The Definition of Marketing
i
Definition:
Marketing is the activity, set of institutions, and processes for creating,
communicating, and delivering and exchanging offerings that have value to
customers, clients, partners and society at large (NEW)The Scope of Marketing
What all do we Market?
Examples / Explanation
| Goods | Cars, Refrigerators, Televisions sets, Packaged Food, others
| Services | Air travel, Hospitality, Medical Services, Professional services
[ Events Miss Universe, The World Cup, The Olympics, others
| Experiences | Walt Disney's Magic Kingdom, A Light and Laser Show, Others
| Persons | Donald Trump, Shahrukh Khan, Politicians, Others
| Places | Taj Mahal, Las Vegas, Others
| Properties | Real estate, Farms
| Organizations | Reliance, ABG Ltd, Pantaloons, Shoppers Stop
[ information | Books, Encyclopedias, CD ROMs, Dial me Services, Colleges, Others
Embedded in every Marketing offering is an idea
Rajeev Chawla 2Company Orientation towards the Marketplace
————————————————————_>_—_—_——_——__————S
The Production Concept
= Consumers prefer products that are widely available and inexpensive
The Product Concept
= Consumers favor products that offer the most quality, performance or
innovative features
The Selling Concept
"Consumers will buy products only if the company aggressively
promotes/sells these products
The Marketing Concept
= Focuses on needs/ wants of target markets & delivering value better
than competitors
The Holistic Marketing Concept
* It is based on the development, des
marketing programs, processes, an
breadth and interdependencies
ig and implementation of
activities that recognizes theirHolistic Marketing
Holistic Marketing: It is based on the development, design, and implementation of
marketing programs, processes, and activities that recognizes their breadth and
interdependencies
Products & Channels
Communications Services ow
= z
Senior other
Management Departments
Marketing
Department
Sales Revenue
Brand’&
Customer Equity
Ethics é 4 Community
Environment LegalThe Marketing Mix:
The Marketing Mix
The set of marketing tools the firm uses to pursue its marketing objectives
Product
Product Variety
Quality
Design
Features
Brand Name
Price
List price
Discounts
Allowances
Payment Period
Credit Terms
Place
Channels
Coverage
Assortments
Locations
Inventory
Promotion eee
Advertising
Sales Promotion
Personal Selling
Direct Marketing
Public Relations
Event Marketing
Word of Mouth Marketing
Interactive MarketingThe Marketing Mix
The Marketing Mix: Services
The set of marketing tools the firm uses to pursue its marketing objectives
People
Employees
Customers
Communicating
culture and values
Employee meatal NN
ane —_
Product Variety Channels
Quality Coverage
Design Assortments
Festwen Locations
Brand Name Inventory
Packaging Promotion Transport
Price Advertising
fa List price Sales Promotion
Warranties Discounts Personal Selling
Retums Allowances Direct Marketing
Payment Period Public Relations
Credit Terms Event Marketing
Word of Mouth Marketing
Interactive Marketing
Rajeev ChawlaThe Marketing Mix:
The
aa
Product
Product Variety
Quality
Design
Features
Brand Name
Packaging
Sizes
Services
Warranties
Returns
=
The Marketing Mix
/
/
Price
List price
Discounts
Allowances
Payment Period
Credit Terms
Rajeev Chawla
et of marketing tools the firm uses to pursue its marketing objectives
Place
Channels
Coverage
Assortipents
\ Locations
\ Inventory
Promotion “Traniepert
Advertising
Sales Promotion
Personal Selling
Direct Marketing
Public Relations
Event Marketing
‘Word of Mouth Marketing
Interactive MarketingThe Marketing Mix
The Marketing Mix: Services
The set of marketing tools the firm uses to pursue its marketing objectives
People
Employees
Customers
‘Communicating
culture and values
Employee Research
-_
Product
Product Variety
Quality
Design
Features
Brand Name /
Packaging
Sizes Price
Services List price
Warranties Discounts
Returns Allowances
Payment Period
Credit Terms
Rajeev Chawla
Physical Evidence
Facility design
‘Signage
Equipment
Employee Uniform
Other Tangibles
Place
Channels
Coverage
Assortments
Locations
Inventory
Promotion —_ Transport
Advertising
Sales Promotion
Personal Selling
Direct Marketing
Public Relations
