Professional Documents
Culture Documents
BY
PROF. R B TANDAN
Ê
Ê
÷. Overview of marketing.
2. Marketing management.
3. Marketing environment.
4. Customer demand & Market Segmentation.
5. Buyer behavior.
6. Demand & Sales forecasting.
7. Marketing information & Research process.
8. Marketing planning & Strategy.
9. Consumerism & Consumer protection act.
j
÷ . Product plan.
÷÷. Product related strategies.
÷2. Price.
÷3. Promotion.
÷4. Personal selling.
÷5. Sales management.
÷6. Advertising.
= Marketing Management
By Philip Kotler, Kevin Lane Keller, Abraham
Koshy, Mithileshwar Jha.
m
0The aim of marketing is to meet and satisfy the
target customerǯs needs and wants better than
competitors. Marketers are always looking for
emerging customer trends that suggest new
marketing opportunities. For example, the
emergence of the mobile phone, especially with
teens and young adults, has marketers rethinking
their practices.dz
p
m
Marketing is everywhere. Formally or
informally, people and organizations engage
in a vast number of activities that we could call
marketing. Good marketing has become an
increasingly vital ingredient for business
success. Marketing profoundly affects our day
to day lives. It is embedded in every thing we
do Ȃ from the clothes we wear, to the web sites
we click on, to the ads we seeǥǥ.
j
Good marketing is no accident, but a result of
careful planning and execution. It is both an
art and a science Ȃ thereǯs a constant tension
between its formulated side and its creative
side. Itǯs easier to learn its formulated side,
but we will also study how real creativity and
passion operate in many companies.
Ê
m
To prepare to be a marketer, you need to
understand what marketing is, how it
works, what is marketed, and who does
the marketing?
What is Marketing?
Marketing is about identifying and meeting
human and social needs. It is also defined as 0
Meeting needs profitably.dz
j
The American Marketing Association offers the
following definition Ȃ
0 Marketing is an organizational function and a set
of processes for creating, communicating and
delivering value to customers and for managing
customer relationships in ways that benefit the
organization and its stakeholders.dz
Thus, we see Marketing management as the art and
science of choosing target markets and getting,
keeping and growing customers through creating,
delivering, communicating superior customer
value.
j
Managers sometimes think of marketing as 0 the art
of selling products,dz but selling is not the most
important part of marketing. Peter Drucker put it
this way Ȃ
0 There will always, one can assume, be need for
some selling. But the aim of marketing is to make
selling superfluous. The aim of marketing is to
know and understand the customer so well that
the product or service fits him and sells itself.
Ideally, marketing should result in a customer
who is ready to buy. All that should be needed
then is to make the product or service available.dz
j
0 Marketing originates with the recognition of a
need on the part of a consumer and terminates
with the satisfaction of that need by the delivery
of a usable product at the right time, right place
and at an affordable price. The consumer is found
both at the beginning and at the end of the
marketing process.dz
Î
j
Four key components for relationship marketing are:
* Customers.
* ëmployees.
* Marketing partners( channels, suppliers, distributors,
dealers, agencies)
* Members of the financial community( shareholders,
investors, analysts).
The ultimate outcome of relationship marketing is a unique
company asset called a marketing network. A marketing
network consists of the company and its supporting
stakeholders Ȃ customers, employees, suppliers,
distributors, retailers, ad agencies, and others Ȃ with whom
it has built mutually profitable business relationships.
The Marketing Mix.
The marketers task is to devise marketing activities
and assemble fully integrated marketing
programs to create, communicate, and deliver
value for consumers.
McCarthy classified these activities as marketing Ȃ
mix tools of four broad kinds, which he called the
four Pǯs of marketing Ȃ
Product
Place
Promotion
Price
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Product
Product variety
Quality
Design
Features Price Promotion Place
Brand name List price Sales promotion Channels
Packaging Discounts Advertising Coverage
Sizes Allowances Sales force Assortments
Services Payment period Public relations Locations
Warranties Credit terms Direct marketing Inventory
Returns Transport
m
Holistic marketing incorporates internal marketing,
ensuring that everyone in the organization embraces
appropriate marketing principles. Internal marketing
is the task of hiring, training and motivating able
employees who want to serve customers well.
