselves from their peers by offering the consumer the
opportunity to contribute to something more than the company’s bottom line. National and
International brands can better identify with their local markets by linking themselves with
community organizations, or with regional or nongovernmental organizations.
Outreach to Niche Markets: Partnering with non-profit organizations can help a company to
connect with specific demographic or geographic markets. For Example, Ford Motor
Company successfully positioned itself among a formerly disengaged target market –
Women. In addition to its Substantial financial and in – kind donations to Race events, The
Ford Division of the Ford Motor Company has issued thousands of public service
announcements in an effort to both communicate a critical health message to women and
to enfold them into its brand identity.(Cause Related Marketing A Conceptual Paradigm)
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20. Customer relationship management
Main aim: customer retention and customer satisfaction
We have to make list of the customers, these serve as the target lists.
Save money by not marketing to those who are less likely to respond.
Make money by making relevant offers to those who need, or want or can afford or
products.
We build relationship with our best customers, resulting in higher loyalty, retention, referral,
spending rate and profits.
It is a process or methodology used to learn more about customers' needs and behaviours in order
to develop stronger relationships with them. CRM helps businesses use technology and human
resources to gain insight into the behaviour of customers and the value of those customers.
Helping an enterprise to enable its marketing departments to identify and target their best
customers, manage marketing campaigns and generate quality leads for the sales team.
Assisting the organization to improve telesales, account, and sales management by
optimizing information shared by multiple employees, and streamlining existing processes
(for example, taking orders using mobile devices).
Allowing the formation of individualized relationships with customers, with the aim of
improving customer satisfaction and maximizing profits; identifying the most profitable
customers and providing them the highest level of service.
Providing employees with the information and processes necessary to know their customers
understand and identify customer needs and effectively build relationships between the
company, its customer base, and distribution partners.
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The main aim of CRM is customer retention. Customer retention efforts involve considerations such
as the following:
1. Customer valuation - describes how to value customers and categorize them according to
their financial and strategic value so that companies can decide where to invest for deeper
relationships and which relationships need to be served differently or even terminated.
2. Customer retention measurement - This is simply the percentage of customers at the
beginning of the year that are still customers by the end of the year. In accordance with this
statistic, an increase in retention rate from 80% to 90% is associated with a doubling of the
average life of a customer relationship from 5 to 10 years. This ratio can be used to make
comparisons between products, between market segments, and over time.
3. Determine reasons for defection - Look for the root causes, not mere symptoms. This
involves probing for details when talking to former customers. Other techniques include the
analysis of customers' complaints and competitive benchmarking.
4. Develop and implement a corrective plan - This could involve actions to improve employee
practices, using benchmarking to determine best corrective practices, visible endorsement
of top management, adjustments to the company's reward and recognition systems, and the
use of "recovery teams" to eliminate the causes of defections.
21. Differentiation
The market is flooded with similar products and offerings which has created a huge clutter of brands
and products. It is essential for a marketer to be able to differentiate his product to break through
the clutter. Differentiation based on product features has become a difficult task with competitors
taking no time in copying /adopting that feature. Differentiations based on incremental product
improvements /features have become difficult to develop and sustain in the market.
Methods of differentiation:
1. Invest in R&D
India is an R&D and product development hub for most of the MNCs but seldom Indian
marketers were able to create breakthrough products for the Indian market. Tata Nano has
shown the world what Indian minds can do when inspired. The market is moving in a
direction where only those brands will succeed who can innovate.
2. Protect the Differentiation
An important determinant of a successful differentiation is the brand’s ability to protect the
differentiation. Smart brands use ingredient branding to protect their key differentiators.
Ingredient branding is where a particular product feature or an ingredient is branded by the
company. There are two kinds of ingredient brands.
a. Where the ingredient is owned by another company. Intel is a pioneer in ingredient
branding. Intel has built ingredient brands like Pentium, Celeron and Atom etc.
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b. Where the feature/ingredient is owned by the company itself. Bajaj has a powerful
ingredient brand DTSI (which is also a patented technology) which it now uses for all of
its two wheeler brands.
3. Connect to a Relevant Need
Creating a sustainable differentiation is possible only when brands become customer
focused. When products become standardized, it is important for marketers to create
differentiation focusing on consumer needs.
Types of Differentiation:
Personnel Differentiation: By using better trained employees. Singapore airlines are well
regarded because of its flight attendants.
Channel Differentiation: By efficiently and effectively designing distribution channels
coverage, expertise and performance. Eureka Forbes water purifiers and vacuum cleaners
gained popularity due to their differentiated positioning through their direct to home
channel. Examples: The Himalaya drug company differentiates itself by using ayurvedic
ingredients.
Product Positioning: In marketing, positioning has come to mean the process by which
marketers try to create an image or identity in the minds of their target market for its
product, brand, or organization. It is the 'relative competitive comparison' their product
occupies in a given market as perceived by the target market. Positioning means
determining and communicating the central benefit of the product in the minds of target
buyers. For example, a car manufacturer might target buyers for whom safety is a major
concern. The company "positions" its cars as the safest vehicles that customers can buy.