Event Marketing
Word of Mouth Marketing
Interactive Marketing
20The Marketing Mix
The Marketing Mix: Services
The set of marketing tools the firm uses to pursue its marketing objectives
Physical Evidence
Facility design
eee eur
on So
1m
Communicating Sear ingtiee
culture and values
Employee recent
Place
Product
Product Variety Coverage
Quality Assortments
Design Locations
Brand Name , Transport
cane Promotion Transport
ackagit pike Advertising
Se [le poe oes
Warranties Discounts Flow of Activities Direct Marketing
Returns. Allowances Level of Customer Public Relations
Payment Period involvement Event Marketing
Credit Terms Number of Steps Word of Mouth Marketing
Interactive Marketing
Rajeev Chawla 20Consumer want
Products and needs
Promotion Communication
_ Newarewiewing Rejeew chowisssercen MIMI a
The Marketing Mix
‘A-company will only sell what the consumer specifically wants to buy. So, marketers should study
‘consumer wants and needs in order to attract them one by one with something he /she wants to
purchase.
Price is only a part of the total cost fo satisfy 0 wont or a need. The total cost will consider for example
the cost of time in acquiring a good or a service, a cost of conscience by consuming that or even a cost
of guilt “for not treating the kids. reflects the total cost of ownership. Many factors affect cost,
Including but not limited to the customer's cost to change or implement the new product or service ond
the customer's cost for not selecting @ competitor's product or service
‘While promotion is “manipulative” and from the seller, communication is “cooperative” and from the
buyer with the aim fo create o dialogue with the potential astomers based on their needs ond
lifestyles I represents a broader focus. Communications can include advertising, public relations,
personal selling, viral advertising, and any form of communication between the organization and the
In the era of Internet, catalogues, credit cards ond phones people neither need to go anyplace to
satisfy @ want or a need nor are limited to a few places to satisfy them. Marketers should know how
the target market prefers to buy, how to be there and be ubiquitous, in order to guarantee convenience
{0 buy. With the rise of Internet and hybrid models of purchasing, Place is becoming less relevant
Convenience takes into account the ease of buying the produc, finding the produc, finding information
‘about the produc, and several other factors
Rajeev Chawla 25How do you get men to pee straight?
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that each urinal has a little picture of a fly in it
= And guess what men, focused that they are, try to do when they
see this fly? That's right. They try to hit the fly with their pee
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process contri
Rajeev Chawla 33Brands & Customer IntimacyCustomer Insights - A Search Guide
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SS — rr —Market Segment Targeting
—_—__—_———S Lae
One the firm has identified its market-segment opportunities, it
has to decide how many and which ones to target
Rajeev Chawla a2Market Segment Targeting
One the firm has identified its market-segment opportunities, it
has to decide how many and which ones to target
To be useful, market segments must rate favorably on 5 key
criteri
Measurable
The size, purchasing power and characteristics of the segments
can be measured
Substantial
The segment should be large and profitable enough to serve
Accessible
The segments can be effectively reached and served
Differentiable
The segments are conceptually distinguishable and respond
differently to different marketing-mix elements and programs
Rajeev Chawla aMarket Segment Targeting
One the firm has identified its market-segment opportunities, it
has to decide how many and which ones to target
To be useful, market segments must rate favorably on 5 key
criteria:
Measurable
The size, purchasing power and characteristics of the segments
can be measured
Substantial
The segment should be large and profitable enough to serve
Accessible
The segments can be effectively reached and served
Differentiable
The segments are conceptually distinguishable and respond