Internal marketing must take place on two levels. At
one level the various marketing functions Ȃ sales
force, advertising, customer service, product
management, marketing research Ȃ must work
together from the customers point of view.
At the second level, other departments must embrace
marketing, they must also think customer.
Y
m
Holistic marketing incorporates performance
marketing and understanding the returns to the
business from marketing activities and programs, as
well as addressing broader concerns and their legal,
ethical, social and environmental effects.
Management is going beyond sales revenue to
examine the marketing scorecard and interpret what
is happening to market share, customer loss rate,
customer satisfaction, product quality, distributor
and other measures.
Financial Accountability.
Social responsibility marketing.
m
ënvironment plays a crucial role in marketing and that
securing the right fit between the firm and the
environment using the marketing mix as the tool is
the crux of Marketing.
Opportunities and Threats is the starting point and
spotting them is important as it is their that the
economy achieves its growth objectives.
Purpose of marketing environment analysis Ȃ
To know where the environment is heading?
To discern which events are favorable.
To assess scope of various opportunities.
To help secure the right fit between environment and
business unit Ȃ crux of marketing.
j
Mega/Macro ënvironment Factors.
Demographic environment.
Socio-cultural environment.
* Culture Ȃ religion, language, education,
* Social class.
ëconomic ënvironment.
* General economic conditions
* ëconomic conditions of different segments of the
population.
* Rate of growth of each sector.
* Credit availability and interest rates, tax rates.
* Savings, inflation, foreign exchange reserves, etc.
j
Facts of Indian ëconomy
* 6% plus growth
* Per capita still low
* Industrial growth Ȃ 6.2%
* Capital markets Ȃ healthy trend
Political trend - stable
Natural ënvironment
* ëcology
* Natural Resources
* Climate
Technology ënvironment
Legal environment/ Business Legalization
* corporate affairs, consumer protection, employee protection.
ëconomic System Ȃ
We find that millions are engaged in work, a few of
which work for pleasure, but, the vast majority work
to earn a living and to secure an income needed for
satisfying their wants.
Human wants are unlimited but resources are limited.
This applies to individuals and society as a whole.
Societies Resources - land, labor and capital which are
scarce. Thus, this creates a need for economizing
resources or from an economists point of view it
means Ȃ 0 making the best use of what is available.dz
j
ëconomics thus deals fundamentally with choices in the
use of resources. It develops principles for making the
best use of available resources. These principles can
be used for making policy.
Professor Lionel Robbins defined economics as a Ȃ
0 Science which studies human behavior as a
relationship between ends and scarce means which
have alternative uses.dz
ëconomic Organization
It refers to the arrangement by which the basic
problems of an economy Ȃ allocation of resources,
fuller employment and growth of resources Ȃ are
settled.
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Capitalism Ȃ
Capitalism has been defined as an economic system
in which commodity production is dominant, ie.
Goods are produced with hired labor for sale in
the market to earn profits.
It prevails in many countries. It was frist developed
in ëngland and later spread. It now embraces
North America( USA & Canada), Western ëurope,
Japan, New Zealand & Australia.
j
Some of the features are:
Private Property Ȃ
* Dominant in capitalist countries.
* Land, capital and business enterprises are privately owned.
* Management maybe in the hand of professional managers.
Profit making the motivating force.
Role of the price mechanism.
* Basic question of what, how, for whom are decided by price
mechanism.
* It guides resources into production where profit is high.
* Prices are determined by the market forces of supply and
demand.
j
Inequalities of income and wealth -
Such capitalist societies tell us that while 0growth is necessary, it has to be
growth with social justice.dz
Socialism
Public ownership in property.
* State ownership Ȃ industry
* Collective ownership Ȃ agriculture
Planned economy
Four basic ways by which product of society is used Ȃ
* Private consumption of workers who participate in production.
* Collective consumption of people in the form of health, education and
other services.
* Maintenance of the state.
* Investment or creation of physical capital assets.
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Income inequalities Ȃ
Two sources Ȃ private property and wages/salaries.
A socialist society has only the latter.
Mixed ëconomy
Defined as an economy in which the state or the
public sector exists side by side with the private
sector.
m
Ê
Market Segmentation implies that the entire
market is broken down into smaller groups
having similar wants.
