Marketing Summers Primer

Akshay

Why do people believe that Amazon has the

best customer service?

Why do travelers favour suntan lotion

over coconut oil?
Why do people consider Sushi as
gourmet?
Its all about Marketing, honey!

Marketing
A management process responsible for
identifying
anticipating
satisfying
customer requirements profitably

Consumer Behaviour Model

Marketing Stimuli (Mix)

Product

Place

Price

Promotion

Social

Technological

Other Stimuli
Political

Economic

Consumer State of Being

Social

Cultural

Economic

Consumer State of Mind

Motivation

Perception

Learning

Memory

Purchase Decision Process

Problem Recognition

Product
Choice

Information Search

Evaluation of
Consideration Set

Purchase decision

Purchase Behaviour
Brand Choice

Dealer Choice

Purchase
Amount

Timing

Payment
Terms

Basics
Consumer Focus
Satisfying consumer needs (Maslows Model)
Basic (Level 1 and 2)
Social Acceptance (Level 3)
Social Envy (Level 4)

The Core of Marketing

Need
Felt when there is a conflict between desired state
and the current state e.g. thirst, bath

Want
Manifestation of a need
Specific, man-made, e.g. juice, water

Desire
Strong expression of a want e.g. owning a Harley
Davidson or a Ferrari

 The Base 4

Mind your Ps

The basic value proposition

Product Can be a product or service

Price

Consideration given by the consumer

Includes strategies like offers, discounts

Place

Availability at the right place, right time and in the right quantity
Channels such as the internet, wholesalers or retailers

Communicating the value proposition and benefits offered by the

product or service to the consumer
Promoti
Branding, PR, advertising, exhibitions, sales promotions
on

The 7Ps of Services/B2B Marketing

Physical

Process

People

Physical evidence for a consumer to know more about the experience of

using a particular service
Vital since the service is essentially intangible and lacks a physical form
Pamphlets, testimonials, brochures

Process followed during delivery of service

e.g. processes followed by McDonalds, process at ICICI bank branches

The people in the organization who interface with the consumer

Perception of service quality directly depends on the customer service
provided by the people e.g. banking, insurance, wealth management

Communication Channel

TV
Radio Maximum penetration
Print
Internet
Mobile
Social networks (word of mouth)

ATL/BTL
Above The Line
Promotional activities carried out
through conventional forms of mass media
Television
Radio
Print
Billboards

Below The Line

Non-media advertising
Flex/banners at Points of Purchase
Through The Line (Combination of both)

Consumer Behaviour
Different buying behaviour in different situations
Marketing strategy based on consumer behaviour
Impulsive
Picking (Lays, Bingo, Biscuits)
Unplanned
Low-involvement Products

Variety Seeking
Switching

Consumer Behaviour
Brand Loyal Purchasing
Levis Jeans
Van Heusen shirts
Raymond Suits

Problem Solving
Crocin, D-Cold, Burnol, Dettol

Purposive
B2B, industrial marketing, high involvement
products

STP The Essence

Segmentation (Homogeneity of needs)
Geographic (N, S, E, W)
Demographic (age, gender, income)
Psychographic (traits, values, lifestyles)
Thinkers, Achievers, Strivers, Experiencers

Behavioral (benefit-seeking, loyal, usage rates)

Differentiable (through different marketing mix)

Measurable (in terms of size and profitability)
Accessible (e.g. IT services in N/E regions?)
Actionable (product can be customized to serve)

Demographic Segmentation
SEC - Socio-economic Class (Demographic)
Urban SEC System (SEC A1, A2, B, C,D)
Based on occupation and education of the
head of the household
Rural SEC (R1 to R4) System
Based on the education of the head of the
household and the type of housing

 Targeting
Assess segment attractiveness
Market growth, competition, channel
attractiveness

Positioning
Conveying the message of differentiation
Creating Points of Parity and Points of Difference
E.g. Low price, high quality, low calorie, refined
etc.
Positioning of Nirma (low price), Surf Excel Matic
(high-quality), Rolls Royce (premium), Harley
Davidson (iconic American)

PESTLE Framework
Used in SWOT analysis for strategic planning,
marketing planning, product development
Political
Tax laws, trade tariffs, trade restrictions

Economic
Growth rate, interest rates, inflation

Social
Health consciousness, attitudes, acceptance

Technological
Legal
Environmental

Porters 5 Forces Model

The Mother of all 2X2s

BCG Matrix Explained

Applications
Brand marketing, Product management
Strategic management, Portfolio Planning
Cash Cows
Low growth and "mature" market
To be "milked" continuously with as little
investment as possible
E.g. Dettol antiseptic, ITC Cigarettes