differently to different marketing-mix elements and programs
Actionable
Effective programs can be formulated for attracting and serving
the segments
Rajeev Chawla 25-Patterns of Target Market Selection
Ml M2 M3
PL
P3
Single-segment
concentration
P - Product
M - Market5-Patterns of Target Market Selection
M1 M2 M3 M1 M2 M3
Pl Pl
P2 P2
P3 P3
Single-segment Selective
concentration specialization
P - Product
M - Market5-Patterns of Target Market Selection
Mi M2 M3 Mi M2 M3 ML
Pl
P3
Single-segment Selective Product
concentration specialization specialization
P - Product
M - MarketPL
P3
Pl
P3
5-Patterns of Target Market Selection
M1 M2 M3
Single-segment
concentration
Ml M2 M3
Market
specialization
PL
Ml M2 M3
Selective
specialization
ML
PL
P3
Product
specialization
P - Product
M - Market5-Patterns of Target Market Selection
Ml M2 M3 Ml M2 M3 M1
PL PL PL
P2 P2 P2
P3 P3 P3
Single-segment Selective Product
concentration specialization specialization
Ml M2 M3 Ml M2 M3
PL
P - Product
P2
M - Market
P3
Market Full market
specialization coverageSegment-by-Segment Invasion Plan
saaSegment-by-Segment Invasion Plan
Customer Grou:
cs
Railroads
Airlines
Large
computersSegment-by-Segment Invasion Plan
Customer Group
Large
computers
Company A BY Company B ES Company cProduct Positioning
After segmenting and targeting its product, a company positions its
offering so that the target market recognizes the company’s distinctive
offering and image
Positioning is the act of designing the company’s offering and image to
occupy a distinctive place in the mind of the target market. The goal is to
embed the brand in the mind of consumers to maximize the potential
benefit to the firm
Positioning results in the creation of a customer-focused value
proposition
Ex:
* M&M's Scorpio — “the luxury of a car and the thrill of a SUV”
* Indica — “More car per car”
* Domino's Pizza - “A good hot pizza, delivered to your door within 30 minutes
of ordering, at a moderate price
Rajeev Chawla 60——- °° ° °° °°
Product Positioning
Al Ries & Jack Trout coined the word POSITIONING:
Po: ning starts with the 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
Positioning as per all approaches requires that similarities and
differences between brands be defined and communicated.
Specifically, deciding on a positioning requires determining a
frame of reference by identifying the target market and the
competition, and identifying the ideal points-of-parity and the
points-of-difference brand associations
Rajeev Chawla 61The Product Life Cycle - Introduction
_ —SSS___
INTRODUCTION STAGE:
* Period of slow growth
* Initial market acceptance is in doubt
The product is obviously not profitable
* High marketing and other expenses too
Marketing strategy in this stage is based on combinations of product,
price, promotion and distribution
STRATEGY:
Price and promotion are used to generate the following strategy
alternatives:
Name Price Promotion Category
High Skimming Heavy
Low Skimming High Low
High Penetration Low Heavy
Rajeev Chawla 28The Product Life Cycle - Introduction
SS
INTRODUCTION STAGE:
* Period of slow growth
* Initial market acceptance is in doubt
* The product is obviously not profitable
* High marketing and other expenses too
Marketing strategy in this stage is based on combinations of product,
price, promotion and distribution
STRATEGY:
Price and promotion are used to generate the following strategy
alternatives:
Name Promotion Category
High Skimming Heavy
Low Skimming Low
High Penetration Heavy
Low Penetration LowThe Product Life Cycle - Growth
GROWTH STAGE:
* There is substantial profit improvement
* Product acceptance ible in markets
* Retail feedback is positive as customers are buying
* Competition counters with new offerings
STRATEGY
= Product Improvement
New feature addition
New models introduction
Development of new market segments
Addition of new market channels
Selective demand stimulation
Price reductions to bring in new customers
Rajeev ChawlaThe Product Life CycleThe Product Life Cycle - Patterns
style Fashion
Sales
Sales
Time Time
Rajeev Chawla
Sales
Fad
Time
41Perspectives of The Product Life Cycle
Introduction
Growth
Maturity
Decline
Low sales
Rapidly rising
sales