The concept of divide and rule applies to the
market segmentation. You divide the market,
choose your target market and then master it.
If the marketing effort is spread over a wide area
it does not have that effect but if it is
concentrated on a point it can go much further
and can be more effective.
j
Companies cannot connect with all customers in
large, broad, or diverse markets. But they can
divide such markets into groups of consumers or
segments with distinct needs or wants. A company
then needs to identify which market segments it
can serve effectively. This decision requires a keen
understanding of consumer behavior and careful
strategic thinking. To develop the best marketing
plans, management need to understand what
makes each segment unique and different.
j
Market segmentation is a process of dividing a
potential market into distinct sub-sets of
consumers with common needs and
characteristics and selecting one or more
segments to target with a distinct marketing mix.
Thus, market segmentation has proved to be a
positive force for both consumers and markets
alike.
Today every product category in the consumer
market is highly segmented.
ëx. Vitamin market, hotels, automobiles, etc.
j
m
Ê
To compete more effectively, many companies are now
embracing target marketing. Instead of scattering
their marketing efforts , theyǯre focusing on those
consumers they have the greatest chance of satisfying.
ëffective target marketing requires Ȃ
÷. Identify and profile distinct group of buyers who
differ in their needs and preferences(market
segmentation).
2. Select on or more market segments to enter(target
marketing).
3. For each target segment, establish and communicate
the distinctive benefits of the companyǯs market
offering(market positioning).
m
Ê
The market for any product is normally made up of several
segments. A market is the aggregate of consumers of a
given product, and, consumers who make a market are
seldom one homogenous lot. They vary in their
characteristics and buying behavior. It is thus natural that
many differing segments occur within a market. Market
segmentation rests on the recognition that Ȃ
÷. Any market is made up of several sub-markets or sub-
groups of consumers, distinguished from one another by
their varying needs and buying behavior.
2. It is feasible to disaggregate the consumers into segments
in such a manner that in needs, characteristics and
buying behavior the members would vary significantly
among/across segments. But would be homogenous
within each segment.
j
Why segment the market?
÷. Facilitates proper choice of target market.
2. Facilitates tapping of the market, adapting the
offer to the market.
3. Helps to divide the market and conquer them.
4. Makes the marketing effort more efficient and
economic.
5. Helps identify less satisfied segments and
concentrate on them.
6. Benefits the customer as well.
j
Advantages of market segmentation Ȃ
* Helps distinguish one customer group from another within a
given market.
* Facilitates proper choice of target market.
* Helps crystallize the needs of the target buyers and elicit more
predictable responses.
* Helps develop marketing programs on a more predictable basis.
* Helps develop marketing offers that are most suited to each
group.
* Helps achieve specialization required in product distribution,
promotion and pricing for matching the customer group and
develop marketing offers and appeals that match needs of such
groups.
* Makes the marketing efforts more efficient and economic.
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Bases for segmenting consumer markets.
The major basis that marketers use for
segmenting markets are Ȃ
* Geographic Ȃ South, West, North, ëast India
State, District, Rural/Urban, Race.
* Demographic Ȃ Age, sex, education, religion,
language, income, illiterate, etc
Among demographics purchasing
capacity/price preference forms a major base.
j
ëx. Passenger cars Ȃ based on price preference Ȃ
Segment Car
Budget car 8 /omni Ȃ 6 % market
Compact car Zen. Santro, Indica -÷5%
Family car ësteem, Ford, Swift Ȃ ÷ %
Premium car Honda, Lancer - ÷ %
Super Luxury Mercedes, Audi - 5%
Psychographic
Personality traits, attitude, lifestyle, value system.
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= Psychographic Segmentation
a. Needs Motivationǥ.... safety, shelter, security,
affection, sense of self-worth.
b. Personalityǥǥǥëxtrovert, introvert, aggressive,
compliants.
c. PerceptionǥǥLow risk, moderate, high risk.
d. Learning InvolvementǥǥLow, High
e. Attitudesǥǥ.Positive, Negative
f. Psychographic( lifestyle)ǥǥSwingers, straights,
conservatives, status seekers
Y
Ê
0 It is your attitudes, interests and opinions that project your
lifestyledz
Introduction
It is defined simply as how one lives and spends money. It is
determined by our past experiences, innate characteristics
and current situations. The products we consume are
related to our lifestyle.