Positioning starts with a product. A piece of merchandise, a service, a company, an
institution, or even a person. But positioning is not what you do to a product. Positioning is
what you do to the mind of the prospect. That is, you position the product in the mind of the
prospect. Brands usually position themselves using certain parameters. These parameters
highlight the most relevant features of its product and the image, the brands wishes to
portray to its consumers.
How to write a positioning statement:-
For [target end user]
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Who wants/needs [compelling reason to buy]
The [product name] is a [product category]
That provides [key benefit].
Unlike [main competitor],
The [product name] [key differentiation]
Product differentiation: Differentiation is the act of distinguishing your company's offering
from competitors' offerings in ways that are meaningful to consumers. You can differentiate
products physically or through the services your company provides in support of the
product. In business terms, to differentiate means to create a benefit that customers
perceive as being of greater value to them than what they can get elsewhere. It's not
enough for you to be different--a potential customer has to take note of the difference and
must feel that the difference somehow fits their need better. (Other words that mean
virtually the same thing: Competitive Advantage; Unique Selling Proposition; or Value
Proposition.)
form—size, shape, physical structure; for example, aspirin coating and dosage
features—such as a word processing software's new text-editing tool
performance quality—the level at which the product's primary characteristics function
conformance quality—the degree to which all the units of the product perform equally
durability—the product's expected operating life under natural or stressful conditions
reliability—the probability that the product won't malfunction or fail
reparability—the ease with which the product can be fixed if it malfunctions
style—the product's look and feel
design—the way all the above qualities work together; (it's easy to use, looks nice, and
lasts a long time)
Internet
Banner Ad: An advertisement that appears on a Web page, most commonly at the top
(header) or bottom (footer) of the page. Designed to have the user click on it for more
information.
Blog: blog is a user-generated Web site where entries are made in journal style and
displayed in a reverse chronological order
Brand and consumer interaction through social web and brand’s own website
Microsite: A mini Web site design to promote a specific portion or brand from a larger
corporate site. Used often with contests or as a landing page for a specific promotion.
RSS or Real Simple Syndication is technology designed to allow users to subscribe to a
specific content feed and be automatically alerted when new updates are available.
Personalised E-mails to subscribers of company’s newsletters etc/ potential customers
SMS (Short Message Service) is a one-way text message sent via a cell phone.
MMS
ADVANTAGES
DISADVANTAGES
Consumers can easily connect with one another, often using multimedia sites such as
YouTube and Flickr, so they themselves can satisfy their need for information about
products. What’s more, consumers may trust information obtained in this way much more
than they do information from your company
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From the buyer's perspective, the inability of shoppers to touch, smell, taste or "try on"
tangible goods before making an online purchase can be limiting.
Many consumers are hesitant to purchase items over the Internet because they do not trust
that their personal information will remain private. Encryption is the primary method for
implementing privacy policies. Customers are unaware if and when their information is
being shared, and are unable to stop the transfer of their information between companies if
such activity occurs.
Examples:
Examples
Under Philips light Marathon they launched a CFL bulb as "Marathon," underscoring its new
"super long life" positioning and promise of saving $26 in energy costs over its five-year
lifetime.
HP’s promise to cut its global energy use 20% by the year 2010. The Hewlett-Packard
Company announced plans to deliver energy-efficient products and services and institute
energy-efficient operating practices in its facilities world-wide.
Indica EV- an electric car from Tata Motors which runs on polymer lithium ion batteries
For green marketing to be effective, you have to do three things; be genuine, educate your
customers, and give them the opportunity to participate.
Being genuine means that you are actually doing what you claim to be doing in your green
marketing campaign and that the rest of your business policies are consistent with whatever
you are doing that's environmentally friendly. Both these conditions have to be met for your
business to establish the kind of environmental credentials that will allow a green marketing
campaign to succeed.
Also read about “Green Washing”- form of spin in which green marketing
is deceptively used to promote the perception that an organization's products, aims or
policies are environmentally friendly.
Educating your customers isn't just a matter of letting people know you're doing whatever
you're doing to protect the environment, but also a matter of letting them know why it
matters. Otherwise, for a significant portion of your target market, it's a case of "So what?"
and your green marketing campaign goes nowhere.
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25. Guerrilla Marketing.
Major reasons why guerrilla marketing draws analogy from the guerrilla warfare are it is associated
with
a. Counters the traditional large spends on marketing through unconventional method which is
effective yet involves much lesser spends.
b. They are unexpected and unconventional where customers are targeted at unexpected
places.
c. It should be based on human psychology instead of experience, judgment, and guesswork
Guerrilla marketing involves unusual approaches such as intercept encounters in public places,
street giveaways of products, PR stunts, any unconventional marketing intended to get maximum
results from minimal resources.
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Examples
1) Nike
Impact on Psychology
2) McDonalds
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4) artforransom.org
With many non-profits struggling during these economic times, a group in Denver wanted to put a
spotlight on the arts. To make people aware that public art and all art in the city comes at a cost;
public art pieces across Denver were covered with black plastic and wrapped with yellow caution
tape.