Peak Sales
Declining Sales
High Cost per
customer
Average cost
per customer
Low Cost per
customer
Low Cost per
customer
Negative
Rising profits
High profits
Declining
profits
Customers
Innovators
Early adopters
Middle majority
Laggards
Competitors
Few
Growing
number
Stable number
beginning to
decline
Declining
number
Marketing
Create product
awareness and
trial
Maximize
market share
Maximize profit
while defending
market share
Rajeev Chawla
Reduce
expenditure
and milk the
brandPerspectives of The Product Life Cycle
Introduction
awareness and
trial
Growth
Maturity
while defending
market share
Decline
expenditure and
milk the brand
Offer a basic
product
Offer product
extensions,
service warranty
Diversify brands
and models
Phase out weak
items
Use cost-plus
pricing
Price to penetrate
the market
Price to match or
beat competitors
Cut price
Build selective
distribution
Build intensive
distribution
Build more
intensive
distribution
Go selective;
phase out
unprofitable
outlets
Build product
awareness among
early adopters
and dealers
Build awareness
and interest in the
mass market
‘Stress brand
differences and
benefits
Reduce to level
needed to retain
hardcore loyalists
Sales Promotion
Use heavy sales
promotion to
entice trial
Reduce to take
advantage of
heavy consumer
demand
Increase to
encourage brand
switching
Reduce to
minimal levelBRAND - Evolution of the Concept
Brandr = “to burn”
-An Old Norse word
Brands were and still are means by which the owners of livestock
mark their animals to identify them
A Brand is a name, term, sign, symbol, logo or design, or a
combination of them, intended to identify the goods and services
of one seller or group of sellers and to differentiate them from
those of competition
-The American Marketing Association (AMA)
The above different components of a brand that identify and
differentiate it can be called brand elements
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Term
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Term
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Term
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Rajeev ChawlaCustomer Based Brand Equity
—————_ a=
CBBE Model:
The power of a brand lies in what customers have learned,
felt, seen, and heard about the brand as a result of their
experiences over time
We need to link the right desired thoughts, feelings, images,
beliefs, perceptions, opinions and so on with the brand
CBBE:
The differential effect that the brand has on consumer
response to the marketing of that brand
1) The ‘differential effect’
2) Brand knowledge and
3) Consumer response to marketing
Rajeev Chawla ssBuilding a Strong Brand
The 4 Steps:
4.
Ensure IDENTIFICATION of the brand with the consumers
and an association of the brand in consumer’s minds with a
specific product class or customer need
. Establish the totality of BRAND MEANING in the minds of
customers by strategically linking a host of tangible and
intangible brand associations with certain properties
. Elicit the proper CUSTOMER RESPONSES to the brand
identification and meaning
. Convert brand response to create an intense, active loyalty
RELATIONSHIP between customers
Rajeev ChawlaServiceability emer
Service Effectiveness, Efficiency
and Empathy; Style and Design Lintory Inttteiee, Send xprertencee:
Price
Cc Identification
Salience [edt blaniy
Rajeev Chawla
92Channel Structures
(Consumer Products - FMCG)
Household Consumers
Rajeev Chawla 218Channel Structures
(Consumer Products - Consumer Durables)
Rajeev Chawla
219Channel Structures
(Industrial Products)
Rajeev ChawlaChannel Structures
(Industrial Products)
Rajeev Chawla
220Multi-level Marketing
Multi-level Marketing:
* Multi-level Marketing is also called Network Marketing
* Noteworthy companies who practice this Marketing are: Herbal Life, Avon
Cosmetics, Amway, Tupperware, Japan Life, etc
Companies dispense with the Distributor and high Advertising or
Communication costs
The Premise to this Marketing is that ‘The Consumer/Customer is also the
Distributor’
In this method you develop your network of Distributors who are also
Consumers to the products as individuals or families
The success of this Marketing for both the principal company and the