Lifestyles segmentation is based on activities and interests
and opinions of groups.
Demographic and Psychographic lifestyles are
complimentary and work best together. Demographic
variables help to locate the target markets, and
psychographics provide insights into the segments.
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÷. Lifestyle is a group phenomenon which
influences others in the society. A person
having a particular lifestyle can influence
others in a social group.
2. Lifestyle influences all areaǯs of oneǯs activities.
A person having a certain lifestyle shows
consistency of behavior in other areas as well.
You can always predict that a person shopping
from elite or specialty stores, would not shop
from common places. The same applies to
eating habits and other habits as well.
j
3. Lifestyle implies a certain life interest. A
person may have interest in education,
leisure, adventure work, sexual exploits, etc.
which may become their main interest in life.
4. Social changes in society affect lifestyles: For
example, as the society becomes more
affluent, lifestyles of people change,
sometimes drastically. As one would become
richer ones lifestyle changes accordingly.
Ê
This is known as lifestyle segmentation and was introduced
in ÷978 by Arnold Mitchell. It provides a systematic
segmentation of adults into nine segments. These were
widely used. VALS( value & life style segmentation).
They can be described as follows:
÷. Survivors Ȃ They are disadvantaged people who are poor,
depressed, and withdrawn. Their purchases are price
dominant and they like to buy products which are
economical and suit their pocket. They are not very
knowledgeable.
2. Sustainers Ȃ They are motivated by brand names. They
look for guarantee and are impulse buyers. These people
are disadvantaged and want to get out of poverty.
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3. Belongers Ȃ They buy products which are popular. They are
careful and brand loyal shoppers. They are people who are
conventional, conservative and unexperimental.
4. ëmulators Ȃ They are status conscious and upwardly
mobile. They emulate others, and buy products to impress
other people. They have high aspirations in life.
5. Achievers Ȃ They buy top of the line products. They are
brand conscious and loyal. They are leaders and make
things happen. They want to enjoy a good life.
6. I am me Ȃ These people are typically young, self engrossed
and given to whims. They go after fads and do not mind
taking the lead.
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7. ëxperimental Ȃ These people pursue a rich inner
life and want to directly experience what life has
to offer.
8. Societal conscious people Ȃ They are simple,
frugal persons, who read labels carefully and seek
information. They are conscious of society and
social responsibility. They want to improve
conditions in society.
9. Integrated Ȃ These are fully matured people and
constitute the best of outer and inner directed.
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These segments did not appeal to many marketers and
therefore, VALS Ȃ 2 was introduced in ÷989.
This system has more of psychological base than the
original, which was more activity and interest based.
VALS Ȃ 2 is based on attitudes and values.
It has identified three primary self orientations:
÷. Principle oriented Ȃ they are guided by their beliefs
and principles.
2. Status oriented Ȃ these individuals are heavily
influenced by actions, approval and opinion of others.
3. Action oriented Ȃ they desire social and physical
activity, variety and risk taking.
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These three orientations determine the types of goals and
behaviors that consumers will pursue and the goods they
will get interested in.
This classification is based on Maslowǯs hierarchy of needs.
÷.Strugglers Ȃ These are poor people, struggling for
existence. ëducation is low, low skilled, without strong
social bonds. They are despairing and have a low status
in society. Their chief concern is to fulfill their primary
needs of physiological security and safety needs. They
represent a modest market and are loyal to their favorite
brands.
2. Makers Ȃ They are in the action oriented category. They
have construction skills and value self sufficiency. They
buy stuff which helps them in achieving their purpose.
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3. Strivers Ȃ They are a status oriented category, but have a low
income as they are striving to find a secure place in life.
They are low in economic, social, and psychological
resources. They are concerned about the opinion of others.
They see success with money. They like to be stylish. They
wish to be upwardly mobile and strive for more.
4. Believers Ȃ They are in the principle oriented category.
They are conservative, conventional people with their
needs, strong faiths, and beliefs. Have modest resources
sufficient to meet their needs. Use established brands.