 Dogs
Low growth, low market share
Should be hived off or divested e.g. ITC Infotech

Question Marks (Problem Child)

High growth, low market share
Analyze carefully in order to determine whether
they are worth the investment required to grow
market share e.g. Fiama De Wills, Vivel, Sunfeast

Rising Stars
Invest: High growth, high market share
Hotels and Agri-business for ITC Group

 Limitations
Linkage between market share and profitability is
questionable
A low market share product may actually be very
profitable and vice versa

Ansoff Growth Matrix

e.g. Dettol tried to promote its disinfectant as a

medical antiseptic as well as a household cleaning
product (market development)
ITC Bingo chips (product development)
Virgin Group (diversification)

The Product Life Cycle

A product has a limited life during which it poses

different challenges these have to be managed

 Introduction Phase (Innovators)

Costs high (promotion and marketing)

Sales volume low
No/little competition
Demand has to be created

Growth Phase (Early Adopters)

Reduced costs due to economies of scale
Sales volume increases significantly
Competition increases with few new players in establishing
market
Maximize market share

 Maturity Phase (Majority)

Costs are very low
Sales volume peaks
Increase in competitive offerings
Prices tend to drop due to the proliferation of
competing products
brand differentiation, feature diversification
Industrial profits go down

 Saturation and Decline Phase (Laggards)

Costs become counter-optimal
Sales volume decline or stabilize
Prices, profitability diminish
Profits through cost cutting
Focus on production/distribution efficiency rather
than increased sales

Sales and Distribution

Colgate Palmolive Factory
Stock Transfer
Carrying and Forwarding Agents
Primary Sale
Stockist
Secondary Sale
Wholesaler
Retailer
Offtake / Tertiary Sale
Customer

Sales and Distribution N/w

Statistics
HUL
4,000 stockists
6.3 million retailers
Entire urban population + 250 million rural
consumers

Marico

1,000 distributors
2,500 stockists
1.6 million retailers
18 million Indian households

Sales Objectives
Place of the Marketing Mix
Target-driven (push strategy)
Making the product available at the right
place, right time and right quantity

Other Segmentation Models

Globals
Strivers
Seekers

Customizin
g products
Smaller
stock
& services
keeping
for the
units (SKU)
lesser
privileged

Aspirers
Project
Shakti,
Swasthya
Chetna

Deprived (Bottom of
Pyramid)

Marketing Warfare
Defensive
Only the market leader should consider
Best defensive strategy is the courage to attack
yourself
Blocking strong competitive moves
E.g. Colgate Dental Cream Market leader
consistently defensive positioning v/s Close-up,
Pepsodent
Built up defenses on all price points and varieties

 Attack
Usually practiced by challenger(s) to the market
leader
Attack a weakness in the leaders position
Car rental firm Avis attacked market leader Hertz
with purely offensive strategies.
Avis talked of being perfect because of the
number two tag
Burger King claims its burgers are bigger and taste
better than McDonald's
Have It Your Way Campaign attacks McDonald's
inflexible consistent production line

Flanking

Practiced by the other smaller players

Flanking move played in uncontested territory
Tactical surprise is the key
Pursuit (follow-up) is equally important
Types
Geographical
Segmented

Nirmas exclusive foray in the low-price segments

Guerilla
Usually implemented by firms who are smaller
in market position/resource base than the
firm they attack
Find a segment of the market small enough to
defend
No matter how successful you become, never
act like the leader
Be prepared to leave at a moment's notice
Babool, Chandrika, Medimix

Marketing Myopia
Be customer-oriented rather than product-oriented
Hollywood
Faced an increased competition from television
Business of entertainment rather than moviemaking
Cadburys
Business of spreading joy (rather than chocolate
making)
Coca-Cola
Business of quenching thirst
Drops of Joy positioning

Some Tips
Read up on leading brands of the leading
FMCGs
Know more about the leading brands and the
companies they belong to for various product
categories like foods, hair care, personal care
etc.
Most interviews are form-based
HUL interview involves questions on
competing brands

India FMCG Snapshot

Company

Sales Revenue YoY (%)

QoQ (%)

Colgate
Palmolive
Dabur
Godrej
Consumer
HUL
ITC
Marico

4076

16.2

4.2

6040
3616

16.0
26.3

-0.4
33.0

42157
38997
6009

21.1
18.4
28.1

11.1
-0.9
28.5

Nestle
Tata Tea

10356
11356

23.5
12.3

-5.1
-3.6