The students are advised to follow the links below to understand more examples of Guerrilla
Marketing.
http://koikoikoi.com/2009/04/guerrilla-marketing-collection1/
http://www.creativeguerrillamarketing.com/
http://blog.guerrillacomm.com
The practice of emotional marketing is all about getting your target audience to connect with your
product, service, and brand at a very basic and fundamental level - the level of emotions. Emotions
drive our behaviour; the world is driven by emotions. Rational thought leads customers to be
interested but it is emotion that sells. People really aren't much interested in attributes; they want
to know if they can have a product that suits their personality. It is all about values. Emotional
marketing is better in many instances than rational marketing that focuses on product attributes.
Emotional marketing appeals include personal and social needs, such as: security, comfort,
happiness, acceptance, self-esteem, and status, achievement, saving money, or making money.
These are basic underlying feelings that drive our decisions and buying behaviour. It may be a need
for financial security, which is associated with an image of a safe investments and insurance, or it
could be a desire for status and achievement, reinforced by the mental picture of luxury possessions.
Your marketing can target positive emotions through the use of unusual words, word rhythms and
rhymes, colours or shapes, pictures, numbers, or symbols, which reveal the associated feelings of a
previous experience, like the pleasant smell of food cooking, or a day at the beach. Appealing to an
underlying desire that triggers an automatic memory image can cause an emotional response that
reinforces logical thoughts, which converge and lead to a buying decision.
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Rather than using ads with dull corporate speak, unfamiliar industry jargon, or selling how good you
are, try tapping into the direct process of brain patterns and emotional images with sharp, specific,
and relevant details that can sway the buying choices of your potential customers.
Nike succeeds because its core belief - its brand promise, its love of the potential for the athlete
inside everyone lives inside the people in Beaverton. When that love is manifested in their gear,
consumers manifest it in their own lives. The result is not only an emotional connection but an
individual one.
Starbucks is one of the strongest global brands around – without following the marketing text book.
So what is the success factor of the Starbucks brand? The emotional experience of its consumers –
they feel sophisticated and part of what many brand experts refer to as a "coffee house"
community. For the Starbucks community, coffee is not just a beverage, but it is a ritual, a habit, a
treat, and a satisfying reward all rolled in one. That’s the reason why Starbucks’ cup sizes are
"grande" and "venti," not medium or large. Each cup of coffee is also freshly made by a "barista" at a
separate counter and never behind a wall or out of sight from the customer. The Starbucks store has
tables and chairs for congregating or reading and working, and many have plush sofas and
armchairs. Many Starbucks also have Internet connection for their customers’ convenience.
Word of mouth - people trust other people that tell them your product works or if it is the
best.
Forums - this is basically electronic word of mouth.
Trials - if you have concrete results, and the people who participated in the trials are
satisfied, you have proof that your product works, which appeals to people's sceptical side.
Testimonials - again, people trust other people. If people are willing to take the time to give
a testimonial, others will know you have a great product.
Example- Singapore Airlines not only employs the more common consistent visual themes one
might expect from an airline, but incorporates the same scent, Stefan Floridian Waters, in the
perfume worn by flight attendants, in their hot towels, and other elements of their service.”
Consumers then link the airline to the scent and, should they be smell Stefan Floridian Waters again,
will be reminded of the airline and the pleasant emotions it brought them.
Marketing Myopia is the failure to define an organization's purpose in terms of its function from the
consumers' point of view. For example, railway companies that define their markets in terms of
trains, rather than transportation, fail to recognize the challenge of competition from cars, airlines,
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and buses. It is therefore necessary to define the needs of the consumer in more general terms
rather than product-specific terms.
Marketing Myopia is the short sighted look of the managers in wrongly identifying the category and
goals of the company, not looking at the whole industry of the product neglecting the fields of
opportunities in their area of industry, not listening to the customer's real needs.
Marketing Myopia is a short sighted and inward looking approach to marketing that focuses on the
needs of the firm instead of defining the firm and its products in terms of the customers' needs and
wants. Such self-centred firms fail to see and adjust to the rapid changes in their markets and,
despite their previous eminence, falter, fall, and disappear. This concept was discussed in an article
(titled 'Marketing Myopia,' in July-August 1960 issue of Harvard Business Review) by Harvard
Business School emeritus professor of marketing, Theodore C. Levitt (1925-), who suggests that firms
get trapped in this bind because they omit to ask the vital question, "What business are we in?"
Example:
Kodak had the myopic view that the company was in the film business rather than the story telling
business. We aren’t buying cameras and film as much as we are buying a record of our memories.
We want to be able to tell our stories for years and want the quickest, easiest tool to do so.
Kodak would have been better off embracing the new digital technology it invented. Companies like
Sony and Canon took a proactive and aggressive approach to marketing digital cameras and when
Kodak decided to get in the game it was too late. The company saw revenues and market share
decline as digital imaging became the dominant technology.
Online Advertising
Display Ads or banner ads are small, rectangular boxes containing text and perhaps a picture that
companies pay to place on relevant Web sites. Traditional these banners were placed on top of the
web site or on the side panels, however now Youtube videos also have such ads below the video.
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Interstitials: advertisements often with a video or animation, that pops up between changes on a
Website. Ads for Johnsons & Johnsons’s Tylenol headache reliever would appear on brokers’ web
sites.