5. ëxperiencerǯs Ȃ They are action oriented, young,
enthusiastic, impulsive, and rebellious. They have enough
resources and experiment in new ventures. They are avid
consumers and spend much on entertainment, clothes,
food, music, videos, movies, etc.
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6. Achievers Ȃ They are also placed high in the Maslowǯs
hierarchy of needs and are career and work oriented.
They make their dreams come true. Work provides
them with a sense of duty, material rewards and
prestige. They live conventional lives, authority and
image is important to them.
7. Fulfilled Ȃ They are satisfied and mature people who
are well educated, value order, knowledge and
responsibility. They are practical consumers. They
look for products which are durable, have value and
function properly.
8. Actualiserǯs Ȃ They have abundant resources and are
sophisticated in their taste and habits. They are active
and have high self-esteem.
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= Sociocultural Segmentation
a. Cultureǥǥ..American, Italian, Chinese,
Mexican.
b. Subculture ReligionǥǥJewish, Catholic,
protestant, Hindu, Muslim,
c. Race/ëthnicityǥǥ..oriental, Hispanic, upper,
lower, Brahmin SC/OBC
d. Social ClassǥǥLower, middle, upper
e. Family lifestyleǥǥ.bachelor, young married
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= Use-Related Segmentation
a. Usage rateǥǥHeavy, medium, light, non-users.
b. Awareness statusǥǥunaware, aware, interested,
enthusiastic.
c. Brand LoyaltyǥǥNone, some, strong.
* Use-Situational Segmentation
a. Timeǥǥ.work, rush, morning, night.
b. Objectiveǥǥgift. Fun, snack, personal.
c. Locationǥ..home, work, friendǯs home.
d. Personǥǥ self, friends, boss, peer.
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= Benefit Segmentation
Convenience, prestige, economy, value-for-the
money.
* Hybrid Segmentation
a. Demographic / Psychographic Profileǥǥǥ
Combination of their characteristics.
Geodemographicsǥǥ..young suburbia, blue estate.
VALS 2ǥǥ..Actualizer, believer, achiever, striver,
fulfilled.
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Behavioral.
Different customer groups epect different benefits
from the same product and accordingly they will
be different in their motives in owning it and
their behavior in buying it.
Benefits Ȃ quality, service, economy, speed
Usage rate Ȃ light, heavy, medium
Loyalty status Ȃ none, medium, strong, absolute.
* Assessing the difference between one customer group
and the other in terms of their needs and their likely
responses to the product and other marketing mix
elements.
* Finding out by what descriptive characteristics can
consumers of a particular disposition be tagged on to
a specified segment.
* Disaggregating the consumers into suitable segments
based on above.
* Analyzing whether it is possible to formulate separate
marketing program/marketing mix for different
segments.
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* Finding out which segments will be particularly
happy with the offerings of the firm and can,
therefore, be considered as the natural targets of
the firm.
* ëstimating the likely levels of purchase by each of
the segments.
* Selecting those segments which offer higher
potential and which will also be amiable to the
offerings of the firm.
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Attributes of ëffective Segmentation.
For segments to be effective they must be Ȃ
* Distinguishable from one another.
* Measurable(potential of the segments as well as effect
of a specific marketing mix on them should be
measurable).
* Accessible
* Sizable
* Growing
* Profitable
* Compatible with the firms resources and capabilities.
m
Once the firm has identified its market segment
opportunities, it must decide how many and
which ones to target. Marketers are increasingly
combining several variables in an effort to
identify smaller, better defined target groups.
This has led some market researchers to advocate a
needs based market segmentation approach.
ëffective segmentation criteria Ȃ
To be useful, market segments must rate favorably
on five key criteria -
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* Measurable - the size, purchasing power and
characteristics of the segments can be measured.
* Substantial - the segments are large and
profitable enough to serve. A segment should be
the largest possible homogenous group worth
going after with a tailored marketing program. It
would not pay, for example, for an automobile
manufacturer to develop cars for people who are
less than four feet tall.
* Accessible - the segments can be effectively
reached and served.
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= Differentiable - the segments are conceptually
distinguishable and respond differently to
different marketing mix elements and programs.
If married and unmarried woman respond
similarly to a sale on perfume, they do not
constitute separate segments.
= Actionable - effective programs can be formulated
for attracting and serving the segments.