customer lies in ensuring that each channel member is monitored every
single purchase cycle to ensure purchase
Rajeev Chawla 191Fro 04:51 PM
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From Rajeev Chawla to Everyone:
Method to Set PRICING:
Selecting the Price Objective
Determine the demand
Estimate the Costs
Analyze the competition
Select the pricing method
Select the final Price I
To: Everyone ¥ O File
Type message here.MIO BC eee
Select the final Price
From Rajeev Chawla to Everyone:
Selecting the Price Objective
Survival
Maximum Current Profit
Maximum Market Share
Maximum Market Skimming
Product Quality Leadership
Other Objectives: Partial Cost Recovery
To: Everyone v O Fie
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From Rajeev Chawla to Everyone:
Understand the factors that affect price
sensitivity
Conditions under which
Customers are less Price Sensitive
Product is more distinctive
Buyers are less aware of substitutes
Buyers cannot easily compare quality
of substitutes
The expenditure is @ lower part of
buyer's total income
The expenditure is small compared to
the total cost
Part of the cost is bore by another
party
The product is used with assets
previously bought
The product is assumed to have more
quality, prestige, or excusiveness
Buyers cannot store the product
From Rajeev Chawla to Everyone:
Conditions under which the demand is
less elastic
There are few or no substitutes
Buyers do not readily notice the higher
price
Buyers are slow to change their buying
habits and search for lower prices
Buyers think higher prices are justified
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Buyers are less aware of substitutes
Buyers cannot easily compare quality
of substitutes
The expenditure is a lower part of
buyer's total income
The expenditure is small compared to
the total cost
Part of the cost is bome by another
party
The product is used with assets
previously bought
The product is assumed to have more
quality, prestige, or exclusiveness
Buyers cannot store the product
From Rajeev Chawla to Everyone:
Conditions under which the demand is
less elastic
There are few or no substitutes
Buyers do not readily notice the higher
price
Buyers are slow to change their buying
habits and search for lower prices
Buyers think higher prices are justified
Estimate the Costs
Types of costs and levels of production
must be considered
Accumulated production leads to cost
reduction via the experience curve
Differentiated marketing offers create
different cost levels
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Fixed costs: do not vary directly with
changes in level of production
Variable costs: vary with production
Total costs: sum of fixed and variable
costs at 2 given level of production
Average cost: cost per unit at a given
level of production
From Rajeev Chawla to Everyone:
Analyze the competition
Firms must analyze the competition
with respect to:
Costs
Prices
Possible price reactions
Pricing decisions are also influenced by
quality of offering relative to
competition
1m Rajeev Chawla to Everyone:
Select the pricing method
Price-setting begins with the three “C's”
Select method:
Markup pricing
Target-retur pricing
Perceived-value pricing
Value pricing
Going-rate pricing
Auction-type pricing
Group pricing
To: Everyone + O Fite
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{dHHow Brand Communication Works
Rajeev ChawlaHow Brand Communication Works
Rajeev Chawla 3How Brand Communication Works4. Noise
|3. Communication
2. Message 5, Receiver
(enced) _ aM Geeies!
[-—*| Customer,
Agency I Prospects:
Other Stakeholders
Rajeev Chawla sCustomer Initiated IMC Message
Rajeev Chawla 84Customer Initiated IMC Message
Rajeev Chawla 84The 5M’s Model of Advertising
Rajeev Chawla 195The 5M’s Model of Advertising
Rajeev Chawla 295The 5M’s Model of Advertising
Measurement
+ Communication
impact
+ Sales impact
Rajeev Chawla 195om Harsh Vardhan to Everyone:
Good afternoon mam.
From Rajeev Chawla to Everyone:
Pre-call Preparation
Prospecting (and the pre-approach)
The Approach
The Sales Presentation
Handling Sales Objections
The Sales Closing
After Sales Service
To: Everyone ~
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