Sponsorships: Companies get their name of the web site by sponsoring certain content on the site.
Online Communities: many companies sponsor online communities whose members communicate
through postings, instant messaging and chat discussions about special interests to the company’s
brands and products. GlaxoSmithKline when launched their first weight-loss drug ‘Alli’, they
sponsored a weight-loss online community.
Social Media: Companies use social networking websites as a platform for advertising too. They
project display ads to focus on their target audience using information given by users on the
website.
Mobile Marketing: Every 2 minute mobile episode of Fox’s show Prison Break starts with a 10
second message that show cases Toyotas new subcompact sedan Yaris.
Place advertising:
Or Out Of Home Advertising (OOH), is a
broad category including many creative and
unexpected forms to grab customer’s
attention. The rationale is that markers are
better off reaching people where they work,
play and of course shop.
Product placement in movie: Movie 3 Idiots, where Madhavan and Sharman Joshi travel in a
Volvo XC90. Movie Taal where Coca Cola products are displayed during a song “Ishq Bina”
Product Sampling: Giving free samples of the product at malls or through other means.
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specifically for the vehicle. The customized overall design of this format provides eye-catching
attention, promotional value and makes a statement about the advertiser. Example: Santro Xing
Another new trend is elevator advertising. High resolution ads are placed on a screen in bustling
high-rise condos or office buildings. The average number of riders per day is at least 500, which
translates to approximately 90,000 views in a six month period.
Some of the examples above can fall in the ambit of Guerrilla Marketing.
Another recent phenomenon is to create brand awareness by solving community problems. Two
great examples of this are:
Stage 1: Development
As soon as you put pen to paper, this is where the PLC of the product/service begins. This is the time
where you will design and develop your product/service with all the direct costs that may be
incurred such as wages, materials for prototypes, research, etc.
During development, a product/service may never move onto the next stage because you may
decide that the risk is too high to launch the product/service. It is important that you recognize any
risk during this time as small businesses will be affected if the product/service does not prove to be
successful once introduced: the costs of development and introduction may never be recovered
where larger companies can usually compensate for unsuccessful products.
Within this stage, the product has not yet been introduced to the market and consequently there
are no sales. The expenditure of development has also created a loss.
Stage 2: Introduction
It is arguable that this stage can influence the length of the PLC and so the product/service should be
introduced in the market as effectively as possible. This is the time when the product/service is new
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in the market and a high degree of marketing will be needed such as promotions and advertising to
increase commercial awareness.
Sales will be slow during the introduction stage and so you should not become impatient and spend
more money than necessary to try to increase the speed of sales: it will take time for people to use
and trust your product/service.
As you begin to make sales, the money used for developing and introducing the product/service may
not be fully recovered (i.e. break-even) until late in the introduction stage. Once you begin to make
profit, you may decide to re-invest the money back into promoting the product/service in an
attempt to stimulate future sales (and profit).
Stage 3: Growth
Once your product/service has become established in the market, you can expect the number of
sales to increase rapidly and marketing expenditure may now be used for brand building. This is the
stage where you will benefit from high profits but this is also the stage where your profits will peak.
Services over products will generally have far longer periods of growth (usually years) where
products, particularly those that are new, will soon attract the attention of competitors.
Once competitors join the bandwagon, the sales will gradually slow down and force you into
marketing new prices: consequently resulting in fewer profits. If you have released your own version
of an existing product (making you the competitor), then the growth stage may be short depending
on how long the existing product has been available in the market.
Stage 4: Maturity
The stage of maturity begins when the product/service sales peak and become stable mainly due to
the introduction of competitors during the end of the growth stage (influencing the move into the
maturity stage).
As pricing becomes more competitive (resulting in even less profits), many businesses, commonly
the smaller businesses, cannot compete and consequently withdraw their product/service from the
market.
Maturity does not only result from increased competition, but also by new alternative
products/services in the market becoming more popular. Quite often, services in particular are
withdrawn because they are no longer needed, unfavourable or out of fashion.
Stage 5: Saturation
The saturation stage is sometimes overlooked in many PLC models but is seen as the first sign of
product/service decline. At this point, the product/service has no future for profits because there
are too many competitors or the product/service is no longer popular.
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Stage 6: Decline
The product/service moves into the decline stage when sales start to drop continuously and will be a
result of the issues that moved the product through maturity and saturation (competition, low
demand, unfashionable, etc).The time taken to reach this stage of the PLC will differ with different
products/services: for an extreme example, Kellogg's still have a range of cereals that are as popular
today as when they were first released in the early 1900s. Also note; Kellogg’s may have the number
one cereal, but they have to spend a lot of money advertising that fact: there being nothing new or
exciting about plain old cornflakes makes this a great example of brand marketing.
In the small business world, when your products/services move into decline, it is a good idea to
either improve your product or remove it completely to avoid damaging your image.
Although you may have your own ideas, the more common strategies include:
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STRATEGIES FOR THE DIFFERING STAGES OF THE PLC (Very
important)
The need for immediate profit is not a pressure. The product is promoted to create awareness. If the
product has no or few competitors, a skimming price strategy is employed. Limited numbers of
product are available in few channels of distribution. Advertising differentiates the product.