Ê m
Ê
In evaluating different market segments, the firm must
look at two factors, the segmentǯs overall
attractiveness and the companyǯs objectives and
resources Ȃ
´ How well does a potential segment score on the five
criteria?
´ Does a potential segment have characteristics that
make it generally attractive- such as size, growth,
profitability, scale economics and low risk.
´ Does investing in the segment make sense given the
firmǯs objectives, competencies and resources?
j
= Single segment concentration - through
concentrated marketing, the firm gains a strong
knowledge of the segmentǯs needs and achieves a
strong market presence. Furthermore, the firm
enjoys operating economies through specializing
its production, distribution and promotion.
However there are risks. A particular market
segment can turn sour or a competitor may invade
the segment.
ëx. Mahindra tractors, Zodiac on formal shirts,
specialty hospitals, etc.
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= Selective Specialization - a firm selects a number of
segments, each objectively attractive and appropriate.
There may be little or no synergy between the
segments, but each promises to be a money maker.
This multi segment strategy has the advantage of
diversifying the firmǯs risk.
ëx. Fair and lovely Ȃ both males and females use it.
* Product Specialization - the firm makes a certain
product that it sells to several different market
segments.
ëx. Microscopes Ȃ sold to university, govt. and
commercial labs.
The downside risk is a new technology.
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= Market Specialization - the firm concentrates on
serving many needs of a particular customer group.
ëx. An assortment of products only to university labs.
The downside risk is the customer group may suffer
budget cuts or shrink in size.
* Full market coverage - the firm attempts to serve all
customer groups with all the products they might
need. Large firms can cover a whole market in two
broad ways through undifferentiated marketing or
differentiated marketing.
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= In undifferentiated marketing - the firm ignores
segment differences and goes after the whole market
with one offer. It designs a product and a marketing
program that will endow the product with a superior
image and appeal to the broadest number of buyers,
and it relies on mass distribution and advertising. The
narrow product line keeps down the cost of research
and development, production, inventory,
transportation, marketing research, advertising and
product management. The company can turn its lower
costs into lower prices to win the price sensitive
segments of the market.
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= In differentiated marketing - the firm operates in
several market segments and designs different
products for each. Differentiated marketing
typically creates more total sales than
undifferentiated marketing. However, it also
increases costs of doing business.
ëx. HUL Ȃ wide range of products for all segments.
m
j
m
= Choosing the target market is relegated to, but not
synonymous with market segmentation.
= Segmentation is the means or the tool, choosing the target
market is the purpose.
= Segmentation can also be viewed as the prelude to target
market selection.
= Choosing the target market usually follows multi-level
segmentation using different bases.
= Choosing the target market involves several other tasks in
addition to segmentation.
= Looking at each segment as a distinct marketing
opportunity.
= Selecting those segments which are most appropriate for
the firm.
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= ëvaluating the worth of each segment.
= ëvaluating whether the segment is Ȃ distinguishable,
measurable, sizable, accessible, growing, profitable,
compatible with firms resources.
= ëxamining whether it is better to choose whole market or
only a few segments and deciding which ones should be
chosen.
= Looking for segments which are relatively less satisfied by
the current offers in the market from competing brands.
= ëvaluating the firms resources and checking whether it is
possible to put in the marketing programs required for
capturing the spotted segments with these resources.
p
0Customer is profit, all else is overloadǥ..dz
÷) Consumer behavior knowledge is applied in
Marketing Management. A sound understanding of
the consumer behavior is essential to the long term
success of any marketing program.
2) Consumer behavior is also important in non-profit
and social organization.
3) Consumer behavior is applied to improve the
performance of govt. agencies as well.
4) Consumer behavior also helps in marketing of
various goods which are in scarcity.
5) Consumer benefit from the investigation of their
own behavior.
m
= Marketing Analysis
a) Consumer
b) Company
c) Competition
d) Condition.
. Marketing Segmentation
a) Identify product related needs.
b) Group customers with similar need sets.
c) Describe each group.
d) Select target market.
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= Marketing Strategy
a) Product.
b) Price.
c) Distribution.
d) Communication.
e) Service.
. Consumer Decision Process
a) Problem recognition.
b) Information search Ȃ internal, external.
c) Alternative evaluation.
d) Purchase.
e) Use.
f) ëvaluation.