Decide when to enter the market. To be first can be rewarding but very risky and expensive.
But pioneer advantage is inevitable as they set the trend for the market class
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Speeding up innovation is essential in an age of shortening product life cycles
Rapid-Skimming strategy involves launching the new product at a high price and high
promotion levels
Slow-skimming strategy involves launching the new product at a high price and low
promotion.
Rapid-Penetration strategy involves launching the new product at a low price and high
promotion.
Slow-Penetration strategy involves launching the new product at a low price and low level of
promotion.
Competitors are attracted into the market with very similar offerings. Products become more
profitable and companies form alliances, joint ventures and take each other over. Advertising spend
is high and focuses upon building brand. Market share tends to stabilise. Advertising establishes
participation with the marketplace.
Improve product quality and add new features and improved styling
Add new models and flanker products (i.e. products of different sizes, flavors, and so forth
that protect the main product.
Enter new market segments.
Increase distribution coverage and enter new distribution channels
Lower price to attract the next layer of price-sensitive buyers
Shifts from product awareness advertising to product-preference advertising.
Example:
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Maturity stage of PLC
Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a
decreasing rate and then stabilise. Producers attempt to differentiate products and brands are
keytothis. Price wars and intense competition occur. At this point the market reaches saturation.
Producers begin to leave the market due to poor margins. Promotion becomes widespread and uses
a greater variety of media. Advertising puts price ahead of the competition.
Market modification: the company might try to expand the market for its mature brand by
increasing the number of users and/or the usage rate.
Eg: Johnson & Johnson promoted its baby shampoo to adult users. Pears introduced pink soap to
target children
Product modification: Manager also try to stimulate sales by improving the product’s quality,
features or style.
Pricing – cuts, discounts, special occasions, credit terms, increase price and quality
Distribution – more outlets and new distribution channels
Advertising – increasing expenditure, change message, timing and frequency of advertising
Sales promotion - stepping up or reducing sales promotion
Personal selling – increase quality of sales force and sales territories
Services – speed up delivery and technical assistance.
Example:
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Decline stage of PLC
At this point there is a downturn in the market. For example more innovative products are
introduced or consumer tastes have changed. There is intense price-cutting and many more
products are withdrawn from the market. Profits can be improved by reducing marketing spend and
cost cutting.
Example:
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Brand Ladder refers to the various benefit levels which a brand provides to it consumers. Over the
lifecycle of a brand, marketers project a brand so as to gain customer loyalty. The term was coined
by Kevin Lane Keller, Professor who wrote the book ‘Strategic Brand Management’.
(i) Attributes: It refers to the physical features of the product like specifications. If we consider
the example of a mobile phone – the attributes could be the size, weight, processor, operating
system
(ii) Functional Benefits: It refers to the benefits that are rendered to the consumer by the
attributes. In a mobile phone, functional benefits includes speed, memory, interface experience
(iii) Emotional Benefits: It refers to how the product/ service connect with the consumer in daily
life through its usage. A mobile phone can provide different benefits for its users like gaming,
messaging, browsing
A brand over its lifecycle is required to travel through these levels in order to gain a loyal customer
base. Some of the most successful brands have been existing for decades because they have been
able to successfully pass through the 3 levels.
Sports marketing is a branch of the marketing industry that involves the promotion of and the
arrangement of sponsorship deals for sporting events, venues, teams, and individual athletes. Those
who work in the field are often employed by a specialty agency, a sports franchise, or by the
marketing division of a corporation that promotes its products through athletic sponsorship.
The first is the advertising of sport and sports associations such as the Olympics, Spanish
Football league and the NFL.
The second concerns the use of sporting events, sporting teams and individual athletes to
promote various products.
The third is the promotion of sport to the public in order to increase participation.
Common examples of sport marketing include athlete endorsements, testimonials, event marketing
and stadium advertising
The origination of the marketing discipline known as sports marketing coincided with the advent of
the first MLB (Major league Baseball ) game ever televised on August 26, 1939 and as a result made
Babe Ruth the first six-figure athlete in the history of professional sports.
Sports marketing morphs advertising, sponsorship, promotion, sales promotion, and public relations
into one of marketing's most effective tools to reach and touch consumers.
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Sports today utilize corporate sponsorships and television money in order to compete and pay for
top quality athletes. Those companies use teams, leagues, colleges, and individual s to differentiate
their products in a very competitive business environment.
IPL is good example of sports marketing. However rising cost of sponsoring cricket events are forcing
sponsors to other sports.
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Persuasive advertising - this tries to entice the customer to buy the product byinforming
them of the product benefit.
Informative advertising - this gives the customer information. Mostly done by
thegovernment (e.g. health campaigns, new welfare benefits).
Product-oriented advertising
Image advertising
Advocacy
Public service advertising
http://tutor2u.net/business/gcse/marketing_promotion_advertising.htm
http://www.knowthis.com/principles-of-marketing-tutorials/advertising/types-of-advertising-image/
http://www.smalltownmarketing.com/sixads.html
The task of projecting your product as something which has differentiating factors comes under the
ambit of USP.
They should resonate with the needs and wants of the consumer.
Examples:
The Emotional Selling Proposition gives you the opportunity to control the marketing message and
to drive an emotional reaction that creates the connection and triggers "I want this. I am going to
buy it."
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Eg: You can emphasize the end emotion after purchase - L'Oreal's "Because you're worth it"
emphasizes pride and recognition of your own self worth,
Caveat: You can't abandon logical benefits supported by credible features in the name of a ESP
approach.
Examples:
So think about the feelings and the emotions that you want to stir up with your prospects and clients
and use this in your sales. Can your product/service make the prospect:
* Feel important
* Feel valued
* Feel part of a unique group or select band of people
* Feel whole
* Feel remembered
* Feel attractive
* Feel trendy
* Feel hip
* Feel safe
* Feel accepted
There have also been some innovations in the distribution of services. For example, there has been
an increase in franchising and in rental services - the latter offering anything from televisions
through tools. There has also been some evidence of service integration, with services linking
together, particularly in the travel and tourism sectors. For example, links now exist between
airlines, hotels and car rental services. In addition, there has been a significant increase in retail
outlets for the service sector. Outlets such as estate agencies and building society offices are
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crowding out traditional grocers from major shopping areas. Activities involved in the channel are
wide and varied though the basic activities revolve around these general tasks:
Ordering
• Handling and shipping
• Storage
• Display
• Promotion
• Selling
• Information feedback
Channel members: Distribution channels can thus have a number of levels. Kotler defined the
simplest level that of a direct contact with no intermediaries involved, as the 'zero-level' channel.
The next level, the 'one-level' channel, features just one intermediary; in consumer goods a retailer,
for industrial goods a distributor. In small markets (such as small countries) it is practical to reach the
whole market using just one- and zero-level channels. In large markets (such as larger countries) a
second level; a wholesaler for example, is now mainly used to extend distribution to the large
number of small, neighbourhood retailers or dealers. In IT and Telecom industry levels are named
"tiers". A one tier channel means that vendors IT product manufacturers (or software publishers)
work directly with the dealers. A one tier / two tier channel means that vendors work directly with
dealers and with distributors who sell to dealers. But the most important is the distributor or
wholesaler.
Retailers- Retailers can promote your product by making consumers aware of its availability and
bypassing on technical information that could encourage the sale. Because there are thousands of
retailers located all around the country, they are an excellent intermediary for distributing your
product to a wide geographical range of consumers.
Wholesalers- reaching a potentially large number of consumers. The main function of a wholesaler is
to provide a link between the producer (you) and the retailer. Once selling to a wholesaler, there are
three ways that your product will reach the consumer. Firstly, the consumer will purchase directly
from the wholesaler: this is the less common route out of the three. Alternatively, your products will
be sold on by the wholesaler to retailers. The other advantages of selling to a wholesaler are that
they may have strong links with quality retailers: research will help discover this fact. In addition,
becausethey buy in bulk, it reduces the burden of on-site storage at your premises reducing
overhead costs. The disadvantage of using a wholesaler to distribute your products is that they
cannot market your products extensively. Further, because they buy in bulk, it is often you will sell at
a price much lower than the final retail price.
Direct Distribution-Very common for small businesses, products/services can be sold directly to
theconsumer on-site i.e. directly from your shop, office or home by consumers physically coming
into the premises to make a purchase. This can be related with, for example, a village baker or a
hand-made furniture business where the products are made and sold at the same place. Works well
only when the TG is in the local region only
Direct Mail- Also known as a mail shot, this type of marketing can produce sales on a local,
national,or even global, scale. Your business would send out, say, flyers, leaflets, brochures or
catalogues (often targeted to particular consumers) selling your product/service. Any interested
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receivers of the mail would make an order through the contact details/order form that would be
included. Although very effective, there is some cost involved but is considerably cheaper compared
to other sources of marketing such as advertising.
Agents/Brokers- An agent or broker will help sell your product/service, but will not take ownership
ofwhat they are selling at any time. They usually work on commission taking a percentage of the
total sales made by themselves. An agency or brokerage will sell your product or service, for
example insurance, tickets for entertainment, accommodation, etc. Perhaps the most common
example of an agent would be a travel agency. They never own the holidays or credit the full amount
of the sale to their business. Instead, they act as a link between the holiday resort and the consumer,
taking a commission on the sales.
Below is a diagrammatic representation of the most common distribution network for FMCG
companies.
Intensive distribution- Where the majority of resellers stock the 'product' (with
convenienceproducts, for example, and particularly the brand leaders in consumer goods markets)
price competition may be evident.
Selective distribution- This is the normal pattern (in both consumer and industrial markets)
where'suitable' resellers stock the product.
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Exclusive distribution- Only specially selected resellers or authorized dealers (typically only one
pergeographical area) are allowed to sell the 'product'.
The marketer must assess the benefits received from utilizing a channel partner versus the cost
incurred for using the services and design the Distribution Channels best suited to his needs.
Advertising
Merchandising
It is the practice of making products in stores available to consumers, primarily by stocking shelves
and displays. Types include: Creating attractive displays (ITC Bingo), Trade shows, Visual display
photo galleries.