. Outcomes
a) Customer satisfaction
b) Sales
c) Product / Brand image.
m
Market analysis requires an understanding of the 4
Cs which are:
Consumer, Conditions, Competitor and Company.
Consumer - Is anyone who engages himself in
physical activities of evaluating, acquiring, using
or disposing of goods and services.
Customer - Is one who actually purchases a product
or service from a particular organization or shop.
A customer is always defined in terms of a specific
product or company.
m
Ê
The market is divided into segments which are a portion of a
larger market whose needs are similar and, they are
homogenous in themselves. Such segments are identified
with similar needs.
Need sets Ȃ It is meant that there are products which satisfy
more than one need. ëx. An automobile.
Demographic and psychographic characteristics Ȃ these
groups are identified and they are described in terms of
their demographic and psychographic characteristics. The
company finds out how and when the product is purchased
and consumed.
Target Segment Ȃ the target customer group known as the
target segment is chosen. Different target segments require
different marketing strategies.
m
Strategies are formulated to provide superior
customer value. In formulating marketing
strategies, the 4 Ps are directed at the Target
market.
Product - product is any thing that is offered to
the consumer which is tangible and can satisfy
a need and has some value.
Price - Price is the amount of money one must
pay to obtain the right to use the product.
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Distribution ( Place ) - The goods can be distributed
by many channels. These can be retailers,
wholesalers, agents, or by direct selling.
Promotion - Is the means of changing the attitude of
the consumer, so that it becomes favorable
towards the companyǯs products. Various means
of promotion are advertising, personal selling,
sales promotion and publicity.
Service - It refers to the auxiliary service that
enhances the value of the product or the service.
ëx. Car service
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Buyerǯs skills come from an innate selfishness
that when we are spending money we should
get the moneyǯs worth. The term Value for
money is born out of this desire. It is said that
no one buys a product. They buy the benefits,
which they derive from the product. If the
benefits outweigh the cost the buyers have
paid then they have received value for money.
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Let us define Customer Value as follows:
Total customer value Ȃ The sum total of all the
benefits the customer is likely to derive from the
product.
Total customer cost Ȃ The sum of money the
customer is to spend while selecting, buying,
using and disposing off the product.
Product perceived value Ȃ The difference of total
customer value and total customer cost
represents the customerǯs idea of the usefulness
of the product.
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The product purchase decisions are taken on
the basis of :
Product brand image / brand equity.
Buyerǯs usage value.
Value of the service provided with the
product.
Intrinsic value of the product.
The above add-up to the total customer value
of the product.
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The other aspect of decision to buy comes from
the following :
Product price.
Product search expensive.
Decision time delay cost.
Cost while using the product.
The above add-up to total customer costs for
the purchase of the product.
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Customer satisfaction from the usage of the product is
measured as follows :
Actual benefit derived as compared to the benefit
perception the customer had before the product was
purchased.
Benefits derived as compared to those obtained from a
competitive product.
Benefits get enlarged if the product cost are in consonance
with the perceived benefits and in such cases the
customers derive a sense of pride besides satisfaction,
which in todayǯs marketing technology is stated as
customer delight.
Customerǯs delight also comes from being known as an
intelligent buyer among the peer group.
Buyers are of two types Ȃ
* Individual consumer.
* Business buyer.
In the two buyers motivation, attitude and purchase behavior are
different.
Individual behavior
What motivates?
What induces?
Why does he buy a specific brand?
Why does he buy from a specific shop?
Why does he shift brand or shop?
How does he react to a new product?
What are the stages he travels through before making a buying
decision?
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All these need to be understood that there is no unified, tested
established theory to study buyer behavior.
Influence of social sciences on buyer behavior.
Influence of economics Ȃ
As per economists man is a rational buyer. Price is regarded as the
strongest motivation for the economic manǯs behavior.
Influence of psychology Ȃ
Any human activity is directed towards meeting certain needs.
Maslow has categorized it as Ȃ
Physiological needs
Safety needs
Social needs
ësteem needs
Self-actualization needs.
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* Influence of sociology and anthropology Ȃ
According to scholars group, pressure is the motive
force behind buying.