Private Branding
Products (or services) which are generally manufactured or provided by one company under the
retailer’s brand. Ex: Big Bazaar has its own line of towels and apparels.
While many elements may make up a firm’s retail marketing mix, the essential elements may
include:
Store location
Store image
Store design
Sales incentives
Merchandise assortments
Store ambience
Customer service
Price
Communication with customers
Personal selling
The retail marketing mix must be consistent with the expectations of customers and must be
responsive to competition. The important factors in retail marketing include:
Store location
Target market
Channel structure
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Channel management
Retailer image
Retail logistics
Retail distribution
People element
Staff capability
Availability
Effectiveness
Customer interaction
Internal marketing
The last couple of years have seen a profusion of luxury brands into the Indian market: from stand-
alone stores in five star hotels to luxury Malls, these labels which were previously only seen in
international fashion magazines and high streets abroad, were now household names in India. With
one of the highest levels of disposable incomes, the well-travelled Indian luxury consumer is being
wooed by all.
Luxury clothing, fragrances, premium footwear, home electronics and high-end watches have
achieved good penetration among male Indian consumers, but items such as cufflinks, belts, wallets,
luxury wines, Champagnes and cigars still rate low on the wish-lists of many Indian men seeking
luxury brands. Among women, jewellery, cosmetics and skincare can already boast high levels of
awareness, followed by categories such as underwear, handbags and mobile phones. Low-
penetration sectors that are yet to make an impact include gourmet food, tableware and imported
furniture.
Super-deluxe brands like Porsche, Chanel, Louis Vuitton, Rolls-Royce, Rolex, Bvlgari and others have
entered the market.
A profile of the Indian luxury consumer, as per a study by research group KSA Tecnopak:
Luxury households can also be categorised into segments according to their attitudes to luxury
goods purchasing:
The Arrived: This is the most affluent group, comprising 49% of the target audience of
luxurygoods companies.
The Actualised Ascetic: This group comprises largely self-made men, professionals
orbusinesspeople who are in their late 40s or early 50s. This is the smallest group (15% of
the target audience).
The Climbers: As the name suggests, this group wants to project a lifestyle image that will
gainthem acceptance into the higher echelons of society, yet many lack the discernment
that comes with exposure to luxury brands and wealth over a long period. These are 19% of
the target universe for luxury brands, says the study.
The Laggards: Although well-heeled and targeted by luxury brands, this group
remainsnonchalant about luxury goods consumption. This group comprises a high
proportion of college drop-outs and graduates who are in business or work as office
executives. This group is 17% of the target consumer base.
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be reflected in all aspects starting from any phone conversation with them and friendly salesman at
the store location to prompt after-sales service.
Benefits:
IMC wraps communications around customers and helps them move through the various
stages of the buying process. The organisation simultaneously consolidates its image,
develops a dialogue and nurtures its relationship with customers.
This 'Relationship Marketing' cements a bond of loyalty with customers which can protect
them from the inevitable onslaught of competition.
IMC also increases profits through increased effectiveness. At its most basic level, a unified
message has more impact than a disjointed myriad of messages. In a busy world, a
consistent, consolidated and crystal clear message has a better chance of cutting through
the 'noise' of other messages.
At another level, initial research suggests that images shared in advertising and direct mail
boost both advertising awareness and mail shot responses. So IMC can boost sales by
stretching messages across several communications tools to create more avenues for
customers to become aware, aroused, and ultimately, to make a purchase
IMC also makes messages more consistent and therefore more credible.
Finally, IMC saves money as it eliminates duplication in areas such as graphics and
photography since they can be shared and used in say, advertising, exhibitions and sales
literature.
A service is the action of doing something for someone or something. It is largely intangible. A
product is tangible (i.e. material) since you can touch it and own it. A service tends to be an
experience that is consumed at the point where it is purchased, and cannot be owned since is
quickly perishes. A person could go to a café one day and have excellent service, and then return the
next day and have a poor experience. So often marketers talk about the nature of a service as:
Lack of ownership: Right of ownership is not taken to the service, since you merely experience it.
Forexample, an engineer may service your air-conditioning, but you do not own the service, the
engineer or his equipment. You cannot sell it on once it has been consumed, and do not take
ownership of it.
Intangibility: Service is intangible and cannot have a real, physical presence as does a product.
Forexample, motor insurance may have a certificate, but the financial service itself cannot be
touched i.e. it is intangible.
Inseparability: Service is inseparable from the point where it is consumed, and from the provider of
theservice. For example, you cannot take a live theatre performance home to consume it (a DVD of
the same performance would be a product, not a service.
Perishability: Service is perishable in that once it has occurred it cannot be repeated in exactly the
sameway.
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Heterogenity: since the human involvement of service provision means that no two services will
becompletely identical. For example, returning to the same garage time and time again for a service
on your car might see different levels of customer satisfaction, or speediness of work.
Goods Services
Tangible Intangible
Homogenous Heterogeneous
Production and distribution are separation from Production, distribution and consumption are
their consumption simultaneous processes
The marketing mix (4P’s) has seen an extension and adaptation into the extended marketing mix for
services, also known as the 7P's (Discussed earlier)
In short it can be defined as any strategy which uses individuals to pass on a marketing message to
others; creating scope for exponential growth in the company’s spread of the intended message.
Companies could even use non-internet mediums such as phone SMS etc. t market their products.
The two basic differentiators of viral marketing from other marketing mediums are:
It is rather inexpensive in its use and also value for money since at times it may be more
effective a marketing tool than contemporary marketing media. For example: Cadbury using
the Gorilla advertising campaign
Its uses the basic tenet of a virus in its spreading i.e. its spreads from one person to another
just as a virus would spread.
When Hotmail launched, much of its early success was due to the virality of the sigline that it
attached to every outgoing email inviting the recipient to join. One of the earliest examples
of viral marketing on the internet
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Subservient Chicken - the creepy webcam site made for a Burger King campaign allowed
people to control a guy in a chicken suit. It went viral almost instantly and for a few weeks
was everywhere
Will It Blend - One of the most recent best viral marketing campaign examples, Blendtec’s
will it blend video series shows scientists testing if various household items will blend in their
super-powerful blender. This campaign leveraged the popularity of online video sharing sites
Dove Evolution Video - Part of a campaign by Dove, this video showed how models’ beauty
is often artificial, and really struck a chord with its intended audience of female viewers
Word of mouth is a reference to the passing of information from person to person. Originally the
term referred specifically to oral communication (literally words from the mouth), but now includes
any type of human communication, such as face to face, telephone, email, and text messaging.
Word of mouth also takes many forms online or off-line. Three noteworthy characteristics are:
1. Credible—People trust others they know and respect, word of mouth can be highly
influential.
2. Personal—Word of mouth can be a very intimate dialogue that reflects personal facts,
opinions, and experiences.
3. Timely— It occurs when people want it to and when they are most interested, and it often
follows noteworthy or meaningful events or experiences.
According to Mintel, 34% of US Internet users who bought a product or service based on a
recommendation got that tip from a friend or relative, while one-quarter bought based on advice
from a spouse or domestic partner. A recommendation from someone familiar and trust-worthy is
the easiest path to a product sale, link or new subscriber. This is because, recommendations are
generally perceived as incentive-free, unlike the obvious motivation of advertisers, who may over-
promise in a bid to increase sales.
The major different between word-of-mouth marketing and viral is that word-of-mouth is often
driven by you the marketer or business owner and viral marketing driven by the passion of your
consumers and its success does not depend on you.
1. Leverage Existing Social Networks. Online communities have a tightly knit group of users
whocan help to increase brand awareness for the product. Tap into these communities with
tools or content targeting their specific sub-culture and you are likely to get a lot of
attention.
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2. Target the Influencers. Look for individuals who are trend-setters or authorities on a
specifictopic. They should preferably be individuals who have many personal connections or
a large and loyal audience. If these people spread your message, your website or product
will very easily be disseminated within a targeted group of potential users. Identify these
influencers, build a relationship with them and market through their existing sphere of social
influence. Examples of influencers include celebrities, power users on social websites and
popular webmasters or bloggers with many loyal supporters.
3. Exclusivity and Scarcity. Many websites or businesses launch virally by offering a
limitednumber of site invites. Some dangle the bait of limited edition products or temporal
discounts. Combine this with influencer marketing and you’ll have an excellent method to
disseminate brand awareness for new websites, products or services. Exclusivity invites
curiosity and scarce products generate consistent demand and conversation.
4. Micro-Market. While online viral marketing leverages the interconnectedness of the web
tospread unique content or user-supported promotional schemes, micro-marketing focuses
on marketing to the individual by providing highly customizable products. Nike and Puma’s
Mongolian Buffet are examples of micro-marketing schemes which allow you to design and
purchase your own unique sneaker online
5. Industry Marketing. Instead of focusing directly on customers, focus on the people who can
build your brand. Make your mark within a niche community (like Sphinn) to build
relationships and leverage-able connections. Get recommendations from others in the
similar industry to be mentioned, promoted or included in an industry-specific ranking or
recommendations list.
Successful examples
Gmail - Google did no marketing, they spent no money. They created scarcity by giving
out Gmail accounts only to a handful of "power users." Other users who aspired to be
like these power users aspired for a Gmail account and this manifested itself in their
bidding for Gmail invites on eBay. Demand was created by limited supply; the cachet of
having a Gmail account caused the word of mouth, rather than any marketing activities
by Google.
Tupperware popularization
Unsuccessful examples
Barriers to Entry:
There are a number of factors that determine the degree of difficulty in entering an industry:
Economies of scale
Product differentiation
Capital requirements vs. switching costs
Access to distribution channels
Cost advantages independent of scale
Proprietary product technology
Favourable access to raw materials
Favourable location
Learning curve
Government policy
It is not obliged to contend with other substitute products for sales in the industry
The industry is not an important customer of the supplier group
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The supplier group is an important input to the buyer's business
The supplier group's products are differentiated or it has built up switching costs
The supplier group poses a credible threat of forward integration
Substitute Products:
Substitute products that deserve the most attention are those that:
Rivalry:
ACKNOWLEDGEMENT
We would like to thank the batches that have come before us for providing us the base for this
material.
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